While looking into Bachmann's health care voting record (still ongoing), I discovered that she has a tendency to vote in the minority. Frequently, she's even voting in the minority among Republicans. Here's what she did in the first half of 2007. I've left out bills on Iraq, where her record of voting with the president is well-known, and appropriations bills, which are generally messy affairs.
January 9, 2007
Bachmann voted against H.R. 1, the bill implementing the 9/11 Commission's recommendations on information sharing, cargo inspections, infrastructure protection, etc. She later voted for the compromise bill on July 17, 2007.
January 10, 2007
She voted against H.R. 2, the bill to raise the minimum wage.
January 17, 2007
She was in the minority among Republicans, voting against H.R. 5, which would lower interest rates on student loans.
March 1, 2007
She voted against H.R. 800, which would make it easier for employees to unionize.
March 14, 2007
She voted against H.R. 985, which would expand the list of retaliatory actions that may not be taken against whistleblowers. She was in the minority even among Republicans.
March 26, 2007
She was one of only 48 to vote against H.R. 802, which provided for pollution control in international shipping.
March 27, 2007
She voted against H.R. 1401, which would direct Homeland Security to develop a security plan for over-land transportation.
April 17, 2007
She was one of only seven to vote against H.R. 1677, the Taxpayer Protection Act of 2007. Seven.
April 25, 2007
She was one of only 45 to vote against H.R. 1332, the Small Business Lending Improvements Act of 2007, which among other things, improves lending in rural areas and to veterans.
May 2, 2007
She was one of only 48 to vote against H.R. 1429, the Improving Head Start for School Readiness Act of 2007, which improves teacher training, mandates that programs be based on education research, and improves disclosures and oversight to avoid abuse of funds.
May 15, 2007
She was in the minority among Republicans, voting against H.R. 916, which provides for repayment of a portion student loans for attorneys who agree to serve at least three years as a prosecutor or public defender.
May 22, 2007
She voted against H.R. 1427, the Federal Housing Finance Reform Act of 2007, which would establish oversight over Fannie Mae and Freddie Mac, among others.
May 23, 2007
She voted against H.R. 1252, which would disallow price gouging on gasoline and other fuels.
June 7, 2007
She voted against S. 5, which would have allowed research using human embryonic stem cells.
June 20, 2007
She was in the minority among Republicans, voting against H.R. 2284, which would encourage small business development among native Americans.
That's it for the first six months of her term. I can't decide whether she's a maverick (or extremist) or she just likes to say, "Nay."
To be continued....
October 06, 2008
McCain Palled Around With Keating
And when I say, "palled around with," I don't mean they served on a board together or one of them reviewed the other's book or they lived in the same neighborhood. I mean that McCain vacationed at Keating's place in the Bahamas. I mean that Keating and Cindy McCain were in business together. I mean that McCain intervened to get regulators off Keating's back while Keating was busy defrauding his company.
That's what palling around is. That's what made McCain part of the Keating Five and responsible for the Savings and Loan Crisis twenty years ago.
Now, twenty years is a long time, longer than many first-time voters are old, but it's not long enough ago to forget about if McCain wants us to trust him to be president. To remind us, the Obama campaign has put together a video. Here's a preview, or you can just view the whole thing.
Don't want to watch? At least read.
That's what palling around is. That's what made McCain part of the Keating Five and responsible for the Savings and Loan Crisis twenty years ago.
Now, twenty years is a long time, longer than many first-time voters are old, but it's not long enough ago to forget about if McCain wants us to trust him to be president. To remind us, the Obama campaign has put together a video. Here's a preview, or you can just view the whole thing.
Don't want to watch? At least read.
Labels:
Politics
October 05, 2008
Palin on Afghanistan
Today:
Sorry, no video available yet.
I guess it's not too surprising. Previously, she thought that sharing a border automatically meant knowing something about the other country. Now she's just turned that logic around.
When do I get to vote against her already?
Three days after a mostly gaffe-free debate performance, the Alaska governor fumbled during a speech in which she praised U.S. soldiers for “fighting terrorism and protecting us and our democratic values”.
“They are also building schools for the Afghan children so that there is hope and opportunity in our neighboring country of Afghanistan,” she told several hundred supporters at a fundraising event in San Francisco.
Sorry, no video available yet.
I guess it's not too surprising. Previously, she thought that sharing a border automatically meant knowing something about the other country. Now she's just turned that logic around.
When do I get to vote against her already?
Protecting Americans' Speech, Internationally
It's been a busy week, so I'm just catching up on my publishing news today as I nurse the sniffles. The Association of American Publishers put out a press release about a week ago, lauding the passage in the U.S. House of H.R. 6146 "to prohibit recognition and enforcement of foreign defamation judgments."
Libel tourism is the practice of filing a libel suit in a country with very strict libel laws (generally England, Wales or Australia) against a party in a more permissive country on the basis of work published in the more permissive country. Internet distribution or small batches of imported materials are being used to establish jurisdiction.
The most well-known cases involve celebrities going after gossip mags. However, the practice has recently been applied to a number of scholars writing about the spread and funding of terrorism. Some authors have seen their books pulled from publication; others have had substantial monetary judgments entered against them in foreign courts.
The fighting back has begun, however. The American Library Association has laid claim to the copies of one recalled book that are in library possession. One author, Rachel Ehrenfeld, countersued in a New York court to determine that the British ruling in her case is void in the U.S. because it interferes with her First Amendment rights. "Rachel's Law" was passed in New York state in March, stating that First Amendment rights supersede the practice of comity, or legal reciprocity with other countries.
In passing H.R. 6146, the U.S. House of Representatives has said it agrees. However, for all of us to receive the same guarantee from the federal government that New York citizens have been given by the state, the Senate needs to vote on S. 2977, the Free Speech Protection Act of 2008. Then the differences need to be ironed out in committee and the compromise bill passed. All that before the end of the year and in the midst of election season.
So contact your senators and tell them to get on this now. It shouldn't be that hard a decision. Sure, the celebrities may suffer a little, because you know that without the British courts, everyone believes everything they read in the National Enquirer. Besides, one of these days, Adnan Oktar is going to get bored filing libel suits to keep the population of Turkey off the internet (here's one way around that, by the way), and he's going to come after all the U.S. scientists/bloggers who have dared to call his brand of creationism complete hooey.
Let's get the law in place before then.
AAP President and CEO Pat Schroeder expressed thanks on behalf of the publishing industry to members of Congress for focusing attention on the serious problem of libel tourism, and called passage of H.R. 6146 a “strong and encouraging step forward.” “Libel tourism is an insidious threat. It seeks to intimidate and silence American authors and deprive us of vital information on issues of public concern. I hope we can build on H.R. 6146 with hearings in the new Congress that will shine a light into this dark corner,” Mrs. Schroeder said.
Libel tourism is the practice of filing a libel suit in a country with very strict libel laws (generally England, Wales or Australia) against a party in a more permissive country on the basis of work published in the more permissive country. Internet distribution or small batches of imported materials are being used to establish jurisdiction.
The most well-known cases involve celebrities going after gossip mags. However, the practice has recently been applied to a number of scholars writing about the spread and funding of terrorism. Some authors have seen their books pulled from publication; others have had substantial monetary judgments entered against them in foreign courts.
The fighting back has begun, however. The American Library Association has laid claim to the copies of one recalled book that are in library possession. One author, Rachel Ehrenfeld, countersued in a New York court to determine that the British ruling in her case is void in the U.S. because it interferes with her First Amendment rights. "Rachel's Law" was passed in New York state in March, stating that First Amendment rights supersede the practice of comity, or legal reciprocity with other countries.
In passing H.R. 6146, the U.S. House of Representatives has said it agrees. However, for all of us to receive the same guarantee from the federal government that New York citizens have been given by the state, the Senate needs to vote on S. 2977, the Free Speech Protection Act of 2008. Then the differences need to be ironed out in committee and the compromise bill passed. All that before the end of the year and in the midst of election season.
So contact your senators and tell them to get on this now. It shouldn't be that hard a decision. Sure, the celebrities may suffer a little, because you know that without the British courts, everyone believes everything they read in the National Enquirer. Besides, one of these days, Adnan Oktar is going to get bored filing libel suits to keep the population of Turkey off the internet (here's one way around that, by the way), and he's going to come after all the U.S. scientists/bloggers who have dared to call his brand of creationism complete hooey.
Let's get the law in place before then.
Labels:
Politics
October 04, 2008
Bachmann on Health Care
Michele Bachmann's position on health care recently came to my attention when she voted against mental health parity in health insurance. The mental health parity law says that insurance companies may not set lower caps for payment for treatment of mental illness, including addiction, and must treat services for these illnesses the same way services for things like sinus infections and sprained limbs are treated. It's a measure that has the potential to improve the productivity and general health of millions of Americans, as untreated mental illness has a broad impact on the rest of a person's life.
The measure had broad bipartisan support, with Bachmann being only one of 47 Representatives to vote against it. That indicated to me that there was probably more in her health care record worth looking at. I started with her policy statement:
The Health Care Freedom of Choice Act
What is this bill? It was introduced in the House on January 23, 2007 and referred to the Ways and Means Committee. Aside from its description, it isn't necessarily a bad little bill. It removes the provision of the code that says only expenses over 7.5% of adjusted gross income are deductible. However, it also greatly broadens the description of a dependent for purposes of these deductions, to those disallowed by the Code for other purposes. No further action was ever taken on the bill, which makes it appear that it was an attempt by the 64 Republicans who sponsored it to be able to say, "I did too do something on health care."
As an aside, signing on to a Michele Bachmann-sponsored bill is a great way to state a position without having to worry about being responsible for it later. The only two bills she's sponsored that have passed the House have been symbolic.
The Minnesota Expanded Health Care Practices Act
Bachmann also sponsored a health care bill while she was in the Minnesota legislature. The Minnesota Expanded Health Care Practices Act protects a health care provider's "[r]ight to provide expanded health care." Expanded health care, in this case, is:
In other words, woo. Not only would the bill have created a right for your doctor to practice woo, but it would have limited those who could give evidence on how well the woo is being performed to:
So, if you'd gone to a regulatory board to complain that the crystals and enemas you were treated with did nothing to improve your impotence but cost an awful lot, the only person who could have talked about whether you were treated appropriately would have been someone who also wanted to treat you with crystals and enemas.
This bill also died. Unfortunately, I wasn't able to determine whether Bachmann's conflict of interest played any part in that death. By the way, the Christian counseling business she and her husband own doesn't provide its employees with health care.
More to Come
I wanted to dive further into her voting record and public statements on health care, but this post is already long enough. Next time.
Of course, if that's already quite enough for you, you can always make a donation to her opponent. His statement on health care is somewhat more comprehensive.
The measure had broad bipartisan support, with Bachmann being only one of 47 Representatives to vote against it. That indicated to me that there was probably more in her health care record worth looking at. I started with her policy statement:
American healthcare is the best in the world, but rising costs make it inaccessible to many. In fact, according to the Kaiser Family Foundation, between 2000 and 2006, premiums for family coverage increased 87%, making the average annual premium for families more than $12,000.
A big part of the problem has roots in the Tax Code, which favors employer-provided health insurance. My Health Care Freedom of Choice Act would provide full tax deductibility for individual medical expenses, including medical care, dental care, long-term care and insurance premiums.
The Health Care Freedom of Choice Act
What is this bill? It was introduced in the House on January 23, 2007 and referred to the Ways and Means Committee. Aside from its description, it isn't necessarily a bad little bill. It removes the provision of the code that says only expenses over 7.5% of adjusted gross income are deductible. However, it also greatly broadens the description of a dependent for purposes of these deductions, to those disallowed by the Code for other purposes. No further action was ever taken on the bill, which makes it appear that it was an attempt by the 64 Republicans who sponsored it to be able to say, "I did too do something on health care."
As an aside, signing on to a Michele Bachmann-sponsored bill is a great way to state a position without having to worry about being responsible for it later. The only two bills she's sponsored that have passed the House have been symbolic.
The Minnesota Expanded Health Care Practices Act
Bachmann also sponsored a health care bill while she was in the Minnesota legislature. The Minnesota Expanded Health Care Practices Act protects a health care provider's "[r]ight to provide expanded health care." Expanded health care, in this case, is:
[H]ealth care and healing methods, modalities, treatments, procedures, or protocols that have not been generally adopted by a profession, or that are not generally considered to be within the prevailing minimum standards of care of a profession, or that are not standard practices of a profession in a particular community.
In other words, woo. Not only would the bill have created a right for your doctor to practice woo, but it would have limited those who could give evidence on how well the woo is being performed to:
[E]xperts who have specialized knowledge, training, and clinical competence in the practice method or treatment used by the professional being investigated. The majority of the expert's practice must be the same as that of the professional being investigated.
So, if you'd gone to a regulatory board to complain that the crystals and enemas you were treated with did nothing to improve your impotence but cost an awful lot, the only person who could have talked about whether you were treated appropriately would have been someone who also wanted to treat you with crystals and enemas.
This bill also died. Unfortunately, I wasn't able to determine whether Bachmann's conflict of interest played any part in that death. By the way, the Christian counseling business she and her husband own doesn't provide its employees with health care.
More to Come
I wanted to dive further into her voting record and public statements on health care, but this post is already long enough. Next time.
Of course, if that's already quite enough for you, you can always make a donation to her opponent. His statement on health care is somewhat more comprehensive.
Labels:
Politics
October 03, 2008
Palin Loses Facebook
I've heard a number of people complaining about the new Facebook, but after last night, I'm perfectly happy with it. Status updates are always fun, but last night, they told me who would be watching the debate with me.
I turned off the analysts almost immediately afterward, because they were waffling. "Oh, did Palin suck little enough that people still liked her? We'll have to wait and see." Blegh.
Nobody was waffling on Facebook. We had Biden love, to Ifils hating, to grudging recognition of Palin's improvement, to frustration over her inability to answer questions as asked, to fear of her inappropriate toothiness (okay, that was me).
Then the fun started. The new Facebook allows people to comment on, oh, everything. So the next couple of hours were a wandering set of discussions across about half a dozen profiles. Snark and cattiness abounded. It was beautiful.
But that wasn't the best part. I have conservative Christian types in my friend list too, people I knew in high school, so I got to see what their reactions to the debate were.
They weren't.
None of these folks had anything to say about the debate. The women who were all gung-ho in early September about how they adored Alaska's governor were doing very good cricket impressions last night. I don't know that any of them have changed their intended votes, but the enthusiasm has evaporated. Poof.
I couldn't ask for more. Well, except this.
I turned off the analysts almost immediately afterward, because they were waffling. "Oh, did Palin suck little enough that people still liked her? We'll have to wait and see." Blegh.
Nobody was waffling on Facebook. We had Biden love, to Ifils hating, to grudging recognition of Palin's improvement, to frustration over her inability to answer questions as asked, to fear of her inappropriate toothiness (okay, that was me).
Then the fun started. The new Facebook allows people to comment on, oh, everything. So the next couple of hours were a wandering set of discussions across about half a dozen profiles. Snark and cattiness abounded. It was beautiful.
But that wasn't the best part. I have conservative Christian types in my friend list too, people I knew in high school, so I got to see what their reactions to the debate were.
They weren't.
None of these folks had anything to say about the debate. The women who were all gung-ho in early September about how they adored Alaska's governor were doing very good cricket impressions last night. I don't know that any of them have changed their intended votes, but the enthusiasm has evaporated. Poof.
I couldn't ask for more. Well, except this.
October 02, 2008
Palin Didn't Lose, But Biden Won
So Palin didn't embarrass her party tonight as much as she has recently. Sure, she spent precious minutes babbling random catch phrases as she tried to figure out what the answers should be. Sure, she still had the pageant trick of smiling no matter what she was talking about, like dead soldiers and nukular threats. Sure, you could see the angry, vindictive inside crack through the pancake whenever Biden pointed out that she was wrong.
Still, she did manage to string multiple sentences together occasionally, which made me worry. I know talking points are as a window to me (did she really dare talk about the Founding Fathers again?), but I already knew who I was voting for before the debate. What about the all-critical undecideds?
Here's the early answer:
Yes.
Still, she did manage to string multiple sentences together occasionally, which made me worry. I know talking points are as a window to me (did she really dare talk about the Founding Fathers again?), but I already knew who I was voting for before the debate. What about the all-critical undecideds?
Here's the early answer:
Forty-six percent of the uncommitted voters surveyed say Democrat Joe Biden won the debate, compared to 21 percent for Republican Sarah Palin. Thirty-three percent said it was a tie.
Eighteen percent of previously uncommitted percent say they are now committed to the Obama-Biden ticket. Ten percent say they are now committed to McCain-Palin. Seventy-one percent are still uncommitted.
Yes.
Labels:
Politics
October 01, 2008
ScienceOnline'09
I just signed up for a new con. This one's a conference, though, not a convention and not my usual thing. In January, I'll be attending ScienceOnline'09.
When I first read the description, I thought, Sounds interesting but not for me, I'm afraid. See, it used to be called the NC Science Blogging Conference. And while I blog, and I'm interested in science, support good science education, read science blogs, etc., I'm not a science blogger. I'm a...I'm...I don't know what kind of blogger I am. If you figure it out, let me know.
Then half my blogroll registered--the half I haven't met.
That was when the stray enabling thoughts started popping up. I have done a guest post on ScienceBlogs, about science blogs. My blog does have a strong anti-woo undercurrent. All my friends are doing it. As a science fiction writer, I have a vested interest in promoting a love and understanding of science.
If it hadn't been for All my friends are doing it, I could have talked myself into it eventually. Sometimes I mistrust my own motives.
Then, today, they released Program v1.0.
Okay. I'm going. There are other sessions I want to attend, but that one, alone, sold me.
I'll see a bunch of you guys in January.
Update
So much for impostor syndrome. I'm now moderating the science fiction session. Feel free to share ideas on what you want to see there.
When I first read the description, I thought, Sounds interesting but not for me, I'm afraid. See, it used to be called the NC Science Blogging Conference. And while I blog, and I'm interested in science, support good science education, read science blogs, etc., I'm not a science blogger. I'm a...I'm...I don't know what kind of blogger I am. If you figure it out, let me know.Then half my blogroll registered--the half I haven't met.
That was when the stray enabling thoughts started popping up. I have done a guest post on ScienceBlogs, about science blogs. My blog does have a strong anti-woo undercurrent. All my friends are doing it. As a science fiction writer, I have a vested interest in promoting a love and understanding of science.
If it hadn't been for All my friends are doing it, I could have talked myself into it eventually. Sometimes I mistrust my own motives.
Then, today, they released Program v1.0.
Science Fiction on Science Blogs?
Science Fiction was the original source of excitement for many a scientist. How can a science blogger use Science Fiction to draw the readers in and explain the actual science?
Okay. I'm going. There are other sessions I want to attend, but that one, alone, sold me.
I'll see a bunch of you guys in January.
Update
So much for impostor syndrome. I'm now moderating the science fiction session. Feel free to share ideas on what you want to see there.
Labels:
Art,
Blogkeeping,
Conferences
What Is the Difference?
Like any good narcissist blogger, I like to see what search terms people are using to find my blog. The most common are "perfect margaritas" and "stereotypes in comedy." I got a new one yesterday, though, a good one.
"What is the difference between Palin and Bachmann?"
What an excellent question. I could talk about the similarities from now until the election (and be warned, I may), but differences? Huh. Well, here goes.
Alternately, you could send a few bucks to Bachmann's opponent and make sure Bachmann doesn't go back to Washington where she can do more harm. That would be a similarity worth seeing.
"What is the difference between Palin and Bachmann?"
What an excellent question. I could talk about the similarities from now until the election (and be warned, I may), but differences? Huh. Well, here goes.
- Sarah Palin hunts wolves from helicopters. Michele Bachmann hunts queers from the bushes.
- Palin tries to deny using a teleprompter. Bachmann makes it all too obvious she's just reading something she doesn't understand.
- Palin's never snogged a leader of the free world, at least not on camera. She may have winked at Putin from her kitchen window, though.
- Palin's hair and wardrobe only admit to being a few years out of date. Bachmann's are screaming that Reagan is still president, damnit.
Alternately, you could send a few bucks to Bachmann's opponent and make sure Bachmann doesn't go back to Washington where she can do more harm. That would be a similarity worth seeing.
September 30, 2008
No Sympathy, No Idea
I'm about ready to eviscerate the next idiot I run across in the blogosphere who says, "I don't have any sympathy for the borrowers. It's not my fault if they're idiots. They should have known better than to think they could really afford a house." Actually, I already took a fair swipe at the last one. He was dense enough it probably didn't leave much of a mark, though. I'll do a more thorough job on the next one.
Leaving aside for now the classist implications that these people didn't deserve an arrangement that allowed them an opportunity to accumulate a sliver of wealth--only because if I don't, this post will consist solely of hateful gibberish--these statements tell me two things about the person making them. First, they tell me that they didn't start with much sympathy. Second, they tell me they can't do math.
The reason people can't make these mortgage payments is not that they couldn't afford their original payments. It's that their payment amounts changed in ways they hadn't been prepared for.
There are two types of risks to the lender in making loans. The first is the risk that the borrower will not make the payments. This risk may or may not be covered by the collateral, especially if the collateral is overvalued at the time of the loan.
The second is that you won't earn interest from the loan quickly enough to cover the decrease in the value of the money you put into it. With an average 3% rate of inflation, the principal of a $100,000 loan is worth about $40,000 at the end of a 30-year repayment term. Any interest rate has to be higher than the rate of inflation in order for a lender to make money off a loan.
In a housing bubble, with interest rates indices held below inflation rates by the Fed's determination to keep the War on Terror from having a visible impact on the economy, lending to borrowers who represented some unknown additional risk beyond that of regular borrowers, lenders didn't like their odds. In order to push some of that risk off their plates, they made the borrowers liable for changes in interest rates, which for at least the last 30 years have varied with inflation as a matter of policy.
Adjustable rate mortgages (ARMs) protect lenders by passing changing rates on to the borrower. Good Math, Bad Math did a great job of explaining why that didn't get rid of as much risk to the lender as claimed. What it did do, however, is greatly increase the risk to the borrower.
"Of course it did!" the sympathy-challenged holler. "How could they not have known that an adjustable rate mortgage could be adjusted upward?"
They did know. What they didn't know, because nobody told them, is how far they could go up and how quickly. Following this requires a little sympathy, but stick with me if you can.
Say you're a borrower, excited at the prospect of buying your first home (or being able to buy a home again after you filed bankruptcy years ago to deal with the lingering costs of the cancer). You're talking to a mortgage broker about what you can afford. The broker says, "Well, with this ARM, you'll have a starting rate of about 6%. Your take-home income is about $1,800 a month. Figuring that a third of your take-home goes into your mortgage, which is less than you're paying in rent, you can afford a $100,000 mortgage."
Now, a $100,000 mortgage buys you a one-bedroom bungalow in an interesting neighborhood, but you can give the kids the bedroom and sleep on the couch if it means you're going to get them into a house. And a decrease in your housing costs...oh, wait. With taxes and such, it's not really that big a decrease. Huh. "So what happens if interest rates go up?"
The broker says, "If they go up a full percent, your monthly payment will go from $600 to $665. That's 37% of your take-home instead of 33%."
Well, there goes the rest of the money you save by not renting. A few bucks more a month, too. But if you have to, one of you will get a second job to get the kids into that house. "Okay. We'll do it."
Sounds simple, right? Remember what I said about interest rates being held below inflation? What the broker didn't tell you was that interest rates were two to four percentage points lower than they had been through the late nineties. Flash forward two years, from 2004 to 2006, through the inflation caused by rising gas prices, and your interest rate is now 10%.
There are people whose credit cards don't charge them 10% interest. And those cards give them frequent flyer miles.
Your broker told you what would happen if rates went up 1%. What happened when they went up 4%? Your mortgage payment is now about $880 a month. Even with small raises over the last two years, that's nearly 50% of your take-home. If you're lucky, one of you can work that second job and just hold it together. If not, well, there aren't as many second jobs as there were before gas prices went up and the price of everything else is so much higher now too. You love your little bungalow, down to the drafty back door, but you're now in default on your mortgage.
It isn't because you didn't ask what could happen to your mortgage. It's because the person who should have given you better information either didn't know enough or didn't care enough to give you a full answer. If it helps, your broker is watching the value of his/her IRA plummet and thinking it might be a couple extra years before retirement.
Yeah, I know. It doesn't help.
For what it's worth, you have my sympathy.
Leaving aside for now the classist implications that these people didn't deserve an arrangement that allowed them an opportunity to accumulate a sliver of wealth--only because if I don't, this post will consist solely of hateful gibberish--these statements tell me two things about the person making them. First, they tell me that they didn't start with much sympathy. Second, they tell me they can't do math.
The reason people can't make these mortgage payments is not that they couldn't afford their original payments. It's that their payment amounts changed in ways they hadn't been prepared for.
There are two types of risks to the lender in making loans. The first is the risk that the borrower will not make the payments. This risk may or may not be covered by the collateral, especially if the collateral is overvalued at the time of the loan.
The second is that you won't earn interest from the loan quickly enough to cover the decrease in the value of the money you put into it. With an average 3% rate of inflation, the principal of a $100,000 loan is worth about $40,000 at the end of a 30-year repayment term. Any interest rate has to be higher than the rate of inflation in order for a lender to make money off a loan.
In a housing bubble, with interest rates indices held below inflation rates by the Fed's determination to keep the War on Terror from having a visible impact on the economy, lending to borrowers who represented some unknown additional risk beyond that of regular borrowers, lenders didn't like their odds. In order to push some of that risk off their plates, they made the borrowers liable for changes in interest rates, which for at least the last 30 years have varied with inflation as a matter of policy.
Adjustable rate mortgages (ARMs) protect lenders by passing changing rates on to the borrower. Good Math, Bad Math did a great job of explaining why that didn't get rid of as much risk to the lender as claimed. What it did do, however, is greatly increase the risk to the borrower.
"Of course it did!" the sympathy-challenged holler. "How could they not have known that an adjustable rate mortgage could be adjusted upward?"
They did know. What they didn't know, because nobody told them, is how far they could go up and how quickly. Following this requires a little sympathy, but stick with me if you can.
Say you're a borrower, excited at the prospect of buying your first home (or being able to buy a home again after you filed bankruptcy years ago to deal with the lingering costs of the cancer). You're talking to a mortgage broker about what you can afford. The broker says, "Well, with this ARM, you'll have a starting rate of about 6%. Your take-home income is about $1,800 a month. Figuring that a third of your take-home goes into your mortgage, which is less than you're paying in rent, you can afford a $100,000 mortgage."
Now, a $100,000 mortgage buys you a one-bedroom bungalow in an interesting neighborhood, but you can give the kids the bedroom and sleep on the couch if it means you're going to get them into a house. And a decrease in your housing costs...oh, wait. With taxes and such, it's not really that big a decrease. Huh. "So what happens if interest rates go up?"
The broker says, "If they go up a full percent, your monthly payment will go from $600 to $665. That's 37% of your take-home instead of 33%."
Well, there goes the rest of the money you save by not renting. A few bucks more a month, too. But if you have to, one of you will get a second job to get the kids into that house. "Okay. We'll do it."
Sounds simple, right? Remember what I said about interest rates being held below inflation? What the broker didn't tell you was that interest rates were two to four percentage points lower than they had been through the late nineties. Flash forward two years, from 2004 to 2006, through the inflation caused by rising gas prices, and your interest rate is now 10%.
There are people whose credit cards don't charge them 10% interest. And those cards give them frequent flyer miles.
Your broker told you what would happen if rates went up 1%. What happened when they went up 4%? Your mortgage payment is now about $880 a month. Even with small raises over the last two years, that's nearly 50% of your take-home. If you're lucky, one of you can work that second job and just hold it together. If not, well, there aren't as many second jobs as there were before gas prices went up and the price of everything else is so much higher now too. You love your little bungalow, down to the drafty back door, but you're now in default on your mortgage.
It isn't because you didn't ask what could happen to your mortgage. It's because the person who should have given you better information either didn't know enough or didn't care enough to give you a full answer. If it helps, your broker is watching the value of his/her IRA plummet and thinking it might be a couple extra years before retirement.
Yeah, I know. It doesn't help.
For what it's worth, you have my sympathy.
September 29, 2008
Acting Unafraid
In the current election, we have one candidate who sees other world leaders as essentially rational beings with whom we may find common ground if we negotiate cautiously. We have one candidate who views the rest of the world as potential enemies to be punished until they become allies. Completely aside from the question of whose approach is likely to gain us more allies, these worldviews have practical consequences in high-pressure decision-making.
Twenty-five years ago, one Russian officer named Stanislav Yevgrafovich Petrov faced a choice between giving in to the paranoia of the Cold War or believing that Americans were rational people who didn't want to destroy the world any more than he did. Because he chose to stand against irrational fear, we're still here.
It's a new unwinnable war these days, but the stakes are still high and the battle is the same: paranoia versus audacity. None of us faces Petrov's choice alone, but it's still the same choice. Can we do less than our "enemy" did?
Via Charlie Stross.
Just past midnight, Petrov received a computer report he'd dreaded all his military career to see, the computer captured a nuclear military missile being launched from the US, destination Moscow.
In the event of such an attack, the Soviet Union’s strategy protocol was to launch an immediate all-out nuclear weapons counterattack against the United States with nuclear power, and immediately afterwards inform top political and military figures. From there, it would be taken a decision to further the military offensive on America.
Twenty-five years ago, one Russian officer named Stanislav Yevgrafovich Petrov faced a choice between giving in to the paranoia of the Cold War or believing that Americans were rational people who didn't want to destroy the world any more than he did. Because he chose to stand against irrational fear, we're still here.
It's a new unwinnable war these days, but the stakes are still high and the battle is the same: paranoia versus audacity. None of us faces Petrov's choice alone, but it's still the same choice. Can we do less than our "enemy" did?
Via Charlie Stross.
Labels:
Politics
September 28, 2008
Recipe for Dealing with Disaster
Ingredients
For Disaster
1 mother in hospital with acute heart problems
1 father who is coping with less than his usual annoying cheer
1 year already studded with too many family problems
For Dealing
1 date finally scheduled for surgery
1 sibling who can share responsibility
1 friend who has a problem father can help solve
1 evening out with friends
1 Cuban roast pork shoulder with fixings
Choice of rum and coke or gin and tonic
1 viewing of The Adventures of Buckaroo Banzai Across the Eighth Dimension
Liberal dose of snark
Directions
Shake with laughter and release pressure valve.
Feel better soon, Nancy.
For Disaster
1 mother in hospital with acute heart problems
1 father who is coping with less than his usual annoying cheer
1 year already studded with too many family problems
For Dealing
1 date finally scheduled for surgery
1 sibling who can share responsibility
1 friend who has a problem father can help solve
1 evening out with friends
1 Cuban roast pork shoulder with fixings
Choice of rum and coke or gin and tonic
1 viewing of The Adventures of Buckaroo Banzai Across the Eighth Dimension
Liberal dose of snark
Directions
Shake with laughter and release pressure valve.
Feel better soon, Nancy.
Labels:
snark
September 27, 2008
Drinker's Diary
I've been drinking a lot lately.
Don't worry; this is definitely not going to turn into one of those blog posts. It's more a question of scheduling than anything else. Last Sunday, The Happy Gnome had a whiskey tasting event as part of their Octoberfest. While my husband and I were there, we discovered that they were starting up their brewmaster dinners again on Wednesday with Brewery Ommegang, just in time for my birthday. And today was the Minnesota Craft Brewers Guild's Autumn Brew Review, for which we'd forgotten we had tickets.
Oof. While I like my drinks, I average two or three a week. Here's what I've had to drink this week, with tasting notes where appropriate. We passed drinks for everyone to try, so some of these, I had only a sip or two, but that's still a lot of drinking.
Scotch & Whiskey Fest
Connemara Cask Strength: Like a little campfire in the mouth. That's a compliment.
Isle of Arran Sassacaia finish: What port would taste like if port were scotch. Yum.
Isle of Arran 10-year: Exactly like the Sassacaia but without the port flavor. A sweet, winey scotch.
Mcallan 30-year: Smells great but tastes strongly woody. Not worth what one will be charged for it.
Peat Monster: Very strong smoke balanced throughout by sweet vanilla. The flavors ran out together.
Sazerac 6-year Rye: Nice, with a nearly chewy grain finish.
Speyburn: Nothing special. A perfectly servicable Speyside.
Wisers 18-year: An aged version of the fastest-growing Canadian brand. A smooth sipping whiskey.
Yamakazi 18-year: What vanilla extract should taste like. Very smooth, round flavor, almost too smooth for my tastes.
I tried a few more, including Oak Cross and Aberfeldy 21-year, but I was burned out by then. It all just tasted like whiskey, which isn't bad but wasn't the point.
Ommegang Beer Dinner
I just scanned the menus for this one.
There's not much else to say, except that everything worked exactly the way it was supposed to, except maybe the nuts in the panna cotta. The food made the beer taste amazing, and the beer complemented the food perfectly. This was made even more amazing by the fact that the chef hasn't had a drink in two years. He was working from smell and from knowledge of how the beer was put together.
Speaking of knowledge, hearing from the Ommegang brewmaster was a treat. He seemed a little shy, but he warmed up to questions well.
Autumn Brew Review
The weird thing about craft brew festivals is that you'd think it would be easier to get drunk than it is. Not to say that no one was drunk, but I don't understand how they do it. If it's good beer, and it generally is, I get full before I'm more than a wee bit tipsy.
The standouts at this festival, which has more than just Minnesotan beers, were the Big Eddy Russian Imperial Stout from Leinenkugel (yes, Leinenkugel), the Three Feet Deep and Fallen Apple from Furthermore Beer, and the Frostop rootbeer. Abita's Purple Haze and Strawberry Lager were just weird, as was the Coney Island Freaktoberfest Oktoberfest from Shmaltz Brewing. The others are listed below, but I'm almost certainly forgetting a few of the "just a sip" beers, as not everything is listed in the program.
Avery Brewing, New World Porter
Boulder Beer Company, Hazed and Infused
Capital Brewery, Baltic Porter
Great Waters Brewing Company, Pflugenpflagen
Left Hand Brewing, Milk Stout
McCann's Food & Brew, Flame
Minneapolis Town Hall Brewery, Anniversary Tripel
Minneapolis Town Hall Brewery, Fresh Hop 2008
New Belgium Brewing, 1554
New Holland Brewing, Golden Cap
New Holland Brewing, Ichabod Pumpkin Ale
Peak Organic, Maple Oat Ale
South Shore Brewery, Applefest Ale
South Shore Brewery, Herbal Cream Ale
South Shore Brewery, Coffee Mint Stout
Southern Tier Brewery, Cherry Saison Imperial Oak Aged Cherry Ale
Surly Brewing, Coffee Bender
Vine Park Brewing, Rock Hopper Red Ale
Don't worry; this is definitely not going to turn into one of those blog posts. It's more a question of scheduling than anything else. Last Sunday, The Happy Gnome had a whiskey tasting event as part of their Octoberfest. While my husband and I were there, we discovered that they were starting up their brewmaster dinners again on Wednesday with Brewery Ommegang, just in time for my birthday. And today was the Minnesota Craft Brewers Guild's Autumn Brew Review, for which we'd forgotten we had tickets.
Oof. While I like my drinks, I average two or three a week. Here's what I've had to drink this week, with tasting notes where appropriate. We passed drinks for everyone to try, so some of these, I had only a sip or two, but that's still a lot of drinking.
Scotch & Whiskey Fest
Connemara Cask Strength: Like a little campfire in the mouth. That's a compliment.
Isle of Arran Sassacaia finish: What port would taste like if port were scotch. Yum.
Isle of Arran 10-year: Exactly like the Sassacaia but without the port flavor. A sweet, winey scotch.
Mcallan 30-year: Smells great but tastes strongly woody. Not worth what one will be charged for it.
Peat Monster: Very strong smoke balanced throughout by sweet vanilla. The flavors ran out together.
Sazerac 6-year Rye: Nice, with a nearly chewy grain finish.
Speyburn: Nothing special. A perfectly servicable Speyside.
Wisers 18-year: An aged version of the fastest-growing Canadian brand. A smooth sipping whiskey.
Yamakazi 18-year: What vanilla extract should taste like. Very smooth, round flavor, almost too smooth for my tastes.
I tried a few more, including Oak Cross and Aberfeldy 21-year, but I was burned out by then. It all just tasted like whiskey, which isn't bad but wasn't the point.
Ommegang Beer Dinner
I just scanned the menus for this one.
There's not much else to say, except that everything worked exactly the way it was supposed to, except maybe the nuts in the panna cotta. The food made the beer taste amazing, and the beer complemented the food perfectly. This was made even more amazing by the fact that the chef hasn't had a drink in two years. He was working from smell and from knowledge of how the beer was put together.
Speaking of knowledge, hearing from the Ommegang brewmaster was a treat. He seemed a little shy, but he warmed up to questions well.
Autumn Brew Review
The weird thing about craft brew festivals is that you'd think it would be easier to get drunk than it is. Not to say that no one was drunk, but I don't understand how they do it. If it's good beer, and it generally is, I get full before I'm more than a wee bit tipsy.
The standouts at this festival, which has more than just Minnesotan beers, were the Big Eddy Russian Imperial Stout from Leinenkugel (yes, Leinenkugel), the Three Feet Deep and Fallen Apple from Furthermore Beer, and the Frostop rootbeer. Abita's Purple Haze and Strawberry Lager were just weird, as was the Coney Island Freaktoberfest Oktoberfest from Shmaltz Brewing. The others are listed below, but I'm almost certainly forgetting a few of the "just a sip" beers, as not everything is listed in the program.
Avery Brewing, New World Porter
Boulder Beer Company, Hazed and Infused
Capital Brewery, Baltic Porter
Great Waters Brewing Company, Pflugenpflagen
Left Hand Brewing, Milk Stout
McCann's Food & Brew, Flame
Minneapolis Town Hall Brewery, Anniversary Tripel
Minneapolis Town Hall Brewery, Fresh Hop 2008
New Belgium Brewing, 1554
New Holland Brewing, Golden Cap
New Holland Brewing, Ichabod Pumpkin Ale
Peak Organic, Maple Oat Ale
South Shore Brewery, Applefest Ale
South Shore Brewery, Herbal Cream Ale
South Shore Brewery, Coffee Mint Stout
Southern Tier Brewery, Cherry Saison Imperial Oak Aged Cherry Ale
Surly Brewing, Coffee Bender
Vine Park Brewing, Rock Hopper Red Ale
Labels:
Recipes
September 26, 2008
Monetarism and the Housing Bubble
For Becca, who asked why some of us fogeys were talking about the housing bubble crash as though it had implications beyond a bailout.
Monetarism is the basic economic principle the U.S. currently operates under. To simplify greatly, monetarism says that the health of our economy is directly dependent on the amount of money in it. It's a top-down ideology that treats the economy as a monolith, with no regard for differences among industries or for non-monetary events, but it has some appeal in its simplicity.
Since the Carter administration, the heads of the Federal Reserve, all three of them, have been monetarists. The setting of the Fed Rate on a periodic basis is a monetarist policy decision, determining how much money is available in the economy in the form of loans. Lower interest rates make more money available. The broad acceptance of monetarism is seen in the way that investors eagerly await the Fed's decisions on rates and the way the stock market can swing after a decision.
Alan Greenspan was the second monetarist Fed chairman. His reputation was made by his handling of the 1987 stock market crash. He was reappointed by Democrats and Republicans and was one of the most trusted people in government. Despite overseeing the economy during the dot com bubble, his reputation remained intact until the collapse of the housing bubble.
The housing bubble itself and the problems stemming from it may be Greenspan's fault. The dot com bubble burst in early 2001. In September, America's confidence was shattered. Markets fell further. The Fed responded by drastically dropping interest rates and flooding banks with cheap cash. Those rates stayed ridiculously low until rising gas prices triggered general inflation a couple of years ago.
The banks, with their "responsibility to shareholders" (see also this), had to do something with that money. Because the average consumer was already overextended with debt, because much of the production for our economy has shifted overseas, because there was no political will to invest in infrastructure, because confidence at the top doesn't mean everyone is confident, the banks had to create a place to invest that money. There was nowhere real to put it, so we got a bubble instead.
This bubble is largely a failure of monetarism. It shows monetarism to be a myopic, overly simplistic theory. In addition, it's a failure of laissez-faire capitalism, which has generally been sold to us right alongside monetarism, since monetarism was created and adopted first by libertarians. Anarchic markets and industry are not the answer. They're the problem.
We all know (at least all of us who can think) that strict monetarism, if it wasn't the answer last time, is not the answer this time. We're just not sure what comes next.
Monetarism is the basic economic principle the U.S. currently operates under. To simplify greatly, monetarism says that the health of our economy is directly dependent on the amount of money in it. It's a top-down ideology that treats the economy as a monolith, with no regard for differences among industries or for non-monetary events, but it has some appeal in its simplicity.
Since the Carter administration, the heads of the Federal Reserve, all three of them, have been monetarists. The setting of the Fed Rate on a periodic basis is a monetarist policy decision, determining how much money is available in the economy in the form of loans. Lower interest rates make more money available. The broad acceptance of monetarism is seen in the way that investors eagerly await the Fed's decisions on rates and the way the stock market can swing after a decision.
Alan Greenspan was the second monetarist Fed chairman. His reputation was made by his handling of the 1987 stock market crash. He was reappointed by Democrats and Republicans and was one of the most trusted people in government. Despite overseeing the economy during the dot com bubble, his reputation remained intact until the collapse of the housing bubble.
The housing bubble itself and the problems stemming from it may be Greenspan's fault. The dot com bubble burst in early 2001. In September, America's confidence was shattered. Markets fell further. The Fed responded by drastically dropping interest rates and flooding banks with cheap cash. Those rates stayed ridiculously low until rising gas prices triggered general inflation a couple of years ago.
The banks, with their "responsibility to shareholders" (see also this), had to do something with that money. Because the average consumer was already overextended with debt, because much of the production for our economy has shifted overseas, because there was no political will to invest in infrastructure, because confidence at the top doesn't mean everyone is confident, the banks had to create a place to invest that money. There was nowhere real to put it, so we got a bubble instead.
This bubble is largely a failure of monetarism. It shows monetarism to be a myopic, overly simplistic theory. In addition, it's a failure of laissez-faire capitalism, which has generally been sold to us right alongside monetarism, since monetarism was created and adopted first by libertarians. Anarchic markets and industry are not the answer. They're the problem.
We all know (at least all of us who can think) that strict monetarism, if it wasn't the answer last time, is not the answer this time. We're just not sure what comes next.
Labels:
Politics
September 24, 2008
Yeah, Yeah
It's that time of year again. Since people have hinted that I'm to watch their blogs, I'll add links later.
In the meantime, enjoy the traditional Renaissance Festival birthday song. The "happy birthday"s are sung in a group, with a loud grunt at the end of each. The changing lyrics are started by whomever sings the loudest and continued by everyone who knows them. The "but" is very cheerful. The rest is a dirge. If I've missed a verse, traditional or not, please add it in the comments.
Happy birthday, huh.
Happy birthday, huh.
All the world's in dark despair
People dying everywhere, but
Happy birthday, huh.
Happy birthday, huh.
I like puppies, yes I do
Boiled or baked or in a stew, but
Happy birthday, huh.
Happy birthday, huh.
Now that you're the age you are
Your demise cannot be far, but
Happy birthday, huh.
Happy birthday, huh.
I'm a leper can't you see
Get your birthday hug from me, but
Happy birthday, huh.
Happy birthday, huh.
May the cities in your wake
Burn like candles on your cake, but
Happy birthday, huh.
Happy birthday, huh.
You have lived a year too long
You've had to hear this stupid song, but
Happy birthday, huh.
Happy birthday, huh.
Updates
Janie knows the perfect birthday gift for me. A story. Just don't pay attention to the part where she casts aspersions on my ass. She's never seen my ass, though not for lack of asking.
Greg gave me another Stephanie to share my birthday with. How cool is that?
Dr. Isis has a lovely, immodest proposal that isn't really for the occasion, but I'm going to pretend it is anyway.
Mike is exaggerating my writing prowess. He's right about almost everything else, though.
Betul has posted pictures from her trip to Turkey. These are from the Black Sea region and so beautiful I'll even lay off asking her for the Istanbul pictures--for a while.
Monica has updated her blog after far too long a hiatus. Now this is starting to feel like an occasion.
In the meantime, enjoy the traditional Renaissance Festival birthday song. The "happy birthday"s are sung in a group, with a loud grunt at the end of each. The changing lyrics are started by whomever sings the loudest and continued by everyone who knows them. The "but" is very cheerful. The rest is a dirge. If I've missed a verse, traditional or not, please add it in the comments.
Happy birthday, huh.
Happy birthday, huh.
All the world's in dark despair
People dying everywhere, but
Happy birthday, huh.
Happy birthday, huh.
I like puppies, yes I do
Boiled or baked or in a stew, but
Happy birthday, huh.
Happy birthday, huh.
Now that you're the age you are
Your demise cannot be far, but
Happy birthday, huh.
Happy birthday, huh.
I'm a leper can't you see
Get your birthday hug from me, but
Happy birthday, huh.
Happy birthday, huh.
May the cities in your wake
Burn like candles on your cake, but
Happy birthday, huh.
Happy birthday, huh.
You have lived a year too long
You've had to hear this stupid song, but
Happy birthday, huh.
Happy birthday, huh.
Updates
Janie knows the perfect birthday gift for me. A story. Just don't pay attention to the part where she casts aspersions on my ass. She's never seen my ass, though not for lack of asking.
Greg gave me another Stephanie to share my birthday with. How cool is that?
Dr. Isis has a lovely, immodest proposal that isn't really for the occasion, but I'm going to pretend it is anyway.
Mike is exaggerating my writing prowess. He's right about almost everything else, though.
Betul has posted pictures from her trip to Turkey. These are from the Black Sea region and so beautiful I'll even lay off asking her for the Istanbul pictures--for a while.
Monica has updated her blog after far too long a hiatus. Now this is starting to feel like an occasion.
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