Congress fouls consumers for corporate fairness

By Libby

Congress just held a hearing on credit card tricks and traps. The corporations and their lobbyists were allowed to speak for hours and dish out reams of statistics without disclosing the source of their data. Four citizen panelists that were supposed to testify in rebuttal didn't end up speaking because of an eleventh hour requirement that was conjured up in order "to be fair" to the corporations.

The people who had been invited to testify had flown in from around the country with their credit card bills in hand, only to learn that they couldn't talk unless they would sign a waiver that would permit the credit card companies to make public anything they wanted to tell about their financial records, their credit histories, their purchases, and so on. The Republicans and Democrats had worked out a deal "to be fair to the credit card lenders." These people couldn't say anything unless they were willing to let the credit card companies strip them naked in public.

Is there anybody who doubts these people would be subjected to worst sort of disclosures about their personal lives if they had signed the waiver? This brings to mind a story I didn't get around to blogging a couple of weeks ago about how Comcast blocked the public from attending a public hearing.

There was huge turnout at today’s public hearing in Boston on the future of the Internet. Hundreds of concerned citizens arrived to speak out on the importance of an open Internet. Many took the day off from work — standing outside in the Boston cold — to see the FCC Commissioners. But when they reach the door, they’re told they couldn’t come in.

Comcast — or someone who really, really likes Comcast — evidently bused in its own crowd. These seat-warmers, were paid to fill the room, a move that kept others from taking part.

They arrived en masse some 90 minutes before the hearing began and occupied almost every available seat, upon which many promptly fell asleep (picture above). One told us that he was “just getting paid to hold someone’s seat.” He added that he had no idea what the meeting was about.

Comcast later admitted they had stacked the room in their favor.

A number of people in the audience wore yellow highlighter marking pens on their shirts or jackets; Karr said that was to identify them to Comcast employees coordinating the company's appearance at the event. Khoury acknowledged that Comcast coordinated the employees that it brought to the hearing.

Which reminds me of this post at Cabdrollery that I never got around to flagging that reminds us what really sucked about the bankruptcy bill is that it punished ordinary people but allowed corporations to get away with passing their debts and responsibilities onto the taxpayers.

And the Libertarians wonder why I sneer when they speak of the free market? The only thing free about it is the free pass the corporations get for their relentless malfeasance.

Bear Stearns Gets Fed Bail-Out

By Cernig

Fester certainly called it earlier this morning when he wrote: "we could have a situation where a really nasty private sector debt crisis transforms itself into a really nasty public-private debt crisis".

He means like this:

JPMorgan Chase & Co (JPM.N) and the Federal Reserve Bank of New York on Friday agreed to provide emergency financing to Bear Stearns (BSC.N) after the investment bank said its cash position had deteriorated sharply, sending its shares into freefall.

Stock of the fifth-largest U.S. investment bank dropped as much as 50 percent in morning trading after the news, the latest in the Fed's efforts to soothe financial markets in response to a widening credit crisis spurred by rising mortgage defaults.

"Our liquidity position in the last 24 hours had significantly deteriorated. We took this important step to restore confidence in us in the marketplace, strengthen our liquidity and allow us to continue normal operations," said Bear Stearns Chief Executive Alan Schwartz, in a statement.

...Bear Stearns has more exposure to the U.S. bond markets than its competitors, and has a large mortgage-backed securities business. It was among the first to disclose the impact of the subprime mortgage market meltdown when two of its leveraged hedge funds collapsed last summer, losing $1.6 billion.

"With the market's reaction, I'd say stick a fork in them, they're done," said James Ellman, portfolio manager at Seacliff Capital, a San Francisco-based hedge fund. "The company clearly has to choose from a set of unpalatable choices: sell a large amount of equity, sell the company outright or sell assets and try to hold on and hope for the best."

..."The situation is very much that Bear Stearns was very close to the edge and it was much worse than we all thought," said Michael Klawitter, currency strategist at Dresdner Kleinwort, Frankfurt.

"It raises severe concerns over other banks. (Bear Stearns) wasn't a small bank, it was the second largest underwriter of mortgages last year. For the situation to deteriorate in that way is not good news and it will add further to jitters," he added.

Now I'm not an economist, I don't even play one on the internet, but it seems to me that Bear Stearns has just been helped to a hefty chunk of corporate welfare on the taxpayer's dollar (that's you) as reward for a whole slew of bad investments. Bad investments that were, according to Nobel winning economist Joseph Stiglitz, encouraged by the Bush administration in a vain attempt to keep the U.S. economy afloat on deficit spending while three trillion bucks was poured into the Iraqi sandpit. Where's the "credit card act" for these people?

And since the Federal piggy-bank (that's you again) is empty, the only place the Fed can get the money for bail-outs like this is overseas (more deficit) - which Fester points out will only come with strings attached. I've written before that George Bush has the soul of an assett-stripper. This is the endgame, after all the good bits have been sold out from under the shareholders and employees (guess what, you again) to Dubya's own backers and just before the remaining shell of what was USA Inc. is declared non-viable and sold to some foreign buyer.

Telecom immunity is just the beginning

By Libby

Lambert picked up on a story yesterday that didn't get enough notice. The Senate apparently intends to turn excusing corporate criminality into a cottage industry.

Sen. Jeff Sessions (R-Ala.) has sponsored an unusual [not for long!] provision at the urging of the nation’s banks granting them immunity against an active patent lawsuit, potentially saving them billions of dollars.

Adopted with little fanfare [I’ll bet!] , the amendment would prevent a small Texas company called DataTreasury from collecting damages from banks for infringing on its patented method for digitally scanning, sending and archiving checks. The patents were upheld last summer by the U.S. Patent and Trademark Office after they were challenged.

The provision, passed without dissent by the Senate Judiciary Committee [Nice work, Senator Leahy!] in July and inserted into legislation scheduled for a vote by the full Senate this month, is a rare [but not for long!] attempt by Congress to intervene in ongoing litigation, congressional experts say.

Maybe somebody should remind them that their job is to draft laws, not interfere in active lawsuits. They seem to have forgotten, perhaps in their haste to tally up their corporate campaign contributions. [via]

Christmas shopping and the state of the economy

By Libby
Updated below and again

Fester posted last week about his Christmas shopping experience. He found the parking lots and stores 75% empty. Yesterday, I finally screwed up my courage to make a trek out for the last few items on my list. My main goal was to find an angel ornament. I've bought my daughter one every single Christmas since the year she was born. I hadn't found anything suitable in the limited stores nearby my home and encouraged by Fester's experience, I expected to sail through in a couple of hours. It took six.

The traffic was horrendous and I found the parking lots 75% full, but nonetheless it wasn't difficult to find a convenient spot. The stores were also relatively crowded but people were looking, not buying. I've never overheard so many people debating on whether they wanted to spend quite so much on some item, even when it was on sale. And the sales were astounding. I've never seen such price slashing before Christmas Day. But the selections were spare. Stores definitely tightened up their inventories this year. It took me four stores to find a suitable ornament.

Most telling on the state of Christmas sales this year, was the speed at which I sailed through the checkouts. Despite the crowds, people weren't buying much. There were a dozen people ahead of me at the most crowded store and I got to the cashier in less than a couple of minutes. Last year at the same store it took close to a half an hour in a similiarly long line. But what really struck me was the dispirited mood of the people. The atmosphere was grimly determined rather than carelessly festive.

I'd note that I spent my time at the higher end speciality stores. The clerk at the convenience store I stopped at on the way home told me that the WalMart in town was so crowded, you couldn't get into the parking lot. No doubt they were there to snap up the deeply discounted items the big retailer was holding out as bait to get the last minute shoppers in. I doubt they bought many additional impulse items.

But while my sojourn into the consumer end of Christmas wasn't all that pleasant, I'm not complaining. Reading the news this morning makes me realize how fortunate I am to be able to shop at all. The thousands of homeless in New Orleans won't be having a Merry Christmas and neither will the children living in this growing tent city in Southern California. A scene I'm certain is repeated in many more places that we don't hear about. Even in my tiny town the homeless population is growing.

The White House and the materialistic conservatives who have benefited from its policies can tout the 'growing economy' all they like, but the reality on the streets presents a far more bleak picture. What does BushAmerica really look like? I think Jill has the perfect illustration for this Dickensesque Christmas and beyond to the New Year.

Update by Cernig For those who might accuse Libby of arguing from anecdote rather than facts, there's this:

NEW YORK (AP) -- With just a few days left before Christmas, the nation's retailers are in a lather to attract last-minute shoppers to salvage what has been a mediocre December.

Department-store operator Macy's Inc. has slashed prices on everything from clothing to jewelry, while Toys "R" Us is offering price cuts of up to 75 percent this weekend. At stake are retailers' profits for the year and perhaps even the strength of the economy.


..."There's been a malaise" among women's clothing sales and "it has spread to other areas," said Dan Hess, chief executive of Merchant Forecast, a New York-based research firm. "The panic button has been pushed, particularly in department stores."

And even with an expected sales surge this weekend, which traditionally accounts for about 10 percent of holiday sales, Lazard Capital Markets analyst Todd Slater expects that the last-minute spending will be "too little, too late" to save Christmas.

"When people think they are in a recession, they spend like they are in a recession," Slater said.

...Slater said that he estimates that large department stores are missing their sales plan by as much as 10 percent so far in December.

When people's pockets are as empty as this, then it's a recession - no matter how the Bush administration and its glad-handers massage the figures.

Update by Libby: McQ weighs in. He's mightily irked that the article dared mention the mortage meltdown, even though it notes it wasn't a factor in the tent city in SoCal and then takes a crack at my post.

UPDATE: Of course, dependable as dawn, the usual suspects swallow the nonsense hook-line-and-sinker and predictably blame it on Bush.

Well, how silly of me to think that Bush's economic policies have anthing to do with, you know, the current state of the economy. Kathy at Liberty Street kindly comes to my defense.

Whether the 200 or so people living in that tent city in California are there because the bank foreclosed on their houses, or whether they are there because they can't find a job or a place to live and they have nowhere else to go, the problem is an economy that forces people into such desperate situations, and a presidential administration that simply does not care.

That's the point. The Bushenomic boom is a numbers game. Sure it grew the economy but the benefits accrued to those who needed them the least, at the expense of the millions of working class Americans who find themselves one paycheck from the street. Yet the materialistic conservatives still can't understand why were not excited by the pretty charts that tell us how much more well off, the have mores have become.

Overtreatment not the real problem

By Libby

A lot of economists write books about healthcare and the NYT quotes one point that gets close to the crux of the problem, but doesn't quite hit the mark.

Above all, it’s the natural outgrowth of our fee-for-service health care system. It turns doctors into pieceworkers, as Ms. Brownlee puts it, “paid for how much they do, not how well they care for their patients.” Doctors and hospitals typically depend on the volume of work for their income, and they are the gatekeepers who decide when work needs to be done. They also worry about being sued if they do too little, a well placed concern in today's litigious society. So they err on the side of overtreatment.

Brownlee lays the blame at the feet of the providers and over demanding patients who want the same treatments they see on the TV doctor shows but fails to factor in the root cause of the current standards of practice -- the insurance companies reimbursement policies. Unrealistic patients are certainly a driver in terms of excessive spending, insisting on expensive state of the art procedures to prolong an elderly relative's life by perhaps as little as a few weeks, and doctors will accommodate them for fear of malpractice suits. However the doctors are most often unable to render the best medical care efficiently on account of the ridiculous manner in which they're compensated for their services.

This is the way it works -- or more aptly, doesn't work. If a patient is admitted to the hospital for a certain ailment, for the sake of simplicity let's say it was for a compound bone fracture. If in the course of testing, the doctor discovers there are other conditions that need treatment, say a cardiovascular problem or even cancer, they can't treat those conditions because the patient was admitted for broken leg. Or rather, they can treat them, but they won't get paid for it.

Insurance will only compensate for services that address the problem for which the patient was initially admitted. In order to get paid for unrelated maladies, the doctor must first discharge the patient and get them readmitted for the unrelated medical condition. Needless to say, being shuffled in and out the hospital repeatedly does nothing for the patient's health and raises the administrative costs, which is where the insurance companies make all their money.

Futhermore, the paperwork is onerous. For every ten minutes a doctor spends with a patient, there's an hour's worth of papework, minimum, and one misplaced comma, one typo, one missed checkbox and the insurer will deny payment. Every insurer has different forms and different rules. Oftimes, the cost of doing the paperwork is greater than the compensation for the procedure and the hospital will eat the cost, but these costs are ultimately passed on to the consumer in higher rates and through government subsidies for unpaid services.

If there's a stronger case to be made for a single payer system which would standardize the paperwork and allow doctors to treat patients under best practices rather than private insurance rules, I don't see it. In any event, it's wrong to blame the doctors. They're just doing the best they can under the wrongheaded rules of the workplace.

Missing your TV favorites?

By Libby

I've seen this link on several blogs. FireDogLake has put together a handy point and click letter for you to write to the Hollywood honchos and tell them to pay their writers a decent wage already. Of course, it's customizable but again, the template will do. With these mass mailings, they're more likely to count the numbers than actually read the letters. But if you do nothing, expect re-runs forever because the studios are hunkering down and trying to break the strike. Fight for your fellow workers.

Most interesting to me was that you have to choose which show to write to from a drop down menu. It's a long list. I only recognized about a dozen of the programs. I guess I really am out of touch with pop culture. I mean, Cashmere Mafia, Gossip Girl, Two and a half Men? Who are these people? I wrote to House. That's the only one I watch consistently.

Climate deniers - skeptical of facts, but not of the skeptics

By Libby

I expect the usual suspects, who just can't seem to grasp the difference between the weather and the climate, will be jumping on this latest allegation of climate data tampering.

The IPCC falsified data showing a sea level rise from 1992-2002 according to Dr. Nils-Axel Morner, former head of the Paleogeophysics and Geodynamics department at Stockholm University in Sweden. In an interview by George Murphy, Morner cites various examples of falsification of evidence claiming sea level rises.

McQ advises that we "be very skeptical and require a very high level of proof, not conjecture, before agreeing to open your wallet." I assume that means we should be skeptical of the majority who take climate change seriously since he notes with a hearty heh that Mörner isn't at all impressed with the computer models used.

Too bad the deniers don't use the same level of scrutiny on the skeptics before they wholehearted embrace their findings. A quick google reveals the old professor has a quirk of his own and may well have his own reasons for alleging improprities. They're rectangular, usually green and fit in a wallet.

Axel-Morner claims to be an expert in "dowsing," the practice of finding water, metals, gemstones etc. through the use of a Y-shaped twig. Axel-Morner's attempt to prove his dowsing abilities is chronicled by James Randi, the well-known myth buster, who has offered the longstanding One Million Dollar Paranormal Challenge.

Listed as an "allied expert" for a Canadian group called the "Natural Resource Stewardship Project," (NRSP) a lobby organization that refuses to disclose it's funding sources. Two of the three Directors on the board of the Natural Resources Stewardship Project are registered energy industry lobbyists and senior executives of the High Park Advocacy Group, a Toronto based lobby firm that specializes in “energy, environment and ethics.”

Yeah, that bit about ethics made me chuckle too.

Dereg and the fuel tanker explosion

By Libby

A parable for my "small government" loving friends. This is what happens when you let the trucking industry self-regulate. You diminish mandatory driver safety requirements, you get bad drivers and you hear stories like this.

Chris Barrow said he awoke to a loud bang and jumped into his car as he saw flames coming toward his home. But as he started to drive away, Barrow realized that the car was on fire. He got out of the vehicle and ran.

You can see some raw footage if you scroll up to the top of the video section on the main page. It's like a Die Hard movie.

Some things you need a government for and this is one of them. It appears to me this was a preventable accident. The moral of the story being, without strong, centralized safety regulations, you'll see more fuel, and other hazardous cargo trucks, overturning in densely populated cities.

Business and the GOP

by shamanic

There's a very thorough piece in the WSJ today on how business types are becoming less and less enchanted with the Republican party.

I don't have a lot to add except to note that universal health care, if done right, is a winning issue across the board. The fact that every Democrat knows that and not a single Republican has a plan beyond 'more of the same' is incredibly telling about the current fossilized state of the GOP.