Tuesday, December 21, 2010

Last Call: Short And Sweet

The FCC adopts net neutrality, which ensures that all data packets are treated equal. 

A food safety bill has passed the House and Senate, and will be the greatest overhaul of the regulations since 1983.  While drawing some criticism for the government involvement, this was long overdue.

The Roman Catholic Diocese of Phoenix cut ties with St. Joseph's Hospital and Medical Center after they performed a surgery that terminated a pregnancy to save the patient's life.

A third actor has been injured in the Spider-Man musical.  Perhaps the world isn't quite ready for the play, or vice versa.

Tax Break Raiders Of The Lost Ark, Part 4

The massive scam that is Ark Encounter isn't going unnoticed.  Joe Sonka is all over this one at Barefoot And Progressive.  The depressing tragicomedy that is the Yabba Dabba D'oh continues.  Now park builder Ken Ham says 200 million people would come to see the Ark Encounter in Kentucky.

“A lot of left-wing media and bloggers have reacted very negatively, writing a lot of false information. They only represent a minority of the people in this nation. The majority of people in this area and across the nation are supportive. The statistics show about 200 million people would want to come if the ark were rebuilt. Locally, the majority of people are really thrilled because it’s family-friendly and it would bring hundreds of jobs to the region,” said Ham.

“There is a growing anti-Christian element in this nation,” Ham added. “This has opened people’s eyes about how anti-Christian these people and some in the media have become.”

Yeah, 2/3rds of the entire country would come to see it.   That's all contained in the park's feasibility study, commissioned by Ken Ham's business partner...and oh, Governor Steve Beshear's office has never seen it.

When Gov. Steve Beshear held a Capitol news conference to announce potential state tax incentives for an amusement park built around a life-size Noah's Ark earlier this month, he cited a feasibility study that predicted the park would attract 1.6 million visitors in its first year.

However, neither Beshear nor other state officials had seen or read the study, which was commissioned by Ark Encounter, LLC, the group building the theme park.

The state doesn't have a copy of the report, according to responses to requests under the Open Records Act sent by the Herald-Leader to the state tourism and economic development departments and to the governor's office.

Officials with Ark Encounter also declined to give the Herald-Leader a copy of the 10,000-page report, including its 200-page executive summary.

To recap:

Ken Ham and his Ark Encounter guys are putting dinosaurs on their little replica Ark in Grant County, they have a 10,000 page report saying 200 million people will come to see it, nobody's actually seen the report, and the state has just unanimously given the preliminary green light for the $37.5 million in tax breaks based on attendance from the feasibility report...a report nobody in the state government has actually read or even seen.

Do you see why as a Kentucky taxpayer I just might have a bit of a problem with this deal here?

If it turns out the feasibility report is complete bull, the Ark Encounter guys lose their tax break.  The report hasn't been seen yet.  The Arts Cabinet voted unanimously to give them the tax break anyway...and none of them saw the report.

Gov. Steve Beshear, you have a massive, massive problem here.  And when the Yabba Dabba D'oh blows up in your face, don't act surprised.

But The Catfood Commission Came Back, The Very Next Day Part 4

President Obama and Republican leaders may be trying to lie low on the Catfood Commission's report to gut Social Security and Medicare/Medicaid in order to cut taxes for the rich even more, but there will always be Centrist Daleks who will happily push that shiny red button and work to make the Commission's report into law.

Enter Republican Senator Saxby Chambliss of Georgia, and Democratic Senator Mark Warner of Virginia, who are looking to build a "bipartisan" group of senators who will stab America in the back and the front.

Like the deficit commission, Chambliss's and Warner's group is also mulling tax reform as a "byproduct" of their spending discussions. Warner noted that the two men agree on the general idea of broadening the tax base by eliminating many existing deductions, while at the same time lowering personal and corporate tax rates. 

While the recent tax-cut deal certainly added to the debt, both men differentiated between that short-term measure to stimulate the economy and long-term efforts to address spiraling deficits - efforts that would take effect after the economy has recovered.

"The term I've used is that we've got to show we can walk and chew gum" at the same time, Warner said.

The group may get an opportunity to do that soon. Before next summer, Congress will have to take a painful vote to raise the federal debt ceiling to allow the country to borrow more money.

"If we can use that as a leverage" to get the ball rolling on a deficit-reduction plan, Chambliss said, "that's an ideal scenario.

It's those two bolded sentences that should be raising the alarm bells.  Tying the Catfood Commission recommendations to the debt ceiling vote would be problematic at best.  There's no way the banksters are going to let the Republicans wreck the financial industry by blowing up that vote, but if we're really talking about the Centrists holding this hostage in order to get tax cuts for the rich, well that's a different story.

It's one thing if Jim DeMint or Tom Coburn wants a hostage.  it's entirely another thing if Mark Warner does it, and that's definitely something you're going to want to keep an eye on.

Zandar's Thought Of The Day

The NASDAQ Composite has more than doubled since its March 2009 low, the S&P 500 has almost doubled since then and the Dow has gained 5,000 points, but Obama still has to apologize to business for his failure to help innovative companies grow over that same time period because of an uncertain climate that is hostile to the bottom line of America's companies.

So hostile that many of their stocks have roughly doubled since Obama took office.

Boy, Obama sure has been bad for business and the markets, huh.

Yes, I know it's all smoke and mirrors and a huge crash is coming in 2011, but the business community has made out like a bandit during Obama's term.  Literally.  Why are they complaining about Obama?

Why does he have to apologize?

Here's a hint:  unemployment is roughly the same, but profits are up sharply and the markets are blowing through the roof.  Ask yourself why that is.

StupidiNews: There's An App For That?

TEL AVIV (Reuters) – A hospital in Israel has begun using Apple's iPad to enable medical staff to help treat patients, provide consultations and study X-rays and CT scans from afar.  
 The high resolution images allow doctors to upload and view the files at easily, and immediately.  Patients waiting in emergency rooms for a decision will now get faster and more accurate treatment.  When minutes can make the difference between life and death, there is now an option to appeal for help outside of the hospital staff.

Doctors who are not on the hospital premises can now send and receive patient information, such as X-rays, medical records and ultrasounds.  This lets medical staff make important decisions and have the information they need at their fingertips. Not only will this lead to an improved medical information transit, but it will eventually allow specialists from around the world to give input immediately, and with confidence.  Doctors can also monitor progress in real time.  While nothing will take the place of a doctor at the patient's bedside, this comes pretty darned close.  The one thing missing is mention of privacy or security, but this advance is still in its infancy.  

Here's hoping this first step is one of many towards using technology to advance medicine, not just in the labs but in real practice.

Epic Hark The Extra Crispy Angels Sing Win

Can't get a Christmas turkey or ham in Japan?  KFC has you covered.

So popular is Kentucky Fried Chicken over the festive season that the fast-food chain’s Christmas Party Barrels can be ordered up to two months in advance in Japan.

“I entered the company in around 1980 and at the time it was pretty tough because there would be these long queues outside the stores,” said Ichiro Takatsuki, a company spokesman. “Because of that over the past decade we’ve been taking orders. We started in November, but people would call and ask if we were taking orders yet, so we started earlier.”

Through one of the most successful advertising campaigns, which started in 1974, KFC Japan has made eating its chicken meals at Christmas a national custom. This happens on December 23, 24 and 25, but particularly Christmas eve. Sales for the three days are equal to half normal monthly sales, the company says.
Japan is well known for taking foreign products and ideas and adapting them to suit domestic taste, and Christmas is no exception. A highly commercialised and non-religious affair, lots of money is spent annually on decorations, dinners and gifts. KFC is arguably the biggest contributor, thanks in part to its advertising campaign.

“One of the reasons the campaign lasted so long is that the message is always the same: at Christmas you eat chicken,” said Yasuyuki Katagi, executive director at Ogilvy and Mather Japan, the advertising agency.

Also, bonus points for the "Christmas Party Barrel" of fried chicken.  No word on the Three Kings Double Down, but hey, there's at least one US export to Japan that's kicking all kinds of ass.

EPIC WIN for Yum Brands.

Kicking One Hell Of A Can

The Senate is expected to pass a short-term continuing resolution to keep the government running today.  If they don't, it's shutdown city just in time for Christmas.  the problem is the continuing resolution is expected to freeze spending at 2010 levels through March, meaning that there will be no funding for health care or wall street reform measures passed this year to be implemented (and additional funding will have to come from the Republicans in the House.)  And that's just what Republicans want.

The $250 billion deal to pay for the government until March 4, which is expected to come to the Senate floor for a vote Tuesday, freezes spending for most government programs at 2010 levels. The deal is expected to clear the Senate and House before current government-spending authority expires that day.

The proposed short-term funding measure would kick the larger spending debate into the new year, when Republicans will control the House and have more Senate seats. It would also start the bargaining between congressional Republicans and the White House at a lower funding level than the now-defunct Democratic plan.

Obama administration officials could shift money around within federal agencies to keep health care and Wall Street regulation on track. But Republicans could try to block such moves through legislation.

"It's going to be a big political fight," said Sen. Richard Shelby (R., Ala.). "I think the odds shift toward Republicans."

Senate Finance Committee Chairman Max Baucus (D., Mont.) said he was confident Democrats could still win funding battles for health care and financial regulation. "Clearly, the fewer resources devoted to any program, the harder it is to implement it," he said.

It's true that Democrats still control the Senate, but I fully expect the House Republicans to go scorched earth and refuse to fund anything passed in 2010, and that includes whatever the Pentagon needs for implementing the repeal of DADT.

We'll see what comes of this, but Sen. Shelby's right:  this battle favors the Republicans.

The Art Of The Deal: Gitmo and DADT

Adam Serwer alerts us to this little gentlemen's agreement:

Thanks to Lynn Sweet, we now know who was responsible for placing the ban on federal funds for federal criminal trials of Guantanamo detainees in the National Defense Authorization Act. It was the Illinois Republican delegation, concerned about the rather remote possibility that the Obama administration would ultimately be moving detainees to the designated "Gitmo North" Thompson former correctional facility. In fact, the ban is almost a non-sequitur in this regard, except in the sense that it makes it more difficult to close Gitmo, both by banning trials and making voluntary transfers to countries with "known recidivists" conditional on the approval of the Secretary of Defense.

That's not the whole story though. Jen DiMascio reports that the Democrats acquiesced to the ban as part of a deal to go forward with repealing DADT:
That might have alienated liberals like Rep. Barney Frank (D-Mass.), but he spoke on the House floor in support of the bill. Frank told POLITICO agreeing to ban detainee transfers was part of a larger House-Senate compromise that also involved passing "don’t ask don’t tell."
“I didn’t like that,” Frank said of the detainee transfer ban. But passing the bill to allow gays to serve openly in the military was more important, he said, adding that the detainee language would have returned in a spending bill. “We would have gotten stuck with that anyway.”
I don't know whether the administration blessed this deal. But as frustrating as the ban is, I'm not sure I wouldn't have exchanged a year without federal criminal trials of Gitmo detainees during a period when the White House was unlikely to bring any regardless, for the end of DADT. A frustrating setback for justice in return for an irreversible milestone on the road to equality for gays and lesbians?

So the Republicans got Gitmo in exchange for repealing DADT:  keeping one bad set of civil rights violations for a few people on the books in exchange for repealing another set that potentially affects thousands.  I'm really not sure how I feel about that, other than it's a hard decision to make, and given the circumstances I think the Dems made the right choice.

Having said that, one has to be infuriated that the Republicans were allowed to frame the deal in those terms and get away with it completely.  Still, correcting one of those 235 year problems does trump correcting a 9 year problem.

Republican math sucks.  And what made the Democrats once again believe the Republicans would honor this deal?  They didn't the first time around.  Both of these measures, the DADT repeal and the ban on money for civilian trials of Gitmo suspects, were in the same military appropriations bill on the House side.  Then Senate Republicans stripped the DADT repeal from the bill in the Senate.  They reneged again, and it took a stand-alone bill and more deals to get that through.  That only happened after the GOP went back on their word.

I wonder what the price was for the stand-alone DADT measure to pass.  Killing the DREAM Act?  Who knows.

Either way, you'd think the Democrats would have figured out by now that Republicans can't be trusted.

No, Muni Bond, I Expect You To Die

If you didn't see Meredith Whitney on 60 Minutes this weekend, you should check it out.  She's predicting dozens of municipal defaults in 2011 as local and county governments will be unable to pay off their bonds, leading to billions in defaults in the municipal bond market.  She knows what she's talking about.

The problem with that, according to Wall Street analyst Meredith Whitney, is that no one really knows how deep the holes are. She and her staff spent two years and thousands of man hours trying to analyze the financial condition of the 15 largest states. She wanted to find out if they would be able to pay back the money they've borrowed and what kind of risk they pose to the $3 trillion municipal bond market, where state and local governments go to finance their schools, highways, and other projects.

"How accurate is the financial information that's public on the states? And municipalities," Kroft asked.

"The lack of transparency with the state disclosure is the worst I have ever seen," Whitney said. "Ultimately we have to use what's publicly available data and a lot of it is as old as June 2008. So that's before the financial collapse in the fall of 2008."

Whitney believes the states will find a way to honor their debts, but she's afraid some local governments which depend on their state for a third of their revenues will get squeezed as the states are forced to tighten their belts. She's convinced that some cities and counties will be unable to meet their obligations to municipal bond holders who financed their debt. Earlier this year, the state of Pennsylvania had to rescue the city of Harrisburg, its capital, from defaulting on hundreds of millions of dollars in debt for an incinerator project.

"There's not a doubt in my mind that you will see a spate of municipal bond defaults," Whitney predicted.

Asked how many is a "spate," Whitney said, "You could see 50 sizeable defaults. Fifty to 100 sizeable defaults. More. This will amount to hundreds of billions of dollars' worth of defaults."

Municipal bonds have long been considered to be among the safest investments, bought by small investors saving for retirement, and held in huge numbers by big banks. Even a few defaults could affect the entire market. Right now the big bond rating agencies like Standard & Poor's and Moody's, who got everything wrong in the housing collapse, say there's no cause for concern, but Meredith Whitney doesn't believe it.

"When individual investors look to people that are supposed to know better, they're patted on the head and told, 'It's not something you need to worry about.' It'll be something to worry about within the next 12 months," she said.

No one is talking about it now, but the big test will come this spring. That's when $160 billion in federal stimulus money, that has helped states and local governments limp through the great recession, will run out.

The states are going to need some more cash and will almost certainly ask for another bailout. Only this time there are no guarantees that Washington will ride to the rescue.

And with the GOP in charge of the House, there's zero chance that's going to happen.  That will leave states on the hook for these problems, and in turn, if enough states get into trouble, something's going to have to give.

The larger problem is the entire municipal bond market itself.  It's going to make borrowing money on bond issues much tougher on all cities and counties, as well as states.  Interest rates will go up here, and that means long-term investors like the hedge fund giants aren't going to be happy at all.  This is going to be one of the big stories in 2011.  Harrisburg, Pennsylvania's capital, was just the tip of the iceberg as it got bailed out by the state.  The rest is going to be ugly.

A Compromise That Everybody Hates

Both the left and the right see the FCC's rules on net neutrality as the end of the internet.  Conservatives are furious because they say a tiered internet is the only way to make sure consumers pay for bandwidth, and that the FCC's power grab will turn the internet into a PC network for PCs as decreased investment throttles growth.  The WSJ:

Nothing is broken that needs fixing, however. The Internet has been open and freedom-enhancing since it was spun off from a government research project in the early 1990s. Its nature as a diffuse and dynamic global network of networks defies top-down authority. Ample laws to protect consumers already exist. Furthermore, the Obama Justice Department and the European Commission both decided this year that net-neutrality regulation was unnecessary and might deter investment in next-generation Internet technology and infrastructure.

Analysts and broadband companies of all sizes have told the FCC that new rules are likely to have the perverse effect of inhibiting capital investment, deterring innovation, raising operating costs, and ultimately increasing consumer prices. Others maintain that the new rules will kill jobs. By moving forward with Internet rules anyway, the FCC is not living up to its promise of being "data driven" in its pursuit of mandates—i.e., listening to the needs of the market.

On the other hand, the left is just as furious that the rules don't go far enough.  While landline broadband is subject to rules governing freedom, mobile broadband isn't, and that means huge mobile networks can do whatever they want in order to limit bandwidth and throttle competitors.  The Huffington Post:

For the first time in history of telecommunications law the FCC has given its stamp of approval to online discrimination.

Instead of a rule to protect Internet users' freedom to choose, the Commission has opened the door for broadband payola - letting phone and cable companies charge steep tolls to favor the content and services of a select group of corporate partners, relegating everyone else to the cyber-equivalent of a winding dirt road.

Instead of protecting openness on wireless Internet devices like the iPhone and Droid, the Commission has exempted the mobile Internet from Net Neutrality protections. This move enshrines Verizon and AT&T as gatekeepers to the expanding world of mobile Internet access, allowing them to favor their own applications while blocking, degrading or de-prioritizing others.

Instead of re-establishing the FCC's authority to act as a consumer watchdog over the Internet, it places the agency's authority on a shaky and indefensible legal footing -- giving ultimate control over the Internet to a small handful of carriers. 

Both sides here argue that the compromise will mean the end of the internet as we know it.  I tend to lean more towards the Huffington Post's view of the situation, but it's true that nearly everyone hates this compromise.  Expect Congress to be pressed into legislation on this in 2011.

[UPDATE]  Matt Osborne argues that progressive activists spent all their time on health care reform and DADT and didn't exactly come through on the issue of tougher net neutrality restrictions.

Turn On The Lights, Watch The Roaches Scatter Part 51

As the foreclosure mills get ready to start up in January, it's important to note that 27 states don't have judges decide foreclosure proceedings, and in those states, trustees hired by the banks conduct proceedings for evictions.

All 50 U.S. states are investigating whether banks and loan servicers used false documents and signatures to justify hundreds of thousands of foreclosures. Attorneys general in non- judicial states, including Arizona, Texas and Washington, are conducting independent probes of mortgage foreclosure practices and examining the documents used to secure foreclosures.

“Washington’s foreclosure process frequently includes inaccurate documents, conflicts of interest, faulty chains of title and failures to provide the disclosures and conduct mediations required by law,” state Attorney General Rob McKenna said at a press conference on Oct. 13.

McKenna sent out about 50 letters that day to trustees operating in the state, asking them to suspend all foreclosures where documents hadn’t been confirmed as legally signed, or where the chain of homeownership wasn’t clear.

“Our consumer-protection division has already begun investigations regarding several trustees,” he said.
Washington will have about 40,000 foreclosures this year, up from 31,000 in 2009, according to Statewide Poverty Action Network in Seattle. The state is ranked at 17th nationwide, said Danielle Friedman of the network, an advocacy group for the state’s poor.

“A handful of trustees do the vast majority of the foreclosures” in Washington, said Jim Sugarman, assistant attorney general. About 60 trustees operate in Washington, he said. Most are affiliated with law firms, he said. Trustees receive a set amount of money to handle a foreclosure based on the difficulty of the transaction, he said.

The trustee system was set up as a “more efficient and less costly alternative for both the borrowers and the lenders,” said Lance Olsen, a Bellevue, Washington, attorney. In a judicial foreclosure state, the borrower “could end up with half of the default owed in attorneys’ fees in a few months,” said Olsen, who represents Northwest Trustee Services in Bellevue.

Opponents of the system “want the outside independent review of a judge,” he said. “That’s a valid request, but it’s an expensive one for a review that’s most often not required.”

Borrowers in non-judicial states can still sue to stop a foreclosure, he said. 

But when the banks are using the MERS system, the "efficient" system is designed to foreclose as quickly as possible, even when the bank doesn't own the mortgage note.   And that's the real problem.  Thousands of homeowners don't have much in the way of recourse in stopping this freight train that will get back on track in January.

How many homeowners will be illegally railroaded into foreclosure?  We may never know.


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