dices_optical_illusionOne of the first things to go when people get morally outraged is their perspective. Not only do they frequently lose perspective, they also lose sight of bigger issues. A sense of outrage simply overwhelms one’s sense of perspective. The enraged heart overtakes the circumspect mind.

I’ve talked about The Project on Government Oversight (POGO) before when I brought up a defense contract maintained by the Federal Government with a company called ArmorGroup. This is the group that basically used Lord of the Flies-like hazing parties for their private security forces guarding embassies in places like Afghanistan. Whistle blowers, POGO, and government audits turned up a lot of fraud and abuse. There were even congressional hearings and questions, however, the contract was continued. Some press coverage reopened the issue earlier this year but the company basically was paid lots of federal dollars before any one took some real notice of it. Other mercenary-like groups–hired by our Defense Department–have had similar issues. Blackwater, while operating in Iraq, was said to be responsible for the deaths of innocent civilians and has been barred from doing business in the country by the Iraqi government. These are just some of the more egregious examples.

Then, there are the defense contractors building bombs and buildings. Remember the solider in Iraq was killed due to faulty wiring by KBR?

American electricians who worked for KBR, the Houston-based defense contractor that is responsible for maintaining American bases in Iraq and Afghanistan, said they repeatedly warned company managers and military officials about unsafe electrical work, which was often performed by poorly trained Iraqis and Afghans paid just a few dollars a day.

One electrician warned his KBR bosses in his 2005 letter of resignation that unsafe electrical work was “a disaster waiting to happen.” Another said he witnessed an American soldier in Afghanistan receiving a potentially lethal shock. A third provided e-mail messages and other documents showing that he had complained to KBR and the government that logs were created to make it appear that nonexistent electrical safety systems were properly functioning.

KBR itself told the Pentagon in early 2007 about unsafe electrical wiring at a base near the Baghdad airport, but no repairs were made. Less than a year later, a soldier was electrocuted in a shower there.

The process of seeking out contractor abuse is nothing new to this government or any other in this country. You may remember that during FDR’s campaign for the presidency, wife Eleanor rode around in car with a steaming teapot on the roof to remind folks of the Teapot Dome Scandal. Folks taking advantage of federal money go from the small fry to the country’s largest multinationals. Lincoln warned of it. So, did Eisenhower.

I remember during the Hurricane Katrina diaspora, many folks were said to use debit cards given to them as largess of the taxpayer on strippers, alcohol and guns. I can say that the money the U.S. government gave to me went to things like driving to Omaha, food, and pajamas. But people are stupid and then stupid things happen. But who do you focus upon? The one idiot the spent the money in the strip joint or the company of a friend of Jeb Bush that sold faulty pumps to the Corps of Engineers? You know the ones that would be necessary to get water out of the city should anything like Hurricane Katrina happen again? You remember Hurricane Katrina? People died? Incredibly costly damage? That sort of thing? I think there was more outrage over the few thousands of dollars they went to Houston strip joints than to any of the fraud that went on with the levee building, installation of the new pumps, and who knows what else will eventually be uncovered by the time these projects are audited by the GAO?

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On Overlooked Battles and Unsung Heroes

PG07-4995In the midst of so much policy disarray, it is easy to overlook many issues that deserve our attention. I’m beginning to think all the chaos may be angle of hat trick magician relying on slight of hand and misdirection. So, just as I continue to hammer at boring things like bank reform, I continue to follow things related to the Patriot Act, FISA, and other potential intrusions that are in conflict with constitutional rights.

Today, the NY Times predicted “A Looming Battle Over the Patriot Act”. Remember, the most sensitive portions and controversial are those that involve surveillance. House and Senate committees are discussing re-authorization of three key sections that are set to expire at the end of this year. In a continuation of the Bush-Cheney encroachment on civil liberties, the Obama-Biden administration seeks re-authorization.

The provisions expanded the power of the F.B.I. to seize records and to eavesdrop on phone calls in the course of a counterterrorism investigation.

Laying down a marker ahead of those hearings, a group of senators who support greater privacy protections filed a bill on Thursday that would impose new safeguards on the Patriot Act while tightening restrictions on other surveillance policies. The measure is co-sponsored by nine Democrats and an independent.

Days before, the Obama administration called on Congress to reauthorize the three expiring Patriot Act provisions in a letter from Ronald Weich, assistant attorney general for legislative affairs. At the same time, he expressed a cautious open mind about imposing new surveillance restrictions as part of the legislative package.

“We are aware that members of Congress may propose modifications to provide additional protection for the privacy of law abiding Americans,” Mr. Weich wrote, adding that “the administration is willing to consider such ideas, provided that they do not undermine the effectiveness of these important authorities.”

At the moment, there appears to be very little evidence that the FBI has abused its current power. Is that the salient point over which to argue for or against re-authorization? Sadly, we liberals have so much on our plate now with pressuring an administration and congress that should be our ally on things like truly universal health care, involvement in Iraq and Afghanistan, and continuation of Bush financial market bailouts, that we could potentially miss this important battle over one of our most basic rights. That right to go missing would be security from government invasion into our person and homes without due process.

The first such provision allows investigators to get “roving wiretap” court orders authorizing them to follow a target who switches phone numbers or phone companies, rather than having to apply for a new warrant each time.

From 2004 to 2009, the Federal Bureau of Investigation applied for such an order about 140 times, Robert S. Mueller, the F.B.I. director, said at a Senate Judiciary Committee hearing last week.

The second such provision allows the F.B.I. to get a court order to seize “any tangible things” deemed relevant to a terrorism investigation — like a business’s customer records, a diary or a computer.

From 2004 to 2009, the bureau used that authority more than 250 times, Mr. Mueller said.

The final provision set to expire is called the “lone wolf” provision. It allows the F.B.I. to get a court order to wiretap a terrorism suspect who is not connected to any foreign terrorist group or foreign government.

Mr. Mueller said this authority had never been used, but the bureau still wanted Congress to extend it.

Several other lawmakers are expected to file their own bills addressing the Patriot Act and related surveillance issues in the next several weeks.

Many of the proposals under discussion involve small wording shifts whose impact can be difficult to understand, in part because the statutes are extremely technical and some govern technology that is classified.

But in general, civil libertarians and some Democrats have called for changes that would require stronger evidence of meaningful links between a terrorism suspect and the person whom investigators are targeting.

In the same way, some are proposing to use any Patriot Act extension bill to tighten when the F.B.I. may use “national security letters” — administrative subpoenas that allow counterterrorism agents to seize business records without obtaining permission from a judge. Agents use the device tens of thousands of times each year.

I know you have a lot of issues and life challenges on your plate right now, but I think it might be worth your time to follow this issue as it makes its way through committee to the President’s desk. Our technological capability to intrude far surpasses our ability to ferret out potential abuse. I think it best we ensure the FBI can do its job, but not at the expense of our our basic civil rights. Just a reminder of who is on what side on one facet of this act. That would be the provision granting immunity from prosecution from telecoms.

As a senator, Mr. Obama voted for that bill, infuriating civil libertarians.

The bill filed Sept. 17 — which is championed in particular by two Democratic senators, Russ Feingold of Wisconsin and Richard J. Durbin of Illinois — would repeal the immunity provision.


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Support your new Alphabet Soup Agency

house-mazeA central component of the Obama administration’s Wall Street reform policy is creation of the Consumer Financial Protection Agency (CFPA). He mentioned it earlier this week in his speech as well as today in his radio address. The banks are not happy about the agency. I thought I’d spend some time on what is being proposed.

Obama emphasized the need for the legislature to move quickly to enact a centerpiece of his plan, the Consumer Financial Protection Agency. (This sentence links to the bill.)

“Part of what led to this crisis were not just decisions made on Wall Street, but also unsustainable mortgage loans made across the country. While many folks took on more than they knew they could afford, too often folks signed contracts they didn’t fully understand offered by lenders who didn’t always tell the truth,” Obama argued. “That’s why we need clear rules, clearly enforced. And that’s what this agency will do.”

The legislature making the CFPA a legal entity is pending in the House. The responsibility for passage and creation of the bill lay with Congressman Barney Frank (D-MA) and the Financial Services Committee. Frank is the principal author. The LA Times has a succinct explanation of what the plans are for the new agency.

Why should you care? What might the agency do for you — or to you? Here’s a quick overview:

To begin with, be aware that the agency’s powers and oversight would extend far beyond mortgages and real estate — into all credit cards, debit cards, consumer loans, payday loans, credit reporting agencies, debt collection, stored-value cards and even investment advisory and financial advisory services, to name only part of the list.

It would have the authority to alter long-common practices that nettle consumers, such as mandatory arbitration clauses in the fine print of contracts that automatically send business-consumer disputes to arbitrators rather than to courts. The agency could ban or limit such clauses in specific products if they are shown to tilt against consumers’ interests.

The agency would write the user-safety rules for virtually all consumer financial products and would have the legal firepower to levy huge fines — tens of thousands of dollars a day per violation in some cases — and prosecute lenders, brokers and others who break the rules.

The agency would be the dominant federal consumer protector in all home real estate settlements. It would regulate “affiliated” title, escrow and financing businesses connected with realty firms and builders. It would oversee equal credit opportunity and fair housing, and would set standards for all mortgage offerings, whether from the biggest national banks or the smallest local brokers. Generally it wouldn’t seek outright bans on mortgage products that carry elevated risks — interest-only loans, for instance — but would require that lenders restrict such mortgages to well-informed applicants who can document that they understand the risks and can afford the payments.

Within its first year, the agency would be tasked with creating consumer-friendly, uniform disclosures for all home purchase and financing transactions, starting with a combined “good-faith estimates” and truth-in-lending statement.

The core idea behind the proposal, supporters say, is to pull together consumer oversight powers that are now scattered among various agencies, and to put consumer interests where they should be — much higher on the priority list than they were during the years leading up to the housing and credit bubble and bust.

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Incoherency is not an Asset

Something in human as taken Paul Krugman from us, I'm afraid.

Something inhuman has taken Paul Krugman from us, I'm afraid.

I’m not sure what happened to Dr. Paul Krugman that fateful night of dinner at the White House, but I’d like the shrill one back now. Was it something in the food? Was it something in the conversation? Who knows? But in as much a Buddhist can offer a Jewish guy a come to Jesus moment, I’d like to take the opportunity to ask him to step forward and confess lest the devil grab his soul (or in my case–no soul to lose–but more confused subtle conscious and an accumulation of some really bad karma). What exactly is this Dr. Milquetoast?

You see, it has been clear for months that whatever health-care bill finally emerges will fall far short of reformers’ hopes. Yet even a bad bill could be much better than nothing. The question is where to draw the line. How bad does a bill have to be to make it too bad to vote for?

Now, the moment of truth isn’t here quite yet: There’s enough wrong with the Baucus proposal as it stands to make it unworkable and unacceptable. But that said, Senator Baucus’s mark is better than many of us expected. If it serves as a basis for negotiation, and the result of those negotiations is a plan that’s stronger, not weaker, reformers are going to have to make some hard choices about the degree of disappointment they’re willing to live with.

So, the Baucus bill is “unworkable and unacceptable” but even a bad bill could be much better than nothing? What? You want to try that again? So, first he tells any of us that support single payer, that we’re being unreasonable by sticking by our convictions during the first real phase of negotiations. I know Krugman knows game theory, so I ask you, where is the sense in negotiating your potential end game position from the start of the first node?

Krugman does mention these three problems with the bill, so again he realizes it’s basically a very bad piece of policy. You gut these out of the bill, however, and you don’t have the Baucus bill at all. It’s a blank sheet of paper. So why not say, dump the thing and let’s start over?

First, it bungles the so-called “employer mandate.” Most reform plans include a provision requiring that large employers either provide their workers with health coverage or pay into a fund that would help workers who don’t get insurance through their job buy coverage on their own. Mr. Baucus, however, gets too clever, trying to tie each employer’s fees to the subsidies its own employees end up getting.

That’s a terrible idea. As the Center on Budget and Policy Priorities points out, it would make companies reluctant to hire workers from lower-income families — and it would also create a bureaucratic nightmare. This provision has to go and be replaced with a simple pay-or-play rule.

Second, the plan is too stingy when it comes to financial aid. Lower-middle-class families, in particular, would end up paying much more in premiums than they do under the Massachusetts plan, suggesting that for many people insurance would not, in fact, be affordable. Fixing this means spending more than Mr. Baucus proposes.

Third, the plan doesn’t create real competition in the insurance market. The right way to create competition is to offer a public option, a government-run insurance plan individuals can buy into as an alternative to private insurance. The Baucus plan instead proposes a fake alternative, nonprofit insurance cooperatives — and it places so many restrictions on these cooperatives that, according to the Congressional Budget Office, they “seem unlikely to establish a significant market presence in many areas of the country.”

The insurance industry, of course, loves the Baucus plan. Need we say more?

Yes, you do need to say more other than watch and see what happens as it evolves and becomes more complex. Krugman is hoping that it eventually passes some ‘threshhold of acceptability’. Since you’ve given up so much so soon, what the heck do you now consider the minimum threshold of acceptability? As far as I can see, Dr. Krugman, the entire thing would have to be gutted to come close to anything that looks like a subgame perfect, let alone a Nash Equilibrium from my standpoint. But then I really want universal and affordable health care. There are a lot of ways to go about that, but the Baucus bill does not even appear to contain ONE of them. That’s probably because it was written by a Well Point Lobbyist.

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Why Force the Poor into Subsidizing Insurance Companies?

HDR-clusterfuckThis health insurance reform bill has sunk to a level that makes me wonder why all the huge corporations in the country don’t line up in front of the white house on Halloween, with bags, dressed as burglars, yelling trick or treat! The Baucus plan is yet another corporate welfare program masquerading as public welfare policy. If this is the plan that goes forward from here, we all should be working hard to defeat it. It just makes me want to scream. What on earth is going on with the Democrats these days?

WaPo columnist Ruth Marcus talked to Ron Wyden about health care reform (as compared to health insurance industry subsidies) and concludes we should all listen up! I liked the information because we’ve had the ongoing discussion here on The Confluence about those of us bitter knitters that aren’t exactly on the Goldman Sachs bonus plan that will be forced into paying for something we can’t afford now. Just how’s this latest scheme going to work for the nation’s poor? Isn’t being poor enough problem with out your own government punishing you for it?

Now, a family earning three times the poverty level — $66,150 for a family of four — would have to pay up to 13 percent of their income for health insurance. And that’s just the premiums — not counting deductibles, co-payments and out-of-pocket expenses.

“I don’t know very many working-class families who you can look in the eyes and say: ‘Do you have that kind of money in your checking account?’ — because they don’t,” Wyden told me.

Those without coverage would face a fine of as much as $3,800, unless costs exceeded 10 percent of their income, in which case they would be given an “affordability exemption.” In other words, they wouldn’t have insurance, but at least they wouldn’t be penalized for it.

“Folks are having trouble affording coverage that meets their families’ needs now. And they have been hearing from the White House and Congress that they’re going to get health-care security,” Wyden said.

If the Baucus proposal passes, he said, “They’re going to say, ‘Huh? Health-care security means I pay a whole lot more than I’m paying today or I get to be exempt from it, or I pay a penalty?’ They’re not going to say that meets the definition of health-care security.”

So, let’s get this straight. We’re going to fine poor people to subsidize the second most expensive payment mechanism in the world and I might add, a highly profitable payment mechanism for the highly profitable insurance industry? Excuse me, but I think this makes Max Bacchus look like the Grinch that stole food from babies’ mouths. What’s the point of working or reporting income at all, if all you’re going to do is get taxed for not being able to afford the 37th best health care system in the world with the number two price tag? Why not just sit home and go for the medicaid option?

The “hardship exemption,” he said, is “a big congressional punt.” The people most in need of insurance — those in their late 50s and early 60s — will end up saying, as Wyden put it, “I’m just as uninsured as I was before I heard all the politicians speak.”

On choice, Wyden argues, the White House and congressional plans have defined eligibility for the new insurance exchanges so narrowly that the vast majority of Americans won’t be allowed to participate.

For all the hullabaloo over the public option, the reality is that most Americans would not be eligible to choose even a private option. In an effort to avoid destabilizing employer-sponsored health care, the exchanges will be open only to the uninsured and small businesses.

“Nobody ever told the folks carrying the public-option signs all over America that 85 percent wouldn’t even get to choose it,” Wyden said. “For hundreds of millions of people, they’re going to have no more leverage after this bill passes than they do today. They work in some company, some person they don’t know in the human resources department decides what’s good for them. Nothing has changed.”

There are reasonable explanations for why Wyden’s colleagues and the White House made the choices they did. A price tag of more than $1 trillion for a more generous subsidy package induced sticker shock — though the cost ought not to have been surprising.

So, let me ask this question. Why are we supposed to support any of this? What is in it for any one but the President who gets to say he did something and the insurance companies who get windfall profits that would make the CEO of Chevron Exxon blush?

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