Universal Health Care Fails After Just 7 Months

Hawaii is dropping the only state universal child health care program in the country just seven months after it launched. Gov. Linda Lingle’s administration cited budget shortfalls and other available health care options for eliminating funding for the program.

Universal Health Care expensive? Who could have forseen that? I mean, insurance costs were vastly different way back in -uhm- January when this program was setup… Officials were also shocked to learn that people were chosing free insurance over paying for it themselves:

A state official said families were dropping private coverage so their children would be eligible for the subsidized plan. “People who were already able to afford health care began to stop paying for it so they could get it for free,” said Dr. Kenny Fink, the administrator for Med-QUEST at the Department of Human Services. “I don’t believe that was the intent of the program.”

Now the best part is this: Even with the “cheating” going on by the people supporting the program with their tax dollars, only 2000 children were actually being covered by the state – and more half of the cost was actually being covered by the insurance company.  Meanwhile “experts” still estimate that 3-16,000 kids lacked health care amist a FREE universal program.  (i want a job where i get to just make up unverifiable numbers too!).  Now if the experts are wrong, we don’t actually have a problem – however – if they’re right, apparently U.H.C. did little to solve the problem while maxing out the budget.

Oblivious of the results of the program, Democratic Sen. Suzanne Chun Oakland spouted the following platitude:  “Children are a lot more vulnerable in terms of needing care”. I think the Senator should also mention that  “dumb people struggle more in school” and that “punching puppies is down right mean”.

Government “Helps” Dow Find The Bottom

In an attempt to solve a problem created by government interference with the free market, the government has promised $700 Billion of additional “help” (minus a considerable amount of pork to get this “absolutely necessary” measure passed).   The market’s reaction? Sell, Sell, Sell! Apparently the greedy wall street bastards have less confidence in the government powers and promises then -well- the government’s own view.

The DJIA is not a perfect measure of the market but it’s an easy reference point.  Here are the closing of the Dow for the last few weeks:

Date Dow Change Notes
Mon, Sep 15, 08 10,917 The week before
Tue, Sep 16, 08 11,059 142
Wed, Sep 17, 08 10,609 -450
Thu, Sep 18, 08 11,019 410
Fri, Sep 19, 08 11,388 369
Mon, Sep 22, 08 11,015 -373
Tue, Sep 23, 08 10,854 -161
Wed, Sep 24, 08 10,825 -29 President Bush proposes $700B bailout
Thu, Sep 25, 08 11,022 197
Fri, Sep 26, 08 11,143 121 Democrats claim they have an agreement
Mon, Sep 29, 08 10,365 -778 House Republicans rejects first bill
Tue, Sep 30, 08 10,850 485
Wed, Oct 1, 08 10,831 -19 Senate passes revised bail out
Thu, Oct 2, 08 10,482 -349
Fri, Oct 3, 08 10,325 -157 House passes revised bail out; Bush signs
Mon, Oct 6, 08 9,955 -370
Tue, Oct 7, 08 9,447 -508
Wed, Oct 8, 08 9,258 -189
Thu, Oct 9, 08 8,579 -679
Fri, Oct 10, 08 8,451 -128

Note that in the week and a half before this “crisis” was declared such, the Dow dropped 92 points.  In the week and a half that the government displayed its competence at promising help without mentioning how we got here, the Dow dropped another 500 points.  And in the sole week since the ill-conceived  solution became law the Dow has plummeted another 1874 points.

How many billions will it cost tax payers to bail us out of this bail out?

UPDATE: Another week and the Dow has “recovered” to 8852.  Only another 2000 point gain is now needed to get us back where we started…

The Credit Crunch: Is It Your Fault?

Victor Davis Hanson had an interesting piece last week that I came across today.  He throws the blame for the sub prime mortgage disaster -well part of it at least- right at your feet.  If you agree with him, a chance to redeem yourself is waiting a short month away.

When the mortgage bubble burst, Americans were “shocked” at how many Wall Street buccaneers had been gambling in a vast pyramid scheme with someone else’s money. Paper fortunes were made buying and selling questionable sub-prime mortgages on the silly assumption that such gargantuan inside profiting would always expand — even as the number of homebuyers able to buy overpriced properties was shrinking.

Now after the recent crash in sub-prime mortgages and the stock of several investment firms, a trillion dollars in “assets” could be nearly worthless…

All that remains of this Ponzi scheme is the election-year blame game. Republicans charge that important financial firewalls were dismantled by the Clinton administration while insider liberal senators got shady campaign donations in exchange for aiding Wall Street. Democrats counter that the laissez-faire capitalism espoused by Republicans for two decades encouraged financial piracy while tax policy favored the rich speculator over the middle-class wage earner.

But no one dares to ask what really drove the wheeler-dealer portfolio managers. Who re-elected these shady politicians of both parties? Who fostered the cash-in culture in which both Wall Street profit mongering and Washington lobbying are nourished and thrive? We citizens did — red-state conservatives and blue-state liberals, Republicans and Democrats, alike. We may be victims of Wall Street greed — but not quite innocent victims.

How The $$ Crisis Happened: A Historical Look

There has been some finger pointing on this Fannie & Freddie, sub-prime mortgage debacle – but not nearly as much as – oh – the baseball steroid scandal.  Why?  Well a lot of the congressmen to blame are still around and an election is coming up…. So here’s a look at the long road to colapse as well as some of the warnings that could have prevented it.

1977 – Community Reinvestment Act – President Carter & Democratic Congress

The CRA was a result of national pressure for affordable housing, and despite considerable opposition from the mainstream banking community. The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. That record is taken into account when the federal government considers an institution’s application for deposit facilities. The Act charged the Federal Reserve System to implement the CRA through ensuring banks and savings and loans met their CRA obligations. The CRA is also enforced by the “FDIC”, CRA Statute.  – wikipedia.org

1989 – Financial Institutions Reform Recovery and Enforcement Act – President Bush Sr. & Democratic Congress

FIRREA was enacted in the wake of the savings and loan crisis of the 1980s. As part of a general reform of the banking industry, it increased public oversight of the process of issuing CRA ratings to banks. It required the agencies to issue CRA ratings publicly and written performance evaluations using facts and data to support the agencies’ conclusions. It also required a four-tiered CRA examination rating system. Fed Chairman, Ben S. Bernanke, states that this law greatly increased the ability of advocacy groups, researchers, and other analysts to “perform more-sophisticated, quantitative analyses of banks’ records,” thereby influencing the lending policies of banks. – wikipedia.org

1992 – Federal Housing Enterprises Financial Safety and Soundness Act – President Bush Sr. & Democratic Congress

This required the Federal National Mortgage Association, commonly known as Fannie Mae, and the Federal Home Loan Mortgage Corporation, commonly known as Freddie Mac, to devote a percentage of their lending to support affordable housing. This in part, contributed to increased Fannie Mae and Freddie Mac pooling and selling of such loans as securities , (i.e. securitization), and expanded the secondary market for those loans. – wikipedia.org

1993 – Executive Order Regulations Change – President Clinton

In early 1993 President Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities. The new rules went into effect in 1995 and featured: requiring numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to targeted groups to collect a fee from the banks. According to a United States Department of the Treasury study of lending trends in 305 U.S. cities between 1993 and 1998 467 billion dollars in mortgage credit flowed from CRA-covered lenders to CRA-eligible borrowers. The number of CRA mortgage loans increased by 39 percent. Other loans increased by only 17 percent. – wikipedia.org

Under the Clinton administration, federal regulators began using the act to combat “red-lining,” a practice by which banks loaned money to some communities but not to others, based on economic status. “No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”    The Clinton-Reno threat of “vigorous enforcement” pushed banks to make the now infamous loans that many blame for the current meltdown, Richman said. “Banks, in order to not get in trouble with the regulators, had to make loans to people who shouldn’t have been getting mortgage loans.”  – CNSNews.com

1994 – Riegle-Neal Interstate Banking and Branching Efficiency Act – President Clinton & Democratic Congress

This repealed restrictions on interstate banking, beginning a wave of bank mergers. This gave advocacy groups power to demand more loans to their constituents because CRA allowed them to charge noncompliance and stop such mergers. Fed Chairman, Ben S. Bernanke, states that over time community groups and nonprofit organizations established “more-formalized and more-productive partnerships with banks.” – wikipedia.org

1999  – Bank Deregulation Bill President Clinton & Republican Congress

Deregulation, as a liberal hot word, has been attempted as a scapegoat in this crisis.  This is primarily due to the fact that this is the closest that Democrats can tie Republicans to the banking mess.  In truth, the deregulation helped cushion the meltdown as banks stronger in non-mortgage interests were able to come in and buy up some of the failing banks.  Saving tax payers from bailing out  Merrill Lynch, Bear Stearns, and Lehman Brothers along with Fannie & Freddie.  Also Clinton and 139 Dems seemed pretty happy about it at the time.

Summary Facts: Treasury Secretary Rubin and Deputy Secretary Lawrence Summers both supported the bill. Europe already had so-called universal banking. Big, diversified financial institutions have been weathering the crunch better than anyone else and have occasionally swooped in to lessen the pain – which would have been impossible prior to Gramm’s deregulation. The root of this crisis is subprime loans lavished on people who couldn’t truly afford their homes. – TownHall.com

President Clinton signed into law today a sweeping overhaul of Depression-era [New Deal] banking laws. The measure lifts barriers in the industry and allows banks, securities firms and insurance companies to merge and to sell each other’s products. “This legislation is truly historic,” President Clinton told a packed audience of lawmakers and top financial regulators. “We have done right by the American people.” The bill repeals parts of the 1933 Glass-Steagall Act and the 1956 Bank Holding Company Act to level the domestic playing field for United States financial companies and allow them to compete better in the evolving global financial marketplace.  – Nov 13, 1999 NY Times

2002 – Executive Order Regulations Change – President Bush

In 2002 there was an inter-agency review of the effectiveness of the 1995 regulatory changes to the Community Reinvestment Act and new proposals were considered. The Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System, and the Office of the Controller of the Currency put new regulations into effect September of 2005.The regulations were opposed by a contingent of Democrats because the action “undercuts the statutory purpose of the Act for institutions to meet the needs of low and moderate-income persons and communities by OTS.” The regulations included less restrictive new definitions of “small” and “intermediate small” banks. Intermediate small banks were defined as assets of less than $1 billion, adjusted for inflation (small banks can opt for large bank exam). Large banks have their CRA performance evaluated according to lending, investment and service tests. – wikipedia.org

2004-07 – Fannie & Freddie

Economists at the Federal Reserve and Congressional Budget Office had begun to study them in detail, and found that – despite their subsidized borrowing rates – they did not significantly reduce mortgage interest rates…  [Then] Fed Chairman Alan Greenspan became a powerful opponent, and began to call for stricter regulation of the GSEs and limitations on the growth of their highly profitable, but risky, retained portfolios. In order to curry congressional support after their accounting scandals in 2003 and 2004, Fannie Mae and Freddie Mac committed to increased financing of “affordable housing.” They became the largest buyers of subprime and Alt-A mortgages between 2004 and 2007, with total GSE exposure eventually exceeding $1 trillion. In doing so, they stimulated the growth of the subpar mortgage market and substantially magnified the costs of its collapse. – wall street journal

2004 – House Hearing On Fannie & Freddie

This is an 8 minute video of excerpts from a House Hearing in 2004.  Don’t let congress re-write history.  See and hear with your own eyes who said and thought what about Fannie & Freddie.

2005 – GSE Reform Bill Filibustered By Senate Democrats

In 2005, the Senate Banking Committee, then under Republican control, adopted a strong reform bill, introduced by Republican Sens. Elizabeth Dole, John Sununu and Chuck Hagel, and supported by then chairman Richard Shelby. The bill prohibited the GSEs from holding portfolios, and gave their regulator prudential authority (such as setting capital requirements) roughly equivalent to a bank regulator. In light of the current financial crisis, this bill was probably the most important piece of financial regulation before Congress in 2005 and 2006. All the Republicans on the Committee supported the bill, and all the Democrats voted against it. Mr. McCain endorsed the legislation in a speech on the Senate floor. Mr. Obama, like all other Democrats, remained silent. – wall street journal

White House Warnings

Many critics say that President Bush should have sounded a louder warning about the coming Fannie and Freddie/GSE crisis.  But compared to congressional leaders that assured us that there was “no problem” and that the GSEs were “sound” GW looks like a genius.  Remember that the people that first created the problem, then missed all the warning signs, are trying to say they are the “only ones” that can “fix it” for us.

  • 2001: 1 warning
  • 2002: 1 warning
  • 2003: 6 warnings
  • 2004: 3 warnings
  • 2005: 1 warning
  • 2007: 5 warnings
  • 2008: 17 warnings before congress acted – White House & Gateway Pundit

Clintons: Make $109 Million; Vow To Stop Rich

That’s right since leaving the White House the Clintons have sure found a lot of GREEN. They couple’s recently released tax returns show that they have made $109,200,000.00 since 2007. That’s an average of $15.6 Million per year. Which makes you wonder if Hillary has her fingers crossed when gives campaign speeches about how she’s going to stop the evil rich or when she explains how she can empathize with the poor and downtrodden in this country.

Something I’ve always wondered: if the Big Wig Democrats actually believed the things told to the adoring masses, why don’t they donate their own money to the government? I mean it’s a widely held democratic belief that the rich are “bad” and can “afford” to give more of their wealth to the government… so where is the leading by example? I think this question could be asked of any multi-millionaire Democrat, (I’m looking at you Hollywood) but particularly a leader of said political movement. If the government is the best method to more justly/correctly/fairly distribute the money that the rich don’t need to help those that do need…. doesn’t it follow that wealthy politicians (that claim such beliefs) should just give the portion of wealth that they don’t need to the government. I mean sure raise taxes as soon as you can, but you don’t have to wait to help the masses with your money – right? Right?