Sunday, September 28, 2008

Tuesday, September 23, 2008

Phil Gramm and Financial Services Deregulation

One of the reasons that the stock market crash of 1929 caused so many banks to fail during the Great Depression was that banks had invested their deposits in speculative stocks during the bubble years of the 1920s. When the stock bubble burst, the banks lost their money, and the government had to step in and start insuring our bank deposits to make banks safe again. Another reform was to prevent banks from getting involved in speculative securities. If banks were too important to let fail and the government was going to insure our deposits, the government wanted to regulate the kinds of risks that banks would be allowed to bear. Force the banks to bear their own risks and not pass them on in the securities market, and they’d be careful not to enter into risky mortgages with people who can’t afford them, right?

This worked great for the next 50 years, until the stock market bubble years of the 1990s, when there was so much money to be made in the market that bank lobbyists and friendly legislators got together to remove the regulations that prevented banks and securities firms from getting too intermingled in each other’s businesses. McCain economic advisor and former Senator Phil Gramm was one of the leaders of this effort. In fact, the legislation which deregulated the financial services industry was named the Gramm-Leach-Bliley Act. Yes, President Clinton signed the bill, there’s blame to go around.

So mortgage banks (IndyMac) were freed from the usual free market risk/reward incentive to be careful about who they gave mortgages to, because they could simply pass the risks on to investment firms (Bear Stearns, Lehman Bros.) who could bundle enough risky mortgages together to make they seem safe to investors. Everything would be fine unless a whole lot of mortgages defaulted, and THAT will never happen!

Phil Gramm removed the very regulations that prevented banks from assuming too much risk and then went to work for one of the biggest mortgage banks in the world (UBS). And this is the result of Gramm’s deregulation: The banks assumed too much risk, failed, and are now running to the taxpayers to save them from their own bad mortgage decisions. And once again, the banks are too important to let fail.

Now McCain wants to deregulate the health insurance industry just like his advisor Gramm deregulated the banks. Oh, and Gramm's name is floated all over the place to be McCain's Secretary of the Treasury. Sound good to you?

Those Pigs Didn't Oink

From MSNBC's First Read:
Those pigs didn’t oink: Notice how the McCain campaign tried to change the subject yesterday? It cut its first Tony Rezko ad, which tied Obama to the “corrupt Chicago machine”; it angrily denounced the New York Times on a conference call with reporters; and it brought up Obama’s tenuous ties to ‘60s radical William Ayers on that same conference call. But unlike two weeks ago, when the McCain camp’s “lipstick on a pig” and “sex-ed for kindergartners” TV ad dominated the political discussion, those weapons of mass distraction got very little attention yesterday. The economy and the current Wall Street crisis have become THE story, and nothing right now is going to stop that. All the cable outlets will be covering the Paulson/Bernanke hearings as big news today -- making subject-changing efforts much more difficult.

The media is finally starting to cover the story of how McCain would rather distract us all than discuss the issues -- losing issues for him. Hopefully, the media will continue to ignore his attempt at diverting our attention, and continue to cover the important stuff. A big win for American voters, whatever party we support.

Monday, September 22, 2008

McCain Still Wants To Deregulate Health Insurance?

Quote from an article John McCain wrote for the CURRENT issue of Contingencies, the magazine of the American Academy of Actuaries (look at the top right column of page 30):
Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

Deregulate? After the week Wall Street has had, after Lehman Brothers and Merrill Lynch and AIG have collapsed, he wants to do to the health care industry what his former chief economic advisor, Phil Gramm, did to the mortgage and banking industries. Yikes.

Friday, September 19, 2008

Presidential Appointments

I’m not talking about the Supreme Court. I’ll leave that to your imagination. I’ve been thinking lately about all of the presidential appointments you never hear about, up and down the executive branch. Some you’ve heard of, some you haven’t.

Remember Monica Goodling? She was a young graduate of televangelist Pat Robertson’s Regent University Law School. She was appointed by the Bush administration to hire career people at the Justice Department. Not political appointees. Career people. Prosecutors and immigration judges. The people who don’t go away when the next administration comes in (as do US attorneys and other political appointees). It’s illegal to hire career people based on political leanings, campaign donations. Remember the famous line, "Why do you want to serve George W. Bush?" And my favorite: when an applicant stated that he admired Condoleezza Rice, she frowned in disapproval and said, "But she’s pro-choice." Entertaining, yes. But also illegal.

Philip A. Cooney, the chief of staff for the White House Council on Environmental Quality, removed or edited to downplay references to manmade global warming in scientific climate research documents. Cooney was an oil lobbyist with an economics degree, no training in environmental science whatsoever.

George C. Deutsch, appointed as a press aide in NASA’s public affairs office in Washington. He too had no scientific training. In the course of his job, Deutsch added the word "theory" to every mention of the Big Bang on NASA’s web site. A NASA scientist, Dr. James Hansen, along with others, complained of "intensifying efforts by political appointees in NASA, including Mr. Deutsch, to "control more closely his lectures and Web presentations." His resume credentials were never checked and it turned out that he had never graduated from college, so he had to resign.

I’m not writing this post to debate abortion rights or global warming or how the earth was made. My point is that the president gets to appoint a thousand nameless, faceless people who make all kinds of decisions for us – they are the people who run all of the departments. I don’t want another Chief Justice John Roberts, I don’t want another Michael Brown (FEMA), and I sure don’t want a thousand Monica Goodlings appointed in departments across the country. Well, John McCain has made his first appointment: Sarah Palin. Basically, Monica Goodling all over again. Except that Monica Goodling at least has a law degree. If you don’t want a thousand Monica Goodlings, don’t vote for John McCain.

Thursday, September 18, 2008

Wednesday, September 17, 2008

Fundamentals

Monday, September 15, 2008

McCain Wants To Tax Your Health Care Benefits

Okay, this one's a little complicated and policy-wonkish, but I can't believe we haven't heard about this from the Obama camp every day since the New York Times reported it on May 1. Fortunately, a blogger for Time pointed it out the other day, so here it is, and no, sadly, I'm not making this up.

Most of us get health insurance through our employer, who pays a significant portion of our premium. This is currently a tax-exempt benefit, and can be substantial -- health insurance for a family can run as high as $12-14,000 a year. McCain proposes to treat the portion of our plan paid for by our employer as wages rather than benefits and tax this money as wages, subject to income and payroll tax. He then says that he will offset this extra tax by giving us a tax credit: $2500 a year for individuals and $5000 for families, to grow with the rate of inflation.

Problems:
1. Health insurance premiums rise faster than the rate of inflation, so as taxes on your "new wages" increase, they will be less and less offset by your new tax credit and in a few years you end up paying more in taxes. [McCain raising taxes! Shock! Horror!] If your tax bracket is already high, or your state income tax is high, so much the worse for you.

2. People who have really good health insurance may start out paying more in taxes than the tax credit covers the very first year. McCain says this will be only the wealthy, but I can tell you as a physician that I see plenty of lesser-paid union and government employees who have outstanding health insurance and will probably face the same problem.

3. Your employer is now paying for health insurance premiums plus taxes on this new taxable "wage." S/he may find this new expense too much to handle and either downgrade your insurance or abandon this benefit that the federal government no longer considers a "benefit" but part of your "wages." Now you have to find and pay for health insurance on your own. Hope your employer gave you a really big raise when your health insurance was terminated. For that matter, I hope you don't have diabetes. Hope your child hasn't had four ear infections in the past year. Hope you're not a woman of childbearing age.

3a. This is actually what McCain is hoping will happen -- according to the NY Times article, he wants the free market to do it's thing by encouraging people to buy health insurance on their own instead of receiving it from their employers. This is a big part of his goal in taxing employer-paid health premiums.

4. If you're poor or have a chronic illness, $5,000 isn't going to help buy you health insurance on the free market. Low-income families need much more help than that to afford the $14,000 that family health care costs. And when uninsured people show up in the emergency room for free care, it raises the bill for the rest of us who do have insurance. Fiscally speaking, the best bet is to insure everyone and spread the risk to keep premiums as low as possible.

5. When local governements have to pay taxes on health benefits for their employees, it will mean less money in the budget for other things, like parks, and teacher salaries, police, fire, hospitals, etc. Or perhaps our property tax rates will increase.

Notably, the other part of McCain's health care plan is deregulation of the health insurance industry. Have you heard him say that you should be able to buy health insurance from other states? What goes hand in hand with that is removal of some of the consumer protections for people in those states. Have you ever had a claim denied? Still want to remove whatever laws regulate insurance companies? This is really glossed over on his campaign web site. Wonder why. After all, we know how well it worked out when they deregulated the trading of energy futures (think Enron), when they deregulated the mortgage and securities industries (mortgage crisis). I could do without a disaster that will leave me without access to healthcare, thank you very much.

For a more involved report, see John McCain's Radical Prescription For Healthcare. It comes from a less-than-objective liberal group, but the report itself is pretty good. I especially recommend the discussion on page 10, which describes further why people with pre-existing conditions won't be able to afford insurance in the free market, but is way more complicated than I could get into here.

Saturday, September 13, 2008

McCain Hired An Oil Lobbyist To Help Ease His Transition Into The White House If Elected

Time reports today that McCain has hired another Washington lobbyist, William Timmons, to help prepare for McCain’s transition, should he win. “Transition” in this context means in charge of hiring all the people who have to be prepared to staff the new administration the moment the new President takes off. So McCain put an oil lobbyist in charge.

William Timmons is an influential Washington lobbyist who has worked in every Republican administration since Nixon. According to the Time article, he is currently registered to work on bills dealing with domestic oil drilling, regulation of Fannie Mae and Freddie Mac, and bills to provide farm subsidies.

McCain is promising REFORM??? By hiring an oil lobbyist who has worked in every Republican White House since I was born to do all his staff hiring for him? You go, maverick.

Thursday, September 11, 2008

If You Support The Troops, Don't Vote For McCain

The Iraq and Afghanistan Veterans of America has ratings for all members of congress. Obama got a B+. McCain got a D. Wonder why? There's a difference between being a veteran and supporting our veterans -- and our troops. McCain does not support our troops.

April 2003 Voted to table (that means kill the bill, or in this case amendment) that would have appropriated over a billion dollars for procurement of equipment for the National Guard and Reserves in Iraq.

October 2003 Voted to table an amendment that would have provided an additional $322 million for safety equipment for United States forces in Iraq.

March 2004 Voted against an amendment to increase Veterans' medical care by $1.8 billion by eliminating abusive tax loopholes.

April 2005 Voted against a bill to provide $2 billion for medical care for veterans.

November 2005
voted against legislation that would have provided $500 million a year for readjustment counseling and mental health services for veterans with mental illness and post-traumatic stress disorder.

March 2006 voted against an amendment to increase Veterans medical services funding by $1.5 billion in FY 2007 to be paid for by closing corporate tax loopholes.

April 2006 voted against an amendment to provide an additional $430 million for the Department of Veteran Affairs for Medical Services for outpatient care and treatment for veterans. Was one of only 13 senators to vote NAY.

May 2006 voted against an amendment to provide $20 million for the Department of Veterans Affairs for Medical Facilities.

March 2007 didn't show up to vote on a resolution to start redeploying combat troops from Iraq.

September 2007 voted against an amendment to require minimum rest periods for armed forces between deployments to Iraq and Afghanistan.

May 2007 A spokeswoman for Senate majority leader Harry Reid commented to The Hill, "[McCain] has only managed to show up for four of the last 14 Iraq votes."

June 2008 Along with President Bush, McCain opposed the new GI bill -- which passed in a veto-proof bipartisan majority. McCain didn't bother leaving the campaign trail to vote against it. The GI bill gives veterans who have served in the military for at least three years since 9/11 full tuition and other expenses at a four-year public university.

I couldn't help but notice that McCain voted for corporate tax loopholes over veterans healthcare not once, but twice. Nice.

Look! Something Shiny!

It seems to be the consensus of the pundits that the lipstick thing really IS a distraction "on purpose" from the McCain campaign from the issues of the day.

We have two wars, an energy crisis, a foreclosure crisis, and a recession. The American people want to talk about healthcare and jobs and middle class tax cuts. None of these is a winning issue for McCain. So any day that he can distract us with something unimportant and irrelevant, especially that will get his base a little riled up is a good day for McCain. Any day that Obama can stay on message about the issues will hurt McCain -- he's voted with Bush 91% of the time. And nobody wants more of what Bush has to offer. So watch for more distractions and tantrums and diversions. McCain doesn't want to talk about the issues. If he talks about the issues, he loses.

It was heartening to see some in the media last night treating this for what it was -- a big lie. Some even brought up other recent lies out of the McCain camp, specifically their disgraceful new "sex ed ad" and the "Bridge to Nowhere." Up until now, the media has gone along with the "Maverick McCain" persona, though the "maverick" is long gone. It's my hope that the "lipstick on a pig" affair might mark a turning point -- that the media will abandon "maverick" and portray McCain more often for what he is: a big fat liar.

Wednesday, September 10, 2008

McCain Would Rather Call His Running Mate A Pig Than Discuss His Economic Policy

To me, it was perfectly clear: Barack Obama was talking about the McCain-Bush economic policies when he said, "You can put lipstick on a pig, it's still a pig."

We all know what happened then. The McCain campaign suggested it was an insult directed at Sarah Palin ("What's the difference between a bulldog and a hockey mom? Lipstick"). The campaign put up a web ad and demanded an apology.

Obama responded this morning. My favorite parts came near the beginning and near the end:
The McCain campaign would much rather have a story about phony and foolish diversions than about the future. This happens every election cycle. Every four years, this is what we do. We've got an energy crisis. We have an education system that is not working for too many of our children, and making us less competetive. We have a economy that is creating hardship for families all across America. We've got two wars going on, veterans coming home not being cared for, and this is what they want to talk about. This is what they want to spend two of the last 55 days talking about.

Spare me the phony outrage. Spare me the phony talk about change. We have real problems in this country right now, and the American people are looking to us for answers. Not distrations, not diversions. Not manipulations. They want real answers to the real problems that we are facing.

I'd like to add, for my part, that the media could choose not to cover this nonsense.

Saturday, September 6, 2008

On Community Service

Unless I missed the boat (and that's always possible), Barack Obama hasn't claimed his years as a community organizer in Chicago as experience that qualified him to be president. They are part of his life story, his history, part of what brought him ultimately to run for president. But as a qualification to be president? I don't recall hearing him say that.

You'd think otherwise after some of the speeches at the Republican convention this week. You'd think that being a community organizer was all the experience Obama has claimed. "Community organizer," Guiliani sneered. "What?" Palin said that being the mayor of a small town is "sort of like a 'community organizer,' except that you have actual responsibilities."

If you believe in small government, believe in cutting government food programs, cutting programs to aid the homeless, or, for that matter, cutting aid to young unwed mothers in Alaska, if you believe in cutting job training programs because you feel that isn't the governement's role, or shouldn't be . . . well, it seems to me that you might then have a strong personal committment to community service. You should believe in non-governement programs through local houses of worship, though community centers. It's just not good for society to have homeless children starving on the street. So if you believe in small governement, then for Heaven's sake, don't ridicule people who give up lucrative jobs and go into the business of community service!

Pray we all stay safe and dry in Hurricane Ike.

Friday, September 5, 2008

It's 3 a.m.

Wednesday, September 3, 2008

You May Have Made A Bad V.P. Pick If . . .

If people keep hitting their internet browser refresh buttons to see what else has come out about her, you might have made a bad VP pick.

If your surrogates are citing her time on the PTA and refueling stops as credentials, you might have made a bad VP pick.

If the word “secessionist” comes up during your convention’s video tribute to Abraham Lincoln, you might have made a bad VP pick.

If Google associates her name with Dan Quayle (122,000 hits), Tom Eagleton (26,100 hits), and Spiro Agnew (21,500 hits), you may have made a bad VP pick.

If the phrase “Jews for Jesus” appears in press coverage previewing her convention speech, you might just have made a bad VP pick.

If there's a picture of her holding a (Bridge to) Nowhere t-shirt, you may have made a bad VP pick.

If the phrase "executive privilege" is used with respect to a pending investigation against her, you just may have made a bad VP pick.

Refresh . . . refresh . . .