politics

Government Motors
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http://www.whitehouse.gov/blog/2010/04/21/auto-industry-a-year-later

“Today, General Motors announced that it has repaid its $6.7 billion loan to the U.S. government in full five years ahead of schedule”

That’s from a blog post by Larry Summers, Director of the National Economic Council.  There are two things wrong with that.

First, GM didn’t borrow just $6.7 billion.  They borrowed $50 billion.

http://online.wsj.com/article/SB10001424052748704133804575197990349307652.html

“GM’s repayment was a fraction of the $50 billion that the company received from the U.S. government last year. The big payback won’t come until GM goes public and the U.S. can begin to sell off its 60% stake in the company.”

Second, they didn’t pay back the money with their own earnings.  How did they do it?

http://wsbradio.com/blogs/jamie_dupree/2010/04/gm-money-game.html

“‘It’s good news in that they’re reducing their debt,’ Barofsky said of the accelerated GM payments, ‘but they’re doing it by taking other available TARP money.'”

That’s right.  They’re paying back their debt to the taxpayers…by getting further in debt to the taxpayers.

“‘It sounds like it’s kind of like taking money out of one pocket and putting in the other,’ said Carper, who got a nod of agreement from Barofsky.”

Well, no kidding.

Well, maybe things will look better soon?

“‘When do you think we’ll have really good news from GM?’ Carper asked.

‘I don’t have a crystal ball on that Senator,’ Barofsky replied.”

Wow, this GM bailout has been such a great idea.

HT: Coyote

Have you heard about the gay couple in CA who had all their visitation rights denied and personal belongings auctioned off by the state when one of them went into the hospital?  Here’s a quick summary:

http://www.pressdemocrat.com/article/20100420/ARTICLES/100429976/1033

“Greene, 78, said that as Scull lay dying in a hospital bed two years ago, Sonoma County officials denied visitation for the same-sex couple, contending they were mere ‘roommates’ despite signed wills, medical declarations and powers of attorney naming each as the other’s spouse.”

and

“‘They stole my furniture, put me in a retirement home and told me to shut up,’ said Greene, sitting in his cramped studio apartment where he lives alone in Guerneville. ‘They took my cats. They took everything.'”

Any reasonable person would agree that’s horrible.  That kind of treatment is inexcusable toward any human.

Or is it?

Well, what if his visitation rights were denied because Mr. Greene put Mr. Scull in the hospital in the first place?  Yup, that’s right.  It was a domestic violence case.

http://i.imgur.com/TeK9Z.png and here.

“The Sonoma County Public Guardian became involved in this matter as a result of a report from Harold Scull that Clay Greene had physically assaulted him, resulting in Mr. Scull’s hospitalization.  Mr. Greene’s domestic violence against Mr. Scull has been independently verified during the course of litigation, including reports of witnesses who tended to Mr. Scull following the hospitalization.”

So, they didn’t allow him to visit his partner because he put him in the hospital.  I don’t think they would have allowed an abusive husband to visit his wife in the hospital after giving her a beating.  And it sounds like they had Mr. Greene put into a retirement home to care for him because of dementia and they sold off his possessions to pay for it.

Sure, I’m a little nervous about the state having that kind of power, but it seems reasonable in this case.  I mean, they had incontrovertible proof, right?

“While criminal charges were not filed, that does not mean there was no domestic violence.  In order to file criminal charges, there must be proof beyond a reasonable doubt, which is the highest standard known in the law”

Wait, what?  You had enough proof to commit a man to a retirement home and sell everything he had but not enough to file criminal charges for a beating you had eyewitnesses for?!

This whole thing is such a mess.  The media and the homosexual lobby seem to be trying to position this as a denial of rights, without telling the whole sordid story, which I find despicable.  It reminds me a lot of the ridiculous tactics of the anti-Prop 8 campaign.

But the state is certainly not without fault either.  It’s pretty rough when you can tell a big wrong has been done but don’t know which side got the worst of it.

http://www.nytimes.com/2010/04/21/health/policy/21health.html

“Fearing that health insurance premiums may shoot up in the next few years, Senate Democrats laid a foundation on Tuesday for federal regulation of rates, four weeks after President Obama signed a law intended to rein in soaring health costs.”

In other words, they realize the bill they passed will skyrocket insurance rates (40% estimated increase in individual premiums, above the already expected increase) and now they want to control premiums now, too.

Let’s pretend you’re a company with a, say, 2% profit margin.  Let’s say one line item of expenses (health care claims) equals 84% of your revenue.  Now, say those costs go up…by 40%.  How much does your revenue need to increase to cover those higher expenses?

33.6%

That’s right, your premiums will have to increase 33.6% to cover that increase in costs.  Do you think the federal regulator will approve that increase?  Here’s a hint:

“After a hearing on the issue, the chairman of the Senate health committee, Tom Harkin, Democrat of Iowa, said he intended to move this year on legislation that would ‘provide an important check on unjustified premiums.'”

Nope.

Since the politicians keep linking insurance premiums to GDP growth, what if they only approved rate increases that were at par with GDP growth?  What a company’s profit margin be then?

-27.6% in year 1.

-41.1% in year 2.

Somewhere between years 5 and 6, they have a 100% loss.

Before that happens, you will not be able to buy individual health insurance, except for from the government.

Which is what Obama and the Democrats have wanted all along.

Soon, the government will be telling you what to eat, what outdoor activities you can do and what medicine you can and can’t take.

A surgical team from Wilford Hall Medical Cent...
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http://www.boston.com/news/local/massachusetts/articles/2010/04/07/study_health_care_savvy_workers_cost_conscious/

“‘If people are more aware of their overall health care costs and how the different types of care have different costs, then people will use the health care system more efficiently,’ said Amy Lischko, the lead author of the report and former commissioner of the Massachusetts Division of Health Care Finance and Policy.”

and

“Those who knew their co-payments were more likely to have more office visits and fewer emergency room visits, which are typically more costly, according to the study.”

Interesting words from someone so closely tied to the spectacular failure that is Massachusetts’ new health care system (and the model for the Federal Health Care Reform Bill).

However, she’s correct.  As I’ve been saying throughout this debate, forcing insurers to cover everybody without a significant mandate to always be insured is a recipe for lost freedom and extremely high insurance rates, not the solution to our problems.

The solution is to lower the cost of services through competition for those services, based on quality and price.  Let’s make price and quality information freely available and step back and watch the market work.  Then services AND insurance will be affordable for everybody.

My apologies for the long post but, holding public figures accountable for their misuse of statistics is important. This post isn’t meant to be partisan, only to critically think about statistics that are being used by politicians. Any examples of politicians of any kind misusing statistics like this are welcome in the comments and may be fodder for future posts.

Recently, the Obama Administration has been publicizing a graph by Nancy Pelosi’s team comparing the last year of the Bush Administration with the first year of the Obama Administration.

It’s an interesting graph and it’s meant to show that Bush Administration (and Republican) policies were losing the nation jobs while Obama Administration (and Democrat) policies are bringing those jobs back. At first blush, it’s pretty damning.

However, there are a number of problems with a comparison like this: Continue Reading

“We Are All Socialists Now: The Perils and Pro...
Image by djsorted33 via Flickr

Well, they’re at it again.  Do you remember all those complaints about mortgage lenders and their unethical practices?  Hidden fees, rate switches, delays at closing, etc?  Well, they haven’t stopped.

http://boss.blogs.nytimes.com/2010/02/01/for-some-arc-loan-borrowers-an-expensive-surprise-caps-the-long-wait/

“And Ms. Essl found one more unpleasant surprise waiting for her in the closing papers: a nearly $600 fee, to cover the cost of a lien search. ‘Nowhere, anywhere through this whole process,’ she said, weariness evident in her voice, ‘did anybody say there were fees of that magnitude.'”

and

“For Ms. Essl’s $20,000 loan, the…fee worked out to 3 percent.”

Hidden fees in the range of an extra 3%?  So, if you borrowed at 6%, you’re now borrowing at 9%.

Who is the unscrupulous institution?

The federal government, of course.

It’s true that the fees aren’t being charged by the government but by the banks loaning the money.  But, the fees are charged because the government requires collateral on every loan, which means a lien search must be done.

And, the fees aren’t even the worst part:

“Sharon Essl, a restaurant owner in New Jersey, commented that after submitting an application to Wells Fargo on July 31 — and resubmitting it three more times — her loan was finally approved two months later. ‘But — wait for it,’ she wrote. ‘Still have not closed!’ In an interview, Ms. Essl said that she received the closing papers last Monday and that the first installment of funds was due by Jan. 28 — four months after she was approved.”

and

“In December, Elease Caracci wrote… that she had won approval for her A.R.C. loan in early August but had yet to receive any money.”

Four months is a big deal to any small business.

When are voters going to understand that the pipe dream they’re handed on the campaign trail is just that?  A dream.  When the government gets involved, the strategy is good about 25% of the time and the execution is good about 2% of the time.