Saturday, February 28, 2009
Weighing the Profit Motive In Health Care
TW: Health care service providers make money the way most everyone else does- by selling their services preferably for high prices. Conservatives talk endlessly about injecting "private market" practices into the health care system. Sounds interesting but I repeat- health care service providers make money the way most everyone else does- by selling their services preferably for high prices. Health care has characteristics distinct from selling cars or hot dogs, reform of health care will have to address those characteristics. Taboo words like rationing (which already exists) and price controls will have to be integrated into the equation.
From Newsweek:
"Moving from hospital to hospital, a young oncologist...made a...discovery. The doctors he worked with often didn't know if the treatment they were administering was the most sensible one available or merely, as was often the case, the most expensive. They would say, "That's how we do it here,"...All too regularly, the result was a poor patient outcome and wasted money and time.
[the author] favors guaranteed care for everyone through a system of government vouchers; national boards, he says, should help decide which treatments work most effectively. Costs should be funded by a dedicated national value-added tax. It's the rational way to do it
...Rationality and political reality tend not to overlap, however. Orszag[Obama budget director] distances himself from Plan Zeke: "There are lots of ideas floating around." More important, Rahm Emanuel says that, while Zeke's ideas are worthy, the politics are impossible.
Administration officials don't dare repeat President Obama's campaign pledge to ensure health care is available to all by the end of his tenure. It may be too expensive, given current economic realities. "Universal coverage is a desirable goal," says Orszag, "but it does cost money upfront."
In the federal budget he'll unveil this week, Orszag plans to offer a fiscal "path to sustainability." But the only way to get there is to cut the growth of spending on health care for 83 million Americans via Medicare, Medicaid, SCHIP and veterans' programs. "This is the ballgame for our long-term fiscal future," he says.
Even if the government could still afford the system that exists, it's become clear the country cannot. Health care in America is an infuriating contradiction: a cutting-edge technological marvel, but one so bloated, wasteful and jerry-built that it consumes one sixth of the nation's wealth without making us comparatively healthy. Obama and his aides recognize this: a feature of the stimulus is a billion-dollar program to establish a clearinghouse for research on "best practices" and ways to measure which ones are the most cost-effective. (It will have only advisory power.)
The next step, to be unveiled in the budget, will be to find ways to apply some of this research in federal programs. As always, the tangled but powerful branches of the health-care industry—doctors, hospitals, insurance and pharmaceutical companies—are searching for ways to not just survive, but thrive, no matter what changes are made.
If Zeke had his way, they would become bidders in a government-funded and supervised marketplace—which is not about to happen any time soon..."
From Newsweek:
"Moving from hospital to hospital, a young oncologist...made a...discovery. The doctors he worked with often didn't know if the treatment they were administering was the most sensible one available or merely, as was often the case, the most expensive. They would say, "That's how we do it here,"...All too regularly, the result was a poor patient outcome and wasted money and time.
[the author] favors guaranteed care for everyone through a system of government vouchers; national boards, he says, should help decide which treatments work most effectively. Costs should be funded by a dedicated national value-added tax. It's the rational way to do it
...Rationality and political reality tend not to overlap, however. Orszag[Obama budget director] distances himself from Plan Zeke: "There are lots of ideas floating around." More important, Rahm Emanuel says that, while Zeke's ideas are worthy, the politics are impossible.
Administration officials don't dare repeat President Obama's campaign pledge to ensure health care is available to all by the end of his tenure. It may be too expensive, given current economic realities. "Universal coverage is a desirable goal," says Orszag, "but it does cost money upfront."
In the federal budget he'll unveil this week, Orszag plans to offer a fiscal "path to sustainability." But the only way to get there is to cut the growth of spending on health care for 83 million Americans via Medicare, Medicaid, SCHIP and veterans' programs. "This is the ballgame for our long-term fiscal future," he says.
Even if the government could still afford the system that exists, it's become clear the country cannot. Health care in America is an infuriating contradiction: a cutting-edge technological marvel, but one so bloated, wasteful and jerry-built that it consumes one sixth of the nation's wealth without making us comparatively healthy. Obama and his aides recognize this: a feature of the stimulus is a billion-dollar program to establish a clearinghouse for research on "best practices" and ways to measure which ones are the most cost-effective. (It will have only advisory power.)
The next step, to be unveiled in the budget, will be to find ways to apply some of this research in federal programs. As always, the tangled but powerful branches of the health-care industry—doctors, hospitals, insurance and pharmaceutical companies—are searching for ways to not just survive, but thrive, no matter what changes are made.
If Zeke had his way, they would become bidders in a government-funded and supervised marketplace—which is not about to happen any time soon..."
The Message Or the Messaging
TW: Douthat is a classical conservative unlike Andrew Sullivan, who despite his protestations has a hybrid conservatism of the more philosophical sort which in practice leans much more leftward than most Republicans. I should post more Douthat stuff as he is a good thinker. If folks like Douthat are heard, then the Republicans will be back in action far sooner than if they head down the path of their current leaders.
From Ross Douthat at Atlantic:
"....it's useful to think of the problems facing the American Right in terms of layers of misapprehension. The first layer is pure denialism - the kind of denial that Rush Limbaugh is practicing when he reads anyone who didn't like Bobby Jindal's speech out of his version of conservatism; the kind of denial that insists the Joe the Plumber gambit was a roaring success and that only snobs would have any problem with Sarah Palin's interview prowess; the kind of denial that boos Tucker Carlson for allowing that the New York Times has good reporters; the kind of denial that thinks the GOP can climb back to power on a tower of tea partys and cracks about volcano monitoring. And every attack on this sort of folly is to be welcomed. But not every attack goes far enough.
...[what]if you got rid of all the gimmicks and the nonsense and had sober-minded, eloquent people selling the current Republican message on the merits, would [the GOP] be "the natural governing party" of these United States.
This is the second layer of right-wing misapprehension, which recognizes that conservatism has an image deficit and a seriousness deficit, but doesn't go far enough in allowing that it has a substance deficit as well. The Right has a messaging problem, yes - but it also has a message problem.
It could be America's natural governing party, sure - but as long as its economic agenda looks like Jim DeMint's alternative stimulus, full stop, nothing else to see here, it won't be. Republicans are in deep trouble because the economic meltdown was piled on top of George W. Bush's personal unpopularity - but they would be in some kind of trouble no matter what, because the right-wing message on domestic policy hasn't been resonating with "the people in the middle culturally and economically,"...the backbone of any plausible conservative majority, for going on years and years now.
The current crisis hasn't created the problem; it's taken an existing problem and throw it into sharp relief. Recognizing that this problem exists is only the beginning of the argument, obviously. Once you allow that conservatism needs a renovated agenda, it's possible to feud endlessly about what that agenda ought to be. But even getting to that feud, and leaving the layers of misapprehension about conservatism's current prospects behind, would be a worthwhile achievement for the Right."
From Ross Douthat at Atlantic:
"....it's useful to think of the problems facing the American Right in terms of layers of misapprehension. The first layer is pure denialism - the kind of denial that Rush Limbaugh is practicing when he reads anyone who didn't like Bobby Jindal's speech out of his version of conservatism; the kind of denial that insists the Joe the Plumber gambit was a roaring success and that only snobs would have any problem with Sarah Palin's interview prowess; the kind of denial that boos Tucker Carlson for allowing that the New York Times has good reporters; the kind of denial that thinks the GOP can climb back to power on a tower of tea partys and cracks about volcano monitoring. And every attack on this sort of folly is to be welcomed. But not every attack goes far enough.
...[what]if you got rid of all the gimmicks and the nonsense and had sober-minded, eloquent people selling the current Republican message on the merits, would [the GOP] be "the natural governing party" of these United States.
This is the second layer of right-wing misapprehension, which recognizes that conservatism has an image deficit and a seriousness deficit, but doesn't go far enough in allowing that it has a substance deficit as well. The Right has a messaging problem, yes - but it also has a message problem.
It could be America's natural governing party, sure - but as long as its economic agenda looks like Jim DeMint's alternative stimulus, full stop, nothing else to see here, it won't be. Republicans are in deep trouble because the economic meltdown was piled on top of George W. Bush's personal unpopularity - but they would be in some kind of trouble no matter what, because the right-wing message on domestic policy hasn't been resonating with "the people in the middle culturally and economically,"...the backbone of any plausible conservative majority, for going on years and years now.
The current crisis hasn't created the problem; it's taken an existing problem and throw it into sharp relief. Recognizing that this problem exists is only the beginning of the argument, obviously. Once you allow that conservatism needs a renovated agenda, it's possible to feud endlessly about what that agenda ought to be. But even getting to that feud, and leaving the layers of misapprehension about conservatism's current prospects behind, would be a worthwhile achievement for the Right."
Perhaps Some Day They Will Find Some Adult Leadership
From Economist:
"She says the thing I think but cannot say. That's why we need her, and that's why we love her."
---Tom DeLay, the disgraced former House Republican majority leader, introducing Ann Coulter.
He's blubbering like a fanboy: "I love her! She takes 'em all on!"
"She says the thing I think but cannot say. That's why we need her, and that's why we love her."
---Tom DeLay, the disgraced former House Republican majority leader, introducing Ann Coulter.
He's blubbering like a fanboy: "I love her! She takes 'em all on!"
Engage Or Combat?
TW: Our relations with Iran have been a mess for decades. The Iranians are going to obtain nuclear weapons unless we decide to engage in full out war to prevent it. Put yourself in their shoes would not you wish the security of nuclear weapons? Obtaining nuclear weapons will be hugely risky on their part as any future nuclear attack would likely be attributed to them regardless of the circumstances there by risking devastating retaliation.
To me Iran is a country with a brittle but hard thin crust of mullahs capping a populace bristling with opportunity.
From Roger Cohen:
"...Iran, on the 30th anniversary of the Islamic Revolution, is full of defiance and suspicion of President Obama's motives in reaching out to Tehran. But it is equally full of longing. Most people are under 30 and, like these soldiers, they thirst for contact with the outside world and, above all, an America that looms with all the power of myth
...The revolution freed Iranians from the brutality of the Shah's secret police, Savak, and delivered a home-grown society modeled on the tenets of Islam in place of one pliant to America's whim. But like all revolutions, it has also disappointed. Freedom has ebbed and flowed since 1979. Of late, it has ebbed.
...Competing pressures bear down on President Mahmoud Ahmadinejad, and behind him the supreme leader, Ayatollah Ali Khamenei. They know that with unemployment at 14 percent (and rising), inflation at about 25 percent, oil revenues set to plunge by about two-thirds this year, and the country's oil and gas infrastructure in desperate need of modernization, opening to the West and its technology makes sense.
They also know Iran is composed of two worlds: the surface and the subterranean. The former is placid; the latter is hungry for more of the freedom the revolution promised. This, too, speaks for an engagement that might over time end Iran's bipolar state.
...On the other hand, a revolutionary government that deprives itself of its great enemy is one that has lost the core of its galvanizing propaganda. Opening equals risk.
..."The Arabs are chickens," he said. "Just look at what Egypt did about Gaza. Those big-bellied Arabs, you take up a stick and they run away."
Scratch the surface and there's no love lost between Persians and Arabs, another reason to be careful in distinguishing Iranian rhetoric, which can seem monolithic, from Iran's many-shaded reality.
...A few days after this meeting, I found myself on the Tehran subway. A bunch of youths started smiling and pointing. "This guy's an American!" they exclaimed. There was no menace, only curiosity...."
http://www.iht.com/articles/2009/02/11/opinion/edcohen.php
To me Iran is a country with a brittle but hard thin crust of mullahs capping a populace bristling with opportunity.
From Roger Cohen:
"...Iran, on the 30th anniversary of the Islamic Revolution, is full of defiance and suspicion of President Obama's motives in reaching out to Tehran. But it is equally full of longing. Most people are under 30 and, like these soldiers, they thirst for contact with the outside world and, above all, an America that looms with all the power of myth
...The revolution freed Iranians from the brutality of the Shah's secret police, Savak, and delivered a home-grown society modeled on the tenets of Islam in place of one pliant to America's whim. But like all revolutions, it has also disappointed. Freedom has ebbed and flowed since 1979. Of late, it has ebbed.
...Competing pressures bear down on President Mahmoud Ahmadinejad, and behind him the supreme leader, Ayatollah Ali Khamenei. They know that with unemployment at 14 percent (and rising), inflation at about 25 percent, oil revenues set to plunge by about two-thirds this year, and the country's oil and gas infrastructure in desperate need of modernization, opening to the West and its technology makes sense.
They also know Iran is composed of two worlds: the surface and the subterranean. The former is placid; the latter is hungry for more of the freedom the revolution promised. This, too, speaks for an engagement that might over time end Iran's bipolar state.
...On the other hand, a revolutionary government that deprives itself of its great enemy is one that has lost the core of its galvanizing propaganda. Opening equals risk.
..."The Arabs are chickens," he said. "Just look at what Egypt did about Gaza. Those big-bellied Arabs, you take up a stick and they run away."
Scratch the surface and there's no love lost between Persians and Arabs, another reason to be careful in distinguishing Iranian rhetoric, which can seem monolithic, from Iran's many-shaded reality.
...A few days after this meeting, I found myself on the Tehran subway. A bunch of youths started smiling and pointing. "This guy's an American!" they exclaimed. There was no menace, only curiosity...."
http://www.iht.com/articles/2009/02/11/opinion/edcohen.php
Things I Like - Chicago
Chicago has had a tough couple of months - first the Blagojevich embarrassment, then the circus named Roland Burris. Now Forbes has named Chicago the 3rd most miserable city in America. In its second annual report, Chicago moved ‘up’ from 6th place to 3rd. Interestingly enough, New York, Philadelphia and LA, the 4th, 5th and 7th most miserable cities in 2008, completely dropped out of the top 10.What’s this you say, have things changed so much in one year? Of course not, what changed were the factors that Forbes decided to quantify in its ‘misery index’. In 2008, the index included
• Commute time
• Income tax rates
• Superfund sites
• Unemployment
• Violent crimes
• Weather
This year, they added 3 new factors: sales tax, sports teams and corruption. I’m not sure how sports teams fits in – does the fact that the Cubs (one of SIX professional teams in Chicago) haven’t made it to the World Series for 100 years make us more miserable than the folks in Flint Michigan (last year’s #3, dropping to #6 in 2009) who don’t have a professional sports team of any sort??
Let’s look at the corruption factor. I checked the source that Forbes cites – Federal Public Corruption Convictions by District from the US DOJ. Since there’s no detail provided, I’m assuming that Forbes attributed all 385 of the Federal public corruption convictions associated with the Illinois Northern District over the past decade to Chicago. That’s fine, even though Rockford is in the Northern District. I hope they were consistent in their methodology and also attributed the 565 convictions in the Florida Southern to Miami, the 370 convictions in the Ohio Northern to Cleveland, the 343 in the Pennsylvania Eastern to Philly and the 129 in the Michigan Eastern to Detroit. Given that Chicago is twice the size of Philly, the level of corruption on a per person basis there is significantly higher than ours. In fact, all of these cities, ranked less miserable than Chicago in 2009, have higher per person corruption rates than we do.
And I know that Chicago has the highest sales tax of any city in the country – but New York and LA are not all that far behind at 8.375% and 8.25% respectively. Did all the factors that made these places miserable in 2008 improve significantly?
I’m not saying we should be proud of our corrupt officials or happy to be paying the country’s highest sales tax, I’m just saying that it looks like Forbes might have messed around a little with the misery index in order to move Chicago up. Seriously, Chicago moves up 3 spots while Philadelphia, New York and LA disappear.
But my real problem with this “report” is that they completely ignore the positive factors that offset the misery index they’ve “calculated”. I agree that if Chicago did not have its museums, parks, lakefront, sports teams, restaurants, outdoor festivals, public sculpture, bars, music, theater and architecture, it might be a pretty miserable place. But please try to convince me that any one of the cities ranked 4 through 10, or Philadelphia or even New York, has the beauty of our city (regardless of the weather), the cultural and entertainment opportunities and the people that make it such a phenomenal place to live. I think Forbes might need to check its own corruption factor…
Friday, February 27, 2009
The Obama Revolution
TW: Have been writing how the Republicans have been petrified that the Reagan era was in the process of being trampled. Their fears are justified. Some of us like the concept...greatly.
Sullivan is being a bit overly dramatic as is his style but the sentiment is largely accurate. The thing the Republicans need to focus on from my view is less preservation of Reagan and more on how to address the very significant crisis we have entered (I would say largely due to some of the Reaganesque policies regardless the crisis is very severe). The Dems tried to keep the "FDR" age going for about twenty years too long, the Republicans risk the same now with Reagan.
I laughed on Monday when the Republicans starting whining about Obama not being hopeful enough and that he needed to sound hopeful in his Tuesday night speech. If there is one thing Obama can do it is sell hope (I thought that was one of his faults?), the Republicans played into his hands on that, will they continue to do so?
Today he announces a new Iraq policy that substantively is far closer to his campaign views than the Republicans yet the Republicans cheer it while the Dem left squawk. Again playing into Obama's hands. Meanwhile the CPAC meets in DC with cast of speakers straight out of loserville- Michelle Bachman, Joe the dumb ass Plumber, Anne Coulter and the keynote!!! speaker Rush Limbaugh. Mitch McConnell spoke and was derided for "letting" three Republicans vote for the stimulus package. The Republicans will come back but it will take awhile especially if they refuse to face reality. And no I did not appreciate John Bolton joking about Chicago getting nuked so that Obama would take the Iranians seriously, that guy was UN ambassador for W. Bush, he is a freak who should have never been anywhere near serious policy making.
From Andrew Sullivan:
"I've learned for two years now not to under-estimate Obama. I watched from the very start of the campaign how he strategized a path to achieving his goals partly by eschewing the kinds of tactics that Washington has come to see as political skill. I think of him in some ways as the Un-Rove. Karl Rove mastered the art of petty and nasty political tactics in the South of the post-Reagan era. And he never had a solid grip on conservatism as a political philosophy or of political strategy. And so Rove today endures as the architect of the biggest and deepest political implosion since the Democrats in the 1970s. It was all tactics, no strategy; all politics, no governance. He remains the worst single political strategist of modern times.
Now look at how Obama has framed the debate since the election. Every single symbolic act has been inclusive and sober. From that speech in Grant Park to the eschewal of euphoria on Inauguration Day; from the George Will dinner invite to the Rick Warren invocation; from meeting the House Republicans on the Hill to convening a fiscal responsibility summit; from telegraphing to all of us Obamacons that he wasn't a fiscal lunatic to ... unveiling the most expansive, liberal, big government reversal of Reagan any traditional Democrat would die for.
Smart, isn't he? He won the stimulus debate long before the Republicans realized it (they were busy doing tap-dances of victory on talk radio, while he was building a new coalition without them). And now, after presenting such a centrist, bi-partisan, moderate and personally trustworthy front, he gets to unveil a radical long-term agenda that really will soak the very rich and invest in the poor. Given the crisis, he has seized this moment for more radicalism than might have seemed possible only a couple of months ago.
The risk is, at least, a transparent risk. If none of this works, he will have taken a massive gamble and failed. The country will be bankrupt and he will have one term. His gamble with the economy may come to seem like Bush's gamble in Iraq. But if any of it works, if the economy recovers, and if the GOP continues to be utterly deaf and blind to the new landscape we live in, then we're talking less Reagan than FDR in long-term impact.
It's going to be a riveting first year, isn't it?"
Sullivan is being a bit overly dramatic as is his style but the sentiment is largely accurate. The thing the Republicans need to focus on from my view is less preservation of Reagan and more on how to address the very significant crisis we have entered (I would say largely due to some of the Reaganesque policies regardless the crisis is very severe). The Dems tried to keep the "FDR" age going for about twenty years too long, the Republicans risk the same now with Reagan.
I laughed on Monday when the Republicans starting whining about Obama not being hopeful enough and that he needed to sound hopeful in his Tuesday night speech. If there is one thing Obama can do it is sell hope (I thought that was one of his faults?), the Republicans played into his hands on that, will they continue to do so?
Today he announces a new Iraq policy that substantively is far closer to his campaign views than the Republicans yet the Republicans cheer it while the Dem left squawk. Again playing into Obama's hands. Meanwhile the CPAC meets in DC with cast of speakers straight out of loserville- Michelle Bachman, Joe the dumb ass Plumber, Anne Coulter and the keynote!!! speaker Rush Limbaugh. Mitch McConnell spoke and was derided for "letting" three Republicans vote for the stimulus package. The Republicans will come back but it will take awhile especially if they refuse to face reality. And no I did not appreciate John Bolton joking about Chicago getting nuked so that Obama would take the Iranians seriously, that guy was UN ambassador for W. Bush, he is a freak who should have never been anywhere near serious policy making.
From Andrew Sullivan:
"I've learned for two years now not to under-estimate Obama. I watched from the very start of the campaign how he strategized a path to achieving his goals partly by eschewing the kinds of tactics that Washington has come to see as political skill. I think of him in some ways as the Un-Rove. Karl Rove mastered the art of petty and nasty political tactics in the South of the post-Reagan era. And he never had a solid grip on conservatism as a political philosophy or of political strategy. And so Rove today endures as the architect of the biggest and deepest political implosion since the Democrats in the 1970s. It was all tactics, no strategy; all politics, no governance. He remains the worst single political strategist of modern times.
Now look at how Obama has framed the debate since the election. Every single symbolic act has been inclusive and sober. From that speech in Grant Park to the eschewal of euphoria on Inauguration Day; from the George Will dinner invite to the Rick Warren invocation; from meeting the House Republicans on the Hill to convening a fiscal responsibility summit; from telegraphing to all of us Obamacons that he wasn't a fiscal lunatic to ... unveiling the most expansive, liberal, big government reversal of Reagan any traditional Democrat would die for.
Smart, isn't he? He won the stimulus debate long before the Republicans realized it (they were busy doing tap-dances of victory on talk radio, while he was building a new coalition without them). And now, after presenting such a centrist, bi-partisan, moderate and personally trustworthy front, he gets to unveil a radical long-term agenda that really will soak the very rich and invest in the poor. Given the crisis, he has seized this moment for more radicalism than might have seemed possible only a couple of months ago.
The risk is, at least, a transparent risk. If none of this works, he will have taken a massive gamble and failed. The country will be bankrupt and he will have one term. His gamble with the economy may come to seem like Bush's gamble in Iraq. But if any of it works, if the economy recovers, and if the GOP continues to be utterly deaf and blind to the new landscape we live in, then we're talking less Reagan than FDR in long-term impact.
It's going to be a riveting first year, isn't it?"
Mexican Unrest
TW: 250 people have been murdered in Juarez City (across the river from El Paso) this month. There are 1.6 MM folks in Juarez City, there are 2.8MM within Chicago's city limits. Imagine if an equivalent nearly 500 folks had been murdered in Chicago this month (there were 510 in 2008 total which was up from 450 in '07). The vast majority of the murders are drug related.
The Mexican federal government does not control the drug lords. Corruption is rife throughout federal, state and local governments. To think that our own governments are not also riddled with corruption related to the drug trade would be naive.
From Tom Rick's blog:
"The most interesting news story of the day is that the governor of Texas wants to deploy 1,000 National Guard troops to the Mexican border. I am not sure where this situation is going, but it is the kind of thing that can come out of left field and upset all our plans for our ongoing wars elsewhere.
Meanwhile, the Mexican government also says it is sending troops to the border area, apparently to re-take parts of the city of Juarez, where, according to Reuters, more than 250 people have been killed in drug violence this month. "We aren't going to give up an inch of the city," vowed Interior Minister Fernando Gomez Mont. Kind of reminds me of the recent comments of the Pakistani government about Swat. The difference, of course, is that Swat is near Afghanistan, while Juarez is across the river from the west Texas town of El Paso.
...There is a weird analogy between Pakistan and Mexico. In both places, American addictions -- to oil and to drugs -- have helped fund those who are destabilizing those countries. The Pakistan connection is generally less direct -- I am thinking of Saudi Arabian funding of extremists."
The Mexican federal government does not control the drug lords. Corruption is rife throughout federal, state and local governments. To think that our own governments are not also riddled with corruption related to the drug trade would be naive.
From Tom Rick's blog:
"The most interesting news story of the day is that the governor of Texas wants to deploy 1,000 National Guard troops to the Mexican border. I am not sure where this situation is going, but it is the kind of thing that can come out of left field and upset all our plans for our ongoing wars elsewhere.
Meanwhile, the Mexican government also says it is sending troops to the border area, apparently to re-take parts of the city of Juarez, where, according to Reuters, more than 250 people have been killed in drug violence this month. "We aren't going to give up an inch of the city," vowed Interior Minister Fernando Gomez Mont. Kind of reminds me of the recent comments of the Pakistani government about Swat. The difference, of course, is that Swat is near Afghanistan, while Juarez is across the river from the west Texas town of El Paso.
...There is a weird analogy between Pakistan and Mexico. In both places, American addictions -- to oil and to drugs -- have helped fund those who are destabilizing those countries. The Pakistan connection is generally less direct -- I am thinking of Saudi Arabian funding of extremists."
I Hate Cap And Trade
TW: I hate cap and trade. Can you explain cap and trade? I doubt it. If you cannot explain it, I am highly confident that the majority of the rest of the folks cannot either. Mark it down, cap and trade will never happen. It will be picked apart long before implementation. Those who do not want carbon curtailed will fight it, those who like me think it is a boondoggle waiting to happen will fight it, and those merely confused will not fight for it.
Cap and trade has one attribute which puts it ahead of alternative means to address carbon emissions and reduce our dependence on oil- it does not contain the word "tax". Carbon taxation is by far a better means by which to properly assign costs to the various forms of energy creation. But due to the pathological opposition of many to "taxes", the carbon tax wilts.
Cap and trade is an indirect tax but one that is rife with opportunities for manipulation by governments and private interests. A carbon tax is direct and permits each type of energy to be assigned a fair cost related to its pollution impact.
I fear the only reason Obama has it in his plan is to use the revenues to offset the deficit but I have a feeling he knows its inclusion is a chimera. More to come...
Cap and trade has one attribute which puts it ahead of alternative means to address carbon emissions and reduce our dependence on oil- it does not contain the word "tax". Carbon taxation is by far a better means by which to properly assign costs to the various forms of energy creation. But due to the pathological opposition of many to "taxes", the carbon tax wilts.
Cap and trade is an indirect tax but one that is rife with opportunities for manipulation by governments and private interests. A carbon tax is direct and permits each type of energy to be assigned a fair cost related to its pollution impact.
I fear the only reason Obama has it in his plan is to use the revenues to offset the deficit but I have a feeling he knows its inclusion is a chimera. More to come...
Things I Like - Sciences
Phase-separated blend of two conjugated polymers.
Image by Ashley Cadby - University of Sheffield, UK
Image by Ashley Cadby - University of Sheffield, UK
Nanotechnology is starting to get big. You don't hear much about it in the news - mostly because the work being done right now is too technical to make good news (case in point - the photo above, I have no idea what this is). But that is likely to change with the current focus on climate change and 'green' efforts. From UnderstandingNano.com:
Nanaotechnology is the study and use of structures between 1 nanometer and 100 nanometers in size. To give you an idea of just how small that is, it would take eight hundred 100-nanometer particles placed side by side to equal the width of a human hair.
Why is this tiny stuff so important? That photo on top depicts a composite material that creates an energy transfer (I think). Composite materials like this might be used in solar cells for the generation of relatively inexpensive energy. The applications of nanotechnology are broad with potential to impact development efforts in the space, medicine, food and energy industries as well as the drive to clean our air and water. See the site below for more.
The origin of nanotechnology is usually traced back to Richard Feynman,
Applications for nanotechnology:
http://www.understandingnano.com/nanotech-applications.html
...who in 1959, gave a visionary talk at Caltech in which he said "The problems of chemistry and biology can be greatly helped if our ability to see what we are doing, and to do things on an atomic level, is ultimately developed ---a development which I think cannot be avoided."Looks like we've reached that point, a mere 40-some years after Mr. Feynman suggested it.
Applications for nanotechnology:
http://www.understandingnano.com/nanotech-applications.html
btw, Feynman (who died in 1988) was amazing. A brilliant physicist, teacher and writer who communicated complicated ideas in an entertaining and understandable manner. I highly recommend reading the lecture referenced above as well as "The Pleasure of Finding Things Out", a collection of his best short pieces published in 1999.
Why Health Care Reform Cannot Be a Bridge Too Far
(click on images to enlarge)TW: Folks (as embodied by various interest groups) may not want to face up to the realities of health care but if we do not we have a problem. The problem is so enormous that one way or the other health care must change. Health care eats up 15% of our GDP now at current rates it could grow to nearly 50% which is just not viable.
Sacrifices will have to be made- fewer choices, fewer tests, fewer PROFITs for those in the industry. There is a disconnect between how Americans use health care and pay for it. Too often Americans perceive health care as a free good. Our system is great at providing opportunities for care while avoiding risks and cost containment.
Thursday, February 26, 2009
Why Health Care Reform Is Perhaps a Bridge Too Far
TW: The rockets, mortars, IEDs, and ultimately nukes will be deployed against efforts by Obama and others to reform health care. IF he is able to accomplish significant reform he should receive a Nobel prize in economics and peace.
This piece by the Jim Cramer (who btw has been HORRIBLE since the market turned south) epitomizes the challenges Obama faces. Cramer mentions companies were "raking it in" with certain plans which Obama seeks to reform but then rails against Obama for reducing their profits. There in lies the rub, your health care expense is someone elses profit.
We have lived a Ponzi scheme in real estate, a Ponzi scheme in internet stocks, while it is not a Ponzi scheme per se; the interests aligned to keep health care costs expanding in perpetuity are even more powerful.
From Jim Cramer:
"Talk about the opposite of President Clinton. Both Clinton and Obama campaigned on the idea of reining in health care costs. Clinton even went so far as to go to Merck's headquarters and rail against big pharma, something that exceeded any of the tough talk of Obama.
But once Clinton came in, his health care plans were so diffuse and convoluted, it turned out to be all bluster. The stocks rallied and rallied, his bashing turned out to be a great opportunity to buy just about every private enterprise having to do with health care, from devices and pharmaceuticals to health maintenance organizations and cost containers.
Wow, what a difference! Obama, it turns out, meant it!
He's waging war against the health maintenance organizations, the cost containers. He's changing the rules on Medicare in a way that Humananever thought was possible. He's destroying the margins of Aetna and Cigna. These companies, particularly Humana, have this tremendous Medicare senior plans where they were just raking it in and were subsidized by the government.
em>
So now they are coming for everything in the sector, as reimbursements could be cut for everything. That means some pain in Genzyme, which has high-priced drugs that may not be protected. And some heart assists, like St. Jude, which have been doing excellently, are getting killed. Drug stocks -- no one thinks they can get through unscathed now.
It didn't help that Express Scriptsem> sees some weakness, as people might even be cutting back on taking drugs! Nasty.
This group's been a lone winner. It might regain luster if we can find out that the war is just against this health care cost containment group, which Obama said didn't cut costs or contain anything. In fact, he came perilously close to saying that this group is just a tax on the system,
...Health care had been a safe haven from the awful economy. That might be true, but now we see it's no safe haven from Obama.
The worst dreams of the capitalists are being realized; stocks just got even more unsafe than they were before this budget came out."
This piece by the Jim Cramer (who btw has been HORRIBLE since the market turned south) epitomizes the challenges Obama faces. Cramer mentions companies were "raking it in" with certain plans which Obama seeks to reform but then rails against Obama for reducing their profits. There in lies the rub, your health care expense is someone elses profit.
We have lived a Ponzi scheme in real estate, a Ponzi scheme in internet stocks, while it is not a Ponzi scheme per se; the interests aligned to keep health care costs expanding in perpetuity are even more powerful.
From Jim Cramer:
"Talk about the opposite of President Clinton. Both Clinton and Obama campaigned on the idea of reining in health care costs. Clinton even went so far as to go to Merck's headquarters and rail against big pharma, something that exceeded any of the tough talk of Obama.
But once Clinton came in, his health care plans were so diffuse and convoluted, it turned out to be all bluster. The stocks rallied and rallied, his bashing turned out to be a great opportunity to buy just about every private enterprise having to do with health care, from devices and pharmaceuticals to health maintenance organizations and cost containers.
Wow, what a difference! Obama, it turns out, meant it!
He's waging war against the health maintenance organizations, the cost containers. He's changing the rules on Medicare in a way that Humananever thought was possible. He's destroying the margins of Aetna and Cigna. These companies, particularly Humana, have this tremendous Medicare senior plans where they were just raking it in and were subsidized by the government.
em>
So now they are coming for everything in the sector, as reimbursements could be cut for everything. That means some pain in Genzyme, which has high-priced drugs that may not be protected. And some heart assists, like St. Jude, which have been doing excellently, are getting killed. Drug stocks -- no one thinks they can get through unscathed now.
It didn't help that Express Scriptsem> sees some weakness, as people might even be cutting back on taking drugs! Nasty.
This group's been a lone winner. It might regain luster if we can find out that the war is just against this health care cost containment group, which Obama said didn't cut costs or contain anything. In fact, he came perilously close to saying that this group is just a tax on the system,
...Health care had been a safe haven from the awful economy. That might be true, but now we see it's no safe haven from Obama.
The worst dreams of the capitalists are being realized; stocks just got even more unsafe than they were before this budget came out."
Update Re Yesterday's Post On War Dead
From NBC:
"A Senior defense official tells NBC News that Defense Secretary Gates has decided to lift the ban against media coverage of U.S. war dead returning to the United States, and would leave the decision entirely up to the families."
"A Senior defense official tells NBC News that Defense Secretary Gates has decided to lift the ban against media coverage of U.S. war dead returning to the United States, and would leave the decision entirely up to the families."
Setting Expectations For the Credit Crisis
From Tim Duy's Fed Watch"
"Whatever news comes out of Washington regarding the plan of the day for the banking system, I hope one thing is soon made clear to the public - fixing the financial system is not the same thing as expanding lending. We are way past that point; you can't fix the system with more bad loans. If Treasury Secretary Geithner tries to sell his plans as the solution that will revive credit growth, I suspect he will further test the already strained credibility of the government. A more honest approach: We are simply trying to prevent the financial system from outright collapse."
TW: These are wise bits of perspective. Those who get uptight about banks "lending more" are missing the point. At this point in the downturn lending is not the big issue, solvency/viability as a going-concern are the big issues. I am highly confident the Treasury and Fed folks who receive plenty of backseat advice from peanut gallery are focused on the latter rather than the former as well they should be.
The market seems captivated by their parlor games relative to what DC will do next with the banks etc. Three things to keep in mind:
a) some "sages" lament DC getting so involved, but for the banks/hedgies etc. screwing things up so badly there would not be a need for Barney Frank et al. to be so prominent
b) far more importantly the big challenge now is demand contraction, the banks are a component but not the only or even largest piece of putting this economic puzzle back together
c) this fascination with bank nationalization seems missplaced, the banks are insolvent. Whether or not the equity holders get anything after all is said and done may be important to those equity holders and the pundits on cable but not to the overall state of our economy. The pundits are worrying about bank stock prices when they should be more concerned about a viable banking system.
"Whatever news comes out of Washington regarding the plan of the day for the banking system, I hope one thing is soon made clear to the public - fixing the financial system is not the same thing as expanding lending. We are way past that point; you can't fix the system with more bad loans. If Treasury Secretary Geithner tries to sell his plans as the solution that will revive credit growth, I suspect he will further test the already strained credibility of the government. A more honest approach: We are simply trying to prevent the financial system from outright collapse."
TW: These are wise bits of perspective. Those who get uptight about banks "lending more" are missing the point. At this point in the downturn lending is not the big issue, solvency/viability as a going-concern are the big issues. I am highly confident the Treasury and Fed folks who receive plenty of backseat advice from peanut gallery are focused on the latter rather than the former as well they should be.
The market seems captivated by their parlor games relative to what DC will do next with the banks etc. Three things to keep in mind:
a) some "sages" lament DC getting so involved, but for the banks/hedgies etc. screwing things up so badly there would not be a need for Barney Frank et al. to be so prominent
b) far more importantly the big challenge now is demand contraction, the banks are a component but not the only or even largest piece of putting this economic puzzle back together
c) this fascination with bank nationalization seems missplaced, the banks are insolvent. Whether or not the equity holders get anything after all is said and done may be important to those equity holders and the pundits on cable but not to the overall state of our economy. The pundits are worrying about bank stock prices when they should be more concerned about a viable banking system.
Obama's First Budget
TW: $4 trillion...thats a lot of schmackers. Many are concerned Obama will try to do too much during his first months in office. I am in the camp of go for it, he is playing high stakes poker regardless and as Mr. Evil himself figured out why not?
But as I posted a couple of days ago, all of this short term spending and effort to address the various crises will lose credibility politically and with bond investors if he does not lay out a vision for fiscal sanity down the road. And in the shorter run if he can figure out how to contain "earmarks" that would help greatly as well.
Things I Like - Books
I saw this photo of the new National Library of China recently and it got me to thinking about libraries in general. The main branch public libraries in New York City and Boston are beautiful old buildings as was the original Chicago library (the current Harold Washington Library is more scary than beautiful).So what do the libraries in other cities look like? A quick search on Google brought up Candida Höfer, a German photographer who specializes in photographs of large empty interiors. These photos of libraries are only empty if you don't count the books. But they are beautiful.
Buenos Aires
Rome
Trinity College - Canada
Milan
The Haag
See more here: http://www.artnet.com/artist/691911/candida-hofer.html
or buy the book
Mike Pence: Hooverite
TW: I must say Mike Pence of Indiana may be one of my least favorite Congressmen. The guy is rabidly conservative on social issues and just whacked on economics. He is apparently leading an emerging effort by the Republicans to give Hooverism another shot at ameliorating a depressed economy.
In 1929-1930 the Republicans led by Herbert Hoover reacted to the collapse of financial markets and the contraction of demand by reducing government spending. For the subsequent 75+ years this policy was regarded as an exceedingly stupid policy in the face of demand contraction. The logic being when an economy is contracting (e.g. reduced employment, deflation etc.), the spender of last resort reducing its spending is the precisely wrong policy.
Certain Republicans of the Pence, Tom Delay, Bob Jindal, John Boehner ilk have now decided that the Hooverites were in fact correct.
There are legitimate gripes with some of the details of the Obama plan but this Hooverite dogma is not quibbling on details it is dangerously economically ignorant and potentially destructive. There will be a time to address the federal debt accumulated fighting in Iraq, providing wealthy with tax breaks and yes fighting this depression but you do not contract government spending amidst a massive demand contraction.
These folks have a playbook (of dubious validity ever) from the 80's and 90's and will just not adapt to the fact that we are in different circumstances.
From Washington Independent:
"they [Republicans] have proposed a “spending freeze,” a controversial idea among economists during an economic downturn..."We’re advocating that Congress freeze all federal spending immediately,” said Rep. Mike Pence (R-Ind.), the chairman of the House Republican Conference, during a Tuesday luncheon at the conservative Heritage Foundation. “People out there are hurting, and they understand what you do when times are tough...Pence’s argument for a spending freeze is widely accepted within the Republican conference.
...Bruce Bartlett, a conservative economist who wrote a book critical of George W. Bush’s spending, could not name many peers who believe that smaller deficits and less spending are the way to combat economic downturns. “It’s a total double-standard,” said Bartlett. “Republicans deficits stimulate, Democratic deficits don’t.”
...As Republicans push for spending cuts or spending freezes, they continue to propose tax cuts. That unsettles even some economists who agree with the thrust of Republicans’ arguments. “I would probably not support supply-side tax cuts right now,” said Lee Ohanian, an economics professor at the University of California-Los Angeles"
http://washingtonindependent.com/31396/gop-turns-to-talk-of-spending-freeze
In 1929-1930 the Republicans led by Herbert Hoover reacted to the collapse of financial markets and the contraction of demand by reducing government spending. For the subsequent 75+ years this policy was regarded as an exceedingly stupid policy in the face of demand contraction. The logic being when an economy is contracting (e.g. reduced employment, deflation etc.), the spender of last resort reducing its spending is the precisely wrong policy.
Certain Republicans of the Pence, Tom Delay, Bob Jindal, John Boehner ilk have now decided that the Hooverites were in fact correct.
There are legitimate gripes with some of the details of the Obama plan but this Hooverite dogma is not quibbling on details it is dangerously economically ignorant and potentially destructive. There will be a time to address the federal debt accumulated fighting in Iraq, providing wealthy with tax breaks and yes fighting this depression but you do not contract government spending amidst a massive demand contraction.
These folks have a playbook (of dubious validity ever) from the 80's and 90's and will just not adapt to the fact that we are in different circumstances.
From Washington Independent:
"they [Republicans] have proposed a “spending freeze,” a controversial idea among economists during an economic downturn..."We’re advocating that Congress freeze all federal spending immediately,” said Rep. Mike Pence (R-Ind.), the chairman of the House Republican Conference, during a Tuesday luncheon at the conservative Heritage Foundation. “People out there are hurting, and they understand what you do when times are tough...Pence’s argument for a spending freeze is widely accepted within the Republican conference.
...Bruce Bartlett, a conservative economist who wrote a book critical of George W. Bush’s spending, could not name many peers who believe that smaller deficits and less spending are the way to combat economic downturns. “It’s a total double-standard,” said Bartlett. “Republicans deficits stimulate, Democratic deficits don’t.”
...As Republicans push for spending cuts or spending freezes, they continue to propose tax cuts. That unsettles even some economists who agree with the thrust of Republicans’ arguments. “I would probably not support supply-side tax cuts right now,” said Lee Ohanian, an economics professor at the University of California-Los Angeles"
http://washingtonindependent.com/31396/gop-turns-to-talk-of-spending-freeze
Wednesday, February 25, 2009
Why Moderates Always Face Uphill Careers
TW: Am not sure if Steele is being more stridently ideological or merely amateurish. But his opening the door to cutting funding and supporting primary challengers against the three Republicans who voted for the stimulus package frames why working in a bi-partisan manner can be so challenging.
From NBC:
"In an interview yesterday on FOX, new RNC chair Michael Steele suggested that the three Republicans who voted for the stimulus -- Susan Collins and Olympia Snowe of Maine, and Arlen Specter of Pennsylvania -- would face primary challenges, and he left open the possibility that the three might not receive funds from the RNC
...Steele's comments signaled a stark departure from past practice (the National Republican Senatorial Committee provided significant help to Specter in his '04 primary contest against Pat Toomey) and seemed to violate Ronald Reagan's famous 11th Commandment (never speak ill of another Republican).
One former RNC official said that he couldn't imagine past party chairs undercutting a sitting senator, especially one who's up for re-election in 2010 like Specter (and in a state that Obama carried by 10 percentage points, 54%-44%!).
"I just don’t think we’re at a point where the party can threaten senators and ask them to adhere to some type of monolithic ideology," the official said. "In fact, the party’s almost always been at its strongest when it was broad and had its big tent out. I get what Steele is trying to do in terms of channeling the anger and frustration at the stimulus bill, but there’s probably a more artful way of doing it."
Originally, when First Read reached out to the RNC for comment, we were told that Steele's words spoke for themselves.
But the RNC later reversed course. "The RNC has no intention of getting involved in primaries," a party official told First Read. "We work with state parties to elect Republicans and will continue to do that."
We Have Problems, Other Have Bigger Problems: Exhibit A-Japan
TW: Have mentioned about the only silver-lining (unless abide end of world notions) to this series of crises, if u r an American, is that just about everyone else is even more screwed. Japan is overlaying these crises with an even more insidious crisis, demographic collapse. Given the revulsion to immigrants they will likely bear its consequences without the hope and opportunity of integrating others into their society.
In the meantime their economy, the world's 2nd largest, contracted at an annualized rate of nearly 13% in Q4. Their debt situation is worse than ours and they, unlike us, have great infrastructure so investing there is not really useful, the yen is rising due to its gross undervaluation over the past decade plus, their interest rates are and have been essentially zero for over a decade. Oh and their political system is literally sclerotic dominated by geriatric politicians and parties.
From Business Week:
"...During Japan's lost decade of deflation in the 1990s, it could still count on the American appetite for Japanese goods to sustain the factories of Osaka and Tokyo. Now the slump in demand for Japanese autos and electronics has spread from the U.S. and Europe to China and other once fast-growing markets.
...Making matters worse is that the yen has soared as investors both domestic and foreign have sought the safety of an established currency and the security of a banking system relatively untouched by the subprime scourge. In 2008 the yen gained 20% against the dollar and even more against the euro and other currencies. Exporters, even after extensive cuts, need a yen rate of about 100 to the dollar to make money. Today the yen is at 94.
Can Japan right this mess? It should be able to—it has $1 trillion in foreign reserves, almost $16 trillion in household assets, and perhaps the most skilled workforce on the planet. But its options are surprisingly limited.
...At 173%, Japan's debt- to-GDP ratio is far higher than the U.S. level: Tokyo cannot afford a huge stimulus.
The second option is to slash interest rates. There's not much left to slash. The Bank of Japan pushed rates almost to zero to pull the country out of its last recession, then nudged them up as the recovery took off. As the economy has again slowed, Japan's base rates have fallen from a recent peak of 0.75% to 0.1%—not a lot to get companies and consumers spending.
The next option is to engineer a drop in the yen. One idea is that Japan use its reserves to help fund Washington's bailout and stimulus plans in return for a combined effort to reduce the yen. The U.S. has little to gain from such a deal, though.
The final option is to restructure the economy so it depends more on local consumption and far less on exports. Yet the Japanese, with memories of the lost decade still fresh and layoffs mounting once more, show no desire to open their wallets. In December, household spending fell 4.6%, the 10th consecutive monthly decline.
What's more, Japan's population is now shrinking. To boost consumption a nation needs young families: Japan does not have enough. There are now 10 million fewer Japanese age 20 or under than there were 30 years ago. The dearth of young adults and families is one reason car sales have dropped one-third from their peak in the 1990s. Many of these young people, squeezed by low-wage jobs, are saving far less than their parents did.
The needs of the old also make it hard for policymakers to cut taxes to spur spending. On Feb. 16, the day the government announced the grim economic data, Nippon Keidanren, Japan's biggest business lobby, called for a hike in the consumption tax to fund social security costs. Old, debt-ridden, and scared, Japan is in quite a fix."
http://www.businessweek.com/magazine/content/09_09/b4121020480652.htm?chan=magazine+channel_news
In the meantime their economy, the world's 2nd largest, contracted at an annualized rate of nearly 13% in Q4. Their debt situation is worse than ours and they, unlike us, have great infrastructure so investing there is not really useful, the yen is rising due to its gross undervaluation over the past decade plus, their interest rates are and have been essentially zero for over a decade. Oh and their political system is literally sclerotic dominated by geriatric politicians and parties.
From Business Week:
"...During Japan's lost decade of deflation in the 1990s, it could still count on the American appetite for Japanese goods to sustain the factories of Osaka and Tokyo. Now the slump in demand for Japanese autos and electronics has spread from the U.S. and Europe to China and other once fast-growing markets.
...Making matters worse is that the yen has soared as investors both domestic and foreign have sought the safety of an established currency and the security of a banking system relatively untouched by the subprime scourge. In 2008 the yen gained 20% against the dollar and even more against the euro and other currencies. Exporters, even after extensive cuts, need a yen rate of about 100 to the dollar to make money. Today the yen is at 94.
Can Japan right this mess? It should be able to—it has $1 trillion in foreign reserves, almost $16 trillion in household assets, and perhaps the most skilled workforce on the planet. But its options are surprisingly limited.
...At 173%, Japan's debt- to-GDP ratio is far higher than the U.S. level: Tokyo cannot afford a huge stimulus.
The second option is to slash interest rates. There's not much left to slash. The Bank of Japan pushed rates almost to zero to pull the country out of its last recession, then nudged them up as the recovery took off. As the economy has again slowed, Japan's base rates have fallen from a recent peak of 0.75% to 0.1%—not a lot to get companies and consumers spending.
The next option is to engineer a drop in the yen. One idea is that Japan use its reserves to help fund Washington's bailout and stimulus plans in return for a combined effort to reduce the yen. The U.S. has little to gain from such a deal, though.
The final option is to restructure the economy so it depends more on local consumption and far less on exports. Yet the Japanese, with memories of the lost decade still fresh and layoffs mounting once more, show no desire to open their wallets. In December, household spending fell 4.6%, the 10th consecutive monthly decline.
What's more, Japan's population is now shrinking. To boost consumption a nation needs young families: Japan does not have enough. There are now 10 million fewer Japanese age 20 or under than there were 30 years ago. The dearth of young adults and families is one reason car sales have dropped one-third from their peak in the 1990s. Many of these young people, squeezed by low-wage jobs, are saving far less than their parents did.
The needs of the old also make it hard for policymakers to cut taxes to spur spending. On Feb. 16, the day the government announced the grim economic data, Nippon Keidanren, Japan's biggest business lobby, called for a hike in the consumption tax to fund social security costs. Old, debt-ridden, and scared, Japan is in quite a fix."
http://www.businessweek.com/magazine/content/09_09/b4121020480652.htm?chan=magazine+channel_news
Another (Relatively) Simple Credit Crisis Perspective
TW: I try to avoid getting sucked into too much detail re the credit crisis (complex and frequently beyond my own knowledge base). But when I run across something that I think frames the issues in a relatively simple format I bring it up. Krugman (king of lefties) is frustrated, the righties are frustrated. As I have said before, I suspect answers are lacking due to a dearth of viable answers not lack of trying.
From Paul Krugman at NYT:
"I’m trying to be sympathetic to the various plans, or rumors of plans, for bank aid; but I keep not being able to understand either what the plans are, or why they’re supposed to work. And I don’t think it’s me.
So the latest is that we’re going to convert preferred stock held by the government to common stock, maybe...And it’s not at all clear what is accomplished thereby.
Here’s my stylized picture of the situation:
At the top are a bank’s assets. Below are its obligations to various parties, with decreasing seniority from left to right. I’ve drawn it to embody a pessimistic assumption about the bank’s finances, because those are the cases we’re interested in: the bank’s assets aren’t enough to cover its debts. Nonetheless, the stock, both preferred and common, has a positive market value. Why? Because of the Geithner put: the bank is protected from collapse, keeping the creditors appeased, but stockholders will get the gains if somehow things turn up.
What we want to do is clean up the bank’s balance sheet, so that it no longer has to be a ward of the state. When the FDIC confronts a bank like this, it seizes the thing, cleans out the stockholders, pays off some of the debt, and reprivatizes.
What Treasury now seems to be proposing is converting some of the green equity to blue equity — converting preferred to common. It’s true that preferred stock has some debt-like qualities — there are required dividend payments, etc.. But does anyone think that the reason banks are crippled is that they are tied down by their obligations to preferred stockholders, as opposed to having too much plain vanilla debt?
I just don’t get it. And my sinking feeling that the administration plan is to rearrange the deck chairs and hope the iceberg melts just keeps getting stronger."
So the latest is that we’re going to convert preferred stock held by the government to common stock, maybe...And it’s not at all clear what is accomplished thereby.
Here’s my stylized picture of the situation:
At the top are a bank’s assets. Below are its obligations to various parties, with decreasing seniority from left to right. I’ve drawn it to embody a pessimistic assumption about the bank’s finances, because those are the cases we’re interested in: the bank’s assets aren’t enough to cover its debts. Nonetheless, the stock, both preferred and common, has a positive market value. Why? Because of the Geithner put: the bank is protected from collapse, keeping the creditors appeased, but stockholders will get the gains if somehow things turn up.What we want to do is clean up the bank’s balance sheet, so that it no longer has to be a ward of the state. When the FDIC confronts a bank like this, it seizes the thing, cleans out the stockholders, pays off some of the debt, and reprivatizes.
What Treasury now seems to be proposing is converting some of the green equity to blue equity — converting preferred to common. It’s true that preferred stock has some debt-like qualities — there are required dividend payments, etc.. But does anyone think that the reason banks are crippled is that they are tied down by their obligations to preferred stockholders, as opposed to having too much plain vanilla debt?
I just don’t get it. And my sinking feeling that the administration plan is to rearrange the deck chairs and hope the iceberg melts just keeps getting stronger."
Things I Like - Food
From This is why you're fat a site where people submit photos of 'food'. It doesn't say whether or not anyone has actually eaten any of these items but given that the US has the highest obesity rate of any nation in the world, I wouldn't be suprised.
The Double Bacon Hamburger Fatty Melt
Three bacon-stuffed grilled cheese sandwichs for buns, cheese, bacon and two four-ounce beef patties.
Now that I take another look, the sloppy joe on a krispy kreme here looks kind of tasty...
The Double Bacon Hamburger Fatty MeltThree bacon-stuffed grilled cheese sandwichs for buns, cheese, bacon and two four-ounce beef patties.
Now that I take another look, the sloppy joe on a krispy kreme here looks kind of tasty...
Should Media Cover the Arrival Of American Dead At Dover?
From Newsweek:
"...there were six coffins and a few small clumps of civilians to receive them. One by one the flag-draped coffins slid down from the nose of the cargo plane, and one by one the coffins were shepherded by an honor guard—a half dozen soldiers in dress uniforms and white gloves—to waiting hearses. One or two elderly people wept; everyone else was stoical. There were no bugles. No bands. There was no pageantry—just the heavy tread of the honor guard in a ritual perfected through much repetition. It was an event so moving in its intimacy and restraint, out there on the acres of concrete, that I felt an intruder. I was glad there were no waiting cameras and flashbulbs.
...it's not an easy issue. It never has been. For many years, dead soldiers were buried where they fell, or close to, at home or abroad...It wasn't until the Korean War that the United States started routinely shipping bodies home. The Dover ceremony became familiar to the public in the 1980s, in part because President Reagan was such an affecting figure mourning the dead as they were returned from Lebanon or other locations where U.S. soldiers were dying. On the eve of ground combat in the first Gulf war in 1991, the administration of George H.W. Bush grappled with a grisly question: war planners were expecting so many combat fatalities that they worried that the military would have to use forklifts and pallets at Dover. President Bush instituted the camera ban, which persists to this day.
...Dead soldiers, their bodies sometimes torn and bloody from the battlefield, are packed in ice, placed in a casket and flown directly to Dover, where they are cared for. Then the body is sent on to the soldier's hometown for a military funeral—with plenty of publicity if the family wishes to allow it.
The military's aim is to move the bodies from the battlefield to Dover in two days. If cameras are present to greet the caskets, there will be a great deal of pressure on the families to be there, too—an emotional and financial hardship for many. Some may want a public ceremony; some may want privacy and silence. Is there a better way to honor their privacy and meet their needs while making sure the public is reminded of the price of war? Canada may have an answer. The more than 100 Canadian soldiers who have fallen in combat in Afghanistan have been flown to Trenton air base, then driven 107 miles to the mortuary in Toronto. A stretch of Canada's Highway 401 has become known as the Highway of Heroes. When the military hearse drives down it, all other traffic is blocked; police and fire trucks, lights flashing, line each overpass, and hundreds of Canadians, flags in hand, wait along the highway. Perhaps fallen American soldiers could arrive at Andrews Air Force Base— with the sort of quiet, dignified ceremony I chanced to witness—and then be carried by hearse (anonymously; no family need be present) to the mortuary at Dover, 102 miles away by road and highway. The route could pass by the White House."
TW: What do you think?
"...there were six coffins and a few small clumps of civilians to receive them. One by one the flag-draped coffins slid down from the nose of the cargo plane, and one by one the coffins were shepherded by an honor guard—a half dozen soldiers in dress uniforms and white gloves—to waiting hearses. One or two elderly people wept; everyone else was stoical. There were no bugles. No bands. There was no pageantry—just the heavy tread of the honor guard in a ritual perfected through much repetition. It was an event so moving in its intimacy and restraint, out there on the acres of concrete, that I felt an intruder. I was glad there were no waiting cameras and flashbulbs.
...it's not an easy issue. It never has been. For many years, dead soldiers were buried where they fell, or close to, at home or abroad...It wasn't until the Korean War that the United States started routinely shipping bodies home. The Dover ceremony became familiar to the public in the 1980s, in part because President Reagan was such an affecting figure mourning the dead as they were returned from Lebanon or other locations where U.S. soldiers were dying. On the eve of ground combat in the first Gulf war in 1991, the administration of George H.W. Bush grappled with a grisly question: war planners were expecting so many combat fatalities that they worried that the military would have to use forklifts and pallets at Dover. President Bush instituted the camera ban, which persists to this day.
...Dead soldiers, their bodies sometimes torn and bloody from the battlefield, are packed in ice, placed in a casket and flown directly to Dover, where they are cared for. Then the body is sent on to the soldier's hometown for a military funeral—with plenty of publicity if the family wishes to allow it.
The military's aim is to move the bodies from the battlefield to Dover in two days. If cameras are present to greet the caskets, there will be a great deal of pressure on the families to be there, too—an emotional and financial hardship for many. Some may want a public ceremony; some may want privacy and silence. Is there a better way to honor their privacy and meet their needs while making sure the public is reminded of the price of war? Canada may have an answer. The more than 100 Canadian soldiers who have fallen in combat in Afghanistan have been flown to Trenton air base, then driven 107 miles to the mortuary in Toronto. A stretch of Canada's Highway 401 has become known as the Highway of Heroes. When the military hearse drives down it, all other traffic is blocked; police and fire trucks, lights flashing, line each overpass, and hundreds of Canadians, flags in hand, wait along the highway. Perhaps fallen American soldiers could arrive at Andrews Air Force Base— with the sort of quiet, dignified ceremony I chanced to witness—and then be carried by hearse (anonymously; no family need be present) to the mortuary at Dover, 102 miles away by road and highway. The route could pass by the White House."
TW: What do you think?
Tuesday, February 24, 2009
Hypocrisy Watch
TW: I really cannot think of a more important media person than Jon Stewart at this point. Once again, he nails the hypocrisy.
Obama's Popularity
(click on image to enlarge)
TW: Polling is subject to bias, but the reporting of the polls is the source of the most bias. These polls seem pretty straightforward to me. The headlines should be:
1) Obama's support amongst Republicans declines
2) Obama's support amongst Dems and Indies remains very high.
Yet one sees headlines suggesting serious erosion of Obama's support. It will happen in time (i.e. as the market continues to go down) but...not yet.
A blog comment I saw today:
"not only will his popularity continue to slip, but all it will take is one terror attack on american soil and he's finished no matter how he responds. stocks will continue to slide, deficit will continue to skyrocket, poverty and unemployment will force more borrowing by the democrat congress.. it's the 1970s all over again. thank god we have sarah palin waiting in the wings."
Maybe 20% of the folks out there abide this sentiment, regarding terrorism, democrats and my gal Sarah. The polls will reflect their views as well, it is a free country after all.
Russia: Grizzly or Cubby Bear?
TW: I vote for Cubby. The neo-cons vote for Grizzly. Do the Russians have a chip on their shoulder? yes; nukes? yes; a strong conventional military? absolutely not; a strong economy?absolutely not; strong moral authority associated with a western liberal democracy? absolutely not; are they surrounded by hostile or dysfunctional states on nearly every border? YES.
Yet the neo-cons want to fret and create another frictional relationship between the U.S. and Russia. Respect the Russians and politely tell them to pound sand whilst their economy implodes. It will be much less risky and costly than the neo-con confrontational, answer a chip on the other's shoulder with a bigger chip approach.
From Joe Klein at Time:
"[Neo-cons are promoting that] Barack Obama is getting played by the Russians. This is a theme that goes back to John McCain's overreaction to the skirmish in Georgia last summer--and further, to Robert Kagan's theory that the Russkies are roaring again. Which goes back to the neoconservative tic of searching for--at times, creating--enemies rather than opportunities.
In other words, this is cold war nonsense. The Russians were behind Kyrghizstan's "decision" to close down the American base there, an important Afghan supply link. (The "decision" is more like the opening round in a negotiation, which will probably wind up with the U.S. shelling out more for the rights to use the base.) The Russians want to have a choke-hold on U.S. Afghan supply routes. The Russians want to build a naval base in Abkhazia--nominally part of Georgia, but not really--on the Black Sea. The Russians want to gobble up Georgia.
OK. Russia has a history of aggression in its near-abroad. Let's assume all of the above is true, even if it probably isn't. (Why would the Russians want to put a choke-hold on our ability to fight in Afghanistan, where the enemy is the jihadi allies of the central asian Islamic terrorists--Chechens, Uzbeks etc--making life difficult along Russia's southern border?) Realism dictates that if the Russians actually want to swallow Georgia, there's nothing we can do to stop them. (Realism also dictates that the Russians learned a lesson when their stock market tanked last summer--foreign investors fleeing--when it seemed they would actually press on to Tblisi.)
On the other hand, let's say we do what Obama seems interested in doing: make further reductions in the U.S. and Russian nuclear stockpiles, and agree to put a hold on the anti-ballistic system in Europe (a system that is a technological fantasy, so far, in any case)...if the Russians successfully help to convince--or help threaten--the Iranians to halt their nuclear weapons plans. Diehl seems to think that because the Russians appear to open to this sort of negotiation, we should be suspicious of it. If--a big if, granted--we could stop the Iranian bomb program at the price of the anti-ballistic missile system (and slow-walking Georgia and Ukraine's entry into NATO), who wouldn't take that deal?
The fact is, Russia isn't the Soviet Union. Its military, beyond a few elite units, is decrepit. Its economy is suddenly shaky, given the recession--and the drop in demand for its oil and gas. It may be able to threaten a few former Soviet provinces, but its Eastern European satellites are safely tucked beneath the NATO and EU umbrella.
We have had eight years of neoconservative huffing and puffing about this putative enemy and that. This Russia fixation is among the weirder outcroppings. Obama's "reset" with Russia may not work, but it's certainly worth a major effort."
http://swampland.blogs.time.com/2009/02/23/ursa-minor/
Yet the neo-cons want to fret and create another frictional relationship between the U.S. and Russia. Respect the Russians and politely tell them to pound sand whilst their economy implodes. It will be much less risky and costly than the neo-con confrontational, answer a chip on the other's shoulder with a bigger chip approach.
From Joe Klein at Time:
"[Neo-cons are promoting that] Barack Obama is getting played by the Russians. This is a theme that goes back to John McCain's overreaction to the skirmish in Georgia last summer--and further, to Robert Kagan's theory that the Russkies are roaring again. Which goes back to the neoconservative tic of searching for--at times, creating--enemies rather than opportunities.
In other words, this is cold war nonsense. The Russians were behind Kyrghizstan's "decision" to close down the American base there, an important Afghan supply link. (The "decision" is more like the opening round in a negotiation, which will probably wind up with the U.S. shelling out more for the rights to use the base.) The Russians want to have a choke-hold on U.S. Afghan supply routes. The Russians want to build a naval base in Abkhazia--nominally part of Georgia, but not really--on the Black Sea. The Russians want to gobble up Georgia.
OK. Russia has a history of aggression in its near-abroad. Let's assume all of the above is true, even if it probably isn't. (Why would the Russians want to put a choke-hold on our ability to fight in Afghanistan, where the enemy is the jihadi allies of the central asian Islamic terrorists--Chechens, Uzbeks etc--making life difficult along Russia's southern border?) Realism dictates that if the Russians actually want to swallow Georgia, there's nothing we can do to stop them. (Realism also dictates that the Russians learned a lesson when their stock market tanked last summer--foreign investors fleeing--when it seemed they would actually press on to Tblisi.)
On the other hand, let's say we do what Obama seems interested in doing: make further reductions in the U.S. and Russian nuclear stockpiles, and agree to put a hold on the anti-ballistic system in Europe (a system that is a technological fantasy, so far, in any case)...if the Russians successfully help to convince--or help threaten--the Iranians to halt their nuclear weapons plans. Diehl seems to think that because the Russians appear to open to this sort of negotiation, we should be suspicious of it. If--a big if, granted--we could stop the Iranian bomb program at the price of the anti-ballistic missile system (and slow-walking Georgia and Ukraine's entry into NATO), who wouldn't take that deal?
The fact is, Russia isn't the Soviet Union. Its military, beyond a few elite units, is decrepit. Its economy is suddenly shaky, given the recession--and the drop in demand for its oil and gas. It may be able to threaten a few former Soviet provinces, but its Eastern European satellites are safely tucked beneath the NATO and EU umbrella.
We have had eight years of neoconservative huffing and puffing about this putative enemy and that. This Russia fixation is among the weirder outcroppings. Obama's "reset" with Russia may not work, but it's certainly worth a major effort."
http://swampland.blogs.time.com/2009/02/23/ursa-minor/
You Break You Fix It
TW: Tom Ricks has written extensively on Iraq and is very hooked into to our military establishment. His theme is simple there are no easy answers in Iraq so get used to it regardless of your political persuasion.
To me I like others am not sure what the best route to take is at this point, although fewer troops in general and the majority of those remaining stationed in Kurdistan is my preference. The fundamental point though is avoiding these catastrophes in the first place, which is why I am glad we have a new POTUS. I can only hope he does not do something stupid in Iran.
From Tom Ricks at Foreign Policy Mag:
"Salon just carried an insightful review of my [Rick's] book [the Gamble] that triggered a mudslide of nasty letters from the magazine's readers.
"If you enjoyed 'Fiasco,' thrilled to have your prejudices about the clueless Bush administration confirmed, it's your responsibility to read 'The Gamble' to have some prejudices challenged," wrote the reviewer, Joan Walsh, Salon's editor-in-chief. I think she really captured the ambivalence at the heart of the book, the sense that staying in Iraq is far from appealing, but may be the least worst choice available. Her review concludes that, "I still want troops out of Iraq as soon as possible. But reading this well-reported book may have changed even my notion of what that means."
Her readers didn't like hearing that, and posted a variety of angry responses. Here's the note I sent to Walsh after reading some, but not all, of the 117 responses:
Looking over the comments on your review, I think what a lot of people are failing to grasp, or are resisting understanding, is that there are no good answers in Iraq. The question many of them don't seem to want to face is, what is the least bad answer?
It was a pre-emptive war launched on false premises that distracted us from the task at hand in Afghanistan. Everything that has happened in Iraq since then is the fruit of that poisoned tree. Given that original sin, what do we do? Staying in Iraq isn't appealing. Leaving risks genocide and regional war.
So what do your more vehement readers recommend? What do you do if both courses of action are bad, even immoral?"
http://ricks.foreignpolicy.com/posts/2009/02/19/stuck_in_iraq
To me I like others am not sure what the best route to take is at this point, although fewer troops in general and the majority of those remaining stationed in Kurdistan is my preference. The fundamental point though is avoiding these catastrophes in the first place, which is why I am glad we have a new POTUS. I can only hope he does not do something stupid in Iran.
From Tom Ricks at Foreign Policy Mag:
"Salon just carried an insightful review of my [Rick's] book [the Gamble] that triggered a mudslide of nasty letters from the magazine's readers.
"If you enjoyed 'Fiasco,' thrilled to have your prejudices about the clueless Bush administration confirmed, it's your responsibility to read 'The Gamble' to have some prejudices challenged," wrote the reviewer, Joan Walsh, Salon's editor-in-chief. I think she really captured the ambivalence at the heart of the book, the sense that staying in Iraq is far from appealing, but may be the least worst choice available. Her review concludes that, "I still want troops out of Iraq as soon as possible. But reading this well-reported book may have changed even my notion of what that means."
Her readers didn't like hearing that, and posted a variety of angry responses. Here's the note I sent to Walsh after reading some, but not all, of the 117 responses:
Looking over the comments on your review, I think what a lot of people are failing to grasp, or are resisting understanding, is that there are no good answers in Iraq. The question many of them don't seem to want to face is, what is the least bad answer?
It was a pre-emptive war launched on false premises that distracted us from the task at hand in Afghanistan. Everything that has happened in Iraq since then is the fruit of that poisoned tree. Given that original sin, what do we do? Staying in Iraq isn't appealing. Leaving risks genocide and regional war.
So what do your more vehement readers recommend? What do you do if both courses of action are bad, even immoral?"
http://ricks.foreignpolicy.com/posts/2009/02/19/stuck_in_iraq
Things I Like - Art
By now you know that I am fond of art that might be considered a little odd. I love these snow globes done by Walter Martin and Paloma Munez. Their website has more globes as well as other unusual art.
http://www.martin-munoz.com/main.html
http://www.martin-munoz.com/main.html
The Implied Assumptions When We Write Or Think
TW: Andrew is a stats professor from Columbia (http://www.stat.columbia.edu/~cook/movabletype/mlm/). Somewhat like Nate Silver he is good at looking at things from different angles. He dissects a story on Japanese consumption to provide an alternative viewpoint using the exact same facts.
From Gelman's blog:
"On the front page of Sunday's New York Times, the primest of prime real estate, Hiroko Tabuchi writes:
Sure, I can see that this is all evidence that Japan's economy is far from booming, but I'm a bit disturbed to see frugality treated as a "disaster" in itself.
What really bothers me, though, is that the assumptions in the article are completely unstated. I'd be happier if the reporter had written something like this:
P.S. Just to be clear: my point here is not that a newspaper reporter wrote something I might disagree with, but rather that sometimes people seem trapped within their unstated assumptions. (Yes, I'm sure that happens to me too.)"
From Gelman's blog:
"On the front page of Sunday's New York Times, the primest of prime real estate, Hiroko Tabuchi writes:
"As recession-wary Americans adapt to a new frugality, Japan offers a peek at how thrift can take lasting hold of a consumer society, to disastrous effect... Today, years after the recovery, even well-off Japanese households use old bath water to do laundry, a popular way to save on utility bills. Sales of whiskey, the favorite drink among moneyed Tokyoites in the booming '80s, have fallen to a fifth of their peak. And the nation is losing interest in cars; sales have fallen by half since 1990."How is this "disastrous"? Using bath water to do laundry makes sense to me. Unfortunately our apartment is not set up to do this, but why not? Cars are much better made than they used to be, probably most people in Japan who want a car badly enough have one already, so it makes sense that car sales would fall--people can continue driving their dependable old cars. Finally, I have nothing against whiskey, but is it really "disastrous" that sales have fallen to a fifth of their peak? Fads and all that.
Sure, I can see that this is all evidence that Japan's economy is far from booming, but I'm a bit disturbed to see frugality treated as a "disaster" in itself.
What really bothers me, though, is that the assumptions in the article are completely unstated. I'd be happier if the reporter had written something like this:
You might think that it's a good thing that the Japanese have become more energy-efficient and less into trendy conspicuous consumption: even well-off Japanese households use old bath water to do laundry, a popular way to save on utility bills, and sales of whiskey, the favorite drink among moneyed Tokyoites in the booming '80s, have fallen to a fifth of their peak.Even the notorious Japanese tendency to buy new cars and appliances every two years, whether they need it or not, has abated. The nation is losing interest in cars--sales have fallen by half since 1990--and people are sticking with old-fashioned television sets rather than snapping up expensive flat-screen TVs.This puts the assumptions front and center, at which point they could quote experts on both sides of the issue or whatever.
But this frugal behavior is having a disastrous effect [or, is
symptomatic of an underlying economic disaster]...
P.S. Just to be clear: my point here is not that a newspaper reporter wrote something I might disagree with, but rather that sometimes people seem trapped within their unstated assumptions. (Yes, I'm sure that happens to me too.)"
Monday, February 23, 2009
Economic Pornography
TW: Not surprisingly I find Glenn Beck repulsive. But he has anchored prominent shows now on two separate major networks, CNN and now Fox. This recent clip to me is the height of irresponsibility and speaks to the depths MSM will sink in pursuit of ratings. Does he represent a segment of our population, probably. A segment we would want governing our nation, I sure hope not.
Btw, the Steven Roach character puking about 90% tax rates works for the Wall Street Journal and appears regularly on CNBC. My guess is his brilliant analysis assumes to trying to pay down all the recent expenditures over a very short time period as opposed to over many years which will be the case (just like we paid for WWII etc.). Mike Scheuer is a very controversial former CIA analyst aligned with Ron Paul.
The gap between certain conservatives and quackery is narrowing.
The Word Of the Week: Them
TW: As I have written previously populism is at once pervasive but almost always destructive. We are amidst challenging times, we do not need populism to morph into a destructive force. Few recall that FDR's greatest challenger for the presidency in 1936 was not a Republican but another Democrat, Huey Long of Louisiana. Long was assassinated in 1935 conveniently pricking a growing bubble of populism embodied by Long and others such as Father Charles Coughlin.
From Jesse's American Cafe blog:
"Demagoguery refers to a strategy for gaining political power by appealing to the popular prejudices, emotions, fears and expectations of the public — typically via impassioned rhetoric and propaganda, and often using nationalist or populist themes, usually singling out a group or groups. >
No, not demagogue or demagogy. The Word for the Week is "them.
Why should we help them.
We are being dragged down by them.
Blaming them feels good.
It makes one feel as if they were successful, not part of the problem.
It wasn't us, it was them.
They caused their own problems.
They caused our problems. It is unfortunate but they would be better off somewhere else, out of sight, no longer an impairment or competition for scarce resources.
They are the scapegoats, usually singled out by the group or groups that caused the problems, and even those who benefitted indirectly, made some money out of the bubble, less deservedly than they might like to imagine.
They are the weak, the poor, the defenseless, the different, the other.
And the circle of the ones that are considered them spreads wider and wider.
Because even those shouting and waving their fists in the crowds against them are also them to someone else higher up in the power structure. Useless eaters.
And then someone will come and take them away, where they do not wish to go. And then comes the descent into madness and destruction, for all."
From Jesse's American Cafe blog:
"Demagoguery refers to a strategy for gaining political power by appealing to the popular prejudices, emotions, fears and expectations of the public — typically via impassioned rhetoric and propaganda, and often using nationalist or populist themes, usually singling out a group or groups. >
No, not demagogue or demagogy. The Word for the Week is "them.
Why should we help them.
We are being dragged down by them.
Blaming them feels good.
It makes one feel as if they were successful, not part of the problem.
It wasn't us, it was them.
They caused their own problems.
They caused our problems. It is unfortunate but they would be better off somewhere else, out of sight, no longer an impairment or competition for scarce resources.
They are the scapegoats, usually singled out by the group or groups that caused the problems, and even those who benefitted indirectly, made some money out of the bubble, less deservedly than they might like to imagine.
They are the weak, the poor, the defenseless, the different, the other.
And the circle of the ones that are considered them spreads wider and wider.
Because even those shouting and waving their fists in the crowds against them are also them to someone else higher up in the power structure. Useless eaters.
And then someone will come and take them away, where they do not wish to go. And then comes the descent into madness and destruction, for all."
Another Tweak: Changing Homeless Policy
TW: Another subtle but useful policy tweak that will receive minimal attention but from my perspective improves governance.
From Amy Sullivan at Time:
"Homeless policy usually focuses on those who are already homeless, getting them off the streets or out of shelters into transitional or permanent housing, and providing mental health or substance abuse treatment to the chronically homeless. And that's what much of the $1.6 billion in grants that HUD announced yesterday for programs that help the homeless will focus on.
But in the current economic and housing crisis, preventing homelessness has become an issue of equal concern. So the administration is devoting almost as many funds--$1.5 billion--to helping individuals and families on the brink to avoid homelessness. If the housing plan announced on Wednesday was targeted to homeowners struggling to pay mortgages and forestall foreclosure, these funds are intended to help renters, a population HUD Secretary Shaun Donovan described in a press call yesterday as traditionally more vulnerable than homeowners.
The $1.5 billion was included in the economic stimulus package, and will fund programs that help people pay security deposits, utility bills, and rent. An inability to cover these kinds of housing expenses can get a family kicked out of an apartment or force them to stay with relatives instead of moving into their own place."
http://swampland.blogs.time.com/2009/02/20/a-new-kind-of-homeless-policy/
From Amy Sullivan at Time:
"Homeless policy usually focuses on those who are already homeless, getting them off the streets or out of shelters into transitional or permanent housing, and providing mental health or substance abuse treatment to the chronically homeless. And that's what much of the $1.6 billion in grants that HUD announced yesterday for programs that help the homeless will focus on.
But in the current economic and housing crisis, preventing homelessness has become an issue of equal concern. So the administration is devoting almost as many funds--$1.5 billion--to helping individuals and families on the brink to avoid homelessness. If the housing plan announced on Wednesday was targeted to homeowners struggling to pay mortgages and forestall foreclosure, these funds are intended to help renters, a population HUD Secretary Shaun Donovan described in a press call yesterday as traditionally more vulnerable than homeowners.
The $1.5 billion was included in the economic stimulus package, and will fund programs that help people pay security deposits, utility bills, and rent. An inability to cover these kinds of housing expenses can get a family kicked out of an apartment or force them to stay with relatives instead of moving into their own place."
http://swampland.blogs.time.com/2009/02/20/a-new-kind-of-homeless-policy/
Saving the Greedy Idiots To Save Us All
TW: Brooks speaks to several realities. One, there are no obvious solutions regardless of what ideologues may suggest. Two, saving the greedy idiots both on Wall Street and on main street is necessary to save the whole. This last concept is fundamental and if not ultimately understood and agreed upon will lead to far worse implications than we have yet seen.
From David Brooks at NYT:
"Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible
Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.
The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.
...[but] government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.
...Right now, the economic landscape looks like that movie of the swaying Tacoma Narrows Bridge you might have seen in a high school science class. It started swinging in small ways and then the oscillations built on one another until the whole thing was freakishly alive and the pavement looked like liquid.
A few years ago, the global economic culture began swaying. The government enabled people to buy homes they couldn’t afford. The Fed provided easy money. The Chinese sloshed in oceans of capital. The giddy upward sway produced a crushing ride down.
These oscillations are the real moral hazard. Individual responsibility doesn’t mean much in an economy like this one. We all know people who have been laid off through no fault of their own. The responsible have been punished along with the profligate.
It makes sense for the government to intervene to try to reduce the oscillation. It makes sense for government to try to restore some communal order. And the sad reality is that in these circumstances government has to spend money on precisely those sectors that have been swinging most wildly — housing, finance, etc. It has to help stabilize people who have been idiots.
Actually executing this is a near-impossible task. Looking at the auto, housing and banking bailouts, we’re getting a sense of how the propeller heads around Obama operate. They try to put together programs that are bold, but without the huge interventions in the market implied by, say, nationalization. They’re balancing so many cross-pressures, they often come up with technocratic Rube Goldberg schemes that alter incentives in lots of medium and small ways. Some economists argue that the plans are too ineffectual, others that they are too opaque (estimates for the mortgage plan range from $75 billion to $275 billion and up). Personally, I hate the idea of 10 guys sitting around in the White House trying to redesign huge swaths of the U.S. economy on legal pads.
But at least they seem to be driven by a spirit of moderation and restraint. They seem to be trying to keep as many market structures in place as possible so things can return to normal relatively smoothly.
And they seem to understand the big thing. The nation’s economy is not just the sum of its individuals. It is an interwoven context that we all share. To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize."
http://www.nytimes.com/2009/02/20/opinion/20brooks.html?th&emc=th
From David Brooks at NYT:
"Our moral and economic system is based on individual responsibility. It’s based on the idea that people have to live with the consequences of their decisions. This makes them more careful deciders. This means that society tends toward justice — people get what they deserve as much as possible
Over the last few months, we’ve made a hash of all that. The Bush and Obama administrations have compensated foolishness and irresponsibility. The financial bailouts reward bankers who took insane risks. The auto bailouts subsidize companies and unions that made self-indulgent decisions a few decades ago that drove their industry into the ground.
The stimulus package handed tens of billions of dollars to states that spent profligately during the prosperity years. The Obama housing plan will force people who bought sensible homes to subsidize the mortgages of people who bought houses they could not afford. It will almost certainly force people who were honest on their loan forms to subsidize people who were dishonest on theirs.
...[but] government isn’t fundamentally in the Last Judgment business, making sure everybody serves penance for their sins. In times like these, government is fundamentally in the business of stabilizing the economic system as a whole.
...Right now, the economic landscape looks like that movie of the swaying Tacoma Narrows Bridge you might have seen in a high school science class. It started swinging in small ways and then the oscillations built on one another until the whole thing was freakishly alive and the pavement looked like liquid.
A few years ago, the global economic culture began swaying. The government enabled people to buy homes they couldn’t afford. The Fed provided easy money. The Chinese sloshed in oceans of capital. The giddy upward sway produced a crushing ride down.
These oscillations are the real moral hazard. Individual responsibility doesn’t mean much in an economy like this one. We all know people who have been laid off through no fault of their own. The responsible have been punished along with the profligate.
It makes sense for the government to intervene to try to reduce the oscillation. It makes sense for government to try to restore some communal order. And the sad reality is that in these circumstances government has to spend money on precisely those sectors that have been swinging most wildly — housing, finance, etc. It has to help stabilize people who have been idiots.
Actually executing this is a near-impossible task. Looking at the auto, housing and banking bailouts, we’re getting a sense of how the propeller heads around Obama operate. They try to put together programs that are bold, but without the huge interventions in the market implied by, say, nationalization. They’re balancing so many cross-pressures, they often come up with technocratic Rube Goldberg schemes that alter incentives in lots of medium and small ways. Some economists argue that the plans are too ineffectual, others that they are too opaque (estimates for the mortgage plan range from $75 billion to $275 billion and up). Personally, I hate the idea of 10 guys sitting around in the White House trying to redesign huge swaths of the U.S. economy on legal pads.
But at least they seem to be driven by a spirit of moderation and restraint. They seem to be trying to keep as many market structures in place as possible so things can return to normal relatively smoothly.
And they seem to understand the big thing. The nation’s economy is not just the sum of its individuals. It is an interwoven context that we all share. To stabilize that communal landscape, sometimes you have to shower money upon those who have been foolish or self-indulgent. The greedy idiots may be greedy idiots, but they are our countrymen. And at some level, we’re all in this together. If their lives don’t stabilize, then our lives don’t stabilize."
http://www.nytimes.com/2009/02/20/opinion/20brooks.html?th&emc=th
Things I Like - Humor
I was looking for something amusing and ran across these photos from Katie Sokoler. Check out her site - she's very creative and amusing in a quirky kind of way.
For example, one day she decided to stick these paper eyes on random objects while walking around in New York City. I hope she left them there to amuse others.
Go to this link to see more 'eye' photos
http://colormekatie.blogspot.com/2009/01/tuesday_27.html
For example, one day she decided to stick these paper eyes on random objects while walking around in New York City. I hope she left them there to amuse others.
Go to this link to see more 'eye' photos
http://colormekatie.blogspot.com/2009/01/tuesday_27.html
The Brass Ring: What Obama Needs To Do
From President Obama via the Atlantic:
"...Health care is a classic situation where it may cost money on the front end and save enormous money on the back end and what we're going to have to figure out is what can we do now to start getting that ball rolling, because the longer we put that off, the worse off we are financially. Medicare and Medicaid on their current trajectory cannot be sustained. And the only way I think we're going to fix it is if we see those two problems in the broader contest of bending the curve down on health care inflation....
I should add one more thing and that is a budget process that starts bending the deficit curve down. I think that all these goals are complementary. I also think that the American people understand we won't get everything done overnight. The U.S. government and the U.S. economy are enormous ocean liners, they're not speedboats. So what we will do this year is to try to get them on the right trajectory and hopefully that means at the end of my term you'll look back and you'll say we're at a different place than we would have been had we not made these changes."
TW: President Obama has an opportunity rarely available to a POTUS. If he is bold and aggressive and politically astute to the level of an FDR or Lincoln, he could transform American fiscal policy for a generation. The various initiatives are costing trillions of dollars. Many are rightly concerned about the impact of this spending on our future fiscal health. They are wrong to suggest a Hooverite approach of not spending to combat the economic crisis, but they are right to ask how we address our fiscal challenges.
Correspondingly, and regardless of the current economic contraction, we face looming fiscal challenges associated with social security and especially health care costs. Obama's challenge is to formulate policies in the short-run effective in mitigating the current economic contraction while in the longer-run creating a framework for reducing our fiscal deficits.
Obama is hosting a summit on the fiscal situation today. Such summits are merely symbolic gestures the proof will be in the pudding of his actual proposals. The Republicans are petrified that the current crisis will provide cover for Obama to define policies of his choosing to redraw our fiscal future. I hope their fears are justified.
These are the type attributes I would like to see in his plan
1) rescind all Bush tax cuts (inc. cap gains) for those making more than $200,000
2) restore the estate tax with the prior exemptions indexed to inflation (future post coming on this)
3) reduce social security benefits by tweaking downward the annual growth factor by roughly 10%
4) reduce medicare benefits through combination of higher deductibles and tighter eligibility standards for high cost treatments
5) create a new higher marginal tax bracket indexed to inflation for those making over $1,000,000 (5% over current top rate)
6) initiate planning to reduce American out of pocket expenses in Iraq and Afghanistan by 50% in current $ over the next 5 years
If Obama can articulate a viable plan by which to reduce the American fiscal deficits near surplus within five years, then he will:
1) Create an environment in which financing the current stimulus measures should be non-problematical as internationals lenders would see the U.S. as a superior investment opportunity
2) Create an environment in which inflation should remain contained and provide the basis for low interest rates and relatively strong economic growth going forward
3) Cut the knees out from under hypocritical Republicans who talk fiscal responsibility but live fiscally irresponsibly by initiating unnecessary wars, cutting taxes for the wealthy and paring the occasional immaterial spending items.
The suggested measures would be controversial on both the left and the right but if Obama is to be a truly transformational leader these are the tough decisions he must initiate. Others speak of making tough choices, these would be tough choices. Do enough Americans trust Obama to take these steps?
"...Health care is a classic situation where it may cost money on the front end and save enormous money on the back end and what we're going to have to figure out is what can we do now to start getting that ball rolling, because the longer we put that off, the worse off we are financially. Medicare and Medicaid on their current trajectory cannot be sustained. And the only way I think we're going to fix it is if we see those two problems in the broader contest of bending the curve down on health care inflation....
I should add one more thing and that is a budget process that starts bending the deficit curve down. I think that all these goals are complementary. I also think that the American people understand we won't get everything done overnight. The U.S. government and the U.S. economy are enormous ocean liners, they're not speedboats. So what we will do this year is to try to get them on the right trajectory and hopefully that means at the end of my term you'll look back and you'll say we're at a different place than we would have been had we not made these changes."
TW: President Obama has an opportunity rarely available to a POTUS. If he is bold and aggressive and politically astute to the level of an FDR or Lincoln, he could transform American fiscal policy for a generation. The various initiatives are costing trillions of dollars. Many are rightly concerned about the impact of this spending on our future fiscal health. They are wrong to suggest a Hooverite approach of not spending to combat the economic crisis, but they are right to ask how we address our fiscal challenges.
Correspondingly, and regardless of the current economic contraction, we face looming fiscal challenges associated with social security and especially health care costs. Obama's challenge is to formulate policies in the short-run effective in mitigating the current economic contraction while in the longer-run creating a framework for reducing our fiscal deficits.
Obama is hosting a summit on the fiscal situation today. Such summits are merely symbolic gestures the proof will be in the pudding of his actual proposals. The Republicans are petrified that the current crisis will provide cover for Obama to define policies of his choosing to redraw our fiscal future. I hope their fears are justified.
These are the type attributes I would like to see in his plan
1) rescind all Bush tax cuts (inc. cap gains) for those making more than $200,000
2) restore the estate tax with the prior exemptions indexed to inflation (future post coming on this)
3) reduce social security benefits by tweaking downward the annual growth factor by roughly 10%
4) reduce medicare benefits through combination of higher deductibles and tighter eligibility standards for high cost treatments
5) create a new higher marginal tax bracket indexed to inflation for those making over $1,000,000 (5% over current top rate)
6) initiate planning to reduce American out of pocket expenses in Iraq and Afghanistan by 50% in current $ over the next 5 years
If Obama can articulate a viable plan by which to reduce the American fiscal deficits near surplus within five years, then he will:
1) Create an environment in which financing the current stimulus measures should be non-problematical as internationals lenders would see the U.S. as a superior investment opportunity
2) Create an environment in which inflation should remain contained and provide the basis for low interest rates and relatively strong economic growth going forward
3) Cut the knees out from under hypocritical Republicans who talk fiscal responsibility but live fiscally irresponsibly by initiating unnecessary wars, cutting taxes for the wealthy and paring the occasional immaterial spending items.
The suggested measures would be controversial on both the left and the right but if Obama is to be a truly transformational leader these are the tough decisions he must initiate. Others speak of making tough choices, these would be tough choices. Do enough Americans trust Obama to take these steps?
Sunday, February 22, 2009
A Bit Blurry But Laura Missed Her Flight the Other Day It Got Ugly
TW: She has been taking language lessons which came out spontaneously
Great Move: Defining Real US Deficit Numbers
TW: This is one of those relatively subtle yet profound changes that greatly impact our governance. Obama, breaking with past practices of W. Bush and several previous POTUS, is calculating our federal budget in a more realistic manner which will increase the projected fiscal deficit by $2.7 trillion over the coming decade.
You may recall the annual hubbub regarding the AMT "patch", every year we now "patch" the AMT to avoid middle class tax payer revolt. Obama says lets call a spade a spade and projects the costs of the patching into the baseline budget. Correspondingly W. Bush funded much of the Iraq and Afghanistan wars with extraordinary resolutions not included in the baseline budget but again those will now be integrated.
Framing the budget in more realistic terms is a good start. Cynics will rightly claim it gives Obama more leeway to "reduce" the future deficit as he is now increasing the baseline but I will take a realistic budget over fantasy any day.
From NYT:
"For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses. But the biggest adjustment will deal with revenues from the alternative minimum tax...
...Mr. Obama’s banishment of the gimmicks, which have been widely criticized, is in keeping with his promise to run a more transparent government. Fiscal sleight of hand has long been a staple of federal budgets, giving rise to phrases like “rosy scenario” and “magic asterisks.”
...As for war costs, Mr. Bush included little or none in his annual military budgets, instead routinely asking Congress for supplemental appropriations during the year. Mr. Obama will include cost projections for every year through the 2019 fiscal year to cover “overseas military contingencies” — nearly $500 billion over 10 years.
For Medicare, Mr. Bush routinely budgeted less than actual costs for payments to physicians, although he and Congress regularly waived a law mandating the lower reimbursements for fear that doctors would quit serving beneficiaries in protest.
Mr. Obama will budget $401 billion over 10 years for higher costs and interest on the debt.
He will also budget $273 billion in that period for natural disasters. Every year the government pays billions for disaster relief, but presidents and lawmakers have long ignored budget reformers’ calls for a contingency account to reflect that certainty."
http://www.nytimes.com/2009/02/20/us/politics/20budget.html?scp=1&sq=obama%20budget&st=cse
You may recall the annual hubbub regarding the AMT "patch", every year we now "patch" the AMT to avoid middle class tax payer revolt. Obama says lets call a spade a spade and projects the costs of the patching into the baseline budget. Correspondingly W. Bush funded much of the Iraq and Afghanistan wars with extraordinary resolutions not included in the baseline budget but again those will now be integrated.
Framing the budget in more realistic terms is a good start. Cynics will rightly claim it gives Obama more leeway to "reduce" the future deficit as he is now increasing the baseline but I will take a realistic budget over fantasy any day.
From NYT:
"For his first annual budget next week, President Obama has banned four accounting gimmicks that President George W. Bush used to make deficit projections look smaller. The price of more honest bookkeeping: A budget that is $2.7 trillion deeper in the red over the next decade than it would otherwise appear, according to administration officials.
The new accounting involves spending on the wars in Iraq and Afghanistan, Medicare reimbursements to physicians and the cost of disaster responses. But the biggest adjustment will deal with revenues from the alternative minimum tax...
...Mr. Obama’s banishment of the gimmicks, which have been widely criticized, is in keeping with his promise to run a more transparent government. Fiscal sleight of hand has long been a staple of federal budgets, giving rise to phrases like “rosy scenario” and “magic asterisks.”
...As for war costs, Mr. Bush included little or none in his annual military budgets, instead routinely asking Congress for supplemental appropriations during the year. Mr. Obama will include cost projections for every year through the 2019 fiscal year to cover “overseas military contingencies” — nearly $500 billion over 10 years.
For Medicare, Mr. Bush routinely budgeted less than actual costs for payments to physicians, although he and Congress regularly waived a law mandating the lower reimbursements for fear that doctors would quit serving beneficiaries in protest.
Mr. Obama will budget $401 billion over 10 years for higher costs and interest on the debt.
He will also budget $273 billion in that period for natural disasters. Every year the government pays billions for disaster relief, but presidents and lawmakers have long ignored budget reformers’ calls for a contingency account to reflect that certainty."
http://www.nytimes.com/2009/02/20/us/politics/20budget.html?scp=1&sq=obama%20budget&st=cse
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