Day: March 10, 2009

Obama’s Housing Plan

The Obama administration released guidelines on its plan to stem the collapse of the housing market with its “Making Home Affordable” initiative, or Homeowner Affordability and Stability Plan (HASP). The plan claims to offer “assistance to as many as 7 to 9 million homeowners.”

Part of the program, costing $75 billion, pertains to private lenders, providing funds to them if they agree to renegotiate home loans. A separate $200 billion component will make funds available to Fannie Mae and Freddie Mac, the two federally-backed mortgage lending giants, so that they can modify a share of the home loans they control.

The newly-announced guidelines pertaining to private lenders make clear that the program’s primary aim is not to assist homeowners, but to further prop up the banks. The plan does not reduce the grossly overvalued debt homeowners owe banks. It will not affect homeowners “underwater” by more than 5 percent—that is, those who owe more than 5 percent more than their homes’ current market value.

Hurdles have been thrown up to prevent easy access to the program. In order to qualify, homeowners must submit an “affidavit of financial hardship,” in addition to payroll documents, tax forms, and extensive information about other debts and assets in order to prove that they have made “every possible effort” to pay their mortgages. Some participating households will be required to seek debt counseling through government-approved “community organizations,” funded by HASP.

According to Moody’s Economy.com about 27 percent of homeowners, or 14 million out of 52 million households, are underwater, owing more than their houses are worth. A survey by First American CoreLogic, the research wing of a major real estate and home title firm, has found that the number of underwater homeowners is likely to increase markedly in the coming months. If home values should fall by the relatively modest figure of 5 percent, another 2.16 million homes would go underwater, according to the report. Housing values have already fallen by 26 percent since 2006 as measured by Standard & Poor’s/Case-Shiller index.

This plan has little chance of helping the majority of the homeowners….it will however give those that may not need assistance help while condemning others to homelessness.  Your tax dollars at work.

AIG Plays The Country Well

American International Group Inc. appealed for its fourth U.S. rescue by telling regulators the company’s collapse could cripple money-market funds, force European banks to raise capital, cause competing life insurers to fail and wipe out the taxpayers’ stake in the firm.

AIG needed immediate help from the Federal Reserve and Treasury to prevent a “catastrophic” collapse that would be worse for markets than the demise last year of Lehman Brothers Holdings Inc., according to a 21-page draft AIG presentation dated Feb. 26, labeled as “strictly confidential” and circulated among federal and state regulators.

“What happens to AIG has the potential to trigger a cascading set of further failures which cannot be stopped except by extraordinary means,’’ said the presentation by New York- based AIG. “Insurance is the oxygen of the free enterprise system. Without the promise of protection against life’s adversities, the fundamentals of capitalism are undermined.’’

Regulators revised AIG’s bailout last week to ease loan terms and extend $30 billion in fresh capital after the firm posted a $61.7 billion fourth-quarter loss, the worst in U.S. corporate history. Lawmakers are reluctant to give more support beyond the package already in place, worth about $160 billion, because they say regulators haven’t given enough detail about how the funds are being used or when the bailouts will end.

The insurer’s first bailout package, crafted last September, later grew to $150 billion. After failing to sell enough subsidiaries to repay the government, AIG had to turn to U.S. taxpayers again. The company may need more support if financial markets don’t improve, the Treasury and Federal Reserve said last week in a joint statement.

Now ask…when will this stop?  How long must we, the taxpayer, subsidize AIG and the like?  When is enough, enough?

Are Repubs Really Leaderless?

Sixty-eight percent (68%) of Republican voters say their party has no clear leader, according to a new Rasmussen Reports national telephone survey. Another 17% are undecided.

Just five percent (5%) view either John McCain, the GOP‘s unsuccessful 2008 presidential candidate, or new party chairman Michael Steele as the party’s leader.

Two percent (2%) see conservative radio commentator Rush Limbaugh in that role, and one percent (1%) name McCain’s running mate, Alaska Govenror Sarah Palin. Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner are each seen as GOP leader by less than one-half of one percent.

Democrats have no question who’s in charge. Two-thirds of the party’s voters (66%) see President Barack Obama as their leader. Nobody else reaches even the five percent (5%) level.

Rasmussen Reports found that just 11% of Republicans agreed with the statement “Rush Limbaugh is the leader of the Republican Party. He says jump, and they say how high.” This was a comment made by Brad Woodhouse, president of an advocacy group running national television ads linking Limbaugh to the Republican Party. His comment came at the same time that top White House officials were saying Limbaugh is the leader of the GOP.

Some pundits, however, wondered if the harsh nature of the quote might have diminished the apparent support for Limbaugh as party leader. In the current survey, we simply asked if Limbaugh is the leader of the Republican Party. The different wording had virtually no impact on the GOP responses: Only 10% said yes.

The Lie Of “Clean Coal”

We are hearing a lot in the media about the use of “clean coal”; even the president is pushing this concept…but people…that is all that it is…a concept…..and above all it is a lie…there is NO such thing as “clean coal”.

The project’s goal is to test and develop affordable technology, on a commercial scale, that can remove 90 percent of emissions produced by coal plants. Chu said he thinks that the plant — which would be built with a group of private coal and utility companies known as the FutureGen Alliance — will move forward with some changes that have not yet been determined and will become a part of larger “portfolio” of research plants developed with other countries.

The FutureGen plant is expected to create jobs, and backers are currently pushing it as a stimulus project that could employ as many as 11,000 workers. The alliance must compete for the stimulus funds, but Chu’s support adds significant momentum to the effort.

There are a few testing ways to clean coal emissions, but that does not make coal a clean source of energy.  One technique is called carbon sequestration and storage (CSS).
CCS technologies attempt to capture carbon dioxide (CO2)from the waste stream of coal power stations and transport and bury it in underground reservoirs.

The problem with CCS, in a nutshell, is that it is too little, too late, too expensive, too risky, and it displaces other solutions that can do the job.

CCS has very few of the attributes needed to provide a solution and moves us in the wrong direction. CCS is still in the testing phase and will take a decade or two before it can be implemented in actual working power plants, and then still further decades before it could be scaled up to operate on large numbers of coal plants around the globe. That is too late to change the course of our energy system away from carbon, and too late to prevent emissions crossing a tipping point.

Demonstration CCS projects all plan to operate close to underground storage sites. One of the problems of scaling up CCS is that most coal power plants are not near appropriate storage sites and so very expensive infrastructure would need to be built to transport the captured carbon dioxide. This means that costs of CCS will increase as it is scaled up and the transport infrastructure costs mount.

CCS is too expensive. It will substantially increase the cost of building coal plants (perhaps a near doubling of plant cost, according to the US Department of Energy) and therefore increase the cost of electricity also. The energy required to remove CO2 from the coal plant stream is also substantial and would consume up to 40% of the energy used by the plant.

Thus, coal plants fitted with CCS would require more fossil fuel inputs, and the prices of these inputs can only increase as time goes on and carbon is more fully costed.

The costs and risks of CCS will be passed on to the public, whereas renewables and efficiency aren’t exposed to these costs and risks. The costs of research and testing of CCS are being borne in substantial part by the taxpayer, not by the already heavily subsidised coal industry. Australia subsidises coal over renewables research by a huge margin and the gap is increasing. The risks of long-term storage of CO2 are so great that no company will take on the liability and many are seeking to limit their legal liability to a mere 10 years.
CCS provides a means for the coal industry to continue reaping the profits while passing on the risks and costs to the public.

CCS delays action to reduce emissions at a time when we can no longer afford to wait, and it displaces those solutions that can work now and have a lasting impact. WWF’s notion of so-called “clean coal” is an oxymoronic vision of Australia’s energy future that will derail real efforts to confront climate change if we let it.

Enough said?

New Buzz: Health Care

Major newspaper, broadcast and cable stories mentioning healthcare reform in the week leading up to President Barack Obama’s March 5 healthcare summit rarely mentioned the idea of a single-payer national health insurance program, according to a new FAIR study. And advocates of such a system–two of whom participated in yesterday’s summit–were almost entirely shut out, FAIR found.

Single-payer–a model in which healthcare delivery would remain largely private, but would be paid for by a single federal health insurance fund (much like Medicare provides for seniors, and comparable to Canada’s current system)–polls well with the public, who preferred it 59-to-32 over a privatized system in a recent survey (New York Times/CBS, 1/11-15/09). But a media consumer in the week leading up to the summit was more likely to read about single-payer from the hostile perspective of conservative columnist Charles Krauthammer than see an op-ed by a single-payer advocate in a major U.S. newspaper.

Over the past week, hundreds of stories in major newspapers and on NBC News, ABC News, CBS News, Fox News, CNN, MSNBC, NPR and PBS’s NewsHour With Jim Lehrer mentioned healthcare reform, according to a search of the Nexis database (2/25/09-3/4/09). Yet all but 18 of these stories made no mention of “single-payer” (or synonyms commonly used by its proponents, such as “Medicare for all,” or the proposed single-payer bill, H.R. 676), and only five included the views of advocates of single-payer–none of which appeared on television.
In contrast, the terminology of choice for detractors of any greater public-sector role in healthcare–such as “socialized medicine” and “government-run” healthcare–turned up seven times on TV, including once on ABC News’s This Week (3/1/09) and five times on CNN. CNN senior medical correspondent Elizabeth Cohen has herself adopted this terminology in discussing healthcare reform, stating (CNN Newsroom, 2/26/09) that “if in time, Americans start to think what President Obama is proposing is some kind of government-run health system–a la Canada, a la England–he will get resistance in the same way that Hillary Clinton got resistance when she tried to do tried to do this in the ’90s.”

Particularly in the absence of actual coverage of single-payer, such rhetoric confuses rather than informs, blurring the differences between the Canadian model of government-administered national health insurance coupled with private healthcare delivery that single-payer proponents advocate, and healthcare systems such as Britain’s, in which healthcare (and not just healthcare insurance) is administered by the government.

Something eventually must be done…we can either do it now or wait and saddle the decision with our grandchildren…..my guess is that they will choose the later…the cowards that they are.