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Good News on Healthcare

| Mon Sep. 21, 2009 6:03 PM EDT

A bit of good news on the healthcare front:

The chairman of the Senate Finance Committee, Max Baucus, said Monday that he would modify his health care bill to provide more generous assistance to moderate-income Americans, to help them buy insurance.

It was not immediately clear how much Mr. Baucus would increase the proposed subsidies. He said he wanted to reduce the maximum amount that moderate-income Americans would have to pay in premiums, under the legislation, to less than 12 percent of income.

Right now the Baucus bill requires families to pay a maximum of 13% of their income for health insurance, so while a reduction to 12% would be a step in the right direction, it's a fairly small step.  Still, at least it's a welcome sign.  If both Baucus and Olympia Snowe are open to compromise on subsidy levels, and if this is their opening bid, we might actually get somewhere before this thing is put to bed.

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Beck Watch: NYT Weighs Ludacris, Jay-Z, and Glenn Beck

| Mon Sep. 21, 2009 5:07 PM EDT

Attention Beck Watchers: The Gray Lady is officially in the game. Over the weekend, the New York Times ran two stories about Beck—one, an op-ed about Beck as classic American populist, the other an unlikely comparison between talk radio and gangsta rap.

I, for one, find this refreshing. Nothing diffuses a situation like gently intellectualizing it to death from a great distance. Right?

Then there was this gem, from Beck's Twitter: Sept 28. Lets make it a day of Fast and Prayer for the Republic. Spread the word. Let us walk in the founders steps.

Yes, that's Glenn Beck co-opting Yom Kippur, the holiest day of the Jewish year, for the Fox Nation. I would be really, really mad, except that there so precious few Republican Jews to begin with, and since virtually all of them either speak only Russian or don't own TVs and eschew the mainstream media, Beck's entreaty (and my rage) will surely fall on deaf ears.

Without further ado, here's who still advertising:

 

  • Conservatives for Patients' Rights
  • Carbonite
  • Rosland Capital
  • The Law Office of Pulaski & Middleman
  • Superior Gold Group
  • Clarity Media Group (The Weekly Standard)
  • Goldline International
  • Freije Treatment Systems (EasyWater Systems)
  • Scarguard
  • Free tax analysis 800-514-8680
  • News Corp. (The Wall Street Journal)
  • FEMA (National Flood Insurance Program)
  • LifeLock
  • Roche Diagnostics (Accu-Chek Aviva)
  • Imperial Structured Settlements
  • Credit card & debt relief helpline 1-800-650-6878
  • ExtenZe
  • Jos. A. Bank Clothiers

 

Newly Discovered: Enormous Fish

| Mon Sep. 21, 2009 3:53 PM EDT

Brazilian turtle researchers recently encountered a 6-foot long fish never before seen by humans. Check out National Geographic's video.

Will WWE Chair Vince McMahon Hurt Linda's Senate Hopes?

| Mon Sep. 21, 2009 2:59 PM EDT

Since former WWE CEO Linda McMahon announced that she will challenge embattled Sen. Chris Dodd for his seat in 2010, a number of highly reputable sources have praised McMahon's business savvy and professionalism—especially in contrast to her more colorful husband, WWE Chairman Vince McMahon.

Vince is known to be bombastic, egocentric, and a dedicated performer in the ring. [See video of Vince below.] His past antics could become a sore subject in Connecticut, where residents watch wrestling less than voters in other states. Even pro wrestlers have mixed feelings about the duo: "The idea that Vince McMahon could be in the vicinity of one of our lawmaking bodies just frightens me," says former wrestling announcer Jim Cornette. Jake "The Snake" Roberts, told Impact Wrestling that Linda "was always the steady oar in the water...Anybody that can put up with all the wrestlers and stuff...has certainly got their head screwed on right." Lanny "The Genius" Poffo agreed, noting to the Daily Beast that McMahon would be a great Senator because "she is the opposite of Nancy Pelosi."

But while Linda runs on a platform of public transparency, has her husband already displayed too much?

Watch WWE Chairman Vince McMahon:

Revisiting Banker Pay

| Mon Sep. 21, 2009 2:20 PM EDT

Via Tyler Cowen, I noticed this morning that Jeffrey Friedman had written a blog post suggesting that executive compensation practices weren't really at the core of our recent financial crisis.  Since I'm sort of a squish on this subject myself, I clicked over to read it.  Unfortunately, this was a big part of Friedman's case:

Perhaps the most powerful evidence against the executive-compensation thesis, however, is that 81 percent of the mortgage-backed tranches purchased by banks were rated AAA, and thus produced lower returns than the double-A and lower-rated tranches of the same mortgage-backed securities that were available. Bankers who were indifferent to risk because they were seeking higher return, hence higher bonuses, should have bought the lower-rated tranches universally, but they did so only 19 percent of the time. And most of those purchases were of double-A rather than A, BBB, or lower-rated, more-lucrative tranches.

Oh come on.  Before 2001, banks were required to meet full capital requirements for all asset-back securities on their books.  But in January 2002 that changed: AAA-rated securities, because they were so safe, were allowed to be backed by only 20% of the usual capital.  That meant banks had every incentive to manufacture and keep on their books as much AAA debt as possible.  It allowed them to increase their leverage fivefold.

Later, of course, regulators went further and allowed banks to use their own internal models for risk adjustment, which gave them even more incentive to play games with risk weighting.  As a result, they sliced and diced their securities into a little bit of lower-rated stuff and a whole lot of super-senior tranches, which their models said were so safe they required barely any capital at all to back them.  Leverage went through the roof.

Banks didn't hold lots of AAA-rated securities because bankers were playing it safe.  They held lots of AAA because it allowed them to game their capital requirements and pile ever more risk on their books.  It's evidence of exactly the opposite of what Friedman suggests.

POSTSCRIPT: That said, I continue to think that leverage and capital requirements are the key issues we should be concerned about, not compensation per se.  Bear and Lehman didn't collapse because they made bad bets on the housing market.  They collapsed because they made bad bets on the housing market backed by truckloads of overnight repo financing.  When the financing dried up, they went under.  If they hadn't overleveraged their bad bets, they'd be weaker today but still around.  Likewise, the financial system would be licking its wounds but not responsible for a global meltdown.

We're Number 37: Singing for Health Care Reform

| Mon Sep. 21, 2009 1:49 PM EDT

Singer/songwritter Paul Hipp has put out a little YouTube ditty in mock-celebration of the US' thirty-seventh place ranking in the World Health Organization's most recent ranking of health care systems around the world. Like the best Dylan tracks, this one is more about the message than the music (i.e., Hipp's got a terrible voice). Give it a listen anyway and remember what's at stake in the health care debate.

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Music Monday: Sway Machinery's Rosh Hashanah Flop

| Mon Sep. 21, 2009 1:29 PM EDT

Rosh Hashanah is The Big Show, one of two days a year when every Jew, no matter how lapsed, at least considers attending the service that has existed virtually unchanged since antiquity. And every year, brave cantors test a different rendition of a traditional prayer. Sometimes those new melodies strike a cord, but mostly people want their Pepsi to taste like Pepsi and their Rosh Hashanah to sound like Rosh Hashanah.

I wanted to love Saturday night's Hidden Melodies Revealed, the Sway Machinery's free Rosh Hashanah concert at San Francisco's major Reform temple. And so did the few hundred folks who turned out to see the combined forces of indie-darlings Arcade Fire, Balkan Beat Box, and others. When I arrived to find Emanu-El's Spanish courtyard thronged by hipster masses, I felt sure we were about to witness something transcendent, music that would touch the observant and the lapsed alike. After 14 non-stop hours of prayer and ritual, I was ready for something completely different. Some small part of me even hoped this could be what klezmer revival was a decade ago—a wedge into Jewish culture for the masses.

Alas, it wasn't.  

Instead, the concert was what my mother would call "a good idea, poorly executed." To put it another way, I was really glad I hadn't brought my mother. When the lights dimmed at 10 p.m., roughly two-thirds of the temple's massive sanctuary was full. By 10:03, pretty much everyone over 30 had cleared out. It all started innocuously enough, with a brass rendition of Judaism's central prayer. But the intricate and vaunted melodies of the High Holy Day liturgy just never quite matched up with the music. The product was discordant at best, and ear-splittingly loud. Within 15 minutes, a third of the audience was gone. Another third were pressed against the impromptu stage, while the final portion sat transfixed, unsure whether to rock out or melt into their seats.

There are ways to do religious music so that it's moving to the secular and the faithful alike. Matisyahu—who sings a version of the sacred Shema in his single "Got no Water"—has made a career out of it. Unfortunately, the Sway Machinery hasn't found that balance yet. I'll call it a failure in the tradition of ambitious Rosh Hashanah failures all over the world. Better luck next year, guys.

Climate Change Back on the Agenda?

| Mon Sep. 21, 2009 1:24 PM EDT

After months of obsessing over health care, President Barack Obama could give the climate debate a much-needed shot in the arm this week. Tomorrow he'll speak at the United Nations' Climate Summit in New York, a test run in advance of the Copenhagen conference in December. While Majority Leader Harry Reid has signaled that the Senate may not take up climate legislation until next year, Obama's unofficial "green cabinet" has been quietly lobbying senators behind the scenes to assure them that the climate bill is viewed as a priority by the administration, the Washington Times reports. But the real test of Obama's climate commitment will come later in the week when he addresses the G-20 summit in Pittsburgh. Though the climate isn't officially on the agenda there, watch how Obama does or doesn't talk up green jobs and a carbon market to get an idea of how fast he wants to move on cap and trade.

This Is Your Brain on Kafka

| Mon Sep. 21, 2009 1:11 PM EDT

This story first appeared at Miller-McCune.

The befuddled tramps in Samuel Beckett's Waiting for Godot are a poetic personification of paralysis. But new research suggests the act of watching them actually does get us somewhere.

Absurdist literature, it appears, stimulates our brains.

That's the conclusion of a study recently published in the journal Psychological Science. Psychologists Travis Proulx of the University of California, Santa Barbara and Steven Heine of the University of British Columbia report our ability to find patterns is stimulated when we are faced with the task of making sense of an absurd tale. What's more, this heightened capability carries over to unrelated tasks.

In the first of two experiments, 40 participants (all Canadian college undergraduates) read one of two versions of a Franz Kafka story, The Country Doctor. In the first version, which was only slightly modified from the original, "the narrative gradually breaks down and ends abruptly after a series of non sequiturs," the researchers write. "We also included a series of bizarre illustrations that were unrelated to the story."

The Finance Lobby

| Mon Sep. 21, 2009 12:27 PM EDT

If you use your debit card and overdraw your account, your bank will hit you with an overdraft fee.  If you make five purchases of ten dollars each on the same day, you'll get five more overdraft fees.  And just to make sure you get hit with as many fees as possible, your bank will make sure to debit your biggest transaction of the day first — even if it was actually the last one you made that day.  That way your account goes to zero faster and every subsequent debit triggers another fee.  Ka-ching!

That's all bad enough, but there's one more thing: you have no choice in the matter:

Sen. Christopher J. Dodd (D-Conn.) plans to introduce legislation requiring banks to get permission from customers, rather than allowing overdrafts automatically. If customers decline and then try to overspend, the transaction would be rejected. A similar bill is pending in the House.

Dodd dismissed concerns about the impact on ailing banks. "People out there are getting whacked," he said. "They should have the right to say, 'Deny me the transaction.' "

Well, good for Chris Dodd.  I hope his legislation passes.  But seriously, ask yourself this: what does it say about the power of the finance lobby in America that this was ever legal in the first place?  I mean, it's not even a close call.  It's just flatly outrageous.  It's outrageous that banks should be allowed to charge fees that amount to 1000% interest rates on a short-term loan; it's outrageous that they should be allowed to reorder your debits to make you pay more of these fees than you should; it's outrageous that they should be allowed to charge multiple fees per day in the first place, since they're essentially just making a single loan; and it's outrageous that they should be able to do this whether you want them to or not.

Let's say that again: They can force you to accept a loan at 1000% interest whether you want it or not.  And no one before now has been able to stop them.

Think about that the next you see one of those happy happy happy Visa debit card commercials where they're exhorting you to just swipe that card for every purchase you make without giving it a second thought.  There's a reason for that.  And there's a reason they can get away with it.