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Rug or punk? You make the call! ... 3:18 P.M.
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Tom Blumer buries his unburying of the lede from a recent Peter Wallison op-ed. Wallison's key graf:
New research by Edward Pinto, a former chief credit officer for Fannie Mae and a housing expert, has found that from the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime or Alt-A. [Emphasis added]
"[A]s early as 1993." Hmm. Doesn't that put this alleged routine misrepresentation well before Designated Fall Guy Franklin Raines' tenure as head of Fannie Mae--and back into the watch of Getting-Away-With-It-Because-I'm-Well-Connected-and-Spread-It-Around Mondale campaign manager and initial Obama veep-vetter Jim Johnson? I think it does! (Johnson was CEO of Fannie Mae from 1991-1998.) ... P.S.: 'Misrepresented the mortgages ...." Isn't misrepresenation some kind of, I dunno ... fraud or ... crime? Even if it was done in an arrogant, misguided attempt to extend the American dream of home ownership down the income scale (which maybe had a side effect of justifyiing the high pay of Fannie Mae executives)? ... Just asking! ... [via Instapundit] 3:10 P.M.
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If that's what Brit Hume thinks why shouldn't he say it? This is my in-depth analysis of Hume/Woods controversy. Carl Cannon has more context. ... 4:23 P.M.
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Did Tom Brokaw read this NYT article before going on Meet the Press and claiming it shows the folly of "what happens at UCLA, where they extend life no matter what the cost?" The article actually badly damages the righteous, self-referencing Dartmouth/Orszag/Leonhardt Cult of Curve-Bending, which holds, a la Brokaw, that high-cost hospitals spend more on Medicare without producing results. a) Did you know that the Dartmouth analysis--contrasting the amount spent by U.C.L.A. in the last six months of life with the smaller amount spent by Mayo in Rochester--doesn't count the money spent on patients who live?
It can be hard, sometimes impossible, to know which critically ill patients will benefit and which will not.
That distinction tends to get lost in the Dartmouth end-of-life analysis, which considers only the costs of treating patients who have died. Remarkably, it pays no attention to the ones who survive. [E.A.]
And here I thought having patients survive was kind of the whole point. ... b) The NYT's Abelson gives a cheering example of an instance where U.C.L.A.'s expensive "Hail Mary" worked. ... And Tom Brokaw wouldn't want a doctor who'd throw the Hail Mary? Is there a more benign use of society's resources than throwing medical Hail Mary's? More videogames, maybe? c) Abelson presents several sources of evidence that variations in spending aren't as great as the Dartmouth cult would have it; d) Most important, spending more appears to not necessarily be as wasteful as Orszag and Obama would have us think it is, at least according to one study (commissioned by the expensive California hospitals themselve):
To focus their analysis, the researchers chose to look only at a single category of patients: elderly people with heart failure. The dead would be counted, as Dartmouth does, but so would the living.
What they found seemed to contradict the Dartmouth thesis. The hospital that spent the most on heart failure patients had one-third fewer deaths after six months of an initial hospital stay.
One-third is a huge number, no? ... Yes, the high-cost hospitals paid for the study. But if we're going to start taking things like that into account ...
I'd say Brokaw's comments prove Jack Shafer's point: The biggest corrupting force isn't money, it's consensus--what respectable people believe. These days, they believe the Dartmouth dogma. ... 5:23 P.M.
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All the hopes and dreams of the Democratic Party are bound up in the person of one woman: Janet Napolitano! . She must be protected at all costs. ... 2:20 P.M.
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C-SPAN BFD: Complaints about the Dems failure to televise or otherwise open up the House/Senate health care negotiations seem near-completely hollow (as were Obama's promises during the campaign). Real legislative deals are always most efficiently cut behind closed doors, where the principals can be candid and concession-minded without fear of embarrassment, and where they can't grandstand. ... That's life. It's not like we don't know what the issues are, or that we won't find out how they've been resolved ....If the Dems let C-SPAN cover the negotiations they'd just have to find another room nearby in which to hold the real negotiations first. ...
In essence, understandably desperate Republicans (aided in this case by MSM reporters looking for a bit of cheap, non-ideological adversarialism) have now adopted, for tactical reasons, one of the most immature goo-goo liberal fantasies: the idea that "open meetings" on high-profile issues produce actual legislative transparency (as opposed to another layer of fake transparency). Next they'll be complaining the negotiators don't exhibit enough race and gender diversity. ...
P.S. Because all pols need to have someplace where they can talk in private, the complaints that Sarah Palin dared to use a private email to discuss state business seem equally hollow. ... 11:25 P.M.
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Even the normally skeptical Truth About Cars seems to have bought the NYT's account of the newfound spirit of cooperation between labor and managment at GM's Lordstown, Ohio plant. TTAC:
Who’d have imagined it? But then, who in the UAW of the 1970s and 80s imagined that GM would one day be bankrupt? Like so many of the internal problems that brought GM down, labor issues were largely a product of GM’s sheer size and dominance in the market. The same arrogance that led GM to squander its technological edge and commitment to quality led GM’s UAW workforce to believe that the gravy train would always be there, and that the primary goal was to get a bigger cut of the pie. That sense of certainty that GM would always be a dominant player in the industry has died hard, but with bankruptcy the lesson seems to have been learned. [E.A.]
This seems like a convenient liberal fallback fantasy: First line of defense--the UAW didn't help bankrupt GM. Second line of defense-- OK, sure, the UAW helped bankrupt GM. But these "labor issues were largely a product" of the attitudes engendered by "GM's sheer size and dominance in the market," not by, say, New Deal-style unionism itself. But wasn't the impending end of GM's dominance clear a couple of decades ago? Why couldn't the spirit of cooperation have effectively taken hold a few months, or even years, before bankruptcy and the resulting bailout? ... Alternative view: GM's labor issues were, and are, largely a product of the labor laws that structure labor relations in America's unionized industries. In other words, the Wagner Act. It will always be less efficient to produce cars in a regime of adversarial negotation and legalistic grievance-filing and rulemaking, especially in an industry where (like virtually all industries these days) you have to be constantly making lots of little changes. If GM somehow survives, and the "gravy train" returns, the Wagner Act will still be there to make sure it goes away again. ...11:10 P..M.
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One day I'll read a persuasive article describing how we can "bend the curve" on health care costs without reducing care. Hasn't happened yet! The latest addition to this massive Archive of the Unconvincing is the NYT's David Leonhardt's piece on what he forthrightly calls "rationing" of medical capacity in Richmond, Virginia. Basically, Virginia limits the number of hosptial beds. South Dakota doesn't. The idea seems to be that without the limits, medical entrepreneurs build more capacity, and then doctors order patients to use that capacity, running up costs without improving care. This would seem to require doctors to order up treatments they should know are flat out not effective--not just cost-ineffective-but that's the argument. So how does the Richmond vs. Dakota comparison come out?
1. In Richmond the number of beds per 1000 residents fell from 4.8 in 1996 to "about three." You would now expect Leonhardt to unleash a string of stats showing that medical care in Richmond has gotten better despite these limits. You would be wrong. Care in Richmond is "better than in most American metroplitan areas," says Leonhardt. OK, but what was it like before? Maybe it was better than nearly every metro area before. Richmond hospitals do a "better-than-average job of treating heart attacks," Leonhardt says. OK, but were they much-better-than-average before? Anyway, that's just heart attacks. ... Oh, and a patient named Janet Binns--actually, a patient's daughter--feels there is "nothing cheap about the care." Well, all right then! ....
But wait a minute:, Leonhardt later notes that "[S]ome of Richmond's hospitals do poorly on Medicare's metrics." But that's "kind of the point," he assures us, because it just proves that Medicare in Richmond is just like the rest of the country. Huh? I thought the point was that Richmond's cuts hadn't reduced the excellent quality of care, not that they'd lowered it to the national average. ... And why doesn't he tell us more about those underperforming "metrics"?
2. South Dakota, meanwhile, lifted its regulatory caps on hospital beds. As a result, a health care company named Bon Secours went on "an expansion binge. ...Suddenly, southeastern South Dakota had vastly more medical capacity than just a few years earlier." You would expect Leonhardt to now demonstrate that all this expensive new medical capacity didn't translate into healthier South Dakotans. You would be wrong. He just drops the subject. For all we know, the Bon Secours spending binge revolutionized prarie health care the way LBJ's rural electrification program revolutionized life in the Texas hill country.
3. Some "doctors and hospitals" told Leonhardt that Virginia regulators had become "lax" in their rationing of hospitals beds recently. You would expect Leonhardt to then demonstrate that this rumored relaxation had in fact happened--with the number of hospital beds per thousand rising, perhaps. You would be wrong. Yet Leonhardt uses the rumored, unsubstantiated laxity to explain why Richmond's "spending growth had ... accelerated" recently. Yikes.The curve is coming unbent! Instead of 39th cheapest in the country, Richmond is now only 69th. But wait--a dozen paragraphs earlier Leonhardt had tried to convince us that rationing worked in Richmond by brandishing the "39th" figure. If that was merely an ephemeral success, why didn't he tell us at the time? Alternative explanation: Rationing works for a while. Then it stops working and costs start rising because it starts to impinge on care (which prompts regulators to become "lax" and allow new facilities).
4. Richmond is one city in Virginia. What's happened in the rest of the state?
5. Some 37 states have a program like Virginia's requiring hopsitals to get permission to add beds, etc. What's happened in those other states?
6. Indeed, if so many states have this program, then isn't it part of the status quo? In other words, it's not "our future." It's our present. Whatever savings the regulations may produce, they are part of the profligate spending curve that Obama confidently tells us he'll bend further.
7. Leonhardt's articles in general would be more convincing if he didn't seem a puppet of the Orszagist agitprop bureau "Dartmouth researchers" he constantly cites. It's almost as if they're ...I don't know ... feeding him the stats he says he needs. Too bad they didn't feed him some better ones.
10:20 P.M.
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[Corrected 12/2--The CBO report isn't as grim as my emailer, or I, originally thought. The changes below reflect this. ] An alert reader (who is involved in the health care debate and, like me, favors Obama's reform) emails:
Most of the coverage I’m seeing today of the new CBO report on health reform’s effects on premiums is .totally in the tank for the Obama administration. CBO’s report argues (contrary to a recent paper by Jonathan Gruber, the Obama administration’s favorite health economist) that health reform will INCREASE the cost of private health premiums. There’s no other way to read the thing. Yet the NYT ["No Big Cost Rise in U.S. Premiums Is Seen in Study"] and Wash Post ["Senate health bill gets a boost"] and especially Ezra Klein ["Congressional Budget Office: Reform Will Bring Down the Cost of Health Insurance"] are all saying the report vindicates the Democrats on cost. That’s insane. (The WSJ’s ["Some Health Premiums to Rise"] is the only news account I’ve seen that reports it straight.).
How are reporters distorting this? Mainly in two ways.
1) They’re emphasizing that health reform will leave employer-based premiums largely unaffected. This is supposed to be a huge accomplishment. But health reform does virtually nothing to alter employer-based health care—it’s focused on the individual “nongroup” market—so to say it will have virtually no impact on employer-based premiums is like saying it will have virtually no effect on global warming.
[2) They’re] emphasizing that health reform will lower premiums for the majority of participants in the nongroup market by up to 60 percent. It will do nothing of the sort. It will INCREASE premiums in this market by 10 to 13 percent. That it will do so for good reasons (regulatory changes will require insurers to provide more actual insurance to customers) may justify the increase, but it doesn’t contradict it. Premiums will be higher because of health reform. The bill alleviates this for more than half of all participants in the new exchanges by extending income-based subsidies that will reduce the out-of-pocket cost of premiums by up to 60 percent as compared to what purchasers would pay without health reform. But that shouldn’t be mistaken for lowering the actual cost, which will still be borne by the nearly half of all purchasers who don’t receive subsidies. [E.A.]
When Ivy League universities raise tuition but pledge increased subsidies (i.e. financial aid) the headline usually reads something like "Yale Raises Tuition." ...
P.S.: [Corrections below] Klein seems particularly disingenuous, discussing the report as if premiums would rise only because newly empowered individuals would choose to buy better policies:
Premiums for the same policy in the individual market fall by 14 to 20 percent. But people in the individual market, who are largely low-income, will now have the opportunity to purchase better policies that cover more expenses and provide more security. That's a good thing. It's one of the reasons for health-care reform, in fact. And it is not analogous to health-care insurance becoming more expensive, any more than the fact that I could buy a nicer car after getting a better job suggests that cars are becoming more expensive. [E.A.]
But individuals--at least those buying new policies--won't be able to buy "the same policy" that they can now, as I understand it. The policies they buy on the new exchanges will have to include some state-mandated benefits ("mental health and substance abuse treatment") and they could not exclude preexisting conditions. Both changes make policies better, but also more expensive. If you are an individual without a preexisting condition who doesn't want to buy mental health or drug abuse insurance--sorry! Your premiums are going up anyway--and by more than the CBO's average 10 -13%, presumably, because that figure averages in all the people who now pay more because of their preexisting conditions. You'll have to pay for them anyway. Will that increase outweigh the premium-reducing effect of a) the efficiencies introduced by the bill's "exchanges," and b) the broader insurance pool created because young, healthy people are now required to sign up? It's not clear to me. It looks as if CBO estimates the cost increases due to mandated benefits as at least 9%, probably a bit more,** while the cost-reducing factors are 14-20%.But for an individual without a preexisting condition the cost increase would presumably be higher than 9%, since that averages in all the people who now pay more because of their preexisting conditions.
Plus, according to CBO, that apparently doesn't account for another factor that could push up prices--more people using more services because they'd have policies that require less cost-sharing.expanded insurance driving up health care spending overall, and encouraging the "accelerated dissemination of new medical procedures" (as happened when Medicare started, apparently).
These would be relatively small prices worth paying for the security of knowing that you can always get reasonably priced insurance. But it's silly to pretend that either premiums in the key individual market will never go up a bit (before being subsidized back down for some) or that if they do go up it will just be because people voluntarily buy the equivalent of "a nicer car."
The fear, of course, is that if the first thing already-insured, healthy individual voters see as a result of health care reform is a non-trivial hike in their premiums, they might not be very happy about the Democrats' achievement. Their unhappiness will be all the greater if they've been promised a premium cut, or if any increase is glibly dismissed as simply paying for benefits that they've now had the "opportunity" to purchase. ... The fate of the 1988 catastrophic health care insurance bill--passed, then repealed--offers a relevant, cautionary example, no? ...
Update: Clive Crook defends the MSM. He also addresses the "more important" question of whether the CBO report is right, worrying that premiums will rise due to a factor CBO pooh-poohs--adverse selection. ...
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**-- The 9% doesn't include involuntary increases when individuals who have policies that cover less than 60% of their projected costs are forced to buy policies that cover that statutory amount. Apparently there aren't many such people, but there are some. ... 4:17 P.M.
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