Comments Posted By Larry, your brother
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Lady Logician--

I realize I'll never take your blinders off, but I think you mischaracterize a few things. "The cities, counties and school districts had more to do with that than anything the state or the Feds “dictated”!" Probably not true. As an example, the federal government dictates that schools provide special education services so that childeren can be "mainstreamed." At heart, this isn't a bad idea. It's unfunded, though. The federal governement has never provided enough funding for those services that they dictate. I don't know about the recent past, but I know for certain a few years ago that the deficit in the Mpls. school district was exactly the size of the funding for special ed. that the federal government promised when the enacted the mandate but didn't provide. In the past, some of this shortfall would have been made up from revenue sharing from the state (which is a more progressive system than property taxes) but the state's share of education funding continues to drop. To say that the state's decisions don't contribute to my increased property taxes is wrong. I understand that schools are not managed as efficiently as they could, but it's beginning to feel like we're beginning to cut muscle, not fat. As I mentioned in my first comment, healthcare funding for the poor is something else Pawlenty is cutting that will end up on my property taxes when the county needs to fund its shortfall from providing those services.

"He sits down and listens to people who approach him on issues and takes their concerns into account." Seriously. Were you here last spring? I realize there's enough blame to go around on the budget issue, but to veto the budget, not call a special session, and then begin to "unallocate" funding to various agencies is hardly "personable."

And by the way, I'd be careful in calling MN "liberal" anymore. It may seem that way to some, but we've been pulled toward the middle like most of the country. Remember, this is the state that's produced Michelle Bachman and John Kline.

Comment Posted By Larry, your brother On 16.02.2010 @ 08:43

Having lived through Pawlenty's reign, I've seen him work up close and personal. From a distance, he may seem like a reasoned, thinking leader. In reality, he's not. He's simply done what the Federal government has done--pushed the responsibility for funding programs that people want/need to the local level. Income taxes have not gone up, but property taxes (the major funding source for cities and towns) have. Like most states, the cost of a higher education has skyrocketed, infrastructure is in dire need of repair, and healthcare is a mess (part of his solution to the current fiscal crisis was to "unallocate" funding for the healthcare program for the poor, whose costs are now borne by county taxpayers and, utlimately, property owners). He's kind of a one trick pony: lower taxes/cut spending. And that's he's weakest characteristic: I've not seen any great, creative solution to the myriad of problems facing state and local governments. He really doesn't try to govern and find compromise, he tries to bully. He's not as bad as Jesse Ventura in that way, but only because he does it with a smile and without the gravelly voice.

Comment Posted By Larry, your brother On 15.02.2010 @ 14:05


ACORN could be the worst organization ever conceived of, and its leaders may be accused of trying to bring the Socialist Eden to America. But your explanation of the financial crisis and Acorn's impact on it don't stand up to rational scrutiny.

Mattherw Vadum's piece you refer to is full of the inaccurate, popular business commentary posted in various places. The "radical experimentaion" of the CRA in 1977 was a response to the continuing practice by banks that refused to make mortgage loans in certain parts of major cities. Growing up in Chicago, you have to remember that period. And I've said it before and will say it again: If the CRA (or it's changes in the 1990s) were responsible for last year's financial crisis, then why didn't we have the same kind of crisis during the recessions of 1980, 1981, or 2000 or the slowdowns of 1989 and 1994?

"Banks felt the heat from community organizers and CRA examiners and instead of fighting, they made loans they shouldn’t have and paid out millions of dollars in protection money to ACORN and its brethren." Seriously. Has this guy ever even walked into a bank, much less dealt with one? Do you really think banks made loans they knew people would not pay back? For what? I worked for two large banks for 17 years and the CRA examination was taken very seriously. We documented any community involovement we could to show we were good citizens. But why would a bank make a loan and know they would start becoming a real estate tycoon? Earnings suffer, which means the stock price suffers. Those guys are much more interested in stock prices then CRA examiniers.

"The advent of Mortgage-Backed Securities (MBSs) by Fannie Mae and Freddie Mac gave banks an added incentive to write risky loans, because they knew they could dump their dubious mortgages onto Fannie and Freddie investors who counted on a government bailout if things got rough." Just plain wrong. MBSs have been around for 40 years. They are the reason most of us who own homes were able to get a mortgage at a reasonably low rate. They match long term borrowers with long term investors (of which a bank is not). Fannie and Freddie have been creating these pass-through securites for years. The reason they almost brought the system down, and where they got greedy, is that they held on to more and more of them rather than sell them to investors. When housing values went down, the assets on their books went down in value as well. This caused problems for their balance sheet, their liquidity, and ultimately their solvency.

"MBSs received strong bond ratings from credit agencies in part because Fannie and Freddie, which had been ordered to place politics over profit making, had long enjoyed an implied guarantee from Uncle Sam, so investors bought them with confidence." Mostly wrong. MBSs received a high credit rating because, historically, they paid back something like 97% of principal and interest in a timely fashion. The implied gurantee didn't make them more credit worthy, but probably caused mortgage rates to be lower than they should have been. And it wasn't politics that drove Fannie and Freedie. They issued publicly held stock, their managers received stock compensation, so they were encouraged to make lots of money so their stock prices would go up. Pretty simple self-interest at work.

"Economist Stanley Liebowitz wrote that the current mortgage market debacle is “a direct result of an intentional loosening of underwriting standards—done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.”" Partly right again. The crisis was indeed due to the loosening of underwriting standards. But the disaster came not at the hands of social scientists or socialists but at the hands of capitalists. Somehow investors became convinced that not having proof of income or having poor crdit was OK if you were buying a house. Once that happened the banks and Wall Street starting printing money and could see no reason to stop. The former chairman of Citigroup actually said something like "As long as the music plays, we're going to keep dancing." Doesn't sound to me like ACORN was holding a gun to his head to make these loans.

I went through Vadum's piece in detail to debunk some of the myths of what's happened over the last two years. ACORN could be the worst group in the world (I've had my own run-ins with them). But this crisis was caused by excessive, unregulated capitalism, not creeping socialism.

Comment Posted By Larry, your brother On 23.09.2009 @ 08:34


Nicely done, Rick.

Wikipedia (who else?) reports that Marlene Dietrich first recorded it in 1962. Interestingly, it was performed at the funeral of Harry Patch of England last month. He was the last surviving English soldier from World War I.

Comment Posted By Larry, your brother On 17.09.2009 @ 11:53


1. I am certainly not an expert on healthcare finance. But maybe the first step is to stop the incredibly rising costs before actually bringing them down. And those of us on private insurance plans already benefit from the cost cutting to doctors and hospitals. Insurance companies (like Wellpoint and United Healthcare) use those prices as guidelines for what they pay to doctors.

2. Read my note. Moving from a Single Payer system (which was probably a non-starter anyway) to Insurance Co-Ops is trying to throw up something ANY Republican may possibly, hopefully, maybe listen to.

3. I know you're for reform, as I have read you pretty consistently. Never accused you of anything else.

I haven't seen the Price Waterhouse study, but I'd love to see what activities make up this 10%. Extra tests? Extra paperwork? And insurance pools sound to me like group insurance, which is what I have now. Are they pools for people with the same problems? Isn't that the point of group insurance--to spread the risk among many people? Insurance companies have been trying to segregate risks like this for years, claiming it's the one cancer patient or heart condition in a pool that's jacking up rates. It won't help solve the problem of affordable healthcare. Selling insurance across state lines sounds like eliminating restrictions on branch banking: you get efficiences in the administrative process, but remember these are insurance companies. If they're like banks, that efficiency will not be passed along in lower rates. Finally, insurance companies already tailor policies to people who want less. I just went through that process for a certain 23 year-old young man. We were able to buy a policy that had some basic coverage with low premiums and high deductibles. It didn't cover everything, only major medical and an annual physical. This probably doesn't apply to group policies, but there should be no reason (except legislative) that they can't.

I think the whole problem with the healthcare debate is nobody is stating the obvious: we provide a basic human need in the context of a for-profit system. Why don't we treat it like a utility? Why don't we gurantee a cost+ payment system to healthcare providers (and drug companies and medical device makers)? That's probably what Medicare tries to do, and I'm sure there would be arguments about what should go into the cost structure and what should not. But we do that now for electricity, so why can't we do it for healthcare? I realize there are all sorts of problems with Public Utility Commisions, and people will worry about being dictated to by bureaucrats. But since we are already being dictated to by the private sector equivalent (claims adjusters) why not at least give us some influence over who those decision makers might be?

Comment Posted By Larry, your brother On 19.08.2009 @ 13:27

So what's the solution to the rising cost of healthcare? All I've heard from Republicans is that all we really need to do is tweak the system and everything will be fine. Nothing that indicates any thoughtful proposal, or any attempt at a compromise with Democrats. Single Payer System? "Socialized Medicine!" OK, let's move to a Public Option. "Socialized Medicine!" Right. Let's look at Insurance Co-Ops (which sounds like what group insurance is supposed to do, but...). "Socialized Medicine!" With Kyl's and Grassely's comments from yesterday, it's pretty obvious the Republicans want this issue to fail. Again. So how does that affect me, who has no problem with getting insurance? Because people get sick, regardless of their insurance status, and get treated. If they can't pay for it, someone has to and that cost comes back to me in higher premiums (as the bad debt works its way through the system) or higher taxes (as county hospitals need to recover the cost of treating the indigents). Unless we are willing to let people die because we can't afford to treat them, then we will all pay for these healthcare costs. The question becomes where and how do you want to pay for it.

1. Please present evidence that anything - repeat anything - that is in this reform plan will actually bring down costs. Are you smarter than Director Elmendorf at the CBO who says that it's a pipedream to believe that costs will come down significantly? Even the Medicare cost control measures are nothing more than cutting payments to doctors and hospitals - which will simply be passed on to those of us on private insurance plans.

2. "Negotiating" with the Democrats and the White House has been a sham. Name one concession they've made to the GOP? The idiotic hub bub over the "death panels" only shows their political cowardice.

3. I am for reform. I agree wholeheartedly that unless we find a way to bring costs down, we are done for. I am not such an absolutist that I think all solutions can be found in the free market - something you would know if you had been reading me consistently.

How about tort reform. Price Waterhouse determined in a study that 10% of all health care costs can be attributed to defensive medicine practiced solely because of our wacky malpractice laws. How about insurance pools instead of co-ops? How about changing the regs at state level that prevent insurance companies from selling across state lines? How about changing regs that require insurance companies to offer comprehensive health coverage so they can tailor policies to individuals like we do for auto insurance.

The key I believe is that we are reaching for the stars when we should be planning a trip to Glen Lake. Incremental changes instead of this monstrous disruption that no one knows - including Obama - how it will work, how it will be paid for, or how it will affect the current system would make more sense and would probably gain Obama a few Republicans in the process.


Comment Posted By Larry, your brother On 19.08.2009 @ 11:25


Why the vitrol? What bothers you so much about a rock concert? A very big rock concert (unseen up to that point). I think a lot of people imbued a Woodstock aura on the whole thing, but if you talk to anyone who was there, not everyone was stoned, naked, or out to change the world. The only thing everyone had in common was that there were all wet.

You might say that, if there is a distinction in our generation (emphasis on our) it might be that we heeded the call of Kennedy and the Great Society programs to volunteer and give back. Our parents participated (at church, with the Cub Scouts, or sports) but I think the emphasis was more on people you didn't know rather than family/church related efforts.

Bringing Manson into the disucssion was a wonderful red herring.

And as for the idea that others "still cling to their dream of brotherhood...." count me in. I still believe in the ideas of another radical from about 2000 years ago who preached the same thing.

Comment Posted By Larry, your brother On 17.08.2009 @ 08:35


So I read your article. I'll agree that having a bureacracy design a test would result in something akin to a giraffe--putting in a little bit of everyone's idea results in an ungainly beast. But to think that this is new is incorrect. The idea has been around for at least 25 years, if not longer. There have always been investments that are classified as those available to a "qualified investor," a term with a very real definition (income totals, asset levels, etc.). Experience is always an important part of the equation--no investment experience, no investment in riskiy ideas. With the explosion of financial engineering over the last 15 or 20 years, all sorts of really clever ideas have become available to people who have no idea of what the investment does, what it doesn't do, and what happens if something really unexpected happens (a second or third standard deviation event, as they are called). Here's an example:

In most markets, you have always been able to invest to take advantage of what you think will happen to interest rates. Buy a bond, you believe rates will stay the same or go down and not hurt you. It's a little trickier if you think rates are going up, but you can use options or futures to bet against interest rates. The risk on betting against rates with options or futures is that your loss can be mutltiples of what you invest, so there are tests to see if you know what you're doing (self protection from the brokerage firms, mostly). In the last few years, there is an investment called an exchange traded fund (ETF) that anyone can buy (trades on an exchane like a stock). Their original intent was pretty benign (mimic the S&P 500 returns with a lower cost than other alternatives), but - surprise! - the financial engineers have taken ahold of them. You can now easily bet against interest rates. More than that, you can leverage that bet and invest in something that moves twice as much as interest rates do. I'd be willing to bet many investors don't realize what they're investing in or the implications of changing interest rates. I say that because the same thing happened with similiar investments in the early '90s (Collateralized Mortgage Obligations, or CMOs). And I'm not the only one. Full service brokerage firms are beginning to ban the trading of those instruments by the "retail" investor (maybe in reaction to the CFPA coming guidelines) because of the potential quick and severe losses by individuals.

You could argue that people, if they want to be stupid, should be allowed to be stupid. The problem is that, in the end, it will fall to you and me to get them through old age with no money. I say that because, at heart, we're not going to let old people starve to death, living under bridges in major cities around the country. And if you don't think that could happen, you haven't been paying attention.

Comment Posted By Larry, your brother On 4.08.2009 @ 09:12


How petty.

Something like 20 people had mild cases of the flu on Sunday, the government declares a state of emergency, and the President takes a 4 hour break. What's he supposed to do? Sit by the phone and wait for news of the 21st flu victim? Of course this is serious, but after preparing for an onslaught of sick people, what can anyone do? And because top people may not be in place to direct policy doesn't mean career civil servants (see, there is value to government service) can't handle the situation and follow protocol.

If you're going to pick on something, pick on something a bit more egregious.

Comment Posted By Larry, your brother On 29.04.2009 @ 06:33


As to your reply to my comments:

1. "The stim bill had nothing to do with economics." I wasn't talking about the stim bill. I said later I had no idea if it would work. I was talking about your take on the financial crisis: "But unless our unsteady and clueless Treasury Secretary can get his act together – and quickly – the dominoes will begin to topple, starting with giants like Citibank, working its way down to powerful regional banks like Fifth Third." I guess I should have been more clear. Your comment doesn't' reflect reality. Ciitibank has been a "wounded giant" for at least a decade; it's probably insolvent now, but nobody can figure out how to wind it down. Fifth Third is a third rate bank and has been for years; if it went away nobody would notice.
2. I love the way you refer to "top economists' who said it was amateur hour. I read a variety of news sources and didn't see that comment. Of course, I suppose the Hoover Institute economists that comment in the WSJ didn't like it, but show me someone who's a little less biased. And again, a 4% market action (and it was 4% not 5%) in the last 9 months is not unusual, strange as that sounds. It happened 9 times in October, four times in December, and a few time since the beginning of the year. Again, don't focus on the traders. The Dow has been trading in a range from 7800 to 8600 since last summer. When it get up to the upper band, it trades down.
3. You misread my comment about salaries. I'm saying exactly what you're saying. Why stop at bank CEOs since everyone else receives some sort of corporate welfare? If you want to save them, save them, but we don't need 300 million bank executives now telling banks how they should run their business. What we need is to figure out how better to regulate the financial instruments that got everyone in trouble (which, I believe, someone proposed about 4 years ago and was told to sit down and be quiet).
4. I have no idea where this comment came from. BTW, I love the way "welfare cheaters" are always put up as a straw man. Have you ever met someone on welfare? Have you ever known anyone who has been able to benefit from a time on welfare and become a useful member of society? And no, I don't see myself as a racist.
5. My one very brief comment about conservatives hoping for failure was a gentle tweak. The hypocrisy I was referring to was listening to that twit Boehner looking horrified at the debt we're going to leave our children and grandchildren. Where was he the last eight years? And why are Republicans all of a sudden calculating the cost of things with the future interest payments included? I'm not saying that's incorrect (it certainly makes sense) but why is this the first time we hear it? Aren't we paying interest on all the amassed debt in the last eight years? I haven't seen a calculation of what that would come to, but it certainly result in a MORE than doubling of the national debt. So yes, I will talk about hypocrisy.
6. Again, three weeks (OK-almost four). Come back and talk to me when they have actually had a chance to do something.
7. You seem to believe we all get an email with "talking points." Doesn't happen. We actually think for ourselves.

Comment Posted By Larry, your brother On 15.02.2009 @ 14:13

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