This got me fired up this morning. For those that don't see what I may infrequently post on facebook, I've put the article here and my response. This was posted by a former high school classmate with the following comment. My response is at the bottom.
Former classmate: "Oh Tea Partiers and other healthcare reform opponents, what do you have to say about this? "
http://cbs11tv.com/local/Baby.denied.coverage.2.1587978.html
10-Day-Old Baby Denied Health Care CoverageBy Melissa Newton FORT WORTH (CBS 11 / TXA 21) ―
Houston Tracy is just 10 days old, but the little boy has already lived through trying times."He was born with what's called transposition of the great arteries." his father, Doug Tracy said. "It's heart wrenching; I hated it."The congenital heart defect causes the two major vessels that carry blood away from the heart to become switched.It's a condition rarely detected before birth."My whole pregnancy was simple, it was easy, no complications, doctor visits were great," Houston's mother, Kim Tracy said. "Perfect sonograms, great little pictures and then, he wasn't perfect."The baby was rushed to Cook Children's Medical Center in Fort Worth where he had life-saving surgery."He's doing really good," his mother said with a smile, "he's a little tough guy."While baby Houston is fighting for recovery, his parents found themselves in another battle: Fighting the insurance company, Blue Cross and Blue Shield of Texas.The Tracy's are both small business owners and do not carry health insurance for themselves. They do carry insurance on their two other children and tried to get insurance for Houston, but they found out Wednesday his coverage was denied."They kept saying it's preexisting, it's preexisting, but I don't know how it can be preexisting on a baby that was just born." his father said. "If it's mandated that everyone have health insurance, than how can one be denied?"Blue Cross and Blue Shield can't comment on the family's situation, but did comment about the health care reform law, and how it may affect coverage."We will work closely with our customers to keep them informed of any changes that may result from the new law," said Margaret Jarvis, the company's Senior Manager of Media Relations. "We will continue to review the bill's requirements on our business and their respective time frames to ensure full compliance."While the Tracys said they'll do whatever it takes for their baby, they have no idea at what cost.A "Houston Samuel Tracy" fund is set up at Bank of America to help the family cover medical costs.
My response:
What do you want to hear? Most private individual insurance policies offer de-facto coverage to babies born from an insured mother. The baby's mother CHOSE to NOT have her own insurance, which meant her baby wasn't automatically covered at birth. Sounds like the mother's fault. By choosing to not have coverage for themselves, they denied their ... See Morebaby automatic coverage, and took the risk that if their baby were born with a health issue, it wouldn't be eligible for its own new coverage. The article, and you, of course, fail to mention this very important fact. Health insurance (not health CARE) is a risk-based service provided by companies that have to run sustainable businesses. If insurance companies are forced to cover everyone that asks for coverage, their costs would overwhelm their income and they'll go bankrupt, which of course denies coverage for EVERYONE. It is immensely sad that this baby was born with a defect, but in this world things happen that are expensive, many that are out of our control. When those things happen, it is the person's responsibility, along with the beneficence of fellow citizens, to bear these costs. (Use this publicity to set up a fund where the public can donate to cover the costs of care for this child). It is not the role of the government to FORCE everyone to bear the costs of the private matters of others.
A final note. At the end of the article is information about a fund that indeed has been set up to help the family pay for the medical expenses. This is how it ought to work. We live in a free country where we ought to be free to help (or not help) when situations like this happen.
Saturday, April 3, 2010
Friday, March 26, 2010
Businesses React to Rising Cost of ObamaCare: They're Cutting Benefits
This is from a ticker so I'm not posting the link because won't be active for long, but I didn't make this up. These examples are coming from the Wall Street Journal.
Remember the part in the ObamaCare pitch when they said if you like your
current healthcare, it won't change?
Turns out it might.
Companies are already announcing that their healthcare premium costs are going through the roof. Some are responding by firing people. Some are cutting
benefits. And some are presumably eating it.
But costs they are a-rising.
A few examples from the WSJ:-- Caterpillar said it would cost the
company at least $100 million more in the first year alone.-- Medical device
maker Medtronic warned that new taxes on its products could force it to lay off
a thousand workers.-- Verizon announced to employees that it will likely have to
cut healthcare benefits to offset the new costs.
So, people who like your employer-provided health insurance, get ready to pay more or get less.
Wednesday, March 24, 2010
Empire in Decline
I'm very behind on things that are important, however, I found this article especially interesting, because the guy talking is a hedge fund manager. Yet, he has a very liberal arts/classically educated take on what the health bill means for the USA.
I can't remember if it was Plato or Aristotle, I think Plato, but I'm not sure if it was in the Republic, but at some point he mentions that societies that are becoming weaker will inevitably have many doctors, a trend in this country and the modern world completely aside from the health bill.
The point of the guy in the article is that many doctors, coupled with the 'demand' for universal healthcare, is a sign that the people are relying more and more on the state to take care of them, which of course is a sign of weakness. I say 'demand' because I'm not convinced that greater than 50% of the population wanted this bill, especially given that it supposedly will provide health coverage to only around 10% of the population (and even that number is highly questionable) while costing EVERYONE ELSE in much greater proportion.
I find the health bill and what it means troubling not just with a financial and socialistic perspective, but also a greater politically philosophical one (which does tie to the socialistic perspective, I know). Universal health coverage, with a deep dependence on government, is a concept fundamentally tied to Utopian ideas, which are stupid (and I don't say that flippantly) and ultimately represent an impossible reality. Yet in many ways those ideas are at the root of any liberal, whether they realize it or not.
http://finance.yahoo.com/news/Health-Care-Law-Signals-US-cnbc-4091862289.html?x=0&sec=topStories&pos=7&asset=&ccode=
Health Care Law Signals US Empire Decline?
The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC.
On Tuesday, US President Barack Obama signed into law health care legislation that expands health coverage for the poor, imposes new taxes on the rich and forbids insurance practices such as refusing coverage to those with pre-existing conditions.
In their expansionary phase, empires force people to go out, seek risks and fend for themselves, Murrin said, reminding of the dismantling of the British empire after the war, when the National Health Service, which ensures universal health coverage in Britain, was created.
"This (empire decline) is actually a dead-set course that societies get into and it will happen very quickly I'm afraid," he told "Squawk Box Europe."
"As you start to build a system it becomes cohesive because of its success... the fractures in the American system I think are more apparent than ever," Murrin added.
China's rise will be much faster than most people anticipate as the country's military prowess increases, he said.
"We all know there's going to be a change, the surprise will be the pace of that change," Murrin said, noting that "all empires when they decline they underestimate their challengers."
The peak for commodities will be reached somewhere between 2020 and 2025 and it's the period before that that must be watched, as China seems much more willing to take risks than Western countries, he predicted.
- Watch the full interview with David Murrin above.
"You have a lot more males in China then you do in the west," he said, noting that 56 percent of the Chinese society was male, because of the country's policies to control population and because of traditions which value males more than females.
"What that means is that they're far more risk-oriented than a society in the West...if you look at conflict and your ability to risk your males in conflict," Murrin explained.
China has started to innovate and has worked out what the West's weaknesses are so it can overtake developed countries, he added.
The country is investing heavily in Africa, which Murrin calls a "huge opportunity" because it has the best demographics in the world and a big resource pool.
"I think Africa, as a generic theme, is the hottest thing in town," he said.
I can't remember if it was Plato or Aristotle, I think Plato, but I'm not sure if it was in the Republic, but at some point he mentions that societies that are becoming weaker will inevitably have many doctors, a trend in this country and the modern world completely aside from the health bill.
The point of the guy in the article is that many doctors, coupled with the 'demand' for universal healthcare, is a sign that the people are relying more and more on the state to take care of them, which of course is a sign of weakness. I say 'demand' because I'm not convinced that greater than 50% of the population wanted this bill, especially given that it supposedly will provide health coverage to only around 10% of the population (and even that number is highly questionable) while costing EVERYONE ELSE in much greater proportion.
I find the health bill and what it means troubling not just with a financial and socialistic perspective, but also a greater politically philosophical one (which does tie to the socialistic perspective, I know). Universal health coverage, with a deep dependence on government, is a concept fundamentally tied to Utopian ideas, which are stupid (and I don't say that flippantly) and ultimately represent an impossible reality. Yet in many ways those ideas are at the root of any liberal, whether they realize it or not.
http://finance.yahoo.com/news/Health-Care-Law-Signals-US-cnbc-4091862289.html?x=0&sec=topStories&pos=7&asset=&ccode=
Health Care Law Signals US Empire Decline?
The passage of the health care law shows that the US empire is declining because it illustrates the fact that people expect the state to take care of them, David Murrin, the co-founder of Emergent Asset Management hedge fund manager, told CNBC.
On Tuesday, US President Barack Obama signed into law health care legislation that expands health coverage for the poor, imposes new taxes on the rich and forbids insurance practices such as refusing coverage to those with pre-existing conditions.
In their expansionary phase, empires force people to go out, seek risks and fend for themselves, Murrin said, reminding of the dismantling of the British empire after the war, when the National Health Service, which ensures universal health coverage in Britain, was created.
"This (empire decline) is actually a dead-set course that societies get into and it will happen very quickly I'm afraid," he told "Squawk Box Europe."
"As you start to build a system it becomes cohesive because of its success... the fractures in the American system I think are more apparent than ever," Murrin added.
China's rise will be much faster than most people anticipate as the country's military prowess increases, he said.
"We all know there's going to be a change, the surprise will be the pace of that change," Murrin said, noting that "all empires when they decline they underestimate their challengers."
The peak for commodities will be reached somewhere between 2020 and 2025 and it's the period before that that must be watched, as China seems much more willing to take risks than Western countries, he predicted.
- Watch the full interview with David Murrin above.
"You have a lot more males in China then you do in the west," he said, noting that 56 percent of the Chinese society was male, because of the country's policies to control population and because of traditions which value males more than females.
"What that means is that they're far more risk-oriented than a society in the West...if you look at conflict and your ability to risk your males in conflict," Murrin explained.
China has started to innovate and has worked out what the West's weaknesses are so it can overtake developed countries, he added.
The country is investing heavily in Africa, which Murrin calls a "huge opportunity" because it has the best demographics in the world and a big resource pool.
"I think Africa, as a generic theme, is the hottest thing in town," he said.
Tuesday, February 2, 2010
The Deficit
This is a great article. I have been intending to post on the dangers of the borrowing that the U.S. is doing, but just haven't done it. This will serve as (a much better than what I could produce, probably) substitute for now.
Conservative politics have traditionally meant reduced spending (I know it didn't work that way with Bush) and liberal politics generally advocate bigger government and more spending, and so its hard to believe that the budget will get anywhere near balanced (as Obama hope to get with the commission mentioned at the end of the article) while Democrats are in power, unless there is a large increase in taxes. This is incredibly serious and threatens our standard of living as Americans in the least, and threatens our entire government and way of life at worst.
http://finance.yahoo.com/banking-budgeting/article/108736/deficit-balloons-into-national-security-threat?sec=topStories&pos=5&asset=&ccode=
Conservative politics have traditionally meant reduced spending (I know it didn't work that way with Bush) and liberal politics generally advocate bigger government and more spending, and so its hard to believe that the budget will get anywhere near balanced (as Obama hope to get with the commission mentioned at the end of the article) while Democrats are in power, unless there is a large increase in taxes. This is incredibly serious and threatens our standard of living as Americans in the least, and threatens our entire government and way of life at worst.
http://finance.yahoo.com/banking-budgeting/article/108736/deficit-balloons-into-national-security-threat?sec=topStories&pos=5&asset=&ccode=
The federal budget deficit has long since graduated from nuisance to
headache to pressing national concern. Now, however, it has become so large and
persistent that it is time to start thinking of it as something else entirely: a
national-security threat.
The budget plan released Monday illustrates why
this escalation is warranted. The numbers are mind-numbing: a $1.6 trillion
deficit this year, $1.3 trillion next year, $8.5 trillion for the next 10 years
combined—and that assumes Congress enacts President Barack Obama's proposals to
start bringing it down, and that the proposals work.
These numbers are often
discussed as an economic and domestic problem. But it's time to start thinking
of the ramifications for America's ability to continue playing its traditional
global role.
The U.S. government this year will borrow one of every three
dollars it spends, with many of those funds coming from foreign countries. That
weakens America's standing and its freedom to act; strengthens China and other
world powers; puts long-term defense spending at risk; undermines the power of
the American system as a model for developing countries; and reduces the aura of
power that has been a great intangible asset for presidents for more than a
century.
"We've reached a point now where there's an intimate link between
our solvency and our national security," says Richard Haass, president of the
Council on Foreign Relations and a senior national-security adviser in both the
first and second Bush presidencies. "What's so discouraging is that our domestic
politics don't seem to be up to the challenge."
Consider just four of the
ways that budget deficits also threaten American's national security:
• They
make America vulnerable to foreign pressures.
The U.S. has about $7.5
trillion in accumulated debt held by the public, about half of that in the hands
of investors abroad.
That means America's government is dependent on the
largesse of foreign creditors and subject to the whims of international
financial markets. A foreign government, through the actions of its central
bank, could put pressure on the U.S. in a way its military never could. Even
under a more benign scenario, a debt-ridden U.S. is vulnerable to a run on the
American dollar that begins abroad.
Either way, Mr. Haass says, "it reduces
our independence."
• Chinese power is growing as a result.
A lot of the
deficit is being financed by China, which is selling the U.S. many billions of
dollars of manufactured goods, then lending the accumulated dollars back to the
U.S. The IOUs are stacking up in Beijing.
So far this has been a mutually
beneficial arrangement, but it is slowly increasing Chinese leverage over
American consumers and the American government. At some point, the U.S. may have
to bend its policies before either an implicit or explicit Chinese threat to
stop the merry-go-round.
Just this weekend, for example, the U.S. angered
China by agreeing to sell Taiwan $6.4 billion in arms. At some point, will the
U.S. face economic servitude to China that would make such a policy decision
impossible?
• Long-term national-security budgets are put at risk.
This
year, thanks in some measure to continuing high costs from wars in Iraq and
Afghanistan, the U.S. will spend a once-unthinkable $688 billion on defense.
(Before the Sept. 11, 2001 attacks, by contrast, the figure was closer to $300
billion.)
Staggering as the defense outlays are, the deficit is twice as
large. The much smaller budgets for the rest of America's international
operations—diplomacy, assistance for friendly nations—are dwarfed even more
dramatically by the deficit.
These national-security budgets have been
largely sacrosanct in the era of terrorism. But unless the deficit arc changes,
they will come under pressure for cuts.
• The American model is being
undermined before the rest of the world.
This is the great intangible impact
of yawning budget deficits. The image of an invincible America had two large
effects over the last century or so. First, it made other countries listen when
Washington talked. And second, it often—not always, of course, but often—made
other peoples and leaders yearn to be like America.
Sometimes that produced
jealousy and resentment among leaders, but often it drew to the top of foreign
lands leaders who admired the U.S. and wanted their countries to emulate it.
Such leaders are good allies.
The Obama administration has pledged to create
a bipartisan commission charged with balancing the budget, except for interest
payments, by 2015. The damage deficits can do to America's world standing is a
good reason to hope the commission works.
Tuesday, September 22, 2009
One Prediction
Quick post this morning. First, I'd like to encourage everyone to go down to the Whole Foods CEO post below and read the comment. We have a new participant, and look forward to more contributions to this discussion. I owe responses to some of the recent posts as well, and I will get to them.
I wanted to post this link/story. I have no idea who this man is, his political leanings, economic schooling, etc, but his dire prediction is one that I have feared ever since I started studying economics (it was one of my majors) in college. I have always feared that one morning we'd wake up and find that things we thought had value like 'wealth' and 'money' would be worthless. Such a catastrophe doesn't just 'happen,' but is the result of many many many poor decisions by many many parties (including you and me).
Don't think it can't happen. Many institutions that nobody dreamed
could ever 'fail' went away in a heartbeat just last year. Not even the
U.S. and the almighty dollar are too big to fail.
I wanted to post this link/story. I have no idea who this man is, his political leanings, economic schooling, etc, but his dire prediction is one that I have feared ever since I started studying economics (it was one of my majors) in college. I have always feared that one morning we'd wake up and find that things we thought had value like 'wealth' and 'money' would be worthless. Such a catastrophe doesn't just 'happen,' but is the result of many many many poor decisions by many many parties (including you and me).
Don't think it can't happen. Many institutions that nobody dreamed
could ever 'fail' went away in a heartbeat just last year. Not even the
U.S. and the almighty dollar are too big to fail.
"The future will be a total disaster, with a collapse of our capitalistic
system as we know it today, wars, massive government debt defaults and the
impoverishment of large segments of Western society," Marc Faber writes in
the September issue of The Gloom, Boom & Doom Report.
A statement like that pretty much speaks for
itself, but it's a bit more complicated than appears on first blush.
Faber has been bullish -- especially on commodities and emerging market
stocks -- for some time now and believes the current global recovery trade
will last another two-to-three years, as discussed in more detail in a
forthcoming clip. But he has major long-term concerns about the dollar's
long-term viability given rising U.S. deficits, massive unfunded mandates
and the fact "we have a money-printer at the Fed."
This combination will eventually lead to runaway inflation, wholesale
debasement of the dollar, and a major lowering of living standards for
most Americans and many Europeans as well, says Faber, who is "highly
confident" in this grim prediction.
Wednesday, August 19, 2009
I hope we learn from a recent huge mistake.
If you have bad credit, is home ownership a right? I think that the subprime mortgage crisis showed everyone that home ownership is not a right. Check out this article from the New York Times published on Sept. 30, 1999.
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: Thursday, September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
A version of this article appeared in print on Thursday, September 30, 1999, on section C page 2 of the New York edition.
Clearly, this program was one of the worst mistakes in the recent history of this country. Home ownership for the credit-unworthy is not a right. Ten years later, some tell us that healthcare is a right. Maybe we can learn from this mistake instead of repeating it. Imagine where our economy and our country would be now if the loosening of standards to extend mortgages had been greeted with as much furor as healthcare reform is being shown now? I bet that Obama would not have been elected President.
Tangent alert: On Charlie Rose tonight, I watched an interview with an author named Jim Collins. His most recent book is called How The Mighty Fall: And Why Some Companies Never Give In. He studied how huge, massive businesses fail. His writing can be expanded to apply to a huge, massively successful country like ours. He lists five steps that a company undergoes on the way from being on top of the world to no longer existing or, even worse, becoming irrelevant. The step that reminds me of the current push for healthcare reform is "Stage 2: Undisciplined Pursuit of More". This step is marked by a poor decision to expand too fast into an area where the consequences of failure are not worth the risks. Expansion by the government into the healthcare industry strikes me as classic over-extending.
Fannie Mae Eases Credit To Aid Mortgage Lending
By STEVEN A. HOLMES
Published: Thursday, September 30, 1999
In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.
The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.
Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.
In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.
''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''
Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.
In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.
''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''
Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.
Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.
Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.
Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 per cent and the number of Asian Americans by 46.3 per cent.
In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.
In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.
The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.
A version of this article appeared in print on Thursday, September 30, 1999, on section C page 2 of the New York edition.
Clearly, this program was one of the worst mistakes in the recent history of this country. Home ownership for the credit-unworthy is not a right. Ten years later, some tell us that healthcare is a right. Maybe we can learn from this mistake instead of repeating it. Imagine where our economy and our country would be now if the loosening of standards to extend mortgages had been greeted with as much furor as healthcare reform is being shown now? I bet that Obama would not have been elected President.
Tangent alert: On Charlie Rose tonight, I watched an interview with an author named Jim Collins. His most recent book is called How The Mighty Fall: And Why Some Companies Never Give In. He studied how huge, massive businesses fail. His writing can be expanded to apply to a huge, massively successful country like ours. He lists five steps that a company undergoes on the way from being on top of the world to no longer existing or, even worse, becoming irrelevant. The step that reminds me of the current push for healthcare reform is "Stage 2: Undisciplined Pursuit of More". This step is marked by a poor decision to expand too fast into an area where the consequences of failure are not worth the risks. Expansion by the government into the healthcare industry strikes me as classic over-extending.
Sedition
Not much original thought from me at the moment (and its a months-long moment, I fear), but I will use this blog to stockpile really great articles from other people. At the very least, I will be able to read them again and reflect.
This article comes from the San Antonio Express-News, a newspaper I only look at to read Brent Zwernerman's Aggie sports blog. I went from reading about Von Miller being compared to Ray Childress to this. I feel like this author captures some of the frustration of the public at this pivotal time without applying a partisan filter to the events of the day. I will be reading his stuff in the future.
Dissent OK, unless it's against Obama's plans
Jonathan Gurwitz
Remember when dissent was considered to be the highest form of patriotism? That would have been during the era that began after George W. Bush's inauguration.
It was the summer of 2002, in fact, when leftist historian Howard Zinn — not Thomas Jefferson, to whom the saying is frequently misattributed — popularized the dissent-equals-patriotism formulation in a magazine interview. That era ended on Jan. 20, 2009, the day of Barack Obama's inauguration.
Today, if you merely disagree — dissent is too strong a word — with the policies being formulated by the Obama White House and the unchecked Democratic majorities in Congress, you could be some sort of mindless Nazi. That's what House Speaker Nancy Pelosi seemed to insinuate when she referred to Obamacare protestors as “AstroTurf” who were “carrying swastikas and symbols like that.”
Well, yes. There have been a few protestors who in very poor taste have utilized Nazi symbols, mostly with the universally recognized, crossed out red line to indicate what they are against — an unprecedented expansion of government power.
If you assume, charitably, that Pelosi was merely expressing disgust at the casual use of symbols of hate to express a political disagreement, ponder this: Where was her sensitivity over the years when explicitly equating Bush with Hitler was considered to be an elegant expression of political thought?
Suggesting that the U.S. government is in any way comparable to the Nazi government and shouting down opponents, as a handful of ignorant Obamacare protestors have done, is offensive and wrong. But it is surely no more offensive or wrong than the suggestion by one of the most powerful political figures in the nation that peaceful citizen protests are an artificial manifestation of stormtrooper mentality.
In case that suggestion was in doubt, Pelosi clarified it in an op-ed she penned last week for USA Today with Majority Leader Steny Hoyer. “Drowning out opposing views,” they wrote, “is simply un-American.”
Drowning out? Un-American? Perhaps they had in mind the Service Employees International Union, whose blog declares the imperative, “We must fight back against lies and fear-mongering to drown out the opposition.”
No, wait. SEIU mans the barricades for Obama and supports one or all five of the unsettled health reform bills in Congress.
Perhaps they were referring to Kenneth Gladney, an African American who was roughed up outside a town hall meeting near St. Louis. Police made two arrests for assault.
No, wait. Gladney was giving out “Don't Tread on Me” flags and the goons who allegedly attacked him were Obamacare advocates and, in video of the incident, appear to be SEIU members.
Perhaps they had in mind the speaker at a recent political rally in Virginia. “I don't want the folks who created the mess to do a lot of talking. I want them to get out of the way.”
No, wait. That was Barack Obama, president of the United States, telling opponents to shut up and move. The same president whose White House has set up an Internet tip line for patriotic citizens to report “fishy” criticism of the yet to be defined health reform plan. This is no way to restore civility and elevate the debate.
The official White House blog instructs informers to rat out suspicious dissent by emailing flag@whitehouse.gov. Get it? Rally around the flag. There's liberal nuance for you.
Remember when a false appeal to patriotism was considered to be the last refuge of a scoundrel? This saying actually did come from Samuel Johnson, an 18th century British conservative. The era for scorning such appeals evidently came to an end in the United States on Jan. 20 as well.
jgurwitz@express-news.net
This article comes from the San Antonio Express-News, a newspaper I only look at to read Brent Zwernerman's Aggie sports blog. I went from reading about Von Miller being compared to Ray Childress to this. I feel like this author captures some of the frustration of the public at this pivotal time without applying a partisan filter to the events of the day. I will be reading his stuff in the future.
Dissent OK, unless it's against Obama's plans
Jonathan Gurwitz
Remember when dissent was considered to be the highest form of patriotism? That would have been during the era that began after George W. Bush's inauguration.
It was the summer of 2002, in fact, when leftist historian Howard Zinn — not Thomas Jefferson, to whom the saying is frequently misattributed — popularized the dissent-equals-patriotism formulation in a magazine interview. That era ended on Jan. 20, 2009, the day of Barack Obama's inauguration.
Today, if you merely disagree — dissent is too strong a word — with the policies being formulated by the Obama White House and the unchecked Democratic majorities in Congress, you could be some sort of mindless Nazi. That's what House Speaker Nancy Pelosi seemed to insinuate when she referred to Obamacare protestors as “AstroTurf” who were “carrying swastikas and symbols like that.”
Well, yes. There have been a few protestors who in very poor taste have utilized Nazi symbols, mostly with the universally recognized, crossed out red line to indicate what they are against — an unprecedented expansion of government power.
If you assume, charitably, that Pelosi was merely expressing disgust at the casual use of symbols of hate to express a political disagreement, ponder this: Where was her sensitivity over the years when explicitly equating Bush with Hitler was considered to be an elegant expression of political thought?
Suggesting that the U.S. government is in any way comparable to the Nazi government and shouting down opponents, as a handful of ignorant Obamacare protestors have done, is offensive and wrong. But it is surely no more offensive or wrong than the suggestion by one of the most powerful political figures in the nation that peaceful citizen protests are an artificial manifestation of stormtrooper mentality.
In case that suggestion was in doubt, Pelosi clarified it in an op-ed she penned last week for USA Today with Majority Leader Steny Hoyer. “Drowning out opposing views,” they wrote, “is simply un-American.”
Drowning out? Un-American? Perhaps they had in mind the Service Employees International Union, whose blog declares the imperative, “We must fight back against lies and fear-mongering to drown out the opposition.”
No, wait. SEIU mans the barricades for Obama and supports one or all five of the unsettled health reform bills in Congress.
Perhaps they were referring to Kenneth Gladney, an African American who was roughed up outside a town hall meeting near St. Louis. Police made two arrests for assault.
No, wait. Gladney was giving out “Don't Tread on Me” flags and the goons who allegedly attacked him were Obamacare advocates and, in video of the incident, appear to be SEIU members.
Perhaps they had in mind the speaker at a recent political rally in Virginia. “I don't want the folks who created the mess to do a lot of talking. I want them to get out of the way.”
No, wait. That was Barack Obama, president of the United States, telling opponents to shut up and move. The same president whose White House has set up an Internet tip line for patriotic citizens to report “fishy” criticism of the yet to be defined health reform plan. This is no way to restore civility and elevate the debate.
The official White House blog instructs informers to rat out suspicious dissent by emailing flag@whitehouse.gov. Get it? Rally around the flag. There's liberal nuance for you.
Remember when a false appeal to patriotism was considered to be the last refuge of a scoundrel? This saying actually did come from Samuel Johnson, an 18th century British conservative. The era for scorning such appeals evidently came to an end in the United States on Jan. 20 as well.
jgurwitz@express-news.net
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