Last Call

How many times must people drive a stake through the bullshit that is "Broke-ass black people caused the housing collapse" anyway? The Community Reinvestment Act (CRA) did not cause the housing depression. Greed did.

Barry Ritholz kills this garbage once again:

Assume arguendo that CRA legislation forced banks into making high risk, ill advised loans. And, let’s further assume a huge percentage of these government mandated mortgages have gone bad. The buyers who could not legitimately afford these homes or otherwise qualify for other mortgages have defaulted, and these houses are either in default, foreclosure or REOs.

What would this alternative nation look like?

Given the giant US housing boom and bust, this thought experiment would have several obvious and inevitable outcomes from CRA forced lending:

1) Home sales in CRA communities would have led the national home market higher, with sales gains (as a percentage) increasing even more than the national median;

2) Prices of CRA funded properties should have risen even more than the rest of the nation as sales ramped up.

3) After the market peaked and reversed, Distressed Sales in CRA regions should lead the national market downwards. Foreclosures and REOS should be much higher in CRA neighborhoods than the national median.

4) We should have reams of evidence detailing how CRA mandated loans have defaulted in vastly disproportionate numbers versus the national default rates;

5) CRA Banks that were funding these mortgages should be failing in ever greater numbers, far more than the average bank;

6) Portfolios of large national TARP banks should be strewn with toxic CRA defaults; securitizers that purchased these mortgages should have compiled list of defaulted CRA properties;

7) Bank execs likely would have been complaining to the Bush White House from 2002-08 about these CRA mandates; The many finance executives who testified to Congress, would also have spelled out that CRA was a direct cause, with compelling evidence backing their claims.

So much for THAT thought experiment: None of these outcomes have occurred.

Zero.

In reality, the precise opposite of what a CRA-induced collapse should have looked like is what occurred. The 345 mortgage brokers that imploded were non-banks, not covered by the CRA legislation. The vast majority of CRA covered banks are actually healthy.

As the Master Control Program famously said, "End of line." Good old fashioned greed killed the housing market. The CRA is nothing more than a convenient dupe, when it turns out it might have actually been the only positive thing going on in the entire housing market during the Bush years.

Just A Little Closer To The Truth

Steve Benen comes a bit closer to the truth of the GOP and health care reform:

Maybe now would be a good time to remind the relevant players that there are different political parties for a reason. Democrats and Republicans are -- I hope you're sitting down -- supposed to disagree.

They have very different policy agendas, driven by different worldviews. That they're struggling to agree on how to pass the most sweeping overhaul of the health care system isn't surprising; that they're trying to overcome this is.

A.L. noted this week:

For as long as I can remember, the Democratic party has fought to increase the government's role in providing health care coverage for Americans while the Republican party has fought to reduce the government's role. The Democrats are responsible for Medicare, Medicaid, and S-CHIP; the Republicans fought all of those initiatives. On a policy level, the Democrats believe that the best health and cost outcomes can be achieved by increasing access and encouraging widespread use of routine and preventative medical care. Republicans, on the other hand, have routinely identified the problem as over-consumption of care. Their proposals to fix the system inevitably involve significant deregulation with the goal of encouraging the use of high-deductible policies to try to discourage personal consumption of health care. Nearly every Democrat (including the blue dogs and "centrists") believes this to be bad policy.

In other words, there is virtually no common ground between the parties. The parties don't even see eye-to-eye regarding basic goals and policy assumptions.

There's nothing wrong with this. It's nice and pleasant when both sides can agree, and President Obama probably hoped the situation was so severe, Republicans would put aside many of their preconceived ideological objections to reform, and work in good faith towards obvious, common-sense solutions. That's not going to happen, of course, but that's not necessarily awful. The political system expects the parties to argue with one another. It's a feature, not a bug.

It looks like the opposition party is going to criticize and object to the Democrats' health care reform effort. That's what opposition parties do -- they oppose.

Sen. Jay Rockefeller (D-W.Va.) asked the other day, "[D]o you want to be non-partisan and get nothing? Or do you want to be partisan and end up with a good health- care plan? That is the choice."

The process will probably go much smoother once negotiators come to grips with this.

And from there, it's just a couple small steps to the realization that the GOP never, ever, ever will accept health care reform in any way. There's a big difference between simply opposing the plan and actively working to destroy it by any means necessary. Steve has finally accepted the former, but the trick is of course that the GOP is actively engaged across the board in the latter.

If Obamacare passes, the GOP is done for a generation. I've said that for quite some time now. Any Democrat behind passage can turn to their constituents and say "Democrats helped get you and your family health insurance. What have the Republicans done for you? They did everything they could to try to stop this." And the voters will nod their heads and go "You're right. Thank you."

They know it's a generational bribe, but it's a necessary and useful one. One in six Americans lacks health insurance. The Republicans will never spend a dime to fix that. Ever.

So the Republicans are scared, truly frightened. This is why we're seeing such hateful, over-the-top rhetoric and accusations against Obama, such an ardent effort to dehumanize the President and his supporters as something less than American, something less than human, as Those Who Are The Enemy. If Obama is successful on health care, he'll go a long way towards dismantling the Pretty Hate Machine that has sprung up since 1990 or so. Most importantly, he'll prove that government can actually help the people.

The Republicans can't afford that. They've bet the farm on using fear and hatred to control America for far too long. If Obama comes along and dismantles that, they have nothing. They become powerless.

It has to die, or the GOP does. It is, quite honestly, an existential battle.

John Boehner Has Quite A Mouth On Him

He used it to try to basically filibuster the ACES bill and to swear at it, calling it a "pile of shit".

Minority Leader John Boehner (R-Ohio) had a few choice words about House Speaker Nancy Pelosi's (D-Calif.) landmark climate-change bill after its passage Friday.

When asked why he read portions of the cap-and-trade bill on the floor Friday night, Boehner told The Hill, "Hey, people deserve to know what's in this pile of s--t."

Using his privilege as leader to speak for an unlimited time on the House floor, Boehner spent an hour reading from the 1200-plus page bill that was amended 20 hours before the lower chamber voted 219-212 to approve it.

Eight Republicans voted with Democrats to pass the bill; 44 House Democrats voted against it.

Pelosi's office declined to comment on Boehner's jab. But one Democratic aide quipped, "What do you expect from a guy who thinks global warming is caused by cow manure?"

Thers at Whiskey Fire on the other hand has a much worse (better?) pottymouth.

A Possible Coup

The BBC is reporting that the President of Honduras has been arrested and detained by that country's army in what one of his supporters is calling a military coup.

President Manuel Zelaya's secretary said he had been taken to an airbase outside the capital, Tegucigalpa.

Mr Zelaya, elected for a non-renewable four-year term in January 2006, wanted a vote to extend his time in office.

The referendum, due on Sunday, had been ruled illegal by the Supreme Court and was also opposed by Congress and members of Mr Zelaya's own party.

Reuters news agency reports that soldiers fired teargas at about 500 supporters of Mr Zelaya who had gathered outside the presidential palace, as air force jets flew over the capital.

Early on Sunday, a reporter for the Associated Press news agency said he had seen dozens of troops surround Mr Zelaya's residence.

The arrest comes after President Zelaya defied a court order that he should re-instate the chief of the army, Gen Romeo Vasquez.

The president sacked Gen Vasquez late on Wednesday for refusing to help him organise a referendum.

Mr Zelaya, who under current regulations leaves office next January, also accepted the resignation of the defence minister.

The referendum was to ask the population if they approved of a formal vote next November on whether to rewrite the Honduran constitution.

Seems Zelaya wanted to pull a Hugo Chavez and the Honduras military was having none of it. We'll see where this goes.

Thanks, Republicans!

And for once, I mean that. Eight Blue State Republicans were the difference in passing ACES (Waxman-Markey) last night, 219-212. Eight folks who saw that the planet is headed into peril and did the right thing. Eight Republicans who are now considered to be targeted traitors to be removed by Malkinvania and the Wingers, complete with a nice little wanted poster.

Needless to say, the GOP war against itself continues unabated. It's unclear if the bill will pass in the Senate at this point, the Senate would actually have to write one (they've been busy with health care.)

Still, two week recess, then Sotomayor, health care, ACES and more this summer.

StupidiNews, Weekend Edition!

• The House passed the Waxman-Markey climate change bill with Republican help, 219-212.
• The White House has drafted an executive order allowing for indefinite detention of some Gitmo prisoners.
• A hard-line sermon from a top Iranian cleric could signal a major escalation in the continuing crackdown against dissidents.
• The FDIC seized five more failing banks, pushing this year's tally to 45 busted financial institutions.
• The passing of Michael Jackson nearly took the internet with it.

The Cost Of Climate Change Legislation

Via Yggy, the true cost of Waxman-Markey:

That little orange bit? That's the actual cost to the economy. But that will apparently destroy the entire economy if we introduce the "most regressive taxation" in the history of the known universe. Once again, Republicans are full of hot air...the kind that might wreck the planet.

But the GOP can only fight the truth with lies, lies, lies.



And yet, the GOP wonders how they lost Washington.

Michael Jackson

...is still dead.

Can we move on, please?

What Is It With Detroit, Anyway?

Detroit City Council President Monica Conyers (the wife of Democrat Rep. John Conyers) pleads guilty to bribery charges.

Monica Conyers, the president pro tem of the Detroit city council -- and the wife of Rep. John Conyers, the powerful chair of the US House Judiciary committee -- has pleaded guilty to conspiracy to commit bribery, which is punishable by up to five years in prison.

The Detroit Free Press reports:

The federal plea document released today cites two instances in late 2007, in the days surrounding the approval of the now-infamous Synagro Technologies sludge-hauling contract, when Conyers accepted cash bribes from a Synagro consultant.

Other court documents have said Conyers took at least two bribes of $3000 each, among other bribes.

The paper adds:

In both cases cited in the court documents today, Conyers was handed the cash in an envelope by a individual representing Rayford Jackson, a Detroit businessman doing work for Synagro who pleaded guilty to bribery earlier this month.

Conyers had raised suspicions by strongly opposing the 2007 sludge-hauling contract for Synagro before abruptly switching her position and voting in favor of the deal.

Bad all around, and just plain stupid. As many problems as Detroit has had politically and economically, it deserves much better politicians across the board. The Kwame Kilpatricks and Monica Conyers of the world just aren't cutting it, which goes to show you yes indeed you can have corrupt African-American Democrats in addition to crooked white Republicans...political greed and power lust knows no race, gender, or political affiliation.

And stupid is still stupid.

In Which Zandar Answers Your Burning Questions

Ezra Klein asks:

The issue isn't that insurance companies are evil. It's that they need to be profitable. They have a fiduciary responsibility to maximize profit for shareholders. And as Potter explains, he's watched an insurer's stock price fall by more than 20 percent in a single day because the first-quarter medical-loss ratio had increased from 77.9 percent to 79.4 percent.

The reason we generally like markets is that the profit incentive spurs useful innovations. But in some markets, that's not the case. We don't allow a bustling market in heroin, for instance, because we don't want a lot of innovation in heroin creation, packaging and advertising. Are we really sure we want a bustling market in how to cleverly revoke the insurance of people who prove to be sickly?

We already have one. As a matter of fact, that's how the insurance companies make money and always have. If they don't pay up, they win and we lose.

Once again, I fail to see how driving private health insurance companies out of business would in the long run be a bad thing.

StupidiNews!

• Embattled SC Gov. Mark Sanford plans to return to work today despite calls from his fellow Republicans to resign.
• The House is ignoring President Obama's first veto threat and easily passed a $550 billion Pentagon budget measure.
• California's budget fight has devolved into a "political game of chicken" between Republicans and Democrats.
• China is once again calling for a world "super reserve currency" to replace the U.S. dollar's global role.
• Australia's controversial national web filter technology may end up blocking video games, too.

Goodbye, Michael

Turning into a hell of a day for celebrities. Michael Jackson too has reportedly died today.

Entertainer Michael Jackson has died after being taken to a hospital on Thursday after suffering cardiac arrest, according to multiple reports including the Los Angeles Times and the Associated Press. CNN has not confirmed his death.

Jackson, 50, had been in a coma at the hospital, sources told CNN.

Brian Oxman, a Jackson family attorney, said he was told by brother Randy Jackson that Michael Jackson collapsed at his home in west Los Angeles Thursday morning.

Family members were told of the situation and were either at the hospital or en route, Oxman said.

Fire Capt. Steve Ruda told CNN a 911 call came in from a west Los Angeles residence at 12:21 p.m.

Ruda said Jackson was treated and transferred to the UCLA Medical Center.

Ironically, today happens to be my parents' birthday (yes, both of them, it's rather romantic and I'm convinced it's how they've stayed together for nearly 40 years now, it's not like they can forget each other's birthday.)

Beginnings and endings today.

Tech Support For Tehran

No really, that's John McCain's brilliant plan: to get better internets for Iran!

Three U.S. senators said Thursday they will introduce legislation funding a package of assistance to help get around the Tehran regime's information block.

"The Iranian government recognizes that Internet is a threat to its stranglehold over society and is trying to impose its repressive controls over it," Sen. John McCain, R-Arizona, said. "The legislation would authorize funds to ensure that Iranians have the hardware, software and other tools to evade the censorship and surveillance of the regime online."

McCain joined fellow Sens. Joe Lieberman, D-Connecticut, and Lindsey Graham, R-South Carolina, at a news conference to announce the legislation, which they said is an effort to support the Iranian people.

I have an idea, boys. How about we worry about getting Americans better internet first?

Another Milepost On The Road To Oblivion

Because the GOP is out of fresh reasons to hate Barack Obama, the Village provides some. He's just too perfect, the asshole.

Let’s be honest: Barack Obama is better than you are.

He’s a better father — taking breaks from running the world to cheer on his daughters at soccer and basketball games.

He’s a better husband — zipping his wife off for dinner in New York and Paris.

He’s got a better diet — nibbling on vegetables from his homegrown garden to keep his love handles in check.

And he’s got a terrific jump shot.

You? Not so much.

Why haven't we impeached this inhuman monster already?

Why We Must Have A Public Option

Because the private health care options we pay for now are all about profits for insurers, not about getting care.

Health insurers have forced consumers to pay billions of dollars in medical bills that the insurers themselves should have paid, according to a report released yesterday by the staff of the Senate Commerce Committee.

The report was part of a multi-pronged assault on the credibility of private insurers by Commerce Committee Chairman John D. Rockefeller IV (D-W.Va.). It came at a time when Rockefeller, President Obama and others are seeking to offer a public alternative to private health plans as part of broad health-care reform legislation. Health insurers are doing everything they can to block the public option.

At a committee hearing yesterday, three health-care specialists testified that insurers go to great lengths to avoid responsibility for sick people, use deliberately incomprehensible documents to mislead consumers about their benefits, and sell "junk" policies that do not cover needed care. Rockefeller said he was exploring "why consumers get such a raw deal from their insurance companies."

The star witness at the hearing was a former public relations executive for major health insurers whose testimony boiled down to this: Don't trust the insurers.

"The industry and its backers are using fear tactics, as they did in 1994, to tar a transparent and accountable -- publicly accountable -- health-care option," said Wendell Potter, who until early last year was vice president for corporate communications at the big insurer Cigna.

Potter said he worries "that the industry's charm offensive, which is the most visible part of duplicitous and well-financed PR and lobbying campaigns, may well shape reform in a way that benefits Wall Street far more than average Americans."

Insurers make paperwork confusing because "they realize that people will just simply give up and not pursue it" if they think they have been shortchanged, Potter said.

Sen. Mike Johanns (R-Neb.) questioned the government's ability to make matters clearer, saying federal regulation of mortgage disclosures has made the documents that borrowers encounter in real estate transactions "hopelessly complicated."

Potter's successor as spokesman for Cigna said the company strongly disagrees "with the suggestion that, motivated by profits, the insurance industry has deliberately attempted to confuse or unfairly treat covered individuals."

"At CIGNA we are committed to improving the current system," spokesman Chris Curran said by e-mail.

The report released yesterday alleges that insurers have systematically underpaid for out-of-network care. The issue had been brought to light previously in litigation, committee hearings and other investigations, including a probe by New York Attorney General Andrew M. Cuomo. But as politicians and interests groups clash over the current effort to overhaul the nation's health-care system, it took on new relevance.

Cuomo described it last year as "a scheme by health insurers to defraud consumers by manipulating reimbursement rates."

Many Americans pay higher premiums for the freedom to go outside an insurer's network of doctors and hospitals. When they do, insurers typically pay a percentage of what they call the "usual and customary" rates for the services. How insurers determine the usual rates had long been opaque to consumers and difficult if not impossible for them to challenge.

As it turns out, insurers typically used numbers from Ingenix, a wholly owned subsidiary of the big insurer UnitedHealth Group. Ingenix had an incentive to produce benchmarks that low-balled usual and customary rates and shifted costs from insurers to their customers, the report said.

Ingenix got its data from the same insurers that bought its benchmark information, the report said. Insurers that contributed information to Ingenix often "scrubbed" their data to remove high charges, and Ingenix further manipulated the numbers, removing valid high charges from its calculations, the report said.

Several reactions to this article:

Casinos have nothing. Nothing. On insurance companies. You want to talk about rigging the game so the house always wins? Casinos make their money off pulling in large numbers of losers with money. Insurance companies do the same, only they get to collude with all the other insurance companies to make sure nobody wins. Ever. Insurance companies are the only business I can think of where they actively pursue the model that doing the job you pay them for is the worst outcome possible, and it should be avoided at all costs.

What is it with Republicans saying "We're not convinced that government can do this function better. Ergo, we refuse to let government try." That is literally their answer to every problem. They complain that government will put health insurance companies out of business. I fail to see how that would be a bad thing. After all, the problem is the current health care system is broken and requires radical change. The radical change the Republicans want to provide is doing absolutely nothing and letting insurance companies continue to defraud customers at a cost of billions every year, not to mention lives.

We must have a public option. Without it, nothing even begins to count as reform.