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December 3, 2011

health reform that matters

Here's an interesting aspect of the health care reform with which I was not acquainted, via Forbes' Rick Ungar— as of today, private health insurers are required to spend 80% to 85% of premiums collected on actual health care costs.

That may sound like common sense, but it's pretty bad news for the insurance industry:

Why? Because there is absolutely no way for-profit health insurers are going to be able to learn how to get by and still make a profit while being forced to spend at least 80 percent of their receipts providing their customers with the coverage for which they paid. If they could, we likely would never have seen the extraordinary efforts made by these companies to avoid paying benefits to their customers at the very moment they need it the most.

I can't imagine how the insurance industry did not lobby that into the ground.  But for every injury done to my family and friends by insurers, I say this is pretty good news, especially if the budget line item for spurious denial of claims now has to be counted in that 15% - 20%.

Posted by mrbrent at 2:26 PM

December 2, 2011

david brooks 12.2.11

Oh I'm not going to link it for once, but if you wonder what David Brooks column was like this morning, it was about how the positive qualities of the Germans (hygiene, punctuality, etc.) are the only things keeping the Euro from autodefenestration, as caused by the poor manners and breeding of the Southern Europeans.  I like to think of it as a quick walking tour through the Social Eugenics portion of the brain of David Brooks.

Buried in there is also a refutation of the claim that the Germans are especially sensitive to hyperinflation due to cultural memory of the Weimar Republic, which is especially rich, considering the front page piece in the same paper about how Germans are especially sensitive to hyperinflation due to cultural memory of the Weimar Republic.  It's undermine-y!

Posted by mrbrent at 10:16 AM

December 1, 2011

the chances of newt gingrich

The really fun part of the Republican primaries right now is the number of folks I ordinarily agree with freaking the freak out because if the Eurozone falls/unemployment rises/Israel attacks Iran/etc., then NEWT GINGRICH WILL BE PRESIDENT!!!

I understand how they arrive at this conclusion, but I do not agree.  Could Newt be the nominee?  Maybe.  It sure does seem that a sizable portion of the GOP (that portion led by Roger Ailes and his television interests) would rather be strapped to the roof of a station wagon in a dog carrier than put their support behind Mitt Romney, and Newt, compared to the more recent sweethearts of the polls, is at least a politician and not a total joke.  Could it happen?  Listen to the motor boat noises made by the Republican base: it could very well happen.

But if it does?  I would not bet on this man to win a national election, now, or even back then, before he was run out of Congress, back when he was on his second wife.  His negatives are too negative, and he has thirty years of precedent, whether as an elected official or just as a private citizen/lobbyist too in love with his own voice, with which he can be beaten about the head and neck.  To all but the crazified 23%, he reads megalomaniac, as someone that doesn't just think that America needs saving, but that America needs saving and only Newt Gingrich can do it.

And not to put too fine a point on it, it's been generations since Americans have elected a physically unattractive man as president.

My advice is to lie back, relax and enjoy the Schadenfreude as more and more consensus is swallowed into the black hole that is the ego of Newt Gingrich.

Posted by mrbrent at 9:52 AM

November 30, 2011

hedge funds, and terribleness

Compare and contrast!  This open letter to President Obama made the rounds yesterday, from Leon G. Cooperman asking the president to quit it with the class warfare rhetoric.  The underlying argument:
Capitalism is not the source of our problems, as an economy or as a society, and capitalists are not the scourge that they are too often made out to be. As a group, we employ many millions of taxpaying people, pay their salaries, provide them with healthcare coverage, start new companies, found new industries, create new products, fill store shelves at Christmas, and keep the wheels of commerce and progress (and indeed of government, by generating the income whose taxation funds it) moving. To frame the debate as one of rich-and-entitled versus poor-and-dispossessed is to both miss the point and further inflame an already incendiary environment. It is also a naked, political pander to some of the basest human emotions - a strategy, as history teaches, that never ends well for anyone but totalitarians and anarchists.

OK, then.

Now I would take exception to the allegation that the president is responsible for a narrative embracing the 99%/1% dichotomy.  For one, the tone of obstreperousness is the result of twenty years of calculated republican dog-whistling, and anyone that tells you different is naive or lying.  Also, I have a hard time imagining the president as responsible for this paradigm, considering the good men and women of Occupy Wall Street have worked so hard to put it out there.  In fact, if you ask them, the president has a long way to go to give the paradigm anything other than an uncomfortable nod.

But the letter from Cooperman, one of America's more adroit and successful hedge funders, is lucid and respectful, so I'd hate to cast aspersions on him at all for speaking his mind.

And then there's this open letter, addressed to OWS, from (allegedly) an anonymous young Wall Street financial analyst.  It's a bit of a canary in a coal mine, and you should read it (of course), but check this:

What does this all mean? It means the hedge fund industry is making a gigantic proportion of the profits. The top .1% is earning nearly half of the profits in the industry, through not just hedge funds, but other similar vehicles.

The finance industry is a complete scam, designed to funnel money from the 99% investing public into the hands of the top .1%. Sure, some of you will make good money, but stastically [sic], the rest of us will lose, and who is feeding off us? Hedge funds, and the .1%. You have better odds going to a casino and playing slots, the worst-paying game in the house, but still better than the stock market.

With respect to Mr. Cooperman, the financial system as it stands now, after the deregulations starting with the Reagan administration, has evolved to suck wealth out of the economy, like a Galactus-sized vacuum cleaner, and seat it with the 1%.  Hedge funds are partially guilty of this (taking profits without any measurable betterment to society, like, say, manufacturing), but they're not the only ones.  That's the trick of financial services: offer services, but hoover wealth from the economy like coke off a hooker's ass.

In sum, maybe capitalism, or at least as it is presently constituted, is entirely the source of our problems.

Posted by mrbrent at 2:07 PM

the sec and the public interest

The rejection of the proposed settlement between Citibank and the Securities and Exchange Commission Monday by NY Southern District Justice Jed Rakoff landed with a splash.  The ruling turned on the longtime precedent of the SEC to allow the financial institutions accused of impropriety to sidestep the issue of guilt—although a fine is levied, settlements would allow the institutions subject to the fines to not admit any wrongdoing. Granted, a proviso that the institution would not conduct similar behavior in the future is included, though, as the New York Times revealed in a lengthy exposé, these provisions ended up being ignored, both by the bad actors and by the SEC in future enforcement.  So civil liability is entirely sidestepped by the bad actor, and the facts of the case are buried in a toothless handshake deal with the agency tasked to police the industry.  Rakoff disagreed with this tactic:
Finally, in any case like this that touches on the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives, there is an overriding public interest in knowing the truth. In much of the world, propaganda reigns, and truth is confined to secretive, fearful whispers.
The Consent Judgment in general he described as "neither fair, nor reasonable, nor adequate, nor in the public interest."  And that's what a lot of activists have been waiting to hear, some pushback against the SEC's notion that the only way to police the financial services industry is to never make them admit guilt, and to never resort to injunctive relief no matter how bad the bad actors are.

But for me the most eyebrow raising portion of the Judge's ruling (which is really worth a read, the whole thing [pdf]), is this:

In [the S.E.C.'s] most recent filing in this case, however, the S.E.C. partly reverses its previous position and asserts that, while the Consent Judgment must still be shown to be fair, adequate, and reasonable, "the public interest ... is not part of [the] applicable standard of judicial review."

That may sound like a dry bit of legal gibberish, but this is what the Judge is alleging: the normal course of practice for the SEC when filing for judicial approval of one of these sweetheart Consent Judgments was to reaffirm that the standards that the Judge needs to consider if the arrangement between the SEC and the bad actor is fair, adequate, reasonable and in the public interest.  (And there's a whole substratum for each of those as far as what constitutes fairness, adequacy, etc.)  But what the SEC did in its final filing before Rakoff's judgment was not just to omit "the public interest" as one of these standards, but to put in writing that "the public interest" was no longer pertinent to this Consent Judgment and any judicial approval thereof.

This could be interpreted a couple of ways (and I'm trying to get my hands on the oral arguments of this case, which I hear might be a bit illuminating).  First, it could be the SEC arguing that the Judge need not consider the issue of the public interest, because that's the SEC's job, and they already did that (specious, but a possible interpretation).  The other way, which is much scarier, is that the SEC is asserting that in their dealings with the entities that they regulate, the public interest is not a motivating factor in the SEC's enforcement.

Either way, the deliberate omission of "the public interest" from the SEC's final filing is a tacit admission that the arrangement with Citibank (which was over Citi's misleading of investors in toxic mortgage-backed securities) was not in the public interest.

I'm (pretty obviously) not an expert on this topic, but I believe pretty strongly that this is a public conversation that we should be having.

Posted by mrbrent at 8:58 AM

November 29, 2011

lin wood: civics teacher

Oh my gosh yesterday (and I guess by extension, the weekend) was a huge, enormous news day in discrete ways, many of which I hope to get to today.  But let's get the most inconsequential bit out of the way first.

Apparently Herman Cain (I know, who's Herman Cain?) has another problem with the ladies, this time in the form of a mistress of thirteen years, one who came forward because she didn't like how the women who received settlements over Cain's sexual harassment were generally treated poorly when they volunteered their identities.  (For the record, Cain has been married to his wife for forty-three years.)

This is his high-priced libel attorney, Lin Wood, defending his client yesterday:

...Rather, this appears to be an accusation of private, alleged consensual conduct between adults - a subject matter which is not a proper subject of inquiry by the media or the public. No individual, whether a private citizen, a candidate for public office or a public official, should be questioned about his or her private sexual life. The public’s right to know and the media’s right to report has boundaries and most certainly those boundaries end outside of one’s bedroom door.

That is a new and interesting standard of journalism, let alone the public's right to know, that is entirely made up, with a straight face to boot.  It could be argued that the fidelity of our public figures should be ignored, but the reality of it is, for twenty-five years now, is that you can't expect to cheat on your spouse and hold office simultaneously unless you are willing to accept the eventual fall from grace.

I could care less about the peccadilloes of Herman Cain, really, honestly.  But the implication that bedroom issues are always off limits is a monumental dollop of stupid.  I hope that Mr. Woods is a better libel lawyer than he is a civics teacher.

(Full disclosure: I don't, really.)

Posted by mrbrent at 9:45 AM

November 28, 2011

finally i've googled 'roman missal'

So yesterday the Roman Catholic Church (is that the official nomenclature? Why is there no "About Us" page on the website?) made history (again) by changing the script of the Mass for the first time since the 1970s.  At issue was the translation from the Latin of the Roman Missal, which is, as you know, the official Pope-approved ritual text of the liturgy, as proclaimed by Vatican II.  It may be difficult to believe, but apparently the inviolate text of the celebration of the Mass, as informed by the will of God, was a squishy translation, and as such the inviolate text needed to be spiffed up.

But ultimately it was a banner day for titivils, as you know that more than one Father had a "Doh!" or two yesterday.  (That was the good thing about the Latin: it had to be memorized without understanding what the syllables meant.)

Posted by mrbrent at 9:34 AM