For those of you, like me, whose lives have been impacted by this disease you will appreciate the stories from these 8 patients. 

Unfortunately, my family has recently been introduced to this disease.  How this person has coped with his diagnosis is nothing short of heroic. 

The drug costs for multiple sclerosis treatment are skyrocketing.  So much so that many insurance companies are no longer able to cover them. 

For those of you who know little about multiple sclerosis and are looking for a cause to crusade for, you should consider devoting some of your resources to multiple sclerosis research and awareness.  Multiple sclerosis affects women at roughly 3 times the rate of men.

If you feel so called, please visit the Multiple Sclerosis Society website.

.

First, lets start with a link to calculated risk.  Second, I would like to thank Atrios for linking to this yesterday. 

Now for a quote:

I've heard from industry insiders (not confirmed) that Fannie Mae is putting a limit on the debt service-to-income (DTI) ratio of borrowers regardless of the Automated Underwriting System (AUS) decisions for loans requiring mortgage insurance (Loan-to-value (LTV) > 80%). This is apparently due to pressure from the mortgage insurers (MIs).

I think regulating mortgage terms for the GSE's is a probably smart in the short term.

Despite what many on the right claim, Fannie and Freddie had a very small percentage of subprime mortgages in their portfolios (see this congressional testimony).  The problems the GSEs came across had a lot to do with automated underwriting which used statistical analysis to get a better idea of default risk. During the bubble, this automated underwriting system allowed some sketchy loans because the statistical indicators weren't showing much default risk. However, the reason for this wasn't a problem with the system - it was a problem with the market. The reason it wasn't showing any risks of default was that no one was defaulting!

The GSEs should continue to gather data through this collapse, get a better idea of risk, then let the automated underwriting programs get back to work.  Statistical analysis means a better idea of risk, a better understanding of risk is always a good thing

Since I'm a relative newbie here, I would like to take some time out from my tedious policy discussions to let you know what I'm all about.  Before digging in, I have really enjoyed becoming a member of the TPM community and have appreciated all the blogs that I have read and the comments others have made on mine. 

Now, I am under no grand illusions that what I have to say will garner a large readership or a lot traffic, but I do believe that my experience with government and my chosen profession as a policy analyst has inspired me to take a rather unique approach to political blogging.  If your willing to read on, I'd like to tell you about it.

I believe in numbers.  And I believe that Political Ideology can destroy the process with which you gather and interpret numbers.  Unfortunately there a lot of cynics that would tell you that you can make numbers tell you what you want to know.  Even more unfortunately, those cynics are right.  Numbers in the hands of someone with an agenda can make them tell you whatever they want to tell you.

However, that is why public policy must be approached from a scientific and analytical perspective.  Formulate hypotheses, test those hypotheses using your statistical tools, then rigorously analyze the story those statistics tell you. Look at the distribution of your data to determine the effect on the entire population (the poor, the rich, minorities, etc.) and not just the mean; then test the same model using different tools to figure out exactly how robust your findings are.

Political Ideology precludes people from specifying and interpreting data correctly and thus leads to poor public policy decisions and failed policies.  I think that the TANF post I wrote earlier today is prime example of this.  Bill Clinton, seeking to triangulate between ideologies on the left and the right designed a policy that was completely ineffectual.  The President allowed the states and localities to continue to play the chief role in determining eligibility and benefits to satisfy conservatives on the right, completely overlooking the fact that the decentralized system was designed to keep African Americans off of the roles by 1935 southern Democrats.  This fractured the risk pool and crippled the program.

I am a Democrat because the numbers take me there.  This is not because Democrats do not let their ideology skew their analysis.  It is because Republican conservative ideology has become nothing but mere ideology that cannot be supported by any rigorous analysis. 

Thus, I will continue to bore you with tedious discussions on complicated issues that are critically important.  I hope that you will take the time to read along and comment on the way with your input.  Thanks.

Warning: Policy Wonkish post below.

I have been meaning to blog about this NYT article on the recession and America's safety net for quite some time:

Unemployment insurance is not as generous now. Yet the unemployment rate is at 6.5 percent and some forecasters say it could top 8 percent next year. It hit 10.8 percent in the early 1980s.

This is also the first severe economic slump since President Bill Clinton overhauled the welfare system and made it tougher to qualify for, and keep receiving, benefits. Many people who lose their jobs now and fall into poverty may not qualify for public assistance. Other programs designed in part to counter hard times -- like job training and housing subsidies -- have also been cut back.

If you are a follower of my blog or know me personally, you have probably picked up on some anti-Bill Clinton sentiment.  The primary reason for my President Clinton hate is the 1996 PRWORA welfare-reform bill which should serve as primary example as to how triangulated policies result in very bad policies.  I will get to the NYT article, but first let me point out TANF's  (welfare) failures:

1. By establishing welfare as a maintenance-of-effort grant, states are tasked with setting benefit levels themselves.  This has the effect of fracturing the risk pool.  By doing so, it is impossible for high poverty risk states (poor states like Mississippi) to be subsidized by the low poverty risk states (wealthy states like Connecticut).  This has made it impossible for TANF to actually reduce poverty rates as the states where poverty is concentrated cannot afford to payout enough benefits to the impoverished.
2. Because 54% of African Americans live in the South, where conservative ideology, racial stereotypes of welfare recipients, and poverty are concentrated, TANF has perpetuated the wage differentials between races.
3. It is economically inefficient - the argument behind unemployment insurance is that substantial time is required to match our labor resources with our employment opportunities.  If someone has to settle on the first job available to them, it is an inefficient allocation of the nation's labor resources.  However, if someone loses their job but does not qualify for  Unemployment, they are forced to take TANF which mandates that they be employed to receive benefits.  Thus they are incentivized to take the first job offered to them no matter if they are overqualified or not.
4. By capping the number of months that can be spent on benefits, recipients must go off TANF every month that they possibly can.  Thus many recipients live in constant flux between the TANF rolls and living around the poverty line.

The function of an effective welfare system should be to cycle people out of poverty and into stable jobs.  However, TANF, by forcing recipients to take the first job available to them, often with little prospect for advancement, and then forcing them to live floating between the rolls and barely scraping by capping the number of months benefits are available, we have created a system that is economically inefficient and does not reduce poverty. 

Now, to bring it back around to the NYT article.  The next few years will drastically test TANF's ability to serve the poor during this recession.  It has been 12 years since welfare reform, 12 years of recipients floating on and off the rolls.  As unemployment continues to skyrocket, many of these current and past recipients will be cycled off the payrolls and forced to find menial work in order to receive TANF benefits.  Given the severity of this recession, it is likely that  the labor market will take 2-3 years to recover.  It is thus likely that we will begin to see the first round of TANF recipients that exhaust their benefits.  They will not have any more benefits available to them for the rest of their life.  If this happens, poverty rates will begin to rise again and we will be forced to revisit welfare reform.

UPDATE - This was cross-posted to a Daily Kos diary, where I was honored by its mention in the Diary Rescue 

President Obama will run huge deficits in the coming years.  This is a necessary response to a desperate economy.  However, those of us concerned with equity must beware how the United States goes about repaying this debt in the future.  Roughly 45% of the debt is owned by the federal government itself.  A lesser observer may claim that a practical response would be to let the government default on the debt it owns itself.  We must not let this happen.

That debt is owned by entitlements savings accounts that are funded by the regressive payroll tax. That is to say that low-income earners pay a greater percentage of their income towards the tax.  The payroll tax is a 15% tax levied on all earnings up to $97,000 dollars.  Every dollar earned on top of this amount is not taxed.  Consider the person earning $35K.  This person will pay 15% of his income towards the payroll tax.  Now consider the person earning $200K.  This person will pay roughly 7% of his income towards the payroll tax.  This is justified (not making judgement just stating the rationale) by the fact that benefits for entitlements are funded in a progressive manner in that lower income households benefit much more from entitlements (ie. the progressivity of the Social Security benefit formula).

These funds are being borrowed from these savings accounts to pay for discretionary general fund expenditures.  The general fund is funded by the progressive income tax.  That is to say that higher income taxpayers pay a greater percentage of their income.  Therefore, as of now, the federal government is borrowing from low-income families to pay for expenditures that should be funded by higher income families. 

If the federal government were to default on this debt, it would effectively be a transfer from low-income families to high-income families.  Thus, it is absolutely essential that the federal government not default on its debt to entitlement programs. 

I am a JoeManiac.  I looooovve me some Biden. Always have.  Always will.  I was excited when then Senator Obama chose then Senator Biden as his running mate.  On top of the obvious political advantages of having someone with a blue collar background and ties to Pennsylvania, the pick really solidified my belief that Barack Obama cared about the nuances of public and foreign policy. 

For all of Vice President-Elect Biden's shortcomings (which often make him more appealing to a guy like myself), he has very attractive credentials that Barack Obama should avail himself of.  The first is obvious: foreign policy.  Anyone trolling through tpm blogs at 10pm probably already know about Mr. Biden's credentials in this area so I don't see any need to dwell on them.  The second is that he would be a very useful liason to the senate where he has many powerful connections on both sides of the aisle.  Thirdly, his time in Washington should make him a go to guy on all matters political, from the intricate process of policy development and implementation, to agenda setting. 

JoeManiacs like myself are feeling pretty concerned that Obama will not use Mr. Biden efficiently.  This concern is probably wholly without merit, as all of my intuition about the President-Elect tell me that he is a man that values smart people and their opinions.  However, I guess we were hoping that Mr. Biden would play a large role in the administration.  As it looks right now, the roles that he would be most suited for seem to be getting crowded out by larger personalities like Senator Clinton and Rep. Rahm Emmanuel.  So I guess the point of this posting is thus - how bout letting us know what Joe is going to do?