Political Depression

Don’t have to go very far in this article to show what’s truly wrong with America.

I think anyone who claims Hitler would be better than Obama should visit a concentration camp.  Then stay there.

The struggle in America seems to be less and less a political struggle, and more and more a cultural one.  I get tired of fighting a group of people (and this in no way extends to all on the right) who would prefer to turn back the clock 100 years (in some cases, 138 years) and attempt to continue America’s global dominance merely by strict militarism (ironically, a view much more in common with the USSR’s global strategy than anything the “socialist” left might propose).  A group of people whose politics is governed by hate; hatred of the poor, hatred of the blacks, hatred of the gays, hatred of those who may want to come to America from the south for economic prosperity (while in the same breath complaining that the evil commie left would destroy the desire of those same people to come here in the first place).

A whole segment of our population has political motives whose best strategy for staying in power are the economic oppression of their citizens and the suppression of minority (read:  black) votes.  Meanwhile, while forcing Constitutional dogma which never existed, they willingly engage in a massive religious autonomy movement.  Personally, I’m becoming intolerant of the intolerant.

As I was watching the typical Martin Luther King Day fare, it occurs to me the 1960’s were a study in contrast between both the great things and the terrible things this country is capable of.  The civil rights movements were inspiring, but only necessary due to the immoral behavior of our people.  The ability to send men to the moon was the greatest technological achievement in human history, but that technology was used to massacre a people across the world in a war which meant nothing and protected nothing.  And though movements against such a war were noble and legitimate, they were capped by the desecration of the men and women whose only crime was fighting for their right to produce it.  And the three people who could most likely take us to a very special place in civilization’s history were assassinated in the same year:  LBJ figuratively, RFK and MLK literally.

I’m getting tired of this cultural fight.  I’m tired of hearing the banalities of the opposition, and I’m tired of seeing its effects (from my side as well as theirs).  Most of all, I’m tired of feeling like I have to engage in it.  For a country supposedly founded on the ideals Christ exemplified, we seem to be ignoring much of His teachings.


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Group Who Created Capital Punishment Framework Says It Doesn’t Work

Today the American Law Institute, who wrote the framework for capital punishment the US Supreme Court adopted in Gregg v. Georgia, said that capital punishment in the US is a failure.  Specifically, they stated the US irretrievably fails in “ensuring a minimally adequate system for administering capital punishment.” Minimally adequate?  Ouch.

In the spirit of honesty, I should point out that this doesn’t necessarily mean they think the death penalty is a bad idea; merely that the US sucks at it.  Furthermore, they stopped short of stating a specific position against the death penalty in general.  (Glad that’s off my chest, now I can ignore it without guilt.)

Most people’s position on capital punishment is ideological and not really rooted in any objective premise one way or the other.  For example, many people who are interested in “justice” are really more motivated by revenge.  This became all too apparent in 2000, when then-Governor of Illinois George Ryan put a moratorium on all executions and commuted those on death row to life sentences.  The mantra coming from the anti-moratorium crowd was, “What about the victim’s families?”  Which is a very good slogan.  Ryan’s response was that while he was sympathetic to the families, they don’t own the issue; rather this is a legal issue and should be treated as such.  Which is very good logic.  Besides, if the criminal is brought to what is legally recognized as appropriate justice, the families should be satisfied, correct?  Well, no.  Evidently satisfaction is only given through execution:  it gives closure, and ensures a murderer no longer lives.  While I’m absolutely certain this would be my thought should I ever be unlucky enough to formulate a first-hand opinion on the subject, I also feel this is a position borne in vengeance, and not what is best serving justice.

That being said, I must admit my primary beliefs against the penalty reside somewhere between God’s commandment not to kill (which seems exceptionless) and the seemingly obvious irony in killing people to show that killing people is wrong.  While it’s obvious to me that the reasoning “two wrongs don’t make a right” is preferential to “an eye for an eye”, I also recognize that these are every bit as much ideological arguments as those I retort.

However, I think that the objective evidence does show that capital punishment is not a deterrent.  The death penalty had a four year hiatus in this country, and looking at this hiatus it’s apparent that the death penalty really didn’t have much of an effect, one way or the other.  Further, the “fixed” capital punishment system didn’t have much, if any, improvement over the “broken” one the Supreme Court ruled was unconstitutional.  According to data given by the Justice Research and Statistics Association (pg. 38-39), the US murder rate was quite low in 1900, but around 1905 started to dramatically increase, leaving a murder rate well above 9% at the height of the Great Depression; started to decrease to below 5% in the 1950s; then started to hike again during the Vietnam War.  Reaching a peak over 10% in 1980, the murder rate did not begin to significantly decrease again until 1993.  1993 was Clinton’s first year in office, which is only relevant because he was the fourth President following the reinstatement of capital punishment by the Supreme Court in 1976.

The insignificance of the death penalty on murder rates can be seen in the following graph, derived from The Disaster Center data.  I used this graph because the data syncs up better with US Census Data.  That’s my official explanation.  The real reason is because I like making graphs:

Murder Rates Are Ambivalent About the State of Capital Punishment

So I got to thinking, what is the murder rates of the US versus other countries who do or do not have capital punishment?  You can certainly make the argument that, in general, countries without the death penalty have lower murder rates.  In fairness, that does seem too general.  While Europe, which as a continent has almost anonymously eliminated the death penalty, has some of the lowest murder rates in the world, both Mexico and Russia have abolished the death penalty and their murder rates are higher than the US.  China has a relatively low murder rate of 2.36 per 100,000 people (less than half the US level), and executions run rampant (of course, those are official numbers, which in China may not necessarily mean accurate, but I’m giving them the benefit of the doubt).

So I decided to go the easier route and compare the rates by state (see below).  Fifteen of the US states have abolished the death penalty (Washington D.C. makes sixteen).  According the US Federal Bureau of Investigation, of these states thirteen have murder rates in the best half, and nine of the lowest fifteen murder rates in the country come from this list.  (In fairness, six of lowest ten states have the death penalty, but then the next five are all sans executions.)  In fact, when taking population into account, the murder rate of these states is almost 35% lower than from death penalty states – 3.8% vs. 5.7%.  Even if you include Washington DC, which has no death penalty but a shocking 31.4% murder rate, the total murder rate for all states without capital punishment is 4.0%; still 30% lower than in states with the death penalty.  Even more damning, a study by the FBI showed that the high murder rates in the South, which is almost completely a capital punishment friendly zone, are a major factor in the whole country’s high murder rate.

At best, the list points to complete ambivalence about the whether the death penalty is effective or not.  However, I do believe a little bit of Pascal’s Wager is appropriate here.  The death penalty may or may not be immoral, and it may or may not work.  We should ask ourselves if the bet that it works is worth the payoff, as the sum collected should we lose could very well end up being our souls.

Murder Rate by State
2008 Figures, United States Federal Bureau of Investigation
States without Capital Punishment in Mauve

State Popluation Murders Murder Rate
North Dakota 641481 3 0.5
New Hampshire 1315809 13 1
Utah 2736424 39 1.4
Idaho 1523816 23 1.5
Hawaii 1288198 25 1.9
Wyoming 532668 10 1.9
Minnesota 5220393 109 2.1
Oregon 3790060 82 2.2
Maine 1316456 31 2.4
Montana 967440 23 2.4
Iowa 3002555 76 2.5
Massachusetts 6497967 167 2.6
Wisconsin 5627967 146 2.6
Vermont 621270 17 2.7
Rhode Island 1050788 29 2.8
Washington 6549224 192 2.9
Colorado 4939456 157 3.2
South Dakota 804194 26 3.2
West Virginia 1814468 60 3.3
Connecticut 3501252 123 3.5
Nebraska 1783432 68 3.8
Kansas 2802134 113 4
Alaska 686293 28 4.1
New Jersey 8682661 376 4.3
New York 19490297 836 4.3
Kentucky 4269245 198 4.6
Ohio 11485910 543 4.7
Virginia 7769089 368 4.7
Indiana 6376792 327 5.1
Michigan 10003422 542 5.4
Pennsylvania 12448279 701 5.6
Texas 24326974 1374 5.6
Arkansas 2855390 162 5.7
California 36756666 2142 5.8
Oklahoma 3642361 212 5.8
Illinois 12901563 790 6.1
Arizona 6500180 407 6.3
Nevada 2600167 163 6.3
Florida 18328340 1168 6.4
Delaware 873092 57 6.5
North Carolina 9222414 604 6.5
Georgia 9685744 636 6.6
Tennessee 6214888 408 6.6
South Carolina 4479800 305 6.8
New Mexico 1984356 142 7.2
Alabama 4661900 353 7.6
Missouri 5911605 455 7.7
Mississippi 2938618 237 8.1
Maryland 5633597 493 8.8
Louisiana 4410796 527 11.9
Washington D.C. 591833 186 31.4

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Today’s Proof That Obama is a Socialist

According to the Associated Press, Pfizer was fined $2.38 billion, including a $1.2 billion criminal fine, for the paltry indiscretion of marketing a drug for off-label use.  The Associate Attorney General Thomas Perelli evidently prosecuted the case, illustrating our socialist regime’s obvious intent of rationing our health care by preventing pharmaceutical companies from marketing drugs for uses they aren’t approved for.  Next thing you know, the Administration is going to insist on lengthy and expensive research regimens before drugs are approved for any kind of use.

And this coming only one week after I received my new “machine-readable health plan beneficiary card” in the mail.  Those commie bastards!!

By the by, did you read the text for Obama’s “school speech” to be delivered today?  Obviously a ploy to indoctrinate our children into his evil socialist agendas.  The only thing a President should be reading to our children is The Pet Goat.

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Debunking the Myths, Lies, and Slander of the Health Care Bill

A friend of mine sent me an email with an interesting Twitter feed, from a guy (fleckman) who had perused the new “Obamacare” Health Care Bill.  It should be noted that this is not the final bill coming before a vote in the House, but is probably the most likely to form the mold upon which the final bill will be cast.

I see he has expanded upon his tweeter feed to include the last couple hundred or so pages of the bill.  The email I got was only good up to page 500.  Still, this post seemed long enough . . .

Now, I don’t want to give too much credence to this Fleckman.  But he obviously spent a lot of time reading the bill and coming up with his, ahem, “interpretation”, and I appreciate that.  Plus, it gives a very handy outline of all the myths, misinformation, and downright lies which will be spread about the bill.  (Some of it reads like he copy and paste sound bites from the newest Gingrich primer.)  So hopefully when somebody starts talking about all the rotten things this bill is going to do, you’ll be able to give them a factual account of its actual verbiage.

Please note that this is not a compilation of articles written in support of the bill; rather responses were given by actually reading the portions of the bill he addresses.

Finally, I don’t want to imply that I feel this is a perfect bill.  I don’t.  But it’s a good compromise between single-payer and individual plans which will allow universal coverage.  And it’s leaps and bounds over that status quo.  If people don’t like this method to universal coverage, then fine.  But I can’t stand by and let it be defeated by blanket propaganda and irrelevant claims based upon scare tactics or hot-button issues completely unrelated to the topic.

Pg 22 of the HC Bill MANDATES the Govt will audit books of ALL EMPLOYERS that self insure!!

The government is not proposing to “audit books”.  They will examine the “financial solvency and capital reserve levels of employers that self-insure by employer size.”  This information is already provided to the government (the IRS and SEC).  The purpose of this examination is to complete a report looking into the ability of self-insured companies to meet the obligations they assign themselves by being self-insured.  This report is to be submitted “not later than 18 months after the date of the enactment of this Act.”  The above statement implies that the government will be conducting additional accounting oversight, and on a long-term scale, neither of which is accurate.

Pg 30 Sec 123 of HC bill – THERE WILL BE A GOVT COMMITTEE that decides what treatments/benes u get

The government committee will not decide what treatment or benefits you get.  The panel, which is mandated to represent both the medical field and employers, will recommend (i.e. not mandate) two things:  an “essential benefits package” (that is, minimum coverage), and cost-sharing levels for “enhanced plans and premium plans” (which would ensure a maximum individual medical expense).  Not only would this committee not mandate the coverages in those plans, it would not mandate which plan is offered or which plan a person must buy.  This in no way effects choice of the individual, only attempts to ensure standards under which an individual is guaranteed a certain level of care.

Pg 29 lines 4-16 in the HC bill – YOUR HEALTHCARE IS RATIONED!!!

Page 29 deals with cost-sharing.  This does not ration healthcare, it sets maximums for the amount an individual has to pay for medical under an insurance plan ($5000 for an individual and $10,000 for a family, with automatic increases based upon increases in the Consumer Price Index).  Either this guy doesn’t know what cost-sharing is, or he is being intentionally misrepresentative.

Pg 42 of HC Bill – The Health Choices Commissioner will choose UR HC Benefits 4 you. U have no choice!

Commission sets standards for minimum coverage.  It does not mandate specific coverage.

PG 50 Section 152 in HC bill – HC will be provided 2 ALL non US citizens, illegal or otherwise

Talk about grasping at straws.  Here’s the exact verbiage of the text:  “Except as otherwise explicitly permitted by this Act and by subsequent regulations consistent with this Act, all health care and related services (including insurance coverage and public health activities) covered by this Act shall be provided without regard to personal characteristics extraneous to the provision of high quality health care or related service.”  Oh my God!  Those evil bastards!!

Pg 58HC Bill – Govt will have real-time access 2 individuals’ finances & a National ID Healthcard will be issued!

This says nothing about access to an individual’s finances, it’s an individual’s “financial responsibility at the point of service.”  Not even close to the same thing.  Obviously disingenuous here.  It does not mandate a national ID health card, but “may include utilization of a machine-readable health plan beneficiary identification card”, which is already provided by most insurers.  Nowhere does it say that these cards would stop being issued by the insurer and begin being issued by the government.  (Talk about paranoid.)

Pg 59 HC Bill lines 21-24 Govt will have direct access 2 ur banks accts 4 elect. funds transfer

This does state the desire to enable EFT’s “to allow automated reconciliation with the related health care payment and remittance advice.”  However, it does not stipulate the government’s access to bank accounts, and EFT’s would not be required.  There’s a difference between “enable” and “allow” and “required.”  The wording seems to imply a vehicle to allow people to pay via EFT, which most people are all to happy to do online with a variety of vendors.

PG 65 Sec 164 is a payoff subsidized plan 4 retirees and their families in Unions & community orgs (ACORN).

Section 164 is a temporary subsidized reimbursement plan to help off-set costs of insuring retirees who participated in employment-based insurance plans, which would include any plan “maintained by one or more employers, former employers, or employee associations, or a voluntary employees’ beneficiary association, or a committee or board of individuals appointed to administer such plan.”  Technically he’s right that it will help people in unions and community organizations, though it will also pay money to employers who do not hire union workers.  Obviously, the purpose of his line was to prey on the negative connotations some people have of unions or ACORN, specifically, even though the language is not targeted towards these groups.

Pg 72 Lines 8-14 Govt is creating an HC Exchange 2 bring priv HC plans under Govt control.

This will create a health care exchange, and would include a public health insurance option.  You can debate the merits of such a policy, but that’s a far cry from bringing private health care plans under government control.

PG 84 Sec 203 HC bill – Govt mandates ALL benefit pkgs 4 priv. HC plans in the Exchange

This says nothing about mandating benefits packages in the health care exchange.  It merely states that in order to be in the exchange, an insurer must offer a basic plan in the exchange.  In order to offer an enhanced plan, an insurer must offer a basic plan, and in order to offer a premium plan, an insurer must offer an enhanced plan.  This increases a consumer’s choice by ensuring there are less expensive basic plans a person can buy, instead of being forced into a higher priced plan at the sole discretion of the insurance company.

PG 85 Line 7 HC Bill – Specs for of Benefit Levels for Plans = The Govt will ration ur Healthcare!

Standards within the plans will be mandated, meaning a guaranteed minimum level of coverage.  However, standards do not limit the amount of insurance above these minimums which a company may offer.  So if you wish to purchase more insurance than the standards offered, you would still have that option.  This is the exact opposite of rationing.

PG 91 Lines 4-7 HC Bill – Govt mandates linguistic approp svcs. Example – Translation 4 illegal aliens

A more appropriate example – translation for legal residents.  I guess the theory is that if you don’t speak English you don’t deserve adequate health care.  The author is using the “illegal immigrant” debate to scare people away from a completely unrelated topic.  Common, but no less inappropriate or bigoted.

Pg 95 HC Bill Lines 8-18 The Govt will use groups i.e., ACORN & Americorps 2 sign up indiv. for Govt HC plan

This section does stipulate the use of outreach programs to educate “vulnerable populations” about health care options.  While, in theory, this could include groups such as ACORN, he’s again obviously using a completely unrelated hot-button topic to evade the health care issue.  Besides, why is it so bad that “vulnerable populations, such as children, individuals with disabilities, individuals with mental illness, and individuals with other cognitive impairments” be educated about this health care?  I guess if a quadriplegic with a learning disability doesn’t take the initiative to learn the finer points about the program then that’s his concern.

PG 85 Line 7 HC Bill – Specs of Ben Levels 4 Plans. #AARP members – U Health care WILL b rationed

He already mentioned this three examples ago . . . not sure why he brought it up again.

-PG 102 Lines 12-18 HC Bill – Medicaid Eligible Indiv. will b automat.enrolled in Medicaid. No choice

The exact wording is:  “an individual who is described in section 202(d)(3) and has not elected to enroll in an Exchange-participating health benefits plan (emphasis added) is automatically enrolled under Medicaid.”  So there is a choice.  Unless, of course, the choice is whether or not to be insured.

pg 124 lines 24-25 HC No company can sue GOVT on price fixing. No “judicial review” against Govt Monop

There is no judicial review for premiums or pay rates established for the public health insurance plan.  Technically, the above statement would be correct, if one assumes that the government is going to set up a public plan with the sole intention of losing enough money to drive private insurance companies out of business.

pg 127 Lines 1-16 HC Bill – Doctors/ #AMA – The Govt will tell YOU what u can make.

This is incredibly misleading.  The bill sets up payment terms for physicians under the public insurance plan, based upon whether they are preferred, participating, or other providers.  That’s what insurance companies currently do.  The government is not telling physicians what they can make any more than State Farm or Blue Cross currently does.

Pg 145 Line 15-17 An Employer MUST auto enroll employees into pub opt plan. NO CHOICE

The auto-enrollement actually specifically legislates the choice of the employee to determine what plan they may enroll in.  The auto-enrollement is not designed to automatically enroll an employee into the public plan, but rather to enroll an employee into an insurance plan, specifically, “the plan option with the lowest applicable employee premium.”  This does not predicate enrollment into the public plan at all.  Further, the employee has an option to opt-out of automatic enrollment if they chose to enroll in another, more expensive employer plan or another plan not offered by the employer.  The employer must, by law, accept this opt-out and “under no circumstances” may automatically enroll the employee.

It should be noted that in cases where an employee is currently forced to enroll in a specific insurance plan as a condition of employment, this will actually increase the employee’s choice.  At any rate, it will not decrease the choice of another employee at all, unless (again) it is the choice of the employee to simply not have health insurance.

Pg 126 Lines 22-25 Employers MUST pay 4 HC 4 part time employees AND their families.

This is actually on page 146.  This is accurate that the employer must provide health coverage for part time employees as well as full-time employees.  However, the employer is allowed to pro-rate the coverage for the employee based upon the difference between the hours they work and the hours of a full-time employee.  And as the purpose of the bill is to mandate universal coverage, this should not be surprising.

Pg 149 Lines 16-24 ANY Emplyr w payroll 400k & above who does not prov. pub opt. pays 8% tax on all payroll

This is disingenuous.  The 8% tax is required of any employer who does not offer insurance coverage.  While this includes the public plan, the statement makes it sound like an employer will be subject to this fine if they offer private insurance but not the public option.  This is a false statement.

pg 150 Lines 9-13 Biz w payroll btw 251k & 400k who doesnt prov. pub. opt pays 2-6% tax on all payroll

This is the same as the above argument.  The bill allows for small employers to pay a smaller tax for not offering health insurance than larger ones.  But, again, this only pertains if they do not offer any coverage.  If they offer private insurance coverage they will be exempt from this tax, even if they do not provide the public option plan.

Pg 167 Lines 18-23 ANY individual who doesnt have acceptable HC accrdng 2 Govt will be taxed 2.5% of inc

It is true that an additional tax will be levied on an individual for not having any health care coverage, as part of Congress’s decision that coverage be a shared responsibility between the government, the employer, and the individual.  However, it is not true that this tax will be levied against every individual.  There are exemptions.  In fact, in direct contrast to the above statement, he identifies one below:

Pg 170 Lines 1-3 HC Bill Any NONRESIDENT Alien is exempt from indiv. taxes. (Americans will pay)

Nonresident aliens are already exempted from most taxes, including Social Security taxes, as they are generally not eligible for US Government services.  And the taxes that are levied are only for certain incomes.  Furthermore, many nonresident aliens don’t even preside in the United States, making it absurd that they should pay for services they won’t receive.  However, this isn’t really a fairness issue; this is a tax policy issue which extends far beyond the subject at hand.

Pg 195 HC Bill -officers & employees of HC Admin (GOVT) will have access 2 ALL Americans finan/pers recs

This is not universal access.  It only applies to certain information (which is already provided to the IRS) which can be used to determine if a person is financially capable of paying for insurance.  And it’s not available for “all” Americans, only those whom have filed taxes.  This is so that people who cannot afford insurance are not subjected to the, we’ll call it, “punishment tax”.

PG 203 Line 14-15 HC – “The tax imposed under this section shall not be treated as tax” Yes, it says that

It actually says:  “The tax imposed under this section shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under this chapter or for purposes of section 55.”  Mildly amusing, but not absurd.

Pg 239 Line 14-24 HC Bill Govt will reduce physician svcs 4 Medicaid. Seniors, low income, poor affected

This does not reduce anything.  This refers to the Social Security Act, and changes limitation already present from being effected under a target growth rate computation to a physician fee schedule.  In other words, it merely changes the calculation used to determine certain limitations.

Pg 241 Line 6-8 HC Bill – Doctors, doesnt matter what specialty u have, you’ll all be paid the same

That’s not exactly true.  This establishes (or changes) conversion factors based upon service categories.  While it is accurate that these changes apply “without regard to the specialty of the physician furnishing the service,” certain service categories are going to apply either in whole or in general to certain specialties.  For example, though it would be technically accurate that conversion factors for treatment of cancer would be the same whether you’re a podiatrist or oncologist, there’s not really a very high likelihood of you getting treated for cancer by a podiatrist.  Unless, of course, it’s foot cancer.  But in that case, I think it’s fair that the podiatrist should be paid for treating your foot cancer the same as the oncologist would have. **note – this only applies to Social Security benefits (i.e. Medicaid or Medicare)

PG 253 Line 10-18 Govt sets value of Dr’s time, prof judg, etc. Literally value of humans.

This applies to payment schedules of doctors providing Social Security benefits.  Remember what I said about State Farm and Blue Cross dictating doctor’s pay?  The same is applicable here.

PG 265 Sec 1131Govt mandates & controls productivity for private HC industries

Which do not already incorporate such improvements.  If you read the section, it’s a list of amendments to the Social Security law.  Most of the amendments seem to be regarding dates certain things take effect.

PG 268 Sec 1141 Fed Govt regulates rental & purchase of power driven wheelchairs

This is another amendment to the Social Security law.  It actually doesn’t change any regulation, just changes the verbiage from “power-driven wheelchair” to “complex rehabilitative power-driven wheel-chair recognized by the Secretary as classified within group 3 or higher.”  Those liberal bastards!!!

PG 272 SEC. 1145. TREATMENT OF CERTAIN CANCER HOSPITALS – Cancer patients – welcome to rationing!

I don’t think he actually read this section.  All this section does is set up a study to determine how much ambulance rides cost to the hospital.  Then, if it costs a certain hospital more money to send out an ambulance, then the government will increase Social Security payments to that hospital.  So far from “rationing” services, it actually would help ensure that hospitals are not losing money on ambulance rides for cancer patients covered under Social Security. Which actually sounds like the exact opposite of rationing.

Page 280 Sec 1151 The Govt will penalize hospitals 4 what Govt deems preventable readmissions.

I don’t understand this guy.  First he complains that the government wants to ration health care, then he complains when the government wants to ensure that people don’t go home from the hospital before they are supposed to.  Which is it, dude?

Pg 298 Lines 9-11 Drs, treat a patient during initial admiss that results in a readmiss-Govt will penalize u.

How dare the government expect doctors to appropriately diagnose a patient?  The nerve!!  This is not a penalty for when a doctor admits a patient and then they have to be readmitted.  This is a penalty when the originally admission is so errored that it results in a second medical problem required readmission.

Pg 317 L 13-20 OMG!! PROHIBITION on ownership/investment. Govt tells Drs. what/how much they can own.

What this section does is stipulate that referrals made by a doctor receiving Social Security payments to him or herself can not be used to increase any ownership in their hospital.  This seems to be a technique to stop a doctor from using self-referrals to increase his bill to Medicaid more than it would have been if he would have just preformed the procedure he referred himself to do.

Pg 317-318 lines 21-25,1-3 PROHIBITION on expansion- Govt is mandating hospitals cannot expand

The government is not prohibiting hospitals from expanding.  As I explained above, it is forbidding that doctors refer patients to themselves and use the extra money to expand hospitals.  It’s prohibiting doctors from ripping off the government.

pg 321 2-13 Hospitals have oppt to apply for exception BUT community input required. Can u say ACORN?!!

This provides for an exception to the above prohibition, provided the community supports the expansion.  He’s just looking for a tie-in to ACORN – jingling keys over here to take your attention off the subject over there.

Pg335 L 16-25 Pg 336-339 – Govt mandates estab. of outcome based measures. HC the way they want. Rationing

What are some of the outcome based measures, you might ask?  Rates of admission and readmission to a hospital, measures of prevention quality, mortality following surgeries, health functioning and survival for patients with chronic diseases, and measures of patient safety.  These measures are used to ensure that patients are getting adequate care to eliminate future complications while avoiding potentially dangerous care.  Insurance companies do this all the time.  And, again, this only applies to Social Security patients, which is a form of insurance.

Pg 341 Lines 3-9 Govt has authority 2 disqual Medicare Adv Plans, HMOs, etc. Forcing peeps in2 Govt plan

So, what the author is saying is that the government is trying to force people out of a federally subsidized plan so they are forced into a federally funded plan.  Okay, then.  At any rate, it doesn’t say anything about HMO’s.  Though it does disqualify Medicare Advantage plans which, you know, don’t work.

Pg 354 Sec 1177 – Govt will RESTRICT enrollment of Special needs ppl! WTF. My sis has down syndrome!!

This section does not restrict anything.  What it actually does is change the date of the Social Security law restricting certain enrollments from January 1, 2011 to January 1, 2013, or to January 1, 2016 for certain plans.  Plus, it grandfathers certain people in.  So it’s doing the opposite of restricting coverage – it’s increasing coverage times for special needs.  Your sister is safe.

Pg 379 Sec 1191 Govt creates more bureaucracy – Telehealth Advisory Cmtte. Can u say HC by phone?

Well, this section does create a Telehealth Advisory Committee, so I guess it’s hard to argue with the “creates more bureaucracy” statement.  But the committee doesn’t actually establish a telehealth program.  It merely exists to recommend policy regarding telehealth practices.  Telehealth already exists and is run by private industries.

PG 425 Lines 4-12 Govt mandates Advance Care Planning Consult. Think Senior Citizens end of life

This amends Social Security law to pay for advanced care planning consultations.  Which is technically what he says.  But his implication is clear – this will set up a system whereby the government decides what appropriate advanced care and end of life options are.  This is not even remotely accurate.  It only pays for services already available but currently not paid for.  And these services won’t be provided by the government, anyway.

Pg 425 Lines 17-19 Govt will instruct & consult regarding living wills, durable powers of atty. Mandatory!

Completely false.  The government will not instruct and/or consult regarding living wills and powers of attorney.  Social Security will merely pay for these services.  And these services are not mandatory.  Social Security payment for them if the patient desires them is.  There’s no way anybody who read this section could possibly come the the conclusion that the government will force government-provided consultations on people.  Not even by mistake.  He’s arguing for choice by arguing against it.

PG 425 Lines 22-25, 426 Lines 1-3 Govt provides apprvd list of end of life resources, guiding u in death

The “end of life resources” are not government approved; they are national and State-specific.  Big difference (as in, not even close to the same thing).  The practitioner has to give a list of resources which may further aid the patient; there’s no government “death guiding” involved here.  Again, arguing for choice by arguing against it.

PG 427 Lines 15-24 Govt mandates program 4 orders 4 end of life. The Govt has a say in how ur life ends

This is an especially ironic statement, because this particular piece of the legislation says that Social Security will only pay for advanced care or end of life consolations which include “a program for life sustaining treatments.”  So it’s really saying that the government should not have any say in how early your life ends.  The specific lines he addresses are a prequel to standards of such “life sustaining treatments,” which are virtually entirely left to the States to decide.  It does not force such life sustaining treatments on the patient, only forces their availability.

Pg 429 Lines 1-9 An “adv. care planning consult” will b used frequently as patients health deteriorates

Again, Social Security will pay for them.  They are not required.

PG 429 Lines 10-12 “adv. care consultation” may incl an ORDER 4 end of life plans. AN ORDER from GOV

Again, the order is not from the government.  It’s an order from the patient.  The government merely pays for the consultation to legally formulate the order.  The government does not conduct the consultation, and does not require it.

Pg 429 Lines 13-25 – The govt will specify which Doctors can write an end of life order.

This is a definition, not a limitation. It does not specify which doctors can write an end of life order, only that doctors must write an end of life order.  If that is not possible, certain other health practitioners, also defined in the section, may do so.

PG 430 Lines 11-15 The Govt will decide what level of treatment u will have at end of life

This does not stipulate what kind of treatment will be delivered, but (again) rather stipulates that Social Security will pay for a consultation as to what kind of treatment will be delivered.

Pg 469 – Community Based Home Medical Services=Non profit orgs. Hello, ACORN Medical Svcs here!!?

So, every time the word “community” is mentioned we have to hear about ACORN?  What a weak argument.

Page 472 Lines 14-17 PAYMENT TO COMMUNITY-BASED ORG. 1 monthly payment 2 a community-based org. Like ACORN?

Jesus Christ.

PG 489 Sec 1308 The Govt will cover Marriage & Family therapy. Which means they will insert Govt in2 ur marriage

Having the government pay for marriage and family counseling doesn’t mean anything other than people will be able to have coverage for marriage and family counseling.  Why is this a bad thing?  I thought the Republicans were supposed to be the ‘family party’, anyway?  They think the government can step in and say who can or cannot get married, but the government has no role in helping pay for services which might preserve marriage?

Pg 494-498 Govt will cover Mental Health Svcs including defining, creating, rationing those svcs

These pages actually sate that the government will pay for mental health counselor services and treatment.  In then defines whom an appropriate mental health counselor is (needs a masters or above, at least two years of supervised practice, and a State license or certification).  It doesn’t actually define the services, offers no guidance on creation of these services, nor does it place any limitations on the payment of those services, other than the fact that the services have to be performed in accordance with State law.


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The World Baseball Classic – Where’s the Love?

With the passing of the second quadrennial World Baseball Classic, it’s once again time to crown Japan as the champions. And an exciting WBC it was! The United States shook off a poor showing four years ago, and staked a stunning come-from-behind victory against Venezuela, to proceed to the semi-finals before losing to Japan (no shame in that). And the championship game between Japan and North Korea would rival any playoff or World Series game you’ll see in October. When the two teams, whose baseball programs enjoy a pretty strong rivalry anyway, met in the championship, they had already played four times, splitting the games two apiece. It was a classic baseball contest, requiring exemplary defense, solid pitching, timely hitting, and even a tenth inning to decide. Seiichi Uchikawa made just about the best play you will ever see in the outfield. And when the passion both countries posses for baseball is coupled with the historical political tensions between the Japanese and Koreans, this game can easily be seen as more than just a mere contest of skills on the diamond; a comparison of the 1980 United States/Soviet Union Olympic hockey game would not be a specious analogy, even if the animosity isn’t quite as severe.

I was sad to see the United States lose to Japan. But I couldn’t say I was disappointed with Japan winning the championship. The intrigue of a Japan vs. South Korea game aside, I love the way the Japanese play baseball. They play the game the way it’s supposed to be played; hit for average, run when you get a chance, pull the ball to right with a man on first – pretty much just a small-ball team with an emphasis on defense and pitching. I do enjoy the current makeup of the game, but American baseball has turned into hitters swinging as hard as they can at pitches thrown as hard as possible. I understand the irony of this coming from a fan of the Cubs, a team which in recent history has relied a bit too much on strikeouts and homeruns (pop quiz – when was the last year Cubs pitching did not lead the Majors in strikeouts? 2000; and they came in fifth), but I prefer the old-school style of play. Joe Morgan commented that one of the big differences between Japanese and American pitching is the Japanese trust their off-speed pitches in hitter’s counts. As a guy who always preferred Greg Maddux to Roger Clemens, those are the kind of pitchers that I enjoy watching. It’s smart baseball, not just muscle baseball. And baseball really should be more chess than wrestling.

In short, they play the game the way Ryne Sandberg says it should be played.

Certainly the tournament made me long for exuberant discussion – if only I could have found someone to discuss it with.

By all accounts, it was a smashing success; everything that Major League Baseball had hoped it would be . . . if you look at its impact internationally. For Monday night’s championship game, over 40,000 baseball fans packed into a stadium in South Korea to watch the game on the JumboTron, and almost 55,000 showed up for the actual game in LA’s Dodger Stadium. There were some anemic crowds for some contests. Less than 10,000 people showed up for the Japan vs. Cuba semifinal game last Wednesday, but that game was played in the United States, so some tepid reaction is excusable. And just a touch over 13,000 fans showed up for one game featuring the United States in Dolphin Stadium last week, but that could rival any other baseball game played in Dolphin Stadium (one reason the Florida Marlins may leave Miami).

The goal, however, was not to breed further interest in the sport at home (though I’m sure MLB wouldn’t decline the offer), but rather to garner interest across the world in an effort to make baseball a truly global sport. And the truth is it is a global sport. Of the four major sports in the United States, football and basketball don’t share near the international intrigue of baseball and hockey, though basketball has become very popular in some Mediterranean and Eastern European countries.

The problem is, while hockey’s international appeal has a direct benefit on the sport in the United States, as the lack of pronouncability on player’s jerseys will quickly prove, baseball’s appeal has relatively little economic value for Major League Baseball outside of the United States and the Caribbean. The market for players is starting to expand into Japan and Southeast Asia, and clubs are spending more than ever evaluating talent in those areas. But that is sadly being offset by a tendency of youths coming from economically challenged backgrounds in the United States, whom traditionally looked towards baseball to gain wealth, shifting focus to basketball and football instead. MLB is trying to deal with this problem through programs such as RBI, but the sad fact is the only thing keeping baseball from once again becoming a “white” sport is the influx of major league ballplayers from Central America and the increasing number of players from Japan and Southeast Asia.

I know it sounds cold to put the situation into such nondescript socio-economic and racial terms, but the truth is the best athletes tend to come from economically challenged backgrounds, and money is spent by fans where players are being produced. This is an issue that affects both the integrity and quality of the game played, as well as the economic value of the sport. So the World Baseball Classic was established, in part, to try to expand the market globally, producing an increase in both the quality of players entering the league and the markets in which Major League Baseball can financially tap into.

After only two tournaments over four years, it’s hard to tell if this will have any real impact on either of those goals. As for me, personally, even if it is a failure in that regard it would be a measure of pride that my favorite sport is increasing its global appeal.

I love the World Baseball Classic. I love what it represents for the game. I love watching other countries and nationalities compete in the sport outside of the Olympic venue. And yes, I love seeing how the Americans stack up against players from other countries. And even though there was little representation outside of North America and Asia (The Netherlands, Italy, and South Africa were the only three of the 16 not from those two continents), I honestly believe that this is going to be instrumental in spreading the popularity of the game.

But I don’t understand why this love is so seldom shared among my US brethren. I would think millions of baseball fans would jump at the chance to watch good, quality baseball games in March. (Have you seen Spring Training games?? They’re painful!)

One excuse I’ve heard for the bland response is that it competes with March Madness. This is undoubtedly true, and I don’t think you can reasonably expect it to achieve its full potential in the US during this time frame. But that doesn’t explain the complete lack of enthusiasm. If there was any excitement for it, then it would fare well right along side March Madness; they could even compliment each other. Bud Selig said he’d like to eliminate a lot of the off-days during the tournament, which would increase the number of games played on the weekdays (when the NCAA tournament is dormant) and also lessen the amount of time it has to compete against the NCAA tourney. That will help. Some suggest changing the timing, but to when? To November, so they can play baseball in the snow? To July so they can suspend the regular season for three weeks? March is the only logical time to play the WBC, and so fans are going to have to learn to multitask. It shouldn’t be asking a lot. You don’t ignore the Winter Olympics because of the NFL playoffs.

To be fair, there would probably be a lot more enthusiasm in the United States if the United States baseball team was more successful. The American team, while doing well overall, was hardly the dominating force one would expect them to be. And winning breeds enthusiasm. Without Lance Armstrong’s dominance, the Tour de France is just a bunch of people in stupid outfits riding bikes. And who actually thinks the US swimming team would have received constant national attention if it wasn’t for a certain Michael Phelps?

It is possible, of course, that the Japanese are just a better team. That “old-school” baseball really is a superior game and Japanese dominance reflects this. And it’s possible that we are overestimating the superiority of American ball players to other countries. Still, when considering the bad performance of the team in 2004 and the level of play against some countries in earlier rounds, it’s obvious the American team did not perform up to par.

There are a lot of excuses for the American team not playing as well as one would expect. I’m not sure I buy many of them, mostly because the Japanese team played so well. People say that there wasn’t enough time for players to prepare, and that the team couldn’t jell the way other teams could, or that commitments to their Major League teams kept players from being utilized appropriately or playing as hard as they otherwise would have. But there were several MLB players on most teams, and the rest of the Japanese team was comprised of top-tier professionals from a very successful major league program in Japan. There’s no reason why the Japanese could work around these problems but the Americans couldn’t. To me, it was obviously an issue of attitude.

I don’t want to take anything away from the players who decided to play. I know the players who participated in the WBC felt honored to do so, and seemed legitimately disheartened when they lost. Particularly, Derek Jeter obviously really took the tournament to heart, and I appreciate that. However, the overall reaction from Major League players and their teams to the WBC has been lukewarm, at best. Many of the game’s top players seemed to jump at the chance to wiggle out of the tournament. Look, if CC Sabathia doesn’t want to play, he shouldn’t have to. But practically nobody turns down a shot to play in the All-Star game (though I have seen some pretty lame injuries keep players out). Players should view this as another form of the All-Star game, except instead of representing your league, you’re representing your country.

Much of this attitude seems to stem from the ball clubs. They don’t want to take the risk that their players will be injured, or that the early training and stress will wear them out towards the end of the season. This is understandable, but baseball is notoriously a marathon sport, and there should be ways around this without meaningfully affecting your team’s play in September or October. And I don’t think that competing against a team in international play is any more hazardous to a player’s health than competing against another team in spring training. I have no way of knowing for sure, but I’d also be inclined to believe that many ballplayers probably see this as little more than a run through minor-league all-star teams, so what’s the point? We don’t need the WBC to tell us we’re the best in the world (even though we’ve yet to prove it in that venue), so why break our backs for it?

Culture is a hard thing to change, and I’m not sure I know how to do it. My first thought would be to provide monetary incentive to teams for winning games, but that would seem to fly against the spirit of the tournament, and I’m not sure you could award financial incentives large enough for ultra-competitive multi-millionaires to use it as any more of a motivating factor than winning would otherwise be.

Bud Selig said owner’s need to realize this tournament is ultimately good for baseball, and they may have to make some sacrifices for the greater good. I think these sacrifices would actually be quite small, and agree that the ball clubs should fall in line. But I think he’s missing the point. As long as the majority of Major League Baseball continues to see the WBC as a sacrifice teams need to make, they will not have the enthusiasm for the tournament it deserves.


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Progressive is Pragmatic, Not Punishment

There has been a lot of talk about taxes lately, as in a desperate attempt to regain control in the election John McCain is accusing of Barack Obama of raising taxes on the middle class while simultaneously claiming that his tax cuts on the middle class, which he insists won’t exist, paid for by rolling back tax hikes of the Bush administration, which he was originally against, are some form of socialism.

Of course, the American tax system has been a progressive tax system since the passage of the 16th Amendment in 1913. There were two income taxes prior to that, during the Civil War and the 1880’s, which had flat rates. However, both of those taxes were only levied on the wealthiest of individuals in America, and therefore still adhered to the principle of the progressive tax which claims that those who make the most should shoulder the largest burden.

The historical battle between America and communist/socialist governments has made throwing around the terms “communist” and “socialist” very attractive. But I don’t know anybody in this country who is completely against any government program which dabbles in socialist ideology. I would have very little respect, and suspect very, very few Americans would oppose this view, of those who wanted to eliminate some of our programs which are quite socialist in operation, such as Social Security, Medicare, the postal service, the military, or Major League Baseball. But I digress . . .

There are two prevailing arguments against any sort of tax increase on the wealthy. The first is that the rich already pay far more than their fair share. You hear all sorts of statistics like “the wealthiest six Americans pay more in taxes than the rest of the US population, the crew of the Starship Enterprise, and every Chinese person since the beginning of time combined.” The part they leave out is that they make much more money than everybody else. So I set out to find some statistics which compare income distribution with tax burden. And I stumbled upon a very cool Excel spreadsheet (if there was ever a such thing) made up by the Congressional Budget Office. Check it out here. Unfortunately, it evidently takes two years to come up with this data (as a government employee, I should not have been as surprised as I was), because the most recent data was compiled in December 2007, but is only through 2005. Still, more recent data would actually prove my point better, because Bush helped push through another tax cut on the wealthy in 2006, as one of the Republican Congress’s last actions.

Instead of spouting a mountain of numbers, I decided to create some graphical evidence that our tax system is merely progressive and not some punishment for making money (click on the graphs to see a larger, more legible size):

I stumbled on another interesting little tidbit. Since the other popular argument among the right is that decreasing taxes for the rich increases wealth for all individuals, al la trickle down (I prefer the term “voodoo,” originated by someone whom I’m sure was ultra-liberal) economics, I decided to see how damaging increasing tax rates on the wealthiest individuals was for their earning power. Turns out, it’s not much damaging at all. In fact, their pre-tax income follows their tax rate much more proportionally than inversely:

And mean tax rates vs. mean income follows the same trend:

So it looks like demand side economics isn’t such a bad idea after all.

Of course, I’m not advocating for WWI tax rates, when the richest were taxed at about 70%. But it would appear that rolling back Bush’s tax cuts on the wealthiest while providing breaks for those who can least afford their taxes would hardly be the fatal mistake some would imply it would be.

Many argue for the flat tax as a way to eliminate the “redistribution of wealth.” But since we currently have a progressive tax system, doing so successfully could only result in one of two outcomes: either tax rates on the lower and middle classes would sharply increase, with the increase most severe on those making the least amount of money; or a drastic cut in government spending, inevitably targeting the most drastic cuts in programs designed to support the poorest individuals. Either way, it would also be a massive redistribution of wealth, this time from those most incapable of affording it to those who need it the least.

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The Real Cause of Economic Discourse (Hint: It’s not socialism.)

I’d like to take a little time to address an issue which, I thought, was pretty much common knowledge – the way we got into the economic mess we now see ourselves in. I have been keeping at least a passing attention on the economy since, well, just about forever, and am astonished by the lack of respect some people have for the general population’s ability to retain information over the course of several years, but even more amazed by a general willingness to soak it up.

Mostly what I am referring to is the misplaced belief that somehow the economy was moving along swimmingly, and then Freddie Mac and Fannie Mae came out of left field and just messed the whole thing up for all of us. The truth is the economy has been struggling for quite some time. Heck, earlier this year Bush had to convince America that, based upon a very technical meaning of the word “recession,” we were merely in an “economic slowdown.” This was months before the bailout of Freddie Mac and Fannie Mae. We don’t argue about technical meanings of the word “recession” when everything’s going fine. And meanwhile the American dollar was decreasing in value while American’s purchasing power was being decreased by, among other things, the high cost of energy and oil for a couple of years. So how people can believe that the economic mess is being caused by the collapse of the housing market, and not the other way around, is a little confusing to me.

But the reaction du jour for the far-right conservative movement has been to deny that any economic uncertainty was taking place, and throw the burden of the current economic crisis directly on the shoulders of 1977’s Community Reinvestment Act, with the proverbial back-breaking straw coming in the form of a Clinton amending bill in 1995. This does not seem to be done as a means to blame Bill Clinton for our current economic strife per se, but rather to shift the responsibility from the economic policies of the Bush administration to a much more wide-reaching ideology; that in an attempt to destroy American capitalism and replace it with a neo-socialist liberal agenda which rewards the lazy and indifferent at the expense of the hard-working, God-fearing aristocracy (a la the beautifully poetic dung slinger Ayn Rand), the liberal left has destroyed America’s economy under the name of – get this – equal housing legislation (poor people owning homes: how delightfully evil!!)

A succinct illustration of this argument is an article supposedly passed from an economic professor to a Republican State Senator and former Governor, to the fun loving people of the internet (probably not – these things are seldomly written by those whom it’s attributed to.)

First, it says that the base for this problem was first laid in 1977 with the Community Reinvestment Act (CRA).  It tells you to look it up, but doesn’t actually provide any evidence or reasoning to back up the claim.  Evidently, since it says to look it up we’re just supposed to blindly accept that this statement is true without any sort of validation whatsoever.  I called their bluff.

The bill was actually designed to prevent lending institutions from denying credit to deserving applicants based solely upon the location of the applicant or the general economic status of those in his or her area.  The bill specifically stated that these loans be “consistent with safe and sound operation.”  In other words, contrary to the implication of the article, the bill was not designed to provide credit to those who should not get it, but rather to force credit agencies to end discriminatory practices which denied credit to those who would have been approved if they lived in another area.

And as for that heinous 1995 adaptation?  Well, in 1995 both the House and the Senate was under Republican control.  So this wasn’t something those socialist liberals could have passed without Conservative agreement on the issue.  In fact, according to an article from 1995, most of the law was written by Republicans in Congress, and was almost vetoed by Clinton.  But again the argument damming the liberal agenda makes a claim that it doesn’t bother even attempting to substantiate, and hopes that it’s not checked out by making the assertion that you should.  I did.

The majority of the 1995 amendment was actually aimed at changing the regulatory practices to make them more streamlined, easier, and cost-effective for the lenders.  So the claim that it was targeted towards people who cannot afford to buy a house is patently false.  Contrarily, the biggest impact this bill had on the current economic crisis was the inclusion of subprime securities (which I’ll get to later).  Democrats were originally against these new rules, while the securities lobbyists fought hard for it.

We’re supposed to take it on faith that because the bill was passed during Clinton’s Presidency, he must be to blame for any problems it caused.  In reality, the bill that was passed was a mostly Republican bill with appeasements to Democrats to allow its passage and veto-less escape.

At any rate, CRA loans are typically profitable and safe for the companies which provide them, according the Federal Reserve.  Also, most of the sub-prime loans were not held under CRA oversight, so it couldn’t have been to blame, anyway.  According to an article in Business Week, over 50% of the bad loans were made by an independent lenders not privy to the CRA, and up to 30% were made by lenders associated with CRA institutions but not under CRA regulations.

Finally, it should be noted that CRA lenders were some of the most heavily regulated institutions, and these regulations were becoming more and more lax under the Bush administration.  Since virtually all of the loans which were bad were made during the lessening of the CRA, and not very many were even a part of this program, it’s simply not logical (never-the-less factual) to blame the mess on the CRA at all.

But I’ll let Ben Bernacke, the chairmen of the Fed who was put into place by George W. Bush sum up the “mess” caused by the CRA:

“The managers of financial institutions found that these loan portfolios, if properly underwritten and managed, could be profitable. In fact, a Federal Reserve study found that, generally, CRA-related lending activity was at least somewhat profitable and usually did not involve disproportionately higher levels of default.”

Now, as far as the Freddie and Fannie claims – it is true that some Republicans wanted to change the regulations but ultimately failed in part due to the opposition of some Democrats.  But just as in 1995, to blame this solely on the Democrats is to ignore the makeup of Congress.  As in 1995, both Chambers of Congress were under Republican control, so ultimately if the Republican Party had wanted these reforms they could have just outvoted the Dems on the issue and that would be that.

Also, the changes in regulation which Bush and McCain wanted would have changed the agency under which they would have reported, and would have been a far cry from guaranteeing the defaulted loans would not have occurred.

However, even ignoring that, and even if the claims that the CRA caused the high number of faulty mortgages are true (which they aren’t), it still doesn’t explain the mess that everything’s in now.  Why?  Because if that was the case then Freddie and Fannie would have been bailed out and that would have been the end of the story.  The truth is that, in an attempt to assign blame to the current economic problems on a specific ideology (the evil, communist idea that people in poor neighborhoods should be able to own their own homes, too), the argument misrepresents one major factor in the subprime mortgage crisis, and completely ignores the real crux of its effect on the economy as a whole.

The biggest problem here is not regulation, but deregulation.  The most guilty acts of deregulation fall under Bush’s terms, but also Clinton’s last term, so it is fair to say Clinton shares some of the blame.  In the late ’90’s, regulations put in place after the Great Depression started to be relieved due to a perception (real or imaginary) that American banks could not compete with European and East Asian banks.  This lead to two problems – speculation and securitization.

First, the problem started with the housing boom that began in the 1990’s and continued for upwards around a decade.  Some market correction was going to occur after a while, and that is neither the Democrats or Republicans faults.  But the economy never completely recovered from the tech-bubble bust in 2001 (and has a completely partisan comment, Bush’s economic policies caused downward trends to continue and increase), and interest rates were seemingly being lowered every quarter.  This had the very intended consequence of making credit exceptionally easy to obtain, which played a much bigger role in the ability of people to obtain mortgages they couldn’t afford than the CRA ever could.

As the economy started to tumble lower and lower in 2005, credit started tightening and interest rates rose.  The worsened economy caused many people in sub-prime mortgages to default, but the real killer was the adjusted-rate mortgages (ARM), which were given to many people who actually could have afforded their mortgages with higher, fixed-interested rates.  While it is true that the people who signed these mortgages have some culpability and should be held responsible, there is virtually unanimous consent that many or most of these individuals were at least somewhat victimized by unscrupulous lenders and policies whose risks were not made clear.  And as interest rates climbed and some of the sub-prime mortgages started to go bust, ARMs rates were getting unreasonable and forced many people who otherwise could have afforded their mortgages to default.  (I thought this was pretty well understood, but evidently I’m mistaken.)  This can in no way be attributed to the CRA, especially considering most of these ARM issues were centered in suburbia and were typically causing defaults by lenders not covered under CRA regulations.

When this occurred, housing prices started to plummet.  This caused an even larger problem because people now owed more on their houses than they were worth.  For the average homeowner, this is probably not a big deal because (assuming they have the more traditional fixed-rate mortgage) it doesn’t actually affect their ability to pay the bills.  But at this time speculation was a major wealth builder for many people, who viewed their mortgaged property not as homes, but investments.  When people could no longer turn over their investments for profit, they panicked and got out from under them, causing housing values to fall even lower.   This was a major contributing factor in the collapse of the housing market and since banks could no longer make up the loss on a faulted loan due to recessed pricing in the open market, ultimately helped create the necessity of a Freddie and Fannie bailout.

But even though all this is the case, it’s still not really what caused the extent of the wider impact on the economy.  The real reason why it hit so hard was the securitization of these loans.

Lenders were able to take these sub-prime and ARM mortgages, cut them into little pieces, pool them with other mortgages and types of credit, and then sell these pool on the open market.  This is called securitization, and due to Clinton and Bush deregulation, they were able to inflate the market value of these securities to make them more appealing.  In theory, this spread the risk of these mortgages along to several investors, but in practice some banks were either keeping the securities on their own books, or buying up large amounts of them, centralizing the risks.  And again, though this started under the Clinton administration, it was a Republican addition to the bill, not a Democrat.

In fact, during the Bush years, the percentage of these loans which were securitized rose from just over half to over 75%.

When the mortgages started to go bad, it was this centralization of the risks by the use of securities which caused the most trouble, not the defaulting of the mortgages themselves.  When these securities defaulted, credit froze, causing a halt on the issuance of corporate paper, which locked up the credit market.  The biggest impact on the market was not caused by the loan the bank made, but how they proceeded to package that loan to other investors.

But you don’t have to take my word for it.  A Mr. Alan Greenspan, nominated by Reagan and head of the Fed through the W. Bush administration, agrees, claiming not only that “subprime mortgages are risky, but they are worth it,” but also that the economic downturn was caused by “not the subprime problem itself, but to the securitization of subprime.”

I tried to keep it relatively unpartisan.  (Note that my position is bolstered by the comments of two conservative Republican Federal Reserve Chairmen.)  But since I can’t resist, here’s the partisan timeline of events:

Bush’s failed policies cause the economy to falter.  This causes poor people to lose their homes.  This causes interest rates to increase.  This causes ARMs to become unmanageable.  This causes subprime securities popularized by conservative ideology (i.e. blanket deregulation regardless of original necessity of regulatory action) to fail.  This causes the credit market to lock up.  This causes the Stock Market to suck.


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