In a previous blog I raged about the three bond raters, S&P, Moodys, and Fitch. Since then I've found that a few states have instituted law suits against the outfits. As I read the accounts the judge, Kaplan, I think, quibbled about the status of the raters in the debacle. He indicated that because they weren't the originators of the mortgages they weren't culpable. That,to me,is ridiculous. I conceive of their job as investigators assessing the value of the product. If they bothered to even look into the matter, it would have been clearly evident that there was great risk involved and they should have rated the securitized mortgage bonds as very low grade, junk, instead they prostituted themselves by "selling" the AAA rating. That is pure malfeasance.
That type of shenanigan multiplied a zillion times throughout the financial market is what brought down the house of cards. Now our economy is shattered and almost dead in the water. Spending vast sums, of taxpayer money, to recapitalize the banks and humongous insurance companies was supposed to "prime" the pump and get the economy jump started. Unfortunately the damage had been done and there was no magic formula to change it. Add to that the collapse of the auto industry, add to that the dire straights of most of the state treasuries and you've got one helluva mess.
The resulting unemployment brings the consumer spending to a halt. This in turn leads to greater unemployment as businesses fire employees. The lack of business activity causes a tremendous loss of tax revenue further intensifying the state and federal deficits. Is that the death spiral referred to? Stimulus spending has been an attempt to slow or reverse the free fall and to some extent has prevented a full scale depression. States have been aided, teacher cuts have been averted, as well as firemen and police. Some infrastructure work has been initiated, both to remedy needed repairs and give some employment. For the unemployed the unemployment benefits have been extended to unprecedented periods. All this has been of great value but at tremendous cost. Rather than appreciate the great value however the naysayers have harped on the cost and projected the great bogeyman of horrific debt.
The resulting fear and frustration has caused a backlash that, though understandable,is not at all constructive. At a time when unity and cooperation is most needed we are engaged in the most destructive kinds of behavior. Principally the Republicans have seized on the crisis to tear down Obama and the Democrats instead of rising to the occasion to solve the problems. Considering it was on their watch that the epidemic was incubated and blossomed it is ingenuous of them to act the way they do.
All of the above is plenty of tragedy. It is becoming more and more apparent that we have a very serious problem caused by business interests both big and small that are exerting tremendous pressure on legislators and judges to weaken laws that protect the public from rapacious business practices. This is occurring in several states and has been demonstrated at the Supreme Court level by recent decisions. There is no doubt about it, our democracy is in danger of becoming unraveled. The Tea Partyers have railed against taxes and the size of government but unless we get a handle on this trend in the courts there won't be any thing to tax or government to rail against
Saturday, February 20, 2010
Thursday, February 4, 2010
GOP Denial
My View
The Republicans seemed to be oblivious to reality and are being as obstructive as they can possibly be.
They act as though it was a huge fluke that they were totally rejected because of their dismal record.
Their propaganda army is working overtime to demonize every effort at recovery. After years of building a huge deficit they are suddenly aghast at how much money is being spent --even when that money is going into programs to solve Republican created problems. Apparently Republicans are so ashamed of their own failures they are bent on seeing Obama fail. That is not the role of a loyal opposition.
With the Obama Administration attempting to prevent an out right depression and shepherd through Congress the most ambitious legislative program in decades, it is mired in two unwanted wars and the financial meltdown.
For over eight year’s now we have seen a rather extraordinary scenario played out. First of course was the tragedy of 9/11 . Second was the collapse of the world’s most vibrant economy. And even more improbable was the election in America of a black president.
Eight years previously the Republicans gained the White House under a cloud of controversy that was eventually resolved by the Supreme Court. That was unprecedented in our country’s history.
The government’s budget was running a sizable surplus and we were not at war. The 9/11 attack threw the country into a panic and conservatives capitalized on this event to further an ambitious, but ill conceived, agenda. Very quickly we counterattacked and overcame the Taliban regime that had harbored AlQueda.
While the matter was still in doubt the decision was made to attack Iraq. It is most likely that that decision was based on faulty information and fabrication of unfounded accusations of weapons of mass destruction.
Attacking Iraq was a fatally flawed attempt to transform the Middle East
Quickly the budget surplus vanished in a rush of war related expenditures . Were taxes raised to cover these extraordinary costs ?. Of course not. That would be too rational for a Neo-con administration. Instead there was a massive tax reduction which benefited the top 1% very handsomely.
Also during the eight Republican years other measures were issued that inordinately benefited large corporations. Much of the country’s protective acts such as Clean Water, Clean Air, and environmental protection were modified or eviscerated by executive orders at the urging of corporate lobbyists..
At the same time those regulations were being dismantled financial regulations were drastically lessened . To look good Bush’s administration pushed forcefully for increased home ownership as a proof of the economy’s vitality. This in turn led to FannyMay and FreddieMac being over extended and still suffering.
The wizards of Wall Street, especially the mortgage brokers, concocted “creative” schemes to facilitate easy mortgage acquisitions. People who under normal banking regulations couldn’t qualify for a mortgage were conned into signing up for homes they had no business buying.
The perpetrators of these fraudulent schemes either didn’t know or didn’t care that those mortgages were ultra high risk . They simply bundled them and sold them as securities or bonds around the world. The bond rating agencies namely Standard and Poor, Moodys, and Fitch gave these bonds AAA ratings. Those bonds were really the lowest order of junk bonds, if even ratable at all. This is pure malfeasance that should eventually be prosecuted.
Obama has made numerous overtures at getting a bipartisan atmosphere established. He has been rebuffed by the obdurate Republicans at every turn. Stupid issues have been raised such as Obama’s birthplace. He’s accused of being both a Marxist and a Fascist. Two diametrically opposed ideologies. His hidden agenda is Muslim world domination. In America fortunately a person can say what ever he cares to . Equally fortunate is the fact that people can tell stupid from the truth .
Americans can face facts and deal with them in a rational manner. Ideology appeals to some but in the final analysis it is the rational and practical that carry the day.
The facts are that we’re in a serious financial crisis that can be overcome. It will take time and many of us will suffer for a while. We must make the best of it and do what we can to hasten the recovery. Negativity is counterproductive and needs to be shunned. Republicans created the problems, they are certainly not the answer.
Obama has at least three more years to bring things around. Let us be good citizens and do our part to aid the cause.
The Republicans seemed to be oblivious to reality and are being as obstructive as they can possibly be.
They act as though it was a huge fluke that they were totally rejected because of their dismal record.
Their propaganda army is working overtime to demonize every effort at recovery. After years of building a huge deficit they are suddenly aghast at how much money is being spent --even when that money is going into programs to solve Republican created problems. Apparently Republicans are so ashamed of their own failures they are bent on seeing Obama fail. That is not the role of a loyal opposition.
With the Obama Administration attempting to prevent an out right depression and shepherd through Congress the most ambitious legislative program in decades, it is mired in two unwanted wars and the financial meltdown.
For over eight year’s now we have seen a rather extraordinary scenario played out. First of course was the tragedy of 9/11 . Second was the collapse of the world’s most vibrant economy. And even more improbable was the election in America of a black president.
Eight years previously the Republicans gained the White House under a cloud of controversy that was eventually resolved by the Supreme Court. That was unprecedented in our country’s history.
The government’s budget was running a sizable surplus and we were not at war. The 9/11 attack threw the country into a panic and conservatives capitalized on this event to further an ambitious, but ill conceived, agenda. Very quickly we counterattacked and overcame the Taliban regime that had harbored AlQueda.
While the matter was still in doubt the decision was made to attack Iraq. It is most likely that that decision was based on faulty information and fabrication of unfounded accusations of weapons of mass destruction.
Attacking Iraq was a fatally flawed attempt to transform the Middle East
Quickly the budget surplus vanished in a rush of war related expenditures . Were taxes raised to cover these extraordinary costs ?. Of course not. That would be too rational for a Neo-con administration. Instead there was a massive tax reduction which benefited the top 1% very handsomely.
Also during the eight Republican years other measures were issued that inordinately benefited large corporations. Much of the country’s protective acts such as Clean Water, Clean Air, and environmental protection were modified or eviscerated by executive orders at the urging of corporate lobbyists..
At the same time those regulations were being dismantled financial regulations were drastically lessened . To look good Bush’s administration pushed forcefully for increased home ownership as a proof of the economy’s vitality. This in turn led to FannyMay and FreddieMac being over extended and still suffering.
The wizards of Wall Street, especially the mortgage brokers, concocted “creative” schemes to facilitate easy mortgage acquisitions. People who under normal banking regulations couldn’t qualify for a mortgage were conned into signing up for homes they had no business buying.
The perpetrators of these fraudulent schemes either didn’t know or didn’t care that those mortgages were ultra high risk . They simply bundled them and sold them as securities or bonds around the world. The bond rating agencies namely Standard and Poor, Moodys, and Fitch gave these bonds AAA ratings. Those bonds were really the lowest order of junk bonds, if even ratable at all. This is pure malfeasance that should eventually be prosecuted.
Obama has made numerous overtures at getting a bipartisan atmosphere established. He has been rebuffed by the obdurate Republicans at every turn. Stupid issues have been raised such as Obama’s birthplace. He’s accused of being both a Marxist and a Fascist. Two diametrically opposed ideologies. His hidden agenda is Muslim world domination. In America fortunately a person can say what ever he cares to . Equally fortunate is the fact that people can tell stupid from the truth .
Americans can face facts and deal with them in a rational manner. Ideology appeals to some but in the final analysis it is the rational and practical that carry the day.
The facts are that we’re in a serious financial crisis that can be overcome. It will take time and many of us will suffer for a while. We must make the best of it and do what we can to hasten the recovery. Negativity is counterproductive and needs to be shunned. Republicans created the problems, they are certainly not the answer.
Obama has at least three more years to bring things around. Let us be good citizens and do our part to aid the cause.
The Health Care solution
The Friday, July 17 issue of the Cape Cod Times letters page contained a number of good pieces on the healthcare issue currently before Congress.
The “My View” argument was essentially that if you want the “very best” you have to expect to pay for it. It is a classical insurance industries scare tactic that they know resonates with uninformed people.
The MD’s letter is more to the point. The multiplicity of insurance plans , “approved” pharmaceuticals, exclusions, etc. make it unnecessarily complex for providers. The fact is, the administrative cost overburden does not does provide Health Care but rather impedes it.
As another writer states, the Medicare, Medicaid, Social Security and postal service’s are dependable and efficient. A single payer (governmental) healthcare program is in the same category .
Naturally the question arises: how do we pay for it? In spite of all the gobbledygook and hysteria over increased taxes the net cost would be far less than is currently wasted on exorbitant administrative salaries and campus like expanses of insurance companies.
Employers would be relieved of onerous insurance premiums. Yes, they’d pay more in taxes but that would be a fraction of their current health insurance premiums.
There are many modifications needed to the present Health Care non-system. Preventive care and increased personal responsibility in lifestyle is perhaps the most significant.
Some medical hype has been greatly oversold. There are many hardworking physicians, many are over worked , and they do a heroic job attempting to cope, however people have been conditioned to depend on doctors for the most trivial occurrences.75% of complaints are self limiting, perhaps up to 20% more can be handled by Physician assistants, (P A’s, specially trained nurses). Too many MDs go into specialties because the money is far better there. Those “specialists” are arguably way overpaid. This has come about largely due to insurance payment methods. Over the past 50 years fees have been regularly ratcheted up well beyond the inflation rate.
The current discussion of Health Care and his costs should put all the above on the table and let the light of objective evaluation shine on it. It is an epochal opportunity to correct a problem that has grown through neglect, and manipulative exploitation.
The single-payer solution would go far to ameliorate the situation.
The Friday, July 17 issue of the Cape Cod Times letters page contained a number of good pieces on the healthcare issue currently before Congress.
The “My View” argument was essentially that if you want the “very best” you have to expect to pay for it. It is a classical insurance industries scare tactic that they know resonates with uninformed people.
The MD’s letter is more to the point. The multiplicity of insurance plans , “approved” pharmaceuticals, exclusions, etc. make it unnecessarily complex for providers. The fact is, the administrative cost overburden does not does provide Health Care but rather impedes it.
As another writer states, the Medicare, Medicaid, Social Security and postal service’s are dependable and efficient. A single payer (governmental) healthcare program is in the same category .
Naturally the question arises: how do we pay for it? In spite of all the gobbledygook and hysteria over increased taxes the net cost would be far less than is currently wasted on exorbitant administrative salaries and campus like expanses of insurance companies.
Employers would be relieved of onerous insurance premiums. Yes, they’d pay more in taxes but that would be a fraction of their current health insurance premiums.
There are many modifications needed to the present Health Care non-system. Preventive care and increased personal responsibility in lifestyle is perhaps the most significant.
Some medical hype has been greatly oversold. There are many hardworking physicians, many are over worked , and they do a heroic job attempting to cope, however people have been conditioned to depend on doctors for the most trivial occurrences.75% of complaints are self limiting, perhaps up to 20% more can be handled by Physician assistants, (P A’s, specially trained nurses). Too many MDs go into specialties because the money is far better there. Those “specialists” are arguably way overpaid. This has come about largely due to insurance payment methods. Over the past 50 years fees have been regularly ratcheted up well beyond the inflation rate.
The current discussion of Health Care and his costs should put all the above on the table and let the light of objective evaluation shine on it. It is an epochal opportunity to correct a problem that has grown through neglect, and manipulative exploitation.
The single-payer solution would go far to ameliorate the situation.
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