The American Constitution

[Alan Goldhammer]

What it all boils down to, then, is that your health care is woefully inadequate, and to be worth squat, is confined to the rich who don't feel the pinch of the annual cost of buying it.

I don't see it so much as a political issue of left v. right, but as a total lack of moral, civic responsibility. A state unwilling to consider its people's health a primary concern is not fit for purpose; it's the single most important thing upon which depends everything else about the nation. Far from showing some sense of justice, some vaunting of self-reliance as guiding principle, it reveals an absolute lack of it or of respect for one's fellow human beings.

Self-reliance is all fine and good, but sick people are not in any position to play that game. To be self-reliant, to strike out into the world in some meaningful way and mark your territory requires that you be fit and able to fight the many fights you will inevitably face.

One could touch upon the hypocrisy of nations driving propaganda about tobacco and cancer, fast food and sweet drinks and other rubbish that both fattens into obesity and deprives kids of their natural teeth before they hit their teens, but does absolutely nothing to ban that shit, just keeps on collecting the sales tax on the one hand and putting more and more pressure more on health services to cope with governmental cowardice to do the right thing. Why doesn't it do anything? Popularity! The great television charade that politics has become.

I would hope that all can agree with this fine, thoughtful, post.

[Rob C]

I would hope that all can agree with this fine, thoughtful, post.

It reads better when I remove the third, irrelevant "more" which I have now done!

Thanks, anyway.

Rob

[Alan Klein]

That is really not true as anyone who has read in depth about the financial crisis knows.  Adam Tooze in his fine book on the financial meltdown and aftermath, "Crashed:  How a Decade of Financial Crises Changed the World" that is well worth reading.  Well known investment manager and Bloomberg columnist, Barry Ritholz, skewers the idea that the Community Reinvestment Act had anything much to do with the meltdown.  Unlike the Tooze book, this will only take you about three minutes to read.

My wife and I just happened to be looking to buy a home around 2003 when all of this was going strong a few years before the housing market collapsed.  When I asked my broker what papers he needed to prove we were creditable borrowers, expecting him to ask for our bank and investment statements, tax returns, and payroll stubs, he told us we don't need anything.  Nothing! I was astounded.  He said all we need is to sign the mortgage loan agreement and we'd get the money.  Incredible!

The CRE along with the cancellation of the Glass Steagall Act during the Democrat Clinton administration led to this bizarre arrangement. No one cared.  Everyone was greedy and hoped to get rich buying in April and selling the house 6 months later in October at huge profits.  Greedy deadbeats earning $30,000 a year purchasing a $600,000 home hoping to sell it for $800,000 the following year.  It was like the Tulip boom in the 1600's.   Everyone was at fault.  Greedy deadbeat buyers, crooked banks who didn;t want to get stuck with bad loans, rating agencies who didn;t want to lose their customers the banks, and Congress and the Presidency who pushed these loans and removed regulations that worked for 70 years.  Of course the politicians didn't want to take any of the blame.  Similar things are happening now - the Fed's printing has made it worse today.  The Debt, deficit spending, etc.  When the next recession hits, the Fed, the politicians, etc will again blame private industry when it's the government that always gets the ball rolling.


By the way, the S&L (Savings and Loan)  crisis was also caused by the government although your author Ritholz didn't blame them for that either.  Congress set it up so investments in real estate could be written off for tax purposes in 19 years rather than the usual much longer period.  So real estate investors build strip malls not because there was a business demand for them.  Rather, they build them to write off their costs against profits they made in other real estate ventures.  So there again, the government and Congress created the crisis, not private industry.  Its the government that distorts the economy and drives private business to invest poorly, whether in malls or homes.  Neither would have happened without the government being the catalyst.

[Alan Goldhammer]

My wife and I just happened to be looking to buy a home around 2003 when all of this was going strong a few years before the housing market collapsed.  When I asked my broker what papers he needed to prove we were creditable borrowers, expecting him to ask for our bank and investment statements, tax returns, and payroll stubs, he told us we don't need anything.  Nothing! I was astounded.  He said all we need is to sign the mortgage loan agreement and we'd get the money.  Incredible!

Correct, these were NINJA loans - no documentation required.  I don't know if they even required private mortgage insurance.  When we bought our home we could only put 15% down based on the purchase price.  The lender required us to take out PMI that cost about $90/month and was not tax deductible.  Once the equity in the home had increased so that our value was above the 20% threshold of the mortgage we could cancel PMI.

The CRE along with the cancellation of the Glass Steagall Act during the Democrat Clinton administration led to this bizarre arrangement. No one cared.  Everyone was greedy and hoped to get rich buying in April and selling the house 6 months later in October at huge profits.  Greedy deadbeats earning $30,000 a year purchasing a $600,000 home hoping to sell it for $800,000 the following year.  It was like the Tulip boom in the 1600's.   Everyone was at fault.  Greedy deadbeat buyers, crooked banks who didn;t want to get stuck with bad loans, rating agencies who didn;t want to lose their customers the banks, and Congress and the Presidency who pushed these loans and removed regulations that worked for 70 years.  Of course the politicians didn't want to take any of the blame.  Similar things are happening now - the Fed's printing has made it worse today.  The Debt, deficit spending, etc.  When the next recession hits, the Fed, the politicians, etc will again blame private industry when it's the government that always gets the ball rolling.

CRA played little or no role in the meltdown so I would wish you stop citing it.  Glass-Steagall repeal was impactful but much of the damage was done by the shadow banking industry, the financiers who created the collatoralized debt instruments, and the ratings agencies that gave these ratings that stated they were safe for investment.  The federal government had a minor role in this whole enterprise.  As I already pointed out there were a group of investors who saw through this whole phony house of cards.

By the way, the S&L (Savings and Loan)  crisis was also caused by the government although your author Ritholz didn't blame them for that either.  Congress set it up so investments in real estate could be written off for tax purposes in 19 years rather than the usual much longer period.  So real estate investors build strip malls not because there was a business demand for them.  Rather, they build them to write off their costs against profits they made in other real estate ventures.  So there again, the government and Congress created the crisis, not private industry.  Its the government that distorts the economy and drives private business to invest poorly, whether in malls or homes.  Neither would have happened without the government being the catalyst.

He was not writing about the S&L crisis.  One thing to remember is that the S&Ls were highly regulated and when interest rates started to wildly fluctuate their business model would no longer work.  They were making loans for 30 years that were below the prevailing rates of the time and could not possibly be profitable.  they also had to keep these loans on the books.  The financial industry in this country has difficulty adapting to rapidly changing conditions and as a result there are lots of bankruptcies and consolidation.

EDIT:  I forgot to add that it's also very difficult to read bank balance sheets to assess how stable they are.  Most banks do not retain enough capital to weather a downturn.

[Slobodan Blagojevic]

I would hope that all can agree with this fine, thoughtful, post.

Nope.

[RSL]

+1 Nope

[Alan Klein]

The S&L's went broke when the real estate builders stopped paying them for the loans they received because they couldn't rent out the malls because there was overbuilding due to governmental tax write-offs.  Again, the government started the problem by distorting business investment criteria, same as the 2008 housing recession.   When the next crisis hits, you'll see it was the government that started it.  It will be worse.  Since 2008, we've more than doubled our debt.  The Fed's balance sheet has gone from $800 billion to over $4 trillion in printed money.  Our deficit is pushing another trillion this year.  It's going to be a mess.   

[degrub]

A state unwilling to consider its people's health a primary concern ...... it reveals an absolute lack of it or of respect for one's fellow human beings.

i think that hits the nail on the head for the difference in inclinations between "European" governments and the government in the US -a government that is more about facilitating business  than social welfare. Hence the continuous attempt by some to reverse the social safety net set up by Roosevelt in the '30s and Johnson in the '60s.

[Alan Klein]

i think that hits the nail on the head for the difference in inclinations between "European" governments and the government in the US -a government that is more about facilitating business  than social welfare. Hence the continuous attempt by some to reverse the social safety net set up by Roosevelt in the '30s and Johnson in the '60s.

I'm sure you didn't realize the irony in your comparison denigrating America.  While America was setting up Social Security in the 1930's, Europe was getting ready to start WWII. 

Until Obamacare single handedly is destroying medical care in the US, Americans had good health care privately or through their places of employment.  When I ran my little business twenty years ago, all of my employees had health coverage paid for by my company.  That was standard practice.  America also has Medicare and Medicaid.  I recently had heart surgery paid for by Medicare.  In my semi private room, the fellow next to me was a young, homeless person who just had major heart surgery paid for by the government.  He got all the same excellent care that I got.   We still have issues with medical care that will get resolved. But it's still pretty good here. 

[degrub]

You are making assumptions. i am not kicking the US. Just stating the difference in attitude that leads to the results.

[Alan Goldhammer]

I'm sure you didn't realize the irony in your comparison denigrating America.  While America was setting up Social Security in the 1930's, Europe was getting ready to start WWII. 

Remember that Bismark established a social net in late 19th century Germany that included health insurance and a pension.

Until Obamacare single handedly is destroying medical care in the US, Americans had good health care privately or through their places of employment.  We still have issues with medical care that will get resolved. But it's still pretty good here.

Please tell me how Obamacare is destroying medical care in the US.  Tell me why insurance premiums for businesses and individuals are going up.  I serve on a non-profit that offers health insurance to research fellows and serve on the committee that reviews the policy and makes decisions about coverage.  In almost all areas that we have looked at from a comparison point of view organizations are raising rates, and increasing co-pays and deductibles.  The only reason that companies offer health insurance these days is because they get a tax write off.  Eliminate that and you would quickly see all of them exit and throw everyone into the private market.  HR departments hate health insurance more than almost anything else.

[faberryman]

America also has Medicare and Medicaid.  I recently had heart surgery paid for by Medicare.  In my semi private room, the fellow next to me was a young, homeless person who just had major heart surgery paid for by the government.  He got all the same excellent care that I got.   We still have issues with medical care that will get resolved. But it's still pretty good here.

As long as you and your spouse are 65 or older and can afford a Medicare supplement policy.

[Slobodan Blagojevic]

As long as you and your spouse are 65 or older and can afford a Medicare supplement policy.

And then there is Medicaid, for the poor.

[Rob C]

Why is there a need for two bodies to do the work of one? I always imagined that was the trade-unionist attitude to competitiveness and efficiency.

[Jeremy Roussak]

A state unwilling to consider its people's health a primary concern is not fit for purpose; it's the single most important thing upon which depends everything else about the nation.

I don't agree. A healthcare system to which access is decided by illness rather than by means is hugely desirable; but it's the rule of law on which a nation depends for its existence. Whether that's law imposed by dictators, laws passed by a parliament or something in between is less important than that institutions of the state exist. If they don't, there's no chance for healthcare.

Jeremy

[Slobodan Blagojevic]

Why is there a need for two bodies to do the work of one?...

There are data-backs for the rich, and p&s for the poor. And anything in between. Would you prefer one for all? Like a Canon Rebel for everyone? Even the Soviets had a choice: Zorkiy or Zenit.

[32BT]

but it's the rule of law on which a nation depends for its existence.

LoL, occupational deformation obv, easily demonstrated by the following question: what rule of law determines a nation's border?

[Slobodan Blagojevic]

+1 vote for the rule of law.

[32BT]

+1 vote for the rule of law.

Nonsense, we already had the following observation. Think about this: how is access to the legal system available in your country for the poor and needy? And don't give me that pro bono crap, you first need legal advice to even know whether the law can be of assistance and then you actually need to win the case to potentially have the cost returned.

Perhaps I'm getting more cynical in my dotage, but it seems that constitutions and bills of rights, while fine aspirational (and inspirational) documents, are increasingly becoming works of fiction. Was it always that way?
By this I mean that in many countries the constitution is simply ignored by the rich, by corporations, and by governments when it gets in the way of their power. I include all of North and South America, and much of Europe. Can't speak for Asia or the Middle East.

[Alan Klein]

Nonsense, we already had the following observation. Think about this: how is access to the legal system available in your country for the poor and needy? And don't give me that pro bono crap, you first need legal advice to even know whether the law can be of assistance and then you actually need to win the case to potentially have the cost returned.

Lawyers take cases with no cost to their clients by taking 1/3 of any monies they win in settlement or trial.  Happens all the time in injury cases.