Financial Reform

Apologies for neglecting this blog over the past month. Since the health care bill passed I haven't had much to say about prominent issues (though I still insist that we need universal health care and I am not satisfied with the bill).

Well, the S.E.C. lawsuit against Goldman Sachs and the clear intentions of Obama and Congressional Democrats to institute meaningful financial reform have given me something to reflect upon.

Obama gave a timely speech this week in New York outlining his basic financial reform plan. I thought he did a pretty good job not only laying out his ideas, but also making an argument that banking lobbyists have promoted a false choice between free markets or strangled economy.

To me, these reforms are pretty modest, but they would go a long way at protecting consumers. Limiting executive bonuses, restricting risky investments, calling for greater transparency on derivatives, allowing shareholders a larger say in organizational policy, and shrinking the size of large banks are all good ideas. My feeling is that such measures would help get us off of this boom/bust cycle and back to something more stable, which is more desirable for most people.

This speech comes on the heels of the S.E.C.'s charge that Goldman Sachs fraudulently misled its customers into investing in mortgage-backed securities that the organization knew were worthless. On top of that, Goldman Sachs took out insurance on these securities, essentially betting that they would fail. Turning to our good friend, Jon Stewart...these fucking guys:

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It's insane to me that the scenario described above might actually be legal. Even The New York Times is reporting that the S.E.C. may actually have a difficult case in proving Goldman Sachs committed a crime. That is simply unreal.

One of the company's main arguments is that it didn't actually turn a profit on these investments, but that doesn't make its actions any less wrong. That's like saying you shouldn't be charge for robbing a bank because the money fell out of your van during the getaway.

Still, I think this legal battle is a win-win, largely because the story is too big to ignore and its implications are too great. Goldman Sachs has to fight the charges to maintain any credibility. If Goldman Sachs loses, then there is concrete proof that Wall Street banking firms are committing fraud and should thus be regulated further. If Goldman Sachs wins, people will be pissed off that what the company did is actually legal and -- hopefully -- demand reform.

What I don't understand is Republican opposition to even discussing tighter regulation. To some degree or another, most national politician are in bed with these guys, but that doesn't mean you have to get fucked. This move is political suicide. Anger at the financial district is probably the most bipartisan emotion in this country. I could understand defending them through argument (at least in theory), but to not even allow the argument to be made is just nuts. More than anything, I'm curious to see what the Republicans have up their collective sleeve on this one.

Reconciling Senate differences

I've been hearing a lot about the political process of reconciliation lately, seeing as the Democratic super majority no longer exists -- and for practical purposes never really did. A large tent means diverse views, and it's hard to get everyone on the same page.

I don't really understand the process all that well, but from what I can gather, it began in 1974 to eliminate the possibility of filibustering budget-specific legislation. Since then, the use of the measure has been extended in ways it was never intended, but I like it.

Essentially, it returns us to a simple "majority rules" position. When the filibuster was introduced early in our country's history as a leftover of parliamentary procedure, political parties didn't really exist -- or at the very least they were not so divided. Gaining 60 votes for important measures was probably much easier, but now the game of politics supersedes the importance of progress, health care being just one example.

I don't really have a problem with the Republican standpoint other than the fact that they disingenuously stand for nothing. The claim is that they want to amend the bill, but the ways in which they wish to do so are largely unclear. Mostly we hear about tort reform, which would make it more difficult to sue doctors frivolously and lower the cost of health care by lowering malpractice insurance. Okay. Fine. I like that, but it's not enough.

The only other complaint I here frequently is the idea of pork barrel spending, which is a direct result of trying to set up state-run insurance pools -- which would not be an issue had the public option or single-payer system been set up nationally. The problem of pork resulted directly from a compromise that the Republicans demanded and are now scoring political points for actually landing.

It seems fairly evident to me that Republicans could care less bout health reform; rather, they are interested in defeating Obama and gaining political ground. Our good friend Mr. Stephen Colbert sums it up best:

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It's pure politics. And the Democrats are just as guilty at this point. They need this legislation to save face, but in an attempt to pass it in a bipartisan matter, they've allowed too much compromise to water it down. It seems like everyone has forgotten that keeping their job is secondary to actually doing it.

I say it's time to use the reconciliation measure and slam this thing through. With only 51 votes needed, Democrats could easily get a public option in as part of the bill -- potentially even something resembling single-payer -- and we might see some real change.

Republicans are complaining endlessly about the process of reconciliation, arguing that it undermines the intentions of the founders, but according to The New York Times, 16 of the 22 bills passed using reconciliation were done while Republican were in control, most notably the creation of COBRA, the Bush tax cuts, and welfare reform. Republicans weren't complaining then -- Democrats were. Nobody likes to loose, and reconciliation favors the majority, but so does democracy, so deal with it.

I simply don't buy the argument that reconciliation necessarily leads to bad legislation. Legislating leads to bad legislation because people are flawed and make poor decisions. That doesn't mean, however, that legislating is bad or that reconciliation in the case of health reform will be bad. In all likelihood, we'd be better off passing a more comprehensive bill than rolling over and doing nothing.

The only problem is that it would take some courage on the part of Democrats, a resource they lack seeing as protecting their own jobs appears more important. But the reality is that Americans elected these people to affect meaningful change, and if they don't, we'll fire them just as quickly. The Republicans know this, so they're waiting it out, which is a smart move.

For the Democrats, the smart move is to take a chance and attempt to serve their constituents, to do what they think is best. Even if they lose their respective elections because of it, at least they might maintain some respect.

Growing corporate influence

According to The New York Times, the Supreme Court narrowly decided (5-4) to allow corporations to give limitlessly to promote or oppose political candidates during election seasons. The ruling overturned several past precedents of campaign finance set by the Court over the last century.

I have already spoken about the danger of expanding corporate rights to the point where they outweigh the rights of the individual. Free speech exists more to protect the minority opinion than to provide grounds on which majority -- and more importantly, moneyed -- voices can drown it out. Not to mention the fact corporations are not people and should not be extended the all the rights of personhood.

The Court sided with corporate interest, which has been a predictable trend under Roberts. Blurring the lines between politics and corporate finance is dangerous ground on many fronts. As far as I can see it, there is nothing to stop the few individuals at the top of an organization from using corporate money to advance personal interests, an unhealthy proposition for organizational stockholders and democratic interests in general.

The 2010 midterm elections should provide a glimpse into how this law will effect future elections, but the bigger tell will probably come with the 2012 general elections, given the scale of the presidential race combined with the "practice round" experience from 2010. My feeling as that we are treading treacherous waters and that, years from now, we may look back on this ruling as a landmark in the erosion of personal rights and a major step in the domination of the democratic process by the wealthiest voices.

"Move Your Money" Movement

I was watching The Colbert Report yesterday - which sadly appears to feature more news than NBC, CBS, or ABC - and learned about an interesting movement called, "Move Your Money."

Essentially the idea is to get money away from large, seemingly corrupt banks to prevent them from using it to lobby for loose regulation. More implicitly, however, it seems to be a punishment for wrongdoings on the part of banking institutions, which is of greater interest to me.

I've always believed that the most important vote you can make is the one you make with your dollar. For instance, I am a supporter of the American auto industry for numerous reasons, so naturally I am concerned. When manufacturers like GM, Chrysler, and Ford began seeing declines in the middle of last decade, it was because buyers cast an important - and probably correct - vote. They bought more affordable, reliable, and fuel efficient vehicles from foreign manufacturers, which, in truth, is the best thing customers can do not only for themselves but also for industry. By purchasing the best product on the market, it encouraged change on the part of failing competitors (Ford being a notable example) or the weeding out of poor products (GM and Chrysler for instance, who were rescued by taxpayer money).

I don't think people will be making a run on the major banks because doing business with them affords many conveniences (multiple branches, ATM access, etc.), but the idea intrigues me because it is simple and it probably would work: if you don't like it, don't buy it.

"It's Always Sunny" health care plan

After reading over the concessions the Senate Democrats made to Republicans concerning health care, I'm noticing substantially less reform, yet it's being praised as a complete overhaul. I'm not seeing it. Inspired by the cast of "It's Always Sunny in Philadelphia," I've decided to outline my own health care bill, which I think will work seeing as the title is just damn catch. Who doesn't want health care that is "Always Sunny?"

But first, here's a list of some Senate provisions in the latest bill that make no sense to me, information for which I have lifted directly from The New York Times:

Everyone must purchase insurance

Penalty: $95 a year per person in 2014; $350 in 2015; $750 or 2 percent of a household’s income, whichever is greater, in 2016 and beyond. No penalty if the cost of cheapest available plan exceeds 8 percent of household income.

Exemptions: American Indians, people with religious objections and people who can show financial hardship.

No Public Option

Regulating Insurance Companies

Premiums for older people cannot be more than three times the premium for young adults.

The legislation would not strip health insurance companies of their longstanding exemption from federal antitrust laws.

Insurers would be required to spend more of their premium revenues — between 80 to 85 cents of every dollar — on medical claims. According to a recent Senate Commerce Committee analysis, the largest for-profit insurance companies spends about 74 cents out of every dollar on medical care in the individual market.

Cost and Coverage

$871 billion. Expected to reduce projected federal budget deficits by $132 billion.

31 million people would gain coverage, leaving 23 million uninsured.

No tax increase on the wealthy?!

I think it's good to force everyone to have some type of health insurance, but when individuals have to purchase it directly, it gets tricky. You have to introduce an overly complex system of penalties (and I have no idea what religious objections one might have to not dying) that would likely leave individuals who can't afford insurance having to pay for the privilege of having no coverage. Plus, when all that is said and done, 23 million people still have no insurance. What do we do with them?

On top of that, the regulations on insurance companies are a total joke. You can still charge the elderly a ridiculous premium triple that of young adults, not to mention this half-assed attempt to reduce overhead costs related to profits. Now, instead of 26% of our premiums going to profits for insurance companies, it's 20%; stop the fucking presses.

Medicare has an estimated 3% of overhead costs, so it would seem logical to have some sort of government plan available, but the public option is completely dead because -- God forbid -- it might put the insurance companies out of business.

And I have no idea how these companies are managing to exist beyond antitrust legislation. If you offer exemptions to antitrust laws, they have absolutely no power at all. (Speaking of which, I wonder if our "too big to fail" banks are exempt too.)

Well, I say fuck 'em. If you can't provide a needed service, then you should go out of business. It's ridiculous to profit on someone's health or lack thereof anyhow. Health is the one thing that separates us from death, and we decided to make a buck on that? And then we protect it as though it was a holy establishment? Un-fucking-believable.

And how are we going to pay for it? We're going to increase Medicare payroll taxes (I have no idea where that one came from), tax tanning service operators (I'm not making that up), tax premium health care plans (which makes no sense because it would discourage people from buying better coverage), tax health care companies (which seems logical, but more tightly regulating their profit margins would be better), and then we're going to hope the plan reforms Medicare enough to free up funds there. BUT WE"RE NOT GOING TO TAX THE WEALTHY!

I know some people say it's unfair to tax the wealthy at a rate above the rest of us. I've actually argued for eliminating income taxes in favor of a large national sales tax, but that's a different debate, and probably a fruitless one. The graduated tax system isn't going anywhere any time soon.

Still, when it comes to the rich, fuck them too. Odds are, they stepped over a lot of people to make their fortunes, or they were born into it rather than earning it. If increasing their taxes slightly to pay for universal health care is the only penalty they suffer, they're doing well. Besides, when you tax the rich, they're still fucking rich, so where's the harm?

What I don't understand is the inability to develop a plan that allows every tax-paying U.S. citizen the ability to walk into a hospital and receive care: no hoops, no health insurance exchanges, no nothing. That's the "Always Sunny" health plan, as inspired by this dialogue:

Doctor: Well, actually, Ms. Reynolds, first we need to discuss how you'll be paying for your stay.
Mac: Paying? This is a hospital.
Charlie: Yeah. Since when do you pay to stay in a hospital?
Doctor: Since always.
Charlie: Uh, no, I believe that is what taxes are for.
Mac: Yeah, you don't pay a fireman to put out a fire.
Charlie: Or a cop to shoot a guy.

It could seriously be that simple. What puzzles me the most is the Republican opposition. I understand being opposed to the bill that the Senate is producing -- seeing as I am opposed to it -- but it's their endless bitching that watered this thing down to nothing. Now the complaint is it costs to much and doesn't do enough, which is true, but whose fault is that?

I would love to see something more than a vague, three page document from that side of the aisle. Instead their position seems to be that the current health care system works fine, which is empirically false, a fact which is generally agreed upon. While I don't believe you have to offer an alternative idea to mount a good criticism of an existing one, it would be nice, because right now it feels like the Democrats are failing us and the Republicans just plain don't give a shit. Who are we supposed to vote for in November?

Waging the Afghan War

I've been silent thus far on Obama's decision to send 30,000 additional troops to Afghanistan, mostly because I waiver on this war so frequently. Despite voting for the man, I find myself disagreeing with Obama frequently, but this is not one of those occasions.

I think he made the right decision, but no one seems happy with it. The Right doesn't think the commitment is enough, and the Left thinks it's time to end this whole thing. On this particular issue, Obama's middle ground stance seems to be the best approach.

The most common argument I've heard from the Right is that a president should "listen to his generals." Listen, yes; obey, no. Generals have a great deal of expertise, but the military component is not all that goes into a decision like this.

Americans cannot economically or emotionally handle a drastic troop increase. The current increase would cost about $1 trillion over the next decade, and during a time of 10% plus unemployment, nobody likes to see that kind of money leaving our shores.

And let's not forget the oft-forgotten fact that this war is already eight years in, and patience is wearing thin. During all the chaos of the last administration, the goals for Afghanistan were in a constant state of flux, and nearest I can tell we are yet to accomplish anything of real significance.

The recently stolen election really hurts our credibility, and that could be the most important component of all. In truth, nation building cannot work without the support of those for whom the nation is being built. Early in the war, the response from Afghans was very positive because Americans drove out an unpopular government. The problem is we replaced it with one far less stable and equally corrupt, which leads to waning support and a need for more troops. Still, there comes a point when you can't fight your way through this with force, and to his credit, Obama appears to have recognized this, hence the relatively small "surge."

And now for the Left. Their buzz word is "inherited." The democrats constantly shift the blame for the entire Middle East quagmire to the Bush administration, and for the most part I agree -- though there are several democrats who were in lock-step behind Bush and have since developed amnesia. So democrats, we get it, now please SHUT THE FUCK UP!

Blaming the previous administration for inherited problems is a tactic nearly as old as the presidency itself. It's a great way to win an election, but a shitty way to run a country. It's important to recognize who made mistakes (W, I'm looking at you), but that doesn't change the reality of now. We have to develop a way to get out of this mess, which means being a bit more forward looking.

But if you're going to look to the past, go a little farther back, let's say to the 1980s. Our fight in Afghanistan is teetering dangerously close to the missteps we made concerning the Soviet occupation. We ousted an oppressive dictator, became impatient and frustrated over the amount of invested resources, and withdrew. A country full of abandoned, pissed off young people became radicalized and the next thing you know there's a plane sticking out of a New York skyscraper.

We can't afford this mistake again, otherwise we'll have wasted countless lives and resources only to have failed in capturing the man we set out to find, essentially ending up right where we started. That's the measure of true defeat: to have accomplished nothing at the sacrifice of so much.

My biggest concern is managing the balancing act among all parties concerned. What surprises me most is that no one seems to address the fact that increased American presence in Afghanistan has been the rule rather than the exception. Eventually the point of diminishing returns will catch up to us, probably sooner than later. Hopefully we will have created some stable system in Afghanistan by then, be it democracy, theocracy, or whatever the people are ready to support. If not, we might be fucked. Ideally we can learn from that mistake, but if history is any indication, it appears that we won't

Nazi trial

Accused Sobibor concentration camp guard John Demjanjuk is on trial in Germany for his alleged involvement in the Holocaust.

Apparently, the state of Israel already acquitted this guy because of a case of mistaken identity, and if Eichmann is any indication of the forgiving nature of the Jewish state, I'd say this guy is probably going to walk.

Actually, I should say roll. He's 89 years old and confined to a wheel chair. Time has done more to this guy that Germany every will. Still, in a lot of ways, he reminds me of Eichmann, particularly Hannah Arendt's famous description in the subtitle of her book, Eichmann in Jerusalem: A Report on the Banality of Evil.

Demjanjuk, by all accounts, is a very unassuming man. He lived in exile in the United States and is a retired autoworker, reminiscent of Eichmann's Argentinian exile and failed life as a chicken farmer. If Demjanjuk is anything like Eichmann, or at least the picture of Eichmann we get from Arendt's account, he's probably just a semi-skilled man caught up in the evils of a confusing time of national identity.

I'm not saying this excuses Demjanjuk, nor does it excuse Eichmann, but it's important to remember that you're trying a man, not the Holocaust itself. Neither of these individuals seem capable of atrocities of that scale; theirs are crimes of a lower, and perhaps less brutal kind.

At this point, however, I don't see much good sending an 89 year old man to prison. Convict him, sure, but don't send him to -- what for him at least -- constitutes a state-funded retirement home. If you want to punish him, send him back to the United States and let him deal with finding quality care at an affordable price. He'll die of exhaustion before the search is over.