Category Archives: Current Affairs

Medicare Reform

2 Replies

Health care reform ain't for the faint of heart, and it's also an issue that I think will define the modern era of American politics.  Having just renewed our small group health insurance with BCBSNC to the tune of a 28% increase in premiums I'm going to throw my two cents in and say that I agree that this is a defining issue for our country.  Unfortunately I'm nowhere near smart enough to know what the solution to our health care issue is, but I also suspect that such a person doesn't exist considering the issue is so complex.  Thus I think we're destined for an extended period of sausage making as we try to figure out a better mouse trap and that's why I'm not exactly surprised at what's going on in Washington these days. 

From this Tax.com article on Rep. Ryan's proposed changes to funding for Medicare:

So what happens if we buy the Ryan plan? For those age 55 and older, not so much. But a lot changes starting in 2022, when today's 54-year-olds turn 65, through 2084, the end of the 75-year period covered by Social Security trustee projections.

David Rosnick and Dean Baker, economists at the Center for Economic Policy and Research, crunched the numbers. Whether you like their liberal views or hate them, Rosnick and Baker are just spreadsheet mechanics in this exercise.

Reduced to net present value, Ryan's plan would save $4.9 trillion in taxes from 2022 through 2084, the numbers reveal. That's not chicken feed. In fact, it is within range of the close to $6 trillion shortfall in Social Security between now and 2084…

So for every dollar Americans would save in taxes, they would shell out $5 more from their own pockets using Ryan's preferred baseline, and nearly $8 using the standard baseline. When you stack a plan in favor of its advocate and the additional costs are five times the savings, like the story of the mechanic trying to keep getting paid for fixing up a clunker, the plan should be greeted with laughter, derision, or disgust. I go for all three — in that order.

Rosnick and Baker call this net extra spending of between $20 trillion to $34 trillion waste. That's their political judgment. I'll stick to the facts: The Ryan plan shifts costs and raises them at the same time. Spending $5 to save $1 is nuts. Spending $8 to save $1 is lunacy. (Emphasis mine).

I've become so accustomed to getting smacked in the side of the head with healthcare expenses that I can't really say the numbers shock me at all, but I do find them disheartening. My family pays what I consider a healthy chunk of change just to insure ourselves against medical disaster, and we've been blessed with relatively good health so I don't even want to think about what that insurance would cost if we had real issues.  That said I was hoping that I could pay the piper now and then some day have a "Medicare" party so that I'd at least be able to enjoy "Cadillac benefits" in my waning years, but I'm beginning to think that's a pipe dream.

 

I Wonder if Osama Ordered the Meat Lover’s?

Leave a reply

You can safely assume that the head of PR for Pizza Hut didn't wake up today thinking "I wonder what we should do about one of our stores' phone numbers being found sewn into the clothes that Osama bin Laden was wearing when he was killed?"

Writers of PR textbooks around the globe are busy doing revisions so they can add a chapter on "Terrorist Affiliation Response."

A Thousand Words

Leave a reply

P050111PS-0210

I really like what Rex Hammock has written about the photo of the White House situation room during the attack on bin Laden's compound. I like it because I had exactly the same reaction when I first saw it, but I wasn't smart enough to do what he did in determining that the focus of the picture is really Hillary Clinton's expression:

But, upon further examination, I’ve decided this photo’s true power can best be understood by looking at it, as one can do on Flickr, at the original size it was posted,  4996 x 2731 pixels (click to slide show, then “view all sizes). At this size, you can see the photo as its photographer saw it through the lens — or the photo-editor who chose it might.

At 4996 x 2731, you can immediately see the photo’s focal point is Hillary Clinton — more specifically, her eyes.

The photo tells a story of an entire room of people, but this is a photograph of Hillary Clinton. And, frankly, it is one of the most powerful, honest photographs you’ll ever see of a public figure.

 

Do Not Gloat

1 Reply

I do not support the death penalty, and I suspect that makes me part of the minority view here in North Carolina.  I don't support it for multiple reasons, some based on practicality and some on my faith which is rather complicated given my religious background. Boiled down to its base my belief, a belief that is rooted in my interpretation of what I've been taught about Christianity in multiple churches, is that you can't justify the taking of one man's life because he took others' lives.

As with so many things it's much more complicated to apply such a belief in real life than in a church on a sunny Sunday morning, and it's especially complicated when you're talking about a mass murderer like Osama bin Laden. When one man is responsible for the death of thousands how can you not be justified in taking his life?  In bin Laden's case I don't think we really had to struggle with that issue because according to all the news accounts I've seen he went down fighting. If he'd been captured alive we'd have had a debate about the proper course to take, but I don't think there's any doubt he'd have been executed and the only questions would have been about the process of getting him executed – where he would have been detained, how he would have been tried, how he would have been executed.  I'm not going to say that I'm feeling regret that bin Laden was killed, I'd be lying if I did, but I will say that I'm relieved that we don't have to have the spectacle of a trial and a debate about the propriety of execution.  I was struggling with these thoughts this morning when I read Esbee's post sharing a letter from her priest about bin Laden and I have to say he's expressed exactly what I've been feeling.  I'm going to share it here and I hope she'll forgive me for lifting it in its entirety (I think it's important that it be read by as many people as possible):

Dear Parishioners,

Some years ago, our national conscience was pierced with a dagger that penetrated our hearts, our minds, and our lives. Lives lost in New York City, Virginia, and Pennsylvania touched lives of people across this nation and around the world. The voids left in so many lives will never, never be filled or replaced. One can merely pray that those who suffered loss might someday know peace, and that those who died will find eternal rest in the arms of their "Creator, Redeemer and Friend," to quote from our cherished Anglican hymnody.

This evening we heard the news of the death of the mastermind and chief perpetrator of that assault on human life and the aspirations of so many to make this world a better, safer, and more godly place. Whilst, I admit, I will sleep perhaps more restfully this evening, it brings me no great joy to celebrate at the death of someone, however evil, who, from his birth was created in the image and likeness of God (even as I grapple greatly with that concept).

I recall 11th September 2001. The images of the towers collapsing, heroes, preserving our national monuments proclaiming , "Let's roll," and the sound and the stench emanating from the Pentagon into our home (in Old Town, Alexandria, at the time) will never be forgotten. The images of those in other parts of the world who would call themselves our enemies, rejoicing in our shock, sorrow, and loss are also still clear and vivid.

That said, the words of our Saviour are also enduring, "Love your enemies," "Pray for those who persecute you." We are called to be a "A chosen race, a royal priesthood, a holy nation, God's own people, in order that [we] may proclaim the mighty acts of him who called [us] out of darkness into his marvelous light." In the spirit of him who died for us and was raised from the dead to bring us life eternal, my prayer is that we might all marshal that which is good and salutary within us so that the image which others may have of us is not one of gloating over the death of one individual, but, rather, how we might employ this incident to be for us a new beginning so that all of God's creatures might now know precious they are not only in God's eyes, but in our hearts as well.

I remain, as ever

Your Rector,
Albert

St. John's Episcopal Church, Georgetown Parish

Not So Desperate Housewives

Leave a reply

The latest article from Rolling Stone's Matt Taibbi, the preeminent Wall Street basher, is titled The Real Housewives of Wall Street and it's a doozy.  First there's the story of two wives of Wall Street bigwigs who put together a company in 2009 to take advantage of federal bailout funds:

It's hard to imagine a pair of people you would less want to hand a giant welfare check to — yet that's exactly what the Fed did. Just two months before the Macks bought their fancy carriage house in Manhattan, Christy and her pal Susan launched their investment initiative called Waterfall TALF. Neither seems to have any experience whatsoever in finance, beyond Susan's penchant for dabbling in thoroughbred racehorses. But with an upfront investment of $15 million, they quickly received $220 million in cash from the Fed, most of which they used to purchase student loans and commercial mortgages. The loans were set up so that Christy and Susan would keep 100 percent of any gains on the deals, while the Fed and the Treasury (read: the taxpayer) would eat 90 percent of the losses. Given out as part of a bailout program ostensibly designed to help ordinary people by kick-starting consumer lending, the deals were a classic heads-I-win, tails-you-lose investment…

In the case of Waterfall TALF Opportunity, here's what we know: The company was founded in June 2009 with $14.87 million of investment capital, money that likely came from Christy Mack and Susan Karches. The two Wall Street wives then used the $220 million they got from the Fed to buy up a bunch of securities, including a large pool of commercial mortgages managed by Credit Suisse, a company John Mack once headed. Those securities were valued at $253.6 million, though the Fed refuses to explain how it arrived at that estimate. And here's the kicker: Of the $220 million the two wives got from the Fed, roughly $150 million had not been paid back as of last fall — meaning that you and I are still on the hook for most of whatever the Wall Street spouses bought on their government-funded shopping spree.

But this exploration into the adventures of two wives of Wall Street scions leads to bigger questions:

And then there are the bailout deals that make no sense at all. Republicans go mad over spending on health care and school for Mexican illegals. So why aren't they flipping out over the $9.6 billion in loans the Fed made to the Central Bank of Mexico? How do we explain the $2.2 billion in loans that went to the Korea Development Bank, the biggest state bank of South Korea, whose sole purpose is to promote development in South Korea? And at a time when America is borrowing from the Middle East at interest rates of three percent, why did the Fed extend $35 billion in loans to the Arab Banking Corporation of Bahrain at interest rates as low as one quarter of one point?

Even more disturbing, the major stakeholder in the Bahrain bank is none other than the Central Bank of Libya, which owns 59 percent of the operation. In fact, the Bahrain bank just received a special exemption from the U.S. Treasury to prevent its assets from being frozen in accord with economic sanctions. That's right: Muammar Qaddafi received more than 70 loans from the Federal Reserve, along with the Real Housewives of Wall Street.

I'm still waiting for the Feds to launch JERP – Jon's Economic Relief Program.  When they do I'm hitting the beach baby.

Income Inequality

Leave a reply

Whether or not you agree with Joseph Stiglitz's take on income inequality in the US, I think you'll find his commentary to be thought provoking:

Alexis de Tocqueville once described what he saw as a chief part of the peculiar genius of American society—something he called “self-interest properly understood.” The last two words were the key. Everyone possesses self-interest in a narrow sense: I want what’s good for me right now! Self-interest “properly understood” is different. It means appreciating that paying attention to everyone else’s self-interest—in other words, the common welfare—is in fact a precondition for one’s own ultimate well-being. Tocqueville was not suggesting that there was anything noble or idealistic about this outlook—in fact, he was suggesting the opposite. It was a mark of American pragmatism. Those canny Americans understood a basic fact: looking out for the other guy isn’t just good for the soul—it’s good for business.

The top 1 percent have the best houses, the best educations, the best doctors, and the best lifestyles, but there is one thing that money doesn’t seem to have bought: an understanding that their fate is bound up with how the other 99 percent live. Throughout history, this is something that the top 1 percent eventually do learn. Too late.

1980

Leave a reply

This past Tuesday night was a busy one at the day job – we had our annual awards dinner and we rolled out a new name and logo for the organization.  The organization was founded in 1980 and as I prepared for my emcee duties I decided to do a little research so that I could do a little retrospective on what the world was like 31 years ago.  It was fun, especially since I was in 8th grade in 1980 and while I do remember things like seeing Jimmy Carter on the news, I was your average self-absorbed teen and really wasn't aware of what was going on in my parents' day-to-day lives as they made their way through life.  Here's a taste of what I found using various sites online — I'm not going to vouch for absolute perfection on the numbers, but they're all close enough to give you a sense of what was going on at the time:

  • Soviet Union was in Afghanistan
  • US boycotted the Moscow Olympics
  • Pink Floyd’s Another Brick in the Wall was top song
  • A bunch of people tuned into Dallas to see who shot JR Ewing and Bo and Luke Duke were driving around being chased by the dumbest sheriff ever born.
  • First fax machines were available in Japan
  • Average 30 year mortgage rate was 15.28%
  • Yearly rate of inflation was 13.58%
  • Median value of a house in NC was $36,000 ($101,000 in today’s dollars)
  • Average monthly gross rent in NC was $205 ($577 in today’s dollars)
  • Gallon of gas cost $1.19 ($3.35 in today’s dollars)
  • NC unemployment rate in March, 1980 was 5.2%

The first time I ever signed my name to a mortgage was in 1993 and I remember the loan officer telling me and my wife that we were really lucky to be able to get our sub-9% mortgage, and telling us what a wonderful thing PMI was so that we didn't have to put down more than 10% for our loan. I remember agreeing with him because I could remember my mom and stepfather talking about their wonderful 16% note just 14 years earlier (mainly because I was bored to death sitting at the closing for that purchase when I was a self-absorbed teenager).  I also remember sweating bullets as we were asked uncomfortable questions about payments that were a week late on store charge cards a couple of years earlier, and even about some late payments I'd had in college. You can imagine my shock when I started reading about no-look loans, and you can also probably imagine why I'm not particularly sympathetic to those who get their panties in a twist when mortgage rates bounce up a scootch to 4.7%.  It's all a matter of perspective.

Real World Impact of Crappy Journalism

1 Reply

From David Cay Johnston at Tax.com:

When it comes to improving public understanding of tax policy, nothing has been more troubling than the deeply flawed coverage of the Wisconsin state employees' fight over collective bargaining.

Economic nonsense is being reported as fact in most of the news reports on the Wisconsin dispute, the product of a breakdown of skepticism among journalists multiplied by their lack of understanding of basic economic principles. 

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to "contribute more" to their pension and health insurance plans.

Accepting Gov. Walker' s assertions as fact, and failing to check, created the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. 

Out of every dollar that funds Wisconsin' s pension and health insurance plans for state workers, 100 cents comes from the state workers.

How can that be? Because the "contributions" consist of money that employees chose to take as deferred wages – as pensions when they retire – rather than take immediately in cash. The same is true with the health care plan. If this were not so a serious crime would be taking place, the gift of public funds rather than payment for services…

The collective bargaining agreements for prosecutors, cops and scientists are all on-line. 

Reporters should sit down, get a cup of coffee and read them. And then they could take what they learn, and what the state website says about fringe benefits, to Gov. Walker and challenge his assumptions.