The chart on the right is not a very exciting one, but it's important. It's a followup to last week's post about McDonald's threatening to cancel its current healthcare policy because of the passage of ACA. As you recall, the original story in the Wall Street Journal was wrong in some respects and overblown in others, and in any case, the "mini-med" policy that McDonald's currently offers is pretty sucky. Getting rid of it would be one of the benefits of ACA, not an "unintended consequence."
Today, Aaron Carroll puts some numbers to "sucky" and I've added some bloggy value by converting his numbers into a colorful chart. The current McDonald's policy is the red bar on the right: it costs employees $1,664 per year and offers maximum coverage of $10,000.
Now compare that to what a McDonald's employee can get when ACA kicks in in 2014. At minimum wage, he or she will be eligible for Medicaid and will have to pay nothing. A $9/hour, subsidized private insurance will cost $858. At $10/hour it will cost $1,030. Even at $12/hour — more than virtually anyone makes at McDonald's — the premium is $1,720, only a dollar a week more than the current mini-med policy.
And that's for real health insurance. Under ACA, the vast majority of McDonald's workers will get genuine health insurance that's either free or no more costly than even the laughable micro-med option that offers maximum coverage of $2,000. When 2014 rolls around and McDonald's does away with both its mini and micro-med policies, that won't be an unintended consequence of ACA. It will be the whole point.
In the latest on the foreclosure front, Ohio Attorney General Richard Cordray announced today a suit against GMAC Mortgage, the loan servicing subsidiary of the bank Ally Financial, for "fraudulent practices potentially involving hundreds of Ohio mortgage loan foreclosures." Here's the press release from the Ohio AG's office:
Last week, Cordray sent a letter to Ohio judges requesting that the state courts make special review of all foreclosure cases that involve GMAC Mortgage. The letter was sent in response to recent reports of questionable affidavit procedures by the large loan servicer. It appears that affidavits were being signed en masse, and that those signing them were attesting to having personal knowledge about matters that they in fact knew little or nothing about.
Cordray's announcement is the latest in a flurry of actions against GMAC and other major mortgage companies throughout the country, all stemming from servicers' use of bogus legal filings to foreclose on homeowners. (A fuller description of that mess is here.) More than half a dozen state attorneys general are investigating major financial players like GMAC, Bank of America, and JPMorgan Chase. Some banks have ordered moratoriums on foreclosures in their states until the paperwork debacle is settled, while AGs and members of Congress have demanded more foreclosure freezes. Read more on that here.
In his official announcement, Ohio's Cordray said, "We know that as Ohioans were fighting to save their homes, this loan servicer benefited financially from the dire circumstances. Instead of stepping up and assisting those at risk of losing their homes, it is clear that GMAC chose to compound the problem through fraudulent and unfair and deceptive practices."
A sampling of the latest science papers. Forthwith: Lizard families form multigenerational dynasties; Extinct passenger pigeons speak through DNA; 2008 volcanic eruption fertilized North Pacific; Volcanic eruptions 40,000 years ago doomed Neanderthals and enabled rise of an upstart pipsqueak, Homo sapiens.
Researchers at the University of California Santa Cruz found that desert night lizards from the Mojave Desert live in family groups and show patterns of social behavior more commonly associated with mammals and birds. Desert night lizards are unusual among reptiles in that they're vivparous, giving birth to live young. They also huddle in groups through the winter beneath fallen Joshua trees. Genetic analysis revealed the huddling groups are made up of related individuals. Five years of study showed that young desert night lizards stay with their mothers, fathers, and siblings for several years after birth. Some groups aggregate under the same fallen log year after year, forming dynasties. The investigation provides new insights into the convergent evolution of cooperative behavior. The paper, Convergent evolution of kin-based sociality in a lizard, appears in the Proceedings of the Royal Society B .
DNA extracted from 100-year-old museum specimens reveals extinct passenger pigeons were less closely related to New World mourning doves, as formerly believed, and more closely related to New World pigeons. Biogeographic analysis suggests they may have colonized North America from Asia and dispersed into South America. Passenger pigeons were entirely nomadic, forming huge flocks and breeding colonies, millions strong. They were the most abundant birds on the planet. In the early 1800s, flocks were vast enough to take days to pass overhead, literally darkening the sky. Nothing in modern times compares. Passenger pigeons were also one of North America's first birds driven to extinction at human hands. The paper, The flight of the Passenger Pigeon: Phylogenetics and biogeographic history of an extinct species, appears in Molecular Phylogenetics and Evolution.
New research suggests that climate change following massive volcanic eruptions drove Neanderthals to extinction and cleared the way for modern humans to thrive in Europe and Asia. These eruptions caused a "volcanic winter" as ash clouds obscured the sun's rays, possibly for years. The paper, Significance of Ecological Factors in the Middle to Upper Paleolithic Transition, appears in the October issue of Current Anthropology. From the abstract:
For the first time, we have identified evidence that the disappearance of Neanderthals in the Caucasus coincides with a volcanic eruption at about 40,000 BP. Our data support the hypothesis that the Middle to Upper Paleolithic transition in western Eurasia correlates with a global volcanogenic catastrophe. The coeval volcanic eruptions (from a large Campanian Ignimbrite eruption to a smaller eruption in the Central Caucasus) had an unusually sudden and devastating effect on the ecology and forced the fast and extreme climate deterioration ("volcanic winter") of the Northern Hemisphere in the beginning of Heinrich Event 4. Given the data from Mezmaiskaya Cave and supporting evidence from other sites across the Europe, we guess that the Neanderthal lineage truncated abruptly after this catastrophe in most of its range. We also propose that the most significant advantage of early modern humans over contemporary Neanderthals was geographic localization in the more southern parts of western Eurasia and Africa. Thus, modern humans avoided much of the direct impact of the European volcanic crisis. They may have further benefited from the Neanderthal population vacuum in Europe and major technological and social innovations, whose revolutionary appearance shortly after 40,000 BP documents the beginning of Upper Paleolithic.
Looks like the biggest news Obama is gonna make all week is that presidential seal falling off his lectern. Still seeing it replayed.
Why is it being endlessly replayed? Because it's the perfect prop for every lazy pundit invested in a narrative about "Obama's presidency falling apart at the seams" or some such. It's the killer rabbit of 2010. We are not just ruled by idiots, we are reported on by idiots too.
The Huffington Post's Sam Stein had a good story on Tuesday about Republican leaders—Republican Governors Association head Haley Barbour, House GOP Whip Eric Cantor (R-Va.), and Republican Senatorial Campaign Committee chief John Cornyn (R-Tex.)—throwing cold water on the idea that they're going to be able to get much done if they win back the House and the Senate. I was especially struck by this quote from Sen. Cornyn:
"Even if we controlled the House, unless we controlled the Senate and got 60 votes, we wouldn't be able to pass any corresponding legislation in the Senate," said the Texas Republican. "So I think, we need to keep expectations, again, fairly modest as far as what we can do over the next two years."
In case you missed it, that was a top Senate Republican acknowledging that the filibuster is going to present huge problems for them in passing legislation if they are able to take back the Senate. (The GOP taking back the Senate, by the way, is more likely than you think.) Cornyn has an interest in keeping expectations modest because, until Barack Obama and his veto pen are out of the White House, the Republicans are going to have to work with him to get anything done. Even so, Obama's obviously going to block the GOP's most radical goals. That's probably why they've already decided the aim of the next two years will be to "make it a one-term presidency." If Republicans take back the House and/or Senate, most of their time will be taken up doing things that aren't filibusterable—like launching bogus investigations into everything remotely connected to the scary New Black Panther Party.
Although I wouldn't put it past the Republicans to use the "Constitutional option" to eliminate the filibuster if they take back the majority—and would support their efforts if they tried—I doubt they'll do it while Obama's in the White House. President Palin is a whole other story. But until she (or another Republican) is living in 1600 Pennsylvania Ave., the filibuster is probably going to be a fact of life. The Dems just don't have the stomach for that kind of procedural reform.
The perception that bickering is on the rise has doubled since January 2009, when Obama took office and 50 percent of respondents thought the two parties were working together more than in the past. That number had dropped to 25 percent by early April, 2009. This week it came in at eight percent.
Well, that seems accurate enough. I sort of wonder who the 8% are who persist in believing the parties are working more closely than in the past, but still, not bad, American public! Unfortunately, the American public then blew it on the next question:
At first, it's hard to make sense of this. Whether or not you approve of what Congress has done this term, they've done a lot. There's the big three, of course: a huge stimulus package, healthcare reform, and financial reform. And then plenty of smaller things: the Lilly Ledbetter Act, college loan reform, rescuing GM and Chrysler, credit card disclosure, gas mileage improvements, and plenty of other stuff. So why the disconnect?
I'd guess four things are at work here. First, the public has no idea how much major legislation usually gets passed in a single congressional session. So even if they're aware of the three major bills that passed this term, they don't realize that's more than usual.1 Second, they don't perceive that most of this stuff affects them. Stimulus has gotten a bad rap, healthcare reform doesn't take effect until 2014, and financial reform is too abstract to understand. Third, their bar is set high. Sure, three big things got done, but they expected more. What about climate change? And immigration reform? And DADT repeal? And closing Gitmo? And four, the economy sucks. As long as Congress hasn't fixed that, nothing else really matters.
1And in fairness, compare Obama's first two years to George Bush's first two years. Bush got a big tax cut, declared war on al-Qaeda, passed the PATRIOT Act, passed Sarbanes-Oxley, and signed campaign finance reform into law. Compared to that, it's not clear why the average citizen should consider the current Congress any more successful than usual.
RedState's Erick Erickson has a fairly convincing post on the similarities between the current media coverage of the Dems' apparent "rebound" in the midterm polls and a similar Dem "surge" in 1994. As we know, that 1994 Dem recovery proved to be illusory, and the GOP won a convincing victory. Here's the kicker from Erickson's post:
On October 9, 1994, a month out from the November 8, 1994 election, the Washington Post’s Kevin Merida wrote, "One matchup pits William Frist (R), a wealthy heart-lung transplant surgeon from Nashville, against Sen. Jim Sasser (D), an 18-year veteran who chairs the Budget Committee and is making a strong bid to be the next Senate majority leader. Though some polls have showed the race tightening, several independent analysts doubt that Frist has enough to knock Sasser out. But he is trying."
Bill Frist won the race 56% to 42%
At this point, it's sort of hard to count House races, but polling guru Nate Silver's contention that the GOP control is significantly more likely than not seems about right. Senate races are a bit easier. It's hard to see how even the most optimistic Dem can project losing fewer than four Senate seats—North Dakota, Arkansas, Indiana, and Pennsylvania appear to be done deals. Sen. Russ Feingold (D-Wisc.) has made big comebacks before, but right now, he looks cooked too. Michael Bennet in Colorado doesn't look much better. If you assume the GOP will win only those six races, you're still betting that they'll lose two contests—Nevada and Illinois—that Silver gives them a better-than-even shot of winning. And we haven't even talked about Washington or California or Connecticut or West Virginia yet.
It helps the media to play up the appearance of a Dem resurgence—a closer contest keeps people interested. Don't believe the hype. Barack Obama's party is still in serious trouble.
When Jon Stewart announced his "Rally to Restore Sanity," he billed it as a "million moderate march" that deliberately eschewed partisanship. It's no secret that Stewart's fans skew Democratic and that the rally—coupled with Stephen Colbert's "March to Keep Fear Alive"— is intended to be an antidote the right's Glenn Beck and tea party-fueled hysteria. Until recently, part of the appeal of the rally—which is now expected to attract hundreds of thousands of people to the National Mall on October 30—was the absence of any national political apparatus or clear political agenda.
In recent days, though, liberal organizations have leapt on board to support Stewart's Ironypalooza. Arianna Huffington caught Stewart by surprise on his show by announcing that the Huffington Post would be chartering free buses to the event from New York. The pro-choice group NARAL is planning a big blitz during the rally and is soliciting its supporters to chose a slogan for its PR materials. "They're expected to draw hundreds of thousands of voters from across the country," the group explained. "We need a clever, catchy way to remind them why voting pro-choice is important." Stewart's rally even received a ringing endorsement from President Obama, who mentioned it during a living-room visit to suburban voters: "And [Stewart's] point was 70 percent of the people—it doesn’t matter what political affiliation—70 percent of folks are just like you... They don’t go around calling people names. They don't make stuff up."
You'd think people who worry about the market's confidence in our ability to control spending would be shouting about this from the rooftops. The IPAB is the single most significant cost control we've ever imposed on the single most fiscally dangerous program in our budget. But Republicans are specifically targeting it for repeal, even as they praise Bernanke's remarks. Meanwhile, I wonder whether [Ben] Bernanke even knows IPAB is in there.
We have a system where it seems like it would be in everyone's interest to praise and support this reform, but instead, it's mainly been attacked, dismissed or ignored. Republicans would prefer to win the next election than increase the market's confidence in our ability to balance our books. Frankly, if I were the market, this would make me worry.
Well now, that depends on what "the market" is truly interested in. Is the market (a) worried about future deficits and eager to support cost cutting measures, or is it (b) worried about its paycheck and eager to elect a party that's good for rich people? I would say there's scant evidence for (a) and overwhelming evidence for (b). Paul Krugman has endlessly presented evidence that the financial market has demonstrated its lack of concern about deficits by driving down long-term interest rates to historic lows. Meanwhile, political scientists have presented endless evidence that "the market" (with quotes, meaning that I'm now talking about the actual men and women who make trades and run companies) cares mostly about how much money they personally make and is able to make its preferences on this score crystal clear to the political class. That's two different "markets," not one, and if you look at it that way the behavior of the market(s) makes perfect sense.
[UPDATE]: Sen. Jeff Merkley (D-Ore.) has asked the Treasury and Housing and Urban Development Departments to appoint a special investigator to look at foreclosure processes at major mortgage servicers. "It is essential that completed foreclosure actions be reviewed, and that proper restitution under the law be made for every family not treated properly during the foreclosure process," Merkley wrote. Here's his letter.
[UPDATE 2]: Michigan House Democrats John Conyers and Carolyn Kilpatrick demanded today that all mortgage companies freeze foreclosures in Michigan. "Given the depth of the financial calamity in Michigan and other states, the huge number of foreclosures, and the chain reaction of problems involving foreclosures that has impacted communities and individuals, I would urge home mortgage lenders to cease their foreclosure activities," Conyers said in a statement. "Rather than spending their time running mass production foreclosure mills, the lenders should be working with individuals to keep families in their homes and restructure their loans."
The onslaught of scrutiny and criticism of the nation's top foreclosure players continues to mount. On Tuesday, House speaker Nancy Pelosi and 31 other California House Democrats asked the Justice Department, Federal Reserve, and Office of the Comptroller of the Currency, which regulates national banks, to investigate fraud by mortgage servicers, the middlemen who handle monthly payments, assess late fees, and foreclose on homeowners. "Recent reports that Ally Financial (formerly GMAC), JP Morgan, and Bank of America may have approved thousands of unwarranted foreclosures only amplify our concerns that systemic problems exist in the ways many financial institutions have dealt with homeowners who are seeking to avoid foreclosure," the letter reads. "We are particularly perplexed by this apparent pattern in light of the many incentives Congress and the Obama administration have offered to servicers and lenders to avoid foreclosures where financially viable, including subsidies and loan guarantees from taxpayers." (The delegation's letter is included at the end of this post.)
The California delegation's letter comes amidst a flurry of criticism and demands for investigations by members of Congress and state attorneys general. The whole debacle began after a leaked GMAC memo revealed the company's plans to freeze foreclosure evictions and sales of repossessed houses as the multibillion-dollar company tried to fix a "technical" problem with its foreclosure legal filings. That "technical" problem, however, wasn't so benign, it turns out: An employee in GMAC's "document execution" department (dubbed a "robo signer" by critics) had admitted to mass-signing tens of thousands of legal filings without knowing what they said, a violation of federal rules of civil procedure and casting doubt on the validity of thousands of foreclosures. Moreover, numerous other mortgage servicers used robo signers like GMAC's, bringing into question the validity of yet more foreclosures throughout the country.
Here's are the highlights since GMAC's admission, the first domino to fall:
The AFL-CIO union last week demanded that all banks follow JPMorgan Chase's lead and freeze foreclosures nationwide
Freddie Mac, the government-owned housing corporation, ordered (pdf) mortgage servicers to review their foreclosure processes and root out fraudulent practices
Sen. Robert Menendez sent tough letters to JPMorgan Chase (pdf), Bank of America (pdf), and Ally Financial (pdf) demanding that executives at those banks to revisit potentially fraudulent foreclosures and reinstate those homeowners who were unjustly foreclosed upon. Menendez also sent a sternly worded letter to 117 different mortgage servicing companies (pdf) and demanded a Government Accountability Office investigation into "misconduct" by Ally, JPMorgan, Bank of America, and others
After years of shady practices, barreling ahead with foreclosures, and helping to sink the Obama administration's flagship homeowner relief program, it looks like the mortgage servicing industry is finally getting the scrutiny it deserves. We'll keep you updated as this debacle unfolds.