September 21, 2022

Covering COVID-19 is a daily Poynter briefing of story ideas about the coronavirus and other timely topics for journalists, written by senior faculty Al Tompkins. Sign up here to have it delivered to your inbox every weekday morning.

The Federal Reserve will in all probability raise interest rates again today, and it will send ripples through the economy, which is what it is designed to do. We started the year with the federal interest rate near zero. We might end the day with it being over 3%.

The plan with these interest rate hikes is to slow the economy, thereby slowing inflation.

We started the year with a wild home sales market fueled by 3%-ish mortgage interest rates. Today, those rates are double that — and rising. Home sales cooled fast, down about 13% so far this year. Mortgage rates are influenced by the Fed rate, though they are not directly tied to it.

A long-term look is useful to put the 6% rate in perspective. Let’s look back 30 years and then take a 10-year look.

(Freddie Mac)

(Freddie Mac)

As I look at these two graphics, I remember buying my first house in 1980, when I believed a 13% interest was a steal. Younger homebuyers today have never known interest rates above 5%. Go back even further and you would find the average home interest rate was about 7.8% over the past half-century, according to Freddie Mac.

The New York Times put a pencil on what the higher interest rates mean to a typical homebuyer:

With a down payment of 10 percent on the median home price listed in the database on Realtor.com, the typical monthly mortgage payment is now roughly $2,352, up 66 percent from $1,416 a year ago, taking both higher home prices and interest rates into account.

And that doesn’t account for other expenses — like potentially higher closing costs, along with property taxes, homeowner’s insurance and mortgage insurance, which is often required on down payments of less than 20 percent.

“There is serious sticker shock,” said Glenn Kelman, the chief executive officer of Redfin, the real estate brokerage, which announced in June that it would cut about 8 percent of its work force because of lower demand. “It is just a really thinly traded market. It is hard to put deals together.”

Again, to add some perspective, America is not alone in trying to tame inflation by raising federal bank interest rates. England, Norway, Sweden and Switzerland are all contemplating similar moves this week.

Fed rates directly influence your credit card interest

The higher Fed rate will directly influence how much interest you will pay on credit card balances. Time explains:

The Fed’s decision to increase its target rate is meaningful for cardholders because the prime rate — which most credit card variable APRs are based on — is tied to the federal funds rate. When the prime rate goes up, credit card interest rates do, too.

If you pay your balance on time and in full each month, avoiding interest, an APR increase may not mean much.

But if you’re already carrying a credit card debt balance, a higher APR can prolong the amount of time it takes to pay it off, and the total interest you’ll pay over that time — especially if you have less-than-stellar credit. If your card’s variable APR is between 16% and 24%, you’re most likely to get the lower end of that range if you have excellent credit. If you have a lower score, you may pay the higher end of the variable rate.

‘Failing regimes’ adding to record border encounters

U.S. Customs and Border Protection explains that “failing communist regimes” are resulting in a record number of encounters with undocumented people attempting to cross the southern border. CBP Commissioner Chris Magnus said in a news release that fewer immigrants are coming from Mexico and northern Central America (Guatemala) compared to earlier this year, but, he said:

Our dedicated teams of skilled agents continue to work around the clock to secure our border and safely and humanely process and vet every individual encountered, but those fleeing repressive regimes pose significant challenges for processing and removal.

The newest data from CBP shows a third of the encounters with border agents in August were with people from Venezuela, Cuba or Nicaragua. That is a 175% increase compared to August 2021. At the same time, CBP reported, “Individuals from Mexico and northern Central America were down for the third month in a row and accounted for just 36% of unique encounters, marking a decline of 43% in unique encounters from those countries compared to August 2021.”

CBP also reported more than 400 unaccompanied children arrived at the border each day in August. As high as that number may seem, it is 14% fewer than arrived in July.

Since immigration issues have moved up as a superheated political issue once again, it is worth posting CBP’s statement reminding you how people are expelled or are allowed to remain pending judicial review:

CBP continues to enforce U.S. immigration law and apply consequences to those without a legal basis to remain in the U.S. Current restrictions at the U.S. border have not changed; single adults and families encountered at the southwest border will continue to be expelled, where appropriate, under CDC’s Title 42 Order.  Those who are not expelled will be processed under long-standing Title 8 authorities and placed into removal proceedings.

Under Title 8, those who attempt to enter the United States without authorization, and who are unable to establish a legal basis to remain in the United States (such as a valid asylum claim), will be quickly removed.  Individuals who have been removed under Title 8 are also subject to additional long-term consequences beyond removal from the United States, including bars to future immigration benefits.

After CBP’s release of the August border enforcement data Monday afternoon, a number of news organizations used the word “arrest” to describe the CBP’s encounters with more than 2 million migrants trying to cross the border. I also used that word in my headline yesterday.

(Google)

My friend Angela Kocherga, an award-winning reporter who has covered border stories for years and is now news director at KTEP in El Paso, Texas, dropped me a line saying, “Rather than (saying) ‘arrested’ at the border, may I suggest ‘taken into custody’ by Border Patrol? Most of those arriving are turning themselves in asking for asylum, a legal process, and then are monitored when they are released provisionally to await immigration hearings.”

Aline Barros, who covers immigration for the Voice of America, wrote about the immigration enforcement vocabulary back in May.

After I got Angela’s note, we changed our Poynter headline from “arrest” to “encounter,” which is more accurate.

Counterfeiting superheros

While I was reading through the Customs and Border Patrol data, I ran across a tidbit about inspectors in Norfolk who, last month, snagged nearly $300,000 worth of fake water bottles, coffee mugs and squeeze balls adorned with Superman, Batman, Spider-Man and Captain America. The stuff was heading for Illinois. It may not seem like much, but consider that agents seize about $9 million worth of counterfeit goods every day. The latest report said:

During fiscal year 2021, CBP officers and Homeland Security Investigations (HSI) special agents seized over 27,000 shipments containing goods that violated intellectual property rights. The total estimated manufacturer’s suggested retail price (MSRP) of the seized goods, had they been genuine, was $3.3 billion, or an average of about $9 million every day.

Additionally, HSI special agents arrested 388 individuals in 2021, obtained 155 indictments, and received 100 convictions related to intellectual property crimes. To learn more at HSI’s role in combatting counterfeiting, visit the National IPR Coordination Center.

Media can mine additional enforcement details by viewing CBP’s IPR webpage or by viewing previous years’ annual counterfeit goods seizure reports.

Why does it take so long for federal money to arrive in storm-damaged communities?

Buildings and homes are damaged in the aftermath of Hurricane Laura Thursday, Aug. 27, 2020, near Lake Charles, La. (AP Photo/David J. Phillip)

ProPublica and The Times-Picayune just published an investigation into why it has taken so long for federal assistance to arrive in parts of Louisiana that were damaged by a hurricane two years ago. We all watched on TV as Hurricane Laura struck Lake Charles, Louisiana, and politicians promised the response would be better than the debacle that failed Puerto Rico three years earlier. But the journalists found:

It took more than a year and a half after Laura for the federal government to approve what local officials deemed adequate long-term recovery assistance for the region. And more than two years after the storm, the first federal check from the Department of Housing and Urban Development has still not arrived.

The money has been entangled in the government’s byzantine process of doling out such long-term recovery funds, a process that can drag on for many months and get buffeted by the political priorities of congressional leadership and the White House.

In addition to the wait, it also means that communities in the wake of disaster do not know how much Congress will eventually provide, making recovery planning difficult. Appropriations can vary widely from disaster to disaster.

Indeed, I found this celebratory announcement posted in March of this year saying the federal government was sending money to help Lake Charles. Remember, a year and a half had passed since the storm hit.

Grist noted in April:

In the immediate aftermath of a major disaster like a hurricane, the Federal Emergency Management Agency, or FEMA, arrives on the scene to distribute aid money to victims. FEMA distributes this money out of a multi-billion-dollar pot that it can use for whatever disasters happen in a given year, and most of it helps pay out people who’ve lost their homes or their belongings. The agency spent about $1 billion on the immediate recovery from Laura, which caused around $19 billion in total damages.

Because most of this money is targeted to individuals and families, though, it’s seldom enough to help a community achieve a full recovery, regaining its pre-disaster population and restoring businesses and organizations that shuttered after the storm. In the case of Lake Charles, the agency’s individual assistance payouts weren’t enough to fill a gaping hole in the city’s housing stock: The storm damaged about half the structures in the surrounding parish, and more homes fell to the subsequent disasters the following year. Even insured homeowners struggled to fund the full cost of repairs from back-to-back disasters, and many renters suddenly found themselves priced out of a city where thousands of housing units disappeared, turning what had been a soft rental market into a costly free-for-all.

Many in both camps elected to leave Lake Charles altogether for larger cities like Houston and Dallas, Texas, where their temporary assistance from FEMA could be spent on more affordable housing.

Clearly, the system in place to get federal help to devastated communities needs to reform and find ways to deliver meaningful help faster. When it takes years to repair a broken rural town, people who cannot afford to wait decide to move, making it even more difficult for a community to recover.  Wouldn’t it be interesting if candidates running for elections would talk about meaty issues like this? Maybe journalists could ask them about it.

Student journalists pound away on story of school’s faculty firings

I want to point you toward the nonstop work of student journalists at Emporia State University in Kansas, where the school cut 33 faculty jobs but won’t explain much about why or what happens to the classes the teachers would have taught. The lead story of the student paper’s coverage includes nine names in the byline. Bravo. Stay after it.

We’ll be back tomorrow with a new edition of Covering COVID-19. Are you subscribed? Sign up here to get it delivered right to your inbox.

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Al Tompkins is one of America's most requested broadcast journalism and multimedia teachers and coaches. After nearly 30 years working as a reporter, photojournalist, producer,…
Al Tompkins

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