No One Is Talking About What Ron DeSantis Has Actually Done to Florida by William Kleinknecht

Media coverage of Florida Gov. Ron DeSantis’s all-but-announced candidacy for president is already in full frenzy, and so far the script is exactly as his handlers would like it to be. The governor regularly opens up new fronts in the culture wars, sowing alarm over critical race theory, transgender rights, or border policies. In response, liberal pundits fall into the trap of accentuating the very issues DeSantis has chosen to fire up his base.

 Omitted from the public debate about DeSantis’s policies is almost any discussion of his actual record of governance—what exactly he has delivered to the citizens of his state, especially those without seven-figure incomes and lush investment portfolios.

 Even a cursory dip into the statistics of social and economic well-being reveals that Florida falls short in almost any measure that matters to the lives of its citizens. More than four years into the DeSantis governorship, Florida continues to languish toward the bottom of state rankings assessing the quality of health care, school funding, long-term elder care, and other areas key to a successful society.

 Florida may be the place where “woke goes to die”—as DeSantis is fond of saying—but it is also where teachers’ salaries are among the lowest in the nation, unemployment benefits are stingier than in any other state, and wage theft flourishes with little interference from the DeSantis administration. In 2021, DeSantis campaigned against a successful ballot initiative to raise the state’s minimum wage, which had been stuck at $8.65 an hour. Under DeSantis’s watch, the Sunshine State has not exactly been a workers’ paradise.

 DeSantis weaponizes the cultural wars to distract attention from the core missions of his governorship, which is to starve programs geared toward bettering the lives of ordinary citizens so he can maintain low taxes on the wealthy and corporations. Florida is the ideal haven for privileged Americans who don’t want to pay their fair share of taxes. It has no income tax for individuals, and its corporate tax rate of 5.5% is among the lowest in the nation. An investigation by the Orlando Sentinel in late 2019 revealed the startling fact that 99% of Florida’s companies paid no corporate income tax, abetted by tax-avoidance schemes and state officials who gave a low priority to enforcing tax laws.

 This is a pattern that shows up in the statistics of many Republican-led states, which on average commit fewer dollars per-capita to health care, public education, and other crucial services compared to their blue counterparts, while making sure corporations and wealthy individuals are prioritized for tax relief. Arizona cut taxes every year between 1990 and 2019, following up with a shift to a flat tax this year that will cost its budget $1.9 billion. Meanwhile, its public-school spending ranks 48 among the 50 states.

 In Florida, the state’s tax revenues come largely through sales and excise taxes, which fall hardest on the poor and middle class. A 2018 study by the left-leaning Institute on Taxation and Economic Policy found that Florida had the third least-equitable tax system of the 50 states. In the state’s “upside-down” tax structure, the poorest 20% of Florida families paid 12.7% of their income in taxes, while the families whose income was in the top 4% paid 4.5%, and the top 1% paid 2.3%, according to the study.

 Florida taxpayers get less for their money than residents of many other states. The Commonwealth Fund, a private foundation that studies health-care systems globally, found in its 2022 “scorecard” that Florida had the 16th worst health care among the 50 states. It’s no wonder that Florida ranks below the northern blue states in life expectancy and rates of cancer death, diabetes, fatal overdoses, teen birth rates, and infant mortality.

 Largely because of DeSantis’s obstinacy, Florida is one of 10 states that have refused to expand Medicaid under the Affordable Care Act, an act of political spite that has cost those states billions in federal health care dollars and cost thousands of people their lives. More than 12% of Floridians are without medical insurance, a worse record than all but four other states. Despite having the country’s highest percentage of retirees, Florida has the worst long-term care among the 50 states, according to the American Association of Retired Persons.

 Public schools fare no better than health care in DeSantis’s Florida. Not only did Florida rank 49th in the country for average teacher pay in 2020, but the Education Law Center, a non-profit advocacy group based in New Jersey, found in a 2021 report that the state had the seventh-lowest per-pupil funding in the country. Education Week, which ranks states public school annually, looking beyond mere test scores, placed Florida 23rd in its 2021 report, a lackluster showing for a large and wealthy state.

 It says something about the state of our political discourse that Florida’s denuded public sector was not more of an issue in last year’s gubernatorial campaign. In endorsing DeSantis’s Democratic opponent, Charlie Crist, the Tampa Bay Times spent so many column inches on the incumbent’s demagoguery, vindictiveness, and authoritarian tendencies that it never even got to the minutiae of his governance. “No matter what you think about the state of the Florida economy or its schools or its future…,” the paper wrote, “the choice really is this simple: Do you want the state governed by a decent man or a bully?”

 To be fair to the media, DeSantis and his allies manned the trenches of the culture wars so ferociously that it was all reporters could do to keep up with all the bomb throwing. How do you delve into the state’s tax policy when your governor is flying planeloads of migrants to Martha’s Vineyard or declaring war on Disney for issuing a statement in opposition to the state’s so-called “Don’t Say Gay Law”?

But that is very much the point of wedge issues, as they have been wielded by scurrilous politicians for decades, to anger and distract voters so they won’t notice the actions of public officials that mainly benefit the wealthy and are against the public interest.

 

As the 2024 election draws closer, DeSantis must not be allowed to accomplish nationally what he did in his state—cloak his service to the wealthy by frightening working people with stories about transgender recruiting and “socialist” college professors. There are unmistakable signs that Americans are focused on what an activist government can do for the public good, as evidenced by Floridians’ vote to increase the minimum wage.

The failure of DeSantis to better serve the most vulnerable citizens of his state is his weak underbelly in a national campaign.

 

Arkansas Gov. Sanders signs a law that makes it easier to employ children by Kaitlyn Radde

Arkansas Gov. Sarah Huckabee Sanders signed a law this week rolling back requirements that the state verify the ages of workers under 16 and provide them with work certificates permitting them to work.

Effectively, the new law signed by the Republican governor applies to those who are 14 and 15 years old because in most cases Arkansas businesses can't employ those under 14.

Under the Youth Hiring Act of 2023, children under 16 don't have to get the Division of Labor's permission to be employed. The state also no longer has to verify the age of those under 16 before they take a job. The law doesn't change the hours or kinds of jobs kids can work.

"The Governor believes protecting kids is most important, but this permit was an arbitrary burden on parents to get permission from the government for their child to get a job," Sanders' communications director Alexa Henning said in a statement to NPR. "All child labor laws that actually protect children still apply and we expect businesses to comply just as they are required to do now."

Workers under 16 in Arkansas have had to get these permits for decades.

Supporters of the new law say it gets rid of a tedious requirement, streamlines the hiring process, and allows parents — rather than the government — to make decisions about their children.

But opponents say the work certificates protected vulnerable youth from exploitation.

 

There's no excuse for "why these alarming violations are occurring, with kids being employed where they shouldn't even be in the first place," Jessica Looman, principal deputy administrator of the Wage and Hour Division, told NPR in February.

Investigators from the Department of Labor found hundreds of children employed in dangerous jobs in meatpacking plants. Last month, Packers Sanitation Services paid a $1.5 million fine — the maximum amount — for employing 102 children to work in dangerous meatpacking facility jobs.

 

 

 

Graham Jackson, teaching his story could be illegal under laws in Florida and North Dakota by David Cason

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  The story of Graham Jackson is a timeless tale of American ingenuity, hard work and the cream rising to the top.

It’s also a tale of economic inequality, overt racism and America’s Jim Crow caste system.

As one of the first Black musicians to play on national radio, Jackson is best known for the April 13, 1945, photograph of him that was published by Life magazine, one of the leading publications of its day.

 In that image, Jackson, dressed in his U.S. Navy uniform, is seen playing the song “Going Home” on an accordion as the train carrying the body of President Franklin Delano Roosevelt leaves the station in Warm Springs, Georgia, for his burial in Hyde Park, New York.

 

Jackson’s tear-filled face mourning the death of the nation’s longest-serving president became a symbol of the nation’s grief.

But under legislation that’s been proposed in North Dakota, I am not sure if I can tell the full story of Jackson in one of my college courses without breaking the law.

Officially titled Senate Bill 2247, the measure would criminalize discussing factual history by prohibiting discussions at state universities that involve “divisive concepts.”

 

The bill defines “divisive concepts” as including white privilege, white guilt, Black resentment or America’s being “fundamentally or irredeemably racist or sexist.”

If passed, the measure would ban any classroom discussions that “an individual, by virtue of the individual’s race or sex, is inherently privileged, racist, sexist, or oppressive, whether consciously or subconsciously.”

It would also ban courses that would make an individual “feel discomfort, guilt, anguish, or another form of psychological distress solely because of the individual’s race or sex.”

 

As I detail in my biography of Jackson, the story of Graham Jackson involves all of these things.

An orphan with a musical gift

I spent five years researching Jackson’s life, read hundreds of documents and interviewed people who knew him. Through that research, I was able to factually document the racial realities that Jackson and other Black Americans faced throughout the 20th century.

 

The grandson of enslaved people, Jackson was born into poverty in 1903 and became an orphan. In a twist worthy of Charles Dickens, his mother was committed to Central State Hospital in Virginia after a failed suicide attempt. His father, who had recently lost an arm in a hunting accident, disappeared from his life. He was raised by his aunt.

As an adult, Jackson used his talents as a musician to make a name for himself entertaining. When he moved to Atlanta in 1924, he became the house organist at Bailey’s “81” Theater.

The owner of this theater, Charles Bailey, was a tight-fisted white manager.

 

Some Black artists saw Bailey as a “cracker from the back woods of Georgia” and accused him of assaulting Blues singer Bessie Smith and having her hauled off to jail.

Jobs like this at Bailey’s were some of the few a young Black artist could find in the 1920s.

Jackson also recorded jazz songs, and while these were popular, they were sold and labeled as race records to separate them from the work of white artists whose songs were labeled “old-time” records.

 

Still, he found acclaim in white newspapers, which described him pejoratively as a “darktown jazzologist.”

‘The Plantation Revue’

Jackson became the favorite of many wealthy and influential white people in the 1930s, including President Roosevelt.

Jackson spent time with Roosevelt, but only as an entertainer, not as a confidante or friend. Jackson and his “Plantation Revue” singers once performed for FDR in full slave garb, singing traditional spirituals.

 

In 1939, Atlanta experienced the mania associated with the premiere of “Gone With the Wind.”

City officials planned lavish Confederate-themed balls and events, and an estimated 300,000 people attended a parade featuring most of the movie’s cast.

Jackson and his “Plantation Revue” were hired to perform at one of the balls, in front of a facade of the fictional plantation named Tara, and in full slave regalia.

Several Black church choirs also performed in slave garb with Jackson. Among the singers was a 10-year-old Martin Luther King Jr.

 

Jackson’s lost cause

Jackson volunteered to join the Navy in 1942 to both raise money through performing while enlisted and also to recruit Black men to join the newly desegregated Navy, which had just removed some barriers for service.

In 1950, Jackson was invited to perform at the graduation ceremony at a white high school in South Georgia. Within days the invitation was withdrawn because of violent threats by the Ku Klux Klan.

 Though Jackson did see some success in the 1950s appearing on “The Ed Sullivan Show” and “The Today Show,” by the 1960s he could find steady employment only at several Confederate-themed restaurants in Atlanta.

 

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The story of Graham Jackson is a timeless tale of American ingenuity, hard work and the cream rising to the top.

It’s also a tale of economic inequality, overt racism and America’s Jim Crow caste system.

As one of the first Black musicians to play on national radio, Jackson is best known for the April 13, 1945, photograph of him that was published by Life magazine, one of the leading publications of its day.

In that image, Jackson, dressed in his U.S. Navy uniform, is seen playing the song “Going Home” on an accordion as the train carrying the body of President Franklin Delano Roosevelt leaves the station in Warm Springs, Georgia, for his burial in Hyde Park, New York.

Jackson’s tear-filled face mourning the death of the nation’s longest-serving president became a symbol of the nation’s grief.

But under legislation that’s been proposed in North Dakota, I am not sure if I can tell the full story of Jackson in one of my college courses without breaking the law.

Officially titled Senate Bill 2247, the measure would criminalize discussing factual history by prohibiting discussions at state universities that involve “divisive concepts.”

The bill defines “divisive concepts” as including white privilege, white guilt, Black resentment or America’s being “fundamentally or irredeemably racist or sexist.”

If passed, the measure would ban any classroom discussions that “an individual, by virtue of the individual’s race or sex, is inherently privileged, racist, sexist, or oppressive, whether consciously or subconsciously.”

It would also ban courses that would make an individual “feel discomfort, guilt, anguish, or another form of psychological distress solely because of the individual’s race or sex.”

As I detail in my biography of Jackson, the story of Graham Jackson involves all of these things.

An orphan with a musical gift

I spent five years researching Jackson’s life, read hundreds of documents and interviewed people who knew him. Through that research, I was able to factually document the racial realities that Jackson and other Black Americans faced throughout the 20th century.

The grandson of enslaved people, Jackson was born into poverty in 1903 and became an orphan. In a twist worthy of Charles Dickens, his mother was committed to Central State Hospital in Virginia after a failed suicide attempt. His father, who had recently lost an arm in a hunting accident, disappeared from his life. He was raised by his aunt.

As an adult, Jackson used his talents as a musician to make a name for himself entertaining. When he moved to Atlanta in 1924, he became the house organist at Bailey’s “81” Theater.

The owner of this theater, Charles Bailey, was a tight-fisted white manager.

Some Black artists saw Bailey as a “cracker from the back woods of Georgia” and accused him of assaulting Blues singer Bessie Smith and having her hauled off to jail.

Jobs like this at Bailey’s were some of the few a young Black artist could find in the 1920s.

Jackson also recorded jazz songs, and while these were popular, they were sold and labeled as race records to separate them from the work of white artists whose songs were labeled “old-time” records.

Still, he found acclaim in white newspapers, which described him pejoratively as a “darktown jazzologist.”

‘The Plantation Revue’

Jackson became the favorite of many wealthy and influential white people in the 1930s, including President Roosevelt.

Jackson spent time with Roosevelt, but only as an entertainer, not as a confidante or friend. Jackson and his “Plantation Revue” singers once performed for FDR in full slave garb, singing traditional spirituals.

In 1939, Atlanta experienced the mania associated with the premiere of “Gone With the Wind.”

City officials planned lavish Confederate-themed balls and events, and an estimated 300,000 people attended a parade featuring most of the movie’s cast.

Jackson and his “Plantation Revue” were hired to perform at one of the balls, in front of a facade of the fictional plantation named Tara, and in full slave regalia.

Several Black church choirs also performed in slave garb with Jackson. Among the singers was a 10-year-old Martin Luther King Jr.

Jackson’s lost cause

Jackson volunteered to join the Navy in 1942 to both raise money through performing while enlisted and also to recruit Black men to join the newly desegregated Navy, which had just removed some barriers for service.

In 1950, Jackson was invited to perform at the graduation ceremony at a white high school in South Georgia. Within days the invitation was withdrawn because of violent threats by the Ku Klux Klan.

Though Jackson did see some success in the 1950s appearing on “The Ed Sullivan Show” and “The Today Show,” by the 1960s he could find steady employment only at several Confederate-themed restaurants in Atlanta.

Graham Jackson performing on Ed Sullivan’s “Toast of the Town” on June 17, 1951.

Jackson produced two albums of Confederate songs, and his most popular request was the Confederate battle song “Dixie.”

In 1969, Georgia Gov. Lester Maddox appointed Jackson to the State Board of Corrections. The appointment by Maddox, the last known segregationist to serve in Georgia, was a milestone, because Jackson became the first Black person to serve on a statewide board.

 

But for Jackson, as I learned during my research, the appointment was largely dismissed by many young Black leaders who viewed him as an irrelevant “Uncle Tom.”

Challenges to academic freedom

Florida’s “anti-woke” legislation and the state’s recent rejection of the AP African American studies curriculum are well-known examples of a disturbing trend that attempts to criminalize exploring the stories of Black people such as Graham Jackson.

 

But Florida is not the only state walking down this dark path. Some 44 states have proposed legislation in the vein of the Florida law. Some states target K-12 education. Others target state universities.

Beyond the subjectivity of many of these prohibitions lies the more serious issue of academic freedom in a democratic society.

Challenges to those freedoms have been around for centuries.

Galileo was famously placed under house arrest in 1633 for the heresy of theorizing that the sun was the center of our solar system.

 

In 1907, Charles W. Elliot, President of Harvard University, wrote, “My subject is academic freedom, a difficult subject, not as yet very well understood in this country, but likely to be of increasing interest and importance throughout the coming century.”

“In all fields,” Elliot continued, “democracy needs to develop leaders of high inventive capacity, strong initiative, and genius for cooperative government, who will put forth their utmost powers, not for pecuniary reward, or for the love of domination, but for the joy of achievement and the continuous, mounting satisfaction of rendering good service.” 

 

One of the primary functions of a higher education is to empower critical thinking, challenge long-held assumptions and promote intellectual honesty and integrity.

In my view, the promise of higher education means access to stories like the one of Graham Jackson’s.

Before he died on Jan. 15, 1983, he overcame many barriers caused by systemic racism. In all, Jackson performed for six American presidents and was named the official musician for the state of Georgia by then-Gov. Jimmy Carter.

 

But in my view, Jackson remained a prop of sorts for wealthy white patrons who did not see him as fully human but enjoyed his performances of Confederate songs.

Under the proposed legislation North Dakota, I can say his name but I can’t tell his story without arousing a sense of guilt and resentment – and, ultimately, shame – for a nation still unable to see people, as Martin Luther King Jr. famously said, “for the content of their character and not the color of their skin.”

 

 

 

'Poverty, By America' shows how the rest of us benefit by keeping others poor: Jennifer Ludden

After Matthew Desmond won the Pulitzer for Evicted, about families struggling to stay housed, the Princeton sociologist realized he still didn't understand why the U.S. has more poverty than any other advanced democracy.

His new book Poverty, By America, provides a provocative and compelling answer: It's because the rest of us benefit from it, and act to keep it that way.

 

Desmond admits it feels rude to accuse ordinary people of exploiting others, especially as many don't even realize they're doing it. But he says to understand poverty requires examining not just the relentlessly demonized 1% but "ourselves ... we the secure, the insured, the housed, the college educated, the protected, the lucky."

This means Poverty, By America is not an immersive attempt to bear witness to suffering like Evicted. Instead, Desmond lays out public policies, laws, and tax breaks to show how the U.S. actually spends big on social programs — second only to France! — but gives the most to those who need it the least. Welfare dependency? Yes indeed, for the richer half.

 He packs in a sweeping array of examples and numbers to support his thesis and it can be overwhelming to absorb. But the accumulation has the effect of shifting one's brain ever so slightly to change the entire frame of reference.

 One example among many he offers: In 2020, the federal government spent more than $193 billion on subsidies for homeowners — "most families who enjoy this benefit have six-figure incomes and are white" — but just $53 billion on direct housing assistance for low-income families. That's not for lack of need. Because of chronic federal underinvestment, only 1 in 4 extremely low-income Americans who qualify for housing aid get it.

 Desmond notes that more affluent Americans also disproportionately benefit from subsidized retirement and college savings plans. Exclusionary zoning laws keep their segregated neighborhoods prosperous with well-funded schools, while concentrating poverty elsewhere.

 

Meanwhile, lower-income families locked out of those neighborhoods — disproportionately Black and Latinx — pay more at every turn. Higher interest rates on mortgages when they can get one — and higher rent when they can't. Desmond's analysis finds U.S. landlords in poor neighborhoods typically make double the profit as those in richer ones. Poor people are also hit with billions in bank overdraft fees every year, a policy that became more widespread after banking deregulation in the 1980s.

These inequities and others are self-perpetuating. The wealthy have more political power, Desmond says, and wield it by lobbying for lower taxes, lower wages, and other laws that give them even more money and power.

 

When it comes to solutions, Poverty, By America first offers its own reality check.

Two of the biggest U.S. anti-poverty programs are the Earned Income Tax Credit and housing vouchers to subsidize rent. But Desmond says writing this book has forced him to see how they "rescue millions of families from a social ill, but they do nothing to address its root causes." The tax credit allows companies to keep wages low, he says, and housing vouchers don't keep landlords from raising rent when their tenants' wages go up.

"We need to ensure that aid directed at poor people stays in their pockets," he says.

 

To that end, Desmond calls for policies that give the poor more power in the workplace and housing market, and sees hope in the growing push for unions and a resurgent tenants rights movement.

He also wants a return to bigger investments in the general welfare, which he says would amount to "more poor aid and less rich aid" and less segregation. How to pay? "We could just about fill the entire poverty gap in America if the richest among us simply paid all the taxes they owed," he says.

 

The IRS recently did get more money to go after rich tax dodgers. Maybe it's a start.

But by this point in the book, Desmond has made crystal clear just how difficult it is to change policies that keep so many cozy in their relative prosperity. In 2015, President Obama proposed ending the tax credits in 529 college savings plan; the uproar from his own party was so intense that it was quashed the next day.

 Then Desmond suggests something that felt contrived at first, but stuck with me and seems smart for this moment. Taking a cue from the anti-racist push and consumer movements, he says Americans can join to create change by being "poverty abolitionists."

 

"Poverty in America is not simply the result of actions taken by Congress and corporate boards," he says, "but the millions of decisions we make each day when going about our business."

Changing those decisions can be simple, like choosing UPS over FedEx because their drivers are unionized. Or more disruptive, like examining whether your company exploits workers or your stock market portfolio includes some that do.

Of course, for those who are able, investing and buying to counter poverty can be time consuming and even costly. But Desmond says it's precisely in understanding those costs that we acknowledge our shared complicity.

 

 

How they did it: Reuters reporters expose child labor abuses in the U.S. South by Clark Merrefield

Three Reuters journalists discuss a recent investigation, which revealed how large corporations used migrant child labor for chicken processing and auto supply manufacturing.

In February 2022, Reuters published the first story in what would become a three-part series exposing the use of migrant child labor in Alabama chicken and auto plants.

The children, some as young as 12, were often working with dangerous machinery that put their lives at risk, found reporters Joshua Schneyer, Mica Rosenberg and Kristina Cooke. Part one, which came about with a tip from a longtime source of Cooke’s, tells the story of child labor in one U.S. town by focusing on a 16-year-old migrant from Guatemala working in a chicken plant in Enterprise, Alabama.

“U.S. poultry plants, hungry for labor, rely on migrant workers and staffing agencies to fill jobs,” the reporters write. “With migration soaring from Central America, some minors are making their way into that pipeline.”

After that story published, the reporters started receiving more tips. Those sources told the reporters that the problem of child labor went beyond chicken plants in rural Alabama — that they should look into the auto industry, too.

 

Parts two and three of the series, published in July and December, expose the existence of child workers at four parts makers in Alabama, supplying Hyundai Motor Co. and sister company Kia Corp. One of those parts suppliers, SMART Alabama, was a direct subsidiary of Hyundai.

“After reviewing company documents and other source material that we found, we were able to figure out that that [supplier] was actually a directly owned subsidiary of Hyundai,” Schneyer says. “This is where the alarm bells went off for us. We were like, oh, OK, wait a minute. It’s Hyundai. Kids are working for Hyundai. They are assembling parts for some of the most popular cars and SUVs sold to American consumers. This is the third biggest auto manufacturer in the country

 

While other news outlets also reported on the disturbing practice of large firms using child workers in dangerous work conditions, the Reuters investigation offered unprecedented detail and personal stories.

Weeks after the Reuters report on the Hyundai suppliers, federal and state officials made a surprise visit to one Alabama supplier and found seven underage workers. A class action suit brought by customers soon followed. The Biden administration recently announced it will investigate child labor abuses through an interagency task force, following the reports from Reuters and others. Also in recent weeks, Hyundai told  shareholders it would divest from the parts subsidiary Reuters identified as using child labor.

For all parts of the series, the reporters contacted a wide variety of potential sources, to capture a range of voices and perspectives. These included workers and their families, plant managers, schools, nonprofit groups working on behalf of migrants, and colleagues at Reuters and other experts who understand the intricacies of auto industry supply chains.

There was a huge amount of shoe-leather reporting, which included knocking on doors at trailer parks, apartments, schools, churches, employment agencies, sheriff’s offices and town halls. In the end, the reporting team interviewed more than 100 migrant workers. They learned about how regional auto supply chains worked by building databases from thousands of pages of corporate documents, police records, immigration documents, industrial accident reports and court transcripts.

 

The reporters were especially sensitive to the reality that they were often interviewing minors and others vulnerable to deportation who were reluctant to speak on the record.

In some cases, underage children came to the U.S. for the purpose of securing jobs that would pay far more than what they could make in their home countries, in order to help financially support their families.

“They’re in a conundrum,” Rosenberg says. “They’re living in very desperate situations a lot of times. Kids at very young ages in Guatemala are picking in the coffee fields and working in the sugar plantations in very dangerous situations. And a lot of the people we talked to here had that conception of, ‘Look, we came here to make money and we’re doing everything that we can.’ I think that’s part of the reason why we really wanted to focus on the companies and put the onus on their practices.”

We spoke with Schneyer, Rosenberg and Cooke to gather specific insights for other journalists who want to explore illegal labor practices in their coverage areas.

 

Keep reading for their tips.

1. Look for unexpected data spikes — they may hint at an underlying story.

A longtime source told Cooke in mid-2021 that officials noticed a jump in the number of unaccompanied migrant children being released into the area near Enterprise.

 

The source said those children might be in danger of being trafficked or otherwise exploited. “That kind of piqued our interest,” Cooke says.

She checked data from the U.S. Office for Refugee Resettlement, which keeps tabs on the counties where migrant children are released, usually to family members. It was clear that the Enterprise area had quickly become a hotspot for the resettlement of unaccompanied migrant children.

The next step was figuring out nonprofit groups and others in this rural community that work with migrants.

“There was a small universe of people we tried to reach out to, but we’re casting, at the same time, a very wide net: groups that help immigrants, but also schools, also people who knew the lay of the land,” Rosenberg says. “We found out there were a lot of chicken processing plants and that was, through sources, that was one locus of concern.”

 

2. Create a simple database of how complex systems work.

For the auto-related stories, the first challenge was figuring out where local suppliers of parts were located and how they fed the primary manufacturing plants in the region.

They found a universe of third-party labor contractors, some with overlapping ownership of companies that would quickly form and dissolve.

“We did a lot of work looking at Alabama business records, Georgia business records,” Rosenberg says.  

As they began to understand the regional supply chains and interviewed people involved, such as the labor contractors, they built an Excel spreadsheet showing the connections from local employment agencies up to suppliers for major manufacturing plants.

“This turned into a business investigation of Hyundai and its supply chain in a very kind of organic way,” Schneyer says. “We didn’t set out to write about Hyundai. This was a mystery about, ‘Hey, what’s happening to these kids who are ending up in Alabama? What’s going on?’ And it was only after that first chicken story that we got an explosive tip that there were many kids found working in rural auto parts plants.”

 

3. Remember that building trust takes commitment and protecting sources is essential to responsible reporting.

Migrants and migrant children working in the U.S. have a lot on the line. As the Reuters reporters recount in their series, migrants often owe tens of thousands of dollars to smugglers at exorbitant interest rates. They are trying to maintain employment in the U.S., for wages that would take them weeks or months to earn in their home countries.

In the lede to part one of the series, filed from Enterprise, the reporters write:

“At age 16, when most kids in the United States are halfway through high school, Amelia Domingo found herself working on chicken processing machines in this farm town and deep in debt to loan sharks in her native Guatemala. After borrowing $10,000 for smugglers to get her through Mexico, Amelia crossed into Arizona last February and turned herself over to immigration officials.”

Amelia was released to her sister in Alabama and began working in a chicken plant. The reporters agreed to not use her full name, identify her hometown in Guatemala, or use pictures showing her face or her sister’s face. The prior work of building trust with local groups who work with migrants paid off in Amelia agreeing to share her story.

 

Being there, on the ground where people live and work, is critical to building trust.

“You have to go show your face,” Cooke says. “You know, let them see who you are, that you’re not some faceless government bureaucrat, that you’re a real person. You’re a reporter, and you’ve made this extra trip to come and see them and hear their story, face-to-face.”

 

4. Use social media to coordinate and prioritize reporting efforts.

The reporters used social media to find sources key to their child labor investigation. They found job recruiters posting and tagging workers on Facebook, which helped the reporters gain a sense of who the recruiters were, what sorts of jobs they were advertising, and which workers they were trying to reach. 

The team also used Indeed and LinkedIn to find former and current chicken plant workers, sending personal messages to hundreds of potential sources.

“In one case [Josh] was in Montgomery and I found this recruiter through Indeed,” Cooke says. “We found his address and Josh showed up at his doorstep and was able to interview him. He talked because Josh was there, and he hadn’t been picking up the phone at all.”

5. Meet sources on their schedule, even if it means late nights or early mornings, especially for shift workers.

When interviewing people who work shift schedules, as many food processing and auto plant workers do, be prepared to do the same.

In many cases, meeting workers during the day or early evening proved impossible for the Reuters team. 

 

“They’re working overnight,” Schneyer says. “This was a 24-hour-a-day type of reporting trip where you show up at dawn outside of these plants, or you’re asked to meet people late at night at their trailers or apartments they share with large families.”

Read the stories:

• Teen risked all to flee Guatemala. Her payoff: grueling job in U.S. chicken plant
• Hyundai subsidiary has used child labor at Alabama factory
• Child workers found throughout Hyundai-Kia supply chain in Alabama

 

Opinion /Why white Christian nationalists are in such a panic by Jennifer Rubin

You might find it strange that a large segment of the Republican base thinks Whites are the true victims of racism and that Christians are under attack. After all, America’s biggest racial group is still Whites; the most common religious affiliation remains Christianity. Whites and Christians dominate elected office at all levels, the judiciary and corporate America. What’s the problem?

Well, there is a straightforward reason for the freak-out, and an explanation for why former president Donald Trump developed such a close bond with white Christian nationalists.

 This group feels besieged because they are losing ground. “The newly-released 2022 supplement to the PRRI Census of American Religion — based on over 40,000 interviews conducted last year — confirms that the decline of white Christians (Americans who identify as white, non-Hispanic and Christian of any kind) as a proportion of the population continues unabated,” writes Robert P. Jones, president of the Public Religion Research Institute. “As recently as 2008, when our first Black president was elected, the U.S. was a majority (54%) white Christian country.” By 2014 the number had dropped to 47 percent, and in 2022 it stood at 42 percent.

 The group that has declined the most is at the core of the MAGA movement, the group most devoted to Christian nationalism. “White evangelical Protestants have experienced the steepest decline. As recently as 2006, white evangelical Protestants comprised nearly one-quarter of Americans (23%). By the time of Trump’s rise to power, their numbers had dipped to 16.8%,” Jones explains. “Today, white evangelical Protestants comprise only 13.6% of Americans.”

 

And that decline may yet accelerate, because they skew older than the population as a whole. Put differently, there are far more baby boomers in this group than Generation Z members. White evangelicals are “losing” people with each successive generation. (“White Christian subgroups have each lost approximately half their market share just across the generations who are alive today,” according to Jones.) If your business had lost half its market share, you would be panicking, too.

With those kind of numbers, the responsible thing to do would be to think about “fixing” what’s wrong by adapting to a changing market. Instead, many in this cohort have doubled down, becoming the foot soldiers in the red-hatted MAGA movement. The decline isn’t going to be reversed by angry, gray-haired folks demanding abortion bans and “don’t say gay” bills.

 Instead, White evangelicals might look at former “customers” who are abandoning organized religion in droves. “Nearly four in ten Americans ages 18-29 (38%) are religiously unaffiliated, an increase from 34% in 2021," the PRRI census said. "As the cohorts age, the growth in religiously unaffiliated Americans has started to show up more in the 30-49 age category, which is up to 32% unaffiliated from 26% in 2016.”

 

In some sense, White evangelicals’ desperate efforts to cling to political power and demand adherence to a set of outdated cultural norms only make the problem worse. Not many 20-year-olds (part of the most diverse, inclusive generation in history, one steeped in climate science and tech) would leap at the prospect of living in a state where abortion is unattainable, gays are ostracized and secularism is bashed.

If Christian evangelicals really want to slow their decline, they might consider getting out of the unpopular political ideas market (e.g., abortion bans) and stressing values that could win back alienated young people (e.g., reverence for conserving the planet, ministering to the poor and the weak). That might put more seats in the pews, although it likely wouldn’t do much for the aging, mostly White, reactionary GOP

 

 

The reality is that the convergence of the declining population of White Christians with the rise of Trump has been bad for both evangelicalism and American politics. Trump came along, telling the shrinking band of white Christian nationalists that they are victims. He reveled in nostalgia for a time when they dominated (demographically and politically) and blamed immigrants, elites and “wokeness” for their ills. They were the group most susceptible to a message that reinforces their feeling they have “lost” something or something has been “taken away.”

That “something” they felt had been stolen may have been as concrete as the 2020 election, or as all-encompassing as white Christian supremacy. However they define that sense of loss, it fuels their anger and binds them to Trump.

 But the demographic clock cannot be turned back. No one can claim to be patriotic defenders of democracy when they decide their declining numbers justify anti-democratic voter suppression or even violence. In short, MAGA White Christians have painted themselves into a corner where the majority rejects their outlook and anti-majoritarian tactics cannot keep them in power forever.

 

A dramatic transformation would need to happen for this movement to return to pluralistic politics. The MAGA crowd would have to recognize America’s complete history, reflecting our full experience, not just the story of people like them. And most important, they would need to rediscover the principles on which the United States was founded. (“All men are created equal...”) They would have to abandon the myth that America is the domain of one race or religion.

Unimaginable? Maybe so, but what other choice is there? To thrive in the future, they eventually must appeal to America as it is, not as they imagine it was in the past.

 

Kyrsten Sinema's name is all over the Silicon Valley Bank collapse By Ja'han Jones

The Arizona senator helped pass bank deregulation seen as a culprit behind SVB's downfall, and she has accepted thousands of dollars from the bank's PAC.

 

Sen. Kyrsten Sinema of Arizona, who recently switched her party affiliation from Democrat to independent after facing intraparty criticism for her conservative stances, is yet again the subject of criticism for her political work in service of uber-wealthy finance executives. 

Sinema’s relationship with Silicon Valley Bank, in particular, has come into focus after its collapse. (Read my take on SVB’s downfall here.)

The Daily Beast’s Michael Daly framed Sinema’s dilemma succinctly, noting Monday: “Whether she’s calling herself a Democrat or an independent, her voting record is the same. And it marks her a shill for the banking industry.”

 

Daly explained: 

Before she went from the U.S. House of Representatives to the U.S. Senate, Sinema was party to an early effort by the banks to undo the provisions of the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act that was passed in the wake of the 2007-2008 financial crisis. As a member of the House Financial Services Committee, she was a supporter of H.R.992 — The Swaps Regulatory Improvement Act of 2013 — which sought to exempt certain financial instruments from some Dodd-Frank restrictions. Bank lobbyists drafted key amendments, which appeared word for word in the bill she supported in the committee and when it reached the House floor. The measure passed, but this was during the Obama administration and it had no chance of becoming law.

 

Some Democrats are blaming SVB’s collapse on Sinema and company’s Trump-era rollback of many of the Dodd-Frank regulations. 

Politico reported that Sinema is among the members of Congress who received a combined $50,000 from SVB’s political action committee. To that point, check out this Forbes piece on the thousands of dollars she has raked in from finance industry billionaires in recent years. 

Not a great look for Kyrsten “Let them eat cake” Sinema, who has been derided for her public displays of disregard for the nonwealthy and disempowered. Surely you remember the time she helped tank a raise in the federal minimum wage, delivering her vote with a thumbs-down and a curtsy. 

Rep. Ruben Gallego, an Arizona Democrat who is seeking Sinema’s Senate seat in 2024, is hoping to depict her deference to financial power brokers as part of a disturbing trend.

 It’s not like we received different information,” Gallego told reporters Tuesday, referring to the House’s 2018 vote on bank deregulation. “We got the same pitches as all the members of Congress. But when push came to shove, and the vote came to the floor, I voted to protect Arizona and she voted to protect Wall Street.” 

And then Gallego gave Sinema the Taylor Swift treatment on Twitter:

 

 

How to use free satellite data to monitor natural disasters and environmental changes by Qiusheng Wu

If you want to track changes in the Amazon rainforest, see the full expanse of a hurricane or figure out where people need help after a disaster, it’s much easier to do with the view from a satellite orbiting a few hundred miles above Earth.

Traditionally, access to satellite data has been limited to researchers and professionals with expertise in remote sensing and image processing. However, the increasing availability of open-access data from government satellites such as Landsat and Sentinel, and free cloud-computing resources such as Amazon Web Services, Google Earth Engine and Microsoft Planetary Computer, have made it possible for just about anyone to gain insight into environmental changes underway. 

 

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If you want to track changes in the Amazon rainforest, see the full expanse of a hurricane or figure out where people need help after a disaster, it’s much easier to do with the view from a satellite orbiting a few hundred miles above Earth.

Traditionally, access to satellite data has been limited to researchers and professionals with expertise in remote sensing and image processing. However, the increasing availability of open-access data from government satellites such as Landsat and Sentinel, and free cloud-computing resources such as Amazon Web Services, Google Earth Engine and Microsoft Planetary Computer, have made it possible for just about anyone to gain insight into environmental changes underway.

I work with geospatial big data as a professor. Here’s a quick tour of where you can find satellite images, plus some free, fairly simple tools that anyone can use to create time-lapse animations from satellite images.

For example, state and urban planners – or people considering a new home – can watch over time how rivers have moved, construction crept into wildland areas or a coastline eroded.

 Environmental groups can monitor deforestation, the effects of climate change on ecosystems, and how other human activities like irrigation are shrinking bodies of water like Central Asia’s Aral Sea. And disaster managers, aid groups, scientists and anyone interested can monitor natural disasters such as volcanic eruptions and wildfires.

 

Putting Landsat and Sentinel to work

There are over 8,000 satellites orbiting the Earth today. You can see a live map of them at keeptrack.space.

Some transmit and receive radio signals for communications. Others provide global positioning system (GPS) services for navigation. The ones we’re interested in are Earth observation satellites, which collect images of the Earth, day and night.

Landsat: The longest-running Earth satellite mission, Landsat, has been collecting imagery of the Earth since 1972. The latest satellite in the series, Landsat 9, was launched by NASA in September 2021.

 In general, Landsat satellite data has a spatial resolution of about 100 feet (about 30 meters). If you think of pixels on a zoomed-in photo, each pixel would be 100 feet by 100 feet. Landsat has a temporal resolution of 16 days, meaning the same location on Earth is imaged approximately once every 16 days. With both Landsat 8 and 9 in orbit, we can get a global coverage of the Earth once every eight days. That makes comparisons easier.

 Landsat data has been freely available to the public since 2008. During the Pakistan flood of 2022, scientists used Landsat data and free cloud-computing resources to determine the flood extent and estimated the total flooded area.

 Sentinel: Sentinel Earth observation satellites were launched by the European Space Agency (ESA) as part of the Copernicus program. Sentinel-2 satellites have been collecting optical imagery of the Earth since 2015 at a spatial resolution of 10 meters (33 feet) and a temporal resolution of 10 days.

GOES: The images you’ll see most often in U.S. weather forecasting come from NOAA’s Geostationary Operational Environmental Satellites, or GOES. They orbit above the equator at the same speed Earth rotates, so they can provide continuous monitoring of Earth’s atmosphere and surface, giving detailed information on weather, climate, and other environmental conditions. GOES-16 and GOES-17 can image the Earth at a spatial resolution of about 1.2 miles (2 kilometers) and a temporal resolution of five to 10 minutes.

 

How to create your own visualizations

In the past, creating a Landsat time-lapse animation of a specific area required extensive data processing skills and several hours or even days of work. However, nowadays, free and user-friendly programs are available to enable anyone to create animations with just a few clicks in an internet browser.

 For instance, I created an interactive web app for my students that anyone can use to generate time-lapse animations quickly. The user zooms in on the map to find an area of interest, then draws a rectangle around the area to save it as a GeoJSON file – a file that contains the geographic coordinates of the chosen region. Then the user uploads the GeoJSON file to the web app, chooses the satellite to view from and the dates and submits it. It takes the app about 60 seconds to then produce a time-lapse animation.

 There are several other useful tools for easily creating satellite animations. Others to try include Snazzy-EE-TS-GIF, an Earth Engine App for creating Landsat animations, and Planetary Computer Explorer, an explorer for searching and visualizing satellite imagery interactively.

 

 

Heart and Lung benefit, abused by cops in Philadelphia, could expand under FOP-backed legislation in Harrisburg

Competing legislation is taking shape around a statewide program for injured cops that allows them to collect their full salaries, largely tax free. It's been a problem in Philadelphia.

 

A police disability program that has been abused for years by some Philadelphia officers could be significantly expanded to include potentially thousands of additional law enforcement officers statewide, under new police union-backed legislation introduced in Harrisburg.

Mike Regan, a Republican state senator from south-central Pennsylvania, wrote in a recent memo seeking cosponsors for his bill that he would make expanding the program “one of my top legislative priorities” this session.

 

The Enforcement Officer Disability Benefits Law, commonly known as the Heart and Lung Act, is a 1935 benefit meant mostly for police officers and firefighters in Pennsylvania. It allows first responders to collect their full salaries, largely tax-free, when they are out of work due to an on-the-job injury.

The program currently covers the majority of law enforcement officers in the state.

Regan’s bill, which was introduced this month, would add state park rangers, certain employees in the state’s Department of Corrections and Inspector General’s Office, and some port authority and housing police. It also includes opt-in provisions for police officers at universities and corrections officers at county prisons and jails.

“It’s to make sure the guys out there are protected at the end of the day, if they’re hurt in some way in the line of duty,” said Regan, a former U.S. marshal.

 

In Philadelphia, the program became available in 2004. It was designed to be an improvement over the city’s existing disability program that the Philadelphia Fraternal Order of Police argued had rushed officers back to work before they had healed.

But, over the years, Philadelphia officers began staying out of work for much longer periods, causing the weekly list of injured officers to grow by hundreds. Doctors selected by the FOP evaluated and treated the officers.

 According to an Inquirer investigation published last year, by late 2021, a staggering 14% of all patrol officers were listed as injured on duty — a far higher percentage than other big-city police departments.

 

The Inquirer found examples of officers who claimed to be too injured to work, or even testify in court on open cases, yet were working second jobs or playing sports while collecting their full police salary, without having to pay state or federal taxes. (Other injured employees in Pennsylvania are typically covered by workers’ compensation, which pays only two-thirds of their regular salary.)

Police Commissioner Danielle Outlaw subsequently called the abuse of the benefit “absolutely repulsive” and urged officers who were milking the program to return to work.

 In the months after The Inquirer’s February 2022 report, the number of officers out with injury claims dropped by 31%. A Northeast Philadelphia medical practice that had evaluated most of the injured officers closed last summer, and its doctors left the Heart and Lung program. The number of injured officers cleared to testify in court has more than tripled.

  The Philadelphia police union negotiated the power to select its own disability doctors

 

An audit released in October by then-City Controller Rebecca Rhynhart found that the city had spent $205 million since the 2017 fiscal year on salaries for injured officers, with questionable oversight.

Regan’s bill to expand the Heart and Lung program does not include any provisions to crack down on abuse or fraud in Philadelphia or elsewhere. The senator said he was unaware of the situation in Philadelphia but would be willing to examine it.

 “It’s unfortunate if that’s the case. We can look at what is alleged to have occurred,” said Regan, who previously served as the state’s deputy inspector general. “With any program, you’re going to find ways to beat it. It’s very difficult to legislate around corruption and dishonesty.”

  Number of Philly cops out injured drops 31% after Inquirer investigation uncovers abuse

 Meanwhile, in the House, State Rep. Chris Rabb, a Democrat from Philadelphia, said he plans to reintroduce a bill from last year to require regular audits of the Heart and Lung program and add reporting requirements to increase transparency. It would also require that doctors be chosen independently.

 “The documented abuses of this publicly funded program are a disgrace condemned by law enforcement leadership and police officers who follow the rules and are in genuine need of assistance,” Rabb said. “If my conservative colleagues claim the banners of ridding government of waste, fraud and abuse, fiscal responsibility and law enforcement, my bill should be eagerly embraced.”

 

The Pennsylvania Fraternal Order of Police is “strongly supportive” of Regan’s bill, said Clint Cullison, the FOP’s lobbyist. He said the organization has been working for years to broaden the Heart and Lung program.

“It’s, in our mind, no different than making sure every law enforcement officer in the commonwealth has a bulletproof vest to go to work,” Cullison said.

Rabb’s bill did not get traction last year in the then-GOP controlled House. Democrats now have a slim majority there.

 William Bender

I’m an investigative reporter. Everything from South Philly mobsters to doomsday hucksters. Currently: government accountability, corruption, etc.

 

 

Finance & Tax How Biden saved Silicon Valley startups: Inside the 72 hours that transformed U.S. banking

A historic rescue of a distressed industry came together rapidly, reshaping the government’s relationship with banks in far-reaching ways.  By Adam Cancryn, Ben White and Victoria Guida

 

On Sunday afternoon, an exhausted group of Biden administration officials gathered to put the finishing touches on a hastily composed plan to stave off a nationwide banking crisis.

Just a little more than 72 hours had passed since Silicon Valley Bank suddenly collapsed, rocking the tech industry and igniting fears that the U.S. was on the verge of a financial meltdown.

 

The bank’s demise had come as just as much of a surprise to the White House as it did to the public, triggering a weekend sprint to contain the fallout that spanned several agencies and all hours of the day and night.

The result, announced just minutes before financial markets in Asia reopened, was sweeping: The federal government would provide SVB’s depositors with access to all their funds, effectively averting painful financial uncertainty — and the threat of heavy losses — for thousands of venture-backed startups. Signature Bank, which had followed SVB into insolvency, would receive the same guarantee.

 

Even more critically, the Federal Reserve would provide a massive lifeline to the nation’s banks: It would singlehandedly give all other similar lenders access to funds designed to keep them afloat and quell the panic brewing across the country.

The swift and forceful action to rescue depositors at the two failed midsize lenders rewrote crucial banking guardrails in ways that could reverberate for years. It put the Biden administration’s stamp — for good or ill — on the sector’s future financial stability, while sending a message about the government’s willingness to rescue private businesses in new ways. It also was done without passing a single new act of Congress or holding hearings among elected officials in recent days.

And it almost didn’t happen.

President Joe Biden began the weekend highly skeptical of anything that could be labeled a taxpayer-funded bailout, according to four people close to the situation, who were not authorized to speak for attribution. 

 That would be a serious political risk for the president given that many of SVB’s customers were start-up entrepreneurs and investors with so much money deposited in the bank that they far exceeded the federal government’s $250,000 insurance limit. Signature catered in part to once-high-flying crypto investors.

 

Biden, who as vice president had watched then-President Barack Obama get hammered over his role in bailing out giant banks during the financial crisis, had little desire for a repeat — especially since he had long embraced a “bottom-up, middle out” economic philosophy focused on average working families, the people close to the situation said.

Yet as officials worked through the weekend — mostly in open-ended virtual meetings tying several agencies together — to determine the blast radius of SVB’s failure, they concluded that failing to protect the bank’s depositors could leave small businesses across the country unable to access money needed to pay workers and keep their operations going.

 

“There’s not a way to help the people he wants without also helping the uninsured depositors who made a bad choice by putting too much money into a single bank,” said one adviser to the White House. “I have no doubt in my mind that he feels ambivalent about it. But he’s not willing to take a risk with this economy.”

Though there was little concern that the failures of SVB and Signature threatened to destabilize the entire banking sector, officials mapping the network of companies tied to those institutions worried that refusing to step in could disrupt large swaths of the economy.

Though there was little concern that the failures of SVB and Signature threatened to destabilize the entire banking sector, officials mapping the network of companies tied to those institutions worried that refusing to step in could disrupt large swaths of the economy.

Panicked depositors would likely pull their money en masse from other regional banks, creating a cascading crisis on top of the alarm already spreading throughout Silicon Valley.

 

Biden aides and Democratic lawmakers had also grown concerned about the viability of certain payroll-processing companies tied to SVB, two people familiar with the discussions said. If they were unable to function, the number of workers at risk of not receiving their paychecks would increase exponentially. The situation risked spiraling quickly from there, denting consumer confidence in the economy’s stability.

“There’s just a lot of sensitivity, and he doesn’t want to disrupt an economy that he thinks is doing really well for workers,” the adviser said. “The direction was: Stabilize everything.”

 Biden eventually came around to the view that an emergency rescue was the only viable option after multiple briefings Friday through Sunday from chief of staff Jeff Zients and new National Economic Council Director Lael Brainard, who just joined the White House after serving as vice chair of the Fed and chair of the central bank’s Financial Stability Committee. He also spoke with California Gov. Gavin Newsom on Saturday about SVB’s failure and its impact on the state.

 

Biden received a final briefing from Treasury Secretary Janet Yellen along with Zients and Brainard on Sunday afternoon shortly before the announcement.

Throughout the weekend, Biden’s inner circle emphasized the potential impact on workers’ paychecks, which they believed would resonate both with the president and the public, said one of the people familiar with the deliberations. And they urged Biden to speak to the public before U.S. markets opened to ward off runs on other regional banks. 

Biden agreed, but not before stressing that his speech needed to play up his concern for small businesses and make it clear Americans should maintain trust in the banking system.

At 1 p.m. Friday, Yellen convened a team to come up with a battle plan: Fed Chair Jerome Powell, FDIC Chair Martin Gruenberg, Acting Comptroller of the Currency Michael Hsu, and San Francisco Fed President Mary Daly, whose regional branch oversaw the bank.

 

Their teams eventually settled on three potential options, according to a person familiar with the talks: looking for a buyer, backstopping uninsured depositors, and launching a new emergency lending program at the Fed. By Saturday, they’d agreed to pull the trigger and work on all three.

But it was not easy getting to the finish line, especially when it came to the FDIC and protecting all depositors at the two failed banks.

The FDIC’s decision was particularly fraught and down to the final hours, two people said. Agency officials worried that the proposal could create thorny issues for the agency, which is statutorily bound to protect the deposit insurance fund — a longstanding pot of money financed by bank fees.

It also raised questions about whether the FDIC might be expected to make all depositors whole anytime a bank fails, something it is not designed to do, making the decision especially painful for Gruenberg and his fellow board members.

Though the Fed and the FDIC were each designed to stop financial panics, the moves by both agencies also risked ratifying the notion that the government would always be there to dull the consequences of the collapse of a larger bank. It was the “moral hazard” question that dogged rescue efforts in 2008 and 2009.

But the administration needed a straightforward solution, and also faced increasing pressure from Capitol Hill, where California lawmakers inundated by worried constituents pushed officials to take whatever steps were necessary to maximize SVB’s chances of being bought by another bank.

Members of the California delegation spent the weekend scrambling for any information that might shed light on whether SVB’s extensive customer network of high-tech startups and powerful venture capitalists would be able to access their funds come Monday. A briefing with FDIC officials on Friday offered little substance — according to a lawmaker who attended — as the agency was still gathering information about the bank’s uninsured deposits.

As information trickled out on Sunday about a possible plan to backstop depositors, FDIC and Treasury officials wouldn’t even confirm or deny a widely reported auction process for SVB’s assets, Rep. Anna Eshoo, a California Democrat whose district includes a large section of Silicon Valley, said in an interview.

 

While lawmakers remained largely in the dark until shortly before the announcement, officials from the Fed, FDIC, White House and Treasury spent all weekend in rolling virtual meetings that continued through Friday and Saturday nights into Sunday.

The administration had yet to finalize its plan by the time Yellen went on “Face the Nation” Sunday morning, forcing her to remain noncommittal about a path forward. Yellen merely said the government would not be bailing out a bank’s investors.

 Yet over the next several hours, officials raced to nail down the final details of their approach. Emails and drafts were exchanged among the top players right up until they pushed the button on the announcement and held press briefings. One person familiar with the meetings described them as short of frantic but “very driven and determined.” 

 

At 6:15 p.m. ET on Sunday, the Fed, Treasury and the FDIC jointly announced that the government would immediately provide access to all depositor funds held at the two failed banks, using the government’s power to immediately designate the institutions as systemically significant.

The action did forestall a market meltdown. Stocks ended Monday only slightly lower. But it did not keep investors from hammering other regional banks. Shares in First Republic, which saw lines of panicked depositors over the weekend, plunged 62 percent despite the government actions, suggesting investors still have doubts about the banking system, especially the tiers just below the most heavily regulated giant banks.

Bob Kocher, a partner at venture capital firm Venrock and former Obama-era White House official, said some panicked companies are going as far as transferring all their money into board members’ individual bank accounts while they set up their own new accounts with major financial institutions.

“There’s no way now as a board member you can sign off on putting all your money into a regional bank,” he said, adding that he expects to see significant outflows at similarly sized institutions like First Republic Bank and PacWest Bancorp. “Everybody’s racing to put their money into JPMorgan and Goldman Sachs.”

Beyond making payroll, Kocher said, SVB’s failure raised questions about how companies would pay for basic services like cloud storage and website maintenance, as well a constellation of smaller suppliers, if their deposits got tied up in a troubled bank.

“I think it’s going to take at least a month or two for things to calm down and settle out,” he said.

There’s similar trepidation among Biden officials, who spent Monday holding their breath, closely monitoring banks’ falling stock prices for signs of broader contagion.

In the meantime, aides have tried to head off blowback from the party’s progressive wing, emphasizing that taxpayer money won’t directly go toward propping up SVB’s depositors — and that the toll on workers could have been far worse had they simply let the bank fail.

Biden stressed that point on Monday in remarks aimed at calming the markets, expressing confidence that “the banking system is safe” while also repeatedly emphasizing that taxpayers wouldn’t be on the hook for any losses.

Rep. Maxine Waters (D-Calif.), the top Democrat on the House Financial Services Committee, was similarly resolute. “The government is not bailing out anything,” she said in an interview. “If the banks have made mistakes, if the investments have been bad, if they weren’t watching the balance sheet, they’re going to be held accountable.”