Saturday, May 30, 2009

Saturday updates

Current CNN poll show Americans are for Universal health care but are divided on how to provide it.


Single-Payer!!!

The ONLY way I am in support of having my employer-based health care coverage taxed is to support a single-payer health system... Wait, if single-payer exists, we won't NEED employer provided health care! Let me explain...

I just finished listening to Bill Moyer's latest Journal, in which he examined the single-payer idea of health care. You can listen for yourself or just read my summary (with comments!) below.
  • People argue against health care that it should not be a right, but that begs the question should it be for profit?
  • Some would argue that the current system is working and we shouldn't mess with it. I disagree. So do other people more informed than me. The New Yorker has an excellent article that says public or private won't solve it either way.
  • Is it a good thing that in our country we have UPDATE: insured people who go bankrupt because of medical bills? All that says is if you get sick, you are screwed. That seems really stupid to me in our modern society.
  • Dr. Sidney Wolfe claims that $400 billion dollars are wasted every year on excessive administrative costs. Holy crap! He also says that we can save $4 trillion dollars over the next 10 years if we simply do away with the health care industry. That's a lot more than the $2 trillion the leaders of the health care industry 'promised' to voluntarily reduce after meeting with Obama a couple of weeks ago.
  • Listening to leaders say they will voluntarily reduce cost carries about as much credibility as listening to past GM management say they will turn the company around. How'd that go? We have heard the health care industry say they will voluntarily reduce cost in the 70's and early 90's, only to see costs go up and not down. This industry is more similar to Wallstreet than you might think.
  • We need to look north to our Canadian neighbors and model our system on theirs.
  • Socialized medicine is used as a scare tactic. But aren't our libraries socialized? Are those evil?
  • Senator Baucus, who leads the Senate Finance committee has been against single-payer from the start, and he is the leading Democrat receiving campaign contributions from the health care industry. He is starting to come around, but even Obama opposes completely changing the entire system. That's a shame.
  • Why do congresspeople seem to be for sale? Because of the lure of money for campaign contributions followed by lobbying positions after public service. This is the entire reason.
  • Look how quickly Wallstreet was able to get it's bailout money.
  • Paul Krugman is thinking that since Medicare is such a mess, why not look at a well-run government health care program, the VA?
  • Some say that a new system would limit choice. I can tell you from my experience that our current system limits choice. You can't use an HMO Dr. if you are on a PPO plan without paying more out of pocket. Why would you choose to do that? Why should you have to do that?
  • America is the ONLY industrialized nation that does not provide universal health care. That is a true shame. What kind of legacy are we leaving to our kids if we allow that to continue?
  • Changing the system now would be too "disruptive". Disruption and I would say Revolution, is a healthy thing every now and then. Einstein says that the true sign of an insane person is someone who does the same thing over and over and expects a different outcome. Isn't that what our current system keeps doing?
  • The fear of having a public option alongside with a private option is that the public option will become a dumping ground for the private options to pass along all the sick people to. This would increase the cost of the public plan, making it unable to compete with the private plans. The whole point of having a public plan alongside a private plan is to increase competition and lower costs, which this tactic could nullify.
  • Most Doctors support a universal health care.
  • One argument against universal health care is that it would cost to much. It only costs too much when you compare it to our current system. Canada's plan is cheaper, so is Taiwan's system
  • Canada recently voted Tommy Douglas as their greatest leader in the history of the country. Mr. Douglas was responsible for the Canadian national health insurance program. THAT is the kind of legacy I want to leave to my son.

Thursday, May 28, 2009

Memorial Day

This is late, but look here anyways.

Wednesday, May 27, 2009

Couple of very good reads

Healthcare: At first, taxing my healthcare benefits seems outrageously unfair, but this article makes a very persuasive case and frames the idea of taxing employer benefits in a new way.

AIG: After reading this article, I feel compelled to do several things that I can't. Signing up Joe Cassano for some waterboarding, along with Mr. Hank Paulson seems like a good start. I would also like to go into each Senator and Congressperson's office and tell them exactly how and where they can spend the next AIG bailout. Now, not all the people in the Financial Products division deserve my wrath, but the ones that really are responsible have already left the company. This is an interesting editorial, from the wife of one of the guys in AIGFP.

After looking over my post, I realized that it strikes an odd chord to read about how our healthcare benefits might get taxed and then how these idiots at AIG are getting off pretty much scot free.

Wednesday, May 20, 2009

A busy week, and its only Wednesday!

TARP money should not just be paid back with no strings attached. That is unfair to the taxpayer. If this does happen, my disillusionment with Obama's economic team will grow deeper and my faith that we can get out of this mess with the necessary reforms will shrivel. Barry Ritholtz has a great post about this at his blog. Read it.

Update: I just found this post at naked capitalism. It's more proof of my belief that the war on the middle class does exist and that wages need to go up. The second half of the article really gets into the meat of my belief. Look for the title Is the U.S. efficient and fair?

A Thoughtful viewpoint

I have a 15-month-old son. It scares me to think that our current economic direction is going to be a heavy load that my generation is getting ready to pick up and carry and then pass on to my son and his generation. This article at Public Agenda presents the kind of thoughtful and balanced perspective that I think is missing in a lot of discussions we hear about the deficit and cutting spending.

Oh, and by the way. Social Security is fixed forever if we just eliminate the cap on taxable earnings, which last year was $102,000. That translates into a 'tax increase' on people who from my view can totally afford it. That cap is well above what I make now and I am more than happy to keep paying into a system that has helped out my family.

Tuesday, May 19, 2009

So banks don't own the entire place...

The Senate passed the credit card bill of rights today, 90-5. Its a step in the right direction and goes into effect sooner than I thought. A few downsides, though:

The bill doesn't include a hard 15 percent cap on credit card interest rates, as proposed by Bernie Sanders, and it doesn't include a provision that would make it easier for merchants to offer discounts to customers who do not use credit cards

Social Security

Didn't we go through this nonsense earlier? Social Security needs tweaking, but it's not doomed.

Email with my Dad

So my parents have a small investment in a national food chain called The Pita Pit. Its awesome food. Anyways, my dad got an email from his group's investor representative who attended the Federal Home Loan Bank (FHLB) of Seattle board meetings this past month, and here is what the reps summary of the current economic outlook:

We heard directly from several national expert economists – with more good than bad for the general economy.

The summary that I would conclude from the various speeches and meetings is this:

10. The recession may have indeed bottomed out in March – and recovery has actually begun

11. However, lagging behind, the banking and real estate industries still have some rough times ahead

12. Residential home/condo prices in some major markets (California, Arizona, Nevada and Florida) are 50% of what they were three years ago (truly a buyers’ market)

13. The much anticipated FASB accounting rule changes in April 2009 actually became a two edged sword due to the way in which FASB ‘staff’ quietly (secretly) changed some of the other ‘standards’

14. The primary reasons for the recession were a combination of:

a. Misguided US federal monetary policy

i. too much money in the system

ii. interest rates too low

iii. and a political push to get everyone into houses even if they couldn’t afford it

b. Causing an overstock of new construction

c. Investment banking taking on too much overall risk (not just sub-prime residential)

d. Then with relatively new mark-to-market accounting rules, last August & September, over-zealous federal regulators mistakenly and too quickly ‘closed’ a few large banks

e. Causing and followed by global PANIC! [aka RECESSION]

f. The panic was far worse than ‘reality’, but the panic actually made a recession take hold

g. Fortunately, the panic is now subsiding

15. One economist predicts a big bounce in the economy by this Fall (excluding housing)

16. There is a tremendous amount of money in ‘savings’ right now – if consumer confidence returns, that money will soon begin to be spent on ‘lots of stuff’

17. Inflation is bad - but ‘de-flation’ is worse

18. Post stimulus package, to avoid rebound inflation, the Fed actually has a plan to pull the excess money (trillions that they have just ‘printed’) out of the system – but not until the economy starts to definitely recover.


So So I replied back to my Dad with my comments about what was said:

That’s interesting that they think the recovery is coming soon. See my comments in red.

The summary that I would conclude from the various speeches and meetings is this:

1. The recession may have indeed bottomed out in March – and recovery has actually begun – I see some green shoots. Housing sales are starting to increase, but foreclosures are still way up. I don’t think the recovery is starting. If they call anything a bounce, watch out. Bounce means going up and coming down again. OUCH!

2. However, lagging behind, the banking and real estate industries still have some rough times ahead - Banks are getting ready to start screwing over credit card holders as more and more people who can’t pay their credit card balances start to not pay the balance. This will be another pinch for the big banks. Big banks are starting to prepare for this by proposing to take away perks that cardholders who are paying like to have. So higher interest rates and cash back bonuses might go away really quick.

3. Residential home/condo prices in some major markets (California, Arizona, Nevada and Florida) are 50% of what they were three years ago (truly a buyers’ market) – oh, that’s what we really need, another housing bubble.

4. The much anticipated FASB accounting rule changes in April 2009 actually became a two edged sword due to the way in which FASB ‘staff’ quietly (secretly) changed some of the other ‘standards’ - this means that now the banks can essentially list their asset values to what they think they should be, not what they really are. So banks have essentially gotten it both ways. When prices are inflated, they can say the prices are mark to market, meaning they say that this is what the market says its worth. But when prices drop, the banks now get to say that prices should be higher and that the market isn’t truly giving a correct price. I wish I could live in this universe.

5. The primary reasons for the recession were a combination of:

a. Misguided US federal monetary policy

i. too much money in the system – thanks to Alan Greenspan and the past 30 years of fed policy of controlling inflation with adjusting the LIBOR rate. This sorta works until the rate hits zero, which it did last November.

ii. interest rates too low belief that raising interest rates hurts growth.

iii. and a political push to get everyone into houses even if they couldn’t afford it - a democrat and republican platform. This idea only held water because housing values kept going up. But increases like what we have seen in the past 20 years is a house of cards. House values should not be the primary source of wealth for the middle class. Wages should be.

b. Causing an overstock of new construction

c. Investment banking taking on too much overall risk (not just sub-prime residential) the main thing here is that you had lots of companies like AIG who were guaranteeing that the sub-prime mortgages wouldn’t go bad. These guarantees, called Credit Default Swaps were believed to be completely foolproof and wouldn’t fail under normal circumstances.

d. Then with relatively new mark-to-market accounting rules, last August & September, over-zealous federal regulators mistakenly and too quickly ‘closed’ a few large banks – which led to the term ‘too big to fail’. Loss of talent! Give them bonuses to keep the talent! Is the kind of “talent” that brought about this mess something we want to keep around? (sarcasm intended)

e. Causing and followed by global PANIC! [aka RECESSION] the panic was because each bank owed all the other banks, and if one bank goes down, the others follow.

f. The panic was far worse than ‘reality’, but the panic actually made a recession take hold – panics are always worse than reality, but that is human nature. I think the recession was coming anyways, because the house of cards had already collapsed. To pretend otherwise is misguided.

g. Fortunately, the panic is now subsiding – sure, because the banks have started to remember that the OWN Washington and can apply the right pressure to get what they want. They nuked the amendment to allow bankruptcy judges to modify 1st mortgages, and got the congress to delay the credit card rules tightening to July of next year.

6. One economist predicts a big bounce in the economy by this Fall (excluding housing) – bounces mean stuff has to come down again, right?

7. There is a tremendous amount of money in ‘savings’ right now – if consumer confidence returns, that money will soon begin to be spent on ‘lots of stuff’ – oh great. That’s not a good thing. Our economy is based on consumption. This recession has shown that we’ve been consuming far too much. The government seems to be convinced that if we can get things back to how they were in 2006, everything will be fine. That is BS. The point is that we shouldn’t be hoping that people blow their savings on more crap. That isn’t good. That is what got us into this in the first place. If you want consumption to increase, why not increase wages for workers? That solves lots of problems. Wages go up, people save more, but they can also spend more. The banks can use the money in savings to invest. You can tax workers more too, and it won’t be so bad because hey, I’ve got a raise coming to offset the tax increase. We’ve tried trickle-down for the past 30 years. Didn’t work out so well. Let’s try a trickle-up. Things should go back to how they were in the 1960s, when banking was boring but the economy was growing and wages were increasing.

8. Inflation is bad - but ‘de-flation’ is worse – yup, and with all the money the fed is flooding into the economy the setting is primed for some serious deflation

9. Post stimulus package, to avoid rebound inflation, the Fed actually has a plan to pull the excess money (trillions that they have just ‘printed’) out of the system – but not until the economy starts to definitely recover - more of that so-called ‘transparency’ from the Obama team? No thanks! How will they get the money out? Buy it back? Forgive loans made to the banks? It’s not going to be pretty. Taxes will go up (which I support) because my son’s going to be really hurting here in 50 years. I think the economy will recover, but it has to recover in a way that is fundamentally different from what it was the past 30 years. Too much money is getting sucked up at the top by people who, as this recession has borne out, don’t deserve it at all. But the way to get the money out of the top is not to tax it, but increase the wages of the workers who are actually doing to work. It’s not a coincidence that the last time the top earners were earning a disproportionate amount of all the money was in 1929. How that happens is something I don’t know.

This makes me sound like I hate capitalism. I don’t. But I do think that the current Wall Street form is a sure way to ruin for all be a very few. What do you think about all this? I’d love to have a discussion with you about it this weekend.


Friday, May 15, 2009

The Senate does not belong to The People

So Congress give the banks tons of money. Then they kill legislation to allow bankruptcy judges to modify mortgages that are under $700k. This happened because the banks quit talking to Congress. Then, THEN the Senate softens the bill that would make credit card issues be nicer to card holders. So this happens. So when legislation that makes sense comes through Congress, these "Senators" pontificate about how Amercians are getting screwed, then as soon as they leave the press conference they are handed a phone and talk to a bank lobbyist who reminds the senator that passage of said bill will hurt the banks because they won't be able to grow their business. So the bill gets modified in the banks' favor. I thought WE owned the banks now. I guess not. This whole bailout crap is not a good thing. These bankers have no shame, no honor, and no respect.

So about that Planet Money

Last week, Adam Davidson of Planet Money interviewed Elizabeth Warren, who has been appointed to the Congressional Oversight Panel tasked by Congress to oversee how TARP is going. Now, Adam came off as sounding extremely narrow and obtuse in his interview. I am now a huge fan of Elizabeth Warren, because she agrees with my last post about wages being down over 30 years and how the middle class has been getting screwed over. I am not the only one who thinks Adam looked pretty bad. Most of the Planet Money viewers really took Adam to task over the interview. On the next podcast, Adam still wasn't getting the issues that Warren was describing. I am very disappointed about it. Hopefully he can come around.

CJR Review - GREAT analysis
Huffington Post

Friday, May 8, 2009

If Wages go up...

So wages have been stagnant since the late 70s. More time than I have been on this earth. They have been stuck for so long that it is accepted truth that this is the only reality we have. I disagree. What would our society be like if wages had kept going up? This would not have forced us to use our homes as our primary source of wealth. Our wives wouldn't have been forced to move into the workforce just to stay middle class. We could have avoided taking out home equity loans to cover expenses after since two incomes doesn't cover expenses in a lot of cases nowadays. We could have kept our pensions in our jobs and 401(k)s wouldn't have been as attractive because the lack of income caused by stagnant wages wouldn't have existed. It would be very different. It would be so much better. This is a class war, no doubt. One I feel stronger about more and more each day. Now, I think that if anyone is going to make an argument against this, it is going to be someone who is rich and in the establishment.

Robert Reich of Salon said it perfectly in his Feb. 3rd article in Salon:
What happened to the money? According to researchers Thomas Piketty and Emmanuel Saez, since the late 1970s, a greater and greater share of national income has gone to people at the top of the earnings ladder. As late as 1976, the richest 1 percent of the country took home about 9 percent of the total national income. By 2006, they were pocketing more than 20 percent. But the rich don't spend as much of their income as the middle class and the poor do -- after all, being rich means that you already have most of what you need. That's why the concentration of income at the top can lead to a big shortfall in overall demand and send the economy into a tailspin. (It's not coincidental that 1928 was the last time that the top 1 percent took home more than 20 percent of the nation's income.)
If this can get fixed, and I hope that I can in some small way to help make it happen. Then I have hope for our future as a country and I will have some pride in being an American. I will be able to look my son in the eye when he gets to a point in his life where he can confront these issues and be able to tell him that my generation was able to make things right.

Link, link

Parenting as a DIWK

How is it possible to be good parents when both must work? Right now I am really at a loss to answer this. We had a really bad night with our son who is ill, and I'm feeling really down about the whole situation. I keep having this though go through my head and the thought is how it is really not possible to maintain a middle-class, low-key, 40-hour work week lifestyle with one income in America. In order to live in a region where job prospects are good you need to have 2 incomes, or else one partner must work the equivalent of 2 jobs in order to maintain their lifestyle. I'm rambling here so I'll just get to the point: I want to support my family with the job (non-management position) that I currently have. Here's a list of things that I want:
  1. Enable my wife to stay at home with our son for his first few years
  2. Be able to keep our current lifestyle intact (I feel that our current lifestyle is somewhat frugal and not extreme as compared to my peers of similar age and occupation
  3. Our current lifestyle consists of:
    1. Keep our current home
    2. Put a grand into savings every month
    3. Have a couple hundred for
      disposable income items
Is this REALLY too much to ask? Unfortunately, this idyllic Leave It To Beaver lifestyle isn't possible anymore. Maybe after this current economic 'crisis' things will revert back to the mid-seventies when homes were low-priced and wages were still on the rise. I think that having good wage increases fixes almost all of our problems. But that is another post.

Thursday, May 7, 2009

Goods bill to support

Getting rid of all the stupid ED ads during prime time is just fine with me. I hope this bill passes. Although upon reflection, the bill doesn't seem to ban references to ED products in Prime Time shows. So if you look at the context of some prime-time programming, then the ads aren't that bad. Plus, the time when I find the ads most offensive, during sports games, the bill does nothing for that. So screw this bill.

Should Pell Grants be a right?

Obama is proposing that Pell Grants be an entitlement like Social Security and Medicaid. Is this a good idea?

As someone who benefited from a couple of Pell Grants in school, I do think that they should be available to more students. But to give them to everyone isn't a good idea. Private schools are out. If your family's income is above a certain amount, you can't get a grant. I think this is what it is set up today. One example used against grants as entitlements is Missouri's A+ program. That gives college students the first 2 years of college for free as long as the meet certain guidelines. That's great, but putting the burden on states that are already facing huge shortfalls is lame. Taxes will have to go up. I am all for higher taxes because it means my son pays less money when he is older.

Update: Obama is taking the angle that Pell Grants should be available for those that want to go to community college to get new skills. He used an example of a factory worker that has been laid off and wants to learn some new skills to switch professions. I buy that.

There's an article on the Public Agenda blog that says that people who get free college don't work as hard because they didn't have to earn college. They had it handed to them, so no sacrifice was made and there fore the dedication isn't as strong. I think there is merit to that argument as well.

Entitlement Pell Grants seems like a basic issue but like all issues there is more beneath the surface the closer you look.

Wednesday, May 6, 2009

Not good

So the list of banks that need capital has been released. This sucks because my bank is on the list. What is also not good for me is that the company that owns my mortgage is also receiving federal aid.
Politicians can be bought. What is really sad about this whole thing is that the banks can still dictate terms to Washington. This makes me sick. At least there is still some journalistic integrity out there. Thank God for PBS. Shows like Frontline and Bill Moyers Journal are such standout shows, and being shown on public funded television.