The Economy Today: Students in the Crosshairs

News from Wyoming, California, Texas, and elsewhere

The much-hyped and much-leaked bank stress-test results will be released at 5 p.m. today, but already The Washington Post has another piece based on leaks: Most banks are strong, but some, including Citigroup, Bank of America, and Wells Fargo, will have to raise more capital. USA Today has a good accountability piece about twenty-six police agencies in sixteen states that are “barred from received” stimulus money, because they’ve previously misused federal funds. Among the violators are Amtrak Police in Newark and Camden, New Jersey, and the Waterbury, Connecticut Police Department. Meanwhile, local papers are report that the athletic program at the University of Wyoming may be cut by as much as 15 percent. In Rochester, one company is expanding its debt collection on defaulted student loans. And Texas is considering a change to its college aid program to reward students with better grades by giving them higher priority in grants and loans.

Foreclosures are just one of the reasons that Rochester, New York, has turned into a ghost town; the biggest issue is the city’s declining population. As a result, Rochester has a neighborhood that’s eleventh emptiest in all of New York State. Buffalo has also seen the same type of desertion. One aspect of Rochester’s economy is picking up, however. A local debt collection agency has won a contract with the U.S. Department of Education to collect on student loans in default. The company will hire one hundred and fifty people to handle the increased load.

The Summerville, South Carolina town council is considering a bill that will force bars and restaurants to close at 2 a.m., reports the Charleston Post and Courier. The town has never had a formal last call, but increased public safety concerns have forced the council’s hand. In other vice news, the AP reports that the state legislature will vote to increase the South Carolina cigarette tax from seven to fifty-seven cents in order to expand health-care coverage for the state’s poor. And the legislature is also considering loosening South Carolina’s gambling prohibitions. A bill proposes allowing “kitchen-table poker, gambling-themed fundraisers and raffles.”

In Texas, the Austin American-Statesman reports that Hays County saw a 1.76 percent increase in home values. In the mayoral race, job creation is a hot topic. The candidates suggest building a medical school in Austin, reaching out to small businesses, or working to attract biotech and digital media companies. The Texas legislature is considering changing its college aid program by giving priority to students with higher grades in getting funds. And Austin’s PBS affiliate, KRLU, will cut staff and broadcast hours because it faces a $1 million budget shortfall.

The San Diego Union-Tribune picks up an AP story which says that customers are foregoing landlines and relying exclusively on cell phones in a “high-tech shift accelerated by the recession.” Nationally, the number of households with only cell phones now outnumbers those with only landlines. In local news, a San Diego auditor may have left his previous job in Detroit because of questionable accounting practices. The FBI investigated $46 million in unauthorized transactions.

The Wyoming Tribune Eagle asks a local economist at the University of Wyoming for his prognosis on the recession. Professor Robert Goody says it may take five or six years to regain the lost jobs. But, the upside is that the recession has increased the general public’s financial savviness. Also at the university, the UW athletics department is bracing for cuts to the program, which will lose between 2 and 15 percent in funding. The cuts come as a result of decreased state money allotted to UW.

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Katia Bachko is on staff at The New Yorker.