Just who is responsible for the current economy?

Back in September, I had to opportunity to attend a hearing held by the House Oversight Committee as they attempted to find an answer to this very complex question. During the hearing, members of Congress grilled current and former employees of the credit rating agencies that some have blamed for the credit crash.

This story proved to be a huge challenge for me. My strengths do not lie in economics, so I had to do research in the hopes that I could understand what the issue was about. I am proud that I was able to inform myself enough to write a clear and hopefully informative story about a topic that was completely new to me.

What role did credit rating agencies play in the economic downturn?

Nearly a year after it first started looking into credit rating agencies’ part in the economic meltdown, the House Oversight Committee found that the causes of last year’s crash have not gone away.

During his testimony at Wednesday’s hearing, Eric Kolchinsky, former managing director at Moody’s, used the fact that Moody’s is again rating securities that are composed of possibly risky assets as proof that the company is not changing its ways.

“These are the same products which are responsible for hundreds or billions of dollars of losses at major financial institutions . . .,” said Kolinsky, who was suspended because he wrote a letter to the Security and Exchange Commission warning about the company’s lack of oversight. “The ‘new’ methodologies used to rate ABS CDOs have not improved their poor credit performance – many of the recent deals have been downgraded or have had to resort to restructuring to maintain their ratings.”

Ohio Democrat Dennis Kucinich pointed out that the problem of toxic debt is still being bought and sold under a new name, Re-remics, which stands for resecuritizations of real estate mortgage investment conduits. According to Bloomberg, this is another name for mortgage bonds.

Investors rely on credit ratings issued by companies like Moody’s, Standard and Poor’s, and Fitch in order to determine whether it is safe to buy bonds and other debt.

Committee Chairman Rep. Edolphus Towns explained the importance of these credit ratings in the investment market.

“The main mission of credit rating agencies is to tell investors how risky bonds and other debt securities are,” the New York Democrat said. “Pension plans, banks, insurance companies, and other investors depend on these ratings to help them decide where to invest their funds.”

Richard Cantor, the agency’s chief risk officer explained how Moody’s determines its ratings.

He said, “Moody’s credit rating opinions are determined through rating committees, by a majority vote of the committee’s members and not by an individual analyst.”

Despite Cantor’s defense of the agency, many committee members focused on the conflict of interest they saw as inherent in the credit rating industry. Rep. Paul Kanjorski (D–Pa) compared the fact that the groups requesting the ratings pay Moody’s for its services to a hypothetical situation where a judge’s salary is paid by contributions from attorneys who won their cases.

Kolchinsky explained that because an issuer can go from one agency to another in an attempt to get a rating, there is not much incentive for the agency to turn it down.

“Senior management still favors revenue generation over ratings quality and is willing to dismiss or silence employees who disagree with these unwritten policies,” he said.

While admitting that he “would not give a high rating” to Moody’s performance over the last two years, Cantor defended the rating system saying that they did not expect the housing market to fall as quickly as it did.

Many lawmakers suggested instituting some way to regulate the credit rating industry – one way that was recommended would be to impose the same standards on all companies.

Kolchinsky ended his testimony with an endorsement of added oversight of the industry.

“If I were a doctor, I would diagnose the rating agency patient as very curable,” he said “. . . Rating agencies can once again be productive members of the financial community, but they cannot do this by themselves. They need a helping hand to get back on track.”


Covering California Politics in D.C.

When I decided to go to American to receive my master’s in journalism, I assumed that much of my time would be spent covering national politics. Little did I know that despite being 3,000 miles away from my home state, California politics would never be very far away.

For my Reporting on Public Affairs course, I received the opportunity to attend an event at the American Enterprise Institute, a conservative think tank here in D.C. where Steve Poizner, California’s current Insurance Commissioner and a Republican candidate for governor, gave a speech outlining his plan for the state. I must admit that I was a bit surprised that there was so much focus on a gubernatorial race that was still a year away.

Here is the news story I produced after that event:

West meets East

California Insurance Commissioner and Republican gubernatorial candidate Steve Poizner called Wednesday for lower taxes and spending cuts to turn around his state’s budget woes.

“The only was to repair California’s broken economy is to make California’s tax structure competitive again,” he told the crowd of 60 people at the American Enterprise Institute.

California’s budget problems have forced steep cuts in essential services and even forced public officials to issue IOUs to contractors and tax payers to avoid running out of money to keep the state running.

Both Poizner and Henry Olsen, vice president and director of the National Research Institute at the AEI summarized the challenges that have contributed to the economic crises plaguing the state. Olsen cited statistics showing that “hundreds of thousands native Californians leave the state” while Poizner cited advertisements being run in California newspapers trying to entice businesses to cross the border into Nevada.

In order to make California more business friendly and encourage them to “start and grow” in the state, Poizner is running on a plan in which he cuts income tax rates, the state sales tax and the corporation tax rate by 10 percent while also cutting the capital gains tax by 50 percent.

While creating a business-friendly atmosphere in California appeared to be his priority, the California Republican expressed his desire to improve the public education system saying, “I don’t see how you can fix California’s economy until you repair California’s broken public education system.”

The insurance commissioner, who spent a year volunteering as a teacher in a San Jose high school described the decline of the state’s schools from being the best in the nation to today, where “about 50 percent of the fourth graders . . . in the state of California cannot pass basic reading proficiency tests.”

Poizner placed the blame solely on the shoulders of the state’s politicians, who he claimed took control away at the local level and enforced mandates “uniformly to all 5,000 schools at the same time.

In addition to cutting taxes, another key part of the gubernatorial candidate’s plan is a decrease in government spending. Poizner used a chart to illustrate how quickly government spending in California has grown – his data showed that it has doubled over the past 10 years, outstripping even federal spending. Olsen said the state’s budget deficit “exceeds in its size, the size of most other state budgets in total.”

When talking about cutting government spending, Poizner said he is not “a big fan of taking out a big axe and starting to slice;” instead favoring “a top-down review of every dollar, every person; you need to take programs that really don’t help anybody any more and just stop doing them completely.”

Although Schwarzenegger and the state legislators have been attempting to solve the budget deficits with steep cuts in areas like education and health care, the governor, in a speech in March explained why he had to go against his promise not to raise taxes.

“If we had tried to solve the deficit by spending cuts alone, we would’ve had to close our entire state university system, cut off all welfare assistance and shut down all mental health services,” the governor said.

According to the Los Angeles Times’ Evan Halper, much of California’s spending goes towards programs like Medi-Cal, which provides health care for low-income residents and receives more than $14 billion annually or programs aimed at providing services for the disabled, which receive $2.4 billion per year.

A Morning at the Heritage Foundation

During my time in graduate school, I plan on learning as much as I can, but I also plan on challenging myself. That was my motivation in covering the Heritage Foundation’s panel on reforming the United Nations this morning.

Admittedly, my knowledge of the UN is limited. If I have any regrets in my choice, it’s that I decided to cover a story about a topic that I did not have background knowledge to go off of.

In the end, while I probably should have chosen a topic I know better, I am grateful that I had this opportunity to get out into Washington, DC and cover a story featuring well-known newsmakers.

The Heritage Foundation and the UN

The United Nations has received of ample criticism in recent years, much of it coming from the Heritage Foundation. The conservative think tank hosted a discussion on what it sees as the organization’s needed reforms to coincide with the release of the book, “Conundrum: The Limits of the United Nations and the Search for Alternatives.”

Kim Holmes, vice president of foreign and defense policy studies at the heritage foundation and assistant secretary of state under George W. Bush, gave his theory as to why the United States has had such a hard time instituting reform in the United Nations.

“All too often, the failures and inefficiencies of the UN are tolerated because to many people in New York . . . the United Nations is really more of an idea,” Holmes said. “It’s a process; it’s a way of life that’s actually an ideological cause more than it is a real institution that’s supposed to be held accountable for solving problems . . . and when it falls short, many people who look at it that way, say . . . ‘whatever you do, don’t hold it accountable because you’ll discredit the idea.’”

In addition to criticizing the United Nations, the speakers offered solutions they asserted would increase the accountability and transparency of the organizations’ programs.

Multiple panelists commented that the only way to force reform was to threaten the UN with financial consequences.

John Bolton, George W. Bush’s controversial pick for U.S. ambassador to the UN, has been pushing to make the funding the member organizations provide voluntary – meaning Congress can decide whether to allocate funds. He said, “If we push for this idea and Congress doesn’t see progress, Congress can withhold the funding.”

Bolton explained, “The record of existing UN agencies that have voluntary funding, I think, shows the wisdom [of making funding of the UN voluntary] – in the World Food Program, the High Commission for Refugees and others – these are some of the most efficient and effective and transparent UN agencies because their managers know that if they don’t perform, member governments can take their funding elsewhere.”

The Heritage Foundation has a history of criticizing the United Nations. According to Edwin Feulner, the Heritage Foundation’s president, foundation members began working on reforming the institution in 1982. He explained some of the findings.

“Our critical assessments [on the United Nations] have contributed to exposing mismanagement, inefficiency and abuse in the system and helped to advise the Congress in multiple administrations on strategies to address those challenges,” Feulner said.

Despite the criticism all the panelists offered of the United Nations, no one advocated for the United States pulling out of the organization completely. Regardless of the weakness they see in the institution as a whole, the speakers will willing to admit, as Holmes said, “the UN’s not a cause, it’s not just an idea. It’s a diplomatic tool like any other.”

“Just because we are critical, just because we say there are flaws, doesn’t mean . . . we can’t work with the UN, but it also means there may be other ways we have to work around it, to bypass it because at the end of the day, the very ideals the UN stands for – international peace, human rights and prosperity – these ideas are actually bigger than the UN,” Holmes said. “The UN alone cannot provide them, and if we’re going to exercise leadership by the United States, we have to find ways to work both in and outside the UN.”

The Challenges of Reporting on a Tight Deadline

I’ve had plenty of experience with deadlines, whether in my classes throughout my academic career, or while I was first a reporter and then an editor for the Valley Star, but today was different.

In my Reporting on Public Affairs class, my professor, Sam Fulwood, sent my classmates and I out with the instructions to find a story, conduct interviews, write up a full transcription of the interviews, write the story and have it in by 5 p.m. Today was my first taste of what it would be like in a newsroom of a daily paper, and I’ve learned that it will take a lot of getting used to.

It wasn’t finding the story (I went to American’s Gay, Lesbian, Bisexual, Transgender and Ally Resource Center, where the director and coordinator were happy to sit down with me and answer my questions) or writing the story (although I could have done a much better job with an extra hour or two) weren’t the hardest parts of the day; the worst aspect of the assignment was actually transcribing the interview. It’s incredible how long it takes to type of a 20-minute interview. It’s because I spent so long transcribing that I didn’t have as much time as I wanted to work on my story.

In the end, I will look at this experience as a teachable moment. I may not have been happy with my end product, but at least I proved to myself that I can put a story together on a very tight deadline. What follows is the piece I put together today. It’s not my best work, but I’m a bit rusty, and I’m happy that I got it in by deadline.

My first reporting project as a grad student

College can be a time of discovery; for some students, this might include questioning their sexuality. Staff at American University’s Gay, Lesbian, Bisexual, Transgender, and Ally Resource Center offers students information about issues concerning the GLBT community or simply a sympathetic ear.

“It gives a voice to a minority, Cody Steele, the resource center’s safe space coordinator, said. “It’s important to have a resource for students who are either struggling with identity, or who are looking to find a community.”

Matthew Bruno, program coordinator of the GLBTA Resource Center, and Sara Bendoraitis, the center’s director, and the staff of student workers and volunteers are available to counsel students.

“If students are having a hard time coming out . . .“if they have an issue with roommates, we welcome them to come and talk with us,” Bruno said. “If they need advice on how to talk about their identity with someone else, or advice on who to go to . . . we’ll pass them on to someone else who has better expertise in that area.”

The staff aims to create a safe space, not only within their office, but throughout the campus through their Safe Space Program for those who want to become allies and provide support for the GLBT community.

Bruno, described an ally as “someone who takes some action steps towards creating a better environment for GLBT people, . . .” He explained, “It doesn’t have to be these huge mammoth things that we’re asking people to do, but just to understand their own place in the world and to see how they kind of fit into a cycle which perpetuates homophobia and heterosexism.”

One of the projects the center is working on is a guide for transgender students. The center will also offer a Trans 101 workshop, which will “be a more in-depth look at the transgender identity and what goes under [it]” and focus on “health . . . [and] legal concerns for the trans community,” Bruno said.

Although one of part of the center’s mission is to provide a safe space for homosexual or transgender students on campus, Bendoraitis, said, “I think the campus is pretty safe overall.”  While she described a 2007 incident that “started out as just a name-calling spat between two people that ended up getting physical,” she went said, “I think the typical campus incident is stuff like people throwing names around or writing things on white boards . . . And not to diminish the impact of those, but compared to what could happen, they’re pretty minor things that tend to happen on campus.”

In addition to providing students with information about issues in the GLBT community, the resource center is also attempting to create stronger relationships with courses that focus on gender and sexuality. In addition to allowing faculty and students to use their library of books relating to gender and sexuality issues, the center publishes a list of GLBT and GLBT-friendly courses each semester.

Bruno said, “ Our events hope to connect to students’ academic courses or allow them to explore a new area that they’ve never dealt with before in their academic endeavors.”

Matthew Bruno, program coordinator of the GLBTA Resource Center, explained what the center is there for, saying, “We’re also a safe space . . . for people to hang out in, and to be able to come into this space and be who they are, even if they can’t be who they are in their dorm room, in their classroom, in the hallway.”

A Witness to History

Yesterday, I made my way to Capitol Hill to watch as Sen. Edward Kennedy’s motorcade drove past on its way to Arlington National Cemetery. According to CNN, there were approximately 1000 people gathered to witness history.

The crowd waves and applauds as Sen. Edward Kennedy's motorcade pulls up to the U.S. Capitol

The crowd waves and applauds as Sen. Edward Kennedy's motorcade pulls up to the U.S. Capitol

I was a bit surprised by the atmosphere when I arrived – it felt more like a picnic than a funeral. People brought their dogs with them (I saw plenty of Portuguese water dogs), and children were running around and playing. Once the motorcade pulled up, I did not see any tears. It seemed as if the entire crowd was applauding and cheering. Some even began chanting his name.

Because I got to Capitol Hill so late, I was not able to see the ceremony that took place, but from my vantage point, I very clearly heard them singing America the Beautiful (the people around me joined in).

I was curious as to what I didn’t see, so I’ve included video I found of the ceremony outside the Capitol.

As I watched coverage of Kennedy’s funeral on TV, I’ve constantly been impressed by the way his family members have conducted themselves. My mom passed away in April and I cannot imagine what it would have been like to have to share my grief with the world.

As the Kennedy family left the Capitol to continue the journey to Arlington, I was struck by the fact that they shouted thank yous to those who had gathered to watch.

I almost didn’t go to the Capitol. It was a text message from my dad, asking if I was there that motivated me to head out. As he told me afterwords, I saw history yesterday.

Saying goodbye to Sen. Kennedy

A news crew getting ready to file a report from a building across the street from the Capitol

A news crew getting ready to file a report from a building across the street from the Capitol

The Capitol flag at half staff

The hearse bearing Sen. Edward Kennedy's body stops in front of the Capitol where his current and former staffers joined members of Congress and the Senate to say farewell.

The hearse bearing Sen. Edward Kennedy's body stops in front of the Capitol where his current and former staffers joined members of Congress and the Senate to say farewell.

Changing my point of view in three short weeks

When I first decided on journalism as my career, I was under the impression that I would work solely in print. I was adamant that I would go nowhere near a camera, and I certainly would not be putting video stories togther – that was for the technical people, not me.

Kristin McGrath takes a photo while Sean Connolly and Kristin Tangel decide where to visit first.

Kristin McGrath takes a photo while Sean Connolly and Kristin Tangel decide where to visit first.

Now that I have gone through bootcamp, I have completely changed my tune. I cannot wait to get behind the camera again or grab my digital recorder and create a story by melding still photos and audio. While gathering what I needed for my multimedia stories was challenging, I couldn’t help but feel exhilerated when I saw the final product, knowing that I had done it.

In addition to getting hands-on experience, we were also given the opportunity to listen to some pretty impressive guest speakers. They came from different perspectives (some were more old-school while others embraced the changes in journalism) and from different media, but they all had valuable insight to share with us.

They all had different experiences with journalism, but there seemed to be some common themes running through all the talks:

  • have specialized knowledge in one area, but have a passable knowledge of many others
  • be able to use all types of media – don’t limit yourself to one platform
  • you must be passionate about what you do
  • the Internet may be making life difficult for some journalists, but it’s also opening a lot of doors for others, especially those of us who know how to take advantage of technology

The past three weeks have been overwhelming and stressful, but they have also been eye-opening. Despite all the claims that journalism is a dying field, I came away from the course with a new sense of optimism. It may be difficult, but I know that if I am determined, I can find a way to do my dream job.

Bootcamp was a great way to get me ready for my classes in the fall. I am more curious and more motivated to experiences new forms of media and to break out of the box that I had confined myself in. I have no idea what the future holds, but I can’t wait to experience it.

Throughout bootcamp, we were encouraged to record our lectures and I’ve decided to include a slideshow to give an idea of what the past three weeks have been.

Bootcamp: The Last Day

The major lesson I am taking away from the last three weeks is the need to learn how to use new forms of media.

One of our last guestspeakers was Jan Schaffer, the executive director for the Institute for Interactive Journalism (J-Lab). The goal of the institute is to rethink and reform journalism.

J-Lab works with the intention of giving citizens more resources to report what they observe.

Schaffer commented that “jourmalists today have become almost stenographers.” They simply report what is being said regardless of whether it is true or not. She wants to change the idea that once a reporter has told a story, it’s over.

From Gadfly to Respected Journalist

“Be prepared for hostility and isolation if you want to do anything worthwhile.” This was the lesson Jeremy Stone learned from his father, I.F. Stone.

Jeremy watched as his father was punished for his “radical” views through increasing isolation. He compared his father to Walter Lippmann, a reporter who was able to interview the most important sources, but never questioned what his sources told him. Jeremy pointed out that decades later, his father’s writings are considered more important than those of Lipmann.

Because he started his own weekly, I.F. is called the first blogger. His son admitted that his father would have had a much easier time publishing his works today.

Although our two guestspeakers today were quite different, they both came with the same message – it’s important to tell a story in a different way. As journalists, we must not only report the facts, but question their veracity and provide our readers with the most accurate information we can.