Wednesday, September 8, 2010

Last Call

Andy McCarthy disgorges a hairball o' Islamophobic hate as usual, but the best unintentional laughs come from the actual National Review article title:

This Is Where We Begin to Say No

Because wingers have been saying yes to everything in the last four years. No, really.

Unwinding The Serpent

The same big Wall Street interests that fought tooth and nail to avoid the government liquidating them are now calling for the end of Fannie and Freddie.
The federal government should take mortgage finance giants Fannie Mae and Freddie Mac off life support sooner rather than later, the Mortgage Bankers Association urged on Wednesday.
The bankers said Fannie Mae and Freddie Mac should move beyond the "conservatorship" that started two years ago and be placed "receivership."

"Fannie Mae and Freddie Mac have already moved well beyond the points where any other financial institution would have been put into receivership," MBA Chief Executive John Courson and MBA Chairman-elect Michael Berman wrote in a seven-page letter to the Federal Housing Finance Agency.
So why liquidate Fannie and Freddie and the trillions in mortgages they control?  Guess.

The mortgage bankers urged the FHFA to make it clear what would happen to the two firms so creditors will know who will be paid if and when they are put into receivership.

"What is paramount, however, is that FHFA protect all the cash flows associated with the (mortgage backed securities) from the demands of any other class of claimants," the bankers wrote.
In other words, make sure we get our cut, and oh yeah, you'll need some mortgage banks to sell all those mortgages to at pennies on the dollar, right?  Pretty good deal if you think about it.  Trillions in mortgages at pennies on the dollar will turn Wall Street's mortgage giants into unstoppable powerhouses that will of course be Too Big To Fail.

Make no mistake, this is the real endgame of Wall Street "reform" right here.  And if the Wall Street tycoons win, it's game over for the middle class.

Penn State Of Chaos

The first blow in the coming municipal bond debt crisis is here, and it's being played out this week in Harrisburg, capital of Pennsylvania.

This year, Harrisburg leaders acknowledged they could not make roughly $68 million in debt payments - owed by the authority that runs the plant and backed by the city - that were due.

Since then, officials have scrambled to negotiate a solution that could stave off a declaration of bankruptcy. But those efforts have bogged down amid infighting - between the new mayor and the city controller, and the mayor and members of City Council.

Last week, the city announced it would skip a $3.3 million payment on a general-obligation bond this month.

That amount is small potatoes compared with the separate debt for the ill-starred incinerator project. But it looms large in another way: General-obligation bonds are the seemingly durable, reliable bonds that municipalities strive to ensure are paid on time. Failure to do so put Harrisburg's fiscal woes on public display and reignited bankruptcy talk.

The announcement had municipal-bond-market analysts shaking their heads, warning that the city was endangering its ability to borrow in the future, and predicting a long and tricky road to recovery.

"It is not a good sign when the state of Pennsylvania's capital city is on the edge of bankruptcy," said Matt Fabian, a managing director at Municipal Market Advisors, a research firm in Westport, Conn. "The bond markets will take notice of that - and they won't lend money."

The incinerator problem is bad enough, but now the city is planning to skip out on its biannual bond payments, and that's going to cause serious problems down the road.  The city is insured by an underwriter called AMBAC, but that's going to put a huge dent in Harrisburg's credit rating, and they're not going to be able to borrow much of anything.

The real problem is that there's potentially hundreds, if not thousands of Harrisburgs out there in America, waiting to throw in the towel on muni bonds as revenues dry up and tax increases are out of the question.  That could rock the entire $3 trillion muni bond market to its core.

A lot of long-term investing is done in muni bonds, and if those start going under, the domino effect could be catastrophic.

Just another piece of good news, I guess.  Big cuts in social programs don't fare well at election time, neither do tax increases.  That leaves bond payment default.  Harrisburg will not be the only city to go down that road over the next few years.

Ramblin' Rand

I didn't think that SurveyUSA poll showing Rand Paul with a 15-point lead was terribly accurate.  Yet another poll shows a much closer race, this time with Paul only having a 3 point lead.
Ophthalmologist Rand Paul (R) and state Attorney General Jack Conway (D) are in a statistical tie in the Kentucky Senate race, according to a new survey conducted by a Democratic pollster.
Paul takes 48 percent to 45 percent for Conway in the poll, which was conducted for the Kentucky Leadership Council by John Anzalone.
The poll shows voters are concerned about Paul's public statements, including one in which he appeared to dismiss the state's problems with drugs. Neaely six in ten voters (59 percent) agreed that Paul "says things that bother and concern me."
The Anzalone poll contrasts sharply with a SurveyUSA poll released over the weekend, which had Paul leading 55 percent to 40 percent.
Conway's campaign also fought back on the SurveyUSA poll Tuesday, releasing a memo from its pollster, Pete Brodnitz, that suggests the voter model used by SurveyUSA was flawed.
The Benenson memo noted that Democrats have historically turned out 20 percent more voters than Republicans in the state, while SurveyUSA's model had them at just 5 percent more.
Kentucky, where Sen. Jim Bunning (R) is retiring, is regarded by Democrats as one of their top pickup opportunities on the ballot this fall.
So again, it depends on Kentucky Democrats getting out to vote for Conway.  It's all about turnout.  If the turnout follows the GOP "gloom and doom" model for the Dems then yes, Paul will walk off with an easy win.

If Dems actually show up to vote, Paul's in trouble.

Something About This Plan Seems Awfully Familiar

Indiana Gov. Mitch Daniels is the latest Republican offering unsolicited advice on fixing the economy, and it looks very familiar...only with a starkly mean-spirited GOP twist as Ezra Klein points out, but it's not altogether different from what Obama is proposing this week.
Instead, it begins with a payroll-tax holiday. Daniels would like to see the tax suspended for a full year. He then offers four policies that would "offset the revenue loss twice over," though I'm quite sure the CBO wouldn't agree with that assessment: recalling unspent TARP and stimulus funds; giving the president the power to "impound" congressional spending projects in order to spend less; a federal hiring freeze; and "some sort of regulatory forbearance period in which the job-killing practice of agonizingly slow environmental permitting is suspended."
Daniels thinks it "fanciful" to imagine that the Obama administration would adopt some variant of this plan, but these are hardly alien ideas to them: The White House has been weighing a payroll-tax holiday for weeks; Peter Orszag, in his role as OMB director, proposed a more Congress-friendly variant of Daniels's impounding powers; a hiring freeze is a bit of a blunt tool, but it's not that far off from the discretionary spending freeze that the administration is already supporting. The outlier here is the regulatory forbearance period: I could see the argument for something like this in the financial sector, where regulators got very aggressive at the same time banks got very cautious. But the White House won't buy it in the environmental space.
The convergence is clearest in Daniels's sixth and final suggestion: "Accelerated or full expensing of business investment." As it happens, the administration is announcing a policy to do exactly that later this week. It appears that one of the editors informed Daniels of this, as the paragraph now ends with this parenthetical: "Reports indicate that the administration is about to propose this very idea. If so, good." 
Hmm, the plan seems to be exactly what Obama is proposing more or less.  But my problem is that the same guy saying that "where's the jobs?" is asking for federal hiring freeze as well as a pay freeze.  No offense to Ezra, but I'm thinking A) that won't affect Congress, and B) we need all the jobs we can get, even if it's file clerks at the patent office.  Also, why should federal employees have to be made to suffer?  Last time I checked they bought groceries and piano lessons and bath soaps and house paint from private sector stores just like other Americans.  Employed federal employees working, getting wages and paying taxes have to be preferable to unemployed people living off government dole, yes?

Not if you're a Republican, apparently.  Who honestly proposes a hiring freeze in the middle of nearly ten percent unemployment?  That's just idiotic.  If the government needs to hire people, they should.  A blanket hiring freeze is just silly.

And notice how except for that, Daniels's plan is what Obama's been working on for a while now.  Go figure.  Business tax cuts and a payroll tax holiday.

Of course if a Republican proposes it, it's a brilliant idea, right?  Hey Mitch, rule of thumb:  if your stimulus plan takes more money out of the economy then it's putting back in, it's not a stimulus plan.

[UPDATE]  Jon Chait takes Mitch Daniels's little plan here out back and takes a 20-pound sledge to it.
But it's okay, Mitch. You put out a real plan. Sure, you rely on magical Constitutional thinking and empirically false analysis of federal pay. And your savings only make it 9% of the way to your stated goal. And the four revenue offsets you promised is really only three offsets plus one unrelated ideological hobbyhorse. But it was a good try. Look at Sarah Palin and Newt Gingrich over there -- they fell down after only a few yards! You should really think about running for president.
Ai-ya.  Not that Mitch doesn't deserve this level of snark, but...da-yamn.

Zandar's Thought Of The Day

The universe explained.

Resume your daily routine.

Orange Julius Goes Back To The Future

John Boehner's alternative GOP economic plan?  Freeze tax rates for two years and cut spending levels to fiscal 2008.
Boehner said the biggest problem with the economy currently is the "uncertainty facing small businesses" that have been reluctant to engage in significant new hiring.

Appearing on ABC's "Good Morning America," Boehner said the American people are asking, "Where are the jobs?" and that the Obama White House is "out of touch" with voters. But he also said that "I'm open to the president's ideas." 
Sure he is.  We do realize that cutting funding across the board to 2008 levels means eliminating all the funding for everything Obama and the Democrats have passed, right?  Defunding health care reform, Wall Street oversight, credit card regulation, Medicare and Social Security COLAs, all of that goes away.

The GOP wants to roll back the clock to Bush's last year in office and keep it there (only revenues would be down even further.)  Big tax cuts for the rich, even bigger spending cuts for everyone else.  Where have we heard that plan before?  Taking massive amounts of spending out of an economy on the edge of another leg down in a depression.  That'll help!

Boehner may be measuring the drapes in Nancy Pelosi's office, but in the meantime he should be more worried about how the best plan he has is literally replaying the Bush years.

Any Excuse To Screw You Over

The WSJ reports that insurance companies are quick to blame health care reform as the sole reason why they "have to" jack up insurance premiums, but K-Drum points out the disconnect.

My guess is that a couple of sentences in the Journal piece tell the story:
The rate increases largely apply to policies for individuals and small businesses and don't include people covered by a big employer or Medicare.
....Democrats front-loaded the legislation with early provisions they hoped would boost public support. Those include letting children stay on their parents' insurance policies until age 26, eliminating co-payments for preventive care and barring insurers from denying policies to children with pre-existing conditions, plus the elimination of the coverage caps. Weeks before the election, insurance companies began telling state regulators it is those very provisions that are forcing them to increase their rates.
Hmmm. Don't those provisions apply to all plans, not just individual and small-business policies? So why are insurers boosting rates only on the latter? I'm sure Aetna and Blue Cross have some extremely complicated and plausible sounding reasons for this, but I'd take them with a grain of salt. More likely they're raising rates for the same reason they've been raising rates for the past few years, and it has almost nothing to do with ACA. Caveat emptor.

And of course those reasons are that individual and small-business plans have smaller pools of insured to defray costs.  That's why health insurance exchanges were put in the legislation...but the exchanges won't be on-line until 2014 and some 15 red states are refusing to form the health insurance risk pools now.  That means insurance companies are specifically jacking up rates on individual and small-business plans now.  Minnesota Gov. Tim Pawlenty has recently decreed that all of the state's new health care provision grants must go through his office for approval which he plans to summarily reject, and that could cost Minnesota a billion dollars in health care funding.  Other 2012 hopefuls are going to follow similar tracks.

The real culprits here are Republicans refusing to follow the law.  It's leading directly to higher health insurance costs...and they're simply blaming Obama for it.  Nice work if you can get it.

Meanwhile, that money has to be made up somewhere.  Guess where?

Viewing Rock Stars

NASA says that today's double asteroid pass into near Earth space -- asteroids picked up by the Near Earth Program on Sunday -- shows how critical the program is.
Near-Earth asteroid 2010 RX30, which is estimated to be 32 to 65 feet in size, will pass within 154,000 miles of Earth at 5:51 a.m. ET Wednesday. The second object, 2010 RF12, estimated to be 20 to 46 feet in size, will pass within 49,088 miles of Earth at 5:12 pm ET.

In case you were wondering, that means the two asteroids will pass within 0.6 and 0.2 lunar distances from the Earth, respectively. The first will be closest to Earth over the north Pacific, and the second, over Antarctica.

Roughly 50 million objects pass through near-Earth space each day, Yeomans said. But what makes this situation noteworthy is that these two asteroids are passing so close to Earth on the same day and that NASA spotted them so far in advance.

"Things like this happen every day that we simply don’t know about because we don’t have the telescopes large enough to find them or surveys that are looking full-time," he said. "This demonstrates the system's working on some level, but we need larger telescopes and more of them to find objects that are coming this close."
This is something that could potentially save lives, but given today's economic carnage, it's difficult to see this program getting any additional funding anytime, oh, ever.

I'm surprised it hasn't been cut completely, other than it would be miserable press.  Of course, a GOP congress controlling the purse strings will probably not be so generous as the Democrats have been, especially given the GOP's virulently anti-science bent.

This would be the perfect program to start a fight with Obama over for the GOP.  And honestly, how much political capital would Obama expend to save something like NASA watching for falling rocks?

Gotta love it.

Rand Paul, Trojan Galt

Via skippy I see that Rand Paul is once again doing it wrong.

Well, it turns out that at least one member of Rand Paul's paid campaign staff has been posing as a progressive member of the Daily Kos community in an effort to dampen enthusiasm for Conway's campaign and moneybomb. The staffer, Thomas Kubica, is a paid intern in Paul's Bowling Green office. Paul campaign's front desk confirmed Kubica's status as a paid intern on Tuesday morning.

Kubica registered at Daily Kos under the pseudonym "Huey Long" and has repeatedly posed as a progressive Democrat who opposes Paul but does not believe Conway is worthy of support.

But despite his claim to be a progressive Democrat, look at how Kubica describes himself on his Linkedin page:
Thomas Kubica at Rand Paul for US Senate 2010
Political Organization | Greater Nashville Area
Current: Independent Contractor at Rand Paul for US Senate 2010 Past: Perishables Lab Analyst/Conservation Lab Analyst at Mercyhurst Archaeological Institute Education: Mercyhurst College

Far be it from me to deploy any brickbats on using pseudonyms and all, but if you're going to troll Daily Kos, it's best not to openly do such a crappy job of trying not to admit you're a Republican campaign staffer.  On the other hand, if he had admitted it, he would have been banned anyway.

Kubica has also penned diaries criticizing Conway from the left (here and here), each of them transparent attempts to dampen progressive enthusiasm for Conway.

It goes without saying that Kubica, as a concern troll, is unwelcome at Daily Kos. Daily Kos is a progressive community and its community membership are united by the goal of electing more and better Democrats to public office. While we are tolerant of a wide range of views within the "Big Blue Tent," make no mistake: this site is every bit as blue as it is orange. If Kubica had identified his role with his campaign, he would not have been welcome in the community, so he resorted to deception. Now that we know who he is, he's been banned, per community guidelines.

Funny stuff.  And yes, Republicans think you're that stupid.


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