Given the wide gap here, it's fair for Bulldog to question the assumptions in the studies. That's what any peer review panel does, and what Fred has defended well. Is the article hyperbolic? From Bulldog's perspective, yes. Those are "scare" numbers. Of course there is an agenda.

"Regardless which study is used, tens of thousands of Americans die every year due to lack of health insurance..."

It's also semantically correct to point out that no one is actually killed by lack of health insurance.

Bulldog, meet Big Picture:

People who have insurance are much more likely to get HEALTH CARE, care that ends up saving or prolonging their lives, than those that are not insured.

So how do you want to spend your tax dollars?

Now for MiddleClassBill:

"Multiples more die each year from cancer, so should we spend our trillion dollars to insure 45,000 people or spend it on cancer which kills half a million people each year?"

No, I'd like to spend it like this. Check out Dr. Dean Ornish' testimony in the senate:

help.senate.gov/Hearings/2009_02_26/Ornish.pdf

I'll say this over and over again. Insurance is not the goal here. It is health care. But unless this country can get to a single-payer system, insurance is going to be involved somehow. So let's make it work for as many as possible, start with prevention, and have a public option for the gaps.

As my neighbors say, what's wrong with that, eh?

There is a mid-term election in 2010. Take a look at who is up and compare it to those known to be opposed to the public option, for example:

http://en.wikipedia.org/wiki/United_States_Senate_elections,_2010

You can do the same for 2012.

Have an idea of the work we need to do?

David, you're absolutely correct that this is worth a fight. And if I were a progressive in MT, AR, or any of the other Senate boat anchor states I'd be faxing handwritten notes.

President Obama has been around for just over 8 months. A battle may be lost for the public option this month, but there is much more time to get it done.

And as clearthinker implies, the real challenge ahead is energy. If you think there are forces against progress in healthcare, wait until the climate change legislation is up. Keep digging, folks.

You're missing some fundamentals though:

the Republicans and their proxies have nothing to lose by going negative. There is no central target to hit back, and often the party out of power gains in the midterms. That's not so good.

But if you are Obama and the DNC, think of all the footage of fools you've got for the midterms when the GOP goes too far - like the Virginia GOP gubernatorial candidate, sinking in the polls due to previous writings. What goes around comes around. Not hard to put ads together about Bachman, is it? She almost tanked last fall.

Obama was elected with major grassroots power - not corporate power. Senators aren't. Several "Democratic" senators in red/swing states Obama didn't win - McCaskill, Landrieu, Lincoln, etc, may prevent progressive legislation from passing the Senate to be palatable to their electorate. If you've watched "Sicko" or even done your own homework on www.fec.gov, you can see which Senators took funds from big Pharma, health care companies, etc. Really, the only force pushing hard for health care is the people themselves. Senators aren't yet elected by large numbers of small donations and a strong change vision by the people in their states. It's a corporate engine that got them into the Senate.

I'm sure the Obama/DNC team is eying vulnerable Senate seats in Florida, Maine, and Montana and calculating whether it is politically worth it to go after Baucus or Snowe. Martinez' vacant seat is certainly a target. It's just not as "now" as I'd like it, for sure. But it isn't Obama being a coward.

Finally, I'd like to believe the economy is doing better, I really would. But I work in the financial trenches, and I see lots of interim financial statements from a variety of small businesses. 4Q 2008 was bad. Most of the companies I saw had large drops in revenue. Could you make it if your income dropped 40%? Well, many cut staff and expenses to make it into 2009, but what I'm seeing right now is revenue and income even lower than 2008, with a very recent uptick this quarter. Let's hope the trend holds; it's not over yet. Obama can't get people to spend, and without new jobs, that's a tough sell.

I remember how so many lamented Obama's approach when the Clintons hit him hard in the late primary season. Same thing when McCain/Palin worked on him in October. To turn this massive ship we're riding will take a patient, long-term approach that considers the realities of the Senate, and takes ground where it is possible. Right now it's harder to accomplish things with a corporate Senate and poor economic conditions.

When things turn the corner, it is an entirely different story. Like you said, there is a stimulus package Obama signed he should trumpet - especially in Maine, Arkansas, Missouri, etc. That ought to be enough to get him re-elected with a different Senate, and what isn't possible now may be possible then.

I agree the public option will be a dumping ground - but the thing is, eventually, we'll all end up there, and the more of us there are, the stronger the plan gets. But a weak public plan is an issue - internal changes need to be made. If the plan doesn't provide care and focus on prevention, and if the incentives are for procedures or prescriptions.

About to watch Potter's take now...

Video.
+
Youtube.

http://www.aesopfables.com/cgi/aesop1.cgi?4&TheScorpionandtheFrog

You're asking CEOs to change their nature - and that is a feat indeed!

Profile the Fortune 1000 CEOs, and I'd bet that the majority of them grew up in fairly privileged households, and those that didn't came from poor backgrounds and are "hungry."

The basic personality traits:
- they are relentless and want to win or get ahead
- they know their corporate business model inside and out (though as they rise in the power structure they are less involved in details)
- they are human salespeople for their corporate model - 24/7
- they have jumped over peers with lesser ambition, drive, people skills, education, connections, and most of all, quarter-by-quarter or annual results.
(simply put, they make money for their company than others, and have done it in every single role they've ever been in)

For this personality, there is never enough. There is always more to do, to earn, to win.

This personality type doesn't know Santosha from Soda.

There are exceptions, of course. But as a CEO rises from their starting position from the top, they get more tied to their company by stock options, bonuses, and perqs like the jets, lunches, club memberships, and after a while, they can't distinguish between "wants" and "needs." Throw on top of things the ability to manipulate politicians and elections, and there's the power too.

Sound addictive? Wanna be a CEO?

Those that say "no" for family reasons, or that you don't always need to be first in line, etc, and you're already eliminated from the pack racing up the corporate food chain.

Ask them how much is enough, and you'll get the deer in the headlights look!

Now in line for a fishing license, that's probably another story...

http://www.pbs.org/moyers/journal/07102009/watch2.html

You'd think the insurance companies would figure this out and start paying or lobbying for organics, preventative care, etc. But then the premiums go down, not up...

In the meantime, buy organic locally grown food absolutely as much as you can. Grow your own in the backyard, in pots on the porch or by a window. Walk. Bike.

Fundamentally, we as a society must change our relationship to consumption, and this economic and health crisis is the tip of the rapidly melting iceberg.

The fat food companies are doing rather well right now. And organics? When you can get three burgers for $1.99 and a half pound of organic carrots for the same price, which do you suppose wins? Short term satisfaction or long term health? And which companies prosper?

Then again, hopefully every one of us in the 15% has planted a garden this summer. I sure did.

[Recovery] "depends on consumers who, after all, are 70 percent of the U.S. economy. And this time consumers got really whacked. Until consumers start spending again, you can forget any recovery..."

And misses it in the title - never is a long time.

The savings rate has jumped from negative to 7%, and is probably going to rise higher. But most people put away 3-6 months worth of salary before they go on with prior spending habits. These are the 85% who have jobs.

As for those who don't yet, this isn't a total economic collapse. What's happening is several key sectors that were substantially over sized did collapse (finance, auto, home building). The people who lost jobs in these sectors (including me) can't simply rearrange resumes and jump into growing sectors like health care and energy. Plus, if you can't sell your house, it's much harder to move where the jobs are.

There's a lag with these two key factors. And as Reich implies, there is a process at work. Collectively, we all need to decide what is truly important (such as real health care rather than "insurance" for something we will all eventually need, or renewable energy) and then gear up for it. In the short term it's looking like an L shape - and it won't rise again until this new economy gets legs.

I just wonder a one thing:

no one there had the presence of mind to whip out a cell phone and film this little event from the back wall?

If the statement is accurate, you've got a "don't tase me, bro" moment ready to upload to YouTube 5 minutes after the cops leave.

Lesson learned..?

What governor up there cut social spending?

Mmmm.

Dave could start calling Todd "Abu El Banat" Palin. Perhaps that's more amusing and might better inflame the Palin demographic.

Letterman owes the Palins an apology, but make no mistake - no one owes her a vote.

As for #1, from a pragmatic political perspective, I think this is an issue best addressed in a second term. It caused problems in Clinton's first, and I think other issues, such as the economy, ending the wars, and health care, are higher priorities than ending the don't ask don't tell policy. But only for a while.

Healthcare is the stickiest of the three, in my view. Obama didn't support a single payer system during the campaign, but I think he could be won over. The Senate, on the other hand, is where the challenges are - Ben Nelson in Nebraska, Bayh in Indiana, Lincoln, Pryor, etc. Look at donations to Senate campaigns, and you'll see the big pharmaceutical and health companies well represented on both sides of the aisle. But if you got campaign emails from the Obama team, their operation is now working the ground for health care, so we'll see...

We don't live in our art, and not everyone owns pieces that compose the majority of their net worth, unlike homes.

"The driver in this crisis was decoupling mortgage sales from mortgage holder risk. Just like CDS sales were decoupled from CDS risk."

This is only one of the drivers, and I might agree that it is one of the bigger ones. There was a confluence of events leading to the collapse and there are more cards: deregulation; elimination of Glass-Steagall provisions; collapse of the stock market bubble, leading investors from stocks to "safer" investments; declining interest rates due to expansive Fed monetary policy after 9/11; slowly eroding bank lending standards (I watched this personally - one company I worked for did not, and one did - guess which one is still around); short-term profit focus; executive compensation policies; and more.

"Quit pussyfooting around the real causes and address the politically incorrect truths of inflating demand via artificially enlarging the homebuyer pool with reduced lending standards."

You're correct here as this is one of the big factors. I don't think it is politically incorrect - it came from profit motives as well as the decoupling of risk, pressure from the sales team and sales management, and short term profits. There are those that argue that CRA caused this, but it was so easy to get satisfactory ratings after the Bush admin began, it was a non-issue in both banks I worked at. I can't speak for FNMA or FHLMC as I didn't work there. Did you? Or do you have direct knowledge? If so, by all means, comment!

"You can't argue that 20% down wouldn't have prevented this."

Not arguing that.

From a cleanup point of view, we need the most accurate way to value the underlying assets, not the derivatives, at the banks. Then we know just how insolvent they are and which ones are the worst.

We can deal with stock market bubbles. We don't live there. We can deal with art bubbles. Don't live there either.

The bottom line is people who bought homes in the last 5-6 years have seen a big chunk of the money they put in their homes go away. Poof. There are so many of us in this group, as a whole, we stopped spending money on anything but necessities, and that's the core issue.

Right now, the best approach to weight when valuing a current home is what you can rent it for. This is the case whenever there are rapid changes (up or down!) in both housing sales (due to foreclosures pushing down prices or irrational demand pushing them up) and construction costs (due to a sudden drop in demand or sudden increase). Renters, unlike buyers, don't face pressure to get deals done from anywhere other than the property owner, or face pressure to foreclose during down times.

I'm not saying you eliminate using the sales comp or cost approach - just sharply reduce the weight. Finally, and this is something Baker didn't suggest, is the buyer, not the lender or seller, ought to be able to engage the appraiser. Right now it is the lender, and FIRREA or not, both the lender and RE agents who refer deals to lenders have incentives to get deals done, and end up with appraisers who get the numbers to "work".

Gradually over time, individual banks sold more and more of the loans they originated; bundled more and more of them into packages and sold them in the market (CDOs). They lowered their underwriting standards, again, over years. So instead of doing conventional 80/20 mortgages they sold those and did 90/10s. Then 100%. And less documentation. And the list goes on. But it wasn't a few single banks! It was ALL of the big ones (Citi, Wells, BofA, Wachovia, US Bank, Key, etc) most of the medium ones, and many of the small community banks as well. It was quasi-government sponsored lenders like FNMA, FHLMC, GNMA, etc. It was non-bank lenders like Greentree, Conseco, etc. If everyone you knew was rushing in one direction, racing to see who can be first, are you one of the herd, or do you wait to see what happens? In business, they ride with the herd, which was heading for a cliff.

When your entire banking system, and the investors who bought the CDOs (think mutual funds, and pension funds, and municipalities) who were rated AAA by the ratings agencies, and insurance companies (AIG, etc) who sold credit default swaps to insure against losses they never thought would happen, what do you do?

Morally, I don't disagree that we shouldn't bail out those who were irresponsible. But if your neighbors house is burning along with 10% of the neighborhood, they may have all helped light the candles that caused the fires. But we want to keep the other 90% standing. So for right now, it's time for the hoses. They'll be plenty of time later for the regulations and lawyers so "this never happens again."

I'm absolutely with you on speculative mortgages - I think to maintain greater home value stability, this is an area where speculation, if allowed at all, ought to be carefully regulated and taxed.

You asked how lenders justified lending when prices doubled in 5-7 years. One problem is the appraisal system. There are three approaches they take to valuing a house, and all three tend to drive the values obtained upward in an expanding economy such as California, but they also drive them sharply back down in bad times. It's a triple whammy, and in a nutshell, lenders really can't rely on an appraisal as an accurate long-term valuation of a home in California.The three approaches are comparable sales, income, and cost.

The comparable sales approach looks at the nearest similar homes and how much they sold for. Appraisers look for values that bracket the purchase price (i.e. one sale on the high side and one on the low side). This is easy to find when the market is booming - the oldest sale is the lower end, and two more recent sales are higher. But what this means is each subsequent appraisal finds the homes in the same area are worth a bit more each time, and voila, both lenders and sellers can "justify" a higher sales price. Appraisers usually emphasize this approach as it is "most accurate" as the buyer and seller have agreed on a price.

The cost approach is just that - how much it costs to build the home. But this approach is based on estimates from a book which is typically not up to date, so it usually isn't weighted like the other two. But remember how scarce construction labor was or materials after 9/11? This drives up construction prices, and drives up the cost approach value. Strike two.

The last approach is the income approach, which means how much would the property yield in rent payments, and applied over time, how much is the property worth. As you note so well in your post, available properties to rent are scarce also. This drives up the value the income approach yields.

Simply put, the current appraisal approaches inflate the value of homes in boom times. Sellers and lenders rely on the appraisals to justify the values, and they were working hand in glove. Now there are rules in place (FIRREA) that govern this, but do you think lenders used appraisers who consistently came up with lower values than the purchase prices?

Here's the last part of the problem. The appraisers work for the lender. The lender doesn't have as much incentive to close the deal at the highest price as the seller, but they still have an incentive to close the deal. So do both real estate agents, who don't get paid unless the deal closes. So the only one in the transaction with an incentive to get the lowest price is guess who? The home buyer. We ought to reverse this system and allow the home buyers to engage the appraisers, for starters.

But the bigger question is this: how do you deal with the popularity of California? It's a nice place to live with a great climate, and lots of people want to live there. That factor alone (increased demand) drives up the price of housing compared to worse places to live, say for example, Aleutian Alaska.

An old economics professor of mine went on a similar rant as Santelli when arguing with a more liberal student (not me), and his case was the only fair way to handle supply and demand was "price, always price." My opinion is I have no problem with wild price swings with most things. But I don't want wild price swings in food, shelter, and clothing. So how do we keep the wild price swings out of housing?