The Wrongologist

What’s
Wrong Today:

Most
rental houses in the US are owned by individuals, or local businesses,
but a new breed has emerged: Wall Street-backed investment companies with
billions of dollars at their disposal, while having no problems trying to find insurance for landlords either. In
just the last two years, large investors have bought as many as 200,000
single-family houses and are now renting them out.

This incursion
by hedge funds and private equity groups into the American single-family home
rental market is unprecedented. Prior to the real estate meltdown in 2008, most
rental properties were owned by individuals or small real estate investment
companies. After the crash, many of those foreclosed houses have been purchased
by investors, but are these investors actual landlords with experience or do they have experienced landlords manage their properties for them? Many of these properties are rented out by those who have taken the time to read a great out of state real estate investing guide, and are fairly rented out, but many are handled in less favorable ways. Either way if billionaires are leasing properties out, there will be many leases they have to handle, which would be made much easier with a lease agreement template from associations like AAOA and more.

Three firms
? American Homes 4 Rent, Colony American and Invitation Homes ? have spent more
than $12 billion buying and renovating more than 75,000 homes in order to rent
them out. Now, American Homes 4 Rent is about to “Securitize” the leases it
holds. Remember Securitization? Securitization of the mortgages of single family homes was the
primary reason we had the economic crash in 2007, the crash that brought with
it such high unemployment, much of which is still with us today.

This time,
the securities – if you can call them that – are backed by rental payments on
single-family homes that are, hopefully,
rented out, and will, hopefully,
stay rented out.

According
to the New
York Times, the
latest company to test the frontier in securitization is American Homes 4 Rent
(AMH). The company talked to
prospective investors at a conference in Las Vegas last week about selling
securities tied to $500 million of debt. Apparently, the bonds will be underwritten in March by Goldman, Sachs.

The idea is to
package the leases signed by the home renters into a security backed by the
stream of rental payments to be paid by those renters, and sell the security to
investment groups and individuals. The private equity giant Blackstone Group,
backer of Invitation Homes, sold the first single-family rental securitization
of its kind last fall, a $479 million bond, attracting six times as many
investors as the private equity firm could accept.

Rental lease securitization
could provide a pick-me-up to Wall Street’s mortgage-backed business. Bankers
estimate that single family-rental bond deals could total as much as $7 billion
this year and eventually grow to about $20 billion a year. From Bloomberg:

For landlords like
American Homes 4 Rent, securitizing debt would provide them with more leverage
to buy more homes. It would also increase their profits by lowering their
borrowing costs. And with securitization, landlords could put as
little as 25% of equity into their properties, while borrowing the rest. Credit
lines from banks typically require 40% equity.

In many
markets where these mega-landlords bought vacant single-family homes, like
Phoenix or Las Vegas, prices have jumped 25% or more in just one year. But
these price gains may be ephemeral. If (when) home prices drop to where they
were a year or two earlier, and if occupancy isn’t high enough to service the
debt, these securities could turn into toxic waste.

The next
step will be to move down-market and offer this kind of securitization to all single family rental
investors, including mom-and-pop investors, and other small and
large investors. Cerberus Capital and Blackstone are already working on
offering similar programs to them.

In the
end, these rentals could all be packaged together, sliced into different tranches,
and sold indirectly to unsuspecting pension fund participants. Just like in
2007. All based on the unreliable income streams from rentals.

The impact
of this vulture capital buying program has been showing up in the housing numbers
for months. Purchases by first-time
home buyers ? the crux of the housing market ? dropped to just 27% of all purchases in December 2013, from 30% in
December 2012, and from the 30-year average of 40%.

It is the
lowest recorded in the data series going back to 2008. First-time buyers
have been pushed out by higher home prices, higher mortgage rates, and a flood
of cash buyers (in Florida, 62.5% of all buyers) many of whom are
investors.

If
you were around in 2008, you know the drill: The bonds will be AAA rated by the
rating agencies that are compensated by Goldman and the other underwriters. The
bonds will be sold to those seeking high yield without commensurately high
risk. The deal documents will not be read. Goldman salespeople will travel
around the globe finding suckers to buy the paper and get big commissions. The
investment banks will short the bonds in the interest of risk management. American
Homes 4 Rent executives will pocket incredible bonuses, move their primary
residences to a tax haven state like Florida or Nevada, and be retired from the
business before you know it.

Any
predictions on how this turns out?

How
nice that Wall Street is now buying back homes they first financed then turned
into worthless Mortgage Backed Securities (MBS). Now they are buying them back
and renting them back to same folks they foreclosed upon.

The
saying in real estate used to be: “You
can’t get hurt if you own the dirt”. One reasonable conclusion is that fewer
Americans will ever own the dirt.

Capitalism
must be refined and modified, or we will continue to see fewer owners and more
who will be renters from cradle to grave.

Today is the day when bloggers are asked to
promote less-well-known sites they like within their networks.

Here is the Wrongologist’s list:

Foreign Affairs:

al-Monitor
– Go-to site for Middle East politics

Arms Control Wonk
– Analysis of arms control issues

Back Channel
– Go-to site for Iran & the international community. Part of al-Monitor

Moon of Alabama
– Alternative viewpoints on foreign affairs

Fun and Lifestyle:

Bob Lefsetz  – Bob specializes in music and marketing

Andy Borowitz –
Comedian writes Onion-style political headlines

Political
Carnival – Mostly humor, some political analysis

Jack Cluth
– Snarky political comment

Politics:

Political
Moneyline – Stay on top of money-raising by politicians

George
Washington’s Blog – Fact-based rants on issues of the day

Ed
Kilgore (Political Animal) – All day blogging on DC politics

Health:

Incidental
Economist  – MD’s who specialize
in the economics of health care delivery

Economics:

Calculated
Risk – Great analysis of economic stats of the day by Bill McBride

Economic Populist
– Thorough analysis of economic news

New Economic
Perspectives – Commentary on political economy and economics

Off The Charts
Blog – Commentary on political economy

NSA and Surveillance:

Empty Wheel – Indispensable
site for NSA and surveillance issues

Perhaps we should also have a “Guillotine Day” as well. What
blog needs to be unceremoniously cut off?

What small blogs do you recommend? Let us know the comments
section.

Super Bowl Sunday!! Also Groundhog Day…this is the first time they occur on the same day:

Whether Punxsutawney Phil sees
his shadow or not, we will have 6 more weeks of Super Bowl commercials. And 6
more weeks of posturing by Democrats and Republicans about the Minimum Wage,
unemployment and inequality. Oh, and the
Debt Limit increase should take 6 more weeks of something. So, here comes 6 more weeks of frozen
politics.

Safer than football:

SOTU reveals issues in the family:

Republicans engage in endless debate, still get wrong answer:

Plutocrats position to negotiate with Obama on Minimum Wage:

Pete Seeger’s song about the 1%:

What’s
Wrong Today

Yesterday
we wrote about inequality and how for some, notably the
ultra-rich and their Republican servants, the word is a proxy for class
warfare. Today, let’s go beyond talk of class warfare and look at the tools at our
disposal to improve the level of equality in America.

What
can be done to reduce inequality? The Obama Administration said raising the
minimum wage was a good starting point.

If we are
talking about a $10.10/hr. minimum wage, then according to the Economic Policy
Institute,
(EPI) about 30 million Americans
would get raises, including the thousands of Wal-Mart employees. That would clearly
help inequality.

Reducing
unemployment could have the largest impact on inequality. In his SOTU, President Obama mentioned
that 8 million jobs were created during his time in office. Since peaking at 10%
in October 2010, the unemployment rate has fallen more than 3 percentage
points. But The EPI’s new report on long-term unemployment has some encouraging
and depressing findings. Here is the encouraging finding:

The depressing
finding: (emphasis by the Wrongologist)

Based
on the 2010 Census, in four of the five states with
the largest populations, more than 40% of unemployed people have been out of
work for at least six months.

Restoring
unemployment insurance to the long-term unemployed or Disability insurance to those finding themselves out of work will help a little, but it
doesn’t move the inequality needle. People need jobs. And while Mr. Obama
touted a new commitment from chief executives to give long-term unemployed
workers a “fair shot at new jobs,” that won’t change things in a significant
way.

Here’s
why:

Google
has 47,756 employees, Facebook has 5,790. Microsoft has 100,000, Amazon has
109,000. Apple has 80,300. That totals to 342,846 full and part-time jobs. That’s
just 10% more than GE, which has 305,000 by itself.

And
the total employment of these tech giants equates to roughly two months of new
job seekers that enter the US job market every
month.

In
other words, it’s a pipe dream to believe that the tech giants, Internet
startups, and app developers will ever
employ the same number of people that manufacturing once did. There will
be even fewer realistic routes to full employment in the US as robots become
cheap, efficient, and more flexible.

Last
year, a new Wal-Mart opened in DC and advertised that 400 people would be
hired. Over 20,000 people applied for those 400 jobs, making it harder to get a job at Wal-Mart than to get into Harvard.
And, when there are 10 jobs and 30 job seekers, that doesn’t mean that society
has 20 slackers.

It has
become clear that we have entered an era where businesses just don’t need as
many people to produce the goods and services we use each year. The problem
will become even clearer with the introduction of self-driving cars (goodbye to
most taxi, bus and truck drivers) in the next 10-20 years. Bluntly, there
simply won’t be enough job slots for the entire population.

This means it’s time to assess the future
of work in the US.

Job
openings in the US have improved since the bottom of the Great Recession, but we
still have nearly 1.2 million fewer jobs
available on a monthly basis than before the recession:

And
there are roughly 3 unemployed people looking for each of those available jobs.
 

Lastly, today, we still
have 2 million fewer people working than were working in 2008!

Is
it any wonder that Pew Research says that the proportion of
Americans who identify themselves as middle class has dropped sharply in recent
years? Today, about as many Americans identify themselves as lower or
lower-middle class (40%) as say they are in the middle class (44%). At the
same time, the share of the public who says they are in the lower or
lower-middle classes rose by 15 percentage points, from 25% in 2008 to 40%.

This is inequality we cannot fix
without wholesale changes in our politics. The Anti-Keynesians are just plain
wrong; they are never confused by facts, they just ignore them.

Full
employment could return in time. According to the Wall Street Journal, the number of
children US women are expected to have over their lifetime slipped last year to
1.88 from 1.89 in 2011. That is below the nation’s so-called “replacement rate”
of 2.1.

Compare
that to the birth rates during the late 1940’s and 1950’s when we experienced
the Baby Boom, and it ranged from 3.0-3.5.

All
of that means we may get back to equilibrium of jobs required to jobs offered
sometime in the next 20 years, but not
in the next 5 or 10 years. In the meantime, we are  going to have to recognize that work, as we
currently conceive it, may no longer be the principal contribution to society
for many adults. 

One thing
we could be doing is refreshing our infrastructure. The American Society of
Civil Engineers provides an annual report card on our crumbling
infrastructure. It shows that we need to spend $3.6 Trillion on our
infrastructure by 2020.

Rebuilding
our infrastructure could be a great source of temporary jobs that could help
bridge our workers to the point where all the Boomers will have retired and our
smaller, more-tech-savvy work force can be at near-full employment.

We will
pay for the lives of these out-of-work people indirectly, through unemployment
benefits, food stamps, Social Security, Medicare and Medicaid, so what would be
wrong with paying many of them directly while we upgrade our roads, ports,
airports and build a ubiquitous high-speed Internet?

We used to live in an
industrial age, an Adam Smith and Karl Marx world, where the worker sought to
do as little as possible and the boss tried to get the worker to do as much as
possible. But today, in our self-serve economy, that’s
just not true. Today, people supply their own locomotion.  It will take another
generation for that to be a frictionless factor in our world of work.

Income
distribution is something society can and should decide. There is no intrinsic
reason why most of the benefits of our technology economy should go only to the
1% – that is really a matter of policies such as tax policy, minimum wage
policy, and pension policy.

In a
democracy, these policies should be decided by the majority, not by the 1% and their
political servants.

What’s Wrong Today:

Mr. Obama stuck his toe into the political waters about inequality at the SOTU address on Tuesday. For some perspective on income inequality, Igor Volsky at Think Progress reports that: (emphasis by the Wrongologist)

From 1979 to 2007, the top 1% of families experienced a 278% increase in their real after-tax income, while families in the middle 60% saw an increase of less than 40%. During this period, many blue collar jobs become automated by advances in technology, American workers started competing against cheaper overseas labor, and the number of workers represented by unions dropped from 20% in 1983 to 11% today. As the earnings of lower and middle income Americans stalled, however, CEOs…began paying some of the lowest tax rates in the country’s history

Stanford University reports on America’s global ranking in income inequality: (emphasis by the Wrongologist)

The US ranks third among all the advanced economies in the amount of income inequality. The top 1% of Americans control nearly a quarter of all the country’s income, the highest share controlled by the top 1% since 1928

The Wrongologist has written previously about inequality here and here.

Mr. Obama has been reluctant to talk about income inequality. In the New Yorker’s long piece about President Obama by David Remnick, there was an illuminating quote: (emphasis by the Wrongologist)

 

In 2011, at an annual dinner he holds at the White House with American historians, he asked the group to help him find a language in which he could address the problem of growing inequality without being accused of class warfare

Democrats are afraid of saying anything that can be construed as class warfare, which seems to be the sole property of conservative pundits. Democrats are afraid that they will be portrayed as socialists or worse. The fantasy is that Democrats and progressives can’t even mention inequality and the solutions to inequality.

Even Mr. Romney in 2012 attacked Mr. Obama about “redistribution” of wealth whenever increased taxes on the 1% were raised during the campaign. Yet, last week one billionaire, Tom Perkins, the founder of the fabulously successful venture capital firm Kleiner Perkins, tripped over his own dough when he wrote a letter to the Wall Street Journal: (emphasis by the Wrongologist)

I perceive a rising tide of hatred of the successful 1%. There is outraged public reaction to the Google buses carrying technology workers from the city to the peninsula high-tech companies which employ them… This is a very dangerous drift in our American thinking. Kristallnacht was unthinkable in 1930; is its descendant “progressive” radicalism unthinkable now?

Kristallnacht?? His comments were treated with both criticism and snark, so he took to Bloomberg TV to amplify his thinking: (emphasis by the Wrongologist)

I don’t feel personally threatened, but I think a very important part of America, the creative 1%, are threatened…I think rich as a class are threatened by higher taxes and higher regulation

Alternate read: The rich are different. They have class interests, they know it, and they act on them. But you progressives can’t or we will attack you.

Perkins transgressed the unwritten law: You never talk about class in America, because that would be “class warfare.” You especially can’t do it in the SOTU if you’re a two-term “progressive” Democratic President who is exquisitely attuned to the rules of what can and can’t be said.

Lambert Strether tells us: (brackets and emphasis by the Wrongologist)

Our elected officials listen to their [the 1%] opinions…their jobs depend on not recognizing…how stupid [their opinions] are. It is impossible to get elected president without the backing of a cadre of multimillionaires. It is nearly impossible to get elected to the US Senate without a couple in your corner

Strether goes on to say:

 

…multimillionaires and billionaires fund every effective political interest group in the country, from gun rights to gay rights groups. What makes the wealthy persecution fantasy so risible is that our political class is responsive almost solely to the priorities and views of the rich

The “we are a classless society” fantasy serves a purpose: It prevents Congress from actually acting to address economic inequality. As long as the rich perceive even ineffectual social opprobrium as an existential threat, politicians will be afraid to advance any actual agenda that might hint at redistribution.

If a study last March by political scientists Benjamin Page, Larry Bartels, and Jason Seawright at Northwestern University is any indication, the rich have little interest in solving America’s inequality problem. According to the report—which surveyed a sampling of the richest 1% of Americans—the wealthy are almost categorically opposed to efforts to reduce inequality and improve material conditions for working- and middle-class people.

Some findings:

• 40% support an increase to the minimum wage


• 32% support universal health insurance


• 30% support expanded worker training programs


• 13% support an expansion of the Earned Income Tax Credit


• 8% support a government jobs program for the unemployed

By contrast, the general public is much more supportive of all of these positions. What the rich do support, however, are policies that would shift burdens to individuals, or introduce some nebulous “competition” into the commons. That includes charter schools (90% support), vouchers (55%), Social Security privatization (55%), and merit pay for teachers (93%).

The Daily Beast editorialized:

If this agenda looks familiar, it’s because it’s basically identical to the one pushed by “centrist” deficit hawks in Washington, who have devoted themselves to the consensus positions of business and other economic elites

Never in modern times have taxes on the rich been so low, subsidies so large, legal forbearance so complete, regulations so meaningless, and the state so fully at the beck and call of the rich. Our entire government is oriented around making the rich richer and protecting them from consequences of their actions.

Even though there has not been a better time to be rich in more than a century, it is NOW that the rich complain about taxes and regulation and a hostile business environment.

Is this a cynical, self-aware ploy to press their advantage? Or are we getting a glimpse of the narcissistic pathology that underlies the thinking of so many members of the ultra-rich?

Now that the middle class has largely been destroyed, we have the poor, the working class and the investment class. There are fewer people to contribute revenues to the government that is continuing to provide massive support to the investment class.

So, the ultra-rich’s idea is to let the working class and the poor twist in the wind, the roads deteriorate and the schools fall to ruin.

But they say, we gotta keep funding the military and keep militarizing local police in case the lower classes get the idea that this way of governing is unfair.

What’s
Wrong Today:

Like
many, the Wrongologist watched the SOTU last night. You can read the text of
Mr. Obama’s speech here.
There will be millions of words written today about the SOTU, so let’s focus a
bit on the GOP response and what it tells us about the loyal opposition. Cathy McMorris
Rogers (R-WA), gave the rebuttal. You can read the text of her speech here
and learn more about her votes in the House here.
She is now the 4th ranking person in the House Republican
leadership.

Let’s
unpack her talk:

“Republicans have plans, big
plans! But they are not gummint plans. Never any icky gummint plans.
They are Republican plans. Big Republican plans!

(Sadly she had no time to explain any detail of any Big Plans.)

She did have time to fill the air with adjectives about how you will feel, how warm and happy and yummy in your tummy you will feel.

About yourself, and about America.

And after the Republican’s Big Plans have succeeded in solving every
problem and wiping every tear from your eyes, there will be no more crying or
pain, when the old order has passed away.

Amen.”

OK,
that was snarky. Let’s look at a few actual quotes from her talk:

Republicans
want you to be empowered to make your own decisions. This is a Republican theme
that appears in every one of their proposed solutions to any problem, real or
perceived. It disregards the fact that
those below the poverty line, those who are long-term unemployed, the poor
elderly, and those with food insecurity or job insecurity HAVE FEW OR
NO OPTIONS.

Their
choice is between paying rent or buying medicine this month, between taking the
bus or walking to the store, between phone service and internet service.

Ms.
McMorris Rogers, like all Republicans, are in an idealized, out-of-touch place
where everyone is middle class, and that they have at least some savings that
gives them the choice between staying in the dead-end job they have, and going
to school to improve themselves.

Speaking
of choices, she continued:

Another
Republican idea that glosses over the real facts of health care. Before the ACA
most healthcare was tied to the employer’s group plan. So, if you lost your
job, you lost your healthcare, except for a small minority of insured’s who had
individual plans that were job-independent. So how much choice would Republicans
have offered to the unemployed or those who couldn’t afford health care, or
were denied insurance due to a pre-existing condition? She voted to end Medicare,
and supported and voted for the sequester, which slashed $86 million from
family planning and reproductive health care for poor women. 

Where
is your “choice” in that?  

It seems that
Republicans and Ms. McMorris Rogers in particular, are all about choice, except
for women’s issues. She is the mother of a special needs child who voted
against, and then voted to defund Obamacare 42 times. Apparently, she
believes Americans don’t deserve the coverage she has as a member of the US
House.

In
eight years, just one bill that she has authored has passed. And it was
the renaming of the airport control tower in Spokane, WA. 

That’s
her common sense record.

Fox News said Ms.
McMorris Rogers championed personal
responsibility in her response, another Republican meme that somehow
absolves them from helping the disadvantaged in America. More from the rebuttal:

Republicans
are not alone in using juxtaposition, laying out their good idea vs. the bad
idea of the opposition, but it is time
that Republicans gave us real plans that address the real problems of the
disadvantaged. We do not need more of the “then a miracle will happen”
posing by Republicans.

Their
strategy is to play to the fears of the average person in their home district, that
someone they see as undeserving could get something from the government, like health
care or food stamps or unemployment compensation. They play to the mindset of
these particular voters: That they prefer to be robbed by the rich, mocked by
their own candidates, and encouraged that their racism is secretly shared by
their leaders.

Showing
their own brand of personal responsibility, Republicans sat on their hands at
some interesting points of the SOTU speech. From Mr. Obama:

Democrats
cheered. Republicans sat in stony silence. House Speaker John Boehner grimaced
on the podium behind Mr. Obama. When the president spoke about voting rights:

No
Republican applause. What is it that Republicans don’t like? Voting, or citizenship?
Republicans rose from their seats to applaud preventing a terrorist attack on
the homeland; the military; and winning gold medals at the Olympics.

Now,
that’s backbone!

It
is a strange kamikaze mission they seem to be on, a party of discredited memes
that are unmoored from common sense, fairness, kindness and generosity.

They
came across exactly as they are.

In
the words of former Arizona Cardinals Coach Dennis Green’s rant: “They
are who we thought they were.”

 

What’s
Wrong Today:

On
Friday last week, the BBC broadcast a live TV debate about the US and
whether it has lost its way internationally. The debate was held in Davos,
Switzerland at the World Economic Forum, where hundreds of business and
political leaders spent the week discussing the world’s most pressing issues. And
networking.

The
BBC-organized debate asked the question: Has America lost touch with the world?

The
panelists included Sen. John McCain (R-AZ), Russian parliament member Alexey
Pushkov, Chairman of Russia’s State Duma Committee for International Affairs and
Saudi prince Turki Al-Faisal, former Ambassador to the US and former head of
Saudi Arabia’s Intelligence Agency, and former US Rep. Jane Harman (D-CA), who
is now President and CEO of the Woodrow Wilson
International Center for Scholars.

They
debated America’s role in the world in 2014 and whether the US is losing
credibility, influence and power on the international scene. The debate lasts 55 minutes. You can find it here.

Mr. McCain
says in a BBC
video clip (at 1:48): (emphasis by the Wrongologist)

“We”? It
was only “we” in McCain World.

McCain takes his CIA and Israeli Intelligence briefings
and believes all of it: Democracy loving young people were (are) being massacred
by the twisted dictator, and we were winning until the Hezbollah showed up!

Mr. McCain also took
Mr. Obama to task, for refusing to take stronger action against Mr. Assad for
using chemical weapons. His comments drew support from Prince Turki, who
has criticized the US for the same thing:

To Sen. McCain, the US’
main problem was that it is not active
enough on the world stage. He says that makes America’s allies feel
they can no longer depend on the US, and it leaves room for others to fill the
void. Fill the void?
Isn’t that what we tried to do in Iraq? How did that work out?

McCain droned on:

The use of
force by the US in the Middle East has not made anything better. It has created
more enemies for the US and has not led to any type of self determination.

McCain’s
BBC comments led Secretary of State John Kerry, also at Davos, to spend 37
minutes of his speaking time enumerating the many ways in which the US was
deeply engaged around the world, from trying to solve the crisis in Syria to
pushing for a settlement between Israelis and Palestinians, and negotiating
with Iran about its nuclear program.

So, we
have another in the long list of occasions where McCain undermines the efforts
of the US in its international negotiating position, this time in the Syrian
Peace negotiations. Back to the debate, Mr. McCain said his “friend” John
Kerry had a lot of work to do “as long as we have a president who does not
believe in American Exceptionalism”.

That comment brought
a retort from Mr. Pushkov, saying that the comment was “racist”. Even Ms. Harman
distanced herself from the concept of American Exceptionalism, saying that she
disagreed with Mr. McCain. Harman
said the US should be looked at differently in a post-Cold War world, as an
“indispensable partner” rather than the sole superpower.

But McCain also needs to
mend fences at home.

Arizona Republicans passed a resolution
to censure Mr. McCain for what they characterize as a liberal record that has
been “disastrous and harmful” to
the state and nation. Apparently, they are angry that McCain supports
immigration reform and failed to support the government shutdown. They fail to give
him a free pass just because he advocates
war in every
situation in most countries on
Earth.

It used to be that if
you believed in American Exceptionalism and thought that the use of America’s military
force was always a good thing, then Republicans would willingly stamp your
candidate dance card.

But now, you have to
bring much more (or less), in order to stay in the club. You have to be a
defender of the “Christian nation” philosophy. You have to believe
that women are inherently inferior and must be directed and controlled by the
hand of a man. You have to believe that dark skinned persons are a threat to
the nation’s health and security.
You have to believe
that anyone who does not succeed in life is a lazy moocher who wants everything
handed to them. You have to believe that the wealthy have attained their status
because they are better human beings. You have to believe that there is
absolutely no role for government beyond fighting wars and protecting the
elites. You have to believe that, above all else, an individual has the
pre-eminent right to own any firearm manufactured, and that they have the right to use their own personal discretion to
decide if an armed rebellion is necessary in the US.  

You see the pattern
here. The basic tenet of George Bush’s “you’re either with us or against
us” philosophy has morphed into a Frankenstein’s monster that is consuming
the GOP and our political debate.  

How ironic that this
is happening to Mr. McCain, who, as leader of the “undermine Obama’s international
position” team, along with his fellow-travelers
Lindsey Graham and Joe Lieberman get more mindshare and face time from the media than anyone
else.

That should be enough
for the Tea Party and the most conservative Republicans, but it is not.

John McCain is simply
the latest in their cross-hairs. In his case, it’s good to see it!

Its time he stood
down from politics.

The week
started with our return from Cuba. We learned a lot in a short 7 days. Read
those posts if you have time, starting
here.

Mr. Obama’s 5th State of the Union speech comes on
Tuesday. It will be accompanied by more Washington theater than usual with
three responses
by Republicans, Tea Partiers, and Rand Paul representing, well, Rand Paul.

Use this
quote by former Rep. Mo Udall (D-AZ), about the difference between the words “caucus”
and “cactus” to write your homily for this week:

Last
Monday, we celebrated the Martin Luther King, Jr. holiday. Here is what Clay
Bennett thinks about how we have managed the King legacy:

America’s voting
process is broken and neither party wants to address the true underlying issues.
A state desiring a picture ID must be willing to do whatever is necessary to
provide every voter with the required ID, including deploying mobile units to
provide them.

Reverend
King’s dream was equal opportunity. He never suggested redistribution from the
successful; he advocated for everyone to have the opportunity to be successful.
He encouraged people to prepare for and utilize opportunities.

Dr. King’s
dream was of an America providing a hand up and not a handout is far from a reality
and Congress is not helping. We still have fewer jobs today than we had at
the start of the Great Recession in 2008. Where have all the jobs gone?

Decide for
yourself whether any the following are part of the caucus coalition:

Governor
Christie lays low for now:

Mr. Obama reports that NSA is no different than Obamacare:

The Sochi Olympics are threaten by local terrorists:

Syrian negotiations won’t  produce peace:

What’s Wrong Today:

The Farm Bill expired on September 30, 2013. It happens to include the authorization for funding the Supplemental Nutrition Assistance Program (SNAP, or Food Stamps). Senate lawmakers are proposing a $4 billion cut over the course of 10 years, while the Republican-controlled House voted to slash $40 billion from the program last year. Most lawmakers think the Farm Bill will be voted on in the next few weeks.

Congress should consider the unintended consequences of cutting food stamps.

A new study from the University of California, San Francisco, (UCSF) published online in the journal Health Affairs indicates that poor people with diabetes are significantly more likely to go to the emergency room (ER) for dangerously low blood sugar at the end of the month when food budgets are tighter than they are at the beginning of the month.

The ER admissions occur because diabetics can suffer from low blood sugar (hypoglycemia), when they have not had enough to eat, but continue taking medications for the disease. The symptoms include dizziness, sweating or nausea. In rare cases, hypoglycemia can cause fainting, coma, or death.

In order to control diabetes, patients need to keep their blood sugar within a narrow band. Levels that are either too low or too high (known as hyperglycemia) can be dangerous to diabetics. About 25 million Americans, or 8% of the US population have diabetes, according to the Centers for Disease Control and Prevention. The US spends more than $100 billion a year treating people with the disease, the CDC estimates.

And the poor are disproportionately affected: In the study, UCSF researchers matched hospital discharge records from 2000 to 2008 covering more than two million people in California with the patients’ ZIP codes. People living in the poorest ZIP codes, where average annual household income was below $31,000, were counted as low income.

For each 100,000 admissions of poor people, about 270 of them were given a primary diagnosis of hypoglycemia, compared to only 200 per 100,000 among people of higher incomes. Dr. Hilary Seligman, assistant professor of medicine at UCSF, and the study’s lead author, said the difference was statistically significant.

The New York Times reported that Dr. Seligman said she and her colleagues were aware of the debate in Washington about food stamps, and sought to document whether running out of food stamps or money to buy food at the end of the month damaged people’s health. Previous research had already established that people often give a higher priority to paying monthly bills for rent or utilities, for example, than to buying food, which is managed from day to day. From Dr. Seligman:

Seligman and her coauthors posit a plausible story about the “pay cycle” that develops in households of low-income individuals. Toward the end of the month, a household’s resources—income, SNAP, Social Security, and/or other benefits—can become exhausted, ostensibly changing food consumption patterns.

From the Study’s Abstract:

The Incidental Economist blog posted this chart from the Seligman study:

The chart shows that low-income individuals are at higher risk of hypoglycemia—and the risk increases over the course of a month, consistent with a hypothesis about exhausted food budgets. Their high-income counterparts exhibit no significant trend. Appendicitis findings are offered as a comparison which shows no significant change in admissions over the course of a month.

According to the authors, “hypoglycemia is one of the most common adverse drug events leading to visits to the emergency department”, and it’s been estimated that episodes of care for hypoglycemia have an average cost of $1,186. 

For some perspective on food stamps, they are actually only about 2% of the overall federal budget. The program cost $78.4 billion in the 2012 fiscal year. The amount given to each household averages $272 per month. In the 2010 fiscal year, 40.3 million people were enrolled. Two years later, that number had jumped by 16% to nearly 47 million people. Just over 45% of those getting food stamps are children, according to the Agricultur
e Department.

In the Fox News version of America, food stamp spending is not higher than in the past because more people are poor and hungry. Rather, food stamp use is up because the Obama European Socialist Machine is deliberately trying to build a bigger, stronger, government-supporting coalition for future elections.

In reality, it’s a mirror of the social inequities that plague our nation and drive health disparities.

The poor are always first up for attacks by government. They do not make any campaign donations, and they don’t have lobbyists. Isn’t any Congressional agenda in the last 20 years simply a matter of following the money?

To Republicans, the poor are political poker chips. They are the poster children for an ever expanding government, as well as the preferred sacrifice when the time comes to “defend our principles”.

Anyone who suggests that we must care for the poor, is considered to have an ulterior motive. Give to defense contractors? That’s another story. You have to spend on defense, or the terrorists win.