Charles Keating, who died this week, is best-known as the poster boy for the savings and loan crisis of the 1980s. More than 1,000 banks failed, and taxpayers spent a quarter-billion dollars bailing them out.
Here are a few of his more colorful legacies:
1. Keating gave birth to John McCain as-we-know-him. By making McCain a figure of shame.
Keating's status as the king of the S&L swindlers rests on his sponsorship of the "Keating Five": a group of five U.S. Senators whose campaigns he supported financially-- and who in turn attempted to dissuade regulators from investigating Keating's shenanigans. The sole Republican in the group was John McCain, then a relatively new U.S. Senator. McCain later called the episode "my asterisk" -- and became better-known as a bi-partisan crusader for campaign-finance reform.
2. Also on Keating's payroll in the 1980s: Alan Greenspan.
As a private economist, Alan Greenspan took on a consulting job for Keating in 1984. His job: Drafting a report to regulators, arguing that Keating's bank, Lincoln Savings and Loan, be exempted from certain rules because it was well-run.
3. He was good for a shameless quote.
From the New York Times obituary: "Mr. Keating, a 6-foot-5-inch beanpole who walked with a swagger, never minced words about buying political influence. Asked once whether his payments to politicians had worked, he told reporters, 'I want to say in the most forceful way I can: I certainly hope so.'”
4. He did like to peddle shame.
In the late 1950s and early 1960s, Keating was a huge anti-pornography crusader. He sponsored a hilarious infomercial The Atlantic called “The Reefer Madness of porn.”
5. We can thank him, in part, for financial tools that later blew up in 2008.
Roy Smith teaches finance at NYU. And he spent much of the 1980s at Goldman Sachs. "You have to remember that the S&L crisis actually spawned two of the financial industry's most lucrative product streams," he says. "One was the securitization of mortgages into mortgage-backed securities. Hello! Those things that blew up in 2008..."
They were created for sale to savings and loans. "The other was the derivatives business."
Smith says it took more deregulation, time, and financial creativity for both products to cause problems.
A victory for privacy advocates in New York spells trouble for a national effort to track student data--everything from grades and test scores to disabilities and suspensions. The New York State Education Department has confirmed it will no longer store any student information with the non-profit inBloom. That makes New York the last big customer to drop out of an initiative backed by the Gates Foundation and the Carnegie Corporation. Once boasting nine states as potential customers, the nonprofit group says it’s still talking with individual school districts around the country.
The ousted Ukrainian president says Moscow's annexation of the Black Sea peninsula is "a major tragedy" and he hopes to persuade Russian President Vladimir Putin to return it.
Mary Barra, the newly appointed CEO of General Motors spent another day on Capitol Hill, testifying before lawmakers about why it took GM a decade to recall millions of cars with defective ignition switches.
Barra apologized again today, but how well GM will weather public outcry is still a question. The company’s success at selling cars after this crisis ends “depends on whether this is attributed to the old GM or the new GM” says David Vinjamuri, author of “Accidental Branding”.
Vinjamuri is impressed at how well Barra has handled the recall so far. He says Barra and GM showed they were serious when they brought on Kenneth Feinberg, the attorney known for his work with compensation funds. Feinberg worked with victims of 9/11 and the BP Oil Spill, for example.
Bringing on Feinberg also shows General Motors is looking for a quick -- rather than inexpensive -- way of putting the recall behind them, and it seems likely they’ll pay the families of crash victims related to the recall.
It’s smart for GM to agree to a large payout early on, says Vinjamuri, because in the long run, they’ll make that money back only if American car-buyers learn to trust the company again.
Joan Stallard (L) of Washington DC talks about the issue of the Supreme Court striking down the limit one can donate to political as Scott Dorn (R) of Washington DC looks on in front of the U.S. Supreme Court April 2, 2014, in Washington, DC. The Supreme Court struck down the limits on how much one person can donate overall to political campaigns. The limit to individual candiates is still $2,600 per candidate.
The Supreme Court says you can put a whole lot of money into politics. Its 5-4 decision Wednesday in McCutcheon v. Federal Election Commission strikes down overall limits on what people can give to candidates and political parties. There are still limits as to what someone can give to a single candidate. But now, theoretically, individuals can max out their giving to every candidate nationwide.
Many expect the ruling to mean an overall increase in how much money goes into politics. And it may also mean some money that goes now to independent political vehicles such as super PACs and 501(c)(4)s may go instead to candidates and parties.Marketplace for Wednesday April 2, 2014
Mark Garrison: Let’s meet two folks on two sides of this issue, who both filed briefs with the Court. Ilya Shapiro of the libertarian Cato Institute is happier of the pair.
Ilya Shapiro: The Supreme Court should free up the arena for political speech.
Trevor Potter is with Campaign Legal Center. You may have seen him on TV in his role as lawyer for Steven Colbert’s many satirical political ventures. The Court did not agree with him.
Trevor Potter: If they read our brief, they apparently didn’t care about the consequences.
This is Marketplace, not Legalplace, so we won’t dwell on their arguments. In short, Potter worries about money causing corruption. Shapiro says restricting campaign spending restrains free speech. But there’s one place they agree. First, Potter.
Potter: I think there will be a net increase in the amount of money going into politics.
Shapiro: I think there will be increased contributions in general to the candidates and campaigns.
And it may mean less money given to outside groups. In recent years, dollars have flowed from billionaires to super PACs and 501(c)(4)s. Outside money has been the trendy thing in campaigns. But this ruling may bring a vintage political force back into style. Scott Bland is with National Journal Hotline, a news source for political insiders.
Scott Bland: it’s possible that as a result of this, the parties will be able to exercise a little bit more influence than they have over the last few years.
In a political environment full of new ways to spend money, today’s ruling may help empower a very old one. I'm Mark Garrison, for Marketplace.by Mark GarrisonStory Type: News StorySyndication: SlackerSoundcloudStitcherSwellPMPApp Respond: No
Here's the latest bit of evidence that exercise keeps the brain fit. Much of the research has been in older people, but this study found that being fit in your 20s makes you sharper in middle age.
Thirteen years in the making, the Prison Rape Elimination Act is starting to have an impact. Texas Gov. Rick Perry says it's "ill-conceived," but many other states are adopting the law's standards.
The incumbent mayor of the nation's capital will not be re-elected. A federal investigation into Vincent Gray's 2010 campaign, along with allegations lodged just weeks before the election, helped propel his closest opponent to a surprise double-digit victory in the Democratic primary.
Attitudes toward drug use continue to evolve. A new poll from the Pew Research Center shows that more people favor alternatives to prison for non-violent drug offenders.
Adam Lioz, of the public policy organization Demos, says that Wednesday's Supreme Court ruling will further empower a small, elite group of political donors. He offers a critical perspective on the ruling.
A divided Supreme Court eliminated the overall limits on a donor's contributions to federal candidates and campaigns, while leaving in place the limit on what a donor may give to one candidate.
Texans overwhelmingly choose cars and trucks for their commutes, but in cities like Houston, Dallas and San Antonio, policy leaders have incentives to support cycling. They say it's good for business.
The IRS has not audited a church in five years. Some televangelists are taking advantage of that inaction to shield millions of dollars from public scrutiny.
From the Marketplace Datebook, here's a look at what's coming up Thursday:
- 46 years ago Martin Luther King Jr. gave his famous "Mountaintop" speech in Memphis, Tenn. He was assassinated the next day.
- In Washington, the Commerce Department reports on international trade for February.
- The Senate Foreign Relations Committee receives a closed briefing on Russia.
- Actor Marlon Brando was born on April 3, 1924. He would have been 90.
- And some folks observe National Find a Rainbow Day. Don't want to go outside? Just dig in your box of crayons.
Tuna, swordfish and other migratory fishes are being overfished by vessels on the high seas. A new proposal says we should close these international waters for a few years to let the fishes rebound.
The Russian president and Lyudmila, his wife of 30 years, announced in June they intended to end their marriage.
What's the best sound to pair with wafting coffee smells? What's the right song for the tomato sauce on your pizza? What's most ideal aural ambiance for your milkshake?
Lucy Hooker is a reporter with the BBC. She has been looking into a field called "neurogastronomy," or, in plain terms, "what your brain does when you eat something."
She points to one study in which scientists gave people a dessert and played different sounds while they were eating. Depending on which sounds were played, a dessert could taste more bitter or more sweet.
Starbucks liked the idea so much, they asked the scientists behind the research to compile a playlist of songs people should listen when drinking coffee at home. Hooker said Starbucks is not the only major company interested in this research.
“Lots of the really big food companies -- Unilever, Nestlé -- have massive research and development units, and they are putting a lot of effort and a lot of focus into seeing how they can use our different senses," said Hooker. "How they can combine the sound a food makes in our mouth, the sound of the packaging, the sight of it, the smell of it."
In nine months the human brain grows from a single cell to more than 80 billion. Mapping how genes are activated gives scientists clues to the origins of mental disorders like autism.
The NSA managed to penetrate the networks of the giant Chinese telecommunications firm Huawei, documents show. Journalist David Sanger says cyber-espionage is an "entirely new field of conflict."
A risque campaign that aims to boost self-exams for breast cancer has reignited a debate about whether they prevent cancer deaths. One doctor says it's time to change how women look for lumps.