Thursday, July 16, 2009

Last Call

CNN is reporting two separate explosions hit two different hotels in Jakarta, Indonesia at this hour.
"Up to now, six people were killed, and tens of others were injured, but the number of the victims might change as identification process is still going on," Senior Commissioner Chysnanda, a spokesman of the Jakarta police, said, according to Antara.

It quotes a witness as saying he saw four foreigners among the wounded.

The Ritz-Carlton Hotel was to have accommodated soccer players from Manchester United of Britain, who are expected to arrive Saturday in Jakarta.

The victims were taken to nearby MMC Hospital and Jakarta Hospital, the agency reported.

Police sealed off the area around both blasts, one of which occurred in the Ritz-Carlton Hotel and the other at the J.W. Marriott Hotel, about 50 meters away, about 7:50 a.m. (8:50 p.m. Thursday ET).

"There was a boom and the building shook, and then subsequently two more," said hotel guest Don Hammer, who was leaving his room in the Marriott when the blast occurred.

"The shocking part was entering the lobby, where the glass at the front of the hotel was all blown out and blood was spattered across the floor, but most people were leaving calmly."

The same Marriott hotel hit today was also the site of a car bombing in 2003 that killed 13. Al-Qaeda claimed responsibility for the attack several days later. No word yet on who was behind the attack today.

Hopefully tomorrow will bring some answers.

Peanut Gallery, Legal Edition

In a sense, all political bloggers are just groundlings (myself included) lobbing various internet produce at the Beltway denizens (and each other!) But it's interesting to see that whenever conservatives blow it on some culture war skirmish by taking the slimy route and losing great Antarctic ice shelf sized portions of the populace, the advice from the various Waldorfs and Statlers on the right side of the theater is always "You didn't slime hard enough!"

Case in point: Republicans on the Senate Judiciary Committee all but threw in the towel today on fighting the nomination of Judge Sonia Sotomayor, despite starting out Monday by signaling some pretty strong attack postures. Tuesday's attacks went nowhere despite the very real effort to portray Sotomayor as the most biased person in the room, and by the time Wednesday's assault on her character came, they were nothing more than toothless blows. By the time the proceedings wrapped up today, the deal was done as the attacks had slid into the land of farce.

But the folks on the Right were quite miffed at the milquetoast performance of their GOP stalwarts, and offered their own advice on how they would have "won". Byron York opined this morning:
Republicans on the Senate Judiciary Committee are down to their last chance to make the case that there are serious questions about Sonia Sotomayor's fitness for the Supreme Court. One of the things they will do is stress a subject they have inexplicably downplayed so far: Sotomayor's 12 years of service on the board of the Puerto Rican Legal Defense and Education fund.

In the her first two days of testimony, Sotomayor appeared reluctant do discuss her time with PRLDEF (commonly referred to as "Pearl-Def"). When questioned about it by Republican Sen. Lindsey Graham on Tuesday, she minimized her role in the organization, especially when Graham asked about a PRLDEF lawsuit that compared the denial of taxpayer-funded abortions to slavery.
It would make sense that a Puerto Rican litigator with such a strong record would be asked to serve on PRLDEF's board. York sees something far more sinister and complains:
The reason Sotomayor's work at PRLDEF is important, Republicans say, is that it shows a period in her career in which she put into action the ideas she expressed in her "wise Latina" and other speeches. At PRLDEF, Sotomayor was a liberal activist, not the careful, conservative, law-bound judge she has portrayed herself to be at her hearing. Her PRLDEF years -- she left the group when she became a federal judge in 1992 -- show a different Sonia Sotomayor than the one sitting before the committee.

Why didn't Republicans explore the PRLDEF connection more thoroughly? No one seems to know. There are seven GOP senators on the committee. Each is experienced, and each has his own areas of interest. They do not coordinate their questioning with one another. So several of them spent a great deal of time discussing the "wise Latina" speech without spending much time on how Sotomayor's world view translated into action in her career. In some ways, Sotomayor's time at PRLDEF is the link between her personal views and her legal work. A close exploration of her PRLDEF years could help explain, for example, why she gave such short shrift to the Ricci case, in which she summarily denied the rights of a group of white firefighters who had earned promotions in a testing situation reminiscent of the ones PRLDEF and Sotomayor had challenged in the past.
But how many federal judges and eventual Supreme Court judges (and Senators for that matter) served as board members of advocacy groups, non-profit charities, trade groups, legal groups, or even the boards of Fortune 1000 companies at some point in their distinguished careers? Furthermore, any judge at that level spent years if not decades as a litigator: either a prosecutor or as a private defense attorney or public defender. York's line of attack that work or school experience equates to a pattern of bias would open up about 99% of Washington to the same charges. So, no...sitting U.S. Senators weren't about to open that can of worms...especially not Jeff Sessions (although he did try.)

Jennifer Rubin on the other hand decided more...personal...attacks on Sotomayor were in order ala Jeffrey Rosen's hit piece that got this little party started back in May. Despite Double G stomping Rosen's disingenous and sloppy attack into the dirt, Rosen then making arguably the worst apology on record, and then Double G stomping his ass again, somehow Rubin comes back to the tattered, smoking remains of Rosen's professional dignity, sees it lying on the floor in a twisted and burned heap, and decides that somehow it is a solid foundation from which to build her glass house upon, climb into said house and then launch stones from.
Whether examining her verbal skills, her command of the law or her intellectual acuity, I come away thinking she is one of the least impressive Supreme Court nominees to come along in recent memory. Judge Robert Bork was obviously not everyone’s ideal judge, but the man’s intellectual prowess was undeniable and he refused to lie about his views. Justice Ruth Bader Ginsburg was frankly charming and sharp-witted in her testimony and could march the senators through the evolution of a number of strains of jurisprudence.

Whether you agreed with their philosophy or not, you had the sense with the Clinton, Reagan, and George W. Bush nominees (yes, I leave Souter off the list) that there was good reason to put them on the Court. You listened for a day or even and hour and said, “Yes, that’s a Supreme Court Justice.” It was hard to dispute, even if you disagreed with one or another on his or her judicial methodology, that the nominee was bringing some intellectual heft.

Does anyone really have that sense from Sotomayor? And all of this is made worse, much worse, by her ham-handed efforts to distance herself from her own speeches and deny her own involvement with PRLDEF.

Rosen was trying to warn his liberal compatriots that they could do “better” than Sotomayor. He was right and should get some credit for his effort. Imagine if Diane Wood or Kathleen Sullivan, both liberal in philosophy but undeniably impressive, had been up there over the last couple of days. I suspect that conservatives would have been staring at their shoes, struggling for reasons to say “no” and grudgingly acknowledging that the nominee was going to add something to the Court beyond her gender.

Has she just not heard of Harriet Miers? Honestly? She goes out of her way to call Sotomayor "one of the least impressive Supreme Court nominees to come along in recent memory" and then mentions Bush, and goes out of her way to exclude Souter...but skips Harriet Miers completely?

That's not only intellectually bankrupt as far as a review of the last 15 years of Supreme Court nominations, but downright negligent. There have only been four nominees since 1994, all of them in the last four years, and she thinks Sotomayor is one of the least impressive in recent memory?

Please. Her resume's work record dwarfs pretty much all of the existing Supreme Court, especially as a litigator. Reaching to throw that stone at Sotomayor, Rubin instead drops it on her foot and it goes smashing through that glass house.

Remember the Five D's. We're well into Dehumanize and Demonize territory here...but so far they've been unable to Destroy her.

Max Baucus Returns

Politico is saying Democratic Sen. Max Baucus of Montana, the Senate Finance Committee chair and Obama's unofficial pointman on "bipartisan-ness" as far as health care reform is concerned, is close to some sort of bipartisan deal that could be announced as early as tonight.

Brother, that makes my skin crawl. "Baucus" and "bipartisan deal" should bring to mind the combination of nitro and glycerin. My only question is "Who's getting the shaft?" on Max's little arrangement here?

Nothing good can come of this. Definitely keep an eye out here for the devilish details in this deal.

[UPDATE 10:05 PM] No deal yet, but now we know why:
President Obama's opposition to taxing employer-provided health benefits has slowed progress on passing a health care reform bill, the chairman of the Senate Finance Committee complained Thursday.

"Basically, the president is not helping us," said Sen. Max Baucus, D-Montana, after emerging from closed talks on the bill.
There's a reason he's not helping you there, Max. It's because you're trying to screw this bill, and the President is not about to help you and the other "Sensible Centrists" backstab him.

The Smartest Guys In The Room

Matt Taibbi analyzes Goldman's 2Q profits and comes up with the number in "Goldman Sachs has zero to fear from anyone in Washington."
We constructed this massive bailout infrastructure, and instead of pumping that free money back into the economy, the banks instead simply hoarded it and ate it on the spot, converting it into bonuses. So what does this Goldman profit number mean? This is the final evidence that the bailouts were a political decision to use the power of the state to redirect society’s resources upward, on a grand scale. It was a selective rescue of a small group of chortling jerks who must be laughing all the way to the Hamptons every weekend about how they fleeced all of us at the very moment the game should have been up for all of them.

Now, the counter to this charge is, well, hey, they made that money fair and square, legally, how can you blame them? They’re just really smart!

Bullshit. One of the most hilarious lies that has been spread about Goldman of late is that, since it repaid its TARP money, it’s now free and clear of any obligation to the government - as if that was the only handout Goldman got in the last year. Goldman last year made your average AFDC mom on food stamps look like an entrepreneur.
Do read the whole thing, if only to nod your head in grudging respect at how well Goldman Sachs scammed America. It would be one thing to get played by the likes of George Bush and the Crawford Keystone Kops, but Goldman Sachs has been buggering us professionally. It's a refreshing change of pace from the adolescent pawing and groping of the Bushies.

I can completely see the Goldman Sachs crew going over to Helicopter Ben and Timmy, using the words of Don Cheadle in Ocean's Eleven:

"It'll be nice working with proper villains again."

And like Danny Ocean's crew sticking it to all three of Terry Benedict's casinos in that movie, the Treasury got hit like a tornado and Goldman Sachs walked out with the money in plain sight.

It's disgusting, and yet you have to respect how well the plan worked. It was a con job of epic proportions, leading to a visible theft and everyone knew who was behind it. And yet they got away scot-free anyway. What can Obama do about it?


Now that's an American success story.

Another Milepost On The Road To Oblivion

Jeff Sessions makes jokes about crack cocaine.

Check, please. Also, while we're at TPM, Robert Bork is apparently still angry about, well, being Borked, and thinks Sonia Sotomayor should be Borked too.

Borkings for all, apparently. Still, the Sotomayor confirmation appears to be all but a done deal right now.
Sotomayor, poised to become the first Hispanic justice on the top U.S. court, appeared for a fourth day before the Senate Judiciary Committee where she has coolly parried Republican attempts to depict her as unfit for the lifetime job.

The committee's Democratic chairman Senator Patrick Leahy said there was little doubt she would be approved by the full Democratic-controlled Senate and take her seat when the nine-member court hears its next case in September.

And the ranking Republican on the committee, Senator Jeff Sessions, said Republicans would not seek to block the confirmation vote, expected in the next several weeks.

"I look forward to you getting that vote before we recess in August," Sessions said.

Four days of straight damage to the Latino image of the Republican Party is enough even for these gluttons for punishment.

Zandar's Thought Of The Day

How in the hell did I end up waaaaay at the top of Memeorandum, much less on it at all?

Not like I applied for it. That does explain the trolls, however.

Oh well. Welcome readers, all...umm...14 of you.

Roubini Goes Happy Face

Well, I for one am shocked, but there you are. Noriel Roubini was quoted as basically saying the worst is behind us, and that unlike his dire predictions last month, we may be in a general bottom now.
Roubini, of RGE Global Monitor, still warned that the US may need a second fiscal stimulus package of up to $250 billion around the end of the year to boost the deteriorating labor market, Reuters reported.

The stimulus "cannot be too small, but it cannot be too large," Roubini said, or financial markets will become too worried about the sustainability of the U.S. debt.

But he also signaled that economic and the financial crisis may not get any worse, contrary to his warning last month that there could be another downturn toward the end of next year.

Now, that's still not great news. Another 12-18 months of where we are right now, and we're looking at a long, slow, brutal recovery. But Roubini seems to suggest we're no longer in for that "W" shaped double-dip recession. I'm not buying it, I think CNBC is overestimating what counts as "happy" for Roubini, especially after what he said yesterday.
Recent data suggest that job market conditions are not improving in the United States and other advanced economies. In the U.S., the unemployment rate, currently at 9.5%, is poised to rise above 10% by the fall. It should peak at 11% some time in 2010 and remain well above 10% for a long time. The unemployment rate will peak above 10% in most other advanced economies (especially Europe and Japan), too, where social safety nets are broader and thus leading to less short term job losses and pain, but where the effects of the crisis on growth have been even more severe than the U.S.

But these raw figures on job losses, bad as they are, actually understate the weakness in world labor markets. If you include partially employed workers and discouraged workers who left the U.S. labor force, for example, the unemployment rate is already 16.5%; even temporary employment is sharply down. Monetary and fiscal stimulus in most countries has done little to slow down the rate of job losses as economies suffer from problems of insolvency, not just illiquidity, and as the fiscal stimulus programs are too small and not labor intensive enough. As a result, total labor income – the product of jobs times hours worked times average hourly wages – has fallen dramatically.

Moreover, many employers, seeking to “share the pain” of the recession and slow down the rate of layoffs, are now asking workers to accept cuts in both hours and hourly wages. Thus, the total effect of the recession on labor income of jobs, hours and wage reductions is much larger.

Other indicators are suggesting a protracted period of job losses and a persistently high unemployment rate even after the recession is over. The average duration of unemployment is not at an all time high in the U.S. Many manufacturing sectors are on a secular decline (autos, etc.) and employers are shedding jobs on a permanent basis; employment in the previously bubbly sectors (housing and related housing/real estate services, banking and financial services) is falling sharply and will not recover for a long time. The process of offshore outsourcing of both blue collar and white collar jobs is still in full swing. A lot of the job losses in the U.S. and in other advanced economies are structural rather than cyclical; many jobs will never come back.

So, even if the actual technical recession is over, and the worst-case scenario has not come to pass, the reality is we're going to be in serious economic doldrums into 2012 at the minimum, and possibly a lot longer. It's Jimmy Carter's malaise, only on steroids and riding a tyrannosaurus.

The argument is that putting together a social safety net now when it is going to be the most needed is prudent on a national level, but many states are doing the opposite because they simply can't afford it and can't do deficit spending.

Something's going to have to give here soon. Rather than a short, fatal drop of a sudden car crash, we're facing the long dark winter of stagflation where deflation now will mask many of the real problems we'll be facing in the next decade.

As Roubini says, we're in a "damned if we do, damned if we don't" scenario.

[UPDATE 5:24 PM] Hey look, I called that one. CNBC is now reporting that Roubini has said his outlook on the economy has not changed. This could get interesting, as Roubini's comments did cause the major stock indicies to rise in this afternoon.

Nouriel Roubini, the economist whose dire forecasts earned him the nickname "Doctor Doom," said after markets closed Thursday that earlier reports claiming he sees an end to the recession this year were "taken out of context."

"It has been widely reported today that I have stated that the recession will be over 'this year' and that I have 'improved' my economic outlook," Roubini said in a prepared statement. "Despite those reports ... my views expressed today are no different than the views I have expressed previously. If anything my views were taken out of context."

My, this is going to get messy.

It's Paul-Some

Ron Paul's still out there, and the longer the economic crisis lasts, the less insane his ideas start to look. I'm not sure if that's a function of just how bad the economic picture is (with foreclosures still topping record figures for the first six months of the year and poised to get much worse) or the function of having the Obama administration generally run out of things to try that aren't crazy Ron Paul ideas.

TechTicker's Aaron Task goes over the Ron Paul plan:

Had he been elected, Paul said he would be doing "a lot less" than President Obama and blames Keynesian economics - which advocates increased government borrowing and spending during times of duress -- for our nation's current ills.

While admitting a transition to what he views an "ideal society" won't be quick or simple, Paul's economic prescription includes:

  • Allowing bankruptcies to occur vs. rewarding failure with bailouts.
  • Stop inflation by dismantling the Fed and returning to the gold standard.
  • Encourage savings and liquidate debt.
  • Deregulate.
  • Give tax credits to those who take care of themselves, or the doctors who provide their care.
  • Cut government spending, especially on international endeavors. "We spend hundreds of billions of maintaining our empire around the world. Let's bring that money home," he says.

These recommendations will be familiar to anyone who followed (or supported) Paul's run for the Presidency in 2008. Given all that's transpired in the past year, one suspects he'd be getting a lot more votes if the campaign were happening today.

While that first idea seems like a capital one, the rest are pretty deep into Libertarian Limbo. I respect the guy's consistency (and his plan to audit the Fed is something that we should definitely be considering at this point) but abolishing the Fed altogether is not feasible, practical, or even mildly helpful to recovering the economy, and there's enough evidence against deregulation over the last 8 years that nobody's going to really stick their neck out in Congress over it.

Cutting goverment spending of foreign aid at least makes some sense.

Still, as I've said, the longer Obama's plans take to work, the more people will come around to the Libertarian/Ron Paul point of view, or at least become people like myself who think a couple of his ideas aren't all that terrible.

Blue Dogs Chasing Moving Cars

The problem with Blue Dogs chasing Obamacare cars on the highway of history is that if you dart into traffic like that, you risk getting run over as D-day points out.
The lack of an instinct for self-preservation strikes me. If health care doesn't pass, the primary part of the President's agenda, the 2010 midterms could get ugly. And the first people to pay the price would be Blue Dogs in conservative districts and freshmen, the same people grousing at the provisions of the bill. Some of that is legislative sausage as they look to get paid off - but the cost of not having a bill for these members of Congress is great.
I actually think the Blue Dogs have convinced themselves --or more likely they have been convinced by Big Pharma and the Insurance giants -- that voters will actually reward the Blue Dogs for killing Obamacare.

More likely still, the health care lobbyist army has come to the Blue Dog membership and said "Look, we're going to defeat this measure. It's going to go down in flames just like in 1993. If you're still hitched to Obama's wagon on this, you're going to go down along with him. Do you remember what happened to your party in 1994?"

And they are falling in line like good little bought and paid for show poodles.

Only, as D-Day says, it's opposing health care reform that's going to get these Blue Dogs hits by the Angry Constituent Bus.

Dear America:

"FISA was stupid. We ignored it because we had to. Really, I don't see what the problem is, and it's a moot point anyway because Congress went back and retroactively made everything we did legal. Screw all of you."

--John Yoo, WSJ

Bonus Verbatim Asshole: "Only the executive can act to protect the "security and interest of the public.""

Apparently, the opinions, laws, legal precedents, oversight, checks and balances of rest of America don't f'ckin' matter.

Just Words, Right?

So, when I said last week that there are folks out there who think we're at war with the government right now (and promptly got attacked for saying so I might add) I still stand by that statement, especially when we have state Republican candidates running on the platform of "we're at war with the government right now."

When people are saying stuff like this:
"We have the chance to fight this battle at the ballot box before we have to resort to the bullet box... That's the beauty of our Second Amendment rights."
...then we have a real problem in this country. Somebody will eventually resort to the bullet box...and how fast we have forgotten that people already have.

But it's just words, right? It's totally unfair to point out that there's a relationship between advocating violence against the government and people shooting and killing cops, Holocaust Museum security guards, and abortion doctors in order to try to effect changes in government policy, right?

Reading Comprehension For The Win, Again

The Wingers are trying as hard as they can to discredit the AHCA health care bill, with this breathless screed from the hard right Investor's Business Daily:

When we first saw the paragraph Tuesday, just after the 1,018-page document was released, we thought we surely must be misreading it. So we sought help from the House Ways and Means Committee.

It turns out we were right: The provision would indeed outlaw individual private coverage. Under the Orwellian header of "Protecting The Choice To Keep Current Coverage," the "Limitation On New Enrollment" section of the bill clearly states:

"Except as provided in this paragraph, the individual health insurance issuer offering such coverage does not enroll any individual in such coverage if the first effective date of coverage is on or after the first day" of the year the legislation becomes law.

So we can all keep our coverage, just as promised — with, of course, exceptions: Those who currently have private individual coverage won't be able to change it. Nor will those who leave a company to work for themselves be free to buy individual plans from private carriers.

OMG FASCISM REARS ITS HEAD IN WASHINGTON AIRSPACE! The entire Winger community has declared jihad this morning on Congress! TO ARMS! TO AR...wait a minute. You mean there's another 1,000 pages of this bill to read? Luckily, Instadork has readers willing to look at them before, you know, jumping to idiotic conclusions.
UPDATE: Reader Patrick Ying disagrees:

Investor’s Business Daily did not continue to read the bill to page 19. “Individual health insurance coverage that is not grandfathered health insurance coverage under subsection (a) may only be offered on or after the first day of Y1 as an Exchange-participating health benefits plan. ” It does not outlaw individual private coverageyou can still buy the plan on the Exchange where they will compete with the public option, not be replaced by it. The advantage of the Exchange, is that the coverage no longer has one of the problems of individual coverage – skyrocketing premiums should you become ill.

Hmm. We should have more time for all this stuff to be sorted out. Instead they’re ramming it through as quickly as possible. That makes me suspicious.

So, we should be suspicious about the bill because people who haven't read the entire bill are warning that there's evil afoot in the bill...they themselves...haven'

Morons. Seriously.

And of course, how many Wingers will go with this "Page 16" story and skip "Page 19"?

(Obama is a Muslim, you know. I heard it on the internet. It must be true.)

Up To Something Good

Via Balloon Juice, Barry Ritholtz reveals People In California Are Officially Up To Something on the bond ratings agencies (emphasis mine)
I poked around with some law firms in California, and started to pick up the rumor that California Public Employees’ Retirement System (CALPERS) was going to drop the bomb on S&P, Moody’s and Fitch. No one would say anything on the record, but it was clear that litigation was being considered as an option against the Ratings Agencies.

Here is the money quote:

The AAA ratings given by the agencies “proved to be wildly inaccurate and unreasonably high,” according to the suit, which also said that the methods used by the rating agencies to assess these packages of securities “were seriously flawed in conception and incompetently applied…”

“The ratings agencies no longer played a passive role but would help the arrangers structure their deals so that they could rate them as highly as possible,” according to the Calpers suit.

Now, here comes the fun part: Calpers doesn’t give a rat’s ass about the money. Sure, the financial instruments at hand (Cheyne Finance, Stanfield Victoria Funding and Sigma Finance) have defaulted on their payment obligations. The losses to Calpers are ~!$1 billion.

But that’s not what’s going on here: These Left Coasters want their pound of flesh. They don’t care for the Ratings Agency folks, and consider them a blight on the investment landscape.

The goal of the litigation (as I see it) isn’t to make the rating agencies pay a financial penalty; rather, it is to publicly try them just as the regulatory rules are being rewritten. I also predict that CALPERS is going to attempt to not just win, but humiliate these agencies, call them out in the most embarrassing way possible, trash the senior executives, and make things very uncomfortable in general for these firms.

They don’t want them to merely suffer — they want to destroy their unique position as an Oligopoly, to remove them from having a special status under the SEC rules.

In these sorts of litigations, plaintiff can be very often bought off cheaply. In this case, that won’t happen. An offer a few million dollars — or a few 100 million — won’t tempt them into taking the money and going away. They have as much money as they need to finance this litigation to the long, drawn out, bitter end.

If I was a Rating Agency lawyer, I would be very, very nervous . . .

And I say good for CALPERS. Here's the NY Times article:

As the Obama administration considers an overhaul of the financial regulatory system, credit rating agencies have come in for their share of the blame in the recent market collapse. Critics contend that, rather than being watchdogs, the agencies stamped high ratings on many securities linked to subprime mortgages and other forms of risky debt.

Their approval helped fuel a boom on Wall Street, which issued billions of dollars in these securities to investors who were unaware of their inherent risk. Lawmakers have conducted hearings and debated whether to impose stricter regulations on the agencies.

While the lawsuit is not the first against the credit rating agencies, some of which face litigation not only from investors in the securities they rated but from their own shareholders, too, it does lay out how an investor as sophisticated as Calpers, which has $173 billion in assets, could be led astray.

The security packages were so opaque that only the hedge funds that put them together — Sigma S.I.V. and Cheyne Capital Management in London, and Stanfield Capital Partners in New York — and the ratings agencies knew what the packages contained. Information about the securities in these packages was considered proprietary and not provided to the investors who bought them.

Calpers also criticized what contends are conflicts of interest by the rating agencies, which are paid by the companies issuing the securities — an arrangement that has come under fire as a disincentive for the agencies to be vigilant on behalf of investors.

In other words, I absoutely agree with Barry that the whole point of this lawsuit is to *bury* the ratings agencies and possibly put them out of business.

I won't shed a tear should CALPERS be successful. I say more power to them.

Pretty Hate Machine

Via Digby, the guys over at Media Matters have been collecting daily Winger sound bites into a daily compilation of "Two Minutes Hate". Monday's edition and Tuesday's installment are bad enough, but yesterday's was pretty egregious:

Keep in mind it's easy to edit together a couple minutes of this stuff on a daily basis from Wingerville...and the fact is nearly every day there's far more than just two minutes of this kind of crap out there from gasbags like Mike Savage, El Rushbo and Glennsanity, not to mention all the TV sound bites from guys like Pat Buchanan and oh, just about anyone on FOX News.

Parade Of Home Foreclosures

Realty Trac's latest numbers on foreclosures in the US for the first half of 2009 are pretty damned grim.
A record 1.53 million properties were in the foreclosure process -- default notices, auction sale notices and bank repossessions -- during the first six months of 2009. That was 9% more than the previous six months and 15% more than the same period of 2008, according to a report released Thursday by RealtyTrac.

There were a total of 1.91 million filings resulting in 1 out of every 84 U.S. properties receiving at least filing in the first half of the year. Banks repossessed 386,800 properties.

"What this means is, despite the intensity of the efforts on the part of government and lenders we don't have a handle on foreclosures yet," said Rick Sharga, a spokesman for RealtyTrac.

And, in a bad sign for a housing recovery, there was no recorded improvement in June, the last month of the cycle. More than 336,000 homes reported foreclosure filings, the fourth straight 300,000-plus month. Filings were up 33% over last June and nearly 5% compared with May.

"Foreclosure activity continues to increase to record levels," said James J. Saccacio, chief executive officer of RealtyTrac in a prepared statement. "Unemployment-related foreclosures account for much of this increased activity, and the high number of borrowers who find themselves owing more on their mortgages than their homes' are now worth represent a potentially significant future risk."

As I said earlier, we're now seeing the second tsunami of foreclosures, mostly caused by rising unemployment. The problem is simple, this second wave is self-perpetuating. People lose their jobs, they lose their homes to foreclosure, they can no longer buy the products and services provided by their neighbors and home prices around the foreclosed home fall, neighbors get laid off and the cycle begins again.

It's going to continue to get worse. Obama's program to stop this cycle was pretty much doomed to failure when Congress refused to pass cramdown legislation to allow bankruptcy judges to modify mortgage payments. The measure was killed by the ConservaDems.

So now we're facing the music. Foreclosures are growing rapidly, and as long as that happens we're in trouble. On top of the unemployment tsunami, we're looking at millions of adjustable rate mortgages adjusting upwards over the next 18 months.

That'll only make it worse. We've got a long way to go, folks. Despite Jim Cramer's idiotic braying, we are nowhere near the housing market bottom. The first six months of 2009 are only the beginning.

If It's Thursday...

...the numbers get...weird. The timing this week of seasonal layoffs in the auto industry caused a major drop in both new claims (down 47,000) and in continuing claims (down an awesome 642,000!!!).

All this means is that this being the summer furlough season for automakers, suddenly all those thousands of workers got canned well before the July shutdowns, throwing off the numbers. Weekly numbers for the next few works will be "distorted".

We'll see where the monthly numbers come out in three weeks.


The Golden State: still screwed.
California Governor Arnold Schwarzenegger and lawmakers failed on Wednesday night to agree to balance the state's budget by closing a $26.3 billion deficit, but officials said talks would continue.

The budget talks, which have lasted weeks, have stalled over a part of the governor's plan to suspend a law on school funding, Karen Bass, the speaker of the state assembly, and California Senate President Darrell Steinberg told reporters.

The legislature's two top Democrats said budget talks would resume on Thursday.

It's real simple, folks. Both sides are trying to do as much damage to the other guy's traditional voters as possible without hurting their own supporters, and both sides are secretly praying for a federal bailout to save them.

As long as this keeps devolving into a game of Screw Your Neighbor, everybody in California loses. It's important to also note that since there's no way to raise taxes in California due to its crazy ass laws requiring a 2/3rds majority in both chambers of the State Assembly to raise them, the $26.3 billion is going to eventually be paid solely by the people who need the state's services. The only question is how much pain will be caused by the cuts.

We're already seeing illegal immigrants as the new scapegoats in California. I figure it's just a matter of time now before things get physical and very very ugly in this long, hot summer.

Ration-al Thoughts On Health Care

NY Times Magazine writer Peter Singer has an interesting and informative piece about the issue of health care and rationing, and makes clear the point I myself have made on a number of occasions: the free market already rations health care.
You have advanced kidney cancer. It will kill you, probably in the next year or two. A drug called Sutent slows the spread of the cancer and may give you an extra six months, but at a cost of $54,000. Is a few more months worth that much?

If you can afford it, you probably would pay that much, or more, to live longer, even if your quality of life wasn’t going to be good. But suppose it’s not you with the cancer but a stranger covered by your health-insurance fund. If the insurer provides this man — and everyone else like him — with Sutent, your premiums will increase. Do you still think the drug is a good value? Suppose the treatment cost a million dollars. Would it be worth it then? Ten million? Is there any limit to how much you would want your insurer to pay for a drug that adds six months to someone’s life? If there is any point at which you say, “No, an extra six months isn’t worth that much,” then you think that health care should be rationed.
Which is the point I've made more than a few times. Your ability to afford health insurance and your insurer's willingness to pay for treatment already rations your health care. If you don't have insurance or your insurer says no, then you are being denied treatment, period. Republicans scream "Obamacare will mean bureaucracy gets between you and your doctor!" The idiots must not realize that the bureaucracy is already there, and its chief aim is to in fact find a way to deny the claim and your treatment.

Singer however brings up another point: even a public option will have cost constraints and will have to ration healthcare at some level.
Rationing health care means getting value for the billions we are spending by setting limits on which treatments should be paid for from the public purse. If we ration we won’t be writing blank checks to pharmaceutical companies for their patented drugs, nor paying for whatever procedures doctors choose to recommend. When public funds subsidize health care or provide it directly, it is crazy not to try to get value for money. The debate over health care reform in the United States should start from the premise that some form of health care rationing is both inescapable and desirable. Then we can ask, What is the best way to do it?
Government already rations everything else, so it will have to ration health care as well because the public option will not have unlimited money to pay for everything, that's just reality.

The difference from the public option to private insurers is that private insurers have to make a profit or they go out of business. Government does not. Singer continues into his proposed solution to the dilemma:

This is the basis of the quality-adjusted life-year, or QALY, a unit designed to enable us to compare the benefits achieved by different forms of health care. The QALY has been used by economists working in health care for more than 30 years to compare the cost-effectiveness of a wide variety of medical procedures and, in some countries, as part of the process of deciding which medical treatments will be paid for with public money. If a reformed U.S. health care system explicitly accepted rationing, as I have argued it should, QALYs could play a similar role in the U.S.

Some will object that this discriminates against people with disabilities. If we return to the hypothetical assumption that a year with quadriplegia is valued at only half as much as a year without it, then a treatment that extends the lives of people without disabilities will be seen as providing twice the value of one that extends, for a similar period, the lives of quadriplegics. That clashes with the idea that all human lives are of equal value. The problem, however, does not lie with the concept of the quality-adjusted life-year, but with the judgment that, if faced with 10 years as a quadriplegic, one would prefer a shorter lifespan without a disability. Disability advocates might argue that such judgments, made by people without disabilities, merely reflect the ignorance and prejudice of people without disabilities when they think about people with disabilities. We should, they will very reasonably say, ask quadriplegics themselves to evaluate life with quadriplegia. If we do that, and we find that quadriplegics would not give up even one year of life as a quadriplegic in order to have their disability cured, then the QALY method does not justify giving preference to procedures that extend the lives of people without disabilities over procedures that extend the lives of people with disabilities.

This method of preserving our belief that everyone has an equal right to life is, however, a double-edged sword. If life with quadriplegia is as good as life without it, there is no health benefit to be gained by curing it. That implication, no doubt, would have been vigorously rejected by someone like Christopher Reeve, who, after being paralyzed in an accident, campaigned for more research into ways of overcoming spinal-cord injuries. Disability advocates, it seems, are forced to choose between insisting that extending their lives is just as important as extending the lives of people without disabilities, and seeking public support for research into a cure for their condition.

The QALY tells us to do what brings about the greatest health benefit, irrespective of where that benefit falls. Usually, for a given quantity of resources, we will do more good if we help those who are worst off, because they have the greatest unmet needs. But occasionally some conditions will be both very severe and very expensive to treat. A QALY approach may then lead us to give priority to helping others who are not so badly off and whose conditions are less expensive to treat. I don’t find it unfair to give the same weight to the interests of those who are well off as we give to those who are much worse off, but if there is a social consensus that we should give priority to those who are worse off, we can modify the QALY approach so that it gives greater weight to benefits that accrue to those who are, on the QALY scale, worse off than others.

The QALY approach does not even try to measure the benefits that health care brings in addition to the improvement in health itself. Emotionally, we feel that the fact that Jack Rosser is the father of a young child makes a difference to the importance of extending his life, but his parental status is irrelevant to a QALY assessment of the health care gains that Sutent would bring him. Whether decisions about allocating health care resources should take such personal circumstances into account isn’t easy to decide. Not to do so makes the standard inflexible, but taking personal factors into account increases the scope for subjective — and prejudiced — judgments.

The QALY is not a perfect measure of the good obtained by health care, but its defenders can support it in the same way that Winston Churchill defended democracy as a form of government: it is the worst method of allocating health care, except for all the others. If it isn’t possible to provide everyone with all beneficial treatments, what better way do we have of deciding what treatments people should get than by comparing the QALYs gained with the expense of the treatments?
In other words, Singer is arguing that some rationing will be necessary. Admit it now, work it into the program, and deal with it.

Seems like his idea has merit from a pragmatic point of view as well as an economic one: we're going to have to pay for it.


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