…so we would know what was in it:
In other words, theoretically the law kicks them out of the federal health plan now in order to force them to join insurance exchanges … that don’t exist yet. Looking forward to tomorrow, when we’re inevitably told that they meant to do that. Exit question for lawyers: Who would have standing to sue to force the federal health plan to drop Congress now? Any citizen, or is it more refined than that?
I can’t wait until they try to pass a bill to fix that one. If it’s not filibusterable, nothing is.
[Tuesday morning update]
Legislate in haste, repent in leisure.
It’s an incumbent protection plan! All those Evil Republicans who thought they would sweep into power next fall will think twice, now that they know the job comes with no health benefits.
I can’t stop laughing at these morons, and the imbeciles who voted for them and defend them, and told us how these wise solons knew exactly what was in the bill and that we were fools for not understanding it.
[Lte morning update]
Maybe they should complain to the White House. After all, the president told us all that “if you like your current plan, you can keep it.”
Hilarious.
Wow. They really are dumber than a sack of rocks. They boggle my mind on a daily basis.
But they have Empathy.
I would sooner elect a sack of rocks to make law, than any Democrat I can think of. And most Republicans, though there are a few whose intellect is at least within a standard deviation of said sack.
“If they did not know exactly what they were doing to themselves, did lawmakers who wrote and passed the bill fully grasp the details of how it would influence the lives of other Americans?”
The New York Times should heed the warning, “Don’t ask the question if you don’t want to know the answer.”
This is the kind of thing that happens when Congress rushes to pass huge bills that they never bothered to actually read. The only bigger morons than the congresspeople who voted for this monstrocity are the people who think it was a good idea.
Geithner is pushing (in the Washington Post) a new financial “reform” bill. Here’s a quote:
First, I want to point out that he’s proposing to close “opportunities for arbitrage”. That’s supposed to be risk free trading and hence, by definition does not contribute to the problem. Now there are two ways to do this. One is to let the market itself (not the traders, the actual market mechanism) make the arbitrage trades (either pocketing the arbitrage profit or distributing it to the traders involved in the trade). Arbitrage is risk free trade, hence it is in my view a legitimate trade for a market to make. Second, is to merely make it harder to do arbitrage trades. I can’t tell for sure, but I think I’d have heard, if they planned to do the former. My view is that if they plan the latter, they will merely break the market further, introducing inefficiency without materially improvement.
This is important to me because it indicates a lack of understanding of what the terms of finance mean.
The second thing is the “wind down” provision that supposedly will only target firms that are “mismanaged”. My take is that this can easily be abused for extortion of firms engaged in lawful behavior. It sounds a really bad idea to me. Besides we have bankruptcy court already. The need is not demonstrated.
Finally, I don’t buy a bit of the premise of the second paragraph. We have centuries of evidence of rich people finding ways to put their money (and Other Peoples’ Money) into high leverage, high risk investments. My view is that they will continue to do so, no matter what Geithner says. This bill doesn’t change the fundamental problem which is that government will bailout (or “wind down” in Geithner’s Newspeak) “too big to fail” firms.
In other words, we have yet another terrible bill coming down the pipeline. This one promises to harm US competitively in the financial world for no real purpose. It doesn’t change the fundamental bubble dynamic, it gives government some powers that are unnecessary and sound ripe for abuse, and as usual, the proponents seem economically ignorant.
So is the refrigerator light still on?
Yes, because the Obamarrhoids left the door standing open and all the food is spoilt.
“My take is that this can easily be abused for extortion of firms engaged in lawful behavior.”
My take is that this is the whole idea. Using the power of the state to reward your friends and punish your enemies is an ideal way to make being your friend and not your enemy a really good idea. Crony capitalism at its finest.
The requirement for Congress to buy coverage on the exchanges was put in because Republicans (and people on this blog) were screaming that Congress had exempted themselves from the bill. They hadn’t.
Karl Hallowell – “wind down” or more accurately “resolution authority” is what the FDIC has had over banks since the 1930s. This is why, when a bank goes bankrupt, the depositors don’t go broke. When the FDIC moves in, instead of your checking account being frozen for months while the bankruptcy court argues about things, the FDIC moves it to a safe place.
Geithner is looking to a similar authority so that if a big Wall Street firm goes belly up, your stock portfolio, or your bank’s investment portfolio, isn’t locked up in bankruptcy court for months.
The requirement for Congress to buy coverage on the exchanges was put in because Republicans (and people on this blog) were screaming that Congress had exempted themselves from the bill.
Well, THAT’S why it’s now so popular! Good lord, without that requirement the thing might actually today be suffering from lack of popular support.
The requirement for Congress to buy coverage on the exchanges was put in because Republicans (and people on this blog) were screaming that Congress had exempted themselves from the bill. They hadn’t.
This blog is responsible for the way part of the bill was written? Who knew that Rand and his merry band of loyal neo-con commenters had that much power?
Well, WE knew we had that kind of power, of course. It’s nice to see Gerrib finally acknowledging it.
In any case, if I read that correctly (and, lord knows, my reading comprehension is pretty high), you’re saying that the fact that this is part of the Health Care Reform law is PROOF that there was NEVER a Congressional exemption from the HCR law.
And that the only reason that this requirement (which is in place to remove Congressional exemption) was put into the HCR bill was because people were complaining that Congress was exempt.
Where I come from, we call that “circular reasoning”. And if it’s not circular reasoning, it certainly fits some other logical fallacy.
John B – there was never an explicit Congressional exemption. Since Congressmen are citizens too, unless the bill explicitly says “except Congressmen” they have to comply with the law.
But that apparently wasn’t good enough. So in a (failed) attempt to get Republican votes, Congress was explicitly told to get coverage via the exchanges. This in fact holds Congress to a higher standard than individuals. You as an individual are not required to use the exchanges if, for example, your employer provides health care coverage.
There’s no circular logic here, just a massive amount of disinformation.
“Higher” standard? As if buying from the exchange is some great moral and ethical good. No, if anything, it merely tells them to eat the crap sandwich they dished up.
Also, you’re missing the point that it sounds very much like, thanks to the slapdash irresponsible incompetent manner in which they rammed through this grotesque Frankenstein’s monster of poorly-considered legislation, Pelosi, Reid and their galloping posse of numbskulls are legally required to drop their existing coverage NOW, and wait until the exchanges start up in 2014.
That’s the brilliance of your team at work.
So in a (failed) attempt to get Republican votes, Congress was explicitly told to get coverage via the exchanges.
And then they (failed) to communicate that fact to the Republicans whose votes they were attempting to get?
There’s no logic here, just a massive amount of comedy material.
FIFY.
Actually Curt, he’s right — just not the way he thinks.
“So is the refrigerator light still on?”
Titus wins the thread.
So is the refrigerator light still on?
Yes, but, like Nancy, it’s a dim bulb.
Actually Curt, he’s right — just not the way he thinks.
I agree McGehee. I guess we are supposed to be upset the Republicans, who didn’t vote for the bill, managed to convince the Democrats, who had to pass the bill to know what is in it and chortled at people who claimed to insist on reading the bill, to pass a bill that negatively affects Congress and makes them equal. Ask me, it seems like a feature.
This is funny too:
Since Congressmen are citizens too, unless the bill explicitly says “except Congressmen” they have to comply with the law.
Apparently another healthcare bill supporter didn’t read the bill. Indeed, Congress is explicitly written in the bill. Indeed, that’s what this thread is discussing (again someone fails reading comprehension). See here:
C) INDIVIDUALS ALLOWED TO ENROLL IN ANY PLAN.—
A qualified individual may enroll in any qualified health
plan, except that in the case of a catastrophic plan
described in section 1302(e), a qualified individual may
enroll in the plan only if the individual is eligible to enroll
in the plan under section 1302(e)(2).
(D) MEMBERS OF CONGRESS IN THE EXCHANGE.—
(i) REQUIREMENT.—Notwithstanding any other
provision of law, after the effective date of this subtitle,
the only health plans that the Federal Government
may make available to Members of Congress and
congressional staff with respect to their service as a
Member of Congress or congressional staff shall be
health plans that are—
(I) created under this Act (or an amendment
made by this Act); or
(II) offered through an Exchange established
under this Act (or an amendment made by this
Act).
Sorry to burst bubbles some had that Democrat Congressmen consider themselves just like the rest of us “we the people”. We are individuals. They are Members of Congress. Despite what Section 9 of the Constitution “Limits on Congress” says about “No Titles of Nobility”.
Geithner is looking to a similar authority so that if a big Wall Street firm goes belly up, your stock portfolio, or your bank’s investment portfolio, isn’t locked up in bankruptcy court for months.
There are two things to remember here. First, a fair allocation of resources takes time. I simply don’t think the Executive branch can divvy up the resources of a failed bank or brokerage in a fair and quick manner. My view is that we’ve already seen this in action in 2008 and 2009. For example, Bank of America has benefited greatly from the bailout of other banks and funds (like Bear and Sterns). And labor unions won big with the takeovers of GM and Chrysler.
Second, this usurps the power of the Judicial Branch. My view is that there is no legitimate justification for granting the Executive Branch this considerable power.
“This is why, when a bank goes bankrupt, the depositors don’t go broke.”
Actually, it’s because banks are required to buy deposit insurance from the Federal Deposit Insurance Corporation to be members of the Federal Reserve system. This is not related to “resolution authority”. I sure wish people would learn how insurance works. You know, risk pools, actuarial science, those insurance thingys.
One more thing, that “backed by the full faith and credit” thing isn’t really an explicit law. There’s a Senate resolution but explicit language seems to be missing from the code. Your crack legislators at work. Maybe the Democrats should pass another law so they can know what’s in it.
Bill Maron – I’ve been on the buy side of two (2) failed banks via the FDIC. Please do not presume to lecture me as to how that process works.
Specifically, the regulator (sometimes the FDIC, sometimes some other regulatory agency) has the authority to seize and close the bank. This is “resolution authority.” The regulator then transfers it to the FDIC, which cleans up, moves the deposits to another institution, and rolls up the other affairs behind the scenes.
Meanwhile, back on original topic: Mike Soja dutifully catalogues more medical central-planning frack-ups.
I’ve been on the buy side of two (2) failed banks via the FDIC. Please do not presume to lecture me as to how that process works. – written by a bank’s IT guy.
Leland – I am not “the IT guy,” I am the head of the department and a member of the senior management team. I am involved in the bid process and the actual assumption. I’ve been to the meetings where the legal process is explained, and had to explain it to a number of the failed banks’ vendors. In other words, I really do know what I’m talking about.
Leland & Bill Maron – now that I have stated the basis of my knowledge in resolution authority, I’d like to hear the basis of your knowledge.
now that I have stated the basis of my knowledge
Color me unimpressed. You’ve also claimed to have graduate degrees, yet your reading skills are poor. Anything else you want to claim rather than actually learn skills in cognitive reasoning?
5 years in commercial banking before heading to the energy business. My dad was a VP and a lawyer at a bank involved in several aquisitions of failed banks as I grew up and I heard about all of this at the dinner table. You still haven’t pointed out where I was wrong. It’s the insurance that guarantees deposits. Am I right or wrong?
You still haven’t pointed out where I was wrong.
I noticed that too. The legislation that Geithner is proposing would give “resolution authority” to FDIC for non-bank entities. One might wonder why the Federal Deposit Insurance Corporation needs to have the ability to take control of an entity that has not, you know, purchased depository insurance. Oh yeah, I guess the government can just write a law requiring any entity to purchase insurance, and then the government can give an insurance company of its choosing the right to determine the solvency of the entity rather than the market. It’s all in the Commerce Clause. You’d know that, Bill, if you had a degree in history to help you understand Con-Law.
I’ve been on the buy side of two (2) failed banks via the FDIC.
Wow. That’s a pretty naked alignment of interest with government. If you really have been on the “buy side” of such things, then you know they’re pretty good deals. Among other things, it’s a sneaky way to inject capital in your own bank without the appearance of a bailout.
To correct one of my previous examples, JP Morgan bought Bear Stearns. Bank of America bought Merill Lynch. Both deals helped greatly the banks who were the buyers.
Bill Maron – insurance covers the deposits. Resolution authority is what allows you to go in and take over. BTW, Dodd’s bill requires “pre-funding” (AKA “insurance”) for the institutions covered. Also, the resolution authority would go to the Federal Reserve, not the FDIC.
Leland – or we could let WaMu fail and instantly bankrupt millions of Americans.
Karl Hallowell – they are also pretty good deals for the depositors since they don’t loose any money. Regarding capital – wrong again. If you aren’t sufficiently capitalized for your pre-bid size, you can’t even bid.
we could let WaMu fail and instantly bankrupt millions of Americans.
By all mean, please expand upon this fantasy you have.
Karl Hallowell – they are also pretty good deals for the depositors since they don’t loose any money. Regarding capital – wrong again. If you aren’t sufficiently capitalized for your pre-bid size, you can’t even bid.
Wrong about what? After the takeover they were sufficiently capitalized. Before, the regulators desperately needed someone to take over the bank or fund. So of course, they were “sufficiently capitalized”.
Leland – if a bank fails without insurance, all of the depositors are suddenly broke. The money they had in checking and savings accounts evaporates, and any outstanding checks bounce. If that wouldn’t cause a wave of personal and business bankruptcies, I don’t know what would.
Karl Hallowell – when a bank fails, the regulators seize the assets, not the bank. The stockholders and managers are wiped out. The bidding bank must be “well capitalized” before it can bid. “Well capitalized” is not a turn of phrase – it’s a specific ratio of capital to risk assets. If you need a bailout, you can’t bid.
The bidding bank must be “well capitalized” before it can bid. “Well capitalized” is not a turn of phrase – it’s a specific ratio of capital to risk assets. If you need a bailout, you can’t bid.
That’s an interesting opinion. All I can say is that it looks to me like J. P. Morgan and Bank of America probably wouldn’t be around today, due to their exposure to the real estate and derivatives markets, if it weren’t for the opportunities to make those bids. That doesn’t strike me as “well capitalized”.
Karl Hallowell – the requirement to be well capitalized is not my opinion. It is a fact, written into the FDIC bid requirements.
Karl Hallowell – the requirement to be well capitalized is not my opinion. It is a fact, written into the FDIC bid requirements.
Looking at the facts for the two firms I mentioned, Merill Lynch and Bear Stearns, neither was a bank and neither was handled by the FDIC. Both were bid off with shifty behavior from the Fed who in each case extorted one or more parties to the transaction (Bear Stearns was forced to sell to J P Morgan while Bank of America was apparently bullied into buying Merill Lynch). These occurred in 2008 under the Bush administration FWIW.
Second, the FDIC bidding process for a failed bank is so opaque, I don’t see how anyone can determine whether the FDIC follows its own rules (and what is the winning criteria for a bid? seems to me that it’s not just highest offer gets the bank).
Third, a large part of resolution authority is the power to take wealth from the equity holders (who completely lose their stake in the process) of the business in question and transfer it either to government or to another business. I don’t see the need for such a tool. I grant that banks have lived with this liability for ages (so their equity holders are familiar with the risk), but I don’t see it as fair to many other corporations that weren’t so insured. This is more evidence that bankruptcy court provides a fairer distribution of assets.
Thinking about my last post, I’ll have to say that I simply don’t know enough about the banking industry or other industries to debate Chris Gerrib. Unfortunately, he is part of a group that I don’t trust enough to allow arguing from authority. I’ll cease to debate the FDIC stuff except to say, that the more I look at it and recent events, the less impressed I am by the law in this area.
if a bank fails without insurance
Washington Mutual Bank was insured. Washington Mutual Incorporated, the holding company of Washington Mutual Bank, was not insured. That’s because the FDIC insures deposits, not holdings. The depositors would have been protected if WMB or WMI failed.
Now I ask again, explain the fantasy of how WMI or WMB would fail. WMI had the liquid assets to cover what JPM wrote off as bad debt. The same holdings were wiped out that would have been wiped out if WMI was allowed to fail. A few more depositors with greater than the $100,000 insured deposits received more funds than insurance would have covered. Was that really worth wiping out the share and bold holders of billions of dollars? For the benefit of JPM share holders?
Karl Hallowell – after the bids are in and the winning bid selected, all bids are released to the public. The reason that the assets are moved to another company is that it is cheaper and less disruptive to the customer. From the customer’s perspective, the only thing that changes is the sign over the front door.
Leland – no, the holding company did not have sufficient liquid assets to cover their debts. If they did, WaMu wouldn’t have failed.
no, the holding company did not have sufficient liquid assets to cover their debts. If they did, WaMu wouldn’t have failed.
When you start off when a false statement; then it is easy to make things sound right. The problem is, the holding company did have sufficient liquid assets. The FDIC insurance is to protect depositors assets in a bankruptcy. WaMu filed bankruptcy only after FDIC seized them and after the FDIC sold off its $307 Billion WMB asset to JPM for $1.9 Billion.