The Tea Party, the debt ceiling, and white Southern extremism

The Tea Party, the debt ceiling, and white Southern extremism

U.S. Senate - Reflects "The Real America"

Have you ever wondered why the U.S. Senate is more conservative than the House of Representatives? I hadn't thought about it much either until our family went to see "The Real American's, a one man play about the blue/red divide in the United States. The play examined in humorous fashion how divided our country is and the stereotypes that make up conservative and liberal viewpoints. One comment of a more serious nature caught my attention though: how California with a population of 37 million has two U.S. Senators and 15 states with a total population of 37 million have a representation of 30 U.S. Senators. And of course the majority of those states are conservative. So the deck is stacked in the U.S. Senate toward a conservative view of our legislation, which is why President Obama can easily get his legislation agenda passed by the House but get it bogged down in the Senate. What we end up with is health care legislation that isn't much liked by anyone. Progressives don't like it because it still depends on private health insurers to provide the bulk of coverage, while conservatives don't like it because they view health care reform as taking us down the road to "socialism". Had health care reform been taken up in a U.S. Senate where states like New York and California had representation in proportion to their population, we would have had a true "public option" in the health care reform bill. We would have also had a banking and Wall Street reform bill with more teeth in it. We probably would not have gone into Iraq in the first place with a Senate vote against it. Our founding fathers set up bicameral legislation system to protect the interests of agrarian states and they succeeded. The problem is that doesn't truly reflect who we are as a society today. We are a country mostly made up of urbanites and suburbanites but that fact is not reflected in the U.S. Senate. Another problem is the talent pool of eligible candidates for Senator in a small state are limited, thus we end up with people like Sharon Angle who couldn't get elected dog catcher in California. I don't have a solution except to amend the U.S. Constitution to just have the House of Representatives and do away with the Senate. That will never happen of course. The small states would never agree to that. Another solution would be for California to split into multiple states, along with New York, Texas, and other bigger states. That won't happen either. So what we are stuck with is a major legislative body that lags behind the times, and reflects an America that doesn't exist anymore.

Summer 2010

Gosh, it has been almost a year since I wrote a formal blog and posted it. Instead of commenting using my own site, I started responding to blogs on the Huffington Post site which in my mind is the premier blogging site on the internet, followed next by Truthdig. But Truthdig seems to appeal to bloggers who lean heavily to conspiricy theory politics. Huffington Post is my primary source of information today except for my two local newspapers. I like the writers on Huffington and I mostly like the caliber of responses. I now have over a 100 fans who like my posts on Huffington. I also get a lot of negative responses from conservatives who don't like what I have to say, but they can't give me a negative rating.

Now that President Obama has been in office for 18 months, it is a good time to look at his record so far. If I was grading, I would give him a solid "B". Based on goals he outlined in his book "Audacity of Hope", I would give him an "A". Why the disparity? In his book, he comes across as a solidy mainstream moderate who believes strongly is being able to work across the aisle to get legislation accomplished with the help of the opposition party. He did exactly what he said he was going to do in his book. He did try and reach across the aisle. His reward was to get two-three Republican's to help him pass his major legislation. That's not really enough to qualify as bi-partisan. As a progressive, I'm not to happy with all of the bending over backwards to try and get Republican help, when it was obvious from day one of his presidency that that was not going to happen. Nontheless it is hard to argue that on the major issues facing us, he has delivered on his campaign promises: health care reform, reform of Wall Street and the banks, a change in war policy from Iraq to Afghanistan, and passing of a major stimulus package to get the economy back on track. Those are some pretty amazing accomplishments in a year and 1/2.

What has hurt the president is the efficiency of the right wing attack machine led by Fox News, that have attacked him and his party since he took office. Part of this is due to the relentless criticism George W. Bush took in his second term when it became obvious he was ineffectual on the war in Iraq, the economy, and Hurricane Katrina. The right wing took the criticism's personally and wanted payback once Obama came into power. The rise of the tea party movement with their concern over the cost of bailing out Wall Street (which happened on Bush's watch) and the cost of the stimulus package, has not helped either. What they don't know or don't want to know if that the primary culprit of our deficit spending has been the unfunded wars in Iraq and Afganistan, and the Bush tax cuts, not Obama's policies, which account for only ten percent of the deficit. Obama has also been impacted by his slowness to recognize that BP was not shooting straight with him on the Gulf oil spill. He should have known that BP has a bad track record in safety and has the highest level of fines of any oil company in history. Obama also got sandbagged by the Bush Administration which downplayed the severity of the recession in 2008, and led Obama to use lower unemployment percentages as his benchmark. Just as JFK got suckered by the Joint Chiefs into the Bay of Pigs debacle in 1961, so has Obama been snookered. But like JFK, he is a quick learner, and will be a lot more wiser in the future. No if he can only learn his lesson in not listening to Fox News or at least telling his department heads to ignore Fox.

Now it is up to the president and his team to get his message of success out to the electorate, especially to independent votes who seemed to have been swayed by the right wing talking points of Republican's who have opposed the Obama Administration at every step. Democrats are still behind Obama, and Republican's will never vote for him anyway. It will be an interesting Fall as the campaign rhetoric starts in full swing. I am hopeful that the Democrats will be able to get their message out in enough parts of the country to maintain their control of both houses of Congress.

Support For Public Option

Dear Senator Feinstein and Boxer,

After seeing President Obama perform very impressively in his town halls this week, i felt the Democrats were regaining the initiative on health care reform. Thus I was disturbed this morning to read that the public option component of health care reform might be off the table. I can't fathom why the Democrats would do this when it is such a key to true reform. The idea of substituting an "exchange" is ludicrous. It will not accomplish the type of reform that is needed and that is to give the private health insurers some much needed competition. And if the reason we are thinking of jettisoning the public option is to achieve bi-partisanship, that is a mirage. The Republican's will not support any type of reform no matter what scraps of support they throw out in public. They sense the opportunity to sink the Obama presidency and will go all out to once again defeat reform just as they did in 1993.

Even though I fought hard for the President in 2008, I am willing to go the extra mile for health care reform also, which is why I am writing you, and also walking through my neigborhood to solicit views on health care reform. I hope you will support the President fully in fighting for the public option and not caving in to the Republicans. After all it was we who won the election in November 2008, not them and elections have consequences.

I know I am speaking for millions of other American's who want our President to succeed on the most important issue facing us today. When I saw the thousands of people lining up this week in Los Angeles to receive free medical care I was hearbroken to realize that America is the only industrialized country in the world that would have to resort to this type of care usually provided in third world countries. Our country is better than that and we need you to fight for us in passing significant health care reform this year with a public option.

The Battle for Health Care Reform - Summer 2009

In 1945, President Truman proposed universal health care system for the United States. He was the first U.S. president to put his full support behind universal health care. Unfortunately, in 1946, the Republican's gained control of Congress, and had zero interest in health care reform. They said such a system would lead to a "socialistic" society, or worse yet, Communism. Sound familiar?

In 1965, Lyndon Johnson, through a successful grass roots effort, was able to get Medicare and Medicaid passed through Congress, which was a form of universal health care, that is administered by the government in concert with private health insurers. Republican's fought vehemently against Medicare.

In 1994 Hillary Clinton led a fight to include universal health care for everyone but again was defeated by the same Republican forces and the same fear tactics that defeated universal health care in 1946. In the Summer of 2009, once again the battle lines are drawn between proponents of universal health care, and the same conservative groups that were aligned against health care reform over a decade ago.

There is one major change today in the fight for health care reform that did not exist in the past: the advent of the internet and the emergence of 24/7 cable news outlets. Both have been a huge factor in getting the message out about health care reform, both positive and negative. American's if they choose to do their homework about health care will find a plethora of easily obtainable facts about the state of health care in this country and health care services in other industrialized countries.

There are certain truths about health care in the U.S. that are pretty much agreed upon whether conservative or liberal in your belief system.

1. Our health care costs are higher per capita than any other industrialized country in the world, about double the next highest country.

2. We have the best hospitals and medical personnel in the world, if cost is no object. The rich and famous usually come to the U.S. for their health care needs. If Steve Jobs needs a liver transplant, he has the financial wherewithal to get a new liver.

3. There is a strong correllation between income level and good health care availability in the United States. The wealthier you are, the chances are better that you will receive excellent health care. In countries with universal health care, like our neighbor to the north, Canada, there is no correllation between degree of wealth and access to good health care.

4. Our prescription drug costs in the U.S. are much higher than in other countries, which is why many U.S. residents try and get their prescriptions filled in Canada.

5, We are the only country in the world where it is possible to go bankrupt through excessive medical expenses. 700,000 Americans went bankrupt last year due to medical expenses.

6. One out of six Americans have no health insurance coverage at all. Millions of other Americans are underinsured.

7. Health care insurance costs that are borne by American companies are making them less competitive in global markets.

8. Our health care delivery systems are very inefficient - they do not take advantage of cost efficiencies through information technology innovation, and the claims approval process is very paper intensive, and bureaucratic. Thus health care administration costs are the highest in the world.

The bottom line is that American's are not getting their money's worth when they pay for health care. We either need to make changes to our health care delivery that reduce costs, or get better delivery of health services. The focus of the health care reform in 2009 is to improve health care access to American's who currently get no health care outside of running down to the emergency room of their local hospital, and cost containment, for American's who currently have health care coverage.

The debate this Summer over health care is being argued over the merits of making the monetary investment in providing health care coverage to all Americans, while putting in place a process to reduce health care costs over time. Universal health care advocates view the expenditure as an investment in America, whereas conservatives view it as an unnecessary expense. The question conservatives put forth is how America afford to do this reform in a time of economic turmoil. President Obama is saying how can we not do it now, when our health care costs continue to escalate every year, making the reform process even more difficult with each passing year. Obama wants a system in place with a universal health care option for those who are not happy with their current health care coverage. For those American's who are happy with their current health care, they can keep it.

Health insurers while recognizing they have a problem with health care costs are not thrilled with a universal health care option which would be overseen by the U.S. government, thereby providing competition for them, and the potential for erosion of their profit margins as they are forced into cost reductions due to the presence of a single payer option. But of course this is a key strategy in bringing health care costs under control. It is the model other countries used to contain costs and get health services delivered to all of their citizens.

Switzerland and Canada at one point had health care systems very similar to the United States. Both went to a form of universal health care - Switizerland's citizens voted by a bare majority for universal care. Today not many Swiss would go back to the U.S. model for health care, nor would many Canadians. Depending on which poll you believe, most Canadians (70-93%) like their health care and would not trade it for a U.S. version. In fact many Canadians are angry that American politicians disparage Canadian health care, when they don't really know the true facts about Canadian health care services.

The best approach for the U.S. would be to do what Taiwan did. They studied the health care delivery systems of 15 leading countries, and took the best practices from each, to come up with their own health care model. Needless to say, they were not very impressed with the U.S. health care model - too expensive and too inefficient. Michael Moore recommended this approach in his movie Sicko. He was of course ridiculed by the health care providers as a radical and a subversive. Now some are saying he was right all along.

We can only hope that in the Summer of 2009, we will at long last have the health care reform that Harry Truman fought for way back in 1945. We can't afford to wait any longer.

What we campaigned for

Today was yet another moment in the first month of Obama's presidency that drove home why my son and I and millions of other Americans volunteered to work for change in America. Today's recap of the summit stimulus task force drove home just how organized and energized our new president is. In eight years, our so called "business school" president never took one step to enlist Congress and the private sector, to work on behalf of the American people, rather than their own narrow special interests. This is amazing considering this process approach is a staple of private enterprise, where people are brought together from all over the enterprise in order, in order to solve the more difficult problems. As one media person said today, "in all of his years of covering politics in Washington D.C. he has never seen an anything like this before in his life." President Obama had his fiercest critics on-hand, including Senator John McCain, Representative Eric Cantor, and Representative Darrell Issa to offer their views to the president, the assembled media, and all of America. It was our American political system at its best, which we haven't seen since 9/11. It was refreshing to hear John McCain get up and talk about bringing costs under control in the Defense Department. Dwight Eisenhower would have been proud to see a Republican start to take on the military-industrial complex. Of course now the defense establishment is complaining about how many jobs will be lost if we cut back on defense spending, as if we spend billions just to keep people employed. As McCain explained we don't need helicopters that now cost as much as Air Force One. Obama said he was perfectly happy with the helicopter he now has.

Later today, the President followed up his meeting with comments about our federal budget process. They were blunt and to the point - a budget was never set up to fund the Iraq war, even after the first year, when it was apparent we were going to be there for awhile. We have never set up a fund to account for national emergencies, even though they occur, each and every year since our nation was founded. These are prudent practices and applied every day in the business sector. Funny how our "business" president chose to ignore fiscal discipline in his eight years.

President Obama will restore confidence in America and get this country moving again with his deeds and not just his words. He is proving that every day of his presidency.

House of Cards - CNBC Must Viewing

If you want to know what really brought on our current economic crisis and imperiled some of the worlds largest banks, look no further than the recent two hour documentary shown on CNBC and narrated by David Faber on the the networks market analysts. the documentary entitlled "House of Cards" is well titled, as becomes readily apparent once the housing market starts to implode. To explain in layman terms what happened Mr. Faber has chosen two areas of Southern California to drive home the severity of this economic meltdown - Orange County, the epicenter of the subprimet mortgage industry, and Riverside County, one of the areas most impacted by the meltdown. The story begins with a Riverside County deputy sheriff as she makers her rounds serving foreclosure notices on residents who bought more home than they could afford. In cryptic terms, she describes the problem by stating "middle class families buying upper middle class homes, they really could not afford". Add to the problem, homeowners who decided they wanted get into a new hobby called "flipping", and home owners who saw their increased home valuations as a resource for continued borrowing of money through an annual refinancing process. Mortgage companies were only too happy to fuel the borrowing mania because they had a new source of cheap money - Wall Street. Wall Street took the place of Fannie Mae and Freddie Mac as the primary lender of funds to buy or refinance homes. Fannie and Freddie were late to this party because of their regulatory problems, and slowness in abandoning the strict guidelines used to approve conventional home loans.

The normal approval process for getting a home mortgage, the process that most people are familiar with, went right out the window, once a flood of cheap money came in from other countries, looking for a safe haven to park their money. Wall Street banks invented a new financial instrument called collaterized debt obligations (CDO's), that had as underlying colleteral, home mortgages that were packaged into these CDO's and then sold all over the world. The proceeds from these CDO's were used to fund even more home loans. The profits were enormous to banks who took a nice commission on all of these sales. Wall Street began to pressure the mortgage companies to fund more loans, so they started promoting no documentation loans also known as stated income loans or "liar loans". These loans were usually variable rate loans with low "teaser" interest rates that reset to higher rates, and some loans even included negative amortization, where the monthly loan payment was so low, it did not cover the interest owed; the balance on the loan started going up each month.

An enabler of these CDO obligations were companies called rating agencies, such as Standard and Poors, and Mooney, which rated these CDO's as "AAA investment grade", which signified to investors that these obligations were almost risk free, and guaranteed a very nice rate of return. The rating agencies graded CDO's using a risk model that presumed that homes would increase in value 6-8 percent per year forever.

In 2006, the first cards in the house of cards started to fall. As interest rates on these subprime mortgages started to reset to higher rates, homeowners found they were having difficulty making the payments. Adding to the problem was the general economic downturn which led to job layoffs, which fueled the mortgage payment problem. As mortgages went into default, warning signal went up on Wall Street, and investors started pully back from CDO purchases. This dried up the funds available for mortgages, and now potential home buyers were having difficulty getting loans. The glut of foreclosures started to adversely affect mortgage company profits and many mortgage companies went out of business throwing thousands of employees out of work. As these foreclosed homes started coming back on the market, the home inventory glut started to depress overall home prices. Recent buyers of homes found they were "upside down" on their homes - they owned more on their house than it was worth. Many just stopped making payments and mailed the keys back to the lender. The result was even more houses coming back on the market further reducing prices.

Fast forward to 2008, and the mortgage crisis is now humbling investment giant like Bear Sterns and Lehman Brothers, Citibanks, Countrywide Mortgage, Wachovia, Merrill Lynch, and even Bank of America are in serious financial difficulty. Not only has this financial meltdown hurt our country, we also exported this toxic mess to countries around the world who purchased these CDO's based on their "AAA investment grade" rating. This worldwide economic problem will exacerbate the U.S. recession and we find it more difficult to get other countries to buy our exports.

"Sixty Minutes" the muckracking popular television show focused on one organization that serves as a microcosm of how we got into this mess. The company is World Savings, now part of Wachovia. World was owned by Marian and Herb Sandler, long time respected members of the mortgage lending community here in the San Francisco Bay Area. They were known for their frugal no nonsense business practices and high integrity in lending practices. However they too got caught up in the lending frenzy brought on by the flood of money from Wall Street and started bending their own lending rules. They started offering the stated income loans and new approaches such as the "pick a payment" feature which let you pay less each month than the amount necessary to amoritze principal. This meant interest not paid each month was added to principal thus increasing the amount owed. It did not take long for unsuspecting homeowners to find themselves "underwater" on their loans once housing prices started to decline. The Sandlers were smart and sold their company to Wachovia for over 2 billion dollars. Wachovia and Wells Fargo Bank are now stuck with these non performing loans, which has hurt Wells Fargo shareholders.

Now we taxpayers will have to help homeowners who were caught up in this "predatory" lending to save their homes through mortgage resets and other subsidies. The rules are strict however - only conforming loans are eligible, and the loans limit is restricted to 31% of income, and 105% of the homes current value. This won't help many California homeowners who took out jumbo loans. This program coupled with the bank bailout TARP program will help to ameliorate the housing situation but it will take a very long time to housing to approach anything close to the normal house appreciation we became accustomed to in the last decade. Those days are over until we work off the glut of foreclosed properties and banks become financially healthy once again. There will be no more "no doc/stated income loan" and no down payment loans. We will be back to the prudent lending standards that we should have kept in the first place. Shame on us and shame on our leaders for allowing "greed" to get the better of us.