Pointed Fingers

I always get a kick out of the posts of the economists at George Mason University. Today Russell Roberts hits the nail on the head with a few twists on the much trumpeted ire of the Democratic Congress.

Roberts borrows from a Politico article, but makes a couple of adjustments I spent my day yesterday wishing I'd had time to post myself. Here is an exerpt:

In response to a POLITICO inquiry, Grassley spokeswoman Jill Gerber clarified Grassley’s comments, saying “clearly he was speaking rhetorically – he meant there’s no culture of shame and acceptance of responsibility for driving a company country into the dirt in this country. If you asked him whether he really wants AIG executives Senators to commit suicide, he’d say of course not.”
In fact I've wanted all along to replace the condemnations of many corporate executives in recent news stories with similar disdain aimed at politicians. The shrill squeals of "George Bush!...Corporate Executives!...George Bush!" wear thin when Democrats were pulling the levers in the most powerful branch of American government as the economy drifted into recession.

Now, with Democrats rushing to repeat and even magnify the errors THEY made in contributing to today's economic messes, it is good to be mindful that no one has more power to do harm to the economy than the people who today so loudly chafe against the rule of law. This sort of posturing is especially hypocritical, even criminal (were it not for the fact these gangsters MAKE the law) given current Treasury Secretary Tim Geitner's (in his role as the Director of the New York Fed) having reportedly taken a significant role in designing AIG's bailout and the complicity of powerful Senators in PROTECTING AIG bonuses!

Am I defending the bonuses? Not really. Executives at every level of both industry and government routinely abuse their power to manipulate money to their own advantage. That is the essence of either industrial or governmental corporate culture. Yes, this is not a shining moment for the banking or insurance industries in this regard. But the people who made the laws under which the bonuses were to be paid, and then added amendments protecting those payments, are now squealing like stuck pigs that there are bonuses to be paid! It is plain foolishness to give them credit for being in the taxpayer's corner with such bald hypocrisy.

Posted by Lee Emmerich Jamison at March 18, 2009 10:02 AM
Comments
Comment #277882

Lee,
Interesting play on words, but I do believe the later version could be an act of war against America. For wasn’t that argument given by UBL and Al Qaeda?

As far as AIG, the argument of stupid does not even begin to cover the mistake made by the CEO and His Lawyers. For how is it that a Company on “Bailout Mode” is able to pay their Top Executives bonuses while not paying the bills owed by the Company. Does this mean every Company in America do not pay their bills as long as they give their Employees a bonus?

Not good and speaks louder than words of why “We the People” need to heavily regulate the Financial and Insurance Sectors. For if the CEOs will not listen to Common Sense than Common Knowledge should tell the Children of the 70’s that the bonuses are just the straw that broke the camels back. For if we are going to pass onto our children a Financial and Insurance System that works than the Argument of Arrogance that has lead to My Democratic and Republican Citizens and Country to lose Billions if not Trilions from a group of men who is willing to sale Snake Oil that they knew would not cure the problem.

Posted by: Henry Schlatman at March 18, 2009 10:34 AM
Comment #277883

When the Senate made these rules, it was almost equally divided, just that short of being a Republican majority. Additionally, we had Bush in the White House, Paulson in treasury, and not a lot of time left to stop AIG from becoming Lehman Brothers II.

AIG is to blame for this fiasco. They essentially put the language in their contracts essentially saying that if these people weren’t given their retention bonuses, they’d be in breach of contract towards their counterparties, which would mean AIG essentially goes caput.

We’re trying to clawback the money for a couple reasons: one, we’re 80% owners of this company, and two, that being the case, we don’t have the patience for retention bonus for those who aren’t retained, or performance bonuses for those whose actions necessitated our stepping in. This isn’t a rule of law; other court cases have supported after the fact taxation of ill-gotten gains, because of its civil nature.

The main question here is why they thought they could get away with this, and the answer is, they’re familiar with government as its been run under the Republicans for so long. On the bright side, I guess, their actions are making it easier for people on my side of the aisle to shove this sort of thing into its grave.

Posted by: Stephen Daugherty at March 18, 2009 10:42 AM
Comment #277885

Spin away, Stephen. Do you ever get dizzy with this stuff?

Posted by: Lee Jamison at March 18, 2009 11:00 AM
Comment #277889

Come on, Stephen. 150 Million of waste is an Outrage, but signing hundreds of BILLION in earmarks and pork is ‘last years business’?

Posted by: Rhinehold at March 18, 2009 11:49 AM
Comment #277891

It’s fun these days to condemn Hank Paulson. Looking back to find the deep seated opposition of the so-much-smarter Democrats we see, in a Washington Post article on the nomination of Paulson back in 1996, the following:

A Democratic member of the Finance Committee, Charles E. Schumer (N.Y.), said he spoke with Paulson yesterday and pledged his “full support for his nomination.”

Wow! Are these leading Democrats prescient or what?!

Posted by: Lee Jamison at March 18, 2009 12:33 PM
Comment #277893

“Am I defending the bonuses? Not really. Executives at every level of both industry and government routinely abuse their power to manipulate money to their own advantage. That is the essence of either industrial or governmental corporate culture. Yes, this is not a shining moment for the banking or insurance industries in this regard.”

Lee, Interesting article, although I disagree with the governmental corporate culture you espouse I do understand that our elected representatives can be seen as part of the corporate culture. As long as we continue with corporate funding of elections I don’t know what else we could expect.

You know if the repubs/conservatives had not been such obstructionist during the 110th Congress, remember they were the do nothing Congress with a popularity level lower than GWB, I would say you may have a point other than dem bashing. How quickly we forgot the reason AIG became to big to fail. How quickly we are to shift the blame to the non participants in the unregulated securities market. By the time the 110th Congress was seated it was to late to avoid the iceberg.

I don’t want to be so bold as to suggest that you might be missing the big picture here but if you look back at other countries, such as Britain and the Dutch, that flamed out as we seem to be doing you may notice the decline was the result of the financial sector became the more important sector of the economy. I think this is what has happened the past 30 years and is the real issue we are seeing come to fruition today (Unless of course the revisionist historians so prevalent on the right today have decided it was due to to much regulation by the government).That is IMHO why the TARP funds are being used to try to prevent the decline of the nation. To think it and the bonuses paid to “executives” is one and the same issue is to not understand the bigger picture.

Posted by: j2t2 at March 18, 2009 1:11 PM
Comment #277899

Can anyone who blames the “insurance industry” for the sins of one arm of AIG please cite more examples of mismanagement? Please name the other insurance companies who are being bailed out. The “traditional” insurance industry is well regulated and doing just fine.

Posted by: Jim M at March 18, 2009 1:51 PM
Comment #277901

Obama has just compared Geitner to Alexander Hamilton. Hopefully Joe Biden doesn’t feel like playing Aaron Burr.

Posted by: Lee Jamison at March 18, 2009 1:55 PM
Comment #277907

Wasn’t it the Hartford and Travelers et el, that had to be ailed out when we guaranteed 80 billion to Mexico in the eighties? 80 billion in bad debt because Mexico was going to default? Fat old men lose their memories, so I’m sure someone in the insurance business can straighten me out…

Posted by: Marysdude at March 18, 2009 2:52 PM
Comment #277916

I wonder if Marysdude could confine his comments to at least the current decade and find examples?

Posted by: Jim M at March 18, 2009 3:42 PM
Comment #277925

Lee Jamison-
They must be prescient if they’re nominating Bush’s Treasury Secretary ten years ahead of time.

Seriously, though, In 2006, Republicans were the majority party, and Bush was the one doing the hiring. If you want to speak about spin, there’s a good example. We know the Democrats were elected to majorities in 2006, but those majorities weren’t sworn in until the following year. Yet you’re trying to pin Paulson on us.

To me, that’s serious spin. However, you provide no examples of my spin, simply poisoning the well by making light of how much I’m doing it. Well, if you think I’m distorting the facts, your best strategy is to stick to the facts, rather than frontload an unsupported allegation.

Jim M-
The interesting thing about AIG is that most of its insurance holdings are actually solid.

The problem is a classic consequence of the Gramm-Lee-Bliley Act: You had a derivatives trading firm attached to those good businesses. That’s one of the problems of just letting AIG go down, besides the problems of creditors on the derivatives side. The way I hear it, an AIG collapse would force this certain kind of fund that the industry has to cover policies for billions of dollars worth of policies or more, and this would suck money out of other insurance companies to compensate, which might kill a good number of them.

This is what supporters of laissez faire policies don’t count on: secondary effects.

Rhinehold-
If you’re talking the spending bill, Obama could negotiate on that until it became a moot point. He could get it passed quickly with earmarks, or have them do the usual Government Shutdown or bridge bill horsecrap.

As for the stimulus? You’ll have to be more specific. I mean it. The Republicans and folks on the Right define just about anything that sounds silly to them as pork, or follow the latest Dittohead talking point. You can win all the arguments you make, if you stick to making them from your own world. And if you’re going to call it pork laden, digging up one or two examples won’t be enough. You’ll have to prove that a substantial portion of this bill represents this kind of poor spending.

Posted by: Stephen Daugherty at March 18, 2009 4:55 PM
Comment #277926
Obama has just compared Geitner to Alexander Hamilton.

There is some definate grave spinning going on now…

Posted by: Rhinehold at March 18, 2009 4:59 PM
Comment #277928
If you’re talking the spending bill, Obama could negotiate on that until it became a moot point. He could get it passed quickly with earmarks, or have them do the usual Government Shutdown or bridge bill horsecrap.

Oh no, you mean he could have threatened a veto and convinced his party to accept the amendments to fund the government at existing numbers until an examination of it, line by line, could be done and save the American people, potentially, hundreds of billions of dollars?

Yeah, I can see why he didn’t want to do that, I mean, saving taxpayers money isn’t the issue… Unless it is someone else doing the spending?

Actually, no, I am confused… why couldn’t he do that again?

As for the stimulus? You’ll have to be more specific

How about the ‘emergency stimulus’ include things that are spent THIS YEAR and the rest be included in the actual budget? Is that specific enough?

And if you’re going to call it pork laden, digging up one or two examples won’t be enough. You’ll have to prove that a substantial portion of this bill represents this kind of poor spending.

Because as you made clear, a little pork is ok, right? Well, as long as Democrats are the ones doing the spending?

Posted by: Rhinehold at March 18, 2009 5:04 PM
Comment #277929
That’s one of the problems of just letting AIG go down, besides the problems of creditors on the derivatives side. The way I hear it, an AIG collapse would force this certain kind of fund that the industry has to cover policies for billions of dollars worth of policies or more, and this would suck money out of other insurance companies to compensate, which might kill a good number of them.

And now we are demanding, with outrage, that the bonses that were agreed to be paid to executives in those other areas of the AIG business, which is not losing money, in April of last year be returned. And, you are getting your wish, many of them are being returned, along with those executive’s resignations, the ones who were doing good things at the company and were going to lead the company out of the situation it is in now, preventing it from collapse and paying back the American people the money they lent.

Instead, it looks like it is going to be longer to pay back the money, if it all. In fact, I heard in the hearings today that AIG should have just went into receivership, then they wouldn’t have had to pay out those bonuses…

This is what supporters of laissez faire policies don’t count on: secondary effects.

And that is what supporters of government run businesses don’t count on: secondary effects…

Posted by: Rhinehold at March 18, 2009 5:08 PM
Comment #277936

Stephen D. said: “When the Senate made these rules, it was almost equally divided, just that short of being a Republican majority. Additionally, we had Bush in the White House, Paulson in treasury, and not a lot of time left to stop AIG from becoming Lehman Brothers II.”

That is absolutely NO EXCUSE! Congress persons KNOW the greed of corporate execs and board rooms. They have an institutional if not living memory of the Savings and Loan collapse. They had every possible obligation and duty to the tax payers to anticipate the greed and failure of common sense at the helm of AIG, and make some sincere attempts at prescribing conditions for the money to protect tax payers.

Democrats - Republicans, it matters not on this issue. They were all so obsessed with reelection that delivering 3/4 of a trillion tax payer dollars to failed corporations and their failed leadership without safeguards for tax payers never entered their campaign mode minds.

Voting out these incumbents next year, who abrogated their most fundamental obligation as the people’s representatives, is the only way this mindlessness over tax payer dollar spending will ever be rectified in future Congressional appropriations. When election becomes more important than representing the people’s interests, it is a self-destructive electorate that vote such incumbents back into office for another term.

Posted by: David R. Remer at March 18, 2009 6:02 PM
Comment #277946

Mr. Obama then compared Geithner’s challenge to that of the first secretary of the Treasury. He said Challange. There was Only One Alexander Hamilton. Even Madison who i admired better had the best day of his life to outsmart Hamilton.

Posted by: Rodney Brown at March 18, 2009 7:31 PM
Comment #277947

Stephen

The rules were made by the Democrats who controlled congress and the provision allowing AIG was part of the stimulus bill passed only weeks ago. Sorry, this is not something you can blame on Republicans.

Why did AIG think they could get away with it? Because the congress told them they could. The same people now howling so loud – Dodd, Waters, Pelosi and Frank – are the ones that did it.

David

I agree with you. Vote the crooks out, but they not only know of the greed of executives; they stoke it and participate in it.

Henry
Who watches the watchers? Dodd, Waters, Pelosi and Frank are the ones we put in charge of watching. They are certainly as craven as the corporate guys, and not even as clever.

BTW – the head of AIG is working for $1 a year. He took the job AFTER the trouble started. He will get no bonus. It looks like the “greedy” executives may be shamed into giving back their bonuses. If only the political class were not so shameless.

Posted by: Christine at March 18, 2009 7:42 PM
Comment #277948

Rhinehold Hopefully these guys do resign and start their own insurance companies and compete with the AIG that is to big to fail. If AIG cannot survive without this roughly 80 people that make millions a year to sell insurance and there are no replacements for them then perhaps AIG can rightsize to compete in the market and hopefully next time not be to big to fail.

What I don’t understand is why all AIG executives that were involved in selling policies on unregulated securities that they were unable to make good on were not charged with fraud, what is the difference between Madoff and this crew?

Posted by: j2t2 at March 18, 2009 8:10 PM
Comment #277949

David R. Remer-
It’s not an excuse, only an explanation. My party has a lot to live with, mistakes-wise, in this mess. Remember what the Administration’s position was, what Bush’s veto meant then.

This is not about the election, David. This is principly, in my mind, about trying to muddle through both the political and the practical necessities of unwinding this mess, while not making it worse at the same time. We can become concerned with the next election when that comes around. For the time being, I think, dealing with our current situation takes priority. And yes, that means some massive things are going to go wrong. But I’m not going to tell Obama, like Republican’s told Bush, that it’s okay to settle for less than the best possible outcome.

Rhinehold-
Earmarks are appropriations. Appropriations direct money. If you did away with every earmark, the spending bill would still total the same amount. It’s an artifact of the previous Administration’s negligent appropriations practices. I expect better from Obama and the Democrats when they’re the ones pulling these things together. In the meantime, we have a government to run.

How about the “emergency stimulus”include things that are spent THIS YEAR and the rest be included in the actual budget? Is that specific enough?

No. What I’m asking you for is actual items you call pork, so we can have a reasonable discussion about what constitutes pork, and what doesn’t. Obama made a number of proposals relating to Earmarks that sounded good, and I like the idea of the earmarks being forced out into the open to be justified, as he put forward.

I think preventing government waste is important, but I do not expect to prevent it all, nor do I put idealistic measures against earmarks above the government actually functioning. A little pork is okay, if America gets some good legislation for it. Too much, though, will undermine the effectiveness of the government.

As for AIG? Good God. This is taxpayer dollars. If these people want to resign, that’s their business. I think it’s chicken****, personally. Your company has been spared, along with your job by the federal government, and you to reward your performance with taxpayer dollars? Your division prompted the need for this takeover, and you want taxpayer dollars to reward your performance?

And what the hell makes you so certain that the people quitting the company correlates with the ones who knew what they were doing? Did you go and interview these people?

The irony is, many of the people who accepted retention payments were already gone from the company. If I were to be paranoid, there’s another purpose entirely for the payments that springs to my mind. There are signs that significant fraud and accounting violations took place in that division.

I’m sick of suggestions from people who think that they can let one failure after another occur in an economy without creating secondary crises as a result. Now what we should be doing is arranging our anti-trust laws so that these companies don’t get too big to fail, so that we don’t have a health insurance business being dragged into financial hell by a badly, even dishonestly run financial decision.

The Republicans threw away what was learned with the lessons of the great depression about having financial industries so incestuously connected to one another, where conflicts of interests multiplied, and the firewalls that would protect one sector of the industry from another no longer existed. This is the consequence.

Posted by: Stephen Daugherty at March 18, 2009 8:10 PM
Comment #277953

Sorry, Stephen D., but you just excused Congressional Democrats after saying your comments are not an excuse, when you subsequently replied: “For the time being, I think, dealing with our current situation takes priority. And yes, that means some massive things are going to go wrong.”

Where is that rule writ that says Congress MUST oversee massive things going wrong, in addressing major crises? Sure sounds like an excuse to me. We don’t elect Congress to let massive things go wrong, anymore than Congress should allow private sector entities to threaten the entire nation’s economy. What is this double standard?

It is horrible if AIG allows massive things to go wrong with its operations, but, inevitable and therefore excusable when Congress does the same?

Posted by: David R. Remer at March 18, 2009 8:55 PM
Comment #277955

I want Obama to succeed in reforming the system, but I want to give him the space to succeed, and not drop critically needed support the instant something doesn’t go right.

This is a big, complicated mess, and there are a lot of competing interests. What faith I have here is because I know Obama to be at least somewhat good at learning from his mistakes, and not holding on to an error. If the problem continues, I will make it clear that Obama needs to get on the ball.

You should take a tour around the Left-Wing Blogosphere: We’re not the ditto-heads the right have been. We’re on this, David, and I’m sure Obama will know when he’s pulled the wrong approach from us. We’re not apologizers. We’re not going to build our party on an ideological bubble, the way the Republicans did.

Posted by: Stephen Daugherty at March 18, 2009 9:41 PM
Comment #277968

j2t2,

I don’t want to be so bold as to suggest that you might be missing the big picture here but if you look back at other countries, such as Britain and the Dutch, that flamed out as we seem to be doing you may notice the decline was the result of the financial sector became the more important sector of the economy. I think this is what has happened the past 30 years and is the real issue we are seeing come to fruition today (Unless of course the revisionist historians so prevalent on the right today have decided it was due to to much regulation by the government).
Why is the government not considered a part of the “financial sector”? When it works well, as it usually does in managing public works projects, it behaves very much like a financial company. When it goes awry it usually does so in the same ways financial sector entities do so. Think about it. It makes promises it forces the people to keep. That’s what Bernie Madoff was doing and his scheme fell apart when the people couldn’t be brought on fast enough to keep it going.

The big difference, as I try to point out in as many ways as I can innovate to get a point across, is that when the government’s financial scheme comes to light the people just have to live with it and come up with phrases like “They pretend to pay us- We pretend to work”. That’s because the people have been foolish enough to make the spender of last resort and the regulator who would often happily sieze the chance to stomp on private industrial financial sector frauds the spender of first resort. Why the hell would they stomp on their own frauds?

I heard an interesting radio caller today on a Houston station talking about Paulson’s employer prior to his stint at Treasury, Goldman Sachs. Goldman seems to have had a finger in every pie, yet it has managed to avoid becoming the focus of public outrage.

j2t2, I don’t necessarily disagree with your comment. I, too, think the financial sector has become too powerful. I just think of it more broadly than you have in the comment. The purpose of the sector is to apportion resources wisely so they can be well and productively used. The sector itself, however, is inherently nonproductive (whether you are discussing banking, insurance, or government) so the larger it grows the more of a drag it becomes on the economy as a whole.

Remer is, of course, right when he tells us we should kick the bums out. I am a firm believer in strict term, and lifetime service, limits.

Government should be something one does for a while and then leaves to live in the real world. George Mitchell found out what a shock that can be.

Posted by: Lee Jamison at March 18, 2009 10:27 PM
Comment #277970

Lee, term limits is just the lazy voter’s way of avoiding the civic responsibility of reviewing the record of their representatives objectively before an election. In fact, if term limits are imposed on Congress, sociological and psychological research can be summoned to support the unintended consequence that voters will take even less interest or time in reviewing their incumbents records. Since, such reviews are rendered pointless by the term limits automated process.

Posted by: David R. Remer at March 18, 2009 10:33 PM
Comment #277972

Stephen D. said: “I want Obama to succeed in reforming the system, but I want to give him the space to succeed, and not drop critically needed support the instant something doesn’t go right.”

I agree with you on Obama. What are Congressional Democrat’s excuses? They aren’t without tenure on their jobs, they aren’t just inheriting the recession which began at the end of 2007. It’s a rhetorical question. Their excuses are likely as numerous as their failures.

Posted by: David R. Remer at March 18, 2009 10:35 PM
Comment #277975

Lee Jamison-
Why is the Government not considered part of the financial sector?

I guess because we’re talking about businesses here who cannot compel Government action. To muddy the watters on the definition leads to taking approaches that confuse a much needed distinction.

The government sometimes has to do things that aren’t favorable to bottom lines for the good of the country. There are duties given to each kind of entity that must be exclusive.

We’re seeing in this AIG mess the price of getting too friendly with business. The government has to be able to set limits that might hurt short term profits, but in the long term might encourage greater stability and responsiblity, not to mention healthy financial behavior. Then, we won’t have to go the very expensive, and corruption fraught socialist direction of trying to bailout disfunctional companies to avoid financial disaster.

By the way: I heard something about Bernie Madoff’s operation that’s of interest: seems like his real operation wasn’t so much a Ponzi scheme as it was a money laundering operation, with money sloshing back and forth between big capital funds and Madoff’s operation.

The thing I think we have to keep in mind is that we created a system which intentionally left these people with a lot of ways to evade accountablity, in the literal sense. I know many people talked about deregulation being about freeing the markets to do what they do best, but so much of the time, the deregulation seemed to center on borderline behaviors, conflicts of interest, exotic financial instruments, and loosening accounting standards.

How much of our economic wealth was simply the product of people pulling a lot of fancy economic tricks, rather than doing things that were genuinely productive. I think the greatest anger we have here about AIG is that these folks failed their way into their bailout, then rewarded themselves as if the people involved deserved to keep their jobs, deserved to rewarded for success.

If these guys had been the victims of some external calamity, nobody would mind bailout money going to bonuses. But that’s not what happened.

We have to ask ourselves what kind of capitalism we have: an economic aristocracy where the wealthy simply pass money back and forth like kids shoving sand around a sandbox, or a more serious system where people get rich and stay rich when they work as functional parts of an economy that rewards people for productive behavior and discourages irresponsibility and dishonesty. The purpose of capitalism is not to make everybody rich; that can never happen. No, it must be to make the nation we live in as efficiently productive and self sustaining as it can, with each person rewarded as equitably and fairly for the work they do as they can be.

I believe in capitalism, but one that aids our Democracy rather than makes it a free and equal society only in nominal fact.

If you wonder what that means on a particular subject, ask me. You may be surprised how much I don’t follow the typical stereotypes. Then you might be surprised how many people agree with me!

This divisiveness over the economy is getting in the way of us realizing that we have common interests, and common values, and that the tough part is participating in a process where you don’t have 100% control over the circumstances.

Posted by: Stephen Daugherty at March 18, 2009 11:10 PM
Comment #277976

The public is SOLD down the river again. AIG political contributions = million dollar bonuses instead of bankruptcy. We should make it harder. Stealing money from the Government is too easy. Don’t worry about that little edit in the bailout bill. The Force (Chris Dodd) be with you.

Posted by: Tom Besly at March 18, 2009 11:22 PM
Comment #277978

“Why is the government not considered a part of the “financial sector”?”

Because the private financial sector I speak of makes money at the expense of others trying to make money. If those in the government were as able to make as much money as the winners in the latest speculative bust perhaps I would agree with you. The only means the government has in perpetrating “financial schemes” on people is through our elected officials doing the bidding of the corporate executives that foot the bill for the election campaigns of our elected officials. This does not mean the government is the financial sector it simply means it is being manipulated by the financial sector.

“I, too, think the financial sector has become too powerful. I just think of it more broadly than you have in the comment. The purpose of the sector is to apportion resources wisely so they can be well and productively used.”

Lee come on my friend, The purpose of the financial sector is to make money for those that pay it extremely well to do so. To think the corporate executives heading such financial firms as AIG, Goldman Sachs, JP Morgan Et al get together to plan the use of resources wisely and productively leaves me wondering where you have been lately. Make no mistake, Lee, financial corporations do not exist to do anything but make money anyway possible consequences to others be damned. The financial sector has grown to be bigger than manufacturing as part of the GDP Lee, this and rampant speculation as we have just witnessed is a red flag when we read our history of the fall of the Dutch and British empires.

“Government should be something one does for a while and then leaves to live in the real world.”

In theory yes but in practice it just doesn’t work. You send a new guy to the USHOR and he gets eaten up by the more experienced bureaucrats, lobbyists and his campaign financiers forcing him to turn to his party for guidance. Then we wonder why things are so partisan today. Bums they are, but as long as we confuse bribery as free speech we get what they pay for. Were we to turn the clock back to before the days our nation became a corpocracy, back when individuals had a chance to control their economic destiny perhaps I would agree with you Lee. But not today.


Posted by: j2t2 at March 18, 2009 11:29 PM
Comment #277984

Jim M.,
All-State, Nation-wide, and all the other insurance companies who have claimed after a hurricane that the price tag would break their company if they were forced to pay full coverage price. Care to explain how these companies can take a full payment from you for years, but fail to in many cases pay the client a single dime.

No, AIG is not in trouble for insurance fraud due to reasons that I cannot explain; however, seeing that they can only pay their clients $.03 on the dollar when they recieving millions in payments for insurance brings into question a deeper question than poor management.

Or is it ok for me to sell you an insurance policy at $100.00 per month knowing that it will never have to be paid out? Is that mis-management or a Madoff Investment?

Posted by: Henry Schlatman at March 19, 2009 1:19 AM
Comment #277999

What do you folks think of this?

Posted by: Stephen Daugherty at March 19, 2009 11:13 AM
Comment #278002

Stephen I think madstork123 had it right. They are republicans they have no shame.

Posted by: j2t2 at March 19, 2009 11:17 AM
Comment #278003

stephen

your right niether republicans or democrats have a leg to stand on when it comes to the outrage over the AIG bonuses. how bout that we actually agree on something.

Posted by: dbs at March 19, 2009 11:19 AM
Comment #278005

j2t2,

Because the private financial sector I speak of makes money at the expense of others trying to make money. If those in the government were as able to make as much money as the winners in the latest speculative bust perhaps I would agree with you. The only means the government has in perpetrating “financial schemes” on people is through our elected officials doing the bidding of the corporate executives that foot the bill for the election campaigns of our elected officials.
Wait a minute! Taxes are being proposed which would, with state and local levies siphon off two thirds of the income of lots of people in this country “trying to make money”! Because of those taxes taking funds out of the productive economy millions of other people who wish to “make money’ will never have their entrepreneurial dreams realized! That is the exact same thing you accuse the private sector financial industry of doing, BUT, the private sector can only make that money on money people have voluntarily placed in their hands. AND, MOST people smart enough to know something that sounds too good to be true is actually too good to be true recognize when they are really placing funds at risk. My bank has never sent me a letter saying I made more money than I thought I had made so I have to dig up $700.00 more than I thought I would.

The disconnect between your own statements about Republicans in public office and you opinion of generic “government officials” in this regard is also utterly breathtaking. Republicans do things to help “their friends in business” but Harry Reid in manipulating Nevada land deals is playing the role of a lowly public servant? Nonsense.

Money is, very simply, power. If power can be had without the tax liability of having to personally accrue a lot of money so much the better. Who can more effectively direct the resources of the economy, a banker who has the government looking over his shoulder and parasitizing his resource base, or a powerful member of the government itself who can use his influence to attract and protect rich friends and, over the course of a long career get adulation for his manipulations and, not incidentally, have a lot of his rich friend’s money slough off in his presence?

And, by the way, how the hell is the pertetuation of bankrupt firms like Fannie, Freddie, AIG, Lehman Brothers, Goldman Sachs, etc., etc. not the perpetuation of “financial schemes”? These firms ARE NOT VIABLE, but politicians are using our children’s fast diminishing future income to keep them alive.

Did not Charlie Wilson enter congress with less than $100,000 to his name and retire a multi-millionaire? Is this unusual?

No.

Your comparison is not simply an apology resting on intellectual compartmentalization. It is flat out blindness to the truth.

Financial institutions do not “make” money. They administer and facilitate the concentration of resources in areas where production occurs (hopefully) more efficiently. Good government will do exactly the same thing. The two administrative economic operators, whether “public” or “private” are supposed to make society function more effectively and more smoothly.

Their faults are likewise the same. They both get inflated images of their own importance and come to believe the money passing through their hands is a measure of their own worthiness to direct (and keep) the levers of power.

The inability to recognize a wolf for a wolf when it dons sheep’s clothing is plain intellectual laziness. Administration of resources is the same thing whether it wears the label “private” or the label “public”. Profit is simply the accrual of resources in excess of their destruction, use, or dispersal and to fail to recognize the growth of government for the accrual of resources it is is likewise sloth.

Posted by: Lee Jamison at March 19, 2009 11:34 AM
Comment #278006

j2t2,

In theory yes but in practice it (term limits) just doesn’t work. You send a new guy to the USHOR and he gets eaten up by the more experienced bureaucrats, lobbyists and his campaign financiers forcing him to turn to his party for guidance.
Limit in the House to three terms, two terms for the Senate, and federal office holders to 25 years total service and you will radically change everything about American Government.

And I’ll flat out guarantee the bureaucrats would not win a war with the office holders. The bureaucrats are there to provide cover for the fannies of people who want to retire in D.C. If their reason for being there goes away because a long career is impossible, so will they.

Posted by: Lee Jamison at March 19, 2009 11:47 AM
Comment #278012

“bribery as free speech” reminds me that John Boehner is the head right wing nut in the House.

Posted by: ohrealy at March 19, 2009 1:11 PM
Comment #278013

Lee

Term limits is just the lazy voter’s way of avoiding the civic responsibility of reviewing the record of their representatives objectively before an election.

In fact, if term limits are imposed on Congress, sociological and psychological research can be summoned to support the unintended consequence that voters will take even less interest or time in reviewing their incumbents records. Since, such reviews are rendered pointless by the term limits automated process.

Government will become less accountable to the people, not more, as fewer people will be motivated to hold them to account, since term limits will boot them anyway. Why spend a hundred hours or even 10 per year reviewing your representative’s record when they are term limited anyway? Unintended consequences.

Not surprising however that Republicans would be calling for term limits today, however. When they were the majority, the notion was preposterous. But, now they are the minority, with no majority status to lose.

Term Limits, can never substitute for an involved, vested, and responsible electorate. Term limits will have the exact opposite effect its proponents intend.

Think about it. Who pays attention to COLA? (Cost of living adjustments). They are automated, therefore, COLA is never a hot button political issue, and the vast majority haven’t a clue what COLA is or what percentage it is from year to year in either compensation packages or entitlements. This will happen with term limits installed as well.

Why spend 10’s of millions of dollars and 100’s of hours of volunteer time to unseat a first term Senator, when you know term limits will unseat them at the end of their second term, anyway? Not worth the time and effort, unless their peformance was so egregious that they would have been removed without term limits in place, anyway.

The concept of term limts assumes bad government and bad politicians as a result of tenure in office. If one operates from the assumption that government is bad, then the expectation and work to create good government is negated from the outset. Philosophically, and practically, term limits is an unsound idea. It serves only one functional purpose: it gives vent to the frustrations of voters who are dissatisfied with government performance. That’s it. Term limits amounts to nothing but whining about the problem creating the false assumption that term limits will somehow make politicians more accountable to the individual will of individual voters. It won’t.

And let us not forget the lucrative revolving door of political office to private sector lobbyist, strategist, or analyst. Term Limits will not break the bond between politician and wealthy special interests. It is a flawed concept from the outset.

Posted by: David R. Remer at March 19, 2009 1:12 PM
Comment #278015

dbs-
Here’s the problem: the Democrats, for the most part, are just being weenies, when they dealt with things this way. The Republicans stood up full force for it. They were the people who argued full force for this, instead of sneaking this around the public’s back. And of course, because the Republicans don’t really like to mess with government intruding on business, Most of them won’t follow through with any kind of action.

The Democrats, I feel, are more tractable. You can shame them. You can get them to actually take some kind of action. Republicans, though, don’t seem to be shameable.

Posted by: Stephen Daugherty at March 19, 2009 1:22 PM
Comment #278016

David,

I’ll have to look up some stuff, but I can show at least that in recent years I’ve made a point of never stopping calling for term limits. The idea of short terms was never that the public would be able to keep close tabs on their office holders, but that the office holders would have to go home to the real world and function there.

The self-interest of the office holder was supposed to be a control on their actions. As it is we really do, when we elect the rare new representative, usually choose someone the community thinks they know.

Besides, our interest is NEVER served by letting people get comfortable with the bureaucracy! No rational person wants to reward government for insulating itself from the population it must serve.

I understand your points, but the cost of representative experience far, far outweighs the benefit.

Posted by: Lee Jamison at March 19, 2009 1:28 PM
Comment #278018

Lee Jamison-
Please, tell me something: Why are the Republicans blocking efforts to clawback the bonus, especially when most Republicans like yourself actually favor them?

This is the insanity of the Republican approach to government at this time: enthusiastic about blaming and blasting others, quick to play to public sympathies, but opposed to getting something actually done, because it might not mesh well with the politics they play by.

Let me make this clear to you: politics is something to get out of the way of policy, not policy something to remove as an obstacle to politics. American needs folks in Washington to pay attention. The Democrats in charge might to learn a few hard lessons, but the buffoons in Washington from your party need to relearn their whole approach to politics.

Posted by: Stephen Daugherty at March 19, 2009 1:47 PM
Comment #278023

stephen

seems your entire reply to lee could have been summed up a lot quicker by just saying ” your guys are worse “

“This is the insanity of the Republican approach to government at this time: enthusiastic about blaming and blasting others, quick to play to public sympathies, but opposed to getting something actually done, because it might not mesh well with the politics they play by.”

ah sounds exactly like what democrats were doing when they were not the ones weilding all the power. i see things have come full circle. the more things change the more they stay the same. enjoy your majority while it lasts.

Posted by: dbs at March 19, 2009 2:34 PM
Comment #278025


I have serious doubts about stopping the corruption and cronyism with either voting out incumbents or setting term limits as long as we continue to spell free speech (MONEY). The two party controlling system has to be challenged as well.

“I want Obama to succeed in reforming the system,”

It is rather hard to reform the system when you surround yourself with people who are part of and dependent on the system.

We discussed this when Obama was naming his cabinet. He could haven picked reformers, he chose insiders instead. The argument from Obama supporters was that Obama was in charge and would lay down the law to the insiders. Now Obama says he is against the bonuses that his Sec. of Treasury had Sen. Dodd insert into the bailout bill.

Just like Senators, Presidents don’t read the bills they sign and if they did, they wouldn’t understand much of what is written into them.

I will be looking for the reform measures and vetos but, I expect all I’ll be seeing is more retorical spin.

Posted by: jlw at March 19, 2009 2:46 PM
Comment #278026

I asked the following question:

“Can anyone who blames the “insurance industry” for the sins of one arm of AIG please cite more examples of mismanagement? Please name the other insurance companies who are being bailed out. The “traditional” insurance industry is well regulated and doing just fine.”

Henry responded by writing; “All-State, Nation-wide, and all the other insurance companies who have claimed after a hurricane that the price tag would break their company if they were forced to pay full coverage price. Care to explain how these companies can take a full payment from you for years, but fail to in many cases pay the client a single dime.

That insurance companies claimed flood damage (not covered in many cases) was the cause of the loss and denied claims which would have been paid for other covered perils was not part of my original question.

An insurance policy is a contract and if violated by the insurance company the policyholder has an avenue for legal redress. Henry, it is not unusual for parties to a contract to disagree and we expect such disagreements to be settled in a court.

It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy. If insurance companies paid all claims presented, without applying the terms of the agreement, neither you or I could afford the premiums. Insurance covers risks identified in the policy and nothing else. Would you, Henry, advocate something else?

Posted by: Jim M at March 19, 2009 2:57 PM
Comment #278027

Lee, you and I have substantial disagreement on this topic.

You posit: “The idea of short terms was never that the public would be able to keep close tabs on their office holders, but that the office holders would have to go home to the real world and function there.”

By your own words, term limits does not even address the root of the problem, which is voter apathy about the record and actions of their own representatives in between elections. Term limits, by implication of your own words, addresses a symptom, not the cause of the problem. It is a gross error in judgment to put a band aid on an embedded piece of foreign infected material beneath the skin. The skin may heal over but the person will likely die of the infection as it does.

Then you make the very bizarre comment: “The self-interest of the office holder was supposed to be a control on their actions.”

Every text book dealing with democratic concepts posits that it is the voters who are supposed to be a control on the actions of their representatives. Not the self-interest of the politician. Where are you getting this notion of yours?

Then you argue a largely false position that is common place but, false, nonetheless. You say: “No rational person wants to reward government for insulating itself from the population it must serve.”

Our representatives have families in the real world, working real jobs, and dealing with world social, cultural, and economic realities. Most of our representatives stay in very close contact with their constituents hearing their real world concerns. The idea that our representatives are out of touch with the real world issues of common citizenry is largely a political canard levied at incumbents by challengers during campaign seasons in order to get themselves elected.

There is some marginal truth to the allegation with regard to Senators with long careers, in the sense that they usually become extraordinarily wealthy over their tenure, and to the extent that living an extraordinary lifestyle of wealth significantly above the average citizen can pose a barrier to stating in touch with average citizen issues, the argument has some small merit, but, not because of the effects of working in a bureaucracy, but the effects of wealth and the distance it can put between the wealthy person and those who are not wealthy in their perceptions of life in America.

If bureaucracy is the parent of the status quo, then new politicians in office would be the children of revolution at the polls. One cannot hope to conduct a successful revolution by automating the revolutionary process (Mao Tse Tung’s central thesis of government). It becomes its own unresponsive and self-perpetuation bureaucracy until another revolution overturns it.

At the core of any successful revolutionary process, there must be a well thought out and rational plan which keeps what works of the status quo while amending what doesn’t work with changes in the status quo. That is the underlying architecture of our U.S. Constitution.

Term limits just becomes another bureaucratic procedure to automate a process that fundamentally must be one of rational critique, debate, and decision making which keeps the best of what is, and changes the what doesn’t work. Term limits will throw out the best of our representatives along with the worst, equally and indiscriminately.

That is a fundamentally flawed strategy, which I posit, deviates from the underlying architecture of our U.S. Constitution and its incorporation of majority deliberation and rule in its decision making processes, whether they be legislative processes or representative elections.

Posted by: David R. Remer at March 19, 2009 3:06 PM
Comment #278029

Stephen,

Please, tell me something: Why are the Republicans blocking efforts to clawback the bonus, especially when most Republicans like yourself actually favor them?
I’ll let the Constitution answer you. From Section 1, Article 9, paragraph 3
No bill of attainder or ex post facto Law shall be passed.
A “bill of attainder” is a bill directed against a group or class of people declaring them all guilty of something and specifically punishing them and no others.

It is simple, Stephen. A CONSERVATIVE believes in the rule of law, rather than the politically expedient empowerment of the mob favored by parasitic would-be tyrants. When the mob desires that an unconstitutional law be passed condemning left-leaning science fiction writers I’ll stand with you every step of the way.

Posted by: Lee Jamison at March 19, 2009 3:20 PM
Comment #278030

Jim M said: “It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy.”

Absolutely false. It is not responsible, nor legal. Every insurance company is predisposed to deny claims for one simple reason - profit motive, which is what they are in business for. Hence, it is in the insurance company’s vested interest to draft and interpret the insurance policy in any way that would permit it to deny a claim.

That is precisely WHY, over the centuries, America has developed a very highly regulated government structure to monitor and oversee the insurance industry and force compliance with fair and responsible contract enforcement based on language and interpretation of the contract established by law, not by the insurance companies beliefs or interpretation.

It is not a perfect system, as some insurance companies in Texas for example, routinely deny claims regardless of the merit of the claim, knowing that more than 95% of claimants will not pursue the matter, because the Texas Republican government favors the insurance company’s lobbyists and campaign contributors over the un-united insurance consumer’s interests.

Fortunately, Texas is but one of a minority of States whose insurance regulatory agency is so deeply and lopsidedly vested in the insurance company’s interests. The majority of states have stronger consumer advocacy representation on the State’s insurance commission and Governor’s office.

Posted by: David R. Remer at March 19, 2009 3:20 PM
Comment #278031

David,

The founders also limited voting rights to property owners, a class of people they felt sure would be voting more responsiby than the fevered masses. Furthermore they left elections of Senators to the state legislatures, thinking they would be more judicious than even the general run of property owners.

We have set loose the forces of the crowd without finding a countervailing force for sobriety. Term limits is not as good as effective education. So… just look around. See any powerful movements toward brilliantly effective education at work in our society?

Therefore, I default to term limits.

Posted by: Lee Jamison at March 19, 2009 3:30 PM
Comment #278032

Many on Watchblog continue to throw around the false number of uninsured’s in this country. This report by Julia Seymour dispels that number and brings it down to reality.

Health Care Lie: ‘47 Million Uninsured Americans’
Michael Moore, politicians and the media use inflated numbers of those without health insurance to promote universal coverage.

By Julia A. Seymour
Business & Media Institute
7/18/2007 4:01:33 PM

Fact Sheet about Michael Moore

Michael Moore was wrong about health insurance.

So were President Bush, Sens. Barack Obama (D-Ill.) and Hillary Clinton (D-N.Y.), presidential candidates former Sen. John Edwards and Gov. Mike Huckabee and The Washington Post, New York Times, Los Angeles Times, People magazine and Time magazine, as well as CNN, CBS and ABC.

Each of these people and media outlets incorrectly claimed the number of uninsured to be 40 to 50 million Americans. The actual total is open to debate. But there are millions of people who should be excluded from that tally, including: those who aren’t American citizens, people who can afford their own insurance, and people who already qualify for government coverage but haven’t signed up.

Government statistics also show 45 percent of those without insurance will have insurance again within four months after job transitions.

Accounting for all those factors, one prominent study places the total for the long-term uninsured as low as 8.2 million – a very different reality than the media and national health care advocates claim.

Breaking It Down: Who’s Uninsured?

The number of the uninsured who aren’t citizens is nearly 10 million on its own, invalidating all the claims of 40+ million “Americans” without health insurance.

“It’s really indefensible that we now have more than 45 million uninsured Americans, 9 million of whom are children, and the vast majority of whom are from working families,” said Sen. Hillary Clinton in a May 31 speech.

It was typical spin and easy to find. ABC medical expert Dr. Tim Johnson cited the incorrect data as he praised a “bold” and “politically brilliant” universal coverage plan on the April 26 “Good Morning America.”

“It’s bold because it does propose to cover all Americans, including the 47 million now who are uninsured, within five years,” said Johnson.

In his propagandumentary “SiCKO” that favored the socialist health care systems of Canada, Britain, France and Cuba, Michael Moore made the fantastic claim that almost 50 million Americans are uninsured.

“SiCKO: There are nearly 50 million Americans without health insurance,” quoted Moore’s Web site.

However, the Census Bureau report “Income, Poverty, and Health Insurance Coverage in the United States: 2005,” puts the initial number of uninsured people living in the country at 46.577 million.

A closer look at that report reveals the Census data include 9.487 million people who are “not a citizen.” Subtracting the 10 million non-Americans, the number of uninsured Americans falls to roughly 37 million.

Moore should have paid attention to that fact, since he agrees that being “an American” matters to get health insurance.

“That’s the only preexisting condition that should exist. I am an American. That’s it,” said Moore in footage aired by ABC’s “Nightline” on June 13.

That isn’t the only problem with the numbers currently being used.

Moore’s Trouble with the Facts

Recently, CNN’s Dr. Sanjay Gupta accused Michael Moore of “fudging” some numbers in his recent film “SiCKO.” This sparked a temper tantrum by Moore who threatened to become the network’s “worst nightmare” if they didn’t apologize and recant.

CNN did “correct and apologize” for one transcription error, but stood by Gupta’s statement “CNN’s numbers and Moore’s numbers aren’t far off, but we believe ours are a fairer comparison.”

In his film and television appearances, Moore left out quite a bit of information about the uninsured.

On his Web site, Moore claimed the Census Bureau had “underreported” the number of people without health insurance.

But Cheryl Hill Lee, a co-author of the Census Bureau study Moore was citing, told the Business & Media Institute that the data showed the exact opposite of what Moore said.

The Census “underreported” the number of people covered by health insurance – meaning that more people have insurance than the report suggests. The Census also underreported the number of people covered by Medicare and Medicaid.

They Can’t Afford Insurance …

Many of the same people pushing the incorrect numbers of uninsured Americans also claim that these people cannot “afford” insurance.

“And when you’ve got 47 million people in this country with no health insurance, they don’t go to the doctor because they can’t afford it,” Moore said on CNN’s “Larry King Live” July 10.

Katie Couric echoed those sentiment on the CBS “Evening News” May 23.

“The number of Americans with no health insurance is continuing to grow as more and more employers say they can’t afford to offer group insurance … People who try to buy insurance on their own often find the price beyond their reach,” said Couric as she introduced a two-part “investigation of the health insurance industry.”

But according to the same Census report, there are 8.3 million uninsured people who make between $50,000 and $74,999 per year and 8.74 million who make more than $75,000 a year. That’s roughly 17 million people who ought to be able to “afford” health insurance because they make substantially more than the median household income of $46,326.

On the July 13 “Larry King Live,” Gupta did make that point, providing more context than Moore and most journalists about the affordability of health insurance.

Subtracting non-citizens and those who can afford their own insurance but choose not to purchase it, about 20 million people are left – less than 7 percent of the population.

“Many Americans are uninsured by choice,” wrote Dr. David Gratzer in his book “The Cure: How Capitalism Can Save American Health Care.” Gratzer cited a study of the “nonpoor uninsured” from the California Healthcare Foundation.

“Why the lack of insurance [among people who own homes and computers]? One clue is that 60 percent reported being in excellent health or very good health,” explained Gratzer.

A Lie that Promotes Big Government

Moore, Clinton and Obama have used the lie about 40-some million uninsured Americans to promote universal health insurance plans. Moore asserted in his film that providing health insurance to everyone is a moral and even religious obligation.

The mainstream media have played along, championing “ambitious” universal coverage plans and referring to the U.S. system as “deeply flawed.”

“California’s ambitious plan to make health insurance available to almost everyone in the state is getting a lot of attention all over the country, and here’s why. According to the latest figures, the number of uninsured Americans has grown to more than 46 million,” said Katie Couric on the “CBS Evening News” January 9.

Journalists’ failure to question that high figure has furthered the cause of nationalized care.

“Proponents of universal health care often use the 46-million figure — without context or qualification. It creates the false impression that a huge percentage of the population has fallen through the cracks,” Gratzer told BMI. “Again, that’s not to suggest that there is no problem, but it’s very different than the universal-care crowd describes.”

Dr. Grace-Marie Turner, a BMI adviser and president of the Galen Institute, agreed that “the number [on uninsured] is inflated and affects the debate.”

Turner also pointed out that “45 percent of the uninsured are going to have insurance within four months [according to the Congressional Budget Office],” because many are transitioning between jobs and most people get health insurance through their employers.

So what is the true extent of the uninsured “crisis?” The Kaiser Family Foundation, a liberal non-profit frequently quoted by the media, puts the number of uninsured Americans who do not qualify for current government programs and make less than $50,000 a year between 13.9 million and 8.2 million. That is a much smaller figure than the media report.

Kaiser’s 8.2 million figure for the chronically uninsured only includes those uninsured for two years or more. It is also worth noting, that, 45 percent of uninsured people will be uninsured for less than four months according to the Congressional Budget Office.

Posted by: Jim M at March 19, 2009 3:37 PM
Comment #278034

I would ask Mr. Remer to examine his own statement as written;

“America has developed a very highly regulated government structure to monitor and oversee the insurance industry and force compliance with fair and responsible contract enforcement based on language and interpretation of the contract established by law, not by the insurance companies beliefs or interpretation.”

He admits to a “developed and highly regulated industry” one which “forces compliance of the contract” and then calls my statement;

“It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy.”

as Absolutely false. It is not responsible, nor legal.

Which is it M. Remer, a contract requires adhesion to the policy terms by both parties or not? It would be, in fact, illegal for an insurance company to pay a claim for which it is not obligated under the policy. Yes, Yes, I know…it would “feel good” and that’s what’s important for some liberals today.

I now understand why some libs are so rankled by the AIG (empolyees) being paid according to contract. It’s just NOT FAIR

Posted by: Jim M at March 19, 2009 3:51 PM
Comment #278035

Yes, Jim M, and a minority of Ph.D.’s can be found claiming no climate change is occurring or, mankind is not contributing to it.

For enough money, one can always find a Ph.D. to make one’s case for one. That is why the empirical methodology requires a preponderance of evidence and consensus amongst the academic or scientific community to adopt the latest data sets as valid and reliable.

Your source’s arguments are flawed in too many ways. Above median income uninsureds? You bet. Millions of middle class folks above the median income have debt obligations and budgets that combined with annual substantial increases in health care premiums found themselves having to cut something from their budgets. They chose health care premiums. Others who are insured may have foregone their child’s entering college, or buying a new car instead of sinking repairs into their older gas guzzling vehicle.

Just one example of why your source’s arguments don’t end up supporting the conclusion she tries to promote based on non-authoritative and unofficial statements made by movie makers.

Nice try. But, no RushBaugh Cigar!

Posted by: David R. Remer at March 19, 2009 3:56 PM
Comment #278036

Lee Jamison-
There you folks go again. The Republicans can always find a good, conservative reason for defending the fleecing of the taxpayers.

Why am I not surprised?

There’s no crime being punished, only taxpayer dollars being recovered from a company we own. Only, we don’t have to sue for it. You’d be all for it, I think, if the majority stockholders were a private company or individual, instead of the American people. Why are Conservatives who hate government waste letting government dollars go to reward screw-ups. At least Democrats are genuinely outraged at their leaders, as well as the other party. That’s the critical difference: we don’t have any problem with bringing down one of our own, or teaching them a harsh lesson.

Posted by: Stephen Daugherty at March 19, 2009 4:02 PM
Comment #278037

Lee said: “We have set loose the forces of the crowd without finding a countervailing force for sobriety”

I agree! And Obama is putting an agenda forward for education that will partially address our nation’s failure to insure education kept pace with universal suffrage.

And let’s be clear. Vested property owners were subject to fevers of their own. And our founding fathers were acutely aware of this. But, term limits counters another fundamental belief held by our founding fathers. And that belief was that leaders with education, knowledge and wisdom should be the goal of a republic, and not banished from the halls of government leadership on some arbitrary basis like term limits.

Automating the process of removing the wise along with the foolish from office on a routine basis would have been hotly contested by many a founding father like John Adams, as fundamentally unsound and in opposition to the constructs of the republic which they erected, governed by democratic decision making in the Congress, and the election of the people’s representatives, as well as the consensus of the more educated and wise bodies of state legislators and electoral college.

Posted by: David R. Remer at March 19, 2009 4:06 PM
Comment #278038

Jim M-
We bailed out their sorry rear ends. And this provision? It’s a provision to essentially pay off the architects of this collapse, or else the company defaults on trillions of dollars of derivatives contracts. Gee, thanks. That sounds like the kind of contract we need to be honoring.

S***, man, even Joe Scarbrough and friends are bringing up the fact that we regularly allow car companies and other industries being bailed out to break contracts concerning their workers.

But I guess that only applies to those who make less than six figures and don’t belong to a union.

Posted by: Stephen Daugherty at March 19, 2009 4:08 PM
Comment #278039

Jim M, your last comment fails to acknowledge your own words which contradict the concept of insurance regulatory bodies: “It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy.”

If that is true, there is no need for regulatory agencies of government in the insurance industry. Whatever the insurance company itself believes is not covered should be good enough, according to your own words.

Thanks again for making may case. One of the major functions of government regulation of insurance companies is to insure against the insurance company deciding what claims are deniable or not. Before regulation, denying claims regardless of merit was routine, and highly profitable, I might add for the insurance companies.

Posted by: David R. Remer at March 19, 2009 4:13 PM
Comment #278049

Stephen,

These were contractual obligations well known to the people, including apparently, by his own admission, Tim Geitner, who created the bailouts for the firm. If any private firm made a contract with an employee to compensate them and then devised an employment fee to take their money back (an ex post facto law, by the way) You’d be up in arms over it.

Posted by: Lee Jamison at March 19, 2009 4:56 PM
Comment #278051

Lee Jamison-
We have people claiming retention bonus who did not stick around. We have people claiming performance bonuses that did not perform. And the US government, having kindly stepped in and saved their company from complete and utter ruin, has certain privileges that other stockholders do not have. Such as the fact that it’s the government, especially the federal government that enforces contracts in the first place. Well, this is the solution that lets AIG honor its contracts, and the Federal government honor its contract with the American people not to waste their money lining the pockets of the irresponsible.

What I’m mad about is Geithner and the others in treasury letting this crap get through in the first place.

I know, you’re so up in arms about the unfairness of this all. Well, it should be pretty damn unfair, pretty terrible of an experience for these people. We’re not a hospice for dying companies, we’re a rendering farm for nags who can’t just be allowed to rot on the racetrack they were shot upon.

Oh, by the way: because the tax rate is a civil matter, rather than a criminal one, an after the fact levying of tax is constitutional. That’s the courts speaking. Which judicial system are you appealing to?

The rule of law means that pundits and parties don’t interpret the law, judges do, and their rulings constitute the current working standard of what is constitutional or not, not the rhetoric of pundits and politicos.

Posted by: Stephen Daugherty at March 19, 2009 5:24 PM
Comment #278052

They Were Against It Before They Were For It

This week, Republican leaders have leapt to join the populist outcry against the bonuses that ailing insurance giant AIG has awarded its executives. But such rants against executive earnings mark a remarkable about-face for the right flank of the party, which condemned President Obama’s decision to set limits on executive pay just last month.

Read on.

Posted by: womanmarine at March 19, 2009 5:26 PM
Comment #278058

womanmarine,

To tell the truth there is quite an outcry in conservative circles over the blatant cowardice shown by the Republicans who went along with this vote. Too many Republican office holders are spongy-spined toadys of one interest group or another. On some things, like resisting attempts to circumvent the Constitution, people should just stand up before the wind, even if the people around you are laying down.

Stephen,

What I’m mad about is Geithner and the others in treasury letting this crap get through in the first place.
Senator Dodd today admitted that he had been specifically asked to place the language preserving the bonuses in the bailout bill by people at Treasury, whom he would not name. Geez, man! This is a made up story! People have been whipped into a frenzy over something the Obama Administration did ON PURPOSE!

Last week the congress passed, and the administration signed, a bill raising government expenditures by over 8% on the current fiscal year’s business, and ADDED 8,500 EARMARKS TOTALLING MORE THAN 2% OF THE BUDGET, 8 BILLION DOLLARS. That carried a lot of bad Karma because all they really had to do was continue passing continuing resolutions to keep the government going. To counter that the administration blew up this dog and pony story and got a piece of unconstitutional legislation passed to confiscate bonuses the administration itself protected all along that amounted to only one one thousandth of the money they had granted to AIG.

And you, Stephen, bought the whole thing.

Posted by: Lee Jamison at March 19, 2009 7:44 PM
Comment #278063

Jim M.,
Why the insurance companies can say that they deny a claim for any number of reasons and have an Army of Lawyers to deal with anyone who wishes to say they are wrong let me use your example to show why the consumer and We the People need to do better.

For if water damage inside the home is to occur than the sealed structure must be bridged. A broken window, a blown down door, or even a collapsed wall due to the strong winds in a hurricane is not beyond reason. However, to say that water did the damage that cause the window, door, or wall to fail goes beyond Common Sense to anyone who has rode out a 100 mph strom.

Yes, the insurance companies can and do more times than not deny all claims without consideration just because they know that the risk of some person having the ability and/or money to fight them is near zero. And why you can say that they do it out of the best interest of the company, I’ll challenge you to show me a Natural or Man-Made Event were any Insurance Company has paid their customers in full for the damages covered by the policies they have agreed to without seeking assistance from the government.

Posted by: Henry Schlatman at March 19, 2009 10:00 PM
Comment #278067

womamarine, thanks for the link. That hypocrisy on public record by McConnel, Cantor, and others in the Republican leadership has not gone unnoticed by many of us. Ostriches of course, will refuse to look up and acknowledge the public record. Such is the nature of partisan loyalty.

Posted by: David R. Remer at March 19, 2009 10:27 PM
Comment #278069

Lee Jamison-
They’re doing what politicians, in part, are supposed to do: respond to the will of the people.

It’s about accountability: it is neither liberal nor conservative to reward people who did poor jobs. It’s just elitist, actually. Nobody should be hiring these people. They need to seriously consider another line of work. People understood salesmanship, but they couldn’t do the math to figure out what the results of their actions were. These are not the people you need running your financial ship. And if they have a problem with not being paid hundreds of thousands, even millions for the world’s worst performance, that’s their problem. People no longer have the patience to let it be our problem as well.

The only thing keeping America from letting Wall Street collapse at this point is the knowledge that to allow that would create devastating ripple effects. But I’ll tell you what: the burden of Wall Street is not a joyfully carried one. They just burned through a ****load of goodwill in the past few months, and so has the Obama Administration, and I doubt that Obama and crew are still as enchanted with being business friendly as they were before.

I don’t know. It’s like the folks opposing Obama on the political landscape seem intent on doing just the things necessary to alienate and piss off most of everybody else, and embarrass Obama because of the hand he held out to them. Do they understand that however much Obama’s been hurt by the negative publicity, people still have much more faith in him, than in them? Do they understand that they’ve essentially put Obama and the Democrats in a position where it’s less and less worthwhile to meet them halfway?

How do they think they come out of it?

As for unconstitutionality, I will wait until somebody produces some good case history and significant decisions before I buy that line; the constitutionality or unconstitutionality of a law or regulation is decided by the courts, not the punditry, nor the demagogues of either party.

Posted by: Stephen Daugherty at March 19, 2009 10:42 PM
Comment #278083

It seems to me that the real issue about the AIG retention bonuses has more to do with the decision to maintain AIG as a private going enterprise rather than putting it into some form of gov. receivership or allowing it to be liquidated like Lehman Brothers. In doing so, the contractual obligations of AIG remain alive and well.

However repugnant the retention bonuses may be, they remain performed contractual obligations. Efforts by the gov. to retroactively abrogate these contracts either by the controversial Dodd amendment or the recent taxation bill are constitutionally suspect due to the prohibitions on ex post facto laws, impairment of contracts and uniform taxation provisions of the Constitution.

In my opinion, these contracts are only a small part of a boatload of awful contracts that AIG entered into. We cannot now pick and chose which ones of these awful contracts we wish AIG to honor. We are a nation of laws, not some banana republic. If we are reluctant to let AIG fail, then we must hold our nose as these contracts unwind. That does not mean that some or many of these contracts, including the bonuses, could not be challenged on basic contract law. However, blanket repudiation of legally binding contracts does not seem to me to be a viable option, It is political grandstanding of a dangerous sort.


Posted by: Rich at March 20, 2009 9:13 AM
Comment #278084

Rich,

“However repugnant the retention bonuses may be, they remain performed contractual obligations.”

While I am quite sure this question has been asked before I am also sure that I don’t understand the answer.

Truly, what is the difference between the auto workers being told they have to take a pay cut despite the “contractual obligations”, before the auto companies could be bailed out, and AIG being told they shouldn’t be handing out bonuses despite the “contractual obligations” after they were bailed out?

Seems to me that there is something very wrong with the equation here.

Rocky

Posted by: Rocky Marks at March 20, 2009 10:03 AM
Comment #278085

Rocky,

The contracts for the auto workers required changes in their contracts be put to a vote. In fact the changes were put to a vote.

Here an ex post facto law containing what is effectively a bill of attainder has been passed by the owners of the company to illegally change the contract by creating what is in effect a fee for the privilege of being paid.

These are not similar situations.

Posted by: Lee Jamison at March 20, 2009 11:00 AM
Comment #278086

Rocky,

As I understand it, the UAW agreed, as a condition of the auto bailout, to modifications of their existing long term contracts going forward but not to give back money or benefits already earned under the contracts. Under the current arrangement with AIG, there are limitations on any employee compensation contracts entered into after Feb. 11, 2009.

I am not defending the retention bonuses of AIG employees. They are truly shocking. However, private entities are entitled to enter into all sorts of stupid contracts (unfunded credit default swaps!). Simply because they are stupid does not make them unenforceable. If AIG was not “too big to fail”, the bonuses would be a moot point. AIG would have been in bankruptcy liquidation and there would have been no funds left to pay the bonuses. But that is not the case. We made a decision to save AIG. With that decision comes a price. It makes no sense to violate very basic concepts of contract and constitutional law to spite the greedy executives of AIG. I believe that we need to move forward and drain the swamp before it overwhelms us.

Posted by: Rich at March 20, 2009 11:00 AM
Comment #278089

M. Remer writes; “Before regulation, denying claims regardless of merit was routine, and highly profitable, I might add for the insurance companies.”

The writer would have us believe that now, “paying” claims regardless of merit should be routine.

Apparently, M. Remer fails to understand that an insurance policy is a legal document binding the parties to the terms. That the terms of a contract are never disputed is an argument M. Remer would have us believe. That courts exist to settle such disputes is evidence enough to dispel his myth.

Posted by: Jim M at March 20, 2009 11:26 AM
Comment #278090

Rich I agree with your comments however many Americans are up in arms over these “retention bonuses” used by AIG to circumvent the law. People are protesting in the streets of this Country because of taxpayer dollars being used to fund these “bonuses”. Are contracts that circumvent the law really contracts that are enforceable? Anyway to the point, We the people do not want to pay these people due to the failure of the company they work for. Our elected representatives had previously allowed these “bonuses” to stand, but have heard the anger of the people who have felt the negative effects of AIG’s failure. Just as the contracts are used to side step a law so are the taxes of 90% being used to side step the sidestepping of the law, how is that for justice being served?

Posted by: j2t2 at March 20, 2009 11:30 AM
Comment #278091

j2t2,

I don’t think that the contracts for retention bonuses side stepped any law. There were entered into well prior to the bailouts for services “performed” mostly prior to any bailout. That doesn’t justify the bonuses from a common sense perspective, only that they are not, on their face, illegal. Just because they are repugnant doesn’t make them illegal. Under normal circumstances the bonuses would be moot. AIG would have been long gone due to the actions of the these highly valued executives who needed a bonus to retain them.

The fact that Americans are outraged doesn’t justify throwing away our Constitution. If we didn’t want to pay the bonuses, then we should have let AIG fail and take the consequences. I would rather have the outrage focused on new regulatory actions to prevent this mess from ever happening again.

Posted by: Rich at March 20, 2009 11:48 AM
Comment #278092

Lee and Rich…thanks for your well-reasoned explanations and thinking. For many libs of both parties it would appear that only those contracts with which they agree should be enforced.

M. Remer is arguing that all claims by policyholders of an insurance contract should be paid regardless of the validity of those claims. Would he argue that those employees holding those contracts with AIG should be paid as well using the same logic? Just wondering!

Posted by: Jim M at March 20, 2009 11:55 AM
Comment #278100

Rich,

I personally believe AIG should have been allowed to fail. It was not. Then the bonuses were specifically protected at the request of the Treasury Department. Now anger is being directed at a bunch of people who should be quietly looking for work for outrages the government not only made possible, but PRESERVED THEMSELVES, POSSIBLY FOR THIS PURPOSE

You’re looking for ghouls to burn and being directed in the process by people wearing white sheets.

Posted by: Lee Jamison at March 20, 2009 1:26 PM
Comment #278104

You’re looking for ghouls to burn and being directed in the process by people wearing white sheets.
Posted by: Lee Jamison at March 20, 2009 01:26 PM

Well said. Jim

Posted by: Jim M at March 20, 2009 1:51 PM
Comment #278110

Jim M, your comments often contain such incompetence with the English language that it appears intentional.

I said:

Every insurance company is predisposed to deny claims for one simple reason - profit motive, which is what they are in business for. Hence, it is in the insurance company’s vested interest to draft and interpret the insurance policy in any way that would permit it to deny a claim.

That is precisely WHY, over the centuries, America has developed a very highly regulated government structure to monitor and oversee the insurance industry and force compliance with fair and responsible contract enforcement based on language and interpretation of the contract established by law, not by the insurance companies beliefs or interpretation.

…One of the major functions of government regulation of insurance companies is to insure against the insurance company deciding what claims are deniable or not. Before regulation, denying claims regardless of merit was routine, and highly profitable, I might add for the insurance companies.

Those are my words and information proffered. From which you reply: “The writer [Remer] would have us believe that now, “paying” claims regardless of merit should be routine.”

No where, in any of my words or sentences, is what you claim even implied. In fact quite the opposite when I said: “America has developed a very highly regulated government structure to monitor and oversee the insurance industry and force compliance with fair and responsible contract enforcement based on language and interpretation of the contract established by law, not by the insurance companies beliefs or interpretation.”

The State of Texas Insurance Commission just a few years ago adopted a homeowner’s insurance contract that excludes mold as a covered loss, whereas previously, the Texas Insurance Commission had for decades mandated certain homeowner’s policies which required coverage of mold damage when caused by covered precipitating water damage. The insurance companies never wanted to cover mold damage.

Government, in order to achieve fairness and enforceability over insurance companies, decides what is covered or not through a variety of branches of government and legal mechanisms, including the State’s Insurance commission, a branch of the Executive government, legislation, and of course, the courts. As I said, if what was covered was determined by the insurance company’s beliefs, as you posited, most claims would be denied out of hand. Paying claims impairs profitability. And profitability is the reason anyone goes into the insurance business or invests in it.

Your comment appears to reflect an utter lack of reading comprehension of what I wrote, or the most dishonest attempt to misrepresent what another has said. I can’t tell which for sure.

Posted by: David R. Remer at March 20, 2009 2:56 PM
Comment #278113

Jim M, and btw, Rich and Lee are discussing AIG. There insurance business in the areas of personal property and transportation are financially sound. It was their insurance coverage against investments going bad that threatened the economy and created their insolvency. And area of their insurance business which WAS NOT regulated by the government, and whose terms and conditions were not overseen and modified by the government.

Which precisely backs up my argument entirely, that when insurance companies are left to their own interpretations and beliefs (your word), they will not make good on the policies they sold and the premiums they collected. There is no profit in paying claims.

And the easiest way in the world to not pay claims for an insurance company is to pocket the premiums and spend it lavishly before a wash of claims come in, at which time the insurance company can claim insolvency due to the premiums having been spent and distributed instead of being held in reserve to cover the losses they insured against. There was no government agency under the Bush administration requiring AIG to keep its premium revenues in reserve to pay claims. Voila! The company claims insolvency after everyone associated with the company as employees or previous investors have walked away with the premiums collected over the years.

Posted by: David R. Remer at March 20, 2009 3:24 PM
Comment #278114

Unlike M. Remer, I won’t first insult his incompetence with the English language as he does with me. He wrote;

“Jim M, your last comment fails to acknowledge your own words which contradict the concept of insurance regulatory bodies: “It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy.”

If that is true, there is no need for regulatory agencies of government in the insurance industry. Whatever the insurance company itself believes is not covered should be good enough, according to your own words.”

By writing, “If that is true” M. Remer disavows the right of the insurance company to deny a claim which it believes is not covered by the policy. He then continues by saying “according to my own words” that I advocate no regulation of the industry. HUH!

Please read very carefully and slowly M. Remer. I said…insurance companies have the legal right to deny claims they determine are not covered in the policy. The policyholder can address this denial in court and a decision will be made by that court. M. Remer is talking about regulation controlling the writing and language of the policy.

M. Remer wishes to talk about regulation, greed (one of his favorite charges against corporations) and past history and not address the silliness he proposes by implying that insurance companies must honor all claims. M. Remer, we’re not talking about regulation here, but rather whether the insurance company is adhering to the policy language in paying the claim…and, that is an issue for the courts.

Since M. Remer likes to confuse issues I will simply ask two questions he can answer with yes or no.

1. Insurance companies have the legal right, and responsibility to their other policyholders and owners, to exercise diligence in claims paying by rejecting those claims which they believe are not within the coverage of the policy. Yes/NO

2. Regulations require that insurance companies must pay all claims made by policyholders whether they agree the claim falls with the coverage of the policy or not. YES/NO

Posted by: Jim M at March 20, 2009 3:33 PM
Comment #278120

Jim M, said: “M. Remer is talking about regulation controlling the writing and language of the policy.”

Damn right, Jim M. Through the courts, stare decisis, precedential rulings, legislative actions, and Insurance commission rulings and selections of what policies can and CAN NOT be sold in a given state, the government has become very integrally involved with writing and adopting the language of the policies that government allows to be issued in its state.

Again, I refer you to Texas’s former HO-B homeowner’s policy vs. the newer adopted policy BY the Texas Government, the HO-3 policy. Government determined the content of the policy sold in Texas, with insurance company’s input and consumer input, of course.

Your postulation that insurance companies, to use your own words, “It is responsible and correct for an insurance company to deny a claim which it believes is not covered in the policy” is empirically and demonstrably false, as insurance commissioners fine and punish insurance companies routinely, as do the courts, when they attempt to deny a claim based on their belief that it should not be covered, as opposed to legal or government precedent as to whether a claim should be covered.

The insurance company is NOT the final arbiter or interpreter of the terms contained in a homeowner’s or automobile, boat, or airplane insurance policy. Nor are they free to pocket the premiums paid to them in any fashion they choose. The state governments mandate insurance revenue set asides and reserves to cover potential claim risks.

When that is not the case, as with AIG, the insurance company is free to abide by its own beliefs and make up the rules as it goes along for its own internal personnel’s and shareholder’s benefit, to the exclusion of the policy holders. End result, legitimate claims in the 10’s of billions are now going unpaid by AIG, leaving the tax payer to pay the claims or suffer the consequences of a failed financial system.

Sorry, Jim M, your comment’s lack of comprehension of the written word and the validity of empirically validated examples continue unabated.

I have found it is a whole lot easier and fulfilling to say, ‘I don’t know’, than to continue to reiterate comments which assert illogical and unfounded positions.

Your comment’s continued assertion that the beliefs or interpretation of the language of an insurance contract by an insurance claims adjuster is wholly sufficient in determining the deniability of a claim, and justified as a basis for settling claims through denial, is truly mind-boggling. And contradicts your other comments about court’s (the government) resolution of disputes over the language of an insurance contract. When a court rules, that is the final and decisive interpretation of the language in an insurance contract. Note this. It is the government that defines the language of the contract, NOT the insurance company or its beliefs about the contract as you stipulated.

Thank you again for the opportunity to respond.

Posted by: David R. Remer at March 20, 2009 4:36 PM
Comment #278143

David and Jim M,

An insurance contract is, first and foremost, an agreement between two parties. It comes in a form highly regulated by state and federal agencies, and in TEXAS is required to follow certain formulations. Still, it is an agreement between two parties.

If it can’t live by the agreement on the paper on which it is written, a la attempts in Mississippi to force insurers to cover flood damage which, fortunately, were rebuffed, it will eventually be impossible to find people stupid enough to write the contract that wouldn’t mean anything anyway.

Posted by: Lee Jamison at March 20, 2009 7:14 PM
Comment #278169

Lee,
You make a good point; however, is the contracts signed by AIG and their Employees even legal when they knew or should of known that the policies they were selling their clients could not be covered by the rules and regulations that protect all parties?

For why I will let the lawyers of Mississippi defend themselves I wonder how many cases pointed out the fact that it was structural damage that gave way which allowed water damage to occur. Otherwise the houses should of just been found uintact under water should they not?

Yes, you can blame building codes; nevertheless, if one takes out insurance on their home to protect them from Nature than should it not be the responsibilty of the Insurer to say if the house is sound and not government?

Care to wager how many homes along the east coast have an insurance certification?

Posted by: Henry Schlatman at March 21, 2009 1:07 AM
Comment #278192

I wonder if anyone noticed M. Remer’s inability to answer two simple question with a yes or no, but rather, went on a long explanation of something we weren’t even talking about to begin with.

Oh well, it’s not unusual for someone who has an indefensible position to muddy up the waters answering questions not asked.

I will try one more time to ask a simple question. Are casualty claims adjusters employees of the insurance company or of the regulators? YES/NO and just for M. Remer…MAYBE, let me explain?

Henry and others simply fail to understand that AIG has many specialized companies operating within the parent structure. The Financial Arm of the company is the one being bailed out, not the traditional insurance part.

M. Remer writes; “Jim M, and btw, Rich and Lee are discussing AIG. There insurance business in the areas of personal property and transportation are financially sound. It was their insurance coverage against investments going bad that threatened the economy and created their insolvency. And area of their insurance business which WAS NOT regulated by the government, and whose terms and conditions were not overseen and modified by the government.”

In this statement he is correct. Not being regulated by the government means that it was not insurance in the traditional meaning. It was covering wagering. And, there is no need or requirement for government to bail it out. Let the wagerers take the hit. This bail out is merely a scheme to separate taxpayers from their money.

What do you suppose will happen when enough American’s understand this and require an accounting of where the money went for this debacle? Would M. Remer and his followers abide a bailout of gamblers who loose money at our nation’s casino’s? If so, where does the line form as I have left a few thousand at the riverboats in Bosier City, LA.

Perhaps I can buy a “gambler’s insurance policy” from State Farm and when I loose and State Farm can’t pay I’ll receive a government bailout to protect my stupid ass.

What AIG was doing and those participating in it should rightly be called “stupidity insurance”.

Posted by: Jim M at March 21, 2009 12:21 PM
Comment #278195

Henry,

I don’t know where you live, but the notion of building homes capable of standing up to hurricane tidal surges is beyond preposterous. Katrina’s tidal surge scoured clean land that was nearly twenty feet above sea level in Pass Christian. In Biloxi a hotel where my family had held a reunion in 2002 was scraped completely off of the foundation.

Federal flood insurance costs on those places should assume complete replacement every 25 years or so.

Posted by: Lee Jamison at March 21, 2009 12:53 PM
Comment #278199

Woops, the hotel (a Super 8) was in Long Beach.

Posted by: Lee Jamison at March 21, 2009 12:58 PM
Comment #278252

Lee,
Why I would have agreed with you a few years ago and though it would require me to search the web for a few days to get a picture of some houses capable of withstanding a Cat 5 Hurricane I do believe that if you google “Housing Hurricane Cat 5 Building Material” you can easily find the windows, doors, etc, that will allow you to build a home that can withstand a Cat 5 Tidal Surge.

Yes, after Andrew and before Katrina the building codes in some states were changed to reflect the need of better housing. Nevertheless, the costs will have to come down in order to make it so affordable that every homeowner has that advantage.So why you can call it “beyond preposterous” by the standards of 20th Century Thinking. Engineers in the 21st Century have already made it a reality in places along the East and Gulf Coast.

Posted by: Henry Schlatman at March 22, 2009 4:18 AM
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