Sat, 21 Nov 2009

Fixing banks -- Will it work?

I'm not really sure anyone remembers this, but we had a bit of a financial crisis last fall. Remember that? Banks too big to fail, but they failed anyway? Financial armageddon avoided via all-weekend meetings in New York and DC. Sunday evening announcements about who'd get billion-dollar bailouts the next day? Good times, those.

What's funny about it is that though we bailed out the banks, we didn't create any way to prevent banks and hedge fund operators from doing the exact same thing all over again. We added some conditions to some of the bailout money. Some of these have been honored in the breach, with executives at several bailed-out banks and investment companies awarding themselves a few billion dollar's worth of bonuses.

So it's with a mixture of pleasure and anxiety that I read that financial reform bills are making their way through both the House and the Senate. If congressional battles over health care reform ever get off the front pages, you'll be reading about attempts to reassemble a regulatory apparatus to protect our financial system from its excesses. That is, a year after the colossal bailouts of last fall, it's finally time to expend some effort to make sure they don't have to happen again.

Last week saw the presentation of an ambitious bill by Senator Christopher Dodd (D-CT), providing a kind of counterpoint to a House bill to do more or less the same, championed by Rep. Barney Frank (D-MA). The bills differ in important details, and both are fairly complex pieces of legislation. I'm optimistic that at last some of these issues are being discussed, but anxious because it doesn't seem to me that the solutions on the table are likely to be effective.

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12:56 - 21 Nov 2009 [/y9/cols] link

Wed, 18 Nov 2009

Letter from the Mayors

In my mailbox this morning. They're exactly right.

The one quibble I have is that there's nothing wrong with binding arbitration. The binding arbitration rules in, for example, Connecticut are quite clear about what are the proper reasons an arbitrator can use to rule one way or the other in a dispute. It's possible to draw those rules to favor unions, and it's possible to draw them to favor management. We should adopt binding arbitration, and then argue about what are the proper grounds for a ruling, but that's a far smarter course than just throwing the whole idea out the window.

Coalition of RI mayors: Best medicine for RI is smart state funding policy

Prescribing a "crash diet" to 39 people you have never met will make some more healthy, make others sick and will kill a handful. Doctors don't prescribe in this way, for obvious reasons. Instead, they base their recommendations on detailed individual histories and a strong understanding of the symptoms. They know who they're dealing with, they see what's wrong and they follow the best practices for fixing the problem.

Everyone knows that Rhode Island's economy is not well. Recently, we have seen signs of courageous and incisive state and municipal leadership, for instance, on education and pension reform. However, when it comes to overall state funding policy, many elected officials - including the governor - are still prescribing a blanket crash diet for Rhode Island's 39 cities and towns. This is not a way to lead our state back to fiscal health. Rhode Island's 39 municipalities have dramatically different fiscal profiles. Only by taking a detailed history can we understand how they got this way and how we might go about fixing it. A history of poor fiscal management in some of our municipalities has resulted in wild deviations between similar communities: some have lifetime Blue Cross insurance for teachers and their spouses while others do not; some have as much as 50 percent more police officers per capita than others; some have millions of dollars more in pension liabilities than others.

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08:19 - 18 Nov 2009 [/y9/no] link

Sat, 14 Nov 2009

Are they serious?

Last week, Congress finally passed an extension to unemployment benefits, after about five weeks of debate in the Senate. The final vote in the Senate was 98-0, but the bill had to overcome three Republican filibusters along the way. In other words, zero Republican Senators were brave enough to vote against the bill, but dozens cooperated in delaying and stalling it.

In other Congressional news last week, Republicans in the House trumpeted a new bill to be their version of health care reform. It's an assemblage of some old ideas: limits on malpractice lawsuits, eliminating barriers to interstate competition in health insurance, promoting healthier lifestyles, and creating "risk pools" where people who have been denied coverage for pre-existing conditions can have a second try.

The problem, of course, is that few of these ideas have anything like evidence in their favor, even if some of them sound plausible. There are states with lots of insurance competition, states with lots of joggers, and also states with strict limits on malpractice lawsuits, and you know what? Medical costs routinely drive people into bankruptcy in those states, too. Essentially, this plan is good for healthy people who already have insurance, but no one else.

The Congressional Budget Office agrees with me. They scored it, as they have scored all the Democratic plans, and according to their score, the plan would be more expensive, and cover fewer people than the Democratic plan it's meant to "improve" upon. According to the CBO, about 17% of Americans don't have coverage, and after ten years of the Republican plan, they predict that about 17% of Americans still won't be covered.

The CBO report essentially tells us that the Republicans are not serious about solving this problem, just as the legislative shenanigans in the Senate showed us they are not serious about providing unemployment benefits to people who need them. These are serious problems. Our economy, our government and our families are being devastated by a health care crisis brought on by decades of spiraling prices. We also face two wars, a maimed economy and the prospect of drowning our coastal cities before the century is out.

Really, "serious" hardly begins to describe it, but in the face of all that, we have a minority party on the national level that seems utterly uninterested in anything except maneuvering for partisan advantage. (Abetted, of course, by a small number of Democratic senators and representatives who imagine that "centrism" is a higher good than addressing actual problems.) This is simply not a serious way to govern.

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16:00 - 14 Nov 2009 [/y9/cols] link

Fri, 06 Nov 2009

Too much forgetting allowed

In 1660, Mary Dyer was hanged on Boston Common. Her crime? Being a Quaker. Her execution was part of a tragic and shameful chapter in our nation's history. So why is there a statue of her in front of the Massachusetts State Capitol east wing? Proponents of removing "Providence Plantations" from our state's name might ask themselves this question.

The statue was erected in 1959, and it wasn't put there because the Massachusetts legislature approved of her execution. No, it was put there because legislators there thought it important that people remember the example of her courageous life, her devotion to freedom of conscience (she traveled back to Massachusetts in protest of the law and was executed), and the heinous laws under which she was put to death.

After all, what, is memory for? It's not just for wallowing in nostalgia; it's the way we avoid making the same mistakes over and over again.

As for ourselves, so also for our society. Our nation's history is one of mistakes made and rectified -- of lessons learned and addressed -- sometimes with statuary, and other times with court decisions, regulations and laws. Why do we regulate barbers, pharmacists, and insurance companies? Because of bad experiences we've had with head lice, quack remedies, and insurance fraud.

We sometimes forget these lessons, and guess what happens then? We get to learn them again.

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15:49 - 06 Nov 2009 [/y9/cols] link

Mon, 02 Nov 2009

Imagine

Orrin Hatch on the dreadful scenario of passing health care reform:

"And if they get there, of course, you're going to have a very rough time having a two-party system in this country, because almost everybody's going to say, 'All we ever were, all we ever are, all we ever hope to be depends on the Democratic Party,' " Hatch said during an interview with the conservative CNSNews.com.

"That's their goal," Hatch added. "That's what keeps Democrats in power."

That is, we fear a party that can actually do things that people want.

15:10 - 02 Nov 2009 [/y9/no] link

Sun, 01 Nov 2009

They really are like that

The doctrinaire libertarian pole of the health care reform debate is occupied by real, prominent, people. It may sound like a cartoon, but the people behind it seem to be serious.

19:06 - 01 Nov 2009 [/y9/no] link

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