Tuesday, November 9, 2010

Last Call

For a brief, shining moment at the US Politics blog rankings at Technorati...


Yes, the observation is completely self-indulgent, trite, sophomoric and altogether meaningless in the grand scheme of life. I'm having pretty much the best week on the blog ever as far as being linked to, whereas Big Hollywood has all of Breitbart's resources behind it and I'm pretty much a meaningless chunk of binary noise compared to them. I freely admit this. Hell, Big Hollywood isn't even his politics site and it has this much clout. I'm an ant compared to a large hadron collider.

But I neener anyway, because this is my Any Given Sunday, and I really, really do not like the man. And for one brief shining moment, here I am.

Macroecono-Moose, Part 2

Nouriel Roubini explains why all this "Sarah Palin's right, we need to go back on the gold standard" crap is just that:  crap.

"A fixed exchange regime, even if it is not a gold standard… That world just doesn't work. Because in that world, monetary policy by definition instead of being countercyclical becomes procyclical," Roubini told NetNet. "Suppose you have a fixed exchange rate regime...It just exacerbates the business cycle."

Roubini asks us to imagine two countries: One that's growing very quickly, and one that's growing very slowly. 

The economy that is growing quickly would tend to "overheat"—an economic phenomenon characterized by accelerated growth, inflation, and the potential for asset bubbles. In the economy that is growing more slowly, there would be a tendency toward deflationary pressure and recession. So, instead of having a central bank with the capacity to successfully counter-balance these tendencies, an economy fixed exchange rate regime is to continue to reinforce the existing negative trends in the business cycle, Roubini argues. 

Although he is best known as an economist who challenges conventional views, Roubini pretty well lines-up the consensus view of mainstream economics on the gold standard or fixed exchange rate regimes: "You have the opposite of what any optimal rule about monetary policy will tell you." 

In other words, going back on the gold standard would tie our hands on being able to do anything to adjust policy at a macro level.  There's a reason the world left it in 1971.  It wasn't working.

Aside from the issue of central banks insufficient current gold reserves, there are the issues that historically plagued gold standard economies. One of the most intractable of those issues was the impact that the gold standard had on traditional business cycles. 

Historically speaking, Roubini says, during the days of the gold standard economies were constantly imperiled by spasmodic cycles: "When you had a traditional gold standard, boom and bust with severe swings in economic activity were the norm—really big ones. It was only once we moved to fiat money that central banks were able to smooth the business cycle, and make it less volatile, as we did during the financial economic crisis." 

So we'd have far larger bubbles and far worse crashes when they popped, because we wouldn't be able to shrink or grow the money supply in order to compensate.  It's literally like driving a speedboat with no throttle, you'd be at the mercy of the currents and all you could do is steer and hope instead of being able to go faster or slower to keep you on course and safe.  You'd be at the mercy of the currency currents, literally.

This is basic stuff, and yet all of a sudden people are acting like going back on the gold standard would be easy, let alone feasible, and now Sarah Palin is getting in on the action.  It's a joke.

The best part? Wingers are lining up to say how Sarah Palin sticking her nose into something she clearly doesn't understand actually justifies their own clueless position on this, like she's a genuine polymath of a Renaissance policy wonk or something, you betcha.

The absurdity of this alone could power suns.

Turn On The Lights, Watch The Roaches Scatter, Part 37

Time for another Forclosuregate update, and it's from right here in Ohio.

When James Renfro had to stop making payments on his two-story fixer-upper in Parma, Ohio, a suburb of Cleveland, he triggered events that were supposed to result in the forced sale of his home.

That Nov. 15 auction has been canceled because of defects in documents submitted by his loan servicer, Ally Financial Inc.’s GMAC Mortgage unit. Two affidavits about Renfro’s home were signed by Jeffrey Stephan, a GMAC employee who said in sworn depositions in Florida and Maine that he hadn’t read thousands of affidavits he’d signed.

Renfro’s case has created a showdown between GMAC and Ohio’s Attorney General Richard Cordray. Cordray has asked Cuyahoga County Court of Common Pleas Judge Nancy Russo not to let GMAC simply submit new documents to cure defects without consequences. He’s taken the same stand against Wells Fargo & Co., which has said it found defects in 55,000 foreclosures.

“This is just the first,” said Cordray, who filed an amicus, or friend-of-the-court, brief in the Renfro case. He argued that Russo should punish GMAC, the fourth-largest U.S. mortgage lender, for its conduct.

The judge today in Cleveland set an accelerated schedule for evidence-gathering in the case, leading up to a Feb. 17 hearing on the integrity of the loan documents. Cordray’s office plans to file a motion tomorrow asking to take part in the case and participate in so-called discovery. 

So why is the Renfro case so important?  This is why.

The precedent set by the case might hasten a settlement between home lenders and the attorneys general of the 50 U.S. states, who are investigating allegations of fraud in foreclosure filings. Those being probed include San-Francisco- based Wells Fargo, which has said it will re-file foreclosure affidavits involving statements that “did not strictly adhere to the required procedures.”

In potentially thousands of cases across the U.S., judges have the power to impose “sanctions, penalties, fines and even default,” as the banks try to submit substitute paperwork to proceed with flawed foreclosures, Cordray said.

“The banks want to wish this away and pretend like it doesn’t exist,” he said. 

And that settlement, plus the fines, penalties and defaults may cost the banks hundreds of billions, that's why.  Couldn't have happened to a more deserving pack of jackals.

The judgment in favor of the homeowner, Diane Yano-Horoski, which is being appealed, has alarmed the nation's biggest lenders, who say it could establish a dramatic new legal precedent and roil the nation's foreclosure system.

It is not the only case that has big banks worried. Spinner and some of colleagues in the New York City area estimate they are dismissing 20 to 50 percent of foreclosure cases on the basis of sloppy or fraudulent paperwork filed by lenders. 

Their decisions illustrate the central role lower court judges will have in resolving the country's foreclosure debacle. The mess came to light after lawsuits and media reports showed lenders were routinely filing shoddy or fraudulent papers to seize the homes of borrowers who had missed payments. 

The banks are in deep trouble now and they know it.

Shutdown Countdown, Part 4

TPM's Brian Beutler discusses the GOP extortion plan to blow up the bond market in order to get what they want.

It's a classic hostage situation. And the key question is whether Republicans are willing to hold ranks and exert their leverage longer than Democrats are willing to call their bluff. If neither side blinks, and Congress, led by Republicans, tells the world, "we're not going to pay off our debts," the economic fallout would be dramatic. If Republican demands are unreasonable and Democrats refuse to cave, then Republicans will be forced to decide whether to let the country -- and particularly their wealthy base, and donors on Wall Street -- take a huge hit, or let down the Tea Party, which is practically itching for a shutdown.

Pitting the Tea Party versus the big banks and other GOP Wall Street donors is exactly why this is a losing measure for the Republicans.  The only way they win is if the Democrats fold and cave in to their demand...and that's the problem.

So far, Republicans are standing firm.

"I think it will not be without some strings attached if it happens, because they're going to have to seriously address spending and debt," Senate Minority Leader Mitch McConnell told Fox News last week.

Sen. Tom Coburn (R-OK) suggested he'd like to see over $300 billion in spending cuts before he'd end a filibuster on the debt ceiling.

On NBC this weekend, Tea Party leader Jim DeMint (R-SC) joined in on the fun: "No, I won't. Not-- not unless this debt ceiling is combined with some path to balancing our budget: Returning to 2008 spending levels. Repealing Obamacare," DeMint said. "We have got to demonstrate that we have the resolve to cut spending." 

The question is who wins here?  If the Dems do fold and actually give the Republicans hundrerds of billions in spending cuts or an across the board spending freeze or both in the middle of a recession, the economy will continue to collapse and Obama will be blamed.

Of course the Republicans will continue to rabidly assault Obama no matter what he does.  But in order to take him down and win in 2012, they're perfectly willing to annihilate our economy, or to try, at least.

As I said Sunday, the Powers That Be on Wall Street won't let this happen.  The Democrats must know this.  All they have to do is stand firm.

Of course "Democrats standing firm" is not even close to the realm of a guarantee.

On the other hand, at least one new incoming Republican says he will shut down the government unless health care reform is repealed completely, so the odds of the GOP doing something colossally stupid is pretty high as well.

The Great Wall Of Downgrade

China is now coming out swinging against Helicopter Ben's QE2 as the country's bankers have laid another debt rating downgrade from AA to A+ on the US.

Dagong has downgraded the local and foreign currency long term sovereign credit rating of the United States of America (hereinafter referred to as “United States” ) from “AA” to “A+“, which reflects its deteriorating debt repayment capability and drastic decline of the government’s intention of debt repayment.

The serious defects in the United States economic development and management model will lead to the long-term recession of its national economy, fundamentally lowering the national solvency. The new round of quantitative easing monetary policy adopted by the Federal Reserve has brought about an obvious trend of depreciation of the U.S. dollar, and the continuation and deepening of credit crisis in the U.S. Such a move entirely encroaches on the interests of the creditors, indicating the decline of the U.S. government’s intention of debt repayment. Analysis shows that the crisis confronting the U.S. cannot be ultimately resolved through currency depreciation. On the contrary, it is likely that an overall crisis might be triggered by the U.S. government’s policy to continuously depreciate the U.S. dollar against the will of creditors.

In other words, China's not too happy with this move and are more than willing to fight back by going after us on the international stage.  Things could get pretty insteresting, "Chinese interesting times" interesting, as I like to say.  It's not a full-on currency war yet, but China has taken the field now.

We'll see where the world's other import/export countries line up on this fight.  Straight-up protectionist silliness cannot be far behind.

Robbing Peter To Flip Rand Paul

A week after his election and Rand Paul is already backtracking on his campaign promises.

Less than a week after his election, Kentucky's Senator-elect Rand Paul already appears to be making a rapid departure away from one of his campaign promises: an earmark ban that stood as a conservative cornerstone, a position Paul touted to indicate he was serious about tackling the reckless spending practices of Washington.
Here's what Paul told the Wall Street Journal over the weekend:
In a bigger shift from his campaign pledge to end earmarks, he tells me that they are a bad "symbol" of easy spending but that he will fight for Kentucky's share of earmarks and federal pork, as long as it's doled out transparently at the committee level and not parachuted in in the dead of night. "I will advocate for Kentucky's interests," he says.
Such statements would have seemed impossible back in March. Here's Paul's clear-cut pledge to tackle the "corrupting" carve-outs of federal money:
Rand Paul has made a ban on wasteful earmark spending in Washington D.C. one of the key points of his campaign. He has supported Sen. Jim DeMint's vocal support for an earmark ban and he supports news that House Democrats are even coming around on the idea of a partial ban.

Just another politician who says one thing and does another folks, just like everyone else.  Don't watch the head fakes, watch his belt buckle to see where he's moving to.  And as I've been saying for months now, Rand Paul is just another GOP hypocrite as was always going to be one.

Surprise, surprise.  It took all of days for him to be captured by the system he railed against.

Watching Reruns Of Barmy Miller, Part 4

Joe Miller is already questioning the Alaska Senate vote and is ready to go with his army of lawyers, even though the write-in ballots that may put Lisa Murkowski in the Senate seat have yet to be even opened.

First, he released a statement objecting to the decision to move up the count to this week. Originally, the Division of Elections announced that the write-in votes would be counted on November 18. But last week they pushed it up to this Wednesday, the 10th.

"Given the geographical and financial challenges of getting observer teams assembled in Juneau," Miller said in the statement, "the earlier date makes it extremely difficult to honor the process, set out by law. The Miller Campaign is concerned with ensuring a fair and accurate counting of the ballots."

Next, Miller questioned the partiality of the Lt. Governor when it comes to overseeing the ballot-counting process. Matt Lewis of Politics Daily reported that in a conference call with bloggers on November 4, Miller claimed that Lt. Gov. Craig Campbell was appointed by Murkowski and has ties to her family, adding that "it appears that his bias is playing out in the decisions that he's making, especially those that are directly contrary to the law." 

Only one problem, Sarah Palin appointed Craig Campbell, not Murkowski.  Oh, but Miller's paranoia gets worse.

On Saturday, Miller released a statement noting that his campaign is "concerned that the Absentee Ballot validation process began yesterday at 10 a.m without notification to the campaign." Miller said: "All Alaskans deserve a free, open and fair election. Unfortunately, the State Division of Elections has decided to call that process into question with the constant maneuvering of dates and procedures."

"Our democratic voting process has at its foundation the Constitution and the statutes of this state, and any manipulation of this process for the purposes of expediency or convenience compromises those principles," the statement said.

But Gail Fenumiai, the director of the Alaska Division of Elections, responded that the Miller campaign failed to comply with notification rules, the Fairbanks News-Miner reports. "Campaigns and parties identify a primary contact person for each election," she said. "The Miller campaign did not identify such a contact person for the November general election and therefore did not receive individualized notice of the ballot review times."

And this goes back to his standard play:  I think Miller here is making his campaign case for repealing the 17th Amendment, making the direct elections of a Senator so phenomenally insane that people actually use his own run for Senate as a direct example of why it should be done away with.  He's going to do everything he can to challenge every aspect of this, much like Norm Coleman did with Al Franken in 2009.  his goal is to make this so absurd that people actually consider changing the Constitution to prevent it.

Barmy Miller strikes again, but this time I'm convinced there's a method to his madness.

How The Game Works

Over at Balloon Juice, Mistermix nails the Right Wing Noise Machine.

Here’s a great illustration of the cycle and danger of the nontroversy. Last week, Mike Huckabee was one of the morons who insisted that Obama’s trip to India was a waste of money because it cost $200 million per day. After serious consideration, the sage and thoughtful Huckabee changed his position yesterday:
Still, the former governor acknowledged that bagging the trip altogether — as some conservatives have suggested — would have been “very insulting” to India, an increasingly important ally to the United States, given its proximity to Pakistan. “They’ve been a good friend of the United States, not only in terms of diplomatic friendship, but they’ve also been a good trade partner,” Huckabee told Van Susteren. “For him to abruptly cancel the trip would have been a snub of epic proportions and would have had long-lasting implications and created damage that, frankly, we don’t need right now in the international community. We need all the friends we can get, and India is one of them we need to keep.”
This is typical of the nontroversy cycle. The same jackasses who tell us lies to get the cycle started are able to come back again and again to comment on it, without repercussion. This would be harmless except that that subjects of these nontroversies are important institutions that are de-legitimatized every time that lies about them are mainstreamed.

And Mike Huckabee, possible Republican candidate for President, will be able to go on his FOX News show and pretend he never bought or propagated the "India is a $200 million a day trip" lie.  Meanwhile the next time the President goes on a trip, that lie will be repeated.

Six months from now another FOX host will say "this is just like the time President Obama went to India after the midterm elections and that cost what $200 million a day?"  It won't be challenged.  It will be repeated.  And it will continue again and again because there will be plenty of opportunities to parade the lie unchallenged.

And soon it will become accepted truth, because that's how the game is played.

True Blood (Out Of Skin)

Canadian scientists have cooked up a way to convert skin cells into blood cells and then grow them, meaning patients could provide their own blood type for transfusions.

Skin cells that are removed from the patient can be multiplied in a petri dish and converted into a large quantity of blood cells, which themselves can be multiplied, lead researcher Mick Bhatia told CNN.

"We're hoping that about a 4-by-3-centimeters patch of skin could be removed from the patient, be converted through this process, which we clearly have to optimize, and ultimately have enough to transplant (enough blood for) a full-grown adult," said Bhatia, scientific director of the Stem Cell and Cancer Research Institute in McMaster's Michael G. DeGroote School of Medicine.

The scientists were able to convert the cells directly without first converting them to pluripotent stem cells - the kind that can grow into any type of organ or tissue - and then converting them again to blood, Bhatia said.

"This groundbreaking work from Mick Bhatia's lab is both fascinating and important," said Samuel Weiss, professor and director, Hotchkiss Brain Institute, University of Calgary. "It heralds a new age by discovering a role for 'directed differentiation' in the treatment of cancers and other disorders of the blood and immune system."

It's going to be years before this procedure can be used of course, but the fact that it can work is an exciting development that may soon be able to save lives.

Could Care Less

In his new book I'm The Deciderer or whatever it's called that's out today, former President George W. Bush says the low point of his Presidential career was Kanye West hurting his feelings after Katrina.  BooMan puts that into perspective:

You know, Kayne West didn't say that President Bush was a racist. He said that President Bush didn't care about black people. You don't have to hate someone to not care about them. You don't have to feel superior to someone to not give a crap if they're drowning. If you're a sociopath, it's really quite easy to not care about people in dire need.

And isn't that the truth.  I can see why the GOP asked Bush to delay the book until the week after the midterms, because he would have been the Dems' best weapon.

Rise Of The Underminers

With Republicans now controlling both state legislatures and Governor's mansions in some 20 states, attention is turning to how and even if GOP-led states will even implement health care reform procedures.

For example, although the law sets baseline standards such as essential benefits that insurers must offer if they wish to sell plans on the exchanges, states can add any mandates. A state could require insurers to prove that their policies are achieving certain outcomes - high child immunization rates, for instance. Or it could allow virtually all comers into its exchange in hopes that doing so would keep costs lower.

States will also have to decide whether they will run the exchanges or outsource their oversight to a private entity.

Similarly, although the law requires states to review "unreasonable" premium increases, it will largely be up to each state to determine what that review process entails. States could require insurers to offer detailed justification and seek preauthorization for any rate increases. Or they could ignore all but the most substantial rate increases, and even then, simply require that insurers file reports detailing their reasons for the rise.

State approaches to insurance regulation differ substantially, and the range was evident in the variations among recent state applications for federal grant money that the law provides to help them develop their new rate review processes. Five states - Alaska, Georgia, Iowa, Minnesota and Wyoming - did not even request funding.

States will also be in a position to exert pressure on the federal government when it comes to the law's requirement that insurers spend 80 to 85 percent of the premiums they collect to pay medical claims or otherwise improve their customers' health. If a state thinks the requirement would cause too many insurers to drop out of its market, it can ask the Department of Health and Human Services for a waiver. Iowa and Maine have already done so, and other states are likely follow.

HHS has the final say. However, it could prove awkward for Secretary Kathleen Sebelius to turn down insurers backed by state governments.

Regardless of what regulations state governments choose to set, their willingness to commit the staff and resources needed to carry them out could also vary considerably.

"Having rules on paper and enforcing rules are not synonymous," said Alan Weil, executive director of the National Academy for State Health Policy, a nonpartisan group that has been monitoring and facilitating state implementation efforts. 

In other words, it won't stop states from taking federal money...but there's the distinct possibility they will set up a program that will do nothing to provide oversight or cost controls for exchanges, or that they will simply put all existing insurers into the state in the exchange and then refuse to enforce anything, or just get a waiver and ignore the provisions altogether.

When health care costs continue to skyrocket in those states, the Republicans will blame "the failure of Obamacare."  Frankly, it's a good plan.  Americans are not interested in whom to blame, but only in results.  And when the results are health insurance providers can jack up rates as high as they want in these states and blame Obama, the Republicans are going to have a lot of capital towards a real repeal effort in 2012.


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