And they wonder why there’s an enthusiasm gap!
Category: Corporate Statism
Nine stories
Crazyland
You’ve noticed, I’m sure, the continuing corporate media refrain: Those irresponsible people ran up their debt and got mortgages they couldn’t afford!
This, of course, is bullshit. We have lots of evidence that mortgage brokers not only lied for people on their mortgage applications, they actually forced qualified minority buyers out of conventional mortgages and into riskier subprime mortgages — on purpose.
Why? Because the bankers made more money by betting against the same mortgage bonds they sold to suckers, and at a certain point in the Ponzi scheme, they simply needed more bad mortgages to maintain the profits.
It’s not that hard to understand — that is, once you ascribe the worst possible motives to the financial services players.
Yet still we have these hacks (either stupid, venal or stupefyingly naive — you decide) who try to turn this whole mess into a morality play by blaming the victims of the con — but not the investors, mind you! The people who got tricked and trapped into the mortgages that would inevitably go bad were the cold-blooded people who tried to milk the system!
Although I don’t believe there’s a hell, it would be pretty to think so.
The case of the missing traders
You’ll probably want to make sure you’ve had some caffeine before you read this one.
The Chamber
Remember, the corporate goal is disposable, cheap labor with no legal protections:
Among the many lies told by the U.S. Chamber of Commerce recently, chief Chamber lobbyist Bruce Josten said that his organization’s foreign affiliates, called AmChams, are only “comprised of American companies doing business abroad in those countries.” In fact, the Chinese AmCham is comprised of Chinese firms like Northern Light Venture Capital; the AmCham in Russia is comprised of Russian state-run companies like VTB Bank; and, the AmCham of Abu Dhabi is comprised of UAE state-run oil companies.
The ties between the AmChams and the U.S. Chamber are deep. In addition to sharing staff members, the Chinese AmCham has worked closely with the U.S. Chamber and the Chinese government to sponsor a series of seminars in America to teach American businesses how to outsource jobs to China (called the China Grassroots Program). Below is an invite to an event sponsored by the right-wing billionaire Sheldon Adelson, inviting local businesses in Florida to come to Jacksonville and learn about outsourcing from Chinese government officials like Li Haiyan, the Counselor for Economic Affairs for the People’s Republic of China, U.S. Chamber lobbyist Joseph Fawkner, and BChinaB, a firm that specializes in helping American firms outsource their manufacturing jobs to China.
MERS mess
As dday points out, no one knows exactly how it will play out — but it has the potential for a massive effect on the economy.
Lies and statistics
Diane Ravitch, strong proponent of school privatization when she worked in Bush’s Department of Education, has since changed her mind and travels the country speaking out against it. Here’s her take on “Waiting for Superman,” the cinematic love letter to charter schools, in the New York Review of Books:
Guggenheim didn’t bother to take a close look at the heroes of his documentary. Geoffrey Canada is justly celebrated for the creation of the Harlem Children’s Zone, which not only runs two charter schools but surrounds children and their families with a broad array of social and medical services. Canada has a board of wealthy philanthropists and a very successful fund-raising apparatus. With assets of more than $200 million, his organization has no shortage of funds. Canada himself is currently paid $400,000 annually. For Guggenheim to praise Canada while also claiming that public schools don’t need any more money is bizarre. Canada’s charter schools get better results than nearby public schools serving impoverished students. If all inner-city schools had the same resources as his, they might get the same good results.
But contrary to the myth that Guggenheim propounds about “amazing results,” even Geoffrey Canada’s schools have many students who are not proficient. On the 2010 state tests, 60 percent of the fourth-grade students in one of his charter schools were not proficient in reading, nor were 50 percent in the other. It should be noted—and Guggenheim didn’t note it—that Canada kicked out his entire first class of middle school students when they didn’t get good enough test scores to satisfy his board of trustees. This sad event was documented by Paul Tough in his laudatory account of Canada’s Harlem Children’s Zone, Whatever It Takes (2009). Contrary to Guggenheim’s mythology, even the best-funded charters, with the finest services, can’t completely negate the effects of poverty.
The big short
I’m reading the Michael Lewis (author of Liar’s Poker, Moneyball) book that came out earlier this year. Here’s an interesting excerpt from “The Big Short“.
Blues
Very happy to see they’re pursuing this case. The Blues are infamous for cutting deals with hospitals that squeeze competition out of the market — in fact, did you know the Blues often require that hospitals do not give sliding-scale prices to people without insurance? If they decide to go after more of them, this might lead to actual competition:
WASHINGTON — The Justice Department sued Blue Cross Blue Shield of Michigan on Monday, asserting that the company, the state’s dominant health insurer, had violated antitrust laws and secured a huge competitive advantage by forcing hospitals to charge higher prices to Blue Cross’s rivals.
The civil case appears to have broad implications because many local insurance markets, like those in Michigan, are highly concentrated, and Blue Cross and Blue Shield plans often have the largest shares of those markets.
In the Michigan case, the Obama administration said that Blue Cross and Blue Shield had contracts with many hospitals that stifled competition, resulting in higher health insurance premiums for consumers and employers.
The State of Michigan was also a plaintiff in the lawsuit, filed in the Federal District Court in Detroit.
Blue Cross and Blue Shield, like most insurers, contracts with hospitals, doctors, labs and other providers for services. The lawsuit took direct aim at contract clauses stipulating that no insurance companies could obtain better rates from the providers than Blue Cross. Some of these contract provisions, known as “most favored nation” clauses, require hospitals to charge other insurers a specified percentage more than they charge Blue Cross — in some cases, 30 to 40 percent more, the lawsuit said.
Christine A. Varney, the assistant attorney general in charge of the antitrust division of the Justice Department, said these requirements were “pernicious.”
“Our lawsuit alleges that the intent and effect of Blue Cross Blue Shield of Michigan’s contracts is to raise hospital costs for competing health plans and reduce competition for the sale of health insurance,” Ms. Varney said. “As a result, consumers in Michigan are paying more for their health care services and health insurance.”
The contract terms, she said, discouraged discounts and prevented other insurers from entering the market. The lawsuit also asserts that Blue Cross, in effect, bought protection from competition — by agreeing to pay higher prices to certain hospitals to induce them to agree to the “most favored nation” clauses.
Foreclosure fraud
Oh, look. Mortgages were sold to several different trusts at the same time!