Friday, April 30, 2010
Obama made $5m in 2009 and tells us we've made enough?
...In a stump speech in Quincy, Illinois, President Obama suggested that “I do think at a certain point you’ve made enough money.” Video here.
Obama made almost $5.5 million last year, most of which came from book royalties according to his tax return.
This comes on top of the other millions of dollars Obama received in previous years. The fact that Obama has been in the public spotlight as a politician has undoubtedly had an impact on the royalties of his two books as well. Go ahead and compare Obama’s 2009 income with other presidents here....
...What is surprising, given the recent controversy over Obama’s membership in the Trinity United Church of Christ, is how little the Obamas apparently gave to charity — well short of the biblical 10% tithe for all seven years. In two of the years, the Obamas gave far less than 1% of their income to charity; in three of the years, they gave around 1% of their income to charity. Only in the last two years have they given substantially more as their income skyrocketed — 4.7% in 2005 and 6.1% in 2006....
Dems spark alarm with call for national ID card
A plan by Senate Democratic leaders to reform the nation’s immigrations laws ran into strong opposition from civil liberties defenders before lawmakers even unveiled it Thursday.
Democratic leaders have proposed requiring every worker in the nation to carry a national identification card with biometric information, such as a fingerprint, within the next six years, according to a draft of the measure.
The proposal is one of the biggest differences between the newest immigration reform proposal and legislation crafted by late-Sen. Ted Kennedy (D-Mass.) and Sen. John McCain (R-Ariz.).
The national ID program would be titled the BELIEVE System, [Biometric Enrollment, Locally-stored Information, and Electronic Verification of Employment].
It would require all workers across the nation to carry a card with a digital encryption key that would have to match work authorization databases.
“The cardholder’s identity will be verified by matching the biometric identifier stored within the micro-processing chip on the card to the identifier provided by the cardholder that shall be read by the scanner used by the employer,” states the Democratic legislative proposal....
The Insurance Mandate in Peril
A"tell" in poker is a subtle but detectable change in a player's behavior or demeanor that reveals clues about the player's assessment of his hand. Something similar has happened with regard to the insurance mandate at the core of last month's health reform legislation. Congress justified its authority to enact the mandate on the grounds that it is a regulation of commerce. But as this justification came under heavy constitutional fire, the mandate's defenders changed the argument—now claiming constitutional authority under Congress's power to tax.
This switch in constitutional theories is a tell: Defenders of the bill lack confidence in their commerce power theory. The switch also comes too late. When the mandate's constitutionality comes up for review as part of the state attorneys general lawsuit, the Supreme Court will not consider the penalty enforcing the mandate to be a tax because, in the provision that actually defines and imposes the mandate and penalty, Congress did not call it a tax and did not treat it as a tax....
...In this way, the statute speciously tries to convert inactivity into the "activity" of making a "decision." By this reasoning, your "decision" not to take a job, not to sell your house, or not to buy a Chevrolet is an "activity that is commercial and economic in nature" that can be mandated by Congress.
It is true that the Supreme Court has interpreted the Commerce Clause broadly enough to reach wholly intrastate economic "activity" that substantially affects interstate commerce. But the Court has never upheld a requirement that individuals who are doing nothing must engage in economic activity by entering into a contractual relationship with a private company. Such a claim of power is literally unprecedented....
...In the 1920s, when Congress wanted to prohibit activity that was then deemed to be solely within the police power of states, it tried to penalize the activity using its tax power. In Bailey v. Drexel Furniture (1922) the Supreme Court struck down such a penalty saying, "there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty with the characteristics of regulation and punishment."...
Youth pastor gets prison for sex with teen
A Placer County judge sentenced a Rocklin youth pastor to prison Wednesday for carrying on a sexual affair with a 14-year-old church member.
Jeffery Allen Waisner, 33, of Lincoln, was handed a three-year prison term for a charge of lewd and lascivious acts with a child stemming from an estimated six-month relationship with a female youth.
The then-14-year-old Rocklin victim and Waisner met at a youth group he led as part of the Crossroads Community Church in Rocklin.
On Wednesday, the victim’s mother stood in an Auburn courtroom to describe the pain and damage Waisner has caused her family.
The mother, whose name is withheld to protect the minor victim’s identity, said that Waisner sent her daughter more than 4,000 text messages in one month. She said many of the messages were sexually explicit. ...
Thursday, April 29, 2010
U.S. Subpoenas Times Reporter Over Book on C.I.A.
WASHINGTON — The Obama administration is seeking to compel a writer to testify about his confidential sources for a 2006 book about the Central Intelligence Agency, a rare step that was authorized by Attorney General Eric H. Holder Jr.
The author, James Risen, who is a reporter for The New York Times, received a subpoena on Monday requiring him to provide documents and to testify May 4 before a grand jury in Alexandria, Va., about his sources for a chapter of his book, “State of War: The Secret History of the C.I.A. and the Bush Administration.” The chapter largely focuses on problems with a covert C.I.A. effort to disrupt alleged Iranian nuclear weapons research.
Mr. Risen referred questions to his lawyer, Joel Kurtzberg, a partner at Cahill Gordon & Reindel L.L.P., who said that Mr. Risen would not comply with the demand and would ask a judge to quash the subpoena.
“He intends to honor his commitment of confidentiality to his source or sources,” Mr. Kurtzberg said. “We intend to fight this subpoena.”
The subpoena comes two weeks after the indictment of a former National Security Agency official on charges apparently arising from an investigation into a series of Baltimore Sun articles that exposed technical failings and cost overruns of several agency programs that cost billions of dollars.
The lead prosecutor in both investigations is William Welch II. He formerly led the Justice Department’s public integrity unit, but left that position in October after its botched prosecution of Senator Ted Stevens of Alaska. ...
Why Waxman really canceled his health care ‘show trial’
Immediately after President Obama signed his health-care bill into law, several large companies disclosed to investors just how big the tax hit from it would be. AT&T, for instance, said that the law’s tax increases alone would cost the company $1 billion.
Key committee chairman Rep. Henry Waxman, California Democrat — whose energetic investigations are loathed by many in Washington — demanded reams of documents to investigate whether the companies were making a political show out of the cost disclosures.
And then … nothing. Waxman at the last minute canceled a hearing to grill executives about the issue.
Publicly, Waxman said the investigation showed the companies’ disclosures were properly filed. But a new report from committee Republicans reveals the documents Waxman obtained included embarrassing evidence that the health-care law could drive up insurance premiums and force employers to dump employees from their health plans.
“Turns out Obamacare means if you like your health plan you can lose it. The president didn’t have to actually strong-arm companies into dumping their employee health insurance because his bill carried financial incentives to virtually guarantee that result,” Energy and Commerce Committee ranking member Rep. Joe Barton, Texas Republican, said.
Most significantly, documents unearthed by the investigation highlight companies that are considering dumping employees from their current health-care plans in the face of new costs from the health-care law. President Obama repeatedly promised his health-care law would let Americans keep their current insurance if they’re happy with it.
A March 3 internal Verizon memo on the impact health-care law said new taxes on insurance companies and health-care equipment manufacturers will be passed onto employers through higher prices.
Facing such increased costs, employers like Verizon “may consider exiting the health-care market and send employees to the exchanges,” the memo says....
Barbara Hollingsworth: Fannie Mae owns patent on residential 'cap and trade' exchange
...When he wasn't busy helping create a $127 billion mess for taxpayers to clean up, former Fannie Mae Chief Executive Officer Franklin Raines, two of his top underlings and select individuals in the "green" movement were inventing a patented system to trade residential carbon credits.
Patent No. 6904336 was approved by the U.S. Patent and Trade Office on Nov. 7, 2006 -- the day after Democrats took control of Congress. Former Sen. John Sununu, R-N.H., criticized the award at the time, pointing out that it had "nothing to do with Fannie Mae's charter, nothing to do with making mortgages more affordable."
It wasn't about mortgages. It was about greenbacks. The patent, which Fannie Mae confirmed it still owns with Cantor Fitzgerald subsidiary CO2e.com, gives the mortgage giant a lock on the fledgling carbon trading market, thus also giving it a major financial stake in the success of cap-and-trade legislation. ...
Electoral dysfunction: Why democracy is always unfair
IN AN ideal world, elections should be two things: free and fair. Every adult, with a few sensible exceptions, should be able to vote for a candidate of their choice, and each single vote should be worth the same.
Ensuring a free vote is a matter for the law. Making elections fair is more a matter for mathematicians. They have been studying voting systems for hundreds of years, looking for sources of bias that distort the value of individual votes, and ways to avoid them. Along the way, they have turned up many paradoxes and surprises. What they have not done is come up with the answer. With good reason: it probably doesn't exist....
Longview youth pastor admits sexual relationship with teen
A 43-year-old former youth pastor at Calvary Chapel church in Longview has admitted to having sex repeatedly with a teenage girl between 2008 and last month, according to court documents filed by Kelso police.
Michael Louis Anthony reported himself to Kelso police April 13 and was booked into jail Friday. He was held Tuesday on $150,000 bail in the Cowlitz County Jail on suspicion of third-degree child molestation, third-degree rape of a child and second-degree sexual misconduct with a minor.
Police said Anthony, who is married and has two children, served as the girl's "spiritual teacher, counselor and confidant." The girl, who was 15 when the sex began, and Anthony told police they had sex too many times to count and that they did so in churches, Anthony's Kelso home, Gerhart Gardens Park and other places....
Tuesday, April 27, 2010
Political Networks Of Fannie Mae And Freddie Mac
...Fannie Mae
James A. Johnson, former chairman and CEO: Aide to Vice President Walter Mondale; recently led Sen. Barack Obama's vice-presidential search team
Jamie Gorelick, former vice chairwoman: Deputy attorney general under President Bill Clinton; former Defense Department general counsel; member of 9/11 Commission
Franklin D. Raines, former chairman and CEO: Budget director under Clinton
Thomas E. Donilon, former executive vice president: Former assistant secretary of state under Clinton; senior adviser to Michael Dukakis' presidential campaign; national campaign coordinator for Walter Mondale's presidential campaign; congressional liaison for President Jimmy Carter.
Robert B. Zoellick, former executive vice president: Former deputy secretary of state and U.S. Trade Representative under President George W. Bush; currently president of the World Bank
Louis J. Freeh, board member: Director of the FBI under Clinton; federal judge
Stephen Friedman, former board member: Assistant to Bush for economic policy
Michele Davis, former senior vice president: Deputy assistant to Bush; currently assistant secretary of the Treasury.
Wayne Berman, outside lobbyist: Assistant Secretary of Commerce under President George H.W. Bush; senior adviser in Bush-Cheney presidential transition; currently a fundraiser for Sen. John McCain's presidential campaign.
Steve Ricchetti, outside lobbyist: Deputy chief-of-staff to Clinton
Kirsten Chadwick, outside lobbyist: Special assistant to President George W. Bush for legislative affairs; currently a fundraiser for McCain's campaign.
Freddie Mac
Richard F. Syron, chairman and CEO: Deputy assistant secretary of the Treasury
Ralph F. Boyd Jr., executive vice president: Assistant attorney general for civil rights
Dennis DeConcini, former board member: U.S. senator from Arizona
Robert R. Glauber, board member: Undersecretary of the Treasury under President George H.W. Bush
David J. Gribbin III, former board member: Aide to Vice President Dick Cheney; assistant secretary of defense under President George H.W. Bush
Harold Ickes, former board member: Adviser to President Clinton and Sen. Hillary Clinton; member of the Democratic National Committee.
Rep. Rahm Emanuel, former board member: Senior adviser to President Clinton; former chairman of the Democratic Congressional Campaign Committee and chairman of the House Democratic Caucus.
Susan Hirschmann, outside lobbyist: Chief-of-staff to former House Majority Whip Tom DeLay of Texas
Michael J. Bates, outside lobbyist: Campaign official for President Reagan, presidential candidate Bob Dole, President Bush.
Martin Paone, outside lobbyist: Secretary of the Senate
J. Patrick Cave, outside lobbyist: Acting Assistant Secretary and Deputy Assistant Secretary of the Treasury
Susan Molinari, outside lobbyist: U.S. Congresswoman from New York
Dogged by Leading Role in Mortgage Meltdown, Andrew Cuomo Personifies Democrats’ Reversal of Fortune
With despair gripping New York Democrats over ethical scandals claiming Governor David Patterson, Rep. Charlie Rangel (D-NY), and Rep. Eric Massa (D-NY), New York’s Attorney General Andrew Cuomo cuts a heroic figure as the presumptive heir to the governorship.
But catching up with Cuomo is his relationship with the mortgage meltdown that nearly destroyed the American economy. Appointed by Bill Clinton as secretary of the U.S. Department for Housing and Urban Development (HUD), Andrew Cuomo has been called “the father of the subprime crisis” for the policies he orchestrated.
It was Cuomo’s directives that mandated HUD to vastly increase the amount of risky home loans bought by quasi-governmental housing giants Fannie Mae and Freddie Mac. Now, Cuomo may be haunted by his tenure as HUD secretary, where he planted the seeds for the nation’s housing collapse.
Though America’s financial fortunes suffered after Cuomo’s time at HUD, his own personal fortune soared. The bulk of this financial “windfall” came courtesy of Andrew Farkas, the billionaire real estate developer who helped Cuomo amass his wealth as a business partner and campaign fundraiser. Farkas — now Cuomo’s financial chairman as he circles the governorship — has personally given Cuomo at least $1.8 million in cash.
As New Yorkers are beginning to discover, Andrew Cuomo personifies the long reach of many at the top of the Democratic Party who built their fortunes on the mortgage bubble and the sub-prime collapse, but have yet to be tarred and feathered as architects of the nation’s worst housing crisis.
Cuomo’s heavy reliance on funds raised from big players in New York real estate, analyzed in detail by the New York Times this January, “hasn’t drawn much scrutiny yet, but it will,” said Blair Horner, legislative director at NYPIRG, the New York Public Interest Research Group, in an interview with Pajamas Media. “If and when he announces as a candidate for governor, because it’s obviously an issue that the public deserves to have explored.”
Notably, another recipient of largess while Cuomo was HUD secretary is current White House Chief of Staff Rahm Emanuel. Clinton appointed Emanuel to the board of Freddie Mac while Cuomo headed HUD. Both Cuomo and Emanuel turned their privileged positions atop the nation’s mortgage finance system into opportunities for quickly amassing personal wealth, which they then leveraged into greater political power....
In Bid To Reform Fannie and Freddie, Obama Can’t Shake Crony Clintonistas Who Caused the Mess
But while the GSEs went belly-up, costing Americans dearly, the fortunate few sitting on their Boards of Directors got filthy rich. These same directors — some of the biggest names in Democratic Party politics and business — failed spectacularly to fulfill their fiduciary obligations.
As it turns out, former President Clinton packed the boards of Fannie Mae and Freddie Mac with virtually as many personal allies and beneficiaries as they could hold. The most visible was Franklin Raines — Fannie Mae chairman, CEO, and former Clinton budget chief — who later resigned in disgrace with a multi-million parachute.
And then there’s President Obama’s current White House Chief of Staff Rahm Emanuel, who served on Fannie Mae’s board for a mere 14 months and raked in a cool $320,000.
Clinton also packed the Fannie board with Democratic Senator and “Keating Five” defendant Dennis DeConcini. Hillary Clinton’s confidante Jamie Gorelick got a prized seat, as did Bill and Hillary favorite Harold Ickes, Democratic strategist.
A federal report by the Office of Federal Housing Enterprise Oversight condemned the boards of both Fannie and Freddie, calling their actions contributing to the housing meltdown “malfeasance.” Freddie Directors like Emanuel were blasted for failing to confront the “management issues that were root causes of many of the problems that led to the ongoing restatement of the financial reports of the Enterprise,” and permitting management to profit from cooking the books to the tune of $5 billion in 2003 alone.
But even a brief stay on the Fannie or Freddie Boards was its own source of fat profits. Among the rewards for Democratic Party “public service,” a lucrative board membership on Fannie and Freddie was considered the Taj Mahal of plum positions. Now, as the housing market limps forward and there are warnings of a new wave of foreclosures, the culpable coterie remains largely anonymous.
What’s more, this group of lifetime political hacks puts the Obama administration at risk, just as it struggles to forge a way forward through the financial wreckage wrought while America’s wealthiest, most powerful Democrats made their careers.
Rahm Emanuel has come under particular scrutiny, with a series of reports by the Chicago Tribune making waves across the Internet. The inexperience and poor management of former HUD Secretary Andrew Cuomo is already well documented....
With despair gripping New York Democrats over ethical scandals claiming Governor David Patterson, Rep. Charlie Rangel (D-NY), and Rep. Eric Massa (D-NY), New York’s Attorney General Andrew Cuomo cuts a heroic figure as the presumptive heir to the governorship.
But catching up with Cuomo is his relationship with the mortgage meltdown that nearly destroyed the American economy. Appointed by Bill Clinton as secretary of the U.S. Department for Housing and Urban Development (HUD), Andrew Cuomo has been called “the father of the subprime crisis” for the policies he orchestrated.
It was Cuomo’s directives that mandated HUD to vastly increase the amount of risky home loans bought by quasi-governmental housing giants Fannie Mae and Freddie Mac. Now, Cuomo may be haunted by his tenure as HUD secretary, where he planted the seeds for the nation’s housing collapse.
Though America’s financial fortunes suffered after Cuomo’s time at HUD, his own personal fortune soared. The bulk of this financial “windfall” came courtesy of Andrew Farkas, the billionaire real estate developer who helped Cuomo amass his wealth as a business partner and campaign fundraiser. Farkas — now Cuomo’s financial chairman as he circles the governorship — has personally given Cuomo at least $1.8 million in cash.
As New Yorkers are beginning to discover, Andrew Cuomo personifies the long reach of many at the top of the Democratic Party who built their fortunes on the mortgage bubble and the sub-prime collapse, but have yet to be tarred and feathered as architects of the nation’s worst housing crisis.
Cuomo’s heavy reliance on funds raised from big players in New York real estate, analyzed in detail by the New York Times this January, “hasn’t drawn much scrutiny yet, but it will,” said Blair Horner, legislative director at NYPIRG, the New York Public Interest Research Group, in an interview with Pajamas Media. “If and when he announces as a candidate for governor, because it’s obviously an issue that the public deserves to have explored.”
Notably, another recipient of largess while Cuomo was HUD secretary is current White House Chief of Staff Rahm Emanuel. Clinton appointed Emanuel to the board of Freddie Mac while Cuomo headed HUD. Both Cuomo and Emanuel turned their privileged positions atop the nation’s mortgage finance system into opportunities for quickly amassing personal wealth, which they then leveraged into greater political power....
In Bid To Reform Fannie and Freddie, Obama Can’t Shake Crony Clintonistas Who Caused the Mess
But while the GSEs went belly-up, costing Americans dearly, the fortunate few sitting on their Boards of Directors got filthy rich. These same directors — some of the biggest names in Democratic Party politics and business — failed spectacularly to fulfill their fiduciary obligations.
As it turns out, former President Clinton packed the boards of Fannie Mae and Freddie Mac with virtually as many personal allies and beneficiaries as they could hold. The most visible was Franklin Raines — Fannie Mae chairman, CEO, and former Clinton budget chief — who later resigned in disgrace with a multi-million parachute.
And then there’s President Obama’s current White House Chief of Staff Rahm Emanuel, who served on Fannie Mae’s board for a mere 14 months and raked in a cool $320,000.
Clinton also packed the Fannie board with Democratic Senator and “Keating Five” defendant Dennis DeConcini. Hillary Clinton’s confidante Jamie Gorelick got a prized seat, as did Bill and Hillary favorite Harold Ickes, Democratic strategist.
A federal report by the Office of Federal Housing Enterprise Oversight condemned the boards of both Fannie and Freddie, calling their actions contributing to the housing meltdown “malfeasance.” Freddie Directors like Emanuel were blasted for failing to confront the “management issues that were root causes of many of the problems that led to the ongoing restatement of the financial reports of the Enterprise,” and permitting management to profit from cooking the books to the tune of $5 billion in 2003 alone.
But even a brief stay on the Fannie or Freddie Boards was its own source of fat profits. Among the rewards for Democratic Party “public service,” a lucrative board membership on Fannie and Freddie was considered the Taj Mahal of plum positions. Now, as the housing market limps forward and there are warnings of a new wave of foreclosures, the culpable coterie remains largely anonymous.
What’s more, this group of lifetime political hacks puts the Obama administration at risk, just as it struggles to forge a way forward through the financial wreckage wrought while America’s wealthiest, most powerful Democrats made their careers.
Rahm Emanuel has come under particular scrutiny, with a series of reports by the Chicago Tribune making waves across the Internet. The inexperience and poor management of former HUD Secretary Andrew Cuomo is already well documented....
Update: Fannie Mae and Freddie Mac Invest in Lawmakers
...Current members of Congress have received a total of $4.8 million from Fannie Mae and Freddie Mac, with Democrats collecting 57 percent of that. ...
Politics and the Fannie Mae Piggy Bank
...Fannie Mae is the biggest single source of money for mortgages in the United States. From 1998 to 2004, the years covered by the OFHEO investigation, it was headed by former Clinton budget director Franklin Raines, whose top management team included former Clinton Justice Department official Jamie Gorelick, sometimes mentioned as a future attorney general in a Democratic administration. During that period, the report says, Raines and his team grossly overstated Fannie Mae’s earnings — to the tune of $10.6 billion — for the purpose of paying themselves big bonuses. “By deliberately and intentionally manipulating accounting to hit earnings targets,” the report says, “senior management maximized the bonuses and other executive compensation they received, at the expense of shareholders.”...
Scandal to Cost Ex-Fannie Mae Officers Millions
WASHINGTON (AP) — Franklin D. Raines, former chief executive of Fannie Mae, and two other top executives are paying a total of nearly $31.4 million over their roles in a 2004 accounting scandal in a settlement that the government announced Friday.
Mr. Raines; the former chief financial officer, J. Timothy Howard; and the former controller, Leanne G. Spencer, were accused in a civil lawsuit in December 2006 of manipulating earnings over a six-year period at the company, the largest American financier and guarantor of home mortgages.
Mr. Raines, a prominent Washington figure who was President Bill Clinton’s budget director, has agreed to pay $24.7 million, including a $2 million fine. Mr. Howard is paying $6.4 million and Ms. Spencer $275,000....
Monday, April 26, 2010
Obamacare’s Danger Signs
Not one of its major programs has gotten started, and already the wheels are starting to come off of Obamacare. The administration’s own actuary reported on Thursday that millions of people could lose their health insurance, that health-care costs will rise faster than they would have if the law hadn’t passed, and that the overhaul will mean that people will have a harder and harder time finding physicians to see them.
The White House is trying to spin the new report from Medicare’s chief actuary Richard Foster as only half bad because it concludes that, while costs will increase, only 23 million people will remain uninsured (instead of 24 million previously estimated)....
...And there’s more: Joint Economic Committee Republicans explain in a new report the impact of a rarely mentioned $14.3 billion per year tax on health insurance, effective in 2014. They find this tax will be mostly passed through to consumers in the form of higher premiums for private coverage. It will cost the typical family of four with job-based coverage an additional $1,000 a year in higher premiums and will fall largely, and inequitably, on small businesses and their employees....
More Global Warming Profiteering by Obama Energy Official
Surprising documents made available to this author reveal that Assistant Secretary of Energy Cathy Zoi has a huge financial stake in companies likely to profit from the Obama administration’s “green” policies.
Zoi, who left her position as CEO of the Alliance for Climate Protection — founded by Al Gore — to serve as assistant secretary for energy efficiency and renewable energy, now manages billions in “green jobs” funding. But the disclosure documents show that Zoi not only is in a position to affect the fortunes of her previous employer, ex-Vice President Al Gore, but that she herself has large holdings in two firms that could directly profit from policies proposed by the Department of Energy.
Among Zoi’s holdings are shares in Serious Materials, Inc., the previously sleepy, now bustling, friend of the Obama White House whose public policy operation is headed by her husband. Between them, Zoi and her husband hold 120,000 shares in Serious Materials, as well as stock options. Reporter John Stossel has already explored what he sees as the “crony capitalism” implied by Zoi being so able to influence the fortunes of a company to which she is so closely associated.
In addition, the disclosure forms reflect that Zoi holds between $250,000 and $500,000 in “founders shares” in Landis+Gyr, a Swiss “smart meter” firm. She also still owns between $15,000 and $50,000 in ordinary shares....
Economists: The stimulus didn't help
NEW YORK (CNNMoney.com) -- The recovery is picking up steam as employers boost payrolls, but economists think the government's stimulus package and jobs bill had little to do with the rebound, according to a survey released Monday.
In latest quarterly survey by the National Association for Business Economics, the index that measures employment showed job growth for the first time in two years -- but a majority of respondents felt the fiscal stimulus had no impact.
NABE conducted the study by polling 68 of its members who work in economic roles at private-sector firms. About 73% of those surveyed said employment at their company is neither higher nor lower as a result of the $787 billion Recovery Act, which the White House's Council of Economic Advisers says is on track to create or save 3.5 million jobs by the end of the year.
That sentiment is shared for the recently passed $17.7 billion jobs bill that calls for tax breaks for businesses that hire and additional infrastructure spending. More than two-thirds of those polled believe the measure won't affect payrolls, while 30% expect it to boost hiring "moderately." ...
Climategate: a scandal that won’t go away
...The first report centred directly on the IPCC itself. When several of the more alarmist claims in its most recent 2007 report were revealed to be wrong and without any scientific foundation, the official response, not least from the IPCC’s chairman, Dr Rajendra Pachauri, was to claim that everything in its report was “peer-reviewed”, having been confirmed by independent experts.
But a new study put this claim to the test. A team of 40 researchers from 12 countries, led by a Canadian analyst Donna Laframboise, checked out every one of the 18,531 scientific sources cited in the mammoth 2007 report. Astonishingly, they found that nearly a third of them – 5,587 – were not peer-reviewed at all, but came from newspaper articles, student theses, even propaganda leaflets and press releases put out by green activists and lobby groups. ...
...Yet this in turn has given rise to all sorts of controversies, not least when Prof Jones last year admitted that much of his data had been “lost” (following his repeated refusals of applications to see it by McIntyre and others). More damaging still was the charge by senior Russian scientists that, in compiling its global record, CRU had cherry-picked the data supplied from Russia, suppressing that from most of the country while retaining the data from the vicinity of cities which, thanks to the “urban heat island” effect, showed a warming trend. So even the accuracy of CRU’s temperature record has been called seriously in doubt, although one would never have guessed it from Oxburgh. ...
Public unions make a private sector power grab
...The great power of the pubic employee unions is their pension funds -- hundreds of billions of dollars provided by taxpayers to pay for retirement benefits. The investment of these funds is directed by political appointees who are motivated to keep the unions happy.
Consider the recent scandal in New York centered on President Obama's former car czar, Steven Rattner.
The New York state pension fund has about $130 billion in it. The contracts for investing those funds are hugely lucrative, and the work is pretty easy. So Rattner, then at the investment firm he founded, went the extra mile to land the business.
The firm, Quadrangle Group, now disavows Rattner's practices and has agreed to pay $12 million to settle complaints from the Securities and Exchange Commission and the state.
Rattner, one of the most prodigious Democratic fundraisers in the land, allegedly used his stroke in New York politics and some liberally applied consulting fees to get the former state comptroller, now facing corruption charges, to give Quadrangle the business. ...
...Around the country, politically connected investment advisers get paid lots of money and then provide more contributions for Democrats to get elected. It's a perpetual motion political machine funded by taxpayers.
But aside from directly funding the campaigns of the politicians who then reward the unions with raises and better benefits, the pension funds provide the unions with clout outside the government.
Shares of stock bought with tax dollars are a way to get publicly traded corporations to do the unions' bidding. Enough shares mean seats on corporate boards and decision-making power.
Already, companies have to be mindful of whether their positions on laws relating to global warming, "card check" union organizing and other politically charged issues will cause a backlash from labor-oriented shareholders and others on the Left who have motivations beyond profits.
The Dodd bill would empower the unions further.
Incorporation has always been a state affair. When you start a company, you incorporate not in Washington but in your state capital or in a state sympathetic to corporations. And you follow state rules for how you establish your board of directors and the powers those directors have. That means states have an incentive to offer attractive rules for corporate governance.
The Dodd plan would federalize that responsibility for the first time and give the SEC the power to set the rules for how boards are governed. The preference among the Democratic majority on the commission is likely to be for rules that give pension funds more seats on more boards and more power to make decisions. ...
Home Field advantage
What kind of U.N. environmental ambassador builds a 20,000 square-foot home with a six-car garage, an elevator and a lagoon? Why, that would be the Hub’s favorite Pats fan, Gisele Bundchen!
And a paparazzo’s sneak pics of Bundchen and hubby Tom Brady [stats]’s gargantuan new Brentwood, Calif., chateau has green activists seeing red.
“How big a space do two people need?” asked Philip Dowds, a Massachusetts Sierra Club official and professional architect. “A 20,000 square-foot house - the resources that it takes to put it together and the land that it needs, this just can’t happen anymore.”...
'Green' BBC spends £5million flying directors around Britain
The BBC has spent almost £5million on flying its directors, staff and guests around Britain, it has been revealed.
Despite the corporation’s pledge to be more environmentally friendly, the licence-fee payer has funded almost 100 short-haul flights a day for BBC staff - a massive 68,000 plane trips over the past two years.
And BBC chiefs have been among the biggest culprits for making these journeys - despite an internal report stating that staff will be encouraged ‘to use rail rather than air wherever that is feasible’. ...
Saturday, April 24, 2010
Steven Greenhut: Public employees receive 'unbelievable' benefits
Average total pay and benefit packages for firefighters in my newspaper coverage area of Orange County, Calif., is an astounding $175,000 a year, which includes overtime and all the various benefit goodies (total cost). The amount -- a compensation package worthy of a chief executive officer -- literally is unbelievable, especially to people who live outside the aptly named Golden State.
While California is on the cutting edge of this absurdity, just as it is on the cutting edge of various other trends for good or ill, this is a nationwide problem.
It's crucial that people grasp the extent of the raiding of the public treasury. Thanks to the overtime system, rigged to boost employee pay rather than protect the public till, many California firefighters earn more than $200,000 a year in pay alone.
One local firefighter amassed so much overtime his annual pay was nearly $300,000 a year. These are not aberrations. ...
Steven Greenhut: Do public safety officials die early?
...>>If the current age is 55, the retiree is expected to live to be 81.4 if male, and 85 if female.
>>If the current age is 60, the retiree is expected to live to be age 82 if male, and 85.5 if female.
>>If the current age is 65, the retiree is expected to live to be age 82.9 if male, and 86.1 if female.
Here is the CalPERS life expectancy data for public safety members (police and fire, which are grouped together by the pension fund):
>>If the current age is 55, the retiree is expected to live to be 81.4 if male, and 85 if female.
>>If the current age is 60, the retiree is expected to live to be age 82 if male, and 85.5 if female.
>>If the current age is 65, the retiree is expected to live to be age 82.9 if male, and 86.1 if female.
That's no mistake. The numbers are identical for public safety retirees as for other government workers. Here is CalPERS again: "Verdict: Myth No. 4 Busted! Safety members do live as long as miscellaneous members."
Steven Greenhut: Even abusive public employees can't get fired
...The investigation documented one absurd case after another. A teacher drank alcohol in front of kids and made offensive, sexual remarks to students, but he couldn't be fired. Nor could the teacher who was "spotted lying on top of a female colleague in the metal shop" because there was no proof they were having sex.
The Times found that "[a]bout 160 instructors and others get salaries for doing nothing while their job fitness is reviewed. They collect roughly $10 million a year, even as layoffs are considered because of a budget gap."
The article focused on the case of Matthew Kim, who had repeated allegations of sexual harassment lodged against him. He was removed from the classroom seven years ago and has been collecting about $68,000 a year for doing nothing.
The teachers union won't allow the 160 teachers in limbo to do other types of work (clerical, cleaning, chores, etc.), so they sit in a school building -- rubber rooms, as they are often called -- and wait for a ruling. ...
Report: Health overhaul will increase USA's tab
WASHINGTON (AP) — President Obama's health care overhaul law will increase the nation's health care tab instead of bringing costs down, government economic forecasters concluded Thursday in a sobering assessment of the sweeping legislation.
A report by economic experts at the Health and Human Services Department said the health care remake will achieve Obama's aim of expanding health insurance — adding 34 million Americans to the coverage rolls.
But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs. It also warned that Medicare cuts may be unrealistic and unsustainable, driving about 15% of hospitals into the red and "possibly jeopardizing access" to care for seniors.
The mixed verdict for Obama's signature issue is the first comprehensive look by neutral experts.
In particular, the warnings about Medicare could become a major political liability for Democratic lawmakers in the midterm elections. Seniors are more likely to vote than younger people and polls show they are already deeply skeptical of the law....
Report says health care will cover more, cost more
WASHINGTON – President Barack Obama's health care overhaul law is getting a mixed verdict in the first comprehensive look by neutral experts: More Americans will be covered, but costs are also going up.
Economic experts at the Health and Human Services Department concluded in a report issued Thursday that the health care remake will achieve Obama's aim of expanding health insurance — adding 34 million to the coverage rolls.
But the analysis also found that the law falls short of the president's twin goal of controlling runaway costs, raising projected spending by about 1 percent over 10 years. That increase could get bigger, since Medicare cuts in the law may be unrealistic and unsustainable, the report warned.
It's a worrisome assessment for Democrats....
Dem budget plan postpones pain
Senate Democrats released details Wednesday of a five-year budget plan that promises to narrow the deficit dramatically by 2015 but still accumulates almost $3.9 trillion more government debt over the same period.
Trying to survive the political storm around them, Democrats would postpone the toughest decisions until after November’s elections, when a presidential fiscal commission is scheduled to make its report to Congress. But there is no escaping the political bind that grips the party, exhausted from the debate over health care reform and under political pressure to extend Bush-era tax cuts.
Health care ate up most of the available Medicare savings and popular tax offsets that might otherwise be tapped to narrow the deficit. And as a result, it’s harder to dig out of the deficit hole, and little progress will be made in the short term absent a further surge in the economy. ...
Senate Bill Sets a Plan to Regulate Premiums
...After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would “provide an important check on unjustified premiums.”
Mr. Harkin praised a bill introduced by Senator Dianne Feinstein, Democrat of California, that would give the secretary of health and human services the power to review premiums and block “any rate increase found to be unreasonable.” Under the bill, the federal government could regulate rates in states where state officials did not have “sufficient authority and capability” to do so.
The White House offered a similar proposal in the weeks leading up to approval of the health care legislation last month. But it was omitted from the final measure, in part for procedural reasons. ...
...Under the new health care law, starting in 2014, most Americans will be required to have insurance. Insurers will have to offer coverage to all applicants and cannot charge higher premiums because of a person’s medical condition or history. ...
Climate Science In Denial
...The IPCC’s position in its Summary for Policymakers from their Fourth Assessment (2007) is weaker, and simply points out that most warming of the past 50 years or so is due to man’s emissions. It is sometimes claimed that the IPCC is 90% confident of this claim, but there is no known statistical basis for this claim—it’s purely subjective. The IPCC also claims that observations of globally averaged temperature anomaly are also consistent with computer model predictions of warming.
There are, however, some things left unmentioned about the IPCC claims. For example, the observations are consistent with models only if emissions include arbitrary amounts of reflecting aerosols particles (arising, for example, from industrial sulfates) which are used to cancel much of the warming predicted by the models. The observations themselves, without such adjustments, are consistent with there being sufficiently little warming as to not constitute a problem worth worrying very much about.
In addition, the IPCC assumed that computer models accurately included any alternative sources of warming—most notably, the natural, unforced variability associated with phenomena like El Nino, the Pacific Decadal Oscillation, etc. Yet the relative absence of statistically significant warming for over a decade shows clearly that this assumption was wrong. Of course, none of this matters any longer to those replacing reason with assertions of authority.
Consider a letter of April 9 to the Financial Times by the presidents of the U.S. National Academy of Science and the Royal Society (Ralph Cicerone and Martin Rees, respectively). It acknowledges that climategate has contributed to a reduced concern among the public, as has unusually cold weather. But Messrs. Cicerone and Rees insist that nothing has happened to alter the rather extreme statement that climate is changing and it is due to human action. They then throw in a very peculiar statement (referring to warming), almost in passing: “Uncertainties in the future rate of this rise, stemming largely from the ‘feedback’ effects on water vapour and clouds, are topics of current research.”
Who would guess, from this statement, that the feedback effects are the crucial question? Without these positive feedbacks assumed by computer modelers, there would be no significant problem, and the various catastrophes that depend on numerous factors would no longer be related to anthropogenic global warming.
That is to say, the issue relevant to policy is far from settled....
Friday, April 23, 2010
GM's Money Shuffle
...Senator Chuck Grassley is asking the Treasury Secretary to justify claims that General Motors has repaid its TARP loans when GM is using other TARP funds to repay the loans.
“It looks like the announcement is really just an elaborate TARP money shuffle,” Grassley said. “The repayment dollars haven't come from GM selling cars but, instead, from a TARP escrow account at the Treasury Department.”...
GM Could Be in Hot Water With FTC Over Truth in Advertising
General Motors is running ads on all the major networks this week claiming it has repaid its bailout from the taxpayers "in full." But the claim isn't standing up to scrutiny from lawmakers and government watchdogs who have found that the automaker was able to repay the bailout money only by dipping into a separate pot of bailout funds.
The TV spot may land GM in hot water with the Federal Trade Commission over its truth-in-advertising laws, which prohibit ads that are "likely to mislead consumers."
"We have repaid our government loans in full — with interest — five years ahead of the original schedule," says Ed Whitacre, chairman and CEO of General Motors Company, asking Americans to give the bankrupt company another look.
But a top Senate Republican has accused GM of misleading taxpayers about the loan repayment, saying the struggling auto giant was able to repay a $6.7 billion bailout loan only by using other bailout funds in a special escrow account....
China tries to sterilise 10,000 parents over one-child rule
Doctors in southern China are working around the clock to fulfil a government goal to sterilise — by force if necessary — almost 10,000 men and women who have violated birth control policies. Family planning authorities are so determined to stop couples from producing more children than the regulations allow that they are detaining the relatives of those who resist.
About 1,300 people are being held in cramped conditions in towns across Puning county, in Guangdong Province, as officials try to put pressure on couples who have illegal children to come forward for sterilisation.
The 20-day campaign, which was launched on April 7, aims to complete 9,559 sterilisations in Puning, which, with a population of 2.24 million, is the most populous county in the province.
A doctor in Daba village said that his team was working flat out, beginning sterilisations every day at 8am and working straight through until 4am the following day. ...
The villain in a dumbed-down morality play
...# The claim against Goldman is that it did not reveal that hedge-fund manager John Paulson helped to select the securities. But at that time, Paulson was a virtual nobody (he became famous later as he made billions by betting against the housing market). As John Tamny notes in Real Clear Markets: ‘Back then, Paulson was not taken seriously, and if his role had been known, it’s a fair bet that client demand for Abacus would have been even greater.’ So why did Goldman have, as the SEC asserts, the obligation to inform potential investors that he was on the other side? Yes, Paulson identified the securities he wanted to bet against, but not all were ultimately selected, as he did not have authority to make the final selections; ACA’s management had the final word, as even the SEC admits. Paulson could not get all the assets he wanted in the package, as there needed to be those on the other side of the trade who would agree to buy.
# The media are excited about the ‘billions’ involved. In fact, Paulson made about $1billion. Which, in the world of investment banking and toxic assets, is akin to Dr Evil’s ransom claim in the movie Austin Powers for ‘one… million… dollars’.
# Goldman itself lost money on the deal ($90million), making it a fraud to deceive… itself?...
What's so great about the welfare state?
...The old notion of the welfare state as a ‘safety net’ to help citizens cope with hardship assumed that individuals, families and communities were generally able to run their own lives most of the time. Social assistance, therefore, was designed to return people to a situation where they could get on with their lives unaided, as autonomous, capable human beings. But the model of welfare that has developed over the past two decades entirely rejects the idea that individuals have the capacity to run their lives. Welfare provision now starts from the assumption that individuals and communities are incapable of managing their own health and lifestyles, family life, child-rearing and informal community relations without the constant intervention of the state and its institutions to advise, train, counsel and (re)educate them.
The change has been so profound that it is really no longer appropriate to talk about a ‘welfare’ state at all. In its place there has developed what former New Labour prime minister Tony Blair described in 2006 as an ‘enabling state’. This new ‘enabling state’ might promote itself through the rhetoric of responsibility and empowerment, but in fact its impact on individuals and communities has been extremely disabling. Virtually every welfare-state intervention is now premised on the assumption that individuals are vulnerable, physically and psychologically incapacitated, and in need of constant therapeutic intervention.
Questioning the role of the welfare state in our lives has never been more urgent. And to do this effectively, we must first understand what the welfare state was really all about in the past, and then consider the more recent transformation of state institutions from providers of discrete assistance and material resources into vehicles for therapeutic guidance....
...In 1899, the political class was appalled to discover that, despite the apparent willingness of the British working man to enlist to fight in the Second Boer War, almost 25 per cent of volunteers were unfit for military service. In Manchester alone, 8,000 of the 10,000 men who volunteered were rejected on the grounds of ill-health and physical incapacity. Worse still, the difficulties experienced by those working men who did pass the basic fitness test and then struggled to defeat the less-experienced Boers made the elite worry that this might be the beginning of the end of Britain’s military greatness. How could Britain be great if its fighting men were so physically weak? There emerged a heated elite discussion about the degeneration of the British race, and how this might be turned around by improving the basic conditions of the working man....
Thursday, April 22, 2010
Bankruptcy bill finally clears committee
Highly controversial, union-backed legislation that would make it more difficult for local governments to declare bankruptcy has made it out of the Senate Local Government Committee after a nearly yearlong stalemate.
Assembly Bill 155 by Assemblyman Tony Mendoza, D-Artesia, was passed by the Assembly nearly a year ago, but was bottled up in the Senate Local Government Committee because one Democrat, Lois Wolk of Davis, refused to vote for it.
Senate President Pro Tem Darrell Steinberg removed Wolk from the committee and with the change, the measure was approved on a 3-2 party-line vote.
The measure, backed by public employee unions, would require local governments to get permission from the California Debt and and Investment Advisory Commission, which is dominated by Democratic officials with union ties, before filing for bankruptcy.
Local government groups oppose the measure, contending that it creates a mechanism for their unions to extract conditions, such as a pledge not to abrogate labor contracts, in any bankruptcy action. ...
Wednesday, April 21, 2010
Could the U.S. become Argentina?
A century ago, if you had told typical citizens of Argentina (which at that time was enjoying the fourth-highest per capita income in the world) that it would decline to become just the 76th richest nation on a per capita basis in 2010, they probably would not have found it believable. They might have responded, "This could not happen; we are a nation rich in natural resources, with a great climate for agriculture. Our people are well educated and largely descended from European stock. We have property rights, the rule of law and an open free-market economy."
But the fact is, Argentina has been going downhill for eight decades, and it has the second-worst credit ranking in the entire world...
...Argentine courts are slow and corrupt. Property rights are not secure, and the government has willfully understated inflation statistics, causing foreign and domestic bondholders to lose much of their investments. The Obama administration unilaterally took away bondholders' rights in the GM and Chrysler cases and, in essence, took their assets and turned them over to the unions that had supported Mr. Obama.
Argentina has extensive labor regulations to favor unions, which greatly increase the cost of hiring. The Obama administration has supported costly labor regulations that the unions favor, which eventually will drive up the cost of hiring workers and result in higher unemployment.
Argentina has a long history of deficit spending, which, in turn, has made government debt burdens so high that the government refuses to pay the debt to the private domestic and international debt holders. Over the next 30 years, economists associated with the Bank for International Settlements in Basel, Switzerland, estimate (as have many U.S. economists) that the U.S. public debt will rise to between 200 percent and 500 percent of GDP. (It is now about 60 percent.) Debt levels of 200 percent to 500 percent cannot be supported; hence, the debt holders will face erosion of their capital through either inflation or nonpayment.
The U.S. is not yet Argentina, but, if many of the policies of the Obama administration are not reversed, America will only get poorer and, in as little as 30 years, become a middle-income country, while dozens of other countries will enjoy a higher standard of living.
Waco
...This is not quite the case, however, by the Clinton administration’s own admissions. CS gas was used at the compound, in order, as senior White House adviser George Stephanopoulos said, echoing senior Justice Department statements, to “try and pressure” those in the compound. It was hoped, he said, that as this “pressure was increased, the maternal instincts of the mothers might take over and they might try to leave with their kids” (Washington Times, April 23, 1995).
But the FBI knew beforehand that adults in the compound had gas masks; the gas therefore would not put pressure on them. On whom, then? If the FBI knew that the adults had gas masks, but went ahead with the gas attack anyway, it is plain that this “pressure” was brought directly against the children because, as the FBI knew, they could not fit into adult– size gas masks. “Maternal feelings”, the FBI hoped, would be unleashed in the mothers by watching their children choking, gasping and blistering from the gas.
The plan Reno approved and took to President Clinton for approval contemplated the children choking in the gas unprotected for forty-eight hours if necessary, to produce the requisite “maternal feelings”. By taking aim at the children with potentially lethal gas, their mothers would be compelled, according to the FBI plan repeatedly defended by the Clinton administration afterwards as “rational” planning, to flee with them into the arms of those trying to gas them. [Emphasis added.]
An independent report on Waco written by the Harvard Professor of Law and Psychiatry, Alan A. Stone, for the then Deputy Attorney General Philip Heymann, says it “is difficult to believe that the US government would deliberately plan to expose twenty-five children, most of them infants and toddlers, to CS gas for forty-eight hours”. Unfortunately, however, that appears to have been exactly the plan.
The effect of CS gas on an unprotected infant exposed for only two to three hours is discussed in the report; in that case report, dating from the early 1970s, the child’s symptoms during the first twenty-four hours were upper respiratory; but, within forty-eight hours his face showed evidence of first degree burns, and he was in severe respiratory distress typical of chemical pneumonia. The infant had cyanosis, required urgent positive pressure pulmonary care, and was hospitalized for twenty– eight days. Other signs of toxicity appeared, including an enlarged liver.
Professor Stone’s report is measured, careful and damning. It is hard to know whether Heymann’s courage in commissioning it was a reason for his subsequent departure from the Justice Department. In the mean time, questions about the performance of the Justice Department are treated by the Clinton administration not as serious allegations of criminal activity, but as little more than a below-the-belt salvo in the culture wars.
I was shocked to read in Stone’s report that the Justice Department had undertaken, and had defended in the press as such, activities which if conducted in wartime would constitute war crimes. Because exposing the children to CS gas was the point of the FBI exercise: no children exposed, no pressure....
The New Orleans Beating: Real Violence, Real Evidence, No Media
...After Jindal, Barbour, and Perry had departed the restaurant from a rear entrance, an employee of Brennan’s announced to the demonstrators that the three were no longer present. The protesters refused to either leave or to cease the abusive chanting. Sometime either before or shortly after the New Orleans Police were called in a semi-successful effort to break up the protest, Louisiana GOP Chairman Roger Villere found himself blocked from exiting the restaurant’s front door. When Villere then tried to exit through the rear, he was chased by protesters. He made a narrow escape into a waiting taxi.
About an hour later, Bautsch and Brown exited through the front door into what appeared to be a dwindling demonstration. The duo were immediately “catcalled” by the remaining protesters, and were followed by a group of approximately five white males bearing a “counterculture” appearance. The pursuers made repeated insulting comments based largely in class-warfare rhetoric: “little blond bitch,” “you think you’re f***ing special.”
Brown told Bautsch to hurry towards their car. When they reached the 600 block of St. Louis Street, a block and a half from Brennan’s, Brown turned to gauge their progress.
At that time, the attack began.
Brown was immediately set upon by four of the assailants, thrown into a wrought-iron fence. Another assailant attacked Bautsch, knocking her to the ground and stomping on her leg. She suffered four breaks in the leg, requiring a steel rod during extensive surgery on April 10, and faces three months of recuperation.
Brown suffered a broken nose and jaw, and a concussion....
The Beholden State
How public-sector unions broke California
The camera focuses on an official of the Service Employees International Union (SEIU), California’s largest public-employee union, sitting in a legislative chamber and speaking into a microphone. “We helped to get you into office, and we got a good memory,” she says matter-of-factly to the elected officials outside the shot. “Come November, if you don’t back our program, we’ll get you out of office.’
The video has become a sensation among California taxpayer groups for its vivid depiction of the audacious power that public-sector unions wield in their state. The unions’ political triumphs have molded a California in which government workers thrive at the expense of a struggling private sector. The state’s public school teachers are the highest-paid in the nation. Its prison guards can easily earn six-figure salaries. State workers routinely retire at 55 with pensions higher than their base pay for most of their working life. Meanwhile, what was once the most prosperous state now suffers from an unemployment rate far steeper than the nation’s and a flood of firms and jobs escaping high taxes and stifling regulations. This toxic combination—high public-sector employee costs and sagging economic fortunes—has produced recurring budget crises in Sacramento and in virtually every municipality in the state.
How public employees became members of the elite class in a declining California offers a cautionary tale to the rest of the country, where the same process is happening in slower motion. The story starts half a century ago, when California public workers won bargaining rights and quickly learned how to elect their own bosses—that is, sympathetic politicians who would grant them outsize pay and benefits in exchange for their support. Over time, the unions have turned the state’s politics completely in their favor. The result: unaffordable benefits for civil servants; fiscal chaos in Sacramento and in cities and towns across the state; and angry taxpayers finally confronting the unionized masters of California’s unsustainable government....
...Four years later, the CTA reached new heights of thuggishness after a business-backed group began a petition to place a school-choice initiative on the state ballot. In a union-backed effort, teachers shadowed signature gatherers in shopping malls and aggressively dissuaded people from signing up. The tactic led to more than 40 confrontations and protests of harassment by signature gatherers. “They get in between the signer and the petition,” the head of the initiative said. “They scream at people. They threaten people.” CTA’s top official later justified the bullying: some ideas “are so evil that they should never even be presented to the voters,” he said.
The rise of the white-collar CTA provides a good example of a fundamental political shift that took place everywhere in the labor movement. In the aftermath of World War II, at the height of its influence, organized labor was dominated by private workers; as a result, union members were often culturally conservative and economically pro-growth. But as government workers have come to dominate the movement, it has moved left. By the mid-nineties, the CTA was supporting causes well beyond its purview as a collective bargaining agent for teachers. In 1994, for instance, it opposed an initiative that prohibited illegal immigrants from using state government programs and another that banned the state from recognizing gay marriages performed elsewhere. Some union members began to complain that their dues were helping to advance a political agenda that they disagreed with. “They take our money and spend it as they see fit,” says Larry Sand, founder of the California Teachers Empowerment Network, an organization of teachers and former teachers opposed to the CTA’s noneducational politicking....
...The symbiotic relationship between the CCPOA and former governor Gray Davis provides a remarkable example of the union’s power. In 1998, when Davis first ran for governor, the union threw him its endorsement. Along with those much-needed law-and-order credentials, it also gave Davis $1.5 million in campaign contributions and another $1 million in independent ads supporting him. Four years later, as Davis geared up for reelection, he awarded the CCPOA a stunning 34 percent pay hike over five years, increasing the average base salary of a California prison guard from about $50,000 a year to $65,000—and this at a time when the unemployment rate in the state had been rising for nearly a year and a half and government revenues had been falling. The deal cost the state budget an additional $2 billion over the life of the contract. A union official described it admiringly as “the best labor contract in the history of California.” Eight weeks after the offer, the union donated $1 million to Davis’s reelection campaign....
...Even more troubling are the activities of the California Organization of Police and Sheriffs (COPS), a lobbying and advocacy group that has raised tens of millions of dollars from controversial soliciting campaigns. In one, COPS fund-raisers reportedly called residents of heavily immigrant neighborhoods and threatened to cut off their 911 services unless they donated. In another, a COPS fund-raiser reportedly offered to shave points off Californians’ driving records in exchange for donations. ...
...The results of union pressure are clear. In most states, cops and other safety officers can typically retire at 50 with a pension of about half their final working salary; in California, they often receive 90 percent of their pay if they retire at the same age....
...The SEIU’s rise in California illustrates again how modern labor’s biggest victories take place in back rooms, not on picket lines. In the late 1980s, the SEIU began eyeing a big jackpot: tens of thousands of home health-care workers being paid by California’s county-run Medicaid programs. The SEIU initiated a long legal effort to have those workers, who were independent contractors, declared government employees. When the courts finally agreed, the union went about organizing them—an easy task because governments rarely contest organizing campaigns, not wanting to seem anti-worker. The SEIU’s biggest victory was winning representation for 74,000 home health-care workers in Los Angeles County, the largest single organizing drive since the United Auto Workers unionized General Motors in 1937. Taxpayers paid a steep price: home health-care costs became the fastest-growing part of the Los Angeles County budget after the SEIU bargained for higher wages and benefits for these new recruits. The SEIU also organized home health-care workers in several other counties, reaching a whopping statewide total of 130,000 new members.
The SEIU’s California numbers have given it extraordinary resources to pour into political campaigns. The union’s major locals contributed a hefty $20 million in 2005 to defeat a series of initiatives to cap government growth and rein in union power. The SEIU has also spent millions over the years on initiatives to increase taxes, sometimes failing but on other occasions succeeding, as with a 2004 measure to impose a millionaires’ tax to finance more mental-health spending. With an overflowing war chest and hundreds of thousands of foot soldiers, the SEIU has been instrumental in getting local governments to pass living-wage laws in several California cities, including Los Angeles and San Francisco. And the union has also used its muscle in campaigns largely out of the public eye, as in 2003, when it pressured the board of CalPERS, the giant California public-employee pension fund, to stop investing in companies that outsourced government jobs to private contractors....
Housing Finance and the 2008 Financial Crisis
...Before looking at the origins of the financial crisis, it is useful to dispose of some of the faulty theories put forward to explain the mess. Some commentators have blamed deregulation for the financial meltdown of 2008. One member of Congress blamed “unregulated free-market lending run amok.” Such an indictment is necessarily skimpy on the particulars, because there has actually been no recent dismantling of banking and financial regulations. Regulations were, in fact, intensified in the 1990s in ways that fed the development of the housing finance crisis, as discussed below.
Some critics of deregulation point to the bipartisan Financial Services Modernization Act of 1999, also known as the Gramm-Leach-Bliley Act, as a source of recent problems. But that act opened the door for financial firms to diversify: a holding company that owns a commercial bank subsidiary may now also own insurance, mutual fund, and investment bank subsidiaries. Far from contributing to the recent turmoil, the greater freedom allowed by the 1999 act has been a blessing in containing the fallout. Without it, JPMorgan Chase could not have acquired Bear Stearns, nor could Bank of America have acquired Merrill Lynch—acquisitions that avoided losses to Bear’s and Merrill’s bondholders. (It is not the Act’s fault that the Fed sweetened the Bear Stearns acquisition at taxpayer expense and forced Bank of America to acquire Merrill Lynch when the bank wanted to scotch the deal). Without it, Goldman Sachs and Morgan Stanley could not have switched specialties to become bank holding companies when it became clear that they could no longer survive as investment banks....
...In the recession of 2001, the Federal Reserve System, under Chairman Alan Greenspan, began aggressively expanding the U.S. money supply. Year-over-year growth in the M2 monetary aggregate rose briefly above 10 percent, and remained above 8 percent entering the second half of 2003. The expansion was accompanied by the Fed repeatedly lowering its target for the federal funds (interbank short-term) interest rate. The federal funds rate began 2001 at 6.25 percent and ended the year at 1.75 percent. It was reduced further in 2002 and 2003, and reached a low in mid-2003 of 1 percent, where it stayed for a year. The real Fed funds rate was negative—meaning that nominal rates were lower than the contemporary rate of inflation— for two and a half years. In purchasing-power terms, during that period a borrower was not paying but rather gaining in proportion to what he borrowed. Economist Steve Hanke has summarized the result: “This set off the mother of all liquidity cycles and yet another massive demand bubble.”
The Taylor Rule—a formula devised by economist John Taylor of Stanford University—provides a standard method of estimating what federal funds rate would be consistent, conditional on current inflation and real income, with keeping the inflation rate to a chosen target rate. From early 2001 until late 2006, the Fed pushed the actual federal funds rate below the estimated rate that would have been consistent with targeting a 2 percent inflation rate.1 A fortiori, the Fed held the actual rate even further below the path, consistently targeting stability in nominal income. The gap was especially large—200 basis point or more—from mid-2003 to mid-2005.
The demand bubble thus created went heavily into real estate. From mid-2003 to mid-2007, while the dollar volume of final sales of goods and services was growing at 5 percent to 7 percent, real estate loans at commercial banks were growing at 10–17 percent....
...The Fed’s policy of lowering short-term interest rates not only fueled growth in the dollar volume of mortgage lending, but had unintended consequences for the type of mortgages written. By pushing very-short-term interest rates down so dramatically between 2001 and 2004, the Fed lowered short-term rates relative to 30-year rates. Adjustable-rate mortgages (ARMs), typically based on a one-year interest rate, became increasingly cheap relative to 30-year fixed-rate mortgages. Back in 2001, non-teaser ARM rates on average were 1.13 percent cheaper than 30-year fixed mortgages (5.84 percent vs. 6.97 percent). By 2004, as a result of the ultralow federal funds rate, the gap had grown to 1.94 percent (3.90 percent vs. 5.84 percent)....
...The International Monetary Fund corroborated the view that the Fed’s easy-credit policy fueled the housing bubble. After estimating the sensitivity of U.S. housing prices and residential investment to interest rates, IMF researchers found that “the increase in house prices and residential investment in the United States over the past six years would have been much more contained had short-term interest rates remained unchanged.”...
...The expansion in risky mortgages to underqualified borrowers was an imprudence fostered by the federal government. As elaborated in the paragraphs to follow, there were several ways that Congress and the executive branch encouraged the expansion. The first way was loosening down-payment standards on mortgages guaranteed by the Federal Housing Administration. The second was strengthening the Community Reinvestment Act. The third was pressure on lenders by the Department of Housing and Urban Development. The fourth and most important way was subsidizing, through implicit taxpayer guarantees, the dramatic expansion of the government-sponsored mortgage buyers Fannie Mae and Freddie Mac; pointedly refusing to moderate the moral hazard problem of implicit guarantees or otherwise rein in the hyperexpansion of Fannie and Freddie; and increasingly pushing Fannie and Freddie to promote affordable housing through expanded purchases of nonprime loans to low-income applicants....
...Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low- and moderate-income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target—42 percent of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50 percent in 2000 and 52 percent in 2005.
For 1996, HUD required that 12 percent of all mortgage purchases by Fannie and Freddie be “special affordable” loans, typically to borrowers with income less than 60% of their area’s median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down....
...The hyperexpansion of Fannie Mae and Freddie Mac was made possible by their implicit backing from the U.S. Treasury. To fund their enormous growth, Fannie Mae and Freddie Mac had to borrow huge sums in wholesale financial markets. Institutional investors were willing to lend to the government-sponsored mortgage companies cheaply—at rates only slightly above those on the Treasury’s risk-free securities and well below those paid by other financial intermediaries—despite the risk of default that would normally attach to private firms holding such highly leveraged and poorly diversified portfolios. The investors were so willing only because they thought that the Treasury would repay them should Fannie or Freddie be unable. As it turns out, they were right. ...
Obama’s Fannie and Freddie Amnesia
...The president’s complicity in the housing collapse hasn’t stopped him from pinning the blame on Republicans, “special interests,” and Wall Street “fat cats.” As he does with other problems, the president blames everyone except himself and his party.
As I recounted in a Cato Policy Analysis, Fannie and Freddie epitomized the tawdry relationship between businesses that receive special federal breaks and policymakers. Democrats, including Obama’s chief of staff Rahm Emanuel, played a key role in facilitating Fannie and Freddie’s destructive activities. Emanuel, a then recent senior adviser to President Clinton, was appointed by Clinton to Freddie Mac’s board of directors, where he earned $320,000 in compensation and sold company stock worth more than $100,000.
Then there’s the current Office of Management and Budget director, Peter Orszag. In 2002, Fannie Mae commissioned a paper authored by Nobel Laureate Joseph Stiglitz, Jonathan Orszag, and Peter Orszag, who was then at the Brookings Institution. The study concluded that “the probability of default by the GSEs is extremely small.” Oops.
Given the company Obama keeps, it’s not surprising that the administration still hasn’t come up for a plan on what to do with Fannie and Freddie.
The administration has intentionally not incorporated Fannie and Freddie into the federal budget in order to hide the cost to taxpayers. ...
Saturday, April 17, 2010
What the whistleblower prosecution says about the Obama DOJ
The more I think and read about the Obama DOJ's prosecution of NSA whistleblower Thomas Drake, the more I think this might actually be one of the worst steps the Obama administration has taken yet, if not the single worst step -- and that's obviously saying a lot. During the Bush years, in the wake of the NSA scandal, I used to write post after post about how warped and dangerous it was that the Bush DOJ was protecting the people who criminally spied on Americans (Bush, Cheney Michael Hayden) while simultaneously threatening to prosecute the whistle-blowers who exposed misconduct. But the Bush DOJ never actually followed through on those menacing threats; no NSA whistle-blowers were indicted during Bush's term (though several were threatened). It took the election of Barack Obama for that to happen, as his handpicked Assistant Attorney General publicly boasted yesterday of the indictment against Drake.
Aside from the indefensible fact that only crimes committed by high-level Bush officials -- but nobody else -- enjoy the benefits of Obama's "Look Forward, Not Backward" decree, think about the interests being served by this prosecution....
...It's not hyperbole to say that Bush's decision to use the NSA to spy domestically on American citizens was one of the most significant stories of this generation. It was long recognized that turning the NSA inward was one of the greatest dangers to freedom, as Sen. Frank Church warned back in 1975, after he investigated America's secret surveillance apparatus: "That capability at any time could be turned around on the American people and no American would have any privacy left, such is the capability to monitor everything: telephone conversations, telegrams, it doesn't matter. There would be no place to hide." It was, of course, the December 16, 2005, New York Times article by Jim Risen and Eric Lichtblau which first disclosed that the Bush NSA was illegally eavesdropping on American citizens inside the U.S., but Gorman's articles regarding the Trailblazer program -- in the time period covered by the indictment, using NSA sources (almost certainly including Drake) -- provided crucial details about how and why the Bush NSA dispensed with key safeguards to protect innocent Americans from such invasive domestic surveillance....
...Think about to whose interests the Obama DOJ is devoted given that -- while they protect the most profound Bush crimes based on the Presidential decree of "Look Forward, Not Backward" -- they chose this whistle-blower to prosecute (and Drake, incidentally, is apparently impoverished, as he's been assigned a Public Defender to represent him). In the process, of course, the Obama DOJ also intimidates and deters future whistle-blowers from exposing what they know, thus further suffocating one of the very few remaining mechanisms Americans have to learn about what takes place behind the virtually impenetrable Wall of Secrecy surrounding the Surveillance State -- a Wall of Secrecy which the Obama administration, through its promiscuous use of "state secrets" and immunity claims, has relentlessly fortified and expanded. Anyone who doubts that whistle-blower prosecutions like this are intended to prevent any further disclosures of wrongdoing should simply review the 2008 Pentagon report which identified WikiLeaks as a major threat to the U.S. and proposed that exposure and prosecution of their sources would crush their ability to obtain further leaks....
Lawyer: Laptops took thousands of images
The system that Lower Merion school officials used to track lost and stolen laptops wound up secretly capturing thousands of images, including photographs of students in their homes, Web sites they visited, and excerpts of their online chats, says a new motion filed in a suit against the district.
More than once, the motion asserts, the camera on Robbins' school-issued laptop took photos of Robbins as he slept in his bed. Each time, it fired the images off to network servers at the school district.
Back at district offices, the Robbins motion says, employees with access to the images marveled at the tracking software. It was like a window into "a little LMSD soap opera," a staffer is quoted as saying in an e-mail to Carol Cafiero, the administrator running the program.
"I know, I love it," she is quoted as having replied....
School District Allegedly Snapped Thousands of Student Webcam Spy Pics
A webcam spying scandal at a suburban Philadelphia school district is broadening, with lawyers claiming the district secretly snapped thousands of webcam images of students using school-issued laptops without the pupils’ knowledge or consent.
Some of the images included pictures of youths at home, in bed or even “partially dressed,” according to a Thursday filing in the case. Pupils’ online chats were also captured, as well as a record of the websites they visited.
Pennsylvania high school officials are accused of spying on their students through webcams on district issued Macbooks. Here is a picture a webcam took of a sophmore sleeping at home
Pennsylvania high school officials are accused of spying on students with webcams on district-issued Macbooks. Here is sophomore Blake Robbins sleeping at home in an image secretly and allegedly taken by his school's laptop. (Posted here with permission of Robbins' attorneys)
When the story first broke in February, the district said the cameras were activated only handful of times when a laptop was reported stolen or missing — an assertion lawyers suing the district say is false.
“Discovery to date has now revealed that thousands of webcam pictures and screen shots (.pdf) have been taken from numerous other students in their homes, many of which never reported their laptops lost or missing,” attorney Mark Haltzman wrote in a Thursday federal court filing....
Va. Christian group officer accused of embezzling $700,000
A top officer of a nonprofit Christian missionary group has been arrested for allegedly embezzling more than $700,000 from the Northern Virginia group and using it to support a "lavish lifestyle" that included buying a Porsche sport-utility vehicle and renting a second residence, Loudoun County authorities said Friday....
They Thought They Were Free
The Germans, 1933-45
"What no one seemed to notice," said a colleague of mine, a philologist, "was the ever widening gap, after 1933, between the government and the people. Just think how very wide this gap was to begin with, here in Germany. And it became always wider. You know, it doesn’t make people close to their government to be told that this is a people’s government, a true democracy, or to be enrolled in civilian defense, or even to vote. All this has little, really nothing, to do with knowing one is governing.
"What happened here was the gradual habituation of the people, little by little, to being governed by surprise; to receiving decisions deliberated in secret; to believing that the situation was so complicated that the government had to act on information which the people could not understand, or so dangerous that, even if the people could not understand it, it could not be released because of national security. And their sense of identification with Hitler, their trust in him, made it easier to widen this gap and reassured those who would otherwise have worried about it.
"This separation of government from people, this widening of the gap, took place so gradually and so insensibly, each step disguised (perhaps not even intentionally) as a temporary emergency measure or associated with true patriotic allegiance or with real social purposes. And all the crises and reforms (real reforms, too) so occupied the people that they did not see the slow motion underneath, of the whole process of government growing remoter and remoter....
Saturday, April 10, 2010
Olbermann on Obama's assassination program
...What's most striking to me about all of this is that -- as I noted yesterday (and as Olbermann stressed) -- George Bush's decision merely to eavesdrop on American citizens without oversight, or to detain without due process Americans such as Jose Padilla and Yaser Hamdi, provoked years of vehement, vocal and intense complaints from Democrats and progressives. All of that was disparaged as Bush claiming the powers of a King, a vicious attack on the Constitution, a violation of Our Values, the trampling on the Rule of Law. Yet here you have Barack Obama not merely eavesdropping on or detaining Americans without oversight, but ordering them killed with no oversight and no due process of any kind. And the reaction among leading Democrats and progressives is largely non-existent, which is why Olbermann's extensive coverage of it is important. Just imagine what the reaction would have been among progressive editorial pages, liberal opinion-makers and Democratic politicians if this story had been about George Bush and Dick Cheney targeting American citizens for due-process-free and oversight-less CIA assassinations....
...Here again, we see one of the principal and longest-lasting effects of the Obama presidency: to put a pretty, eloquent, progressive face on what (until quite recently) was ostensibly considered by a large segment of the citizenry to be tyrannical right-wing extremism (e.g., indefinite detention, military commissions, "state secrets" used to block judicial review, an endless and always-expanding "War on Terror," immunity for war criminals, rampant corporatism -- and now unchecked presidential assassinations of American citizens), and thus to transform what were once bitter, partisan controversies into harmonious, bipartisan consensus...
George W. Bush 'knew Guantánamo prisoners were innocent'
George W. Bush, Dick Cheney and Donald Rumsfeld covered up that hundreds of innocent men were sent to the Guantánamo Bay prison camp because they feared that releasing them would harm the push for war in Iraq and the broader War on Terror, according to a new document obtained by The Times.
The accusations were made by Lawrence Wilkerson, a top aide to Colin Powell, the former Republican Secretary of State, in a signed declaration to support a lawsuit filed by a Guantánamo detainee. It is the first time that such allegations have been made by a senior member of the Bush Administration.
Colonel Wilkerson, who was General Powell’s chief of staff when he ran the State Department, was most critical of Mr Cheney and Mr Rumsfeld. He claimed that the former Vice-President and Defence Secretary knew that the majority of the initial 742 detainees sent to Guantánamo in 2002 were innocent but believed that it was “politically impossible to release them”. ...
Friday, April 09, 2010
NY gov candidate blames Cuomo for mortgage crisis
Republican candidate for New York governor Carl Paladino on Tuesday blamed Democrat Andrew Cuomo and his policies as President Clinton's housing secretary for the sub-prime mortgage crisis that helped trigger the recession.
The millionaire Buffalo developer said Cuomo initiated policies that helped poor people qualify for adjustable rate mortgages they didn't understand and couldn't afford once rates rose.
Paladino said the defaulted mortgages cost poor families their homes, while other taxpayers lost retirement funds in the ensuing Wall Street meltdown.
Cuomo, who was the federal housing secretary in the late 1990s, didn't immediately comment. The one-term attorney general is considering a run for governor.
Paladino said that as secretary for Housing and Urban Development, Cuomo "couldn't wait to get in front of the cameras at press conferences" to say how he was encouraging the federally chartered mortgage giants Fannie Mae and Freddie Mac "to lower their standards so every American can enjoy having a house."
"He did a terrible injustice to those poor Americans telling them they could have a house they couldn't afford," Paladino told reporters a day after he formally announced his campaign for governor. "He did a more egregious injustice to the taxpayers and the people who had homes as he created the sub-prime meltdown, which resulted in lower valuations."
"He was initiator of a policy that was carried by others," Paladino said, naming Clinton and Republican President George W. Bush. "It turned into a monster ... all in the name of Andrew's political career."...
Chaos in the Massachusetts Health Care Market
Want a preview of ObamaCare in action? Check out the Massachusetts insurance market—which earlier this week entered a state of "market chaos" after Governor Deval Patrick denied a host of health insurance rate increases.
On Tuesday, the state's individual insurance market effectively shut down as insurers refused to comply with the state's rejection of 235 of 274 proposed health insurance rate increases.
The dispute has already put the two sides in court. Insurance companies are now claiming that the rejected rate increases mean they won't be able to operate at a profit, and arguing that no actuary would approve the sort of rates that state insurance regulators say they expect. Actuary sign-off is not only important for fiscal stability—it's a legal requirement in the state....
Sunday, April 04, 2010
Vatican Priest Likens Criticism Over Abuse to Anti-Semitism
ROME — A senior Vatican priest, speaking before Pope Benedict XVI at a Good Friday service, compared the world’s outrage at sexual abuse scandals in the Catholic Church to the persecution of the Jews, prompting angry responses from victims’ advocates and consternation from Jewish groups. ...
...“With a minimum of irony, I will say that today is Good Friday, when they pray that the Lord illuminate our hearts so we recognize Jesus,” Rabbi Di Segni said, referring to a prayer in the traditional Catholic liturgy calling for the conversion of the Jews. “We also pray that the Lord illuminate theirs.” ...
Glenn Harlan Reynolds: Progressives can't get past the Knowledge Problem
...The United States Code -- containing federal statutory law -- is more than 50,000 pages long and comprises 40 volumes. The Code of Federal Regulations, which indexes administrative rules, is 161,117pages long and composes226volumes.
No one on Earth understands them all, and the potential interaction among all the different rules would choke a supercomputer. This means, of course, that when Congress changes the law, it not only can't be aware of all the real-world complications it's producing, it can't even understand the legal and regulatory implications of what it's doing.
There's good news and bad news in that. The bad news is obvious: We're governed not just by people who do screw up constantly, but by people who can't help but screw up constantly. So long as the government is this large and overweening, no amount of effort at securing smarter people or "better" rules will do any good: Incompetence is built into the system.
The good news is less obvious, but just as important: While we rightly fear a too-powerful government, this regulatory knowledge problem will ensure plenty of public stumbles and embarrassments, helping to remind people that those who seek to rule us really don't know what they're doing.
If that doesn't encourage skepticism toward big government, it's hard to imagine what will.
Friday, April 02, 2010
With health bill, Obama has sown the seeds of a budget crisis
When historians recount the momentous events of recent weeks, they will note a curious coincidence. On March 15, Moody's Investors Service -- the bond rating agency -- published a paper warning that the exploding U.S. government debt could cause a downgrade of Treasury bonds. Just six days later, the House of Representatives passed President Obama's health-care legislation costing $900 billion or so over a decade and worsening an already-bleak budget outlook.
Should the United States someday suffer a budget crisis, it will be hard not to conclude that Obama and his allies sowed the seeds, because they ignored conspicuous warnings. A further irony will not escape historians. For two years, Obama and members of Congress have angrily blamed the shortsightedness and selfishness of bankers and rating agencies for causing the recent financial crisis. The president and his supporters, historians will note, were equally shortsighted and self-centered -- though their quest was for political glory, not financial gain. ...
...Two weeks before the House vote, the Congressional Budget Office released its estimate of Obama's budget, including its health-care program. From 2011 to 2020, the cumulative deficit is almost $10 trillion. Adding 2009 and 2010, the total rises to $12.7 trillion. In 2020, the projected annual deficit is $1.25 trillion, equal to 5.6 percent of the economy (gross domestic product). That assumes economic recovery, with unemployment at 5 percent. Spending is almost 30 percent higher than taxes. Total debt held by the public rises from 40 percent of GDP in 2008 to 90 percent in 2020, close to its post-World War II peak. ...
...But the CBO estimate is misleading, because it must embody the law's many unrealistic assumptions and gimmicks. Benefits are phased in "so that the first 10 years of [higher] revenue would be used to pay for only six years of spending" increases, a former CBO director, Douglas Holtz-Eakin, wrote in the New York Times on March 20. Holtz-Eakin also noted the $70 billion of premiums for a new program of long-term care that reduce present deficits but will be paid out in benefits later. Then there's the "doc fix" -- higher Medicare reimbursements under separate legislation that would cost about $200 billion over a decade. ...
Vallejo's Painful Lessons in Municipal Bankruptcy
Two years after going broke, the California city still isn't free of its crushing pension obligations.
In 2008, Vallejo, Calif., was nearly broke. Faced with falling tax revenues, rising pension costs, and unmovable public-employee unions, the city was unable to pay its bills and declared bankruptcy. Now, as it prepares to emerge from Chapter 9, officials in Los Angeles, San Diego and other cities across the state are looking to see if Vallejo has blazed a trail for them to get out from under their own crushing pension costs. What they're finding is that even bankruptcy may not be enough to break the grip unions have on the public purse. ...
Coverage Now for Sick Children? Check Fine Print
WASHINGTON — Just days after President Obama signed the new health care law, insurance companies are already arguing that, at least for now, they do not have to provide one of the benefits that the president calls a centerpiece of the law: coverage for certain children with pre-existing conditions.
Mr. Obama, speaking at a health care rally in northern Virginia on March 19, said, “Starting this year, insurance companies will be banned forever from denying coverage to children with pre-existing conditions.”
The authors of the law say they meant to ban all forms of discrimination against children with pre-existing conditions like asthma, diabetes, birth defects, orthopedic problems, leukemia, cystic fibrosis and sickle cell disease. The goal, they say, was to provide those youngsters with access to insurance and to a full range of benefits once they are in a health plan.
To insurance companies, the language of the law is not so clear.
Insurers agree that if they provide insurance for a child, they must cover pre-existing conditions. But, they say, the law does not require them to write insurance for the child and it does not guarantee the “availability of coverage” for all until 2014. ...
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