Wednesday, September 30, 2009
Abortion Fight Complicates Debate on Health Care
...Abortion opponents in both the House and the Senate are seeking to block the millions of middle- and lower-income people who might receive federal insurance subsidies to help them buy health coverage from using the money on plans that cover abortion. And the abortion opponents are getting enough support from moderate Democrats that both sides say the outcome is too close to call. Opponents of abortion cite as precedent a 30-year-old ban on the use of taxpayer money to pay for elective abortions.
Abortion-rights supporters say such a restriction would all but eliminate from the marketplace private plans that cover the procedure, pushing women who have such coverage to give it up. Nearly half of those with employer-sponsored health plans now have policies that cover abortion, according to a study by the Kaiser Family Foundation. ...
Making Bush Look Like a Piker
...Second, Obama is right to note that he inherited a large deficit in fiscal 2009. But as we can see here, he is responsible for growing the deficit beyond expectations in fiscal 2009 and thereafter. In fact, in its January 2009 projections, the CBO built in most of the Bush-era policy spending, including the TARP bailout (which President Obama voted for as a senator) and the takeovers of Fannie Mae and Freddie Mac. In spite of his rhetoric, President Obama bears most of the responsibility for the red part of the bar in fiscal 2009, which includes, among other things, some auto bailouts and $31 billion of additional funding for the omnibus bill, the share of the stimulus funding spent in that fiscal year.
Third, Obama’s deficits are frightening but they promise to get worse. Each month that goes by the president adds spending to the deficit. The August 2009 projections for instance, do not include any of the president’s healthcare reform spending and they assume that the “temporary” stimulus spending will not be prolonged past fiscal 2011. Finally, they also assume that the economy will recover soon and that it will grow enough to generate increasing tax revenue, in spite of the president’s plan to impose new taxes and regulations on the private sector. In other words, the deficit will likely continue to deteriorate beyond the current projections.
The president is right. A new era has started. It’s an era of even bigger government.
Overpaid Bureaucrats Expand in Number and Pay
Thanks to the $800 billion stimulus package, and other huge government spending increases, the number of federal and state employees is projected to increase massively. The federal government’s payroll may grow by more than 200,000, and perhaps as much as 600,000, over the course of the Obama administration. Obama’s budgets, which would result in record deficit spending of $9.3 trillion, would add at least 100,000 additional bureaucrats during just his first budget, and perhaps as many as 250,000.
This is going to be enormously costly, because federal employees are paid much better than private-sector employees, especially for unskilled jobs and jobs requiring only a liberal arts degree. (On the other hand, there are a few highly-skilled professional jobs that are paid lower in the federal government than in the private sector, but that’s rare).
State and local government employees are even more overpaid. “More than 40% of city employees In Vallejo, California, had salaries greater than $100,000 in 2008. In May 2008, Vallejo filed for bankruptcy. Taxpayers support some hefty teacher salaries in Illinois. For example: a physical education teacher earning $163,000 (more than 400 earn in excess of $100,000); an English teacher earning $164,000 (more than 300 earn in excess of $100,000); a driver education teacher earning $170,000 (94 earn in excess of $100,000). In New York, state agency workers collected more than $459 million in overtime, with one aide clocking in 2,455 extra hours, nearly tripling her base salary from $38,500 to $110,841.”
Government employees have radically better benefits and pensions than private sector workers. “When wages and benefits are combined, federal civilian workers averaged $119,982 in 2008, twice the amount of $59,909 which workers in the private sector averaged for wages/benefits. The value of benefits for federal civilian workers averaged $40,000/year, four times the value of benefits that the average private sector employee receives. Only 12% of retirees from the private sector have defined benefit pensions to supplement Social Security. Their average annual pension is $13,083, and they are not eligible for full Social Security benefits until their late 60s. But the majority of public sector workers have pension plans that allow them to retire 10-25 years earlier with benefits many times the retirement payout that Social Security would provide. In San Jose, California, 256 retired officers and firefighters and 34 other city workers collect $100,000+ pensions, and all city retirees get free healthcare.”
Pay in the public sector rises faster than in the private sector even during Republican administrations. Pay for federal workers rose 53.7% between 2000 and 2008, compared to 28.5% for private sector workers....
...There’s something charmingly quaint about the leftists’ continuing attack on capitalism, which is a type of economic order that, if it ever existed at all in this country, has not existed in recognizable form since the 1920s — in a more plausible assessment, not since the years before World War I. Yet the so-called progressives never tire of beating the long-dead horse of capitalism. Are they so ideologically blind that they cannot see how governments at every level have intervened and intervened again until they have displaced or distorted every element of the economic order that might once have contributed to its capitalist character? We live, as F. A. Hayek observed as long ago as 1935, not in a market system, but in a situation of interventionist chaos, where virtually every market is so hog-tied by regulations, laws, and taxes or so artificially pumped up by subsidies, regulatory advantages, and tax loopholes that virtually nothing remains pure and unsullied by the filthy hand of the interventionist state. We inhabit, as we have for nearly a century, a blessed “mixed economy.” What’s this ongoing nonsense about the failure of capitalism? Before anything can fail, it must first exist.
Then comes the obligatory progressive whack at greed, as if those who conduct business among consenting buyers and sellers are intrinsically soiled by an unworthy motivation, whereas, in stark contrast, those whose greed is expressed through state-sanctioned robbery and extortion are, lo and behold, verging on sainthood. How did these people come to believe that getting something done by threatening violence against those who don’t care to join the party — that is, by working through the state – stands higher on the holiness scale than private voluntary cooperation? It takes a special kind of intelligence to achieve this sort of twisted moral outlook, but the New York Times, along with the other upscale news media, has succeeded in finding writers whose ability is equal to the challenge.
Notice also the assumption that markets are driven by “irrational exuberance,” rather than by rational calculation and bottom-line self-responsibility, and that any perceived market failure must have been the result of “the weakness of regulatory systems.” Can anything fly more flagrantly in the face of centuries of facts? When have governments ever acted more rationally than private individuals in free markets? And when have stronger regulations ever solved any real problem, as opposed to creating new or greater problems where private actors were chipping away at genuine solutions, had they only been left alone to carry out their plans? The shelves are groaning under the weight of the Code of Federal Regulations, yet the progressive will never rest until we have reached that nirvana in which everything that is not forbidden is required....
A Death Spiral for Climate Alarmism, Redux?
Desperation is setting in among climate alarmists who by their own math can see that the window is rapidly closing on “saving the planet.”
James Hansen, for instance, said three years ago in the New York Review of Books: “We have at most ten years—not ten years to decide upon action, but ten years to alter fundamentally the trajectory of global greenhouse emissions.” That was also Al Gore’s estimate in “An Inconvenient Truth.” But the time has been ticking away, and it’s increasingly obvious that the Gore/Hansen “wrenching transformation” of the U.S. energy system is simply not going to happen....
...The climate continues its decade long trend of non-warming for another 10 years, as some scientists have predicted. The return of bitterly cold winters, and more years “without a summer” increases public skepticism about climate science. More revelations come out about data manipulation by NASA, and cherry-picking by scientists trying to paint a false picture of recent warming in historical perspective....
...In the face of the risks to the climate crisis agenda outlined above, we can expect the climate crisis industry to grow increasingly shrill, and increasingly hostile toward anyone who questions their authority. Politicians are likely to try to ram as much through as they can for their favored constituencies and technologies before the climate crisis runs out of steam, and public concern drops even lower. This is the time for those concerned about public policy to be on high alert, as panicked activists and politicians will be trying every trick in the book to enact their agenda by hook or by crook....
Broken Hockey Stick Fallout: Leading UK Climate Scientists Must Explain or Resign
MOST scientific sceptics have been dismissive of the various reconstructions of temperature which suggest 1998 is the warmest year of the past millennium. Our case has been significantly bolstered over the last week with statistician Steve McIntyre finally getting access to data used by Keith Briffa, Tim Osborn and Phil Jones to support the idea that there has been an unprecedented upswing in temperatures over the last hundred years – the infamous hockey stick graph.
Mr McIntyre’s analysis of the data – which he had been asking for since 2003 – suggests that scientists at the Climate Research Unit of the United Kingdom’s Bureau of Meteorology have been using only a small subset of the available data to make their claims that recent years have been the hottest of the last millennium. When the entire data set is used, Mr McIntyre claims that the hockey stick shape disappears completely.
Mr McIntyre has previously showed problems with the mathematics behind the ‘hockey stick’. But scientists at the Climate Research Centre, in particular Dr Briffa, have continuously republished claiming the upswing in temperatures over the last 100 years is real and not an artifact of the methodology used – as claimed by Mr McIntyre. However, these same scientists have denied Mr McIntyre access to all the data. Recently they were forced to make more data available to Mr McIntyre after they published in the Philosophical Transactions of the Royal Society - a journal which unlike Nature and Science has strict policies on data archiving which it enforces. ...
Tuesday, September 29, 2009
Celebrities, diplomats unite behind convicted child-raping degenerate
...Needless to say, this reminds me of the left’s umbrage at conservatives daring to bring up Chappaquiddick after Teddy died. Yeah, he left a woman to drown and then made jokes about it afterwards; he was for universal health care, though, wasn’t he? Same with Polanski: Dare we deny the man who made “Chinatown” an occasional drugging and raping of a child? Sure, a kid gets traumatized for life, but on the other side of the scale: “Rosemary’s Baby.” It’d be sweet if the left could come up with some sort of mathematical formula by which we could tell whether an artist or liberal politician has exceeded his quotient of moral indulgence. I’m assuming “Chinatown” wasn’t so awesome that Polanski would be excused shooting a kid in the head at point-blank range, so evidently it’s “worth” less than that but more than a child-rape. Let’s figure out just how much of a liberal hero you have to be to get away with certain crimes.
Subprime Uncle Sam
The FHA makes Countrywide Financial look prudent.
...At a 50 to 1 leverage ratio, the FHA will soon have a smaller capital cushion than did investment bank Bear Stearns on the eve of its crash. (See nearby table.) Its loan delinquency rate (more than 30 days late in payments) is now above 14%, or from two to three times higher than on conventional mortgages. Its cash reserve ratio has fallen by more than two-thirds in three years.
The reason for this financial deterioration is that FHA is underwriting record numbers of high-risk mortgages. Between 2006 and the end of next year, FHA's insurance portfolio will have expanded to $1 trillion from $410 billion. Today nearly one in four new mortgages carries an FHA guarantee, up from one in 50 in 2006. Through FHA, the Veterans Administration, Fannie Mae and Freddie Mac, taxpayers now guarantee repayment on more than 80% of all U.S. mortgages. Sources familiar with a new draft HUD report on FHA's worsening balance sheet tell us that the default rates have risen most rapidly on the most recent loans, i.e., those initiated or refinanced in 2008 and 2009.
All of this means the FHA is making a trillion-dollar housing gamble with taxpayer money as the table stakes. If housing values recover (fingers crossed), default rates will fall and the agency could even make money on its aggressive underwriting. But if housing prices continue their slide in states like Arizona, California, Florida and Nevada—where many FHA borrowers already have negative equity in their homes—taxpayers could face losses of $100 billion or more.
So far Congress has pretended that these liabilities don't exist because they are technically "off budget." They stay invisible until they move on-budget when a Fannie Mae-type cash bailout is needed. ...
An Exercise in Ego Gratification
..."My colleagues, this is our opportunity to make history," implored Chairman Max Baucus as the Senate Finance Committee last week opened consideration of his bill. Politicians, in their most self-important moments, see themselves as instruments of national destiny. They yearn to be remembered as the architects and agents of great social and economic transformations. They want to be at the signing ceremony; they want a pen.
Ordinary Americans are rightly suspicious of this exercise in collective ego gratification, which has gripped Obama and many of his congressional allies. Even when the goals are worthy -- as they are here -- the temptation to exaggerate, simplify and sugarcoat often proves irresistible. Baucus' promotion of his handiwork is a case in point....
Monday, September 28, 2009
Why Not Restore Glass-Steagall?
...Moss and others appear to blame the financial crisis on the repeal of Glass-Steagall. Yet most of them do not argue for restoring Glass-Steagall. No one says that restoring the separation between commercial banking and investment banking would prevent future crises. Hardly anyone even suggests that it would be helpful.
People are not specifically arguing that Glass-Steagall was wonderful regulation. Instead, they are waving around Glass-Steagall in order to make a vague, generic claim that regulation works and deregulation fails....
...Moss mostly offers a thermostat theory of financial regulation. Financial regulation is a thermostat, which you can set on "more" or "less." As long as you turn it toward "more," everything will be fine. Never mind what actually caused the crisis (regulatory capital arbitrage) and what was actually irrelevant to the crisis (the erosion of competitive boundaries between commercial and investment banking). Just adjust the regulatory thermostat to "more."
No-Money-Down Caused The Housing Bubble
...This alone is interesting -- that even on the small-time level, there was an information problem (bosses not knowing what the underlings were doing) -- and the book is rich with details about the nuts and bolts of mortgage fraud.
But beyond that, one point he makes clear -- and remember, this is before 2005, so before the crash and before conservatives blamed government intervention in the housing market for the crash -- is that the FHA's subsidization of $0-down loans made it all possible.
If you make someone pay 10% or 20% of a house's cost upfront, then there's no way you can alter the paperwork enough to make an ineligible buyer buy a house for an inflated price. But once you drop that requirement, everything goes. You can sell any house to any buyer for any price as long as you put in the effort to falsify documents and go through the cumbersome legwork...
Taming ‘Animal Spirits’
...“Animal spirits” is John Maynard Keynes’s abstraction of all that goes into quotidian economic decision-making beyond the rigorously rational pursuit of self-interest. He wrote, in Chapter 12 of his General Theory, “Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as a result of animal spirits — of a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities. Enterprise only pretends to itself to be mainly actuated by the statements in its own prospectus, however candid and sincere.” Conservatives are wrong to deny themselves the clarity of Professor Keynes’s insights, and the pleasures of his lucid prose, only because they object to the policies he advocated and to those that are advocated in his name.
Animal spirits are indeed at play, and mischievously so, both in the marketplace and among those who seek to govern the marketplace. It is characteristic of our academic caste that Professors Shiller and Akerlof attend to the former case but are blind to the latter, and so they have produced an essay that is not so much conventional as convention itself, arguing, in a series of bland metaphors, that economic exorcists in Washington must be deployed against animal spirits in the marketplace...
...The fallacy implicit in the conventional argument for more robust financial regulation is that animal spirits — the whole menagerie of greed, panic, pride, thrill-seeking, irrational exuberance — distort only profit-seeking activity. But they are at least as likely to distort efforts to regulate profit-seeking activity. In truth, the animal spirits of regulators probably are more dangerous than those of Wall Street sharks: Competition and the possibility of economic loss constrain players in the marketplace, but actors in the political realm have the power to compel conformity and uniformity among those under their jurisdiction. The entire economy is yoked to their animal spirits, and the housing bubble was a consequence of that fact. We have bred an especially dangerous hybrid creature in the “too big to fail” private corporation, the bastard offspring of a union between Wall Street’s animal spirits and Washington’s....
Quote of the week #20 – ding dong the stick is dead
We’ve always suspected that Mann’s tree ring proxies aren’t all they are cracked up to be. The graph below is stunning in it’s message and I’m pleased to present it to WUWT readers. I’m sure the Team is already working up ways to say “it doesn’t matter”.
The graph above shows what happens to the “Hockey Stick” after additional tree ring data, recently released (after a long and protracted fight over data access) is added to the analysis of Hadley’s archived tree ring data in Yamal, Russia.
All of the sudden, it isn’t the “hottest period in 2000 years” anymore....
Sunday, September 27, 2009
Not Far From the Tree
While everyone in Washington is suddenly pretending they've hardly ever heard of ACORN, they might want to pretend they've never heard of the SEIU, one of the nation's largest unions.
The Association of Community Organizations for Reform Now and the Service Employees International Union are as tight as Heidi Klum and a new pair of jeans.
You don't think about one without the other. ...
...As an ironic sidebar, America's health-care reform debate could become stalled -- not by Senate Republicans demanding a cost analysis (how mundane) but by dot-connecting prompted by the Halloweenish ACORN sting starring a faux pimp and prostitute.
Screenwriters, poise your pens. Just for fun, keep this name in mind: Rod Blagojevich.
Now picture a triangle. One point is ACORN; another point is the SEIU; the third point is the taxpayer. Now picture arrows flowing back and forth, representing the exchange of greenbacks and services.
While various government agencies funded ACORN to help poor people become voters and homeowners, ACORN under Rathke created SEIU Local 100 (Louisiana, Arkansas, Mississippi and Texas) and SEIU Local 880 (Illinois, Indiana and Kansas). In turn, the SEIU wrote checks to ACORN for political activities and union organizing, according to ACORN whistle-blower affidavits. In 2008, the SEIU and Change to Win, a coalition of labor unions, gave ACORN $1,729,462, according to union financial reports filed with the Labor Department. ...
...One needn't be a mathematician to imagine what a national health-care option might mean to a union in search of new dues-paying recruits. The SEIU, which has promised "to fight tooth and nail" for a public option, is demonstrably persuasive. In Illinois, former governor Blagojevich (thank you for your patience) helped position the SEIU so that it could unionize health-care workers when he signed an executive order allowing collective bargaining. The SEIU showed its appreciation in advance by becoming Blagojevich's largest contributor, handing over $1.8 million for his two gubernatorial campaigns.
ACORN's muscling for money is nothing new
ACORN has used threats and intimidation to advance its agenda since its founding in 1970 by Wade Rathke, who adapted the tactics he learned as a member of the radical Students for a Democratic Society - a group former New Leftist David Horowitz describes as "the first terrorist political cult."
In 1969, Rathke started a Massachusetts chapter of the militant Welfare Rights Organization founded by George Wiley. As Horowitz explains in his book, "The Shadow Party," Wiley used the Cloward-Piven strategy (named for left-wing Columbia University sociologists Richard Cloward and Frances Fox Piven) to purposely overwhelm New York's welfare system and thereby encourage either increased benefits or social upheaval.
Rathke was later arrested for incitement to riot in Springfield, Mass. when the welfare recipients he led in a demonstration turned into a violent rock- and bottle -throwing mob.
ACORN's so-called "muscle for money" strategy extorts "donations" from targeted government and corporate officials by offering them Mafia-like protection from protests by the group's own paid thugs, many of them convicted felons. ACORN has also blocked bank mergers until the targeted financial institutions agreed to change their lending policies to ACORN's satisfaction....
...Hundreds of ACORN members swarmed into the Washington Hilton in 1995, grabbing the microphone and forcing then- House Speaker Newt Gingrich to cancel his planned speech. Two years later, they pushed over a metal detector and prevented Chicago aldermen from leaving a closed session of the City Council.
And a bus full of profanity-chanting ACORN members targeted the private home of then Baltimore Mayor Martin O'Malley, who complained that the protesters badly frightened his wife and children, during their "living wage" campaign....
Saturday, September 26, 2009
Barney Frank on Acorn
...Even after the recent revelations, Mr. Frank is a vigorous and unashamed defender of Acorn. Yesterday he and House Judiciary Chairman John Conyers sent a letter to the Congressional Research Service (CRS) requesting a "careful and objective analysis of a number of issues concerning ACORN." (Mr. Conyers voted to defund Acorn but later said he did so "accidentally.")
The investigation that Messrs. Frank and Conyers envision does not, to say the least, sound aggressive. They ask the researchers to get to the bottom of, among other things, "the extent to which ACORN has assisted [the] homeless." With respect to the child-prostitution sting, they ask the CRS to look into "conflicting allegations" about "the propriety of these activities"—by which they mean not the advice Acorn gave on getting away with crimes, but "the federal and state laws that could apply to such videotaping and distribution of conversations without the consent of all parties."
The Democratic duo also ask CRS whether the legislation defunding Acorn "could constitute an unlawful bill of attainder" by singling out the group—as if the refusal to continue providing federal subsidies is tantamount to punishing it for a crime. Such Constitutional scruples were not evident in March, when the pair joined all but six House Democrats (and 85 Republicans) in voting to impose a 90% tax on executives of AIG and other disfavored corporations....
The Global Cooling Scare Revisited (‘Ice Age’ Holdren had plenty of company)
“Predictions of future climate trends by Stephen Schneider and other leading climatologists, based on the prevailing knowledge of the atmosphere in the early 1970s, gave more weight to the potential problem of global cooling than it now appears to merit.”
- Paul and Anne Ehrlich, Betrayal of Science and Reason (Washington: Island Press, 1996), p. 34.
Recent attention has been paid to the coming Ice Age talk of John Holdren and Steven Schneider before they got global warming religion.
Here are some “global cooling” quotations and comments from an earlier era. While such concern was not a scientific ‘consensus,’ such as that created by the United Nations’s Intergovernmental Panel on Climate Change in favor of high-sensitivity anthropogenic global warming, the Ice Age scare was a very active hypothesis that should give pause to the Boiling Age purveyors of today....
Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse
...The broad case for government as the cause of the meltdown is offered in chapter two. Woods names six “culprits.” First are Fannie Mae and Freddie Mac, the government-sponsored enterprises that dominate the mortgage market. Largely immune from profit and loss, and able to “make markets” in ways that truly private firms are not, Fannie and Freddie created implicitly government-backed markets for trading mortgages and mortgage-backed securities. This encouraged mortgage originators to keep creating new mortgages, however risky, knowing that Fannie and Freddie could use their special line of credit at the U.S. Treasury to buy those up and resell them on the secondary market. This was hardly a “free market.” Rather it was one in which these creatures of government operated without being subject to the market’s own normal regulatory processes–namely, profit and loss and risk management...
...But the bulk of his blame lies with the Fed. Woods offers a complete analysis of the Fed’s role in the context of an accessible account of the Austrian theory of the business cycle. He clearly explains the interaction of savings, time preferences, and interest rates under stable monetary conditions in order to show what happens when the Fed intervenes with an expansionary monetary policy. Chapter five follows up with a good discussion of the myths of the Great Depression....
ACORN’S Enron-Style Accounting: Playing Musical Chairs with Big Money
The activities of the radical, corrupt to the core, left-wing Association of Community Organizations for Reform Now, which has tangled itself up in an infinitely complex web of deceit, thuggery, and questionable financial dealings, are long overdue for a RICO probe.
The Racketeer Influenced and Corrupt Organizations (RICO) Act, which was created to prosecute organized crime, allows the federal government to go after individuals who commit any two RICO-related crimes over a decade. The law allows courts to convict persons if it can be shown that they committed those crimes as part of an illegal enterprise and can order disgorgement of their ill-gotten gains from the enterprise.
RICO is the right tool for the job.
Perhaps it’s the only tool for the job because the ACORN network is deliberately structured to deter scrutiny. Its nebulous legal status and opaque corporate structure allow it to keep its activities largely hidden from public view.
The social justice entrepreneurs of ACORN sit on the boards of ACORN and of ACORN affiliates. Many, many, many of them.
These “interlocking directorates” create an appearance of conflict of interest. Such arrangements may be widespread and lawful, but they always raise legitimate questions about the quality and independence of board decision-making. The ACORN network claims to be a “family” of organizations embodying the ethos of community organizing, which stresses local action and decentralized authority.
In fact, ACORN is tightly controlled from the top. One blogger discovered last year that 294 ACORN affiliates operate out of ACORN’s building on Elysian Fields Avenue in New Orleans.
ACORN’s many affiliates have extraordinarily sophisticated financial arrangements that are largely hidden from public view. ACORN uses its system of interlocking boards of directors to oversee its affiliates and make financial mischief.
As Jim Terry of the Consumers Rights League has noted, “ACORN has a long and sordid history of employing convoluted Enron-style accounting to illegally use taxpayer funds for their own political gain.”...
Global warming: oops, we lost the data
The world's source for global temperature record admits it's lost or destroyed all the original data that would allow a third party to construct a global temperature record. The destruction (or loss) of the data comes at a convenient time for the Climatic Research Unit (CRU) in East Anglia - permitting it to snub FoIA requests to see the data....
...In 2007, in response to Freedom of Information Act requests, CRU initially said it didn't have to fulfil the requests because "Information accessible to applicant via other means Some information is publicly available on external websites".
Now it's citing confidentiality agreements with Denmark, Spain, Bahrain and our own Mystic Met Office. Others may exist, CRU says in a statement, but it might have lost them because it moved offices. Or they were made verbally, and nobody at CRU wrote them down.
As for the raw station data,
"We are not in a position to supply data for a particular country not covered by the example agreements referred to earlier, as we have never had sufficient resources to keep track of the exact source of each individual monthly value. Since the 1980s, we have merged the data we have received into existing series or begun new ones, so it is impossible to say if all stations within a particular country or if all of an individual record should be freely available. Data storage availability in the 1980s meant that we were not able to keep the multiple sources for some sites, only the station series after adjustment for homogeneity issues. We, therefore, do not hold the original raw data but only the value-added (i.e. quality controlled and homogenized) data."
Canadian statistician and blogger Steve McIntyre, who has been asking for the data set for years, says he isn't impressed (http://www.climateaudit.org/?p=6789#comments) by the excuses. McIntyre obtained raw data when it was accidentally left on an FTP server last month. Since then, CRU has battened down the hatches (http://www.climateaudit.org/?p=6673), and purged its FTP directories lest any more raw data escapes and falls into the wrong hands....
Friday, September 25, 2009
ACORN: A Cautionary Tale
When is thievery not a crime but a personal tragedy? When is lying for personal gain or political expedience a mere error in judgment? The answer is obvious to any partisan. Your political enemies engage in criminal or morally repugnant acts; your allies, friends, and relations make mistakes or bend the rules for the greater good. As Rudolph Giuliani remarked during his presidential campaign, the definition of torture "depends on who does it." Waterboarding was "aggressive questioning," when Americans inflicted it. "It was a judgment call," (not a criminal conspiracy,) ACORN president Maud Hurd said in 2008, describing the decision to cover-up the embezzlement of nearly a million dollars by Dale Rathke, the brother of ACORN founder Wade Rathke.
No, I don't mean to suggest that torture and embezzlement are moral equivalents. I do mean to state that activists, advocacy groups, politicians, and pundits, left and right, display equivalent moral hypocrisy when rationalizing illegal or unethical conduct by some of their own. It's the hypocrisy bred by the self-righteousness of people convinced that they're on the side of the angels, that their commitment to the right cause makes them incapable of doing wrong. It's the hypocrisy that led the ACLU national board to trivialize, misrepresent, or conceal serious misconduct by its staff and lay leaders (the subject of my book, Worst Instincts.) It's the hypocrisy that has consistently characterized the "progressive" response to recent and still unfolding ACORN scandals. By ignoring, minimizing, or rationalizing grossly unethical and even criminal conduct, ACORN's left-wing friends have harmed it more than its right wing enemies ever could....
...ACORN's progressive supporters, not to its mention leaders, should begin by taking responsibility for its decline. The depth of ACORN's dishonesty and dysfunction was clearly indicated over a year ago by New York Times reporter Stephanie Strom's stories revealing Dale Rathke's embezzlement of about $950,000 and its nearly decade long cover-up. (ACORN had been accused of misconduct before, but the Times story could not simply be dismissed as another right wing smear campaign.) The Times reported that not even the ACORN board had been informed of the theft, ("a small group of executives decided to keep the information from almost all of the group's board members and not to alert law enforcement.") ACORN executives probably told themselves and each other that the cover-up was in the organization's interests, but the organization was not even reimbursed for its loss: The embezzlement reportedly occurred in 1999 and 2000; in July 2008, when the first Times story appeared, only a reported $210,000 had been paid back, and Dale Rathke had been allowed to remain on the payroll until mid 2008 when "disclosure of his theft by foundations and other donors forced the organization to dismiss him."
The follow-up to this story was equally disturbing: ACORN's leadership seemed to persist in concealing misconduct instead of acknowledging and correcting it. In August 2008, a small group of ACORN activists, led by two members of an interim management committee, filed a lawsuit against the organization in a reported effort to separate it from the Rathke family, "protect financial records from destruction and enhance board access to documents." In October 2008, a report released by an ACORN lawyer pointed to managerial and financial improprieties that "may have led to violations of federal laws." In November 2008, the dissenting interim management committee members were removed; their lawsuit was dropped, and the dissenting group (the ACORN 8) subsequently sought a federal investigation of the embezzlement.
This point is worth repeating: after allowing an embezzler to remain on the payroll for some 8 years, ACORN's leadership quickly expelled two dissident board members who seemed intent on providing transparency and accountability. The two dissidents were found to have violated ACORN's code of conduct (which apparently deemed whistle-blowing a graver offense than stealing,) and they were "aggressively trying to distract the organization from its core mission," ACORN chief executive Bertha Lewis recently explained to the Washington Post. ...
...Consider Peter Dreier's response to the theft and cover-up in the Huffington Post: In a lengthy piece dominated by praise of ACORN's "fight for social justice" and protests of right wing smear campaigns, Dreier excuses the "brilliant" Wade Rathke's decision to conceal his brother's embezzlement as mere misjudgment, attributed not to dishonesty or self-interest but brotherly compassion and concern for ACORN's reputation. He writes misleadingly that the stolen funds were repaid, without noting that until the theft was revealed after 8 or 9 years, about 80% of it remained unpaid. He laments that "Rathke's remarkable organizing work for almost 40 years will now have to be judged against this tragic example of poor judgment." He characterizes the theft and prolonged cover-up as "missteps," stressing that they did not begin to compare to "swindles" by villainous corporations like Halliburton or Enron involving billions; (although it's obvious that the difference between the "missteps" at ACORN and the "swindles" at Halliburton is not measured in dollars but in partisan loyalties.) He notes that "progressive groups have to be squeaky clean. They must live by a higher standard...," as if only a unusually scrupulous organization with unusually high standards would prohibit and punish embezzlement...
...Whether or not ACORN recovers, this crisis of its own making should serve as a cautionary tale for other groups, like the ACLU, that consider themselves too pure to fail; but I doubt that it will. Lying is a habit that's very hard to break, especially when people justify their lies in the service of a greater good. Wade Rathke said he concealed his brother's embezzlement so as not "put a "weapon" into the hands of enemies of Acorn." And, people who begin covering up the misconduct of others out of concern for an organization's reputation (as well as their fear of being ostracized,) inevitably end covering up for their own complicity, and perpetuating conspiracies of silence.
Elementary School Students Taught to Sing Praises of President Obama
...A YouTube video shows nearly 20 young children being led in a song overflowing with campaign slogans and praise for "Barack Hussein Obama," repeatedly chanting the president's name and celebrating his accomplishments, including his "great plans" to "make this country's economy No. 1 again."
The video has set off families in Burlington, N.J., who say that politics shouldn't be forced on young students.
"This video is disturbing," said a grandparent named Sandy, who spoke on the condition that her last name not be noted. "I'm disturbed that someone can give their political opinions in school like this. I'm dead-set against it....
...Another lyric touts a fair-pay bill Obama signed in January: "He said we must be clear today/Equal work means equal pay."
The author of the songs is unknown, but a woman -- possibly a teacher -- can be heard in the beginning of the video correcting and helping a student who has forgotten the words. Another woman, the person holding the camera, cheers the students on: "All right," she says. "I like that."...
Thursday, September 24, 2009
Bank Pay and the Financial Crisis
...The compensation theory is a familiar greed narrative: Bank employees, from CEOs to traders, knowingly risked the destruction of their companies because their pay rewarded them for short-term profits, regardless of long-term risks. It's conceivable this theory is true. But thus far there is no evidence for it—and much evidence against it.
For one thing, according to Rene Stulz of Ohio State, bank CEOs held about 10 times as much of their banks' stock as they were typically paid per year. Deliberately courting risk would have put their own fortunes at risk. Richard Fuld of Lehman Brothers reportedly lost almost $1 billion due to the decline in the value of his holdings, while Sanford Weill of Citigroup reportedly lost half that amount.
In the only scholarly study of the relationship between banker pay and the financial crisis, Mr. Stulz and his colleague Rüdiger Fahlenbrach show that banks whose CEOs held a lot of bank stock did worse than banks whose CEOs held less stock. (The study was published in July on SSRN.com.) Another study by compensation consultant Watson Wyatt Worldwide in July shows a negative correlation between firms' Z scores—a measure of their risk of bankruptcy—and their use of such widely criticized practices as executive bonuses, variable pay and stock options. These studies suggest that bank executives were simply ignorant of the risks their institutions were taking—not that they were deliberately courting disaster because of their pay packages....
...Commercial bank capital holdings are governed by the Basel regulations, which are set by the financial regulators of the G-20 nations. In 2001, U.S. regulators enacted the Recourse Rule, amending the Basel I accords of 1988. Under this rule, American banks needed to hold far more of a capital cushion against individual mortgages and commercial loans than against mortgage-backed securities rated AA or AAA. Similar regulations, contained in the Basel II accords, began to be implemented across the other G-20 countries in 2007. The effect of these regulations was to create immense profit opportunities for a bank that shifted its portfolio from mortgages and commercial loans to mortgage-backed securities.
Bankers were of course seeking profits by purchasing mortgage-backed securities, but the evidence is that they thought they were being prudent in doing so. They bought AAA instead of more lucrative AA tranches, and they bought credit-default-swap and other insurance against default. None of this can be explained unless, on balance, the banks' management and risk-control systems kept in check whatever incentives to ignore risk had been created by the banks' compensation systems.
Banks did not behave uniformly. Citigroup bought as many mortgage-backed securities as it could; banks such as J.P. Morgan Chase did not. Were incentives at work? Yes. But all bankers faced the same artificially created incentive to buy mortgage-backed securities. Most bankers seem to have agreed with the regulators that the profit opportunity created by the regulations outweighed any risk in these securities, especially when they were rated AAA. But some bankers, like Morgan's Jamie Dimon, disagreed.
That type of disagreement, otherwise known as "competition," is the beating heart of capitalism. Different enterprises compete with each other by pursuing different strategies. These strategies encompass everything an enterprise does—including how it manages and pays its employees. ...
'Diversity czar' takes heat over remarks
President Obama's diversity czar at the Federal Communications Commission has spoken publicly of getting white media executives to "step down" in favor of minorities, prescribed policies to make liberal talk radio more successful, and described Hugo Chavez's rise to power in Venezuela "an incredible revolution." ...
..."The property owners and the folks who then controlled the media in Venezuela rebelled - worked, frankly, with folks here in the U.S. government - worked to oust him," Mr. Lloyd said. "But he came back with another revolution, and then Chavez began to take very seriously the media in his country."
Mr. Chavez in fact forced the nation's oldest television network, RCTV, off the air in 2007 by refusing to renew its license, replacing it with a state-run station that showed cartoons and old movies while protesters marched in the streets against the shutdown. His government has also threatened to shut down Globovision, one of two TV channels that continue to criticize Mr. Chavez. ...
To Explain Longevity Gap, Look Past Health System
...But a prominent researcher, Samuel H. Preston, has taken a closer look at the growing body of international data, and he finds no evidence that America’s health care system is to blame for the longevity gap between it and other industrialized countries. In fact, he concludes, the American system in many ways provides superior treatment even when uninsured Americans are included in the analysis.
“The U.S. actually does a pretty good job of identifying and treating the major diseases,” says Dr. Preston, a demographer at the University of Pennsylvania who is among the leading experts on mortality rates from disease. “The international comparisons don’t show we’re in dire straits.”...
...But there are many more differences between Europe and the United States than just the health care system. Americans are more ethnically diverse. They eat different food. They are fatter. Perhaps most important, they used to be exceptionally heavy smokers. For four decades, until the mid-1980s, per-capita cigarette consumption was higher in the United States (particularly among women) than anywhere else in the developed world. Dr. Preston and other researchers have calculated that if deaths due to smoking were excluded, the United States would rise to the top half of the longevity rankings for developed countries.
As it is, the longevity gap starts at birth and persists through middle age, but then it eventually disappears. If you reach 80 in the United States, your life expectancy is longer than in most other developed countries. The United States is apparently doing something right for its aging population, but what?...
What's Missing from This New York Times Editorial?
...I discussed the substantive matter below, but for now let me ask a different question: Where would the arguments in the New York Times editorial leave the New York Times itself? Shouldn't New York Times v. Sullivan (the landmark libel case) and New York Times v. United States (the Pentagon Papers case), for instance, have come out the opposite way under the Times' analysis? The corporation that owns the Times, like all corporations, has "limited liability, special rules for the accumulation of assets and the ability to live forever [in theory]." It is "in a privileged position in producing profits and aggregating wealth." It surely has tremendous "influence." It tries to participate in "politics," in its editorials and also, inevitably (whether intentionally or not) in its news coverage and choices of what to cover. It is a "legally created economic entit[y]."
Now maybe the Times is implicitly suggesting that it's excluded from the analysis because of the proviso that it "is in society’s interest that they are allowed to speak about their products and policies." But the ads in New York Times v. Sullivan and the publication of the Pentagon Papers wasn't speech about its products and policies. The speech was its product, in the sense that it was produced by the Times in part -- not clear whether this was so in the ad in Sullivan but perhaps one might say so -- and it was something that the Times sold. ...
...But in any event, my point here isn't so much the substantive point -- it's that a business corporation is publishing a political message arguing that business corporations shouldn't have the constitutional right to publish political messages, without even (1) mentioning that its argument would apply to itself, and (2) explaining why, despite that, the argument should not apply to itself. (It's clear, after all, from its past statements and arguments in court that the Times does take the view that it indeed should continue to have constitutional rights.)
Roosevelt’s Crusade against Gold
Early in the New Deal, Franklin Roosevelt became convinced that to get America out of the Great Depression, the federal government must gain total control over money. The Federal Reserve seemed to have been powerless during the contraction, so Roosevelt asserted the power of the presidency. He began demonizing gold.
Why gold? For centuries, people have viewed gold as the ultimate store of value, something to buy that can help preserve savings when governments depreciate coins and currency. Gold is a beautiful, lustrous metal. It’s durable. It doesn’t break, burn, or corrode. Brilliant gold coins have been recovered from sunken treasure ships after several hundred years beneath the sea. Gold is malleable, and ever since ancient Egypt, people have shaped it into splendid coins, jewelry, and sculpture. Because gold is rare, it has been a far more reliable store of value than paper money, which can be inflated at the whims of politicians. ...
... In his Presidential Proclamation 2039, March 6, 1933, which declared the national “bank holiday,” Roosevelt blamed the banking crisis on gold hoarding. His proclamation cited the legal authority of the Trading with the Enemy Act (October 6, 1917), which provided fines of $10,000 or as many as 10 years in prison for anyone convicted of doing business with an “enemy” of the United States. A subsection of the Trading with the Enemy Act authorized the president to ban transactions involving gold. Presidential Proclamation 2039 made it against the law until March 9, 1933, for any bank to sell gold.
Roosevelt understood that he must apply the full force of federal power to suppress the natural desire for gold in troubled times. The Emergency Banking Act, signed into law March 9, amended the Federal Reserve Act by adding a new subsection (n), which empowered the secretary of the Treasury to demand that all Americans surrender their gold and receive paper money. The following day, Roosevelt issued Executive Order 6073, which made it illegal for Americans to take gold out of the country.
In his first “fireside chat,” delivered on March 12, Roosevelt didn’t say a word about his backstage maneuvering to seize gold. He remarked that “hoarding during the past week has become an exceedingly unfashionable pastime.”
Less than a month later, on April 5, 1933, Roosevelt issued Executive Order 6012, which expropriated privately owned gold. He ordered Americans to surrender their gold to the government by May 1, 1933. Violators would be subject to a $10,000 fine or as many as 10 years in prison.
In his May 7 “fireside chat,” he claimed that if Americans were free to buy gold, there soon wouldn’t be any left, and therefore in the interest of fairness he denied gold to everybody. That was a silly thing to say, since gold markets had flourished around the world for thousands of years. Gold endlessly changed hands. People have obtained gold during the worst wartime conditions when it was forbidden. Resourceful smugglers have defied the death penalty to deliver gold. Journalist Timothy Green reported that a favorite smuggling technique involved “a thin canvas or nylon corset, bearing thirty or more one-kilo bars of gold slotted neatly into rows all around the garment, strapped to the torso.” ...
Administration Won't Seek New Detention System
The Obama administration has decided not to seek legislation to establish a new system of preventive detention to hold terrorism suspects and will instead rely on a 2001 congressional resolution authorizing military force against al-Qaeda and the Taliban to continue to detain people indefinitely and without charge, according to administration officials.
Leading congressional Democrats and members of the civil rights community had signaled opposition to any new indefinite-detention regime, fearing that it would expand government powers and undermine the rule of law and U.S. legal traditions.
The administration's decision avoids a potentially rancorous debate that could alienate key allies at a time when President Obama needs congressional and public support to transfer detainees held at the military prison at Guantanamo Bay, Cuba, to the United States for trial or continued incarceration. ...
Wednesday, September 23, 2009
More on ACORN and Eminent Domain Abuse
... This scene comes about 40 minutes into the film. By this point the audience has witnessed the announcement of the project as well as growing community opposition to it. In addition, the vast majority of condo owners in the footprint of the proposed project have sold their apartments to the developer in order to avoid having them seized via eminent domain. The main character of the film, Daniel Goldstein, has refused to sell and has become one of the main organizers trying to stop it.
In this scene, Daniel attends a press conference announcing an agreement reached between Acorn and Forest City Ratner--in which the developer has agreed to make half of the units in the proposed project "affordable". Further, it is agreed that Acorn will be involved in monitoring the project as well as marketing the "affordable" units. For this work they will be paid.
At the press conference on May 19th, 2005 Bertha Lewis, the head of NY ACORN (currently the head of the national organization), declares that ACORN is working with the current tenants to make sure that they are not pushed out and treated fairly by the developer. Answering a question she further states that there will be apartments set aside for those displaced by the project.
After the event, Daniel Goldstein confronts her with the fact that tenants are already being pushed out. She admits that ACORN hasn't actually talked to any of the tenants yet. She then argues that the developer has nothing to do with greedy landlords forcing out tenants before they buy the property....
ACORN keeps falling
...Case in point: The Pelican Institute think tank in New Orleans keeps unearthing examples of federal and state tax liens against ACORN's national headquarters in the Crescent City. The institute's indefatigable research broke into national attention yesterday via a column by nationally syndicated writer Deroy Murdock in the New York Post. And freelance journalists and state attorneys general not aligned with ACORN are more than holding ACORN's collective feet to the fire. All of this makes a mockery of ACORN's self-selection of two "internal investigat[ors]" to report on where ACORN went wrong. ...
...Mr. Gansler is one of a number of state attorneys general supported by ACORN after receiving an "A" on ACORN's legislative scorecard, which perhaps explains why so many state AGs have been slow to crack down on ACORN's hijinks. The good news is that Attorney General Buddy Caldwell of Louisiana, ACORN's longtime home state, seems to be an independent actor. He got an "F" on the scorecard, and he started his own investigation back in January of 2008. Mr. Caldwell, a Democrat, has subpoenaed ACORN financial information going back to 1998.
Now the Pelican Institute has added to the story. Pelican investigator Steve Beatty found a Sept. 3 IRS filing for a $548,000 lien against ACORN for nonpayment of employment taxes and unemployment-insurance taxes. This follows another $1 million IRS lien against the group, since repaid, and $334,000 in liens from Louisiana tax officials. ...
Planting Seeds of Disaster
‘You’ve got only a couple thousand bucks in the bank. Your job pays you dog-food wages. Your credit history has been bent, stapled, and mutilated. You declared bankruptcy in 1989. Don’t despair: You can still buy a house.” So began an April 1995 article in the Chicago Sun-Times that went on to direct prospective home-buyers fitting this profile to a group of far-left “community organizers” called ACORN, for assistance. In retrospect, of course, encouraging customers like this to buy homes seems little short of madness.
At the time, however, that 1995 Chicago newspaper article represented something of a triumph for Barack Obama. That same year, as a director at Chicago’s Woods Fund, Obama was successfully pushing for a major expansion of assistance to ACORN, and sending still more money ACORN’s way from his post as board chair of the Chicago Annenberg Challenge. Through both funding and personal-leadership training, Obama supported ACORN. And ACORN, far more than we’ve recognized up to now, had a major role in precipitating the subprime crisis.
I’ve already told the story of Obama’s close ties to ACORN leader Madeline Talbott, who personally led Chicago ACORN’s campaign to intimidate banks into making high-risk loans to low-credit customers. Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards — and to fill ACORN’s coffers to finance “counseling” operations like the one touted in that Sun-Times article. This much we’ve known. Yet these local, CRA-based pressure-campaigns fit into a broader, more disturbing, and still under-appreciated national picture. Far more than we’ve recognized, ACORN’s local, CRA-enabled pressure tactics served to entangle the financial system as a whole in the subprime mess. ACORN was no side-show. On the contrary, using CRA and ties to sympathetic congressional Democrats, ACORN succeeded in drawing Fannie Mae and Freddie Mac into the very policies that led to the current disaster.
In one of the first book-length scholarly studies of ACORN, Organizing Urban America, Rutgers University political scientist Heidi Swarts describes this group, so dear to Barack Obama, as “oppositional outlaws.” Swarts, a strong supporter of ACORN, has no qualms about stating that its members think of themselves as “militants unafraid to confront the powers that be.” “This identity as a uniquely militant organization,” says Swarts, “is reinforced by contentious action.” ACORN protesters will break into private offices, show up at a banker’s home to intimidate his family, or pour protesters into bank lobbies to scare away customers, all in an effort to force a lowering of credit standards for poor and minority customers. According to Swarts, long-term ACORN organizers “tend to see the organization as a solitary vanguard of principled leftists...the only truly radical community organization.”...
Critics of the notion that CRA had a major impact on the subprime crisis ask how a law passed in 1977 could have caused a crisis in 2008? The answer has a lot to do with ACORN — and the critical years of 1990-1995. While the 1977 Community Reinvestment Act did call on banks to increase lending in poor and minority neighborhoods, its exact requirements were vague, and therefore open to a good deal of regulatory interpretation. Banks merger or expansion plans were rarely held up under CRA until the late 1980s, when ACORN perfected its technique of filing CRA complaints in tandem with the sort of intimidation tactics perfected by that original “community organizer” (and Obama idol), Saul Alinsky.
At first, ACORN’s anti-bank actions were relatively few in number. However, under a provision of the 1989 savings and loan bailout pushed by liberal Democratic legislators, like Massachusetts Congressman Joseph P. Kennedy, lenders were required to compile public records of mortgage applicants by race, gender, and income. Although the statistics produced by these studies were presented in highly misleading ways, groups like ACORN were able to use them to embarrass banks into lowering credit standards. At the same time, a wave of banking mergers in the early 1990's provided an opening for ACORN to use CRA to force lending changes. Any merger could be blocked under CRA, and once ACORN began systematically filing protests over minority lending, a formerly toothless set of regulations began to bite....
ACORN’s Empire Will Expand Under Obama’s Health-Care Plan and Financial Rules
Congress recently voted to cut off federal housing funds to controversial group ACORN. But since most federal money goes to ACORN-related entities and affiliates, not ACORN itself, Congress’s action is expected to have little practical effect. ACORN’s chief defender in Congress, House Banking Committee Barney Frank (D-Mass.), claims that the cut-off is unconstitutional. House Majority Leader Steny Hoyer (D-Md.) suggests that Congress’s action was purely symbolic, and not expected to have any effect on ACORN.
Indeed, ACORN’s empire is likely to expand thanks to pending legislation to broaden its and its affiliates’ ability to shake down banks. ACORN, a beneficiary of many welfare and war-on-poverty programs, is a “creature of the Community Reinvestment Act” (CRA), which allows groups like ACORN the ability to shake down banks seeking to obtain regulatory approvals, by accusing them of making insufficient low-income loans.
The Community Reinvestment Act was a key contributor to the financial crisis, because it forced banks to make risky, low-income loans. Yet Obama is now proposing a new agency to more stringently enforce it without regard for banks’ financial safety and soundness. Obama’s Congressional allies are working to expand the CRA’s reach and make it “explicitly race-based.”
ACORN may also benefit from the Obama health-care plan, which contains subsidies for community organizers like ACORN. While funneling money to community organizers like ACORN, Obama’s health care plan would raise taxes, break promises, harm people with insurance, explode the budget deficit, destroy many inexpensive health-care plans, and take away important freedoms....
Steven Chu: Americans Are Like ‘Teenage Kids’ When It Comes to Energy
When it comes to greenhouse-gas emissions, Energy Secretary Steven Chu sees Americans as unruly teenagers and the Administration as the parent that will have to teach them a few lessons.
Speaking on the sidelines of a smart grid conference in Washington, Dr. Chu said he didn’t think average folks had the know-how or will to to change their behavior enough to reduce greenhouse-gas emissions.
“The American public…just like your teenage kids, aren’t acting in a way that they should act,” Dr. Chu said. “The American public has to really understand in their core how important this issue is.” (In that case, the Energy Department has a few renegade teens of its own.)...
...During the presidential campaign, Obama castigated his Democratic rival, Hillary Clinton, for saying the federal government should force everyone to buy health insurance. Five months into his presidency, however, Obama said he supported "making every American responsible for having health insurance coverage." In a speech this month, he argued that "the young and the healthy" cannot be permitted to "take the risk and go without coverage" because "such irresponsible behavior costs all the rest of us money," since "we pay for these people's expensive emergency room visits." ...
...The real reason Obama insists upon making the young and healthy buy insurance they don't want is not the relatively minor free rider problem but the potentially ruinous adverse selection problem: The most expensive patients are the ones who are most likely to sign up for coverage. To keep the official 10-year price tag of his plan below that magical $1 trillion threshold, he needs to balance sick people who rack up big bills with healthy people who pay for insurance but don't use it. Instead of acknowledging this reality, Obama portrays the healthy uninsured as irresponsible leeches.
Even if Obama could make a plausible moral argument for the unprecedented step of demanding that all Americans buy insurance—not in exchange for a particular privilege, such as driving on public roads, but simply by virtue of being alive—he would be hard pressed to cite the constitutional authority for such a mandate. The regulation of interstate commerce is the usual justification for federal intervention in the economy, but the decision to refrain from buying insurance is neither interstate nor commerce.
Obama might be on firmer ground if he portrayed the levy imposed on people who decline to buy insurance as an exercise of the congressional tax power. But he does not want to admit he is forsaking his campaign promise to refrain from raising taxes on households earning less than $250,000 a year. That's why, in his interview with Stephanopoulos, he insisted that the "excise tax" imposed on the uninsured by the Senate health care bill he supports is not really a tax. ...
Tuesday, September 22, 2009
Big Dem Donor Nemazee Indicted In Alleged $292 Million Scheme
Federal prosecutors have accused a major Democratic fundraiser with ties to Barack Obama and Hillary Clinton of orchestrating a Ponzi scheme that involved swindling several major banks out of hundreds of millions of dollars, and using some of the proceeds to fund political candidates and PACs.
According to a Justice Department press release, Hassan Nemazee was indicted this afternoon by a grand jury, charged with using fake documents and signatures to bilk Citibank, Bank of America, and HSBC out of over $290 million, in an alleged scheme that dates back to 1998. Nemazee alleged used the Citibank money to repay the B of A loan, and vice versa. And even after being questioned by FBI agents about the Citibank loan last month, Nemazee allegedly went to HSBC to fraudulently draw down a line of credit, which he tried to access funds to pay back Citibank....
ObamaCare’s Smoke and Mirrors: Huge Costs Paid for by Imaginary Savings
Obama’s health care plan uses imaginary savings to finance massive new spending. His claim that it will not increase the deficit is based on the notion that he can squeeze $2 trillion in savings out of the current health care system to finance his plan’s huge costs.
Washington Post columnist Charles Krauthammer, who once practiced medicine, points out in his column that these savings aren’t real, and that politicians falsely promise to pay for new programs through imaginary savings all the time:
“Obama said he would largely solve the insoluble cost problem of ObamaCare by eliminating ‘hundreds of billions of dollars in waste and fraud’ from Medicare. . . .That’s just an insult to our intelligence. Waste, fraud and abuse as the all-purpose piggy bank for budget savings has been a joke since Jimmy Carter first used it in 1977. Moreover, if half a trillion is waiting to be squeezed painlessly out of Medicare, why wait for health-care reform? If, as Obama repeatedly insists, Medicare overspending is breaking the budget, why hasn’t he gotten started on the painless billions in ‘waste and fraud’ savings?”
Even staunch Democrats admit the president’s claims are questionable. Tennessee Governor Phil Bredesen (D) is criticizing Obama’s health care plan as “the mother of all unfunded mandates,” saying it will force states to massively raise taxes or run big deficits. Earlier, one of Obama’s own economic advisers said his health care plan would explode the federal budget deficit and lead to “crippling deficits” and “higher taxes.”...
FACT CHECK: Coverage requirement enforced with tax
WASHINGTON – Memo to President Barack Obama: It's a tax. Obama insisted this weekend on national television that requiring people to carry health insurance — and fining them if they don't — isn't the same thing as a tax increase. But the language of Democratic bills to revamp the nation's health care system doesn't quibble. Both the House bill and the Senate Finance Committee proposal clearly state that the fines would be a tax.
And the reason the fines are in the legislation is to enforce the coverage requirement.
"If you put something in the Internal Revenue Code, and you tell the IRS to collect it, I think that's a tax," said Clint Stretch, head of the tax policy group for Deloitte, a major accounting firm. "If you don't pay, the person who's going to come and get it is going to be from the IRS."...
...It wouldn't be the first asterisk added to Obama's campaign pledge on taxes. Earlier this year, he signed a tobacco tax increase to pay for children's health insurance. Even that can be read as a violation of his expansive campaign promise.
"I can make a firm pledge," he said in Dover, N.H., on Sept. 12, 2008. "Under my plan, no family making less than $250,000 a year will see any form of tax increase. Not your income tax, not your payroll tax, not your capital gains taxes, not any of your taxes."
He repeatedly promised "you will not see any of your taxes increase one single dime."
Monday, September 21, 2009
Obama's Nontax Tax
President Obama didn't make much news on his round of five Sunday talk shows yesterday, with one notable exception. The President revealed a great deal about his philosophy of government and how he defines a tax increase. It turns out the President thinks a health-care tax is not a tax if he thinks the tax is for your own good.
Appearing on ABC's "This Week," Mr. Obama was asked by host George Stephanopoulos about the "individual mandate." Under Max Baucus's Senate bill that Mr. Obama supports, everyone would be required to buy health insurance or else pay a penalty as high as $3,800 a year. Mr. Stephanopoulos posed the obvious question about this kind of coercion when "the government is forcing people to spend money, fining you if you don't [buy insurance]. . . . How is that not a tax?"...
..."I don't think I'm making it up," Mr. Stephanopoulos said. He then had the temerity to challenge the Philologist in Chief, with an assist from Merriam-Webster. He cited that dictionary's definition of "tax"—"a charge, usually of money, imposed by authority on persons or property for public purposes."
Mr. Obama: "George, the fact that you looked up Merriam's Dictionary, the definition of tax increase, indicates to me that you're stretching a little bit right now. . . ." ...
Three Myths about the Crisis: Bonuses, Irrationality, and Capitalism
...This “executive compensation” theory of the crisis is now the keystone of the conventional wisdom, having been embraced by President Obama, the leaders of France and Germany, and virtually the entire financial press. But if anyone has evidence for the executive-compensation thesis, they have yet to produce it. It’s a great theory. It “makes sense”—we all know how greedy bankers are! But is it true?
The evidence that has been produced suggests that it is false.
For one thing, bankers were often compensated in stock as well as with bonuses, and the value of this stock was wiped out because of the investments in question. Richard Fuld of Lehman Brothers lost $1 billion this way; Sanford Weill of Citigroup lost half that amount. A study by Rüdiger Fahlenbrach and René Stulz  showed that banks with CEOs who held a lot of stock in the bank did worse than banks with CEOs who held less stock, suggesting that the bankers were simply ignorant of the risks their institutions were taking. Journalists’ and insiders’ books about individual banks bear out this hypothesis: At Bear Stearns and Lehman Brothers, for example, the decision makers did not recognize the risks until it was too late, despite their personal investments in the banks’ stock.
Perhaps the most powerful evidence against the executive-compensation thesis, however, is that 81 percent of the mortgage-backed tranches purchased by banks were rated AAA, and thus produced lower returns than the double-A and lower-rated tranches of the same mortgage-backed securities that were available. Bankers who were indifferent to risk because they were seeking higher return, hence higher bonuses, should have bought the lower-rated tranches universally, but they did so only 19 percent of the time. And most of those purchases were of double-A rather than A, BBB, or lower-rated, more-lucrative tranches.
The Myth that Capitalism Caused the Crisis
Both the myth of irrational exuberance and the myth of bankers’ bonuses have contributed to the notion that the excesses of capitalists—whether irrational excesses or self-interested ones—were the root cause of the crisis. Without the first two myths, however, the “Capitalism Did It” thesis itself begins to look more like a myth than a reality. Obviously capitalists were involved in the crisis—bankers were not government officials. But with irrationality and bonuses out of the way, the question is why bankers bought those triple-A mortgage-backed securities, and the answer may well lie in the regulations promulgated by government officials.
Had bankers been looking for the safety connoted by triple-A ratings, they could have bought Treasurys, which were even safer. If they were looking for yield, they could have bought double-A or lower-rated bonds. And why mortgage-backed bonds? The answer seems to be an obscure rule enacted by the Fed, the FDIC, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision in 2001: the Recourse Rule, an amendment to the Basel I accord that governed banks' capital minima.
Under the Recourse Rule, an AA- or AAA-rated asset-backed security, such as a mortgage-backed bond, received a 20-percent risk weight, compared to a zero risk weight for cash and a 50-percent risk weight for an individual (unsecuritized) mortgage. This meant that commercial banks could issue mortgages—regardless of how sound the borrowers were—sell them to investment banks to be securitized, and buy them back as part of a mortgage-backed security, in the process freeing up 60 percent of the capital they would have had to hold against individual mortgages. Capital held by a bank is capital not lent out at interest; by reducing their capital holdings, banks could increase their profitability.
To be sure, banks that bought mortgage-backed securities to reduce their capital cushions were, indeed, knowingly increasing their vulnerability if the investments turned out badly. But absent the Recourse Rule, there is no reason that banks seeking a safe way to increase their profitability would have converged on asset-backed securities (rather than Treasurys or triple-A corporate bonds); thus, they would not have been so vulnerable to a burst housing bubble. The Recourse Rule artificially boosted the profitability of a certain type of investment that the Fed, the FDIC, and the other regulators thought was safe. ...
Sowing the seeds of destruction
Just how nutty is ACORN?
Very, say longtime watchers of the extreme leftwing group that sprouted out of a radical 60s anti-government movement.
For decades ACORN has presented itself as a grassroots network dedicated to improving the lives of the poor.
But there's more to ACORN than its do-gooder veneer.
Just ask the banks, corporations and politicians who've been the target of ACORN's shameless shenanigans over the past 40 years.
Here's how the tiny seed of 1960s radicalism blossomed into a well-funded, national organization with political connections reaching all the way to the White House:...
...*In 1999 Wade Rathke's brother Dale, also a major figure at ACORN, was caught embezzling nearly $1 million from the organization. His plundering was swept under the rug after the Rathke family promised to repay the debt. Both Wade and Dale Rathke remained on the payroll and the group didn't inform any of its board members about the theft, or contact authorities.
*In June 2008 two whistleblowers demanded a full accounting of Dale Rathke's embezzlement, and its subsequent cover-up. When news of it broke, Dale and Wade were forced to leave the organization, which employs hundreds worldwide. Wade remains in control of ACORN International and other subsidiaries of the main group. The two dissident board members were ejected from ACORN and labeled traitors....
...*1993: A vice-chair at the United Missouri Bancshares told the St. Louis Post-Dispatch that ACORN tried to "blackmail" his company into lending $25 million to poor neighborhoods, and demanded payment for every mortgage their loan office helped set up.
"ACORN would invade a bank's office, yelling and screaming, and it was pretty difficult for a bank not to say, 'OK, we'll give you a grant, just leave us alone,'" said Hans Von Spakovsky, an analyst with the conservative Heritage Foundation.
"A lot of businesses felt they had to pay up just so ACORN would leave them alone. And ACORN hasn't come under scrutiny for it, which is unfortunate."
*In 1995 ACORN filed a lawsuit to try and claim an exemption from paying its workers minimum wage. The group had launched several successful campaigns to raise the minimum wage across the country and advocated heavily for fair pay and union wages from for-profit corporations. But it shouldn't have to pay its workers a living wage because it would mean hiring fewer staffers, and make employees less in tune with the needs of the poor, ACORN lawyers said. ...
...*In 1998 an ACORN employee was arrested for falsifying voter registration forms in Arkansas. The next year, authorities in Philadelphia confiscated hundreds of registration forms because one ACORN employee wrote them all. This was the first of many voter registration frauds that ACORN would be accused of in subsequent years.
*Since 2004, members of the activist group in as many as nine states have been charged with crimes related to voter registration fraud. To date about 50 people have been arrested, and approximately 30 have resulted in guilty pleas for ACORN-related voter fraud.
*At election offices around the country, ACORN workers are famous for waiting until registration deadline to dump thousands of new documents on overworked clerks — making it harder for them to fully vet the registration forms...
...*In 1992 President Obama headed the Project Vote campaign — an organization affiliated with an ACORN subsidiary — to register 150,000 voters in Chicago. ACORN backed Carol Moseley Braun, the country's first female African-American Senator.
*Barack Obama was one of the lawyers who represented ACORN in 1994 when it sued Citibank on behalf of "all persons who are African-American" and applied for a loan between 1992 and 1995. The group argued that Citibank wasn't giving mortgages in a "race-neutral way."
*A year later Obama again represented ACORN with a team of lawyers when the group sued Illinois, claiming the state was violating federal voting access law.
*In 2008, during the presidential primary, Obama worked with ACORN subsidiary Citizen Services Inc — a consulting firm affiliated with ACORN — to help with voter turnout. He paid the group $800,000....
$2 million behind National Endowment for the Arts politics push
On August 12, a group of 21 arts organizations endorsed President Barack Obama's health reform plan only 48 hours after a conference call in which a top National Endowment for the Arts official asked arts groups for help in advancing the administration's policy agenda, including health care.
One reason the arts organizations may have been so swift to follow the administration's suggestion is that 16 of the groups and affiliated organizations received nearly $2 million in grants from the National Endowment for the Arts in the 150 days before the conference call. According to a Washington Times analysis of NEA records, more than $1 million of that total came from the stimulus package. (see timeline)
The explosive questions are obvious and so far the administration is not talking:
Is it ethical, or even legal, for a federal official from a grant-making agency to ask grant recipients to endorse the administration's political agenda? Is the White House crossing a line when a West Wing political appointee is on the call? Did political considerations infect the grant-making process at NEA?
Digging deeper into the grants only reveals more disturbing questions. Among the recipients of the grants, in this case, $50,000 from the stimulus package, is a group named Americans for the Arts. According to federal records published at OpenSecrets.org, Americans for the Arts has already dedicated $250,000 to lobbying expenses this year alone. The president of Americans for the Arts is an Obama donor and the affiliated political action committee gave $48,000 to congressional Democrats in the last election cycle. According to NEA records analyzed by The Washington Times, donors to the PAC received more than an additional $500,000 in stimulus funds.
Did Congress intend for stimulus money to land in the coffers of politically connected lobbyists? What protections did the administration put in place to assure that stimulus money was not steered to its political allies? Have other lobbyists been funded through stimulus programs administered by different federal agencies? ...
Hey kids, it ain't easy being green
...There is not, now, much value in arguing about the science of climate change. Even if it's wrong, enough people now believe it that it may as well be right. The winds are blowing so strongly that even The Australian only mentions it in passing when Mojib Latif, a leading author for the Intergovernmental Panel on Climate Change, tells a conference that the world will probably cool for the next decade.
And a lot of solutions proposed by climate affirmers are potentially beneficial, regardless of motive. The world is living beyond its means. It would be good to have less muck in the air. Oil won't last forever, and it would be pleasant to have an alternative sooner rather than later...
Is the Climate Science Debate Over? No, It’s Just Getting Very, Very Interesting (with welcome news for mankind)
How many times have you been told that the debate on the science of climate change is “over”? Probably almost as many times as Al Gore has traveled in private jets and limousines to urge audiences to repent of their fuelish ways.
Although tirelessly intoned by politicians, major media, advocacy groups, academics, and even some Kyoto critics, the “debate is over” mantra is just plain false. The core issues of climate-change attribution, climate sensitivity, and even anthropogenic detection remain very much in play....
...Watts and a team of more than 650 volunteers have visually inspected and photographically documented 1003, or 82%, of the 1,221 climate monitoring stations overseen by the U.S. Weather Service. In a report summarizing an earlier phase of the team’s investigation (a survey of 860+ stations), Watts says, “We were shocked by what we found.” He continues:
We found stations located next to exhaust fans of air conditioning units, surrounded by asphalt parking lots and roads, on blistering-hot rooftops, and near sidewalks and buildings that absorb and radiate heat. We found 68 stations located at wastewater treatment plants, where the process of waste digestion causes temperatures to be higher than in surrounding areas.
In fact, we found that 89 percent of the stations–nearly 9 of every 10–fail to meet the National Weather Services’s own siting requirements that stations must be 30 meters (about 100 feet) or more away from an artificial heating or radiating/reflecting heat source. In other words, 9 or every 10 stations are likely reporting higher or rising temperatures because they are badly sited.
“It gets worse,” Watts continues:
We observed that changes in the technology of temperature stations over time also have caused them to report a false warming trend. We found gaps in the data record that were filled in with data from nearby sites, a practice that propagates and compounds errors. We found adjustments to the data by both NOAA and another government agency, NASA, cause recent temperatures to look even higher....
...Satellite observations are not influenced by heat islands or subject to the quality control problems detailed by Watts, and satellite records tally well with weather balloon observations–an independent database. However, the “debate is over” crowd is unlikely to embrace this solution. The satellite record shows a relatively slow rate of warming–about 0.13ºC per decade–hence a relatively insensitive climate....
Climate Alarmism on the Hot Seat: Eric Berger, Houston Chronicle Science Writer, Wants to Know What’s Up
“For a long time now, science reporters have been confidently told the science is settled…. But I am confused [by recent developments]. Four years ago this all seemed like a fait accompli. Humans were unquestionably warming the climate and changing the planet forever through their emissions of carbon dioxide.”
- Eric Berger, Science Writer, Houston Chronicle, September 6, 2009 [SciGuy Blog]
In his post at MasterResource last week, Ken Green spoke of a potential “death spiral” for climate alarmism, in that the failure of the political process would make it less politically incorrect to challenge climate alarmism. “As hopes for a Gore-style ‘wrenching transformation’ fade,” wrote Green, “more mainstream scientists and opinion-makers will become more ‘practical’ toward the issue, meaning that alarmism may give way to sensible assessments of mitigation, adaptation, and geo-engineering.”
But the other problem for climate alarmism is nonalarmist data, as well as new studies by top climatologists questioning the guts of high-sensitivity climate models. Chip Knappenberger summarized a new study by Richard Lindzen that concluded that the “best guess” warming from the Intergovernmental Panel on Climate Change (IPCC) was radically overstated. Marlo Lewis’s summary, Is the Climate Science Debate Over? No, It’s Just Getting Very, Very Interesting (with welcome news for mankind), also lays out the latest from the quite unsettled–and nonalarmist–science. Are the Malthusians wrong again?
Enter Eric Berger, the open-minded, fair-minded science writer for the Houston Chronicle. With just a little courage, and no doubt a good deal of perplexity, he is asking the question that some have been asking for a long, long time: what is really going on here. And no doubt he will take some heat from his post, and no doubt he is going to get to the bottom of what is going on....
Sunday, September 20, 2009
California must go bankrupt
...California already has issued IOUs to employees, which were eventually refused by the banks and ironically refused by the state itself.
The only real solution to save California from the inevitable actually is the inevitable: Declare bankruptcy, and reset the system.
What will then emerge will be as important as the process and recovery. We will finally get to see, as the saga unfolds, what we saw in the city of Vallejo, Calif., during its bankruptcy proceedings -- a pattern of corruption, cronyism, abuse and the defrauding of the taxpaying public. City officials making more than $300,000 a year, firemen making more than $200,000, friends hiring friends.
Government work should be a refuge, not a gold mine.
California is being broken by its own government, state and local. You can see it when you live in other states. ...
Saturday, September 19, 2009
Acorn Runs Off the Rails
...Acorn has so far fired four of the employees seen on the videos. But it claimed the videos were "doctored" and accused critics of a smear campaign and "racist coverage" of the incidents.
Such rhetoric in the past has deflected scrutiny of Acorn tactics, such as street demonstrations and boycotts against banks to force lower credit standards for home loans, which a congressional report found contributed to the subprime loan mess. But now Acorn may be finally running off the rails.
Last week, 11 of its workers were accused by Florida prosecutors of falsifying information on 888 voter registration forms. Last month, Acorn's former Las Vegas, Nev., field director, Christopher Edwards, agreed to testify against the group in a case in which Las Vegas election officials say 48% of the voter registration forms the group turned in were "clearly fraudulent." Acorn itself is charged with 13 counts of illegally using a quota system to compensate workers in an effort to boost the number of registrations. (Acorn has denied wrongdoing in all of these cases.)
A growing number of people once affiliated with Acorn want nothing more to do with the group. Marcel Reid, for example, was one of eight national Acorn board members who were removed last year after demanding an audit of the group's books. She notes that Acorn received $7.4 million in contributions from the Service Employees International Union (SEIU) between 2005 and 2008 but actively fights unionization efforts by its own employees. Ms. Reid also notes that Acorn was sanctioned by the National Labor Relations Board in 2003 for illegally firing workers trying to organize a union.
In 1995, Acorn unsuccessfully sued California to be exempt from the minimum wage, claiming that "the more that Acorn must pay each individual outreach worker . . . the fewer outreach workers it will be able to hire." The decision to file that lawsuit was made by Wade Rathke, who founded Acorn in 1970 and was its long-time leader. He was forced by the group's board to resign last year after it found that he'd engaged in a cover-up of a nearly $1 million embezzlement of Acorn funds by his brother Dale, then the group's chief financial officer.
Mr. Rathke now the chief organizer of a New Orleans-based local of the SEIU, a key Acorn ally is out with a new book, "Citizen Wealth," in which he touts a vision of "maximum eligible participation" by Americans in welfare programs as a way to force radical social change. ...
...Acorn's allies in Congress have long stopped every move to rein it in. Rep. Steve King (R., Iowa), for example, has tried six times to get House floor votes restricting Acorn's access to federal funds but has been blocked by Speaker Nancy Pelosi's hand-picked Rules Committee members. Some Democrats have grumbled. Michigan's John Conyers, chair of the Judiciary Committee, urged a hearing be held on Acorn abuses in March, but later told the Washington Times "the powers that be decided against it."...
Morning Bell: What The Poverty Advocacy Complex Costs You
This Monday the Senate voted 83 to 7 to strip funding for the Association of Community Organizations for Reform Now (ACORN) from this year’s housing and transportation appropriation bill. The move came after upstart website BigGovernment.com posted videos showing ACORN employees in multiple cities across the country conspiring to help under cover reporters avoid taxes for criminal enterprises.
Despite the swiftness with which the Senate acted, this is hardly the first time ACORN has been accused of illegality. Last fall when ACORN was investigated for vote fraud in a dozen states, the New York Times reported that an internal ACORN legal memo raised “questions about whether the web of relationships among its 174 affiliates may have led to violations of federal laws.”
The Times reporter who wrote that story, Stephanie Strom wanted to pursue the story further, but she was discouraged by her superiors at the Times and gave up after blistering phone conversation with then-candidate Barack Obama’s presidential campaign. Strom revealed in an email: “I’m calling a halt to my efforts. I just had two unpleasant calls with the Obama campaign, wherein the spokesman was screaming and yelling and cursing me, calling me a rightwing nut and a conspiracy theorist and everything else.” Explaining why she wanted to pursue the story further in another email Strom wrote:
The real story to all this is how these myriad entities allow them to shuffle money around so much that no one really knows what’s getting spent on what — and for the charities like the housing orgs, that’s a problem. Charitable money cannot be spent on political activities. It’s a big no-no that can cost charitable organizations their exemptions....
... * Over the next decade (2009-2018), President Obama will spend $10.3 trillion on welfare programs. This includes cash, food, housing, medical care and targeted social services for poor and low income Americans. Of this spending $7.5 trillion will be federal spending and $2.8 trillion will be state government matching contributions to federal welfare programs.
* President Obama will spend twice as much on welfare as Clinton did, after adjusting for inflation. Over the next decade welfare, spending will amount to around $300,000 for each person currently living in poverty, or, on average, $1.2 million for a poor family of four.
* President Obama will spend more on welfare in a single year (FY2010) than Bush spent on the Iraq war during his entire presidency.
* Total cost of the War on Poverty since its beginning in 1964 has been $15.9 trillion. By contrast the total cost of all other wars in our nation’s history has been $6.4 trillion.
* If total welfare spending were divided equally among all poor persons, each would get, on average, $16,800 in welfare benefits.
EPA to Impose Global Warming Regulations: Will Congress Intervene?
President Obama doesn’t want to run the auto industry, but he had to, temporarily of course, to save the economy. And Administrator of the Environmental Protection Agency Lisa Jackson doesn’t want to regulate carbon dioxide, but the EPA seems intent on moving forward regardless. Fortunately, Congress could shorten the EPA’s long, regulatory leash by amending the Interior-Environment appropriations spending bill early next week.
The Environmental Protection Agency issued a proposed endangerment finding in April, saying that global warming and climate change pose a serious threat to public health and safety and thus almost anything that emits carbon dioxide and other greenhouse gases could be regulated under the Clean Air Act. The agency is already targeting the ailing auto industry. New regulations are proposing that the fleet average must reach 35.5 miles per gallon by 2016, which will increase the price and decrease the safety of the vehicle....