Saturday Mashup (5/4/13)

May 5, 2013
  • This recent opinion column in the Murdoch Street Journal by Repug U.S. House Rep John Campbell of California tells us the following…

    There were many contributors to the 2008 financial crisis—including unsound housing loans and mortgage-backed securities, Fannie Mae FNMA -0.12%and Freddie Mac, FMCC -0.85%excess leverage by major financial institutions, and regulatory failures. Car and truck loans were not among the problems, and their lenders in any event pose no “systemic” risk to the financial system.

    And yet, amazingly, the Consumer Financial Protection Bureau—a creature of the Dodd-Frank Act, which was passed to correct and prevent the causes of, and problems that led to, the 2008 crisis—wants to change the way car loans are made. The CFPB’s proposal is a noxious attempt to solve a problem that doesn’t exist and is likely to make a mess of one part of the consumer-loan industry that works.

    I’ll explain what is wrong here shortly.

    Currently, if you apply for a car loan through a bank, credit union or one of the car manufacturers like Ford Motor Credit or Toyota Financial, you are judged on matters such as your credit score, income and debt. The financial institution won’t know your race or ethnicity or even necessarily your gender. It will approve or disapprove the application and offer you an interest rate based on the data. That’s just as it should be.

    But it is not good enough for the CFPB. In a quest to make sure that all individuals falling within the “protected classes” under the Equal Credit Opportunity Act get the same interest rate as those who are not covered by it, the agency wants financial institutions to guess your race, ethnicity and gender based on your name and the address on your application. Put bluntly, they want lenders to profile you.

    The CFPB should withdraw this outrageous and abusive guidance immediately and focus on helping consumers in those areas in which the need for reform truly exists.

    Campbell is actually right about most of that without the vitriol (shocking, I know), but here is the problem. The “financial institution” may not have the demographic information on the person trying to purchase a vehicle, but the dealer sure does. And auto dealers have been known to engage in a practice called “dealer markup,” which the CFPB is trying to address, as noted here

    When consumers finance automobile purchases from an auto dealership, the dealer often facilitates indirect financing through a third party lender. The dealer plays a valuable role by originating the loan and finding financing sources. In this indirect auto financing process, the lender usually provides the dealer with an interest rate that the lender will accept for a given consumer.

    Indirect auto lenders often allow the dealer to charge the consumer an interest rate that is costlier for the consumer than the rate the lender gave the dealer. This increase in rate is typically called “dealer markup.” The lender shares part of the revenue from that increased interest rate with the dealer. As a result, markups generate compensation for dealers while frequently giving them the discretion to charge consumers different rates regardless of consumer creditworthiness. Lender policies that provide dealers with this type of discretion increase the risk of pricing disparities among consumers based on race, national origin, and potentially other prohibited bases. Research indicates that markup practices may lead to African Americans and Hispanics being charged higher markups than other, similarly situated, white consumers.

    Oh, and Campbell is a former auto dealership owner who apparently rents properties to dealerships, as noted here (um, want to try and find someone a little more objective to write a column like this? And Campbell is #40 on the list, by the way).

    If auto dealers and the lenders weren’t engaging in this type of nonsense, then there would be no need for the CFPB to step in (more info is here). But since they do…

  • Next, I know I teed off a bit on South Carolina a day or so ago, and with good reason I believe. And here is more cause for indignation…

    The Supreme Court may have ruled ObamaCare is constitutional, but implementing the controversial federal law would become a crime in South Carolina if a bill passed by the state House becomes law.

    The bill, approved Wednesday by a vote of 65-39, declares President Obama’s signature legislation “null and void.” Whereas the law that Obama pushed and Congress passed is known as the Patient Protection and Affordable Care Act, South Carolina’s law would be known as the Freedom of Health Care Protection Act.

    It would prohibit state officials and employees from “enforcing or attempting to enforce such unconstitutional laws” and “establish criminal penalties and civil liability” for those who engage in activities that aid the implementation of ObamaCare.

    So it looks like “The Palmetto State” is going to try the whole tenther, “nullification” BS to get around that socialist, big gumint Kenyan Muslim Marxist pre-dee-dint of ours.

    However, as noted here

    Steering South Carolina’s uninsured residents away from seeking primary treatment in emergency rooms and into free health clinics is a worthy idea. But it wouldn’t come close to matching the benefits of expanding Medicaid coverage to hundreds of thousands of low-income South Carolinians.

    Last week, S.C. House Republicans launched a proposal designed to serve as an alternative to complying with the federal Affordable Care Act, commonly called Obamacare. The proposal would pay hospitals $35 million next year to guide the uninsured to the state’s 20 free federally qualified health clinics.

    The plan also calls for giving the clinics $10 million next year to treat those patients. The money would come from $62 million the state Department of Health and Human Services received last year but did not spend.

    The plan also includes $20 million – $6 million in state money and $14 million from the federal government – to pay rural hospitals for the entire cost of uncompensated care they provide for low-income patients. Smaller amounts would go to other efforts to expand and improve care, such as $3 million for a program to repay the student loans of doctors who agree to work in underserved areas of the state.

    But not a single new person would be insured under the plan. By contrast, expanding Medicaid under the Affordable Care Act would result in about 500,000 more uninsured residents being covered.

    Also, here is some background on Bill Clinton’s 2012 Democratic National Convention speech in which he outlined the threat to Medicaid expansion from South Carolina Governor Nikki Haley and her pals in charges of states across this country (oh, and has noted here, South Carolina ranks 44th out of 50 states in median income).

    Truly a miracle of Republican Party “governance,” my fellow prisoners…

  • Further, Charles Lane of the WaPo “wanks” as follows here

    Of all the arguments for the Obama administration’s green-energy loan program, one of the worst is that federal aid leverages private capital.

    Consider Fisker Automotive. In August 2009, this wannabe plug-in electric hybrid car company was hard up for cash to pay suppliers and faced potential layoffs.

    A green-energy loan was the only hope, Fisker executive Bernhard Koehler explained in an e-mail to the Department of Energy — because it would help bring in private money. “We are oversubscribed in this equity round with the DOE support — and nowhere without it,” Koehler pleaded.

    A month later, in September 2009, the Energy Department approved a $529 million low-interest loan. Vice President Biden stood before the proposed site of a Fisker plant in Delaware and described the department’s program as “seed money that will return back to the American consumer in billions and billions and billions of dollars of good new jobs.”

    Alas, government loans could not overcome Fisker’s fundamental problem: no experience mass-producing automobiles, let alone the complex battery-powered luxury cars that it proposed to sell for more than $100,000. Today, the company is nearly bankrupt; taxpayers are on the hook for $171 million, and private investors are probably nearly wiped out. (The story is well told, with documents, at PrivCo.com.)

    In response, I give you the following from here

    First, Fisker originally requested the federal funds it received in 2008, before President Obama took office. Why? Because the Bush/Cheney administration urged the company to participate in the federal loan program, seeing it as a worthwhile investment. If Republicans are convinced Fisker should never have received aid in the first place, they’re lashing out at the wrong president.

    Second, to condemn the federal loan program because one company struggled after receiving assistance is silly — some of the companies in the Department of Energy’s program fared well, some didn’t. It happens. As Michael Grunwald explained a while back, “That’s capitalism. That’s lending. That’s life. As one Obama aide told me: Some students who get Pell grants are going to end up drunks on the street.” It’s not as if those failures discredit the entire Pell grant program.

    And third, (House Oversight and Government Reform Committee Chairman Darrell) Issa may want to get off his high horse — in 2009, he urged the Department of Energy to extend federal support to an electronic car manufacturer named Aptera, which declared bankruptcy soon after.

    In the case of this one company, it didn’t work out well, but others have fared far better. There’s no reason for Republicans to throw a fit.

    Silly Steve Benen – what else are the Repugs going to do besides throw a fit? Engage in the tedious, difficult work of actual governance? What a quaint notion (removing my tongue from my cheek).

  • Continuing, I came across this curious item from Think Progress recently…

    The Florida legislature passed a bill this week to impose new obstacles on challenging the death penalty in a state with the greatest number of exonerations. The bill’s intent was to shorten the time inmates wait for execution by imposing time limits for appeals and post-conviction motions, but DNA and other evidence often emerges years after a crime is committed – a concern that didn’t seem to faze Republican proponents of the bill who said swift justice is “not about guilt or innocence”:

    “Is swift justice fair justice?” asked Democratic party Senator Arthenia Joyner, a Tampa attorney who voted against the bill. “We have seen cases where, years later, convicted people were exonerated,” she said. […]

    But Republican Senator Rob Bradley said, “this is not about guilt or innocence, it’s about timely justice.” Frivolous appeals designed only for delay are not fair to victims and their families, he said. […]

    “Only God can judge,” Matt Gaetz, a Republican who sponsored the bill in the House of Representatives, said last week during House debate. “But we sure can set up the meeting.”

    For the record, Matt Gaetz is the son of Don Gaetz, who is in charge of the Florida State Senate. And this tells us that Gaetz the Younger worked in 2010 to defeat amendments that would prevent voting districts from being gerrymandered (which the Repugs have elevated to an art form…the surprisingly forthright excuse – though still a morally bankrupt one – is that the amendments would blunt a “conservative comeback”).

    Florida’s junior state representative also favored repealing Florida’s “Cap and Trade” law here (and get a load of his full-on wingnut language attacking former governor Charlie Crist…some BS about California romance, or something). And based on this, Gaetz the Elder is no prize either.

    However, I don’t believe that M. Gaetz has a right to involve himself on legal matters, at least not for a good while anyway, based on this.

  • Finally, William McNabb wrote the following in the Journal recently (returning to the “money” theme…McNabb is CEO of The Vanguard Group, the mutual fund investing behemoth based in Malvern, Pa.)…

    We estimate that since 2011 the rise in overall policy uncertainty has created a $261 billion cumulative drag on the economy (the equivalent of more than $800 per person in the country). Without this uncertainty tax, real U.S. GDP could have grown an average 3% per year since 2011, instead of the recorded 2% average in fiscal years 2011-12. In addition, the U.S. labor market would have added roughly 45,000 more jobs per month over the past two years. That adds up to more than one million jobs that we could have had by now, but don’t.

    At Vanguard we estimate that the spike in policy uncertainty surrounding the debt-ceiling debate alone has resulted in a cumulative economic loss of $112 billion over the past two years. To put that figure in perspective, the Congressional Budget Office estimates that sequestration may reduce total funding by $85 billion in 2013. Clearly, the U.S. debt situation is the economic issue of our generation.

    Spoken as a charter member of the “pay no price, bear no burden” investor class that continues to skate while the “99 percent rabble” lives paycheck to paycheck…

    Fortunately, Ezra Klein responded as follows here, citing the work of fellow “Wonk Blog” contributor Mike Konczal…

    How do (the authors of the “uncertainty” studies McNabb based his column on) construct the search of newspaper articles for their index, which generates a lot of the movement?

    Their news search index is constructed with four steps. They first isolate their search to a set of articles from 10 major newspapers (USA Today, the Miami Herald, the Chicago Tribune, the Washington Post, the Los Angeles Times, the Boston Globe, the San Francisco Chronicle, the Dallas Morning News, the New York Times, and the Wall Street Journal). They then search articles for the term “uncertainty” or “uncertain.” They then filter again for the word “economic” or “economy.” With economic uncertainty flagged, they then filter again for one of the following words to identify government policy: “policy,” “‘tax,” “spending,” “regulation,” “federal reserve,” “budget,” or “deficit.”

    See the problem? We don’t know what specific stories are in their index; however, we can use their search terms listed above to find which articles would have likely qualified. Let’s take a story from their first listed paper, USA Today, “Obama taking aim at GOP pledge on campaign trail,” from August 28, 2010 (for the rest of this post, I’m going to underline the words in quotes that would trigger inclusion in their policy uncertainty index):Brendan Buck, a spokesman for the House GOP lawmakers who crafted the pledge, said “it’s laughable that the president would try to lecture anyone on.” [….] Buck said the pledge was developed to address voter worries about high unemployment and record levels of government and debt.

    “While the president has exploded federal spending and ignored Americans who are asking, ‘Where are the jobs?’, the pledge offers a plan to end the economic uncertainty and create jobs, as well as a concrete plan to rein in Washington’s runaway spending spree,” Buck said.

    Spokespeople for the conservative movement tell reporters that President Obama’s policies are causing economic uncertainty. Reporters write it down and publish it. Economic researchers search newspapers for stories about economic uncertainty and policy, and create a policy uncertainty index out of those talking points.

    It’s about jobs. It’s about generating demand. It’s about the utter failure of austerity not just in this country, but all over the world.

    I understand that McNabb and those in his orbit won’t admit the complete and total collapse of their wrongheaded ideology, but it’s despicable to watch them try and craft a narrative justifying their mistakes to the utter ruination of working men, women and families all over the world.

    On a bit of a happier note, though, this tells us that, while our supposed geniuses of finance have a collective freak out over pending “Too Big To Fail” legislation co-sponsored in the Senate by Sherrod Brown (no surprise) and David Vitter (WHAAA????), local community banks appear to have no problem with it.

    And those are the folks (and the credit unions also, let’s not forget) that are gradually digging us out of the financial mess created by the corporate Wall Street criminals. Those are the institutions releasing the loans and making the credit available to return the key sectors of our economy to life, thereby increasing demand and leading to better hiring numbers such as these (a long way to go I know, but improvement).

    community-banks
    And given all of this, I would say that this is a sign o’the times.

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    Thursday Mashup (8/6/09)

    August 6, 2009

  • From the “We Decide, Then Report” file, John Lott tells us the following from Fix Noise (here, taking an off day from compiling statistics on how much safer we would be if we all had assault rifles, no doubt)…

    Only in Washington could a program that is spending money 13 times faster than was planned be labeled a “success.” The “cash-for-clunkers” program ground to a halt last week because in less than a week, a program that was supposed to last until November 1, had spent the entire $1 billion allocated to it. Let’s just hope that the government takeover of the rest of the health care industry doesn’t result in similar “success.”

    Meanwhile, in the reality based community (here)…

    The Obama administration’s much-maligned “cash-for-clunkers” trade-in system has made an immediate and indisputable impact on the struggling U.S. auto industry, with consumers flocking to dealerships in numbers not seen in years and auto companies posting strong sales they directly attribute to the government program.

    Ford announced on Monday that their July U.S. auto sales were up a strong 2.3% over results from one year ago, a result that company executives linked to “cash-for-clunkers.”

    And as noted here, the Senate is expected to vote on authorizing $2 billion more of funding for the program today.

    Yes, I’ve read that this is expected to create a mini “auto bubble” also (funny – I wish more people noting that had paid attention to the housing and dot.com “bubbles” as well), with a likely dropoff to occur when the program ends, but who knows for sure? And how can it be a bad thing when the auto industry shows signs of life?

    As noted here…

    If the Senate approves the additional money, it’s likely to lead automakers to increase production and bring back laid-off workers. Many automakers reported low inventories due to increased sales from the program at the end of July. Already Hyundai Motor Co. has added a day of production to its Montgomery, Ala., plant, and Ford is considering increases.

    Ford’s chief financial officer, Lewis Booth, said Wednesday night the company would decide this month and make an announcement in early September.

    Among states, Michigan has taken most advantage of the program, requesting more than $44 million in vehicle vouchers. California dealers had requested nearly $40 million in vouchers, and Ohio had sought nearly $38 million.

    Senate passage would send the legislation to the White House for Obama’s signature and assure consumers there will be no interruption in the program that has led to packed car dealerships nationwide.

    The deals are aimed at boosting auto sales, which have been at their lowest levels in two decades.

    Which of course means that the program is opposed by the Repugs, including Kay Bailey Hutchison of Texas, a state which, to the best of my knowledge, manufactures no automobiles whatsoever (maybe armored, but that’s it).

  • As noted here, President Obama is going to visit Bozeman, MT next week to pitch health care reform. As this story tells us, this is the first visit of a sitting president to this area of “big sky country.”

    (And gosh, J.D. Mullane of the Bucks County Courier Times actually didn’t trash health care reform today, but wrote about a “missing ape sculpture” instead…insert your snark here).

    Maybe while Obama and his entourage are staying over, someone could remind Repug State Rep Michael More that introducing language in a bill that could be potentially interpreted to justify an armed insurrection against this country isn’t a good idea (here).

  • And the both the president and Secretary of State Hillary Clinton are coming under attack for the following based on this (as if Obama doesn’t have enough to do – he’s been in An Oval Office for how long now? Six months and two weeks?)…

    President Obama got lots of attention last month for his drop-in visit to Ghana after the G20 meeting in Italy, where he blasted African leaders for misruling the continent and condemning its people to poverty and backwardness. “Repression can take many forms, and too many nations, even those that have elections, are plagued by problems that condemn their people to poverty,” said Obama. “No person wants to live in a society where the rule of law gives way to the rule of brutality and bribery. That is not democracy, that is tyranny, even if occasionally you sprinkle an election in there. And now is the time for that style of governance to end.”

    They were fine words. But not much else. Obama didn’t single out any particular leader for criticism, and he gave the speech in Ghana, one of Africa’s handful of functional democracies. In her own trip to Africa this week, Secretary of State Hillary Clinton will visit bright spots like South Africa, Cape Verde, and Liberia. But she also has a perfect opportunity to name and shame the continent’s worst leaders. There’s only one problem: she’s going to blow it.

    See how our corporate media cousins have moved from magnifying perceived misdeeds of the Obama Administration to now forecasting what they will do wrong instead; Newsweek must be in possession of tarot cards, tea leaves, an Ouija board, and maybe even Harry Potter’s wand…amazing!

    The article specifically singles out Umaru Yar’Adua of Nigeria, Mwai Kibaki, of Kenya and Joseph Kabila of the Congo as people who are particularly bad actors. And yes, Hillary Clinton has said here that not having a USAID agency head named by the White House is “frustrating beyond words.”

    But I think the following should be considered (from here)…

    The Obama administration inherited a foreign aid system starved of civilian experts and burdened by a bewildering array of mandates. USAID’s full-time staff shrank by 40 percent over the past two decades, but the assistance it oversees doubled, to $13.2 billion in 2008. The agency has a skeleton crew of technical experts, with four engineers for the entire world, Clinton noted recently. Increasingly, USAID has become a conduit for money flowing to contractors, who have limited supervision from the agency.

    As USAID has weakened, foreign assistance programs have proliferated across government agencies, especially the military, causing duplication and confusion. Meanwhile, aid budgets have been saddled with presidential directives, “buy America” provisions and congressional earmarks that raise the cost of aid and reduce its effectiveness, development specialists say.

    “In the USAID budget, every dollar has three purposes: help build an Air Force base, support the University of Mississippi, get some country to vote our way,” said the Rev. David Beckmann, president of the aid group Bread for the World, describing the plethora of political claims attached to aid. The development program, he said, “is a mess.”

    The waste of billions of U.S. reconstruction dollars in Iraq and the growing role of development in the U.S. strategy in Afghanistan have given new urgency to long-running debates about reforming the aid system.

    And as noted here (last year)…

    …the United States currently provides economic aid and security assistance to such repressive African regimes as Swaziland, Congo, Cameroon, Togo, Chad, Cote d’Ivoire, Rwanda, Gabon, Egypt, and Tunisia. None of these countries holds free elections, and all have severely suppressed their political opposition.

    Among the worst of these African tyrannies has been the regime of Teodoro Obiang Nguema Mbasogo of Equatorial Guinea. Obiang has been in power even longer than the 28-year reign of (Robert) Mugabe and, according to a recent article in the British newspaper The Independent, makes the Zimbabwean dictator “seem stable and benign” by comparison. Obiang originally seized power in a 1979 coup by murdering his uncle, who had ruled the country since its independence from Spain in 1968. Under his rule, Equatorial Guinea nominally allowed the existence of opposition parties as a condition of receiving foreign aid in the early 1990s. But the four leading candidates withdrew from the last presidential election in December 2002 in protest of irregularities in the voting process and violence against their supporters. In that election, Obiang officially received more than 97 percent of the vote (down from 99.5 percent in the previous election.)

    Though the U.S. State Department acknowledged that the election was “marred by extensive fraud and intimidation,” the Congress and the administration devoted none of the vehement condemnation that was so evident after the recent, similarly marred election process in Zimbabwe.

    One major reason for the difference in response is oil. The development of vast oil reserves over the past decade has made Equatorial Guinea one of the wealthiest countries in Africa in terms of per capita gross domestic product. Virtually all of the oil revenues, however, goes to Obiang and his cronies. The dictator himself is worth an estimated $1 billion, making him the wealthiest leader in Africa; his real estate holdings include two mansions in Maryland just outside of Washington, D.C. Meanwhile, the vast majority of the country’s population lives on only a few dollars a day, and nearly half of all children under five are malnourished. The country’s major towns and cities lack basic sanitation and potable water, while conditions in the countryside are even worse.

    During his most recent visit to Washington in 2006, Obiang was warmly received by Secretary of State Condoleezza Rice, who praised the dictator as “a good friend” of the United States. Not once during their joint appearance did she mention the words “human rights” or “democracy.” At the same press conference, Obiang praised his regime’s “extremely good relations with the United States” and his expectation that “this relationship will continue to grow in friendship and cooperation.” None of the assembled reporters raised any questions about the regime’s notorious human rights record or its lack of democracy, instead using the opportunity to ask Secretary Rice questions about the alleged threat from Iran.

    Does Obama have work to do in Africa? Yes. Does our Democratic Congress? Uh huh. And our media? Bueller?

    Did Dubya have work to do? Next question.

    Now, Newsweek, since we’ve settled all this for now, can you just report stories like grownups again for a change?

  • And finally, this tells us the following…

    After a period of relatively low bankruptcy filings during 2006-07, U.S. consumer bankruptcies rose sharply in 2008 and continue to climb in 2009. Consumer filings reached 126,434 in July, the highest monthly total since the Bankruptcy Abuse Prevention and Consumer Protection Act (BAPCPA) was implemented in October 2005, and pushed the consumer total for the first seven months of 2009 past 800,000 filings.

    Just to refresh our memories, here are the brave souls who opposed this horrible law (all Dems)…

    Daniel Akaka
    Barbara Boxer
    Maria Cantwell
    Jon Corzine
    Mark Dayton
    Christopher Dodd
    Byron Dorgan
    Dick Durbin
    Russ Feingold
    Dianne Feinstein
    Tom Harkin
    Ted Kennedy
    John Kerry
    Frank Lautenberg
    Patrick Leahy
    Carl Levin
    Joe Lieberman
    Barbara Mikulski
    Patty Murray
    Barack Obama
    Jack Reed
    Jay Rockefeller
    Paul Sarbannes
    Chuck Schumer
    Ron Wyden

    And here are the cowards who supported it (Dems are noted)…

    Wayne Allard
    Lamar Alexander
    George Allen
    Kay Bailey Hutchison
    Max Baucus (d)
    Evan Bayh (d)
    Bob Bennett
    Joe Biden (d)
    Jeff Bingaman (d)
    Christopher “Kit” Bond
    Sam Brownback
    Jim Bunning
    Conrad Burns
    Richard Burr
    Robert Byrd (d)
    Tom Carper (d)
    Lincoln Chaffee
    Saxby Chambliss
    Tom Coburn
    Thad Cochran
    Norm Coleman
    Susan Collins
    John Cornyn
    Kent Conrad (d)
    Larry Craig
    Mike Crapo
    Jim DeMint
    Mike DeWine
    Elizabeth Dole
    Pete Domenici
    John Ensign
    Mike Enzi
    Bill Frist
    Lindsay Graham
    Charles Grassley (he sponsored it)
    Judd Gregg
    Chuck Hagel
    Orrin Hatch
    John Isakson
    Jim Inhofe
    Daniel Inouye (d)
    Jim Jeffords (i)
    Tim Johnson (d)
    Herb Kohl (d)
    Jon Kyl
    Mary Landrieu (d)
    Blanche Lincoln (d)
    Trent Lott
    Richard Lugar
    Mel Martinez
    John McCain
    Mitch McConnell
    Lisa Murkowski
    Ben Nelson (d)
    Bill Nelson (d)
    Mark Pryor (d)
    Harry Reid (d)
    Pat Roberts
    Ken Salazar (d)
    Rick Santorum
    Jeff Sessions
    Richard Shelby
    Gordon Smith
    Olympia Snowe
    Arlen Specter (d?)
    Debbie Stabenow (d)
    Ted Stevens
    John Sununu
    Jim Talent
    Craig Thomas
    John Thune
    David Vitter
    George Voinovich
    John Warner

    (And Hillary Clinton voted Present, which I think is questionable also.)

    A pox on those “Yes” voters for all time…


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