What is good for consumers?

The Fed has proposed new fees that card companies can charge retailers for swiping. Every time you swipe your card at the gas station or grocery store or Target, the companies that help in that process (Visa, Mastercard, etc) charge the retailer a fee. Currently, the fee is 44 cents. The new Fed proposal caps that fee at 12 cents. That seems like a good thing, right? Only for consumers. In an article in the Wall Street Journal, Ed Yingling, president and chief executive of the American Bankers Association, said in a statement that the rules "essentially relieve retailers of paying their fair share for a card payments system that offers them tremendous benefits." He added that the Fed's proposal was a "bad deal for consumers."

Uh, no sir. It's a bad deal for your banks, but it's good for us. The banks need to STFU.

Oh, and I'm reading 'Aftershock' by Robert B. Reich. You should, too.

Turkey posts

Here's some great links to look at during your extended break.

Jonathan Tasini does a great job in popping the deficiet myth in a 50 page booklet.

Bill Moyers explains how wage repression works.

More evidence that America is now a Banana Republic.

A thought on the results of Nov. 4

A lot of people are saying that the election results are a result of people thinking that Obama went too far in his policy. I think that's bull. If you look at the groups that voted, it was tilted towards mostly older whites. This group is always more conservative, so it's no surprise that you get this kind of election result with that electorate group. Baby Boomers are angry. They have good reason to be angry. But they did bring a lot of this on themselves, as I have said many times in this blog. What I think a good spin for Obama on this would be "Yes, the economy isn't where it needs to be. People are really hurting. I have no idea what it is like to lose your home and your job. I don't know where I would find the strength to see me through that situation. But this slow recovery is because I compromised. I tried to meet Republicans halfway. But Republicans are so far to the right that going halfway doesn't mean you meet in the center. It means you end up going right. So that is why our policies have been tilted to the right. Healthcare reform is not an over reach. The stimulus was 40% tax cuts, and look how those tax cuts are NOT helping us. Look at how large our deficiet is BECAUSE of the Bush Tax Cuts. This pain is a RESULT of Republicans, and we are forgetting who got us here and punishing those folks who are trying to get us out of this mess."

Now, will Obama say something like that? No. I don't think he actually believes that for one thing. I also think that it wouldn't help matters, even though it is the truth. Republicans have such an effective propaganda machine it's amazing. I was watching a debate that had Arthur Laffer and Phil Gramm and these guys said great things. But their past actions do not meet their words. Never have. Yet people still hear them and follow them, time and again. It's quite amazing. If conservatives actually practiced what they preached, then

a) things would be very different

b) they probably wouldn't be in office, because people in this country don't like to make hard choices

This countries biggest fiscal issue is non-discretionary spending, yet all Republican's have proposed going after is discretionary spending. That will help, but it won't solve our problems. But that is where the 'adult' conversation with Republicans stops. That's a problem, and electing these liars won't solve them.

The Rich are ANGRY

Sof for the last week or so, the blogs have been exploding over a post by a Law professor at the University of Chicago who complained that the tax increase from the expiring Bush Tax Cuts would hurt him. Paul Krugman talks about a reason why it's ok for rich people to gripe, and links to Brad DeLong's excellent takedown.

Income inequality is very real. Recently there have been several articles and discussions about this, and I think that the concept is finally getting into the mainstream discussion.

Paul Krugman - The Angry Rich

Off the Charts Blog

Bill Maher

The Washington Post

Robert Reich

The New York Times

And don't miss this handy chart showing EXACTLY how income is distributed in the US.

Things America Really Sucks At

Being a young, married, home-owning non-upper class adult with children is very tough in America. Right out of the gate you are punished.

Do you want to go to college? Better be able to pay LOTS to go.

Do you want to own a home? Get ready to pay. Ok, that's the same everywhere.

Do you want to have children? You must pay for the hospital stay.

Do you want to take time off after the baby arrives? Then make sure you either have paid for disability insurance or have saved enough if you want to take time off. It's almost the 20 year anniversary of the Family Medical Leave Act. It's only been 20 years since it became illegal to fire someone for taking time off to have a baby.

Can't afford to keep one parent at home to raise the kids? Gotta pay a LOT for daycare.

But if you are old, Times are GREAT! Free medical care!! Who pays for that? The workers!!!

America could have it much better. America could fix these issues. America has many other issues, too. But America doesn't want to fix these issues. If we fixed these issues, then we would be socialists! Wait, no we would just be delivering our wealth to those who need it and have helped create it. But we don't do that. We don't do that. Because that is un-American. And I think it will get MUCH worse before it gets better, if it ever gets better.

Bruce Bartlett interviewed in the Economist

Great interview. My favorite part:

The Republicans don’t have any credibility whatsoever. They squandered whatever they had when they enacted a massive UNFUNDED expansion of Medicare in 2003. Yet they had the nerve to complain about Obama’s health plan, WHICH WAS FULLY PAID FOR according to the Congressional Budget Office. The word “chutzpah” is insufficient to describe how utterly indefensible the Republican position is, intellectually.

Furthermore, Republicans have a completely indefensible position on taxes. In their view, deficits cannot arise from tax cuts. No matter how much taxes are cut, no matter how low revenues go as a share of GDP, tax cuts are never a cause of deficits; they result ONLY AND EXCLUSIVELY from spending—and never from spending put in place by Republicans, such as Medicare Part D, TARP, two unfunded wars, bridges to nowhere, etc—but ONLY from Democratic efforts to stimulate growth, help the unemployed, provide health insurance for those without it, etc.

The monumental hypocrisy of the Republican Party is something amazing to behold. And their dimwitted accomplices in the tea-party movement are not much better. They know that Republicans, far more than Democrats, are responsible for our fiscal mess, but they won’t say so. And they adamantly refuse to put on the table any meaningful programme that would actually reduce spending. Judging by polls, most of them seem to think that all we have to do is cut foreign aid, which represents well less than 1% of the budget.

Read more here.

Here's some great analysis on the politics of extending the Bush Tax Cuts.

Good article on how to prevent the next financial crisis

Article here. Written by a former Goldman Sachs VP.

And here's an article on how to fix Social Security. It's really not that hard.

Waving the white flag

First, from the Daily Show:

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
Hoarders
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Daily Show Full Episodes Political Humor Tea Party

and then:

The danger posed by the deficit ‘is zero’. This is a very interesting interview of James Galbraith. He makes some really good points and has a lot of good food for thought.

The Case for Deficit Spending

It's from last fall, but it's good education. Article here, but I'm just going to post the whole thing:

If there was one thing that seemed certain about the Obama administration, it was their commitment to Keynesian deficit spending to boost the economy out of its slump. But Keynes beware: With unemployment at a whopping 10.2 percent, and probably rising, the White House has begun trumpeting its commitment to Hoover-style deficit busting. On November 13, the White House warned cabinet departments of a spending freeze. The next week, while in China, Barack Obama told an interviewer the United States could suffer from a “double-dip recession” if it didn’t restrain public debt. And just this week, the White House declared its displeasure with House Democrats’ plans for a new job stimulus.

If the administration does block a new stimulus program--either directly or by reinforcing Republican complaints about government spending--that will have severe repercussions, not only on the economic recovery but also on Obama’s political standing. In a Gallup poll last week, Obama’s popularity dropped below 50 percent for the first time. That reflected, perhaps, the turmoil on Capitol Hill over the health care bill, but it seems primarily due to rising unemployment--which, without a new stimulus, will continue to rise over the next year.

Many previous recessions have been cyclical events precipitated by government efforts to stem the inflation created by a boom or other external events, such as an energy crisis. The severe Reagan recession of the early 1980s, for example, came about when the Federal Reserve under Paul Volcker jacked up interest rates to choke off inflation. As inflation eased, the Fed lowered interest rates, and the private economy quickly revived.

But the current recession, like the depression of the 1930s, did not result from the Fed’s attempts to curb inflation. It was the product of a slowdown in industrial production, which was caused by global overcapacity and foreign competition. According to a recent report from the management consulting firm Deloitte, all American industries except for healthcare and aerospace/defense--both of which government heavily regulates and subsidizes--have suffered from declining rates of profit since 1995. A slowdown in the telecom and other core private industries contributed to the recession during 2001-2002. This slowdown--epitomized most recently by autos, but not limited to them in the least--underlies the current recession.

This recession is often described as a financial crisis--and it’s true that the bursting of the housing bubble did precipitate the sharp downturn that began in late 2008. But the bubble itself was a product of global savings (particularly from the Chinese) seeking investment outlets in the United States, finding few in industrial sectors, and turning instead to Treasury bills and derivatives from the inflated housing market. That is, again, similar to the depression of the 1930s, which was precipitated by the stock market crash, but which was underlain by a downturn in auto and other key industries of the 1920s.

This kind of core industrial downturn has proven resistant to the usual remedies for recessions. By drastically reducing interest rates and pumping money into banks that teetered on the edge of insolvency, the Treasury and Federal Reserve did prevent the kind of crash that leveled the financial sector during the early 1930s. But low interest rates and infusions of cash haven’t revived the industrial sector. That is evident from the Federal Reserve’s quarterly survey of bank lending practices. One would expect normally to find that the monetary easing has encouraged lending, but that has not occurred.

In the April and July surveys, 40 and 35 percent, respectively, of loan officers said they had tightened their standards for approving commercial and industrial loans, while 3 percent in the July survey and zero percent in the April survey said they had eased standards “somewhat”. In the most recent October survey, 14 percent of lenders surveyed by the Fed said they had tightened their standards, 86 percent said they had stayed the same, and exactly zero said they had eased. So over the last ten months, loan standards have generally tightened and not eased. What about the demand for loans? The survey showed that 34 percent of loan officers experienced weaker demand, only nine percent “moderately stronger,” and none “substantially stronger demand.”

This portrait of an ailing private sector is mirrored in figures from private investment. According to the Commerce department, private fixed non-residential investment has steadily declined from the second quarter of 2008 through the third quarter of 2009. So where is the growth in gross domestic product--now revised downward to 2.8 percent for the third quarter of 2009--coming from? It’s coming primarily from government spending and investment. Obama’s $787 billion stimulus proposal, which Congress passed last February, contributed some of the jobs as well as slowing the loss of jobs in construction. The principal areas of new employment have been in government-subsidized health and education.

We face an economy that, like that of the mid-1930s, depends primarily on government spending for its growth. Reduce government spending in order to curb the deficit--as Franklin Roosevelt did in 1937--and you’ll cause new and even greater job loss. This is why it is pure folly for the Obama administration to encourage talk about curbing the deficit. What’s needed is exactly the opposite: greater stimulus, greater deficits, and stimulus programs and budgetary expenditures directed not just toward creating jobs, but toward encouraging new areas of private industrial growth, without which the United States is never going to extricate itself from this slump.

Won’t greater deficits lead to greater debt, which will burden our grandchildren with intolerable obligations? They will in the short term, but they are also the only way to avoid even higher debt in the longer term. The current deficits are much more the result of lost revenues than of increased spending--and they will begin to diminish only when revenues (wages and profits) begin to rise again. That won’t happen without deficit spending now.

Won’t greater deficits lead to higher interest rates, which will choke off investment? This might happen in the future, but not currently, as interest rates remain near or below zero and are not expected to rise until the private economy begins to grow. The Chinese and other foreign holders of dollars could, of course, force interest rates upward by dumping their dollars, but they would lose in the process, as the value of their existing holdings would plummet. So while greater deficits might imperil investment in the future, the United States still has a window of opportunity to use deficits to revive its economy.

Much of the current confusion about jobs, deficits, recovery, and recession may pivot on wrong-headed semantics. The economists’ definition of recession assumes that recession and recovery are mutually exclusive categories. If the economy is growing--even at an anemic pace, and from a deep trough--then it is no longer in recession. That would suggest that, with recovery under way, policy-makers can proceed as if there were no recession. But that’s a misleading conclusion.

It’s best to think of a recession, and particularly this one, as one might thinks of a severe illness and recovery. One can be recovering from pneumonia, for instance, but still be very sick with a very high fever and susceptible to a relapse, or, in the language of recessions and recoveries, a “double-dip” recession. The current slump is exactly of that nature. There are positive signs that a recovery is occurring, or could occur, but the underlying signs of weakness in private industry persist. If Obama and his economic advisors neglect them, they could put the country, and the Democrats’ political future, in peril.

John B. Judis is a senior editor at The New Republic and a visiting fellow at the Carnegie Endowment for International Peace.

Tea Party-time

I'm trying to figure out these Tea Party people. The more I hear about them and what they are about, they less I like them. Any movement that embraces Glenn Beck is an immediate candidate for dismissal, and on closer inspection, these folks are just a little wacky.

Who are these folks?
Some suggest that the tea party is made up of upper-middle class people, but a further analysis shows they are mostly middle-class. These folks have a right to be angry, after a decade of lost wages, a housing bubble, and a credit bubble. Heck, I'm angry about that, too. But I focus my anger on the conservative, pro-market government policies of the past 30 years, and not because my party lost the last election. What sickens me most about the Tea Party is that they strike me as a bunch of hypocrite, whiny Baby Boomers and Gen X'ers who want to have their cake and eat it, too.

Frum Forum has a great couple of articles about the Tea Party. What is most galling is that most of these folks are completely mis-informed. They think that taxes have gone up since Obama took office. They think that Obama is a socialist. They want to cut spending but keep their Medicare and Social Security. I don't know where Tea Party people get their information, but it's hard not to draw a connection between them and folks like Sarah Palin, Glenn Beck, Rush Limbaugh, and Ken Blackwell. Republicans should be wary about trying to embrace this group. They don't like the government. The may really dislike Obama, but they don't like Republicans much, either.

I think it's good to see more American's becoming concerned with how our government works, but they need to come at these issues with their facts straight. Screaming about how socialism is evil and then saying they like Medicare and Social Security (both socialist programs) really shows just how ill-informed these folks are. American's should be upset about government spending, but in a way that is helpful, not voting out anyone who suggests that higher taxes will be needed and entitlements will have to be cut or adjusted. Americans should be really angry at Wall Street (this is where I do agree with Tea Party people). Reigning in Wall Street is good for America. I've talked about this many times on this blog, but I'm too lazy to link back to any posts right now. Reigning in Wall Street will not 'destroy America' or hurt small business. It won't. We went from 1940 - 1985 without any systemic financial failures, and the middle class came to great power and wealth during that time.

American's need to come out of the fog of TV and hyper-commercialism and accept the facts about reality. Anything else will doom us to extinction. Ignoring Tea Party people is just as dangerous as embracing them, because left unchecked they will continue to spread lies and mis-information.

Tea Party-time

I'm trying to figure out these Tea Party people. The more I hear about them and what they are about, they less I like them. Any movement that embraces Glenn Beck is an immediate candidate for dismissal, and on closer inspection, these folks are just a little wacky.

Who are these folks?
Some suggest that the tea party is made up of upper-middle class people, but a further analysis shows they are mostly middle-class. These folks have a right to be angry, after a decade of lost wages, a housing bubble, and a credit bubble. Heck, I'm angry about that, too. But I focus my anger on the conservative, pro-market government policies of the past 30 years, and not because my party lost the last election. What sickens me most about the tea party is that they strike me as a bunch of whiny baby boomers and Gen X'ers who want to have their cake and eat it, too.

Financial Reform is now OPEN for Debate!!

Republicans finally caved and stopped filibustering the Dodd Bill for financial reform. It can now go to the Senate floor for debate. That's right. This wasn't a filibuster for passage. It was a filibuster to PREVENT the bill from even getting on the floor. Why??? NOBODY (aside from Wall Street, it's lobbyists, and Libertarians who have their heads up their ass) likes Wall Street right now. Stopping financial reform is about as popular as killing kittens. This makes the Republicans look bad and look like they are in the pocket of Wall Street. I know that both parties get a TON of money from Wall Street, but even Democrats are smart enough to not stop this.

Onto the LINKS.

Matt Yglesias has a great take on why people in this country keep saying "Freedom!" but then do everything they can to prevent others from having freedom.

Elizabeth Warren on why consumer protection is a good idea. How can anyone disagree with this? "Oh, hey, THANKS for taking me to the cleaners with my home loan! Please Sir, Can I have another?!?!"

Simon Johnson and James Kwak (authors of the excellent 13 Bankers book) on why Bank Reform is needed.

Slate's The Big Money shatter's the idea that Wall Street isn't playing with our money when they do their bets. I found the argument quite convincing.

These F@$cking Guys!!

The Daily Show With Jon Stewart	Mon - Thurs 11p / 10c
These F@#king Guys - Goldman Sachs
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Daily Show Full Episodes Political Humor Tea Party

This week's reading list

One of the Senators that wrote the Senate Financial Reform bill is none too happy about the Senate minority leader's recent comments about it. Mark Warner looks like he's gonna whip some butt in the picture.

Here is the Pro Publica report on the hedge fund Magnatar that was discussed in last week's excellent This American Life episode.

The Atlantic has an excellent article on the Obesity epidemic in America.

Paul Krugman looks at the green economy in the latest NYT magazine.

Monday Thoughts

There's a lot of good stuff out there today. I'll try to go in to depth with some of this stuff, but please read the links, too.

One of the arguments proposed by conservatives to help lower health care costs is to allow selling insurance across state lines. At first glance, this idea seems to carry a lot of merit. It's cheaper in Idaho to carry insurance than it is in Floriday. So wouldn't it drive the costs down if Floridian's could buy insurance from Idaho? That sounds great, but there are a number of problems with that. One, each state has different requirements to what insurance can cover. Guess what? Idaho has some of the fewest requirements. That's why Idaho is very cheap. So if you decide that this is still a good idea, do you let the Idaho plan get sold in Florida as-is, or do you say that the Idaho plan must meet the minimum Florida requirements? If you choose to go as is, then you run the huge risk of having insurance companies run to Idaho to set up shop, the so called 'race to the bottom' that was experienced in the credit card industry. That's why most credit card companies are based in South Dakota. SD let the companies write their laws and sell card agreements. If you choose the other route, then you could end up with something like how the auto insurance industry is set up, with each company following the different states' rules. But that probably won't bring down the costs as much as conservatives would like to think.

One idea that hasn't been floated much is to charge people premiums based on their current health, excluding chronic conditions, age, and mental illness (stuff that people can't control). So if you smoke, you pay more. If you are over weight, you pay more. Seems to me like that would do 2 things: It would give people a real incentive to be healthy, and make those that aren't healthy pay their fair share.

Listening to conservatives scream about getting Obamacare killed in the courts is a remarkable about-face. Conservatives have always been against 'judicial activism', but now that legislation is getting passed that conservatives disagree with, they can't wait to get into court.

FrumForum has a great bunch of articles out today. This post examines how repealing Obamacare is dumb. It needs to be fixed. I couldn't agree more. This post looks at how the GOP has changed in the last 50 years. It makes a lot of sense to me. Reading the comments section after the post shows just how divisive and fanatical some conservatives have become.

More bank handouts by Obama

One of the things I disagree with is Obama's continued baby'ing of the banks. His abrupt U-turn on providing mortgage assistance to people who are underwater is not good. Barry Ritholtz explains why in an interview on NPR.

Older people and the Tea Party movement

I can understand the frustration with our government. I agree that our government does some dumb things. Our biggest fiscal bomb is the rising Medicare/Medicaid, but from what I can tell with these Tea Party folks, they cheer when a politician says that Medicare is untouchable. How does that compute? Especially when a lot of the Tea Party leaders are baby boomers near retirement. They want those benefits that they claim are ruining the country and destroying liberty and all this. That doesn't make sense at all. To me, those folks just reinforce the idea of Baby boomers wanting it all for themselves. I understand the anger more when it comes from baby boomer children, because the children are currently paying for the benefits being paid out right now. What kind of answer is it to someone who gets sick or gets into a car accident and can't work for weeks at a time, like this example here. I don't hear any answers to this scenarios, accept a shrugging of shoulders and an 'oh well, too bad.' I reject that on moral grounds. That is my biggest frustration. Come to me with a plausible solution so that I can do a comparison between the two ideas. Don't just say that the liberal ideas suck and leave it at that. That doesn't SOLVE anything. We have problems. Conservatives: Provide choices with viable solutions. Anything other than that is lazy and is just playing politics.

Historical mandate watch: The Militia Act of 1792 mandated that all able-bodied men between the ages of 18 and 45 equip themselves with a musket and rifle.

I agree with post at Slate. If Republicans actually offered good ideas and compromise, they would have my vote:

...I am in favor of universal access to health care and also horrified by what President Barack Obama's bill is going to cost. So who should I be voting for? If congressional Republicans are determined to fix this bill by, say, reforming the medical malpractice laws that drive up costs and put doctors out of business, they've got my vote. If, instead, they are going to scream "Communist" and "fascist" at our democratically elected president—thereby achieving nothing at all—then I want nothing to do with them.

I'm also getting a lot of enjoyment out of Conservatives crying out about Americans being against the health care bill. For one, its simply not true. Second, public opinion polls never stopped Republicans from doing things, like pulling out of Iraq when nearly 2/3 of Americans were against that war. Third, Democrats won the election in 2008, with large majorities in both Houses. They said they would change health care, and we voted them in. That's American Democracy. If it sucks for the opposition, then they can overturn the law when they get control if that is what the People vote for.

Finally, Bruce Bartlett (fellow Conservative castout like David Frum) has a thoughtful article talking about who the Democrats should thank for getting health care through Congress and then he talks about how similar the law is to Republican proposals from the past 20 years.

Obamacare mandate isn't unconstitutional

Ok, maybe it is on principle if you think that buying insurance from a company in another state does not constitute interstate commerce. But it is unlikely that the courts will rule in favor of it being unconstitutional.

That being said, if you agree that an insurance company can't drop you when you get sick, or can't accept you if you are sick (two things that are in the the health law) then what do you do? The point of insurance is to have a wide pool of policy holders paying into a system. So now you have this big pool of money that you can spend on those policy holders that are sick and need care. Not everyone in the pool is sick. The healthy ones payments cover the costs of the sick ones. If everyone is sick then you are screwed, because health costs are so high. You can try to figure out how to tackle costs (that is called rationing) or you can insist that people who could need care at some point (everyone) must pay into the system. The mandate is needed simply because you are making insurers take people that will cost a lot of money. This is happening right now in hospitals that receive Medicare payments. Federal law states that hospitals that receive Medicare payments must treat people who come into the ER. So people that don't have health care coverage wait until they are really sick and at death's door before they go into the hospital. So now the hospital has spent all this money on people that can't pay and don't have insurance. So the hospital has to increase the rates it charges for its services. This causes premiums to go up for all of us who pay for insurance. So you must have a mandate if you are going to force insurers to carry everyone. Otherwise you abolish the insurers and just cover everyone under Medicare. Or you do something that I haven't thought of.

David Frum is getting a lot of flak over his Waterloo comments, but I have to agree with him. He then states his current political outlook with all the new FrumForum viewers who came to the site to bash Frum over his Waterloo piece. It's well worth a read. The best part is the last line:

I don’t think of myself as having gone squishy. I think of myself as having grown sober. And my conservative critics? On them, I think the most apt verdict was delivered by Niccolo Machiavelli, 500 years ago: “This is the tragedy of man. Circumstances change, and he does not.”

I recently had a Facebook discussion with one of the kids from my neighborhood in Idaho where I grew up. He is a staunch conservative who is convinced that the country is going down the tubes. He is a great guy and has a wonderful family and if I ever move back to Idaho I'll probably hire him to be my realtor. But I just can't agree with his politics. The Machiavelli quote above seems to suit him aptly.

I'm not sure if I've posted this before, but the state of Maryland sets prices for what hospitals can charge for care. But they do it in a very smart way. They don't set prices to be the same for all hospitals. They set prices based on what each hospital is paying its workers and who the hospital provides care to. Guess what? It's working!

Here is a lengthy but thoughtful essay on health care in National Affairs magazine.

And this whole "We don't work past 2pm" Senate rule being used by Republicans? Dumb dumb dumb dumb dumb dumb dumb.

Healthcare 'reform' passes! A step in the right direction

It sure was entertaining to watch on CSPAN last night. The House passed the Senate bill 219-212, then went on to pass the Reconciliation fixes. This bill will be sent to the Senate, which should get passed by simple majority. Hopefully, Obama can sign this by this weekend and we can move on to focusing exclusively on the economy, the deficit, carbon, and the mid term elections.

What are my thoughts on this bill? It's far from perfect. It gives too much away to Big Pharma, it doesn't tax all employer-based health care plans, it paints insurers as the only bad actors in the health care sector. My preferred system is a single-payer, "Medicare for all" type of program that cuts out insurers completely and leverages all 300+ million American's needs with doctors, hospitals, drug companies, and medical equipment providers. This is what the rest of the industrialized world has done. This is the only way that I can see to effectively manage costs. Tort reform and buying insurance across state lines, Republican's 'silver bullet' remedies to healthcare costs, don't amount to much savings. This bill looks very similar to what Republicans proposed as a counter reform to Clinton's 1994 healthcare propoal. It's also very similar to what Mitt Romney and Massachusetts enacted a couple of years ago. So Republicans are left with just being the party of 'No, no, hell no".

I agree with Dennis Kucinich and other Progressives who want even more reform, but I am hopeful that these incremental reforms will prove that even more reform is needed. But attempts to kill the bill because it doesn't do enough is foolish in today's political climate.

This is going to be a good week for the President.

Oh, and lets not forget that tucked into the reform bill is another reform, one that eliminates the middle man from student loans. See, right now a lot of student loans use government money, but the money is given out through third-party bankers. These banker made a tidy sum giving out the money, but if the student defaults on the loan Uncle Sam guarantees the loan will be repaid to the third party. So does it make any sense at all to have the third party at all? No. So this little reform eliminates the third party, saves something like $60 billion over 10 years. Part of this savings will be used to give out more Pell Grants, the other part will go towards reducing the deficit.

Andrew Samwick shows how the Republicans complaints of the process used by Democrats to get the bill passed are bunk.

David Frum thinks that passage of the health care bill is Republican's Waterloo.

For a rundown on what parts of the bill will try to control costs, Ezra Klein has that right here.

People are against the health care bill, but then are for it once they learn what's in the bill. This should worry Republicans who think that November will give them the House. William Saletan agrees that Republicans are risking much by opposing this bill.

Only comedy can bring light to the truth

If you've ever wondered how the subprime crisis happened, and how Wall Street works, John Bird and John Fortune are DEAD ON. You HAVE to ignore what CEOs and Public Officials are explaining. It is not in their interest to explain the truth. It's sad to know that it takes a couple of comedians to distill all the fluff and bogus complexity into this.


And here's another bit, except this is just entirely too funny and not connected to anything.



And now back to how things work. This time it is explained how CDOs and CDSes are put together:




People in the audience are laughing, but they should be crying. This is their money these people are playing with. Their pension funds, their 401(k)s, their investments. The end of the second part is telling, with the 50's speaker guy saying how awesome capitalism is and how it is incorrect to think that capitalism leads to concentrations of wealth if the fundamentals of capitalism are maintained. We have gotten to where we are today BECAUSE the fundamentals of capitalism have not been maintained. The fundamentals have been distorted and changed to precisely enhance the wealth of the well-off. American today is not practicing capitalism for all. We have socialism for the wealthy and capitalism for everybody else.

On a completely different not, why DOESN'T the IRS do my taxes for me? There should be a law that makes them. Oh, wait there IS a proposal to do just that!

Whenever I hear that we can't cut defense spending because we are at war, but we should be cutting spending in other areas, I just can't agree. If this is what some of our defense dollars are being spent on, let's just not spend the money.

Where the money goes

See Here.

WTF?!?!

It's been a crazy couple of days. Lots to catch up on so lets get started.

The Democrats lost the senate seat held by Ted Kennedy to a Republican. Of course, this is being touted as a referendum on health care reform. But the Democrats are running around whining that now all is lost! No, sorry Democrats. All was lost about 6 months ago when you squandered all the political capital on the bank bailouts and the tea parties for healthcare and everything else. Democrats suck. I'm not saying that they go all GOP and start passing things in reconciliation, but to continue to give in to Republican demands in the hope that Republicans will join in voting is proving to be useless. Yet Democrats keep trying.

The Supreme Court just ruled that its ok for companies to directly spend money in politics. This stikes me as a disaster for our democracy. Treating a company as an individual who has free speech rights yet not treating a company as an individual when criminality or wrongdoing has a occured doesn't make any sense. Plus, what good does someone like me have in supporting a candidate who doesn't have the backing of large corporations for donations? Our democracy is no longer 'of the people, for the people, by the people'. It's more like 'of the people, for the companies, by the companies'. This fall, TV is going to be unwatchable because the ads will be unreal. This decision makes our democracy a joke. Even the Supreme Court thinks so, if Twitter can be believed. Republican Senator Olympia Snowe thinks the ruling is bad.

Obama is proposing a raft of bank reforms ala Paul Volker. Geez, what took so long? What started all this populist anger out of Obama lately? Its nice, but a little too late. Did they see the writing on the wall in Massachusetts and realize that they should move the focus to financial reform to save face, now that health care reform is in doubt?

Obama's presidency turned on yesterday. Ezra Klein has a great summary of what his first year means to us progressives. Not very pretty.

But that's meant letting the government work. And that turns out to be an ugly thing, full of deals with pharmaceutical companies and concessions to Nebraska and delays and press releases and controversy and anger and process stories and confusion. Americans don't like Washington, and they like it less when they see it more. Obama's strategy has meant they see it constantly, and there's no one really guiding them through its thickets. The country is trapped in a sausage factory, and they want out.

This is what Obama has given us, but it is not what he was voted into office to do. We wanted someone to change how things got done. Obama has been a real pushover. I mean this isn't even the high road he is taking. He's got a ton of appointments being held up in Congress, he had a supermajority in the Senate and a 40 seat majority in the house, and yet all he has to show for that is a too small stimulus. Take the gloves off, man. Explain how stupid Congress is being. Why isn't he doing this? He keeps giving chances to Republicans. Why? Why why why? Things better change, or Obama will be a one term president with nothing to show for it.

Let's do some blogging

Texas, hold your heads high, because you regained your poise and almost pulled an upset there.

If you want a compact explanation of how we got to where we are right now in the financial world, read this. My favorite part:

Now if the aerospace lobby had told us after the 1986 Challenger disaster that the key to better performance was to turbocharge the engines and quit performing preflight inspections, everyone would have agreed that they were crazy. Yet that's essentially what the finance lobby has done over the past decade, and in some weird way we were too mesmerized to recognize it. Within months of a near catastrophe caused by one of the industry's brightest stars, the lobbyists were busily making certain that it would happen again—and that when it did happen, it would be bigger and more disastrous than ever.

Tim Geitner should be fired. This is not how we do things.

Nobody until now has really explained what is in the health care bills. Now someone has!

After the foiled Christmas plane bombing and the insanely stupid TSA rules that were implemented in response, one has to wonder who the real terrorists are. The media, perhaps?

Lulls in the news cause authors to look at subjects at a more deeper level. This lets authors look at why healthcare is so bad, why the financial crisis came about and so on. One thing that isn't getting enough attention is why wages have flattened. Here is some more attention for that vital subject.

Another reason to fire Tim Geitner.

Here's my economic dream team: Paul Krugman, Bruce Bartlett, Paul Volker, Barry Ritholtz, Robert Reich, Simon Johnson

And Finally, GO VANDALS!!!!

Happy New Year!

Get back to work, ya lazy scum! ;)

Saw a great movie about blogging over the break: Julie and Julia. Fantastic film. You can view the blog that started all this here.

I also highly recommend going to Kellog, Idaho and staying at the Silver Mountain Resort. Aside from good skiing (when there is snow) the resort added a most awesome water park. I haven't had that much fun in a long time. Thanks to my Dad for arranging a free stay at the resort!

Onto business...

2 weeks ago, Paul Volker testified to Congress about what should be done with financial reform. You can read what he said here and here, but the best quote is this: "The only useful financial innovation in the last 20 years is the ATM."

David Frum explains why the GOP lost the Healthcare battle.

The New Republic talks about Republican nihilism.

Brad DeLong finally likes something that the AP has posted about Republicans and the deficit.

The Huffington Post explains, in great detail how Wall Street owns congress.

David Frum is pushing an idea of his that I linked to a long time ago as to why American health care costs so much: We are lazy fatties, and we like it!