Kat's Catches

By John and Kat

One picture from CBS Money Watch is too good to miss.I like the caption:

Here�s a glimpse of the Baconator Triple, from the Wendy�s web site � I guess it�s like an eclipse of the sun, so overwhelming you�re not supposed to look at it directly.

Like a Warhol painting, the image captures an important part of how we live.... indulgent to appetites and indifferent to consequences.

It's a metaphor of our politics: looks good, sounds good, feels good, so gimme some. Quick before somebody else gets any.

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Bankers Ignored Signs of Trouble on Foreclosures
Inexperienced employees and a lack of organization led to chaos in the foreclosure process at many lenders. ["Ignored" or orchestrated?]

 

U.S. Aids Taliban to Attend Talks on Making Peace
The United States� effort to support preliminary talks with the Karzai government might reflect growing pessimism that the buildup of American forces will defeat the Taliban. ["Growing"....???]

• Civilian Cargo Plane Crashes in Mountains East of Kabul

• 18 Iran Guards Killed by Blast at Their Base   The base is close to Iran�s restive Kurdistan region, the site in recent months of several attacks on the Revolutionary Guards

• U.S. to Let Insurers Raise Fees for Sick Children 

The Obama administration, aiming to encourage health insurance companies to offer child-only policies, said Wednesday that they could charge higher premiums for coverage of children with serious medical problems, if state law allowed it.

Earlier this year, major insurers, faced with an unprofitable business, stopped issuing new child-only policies. They said that the Obama administration�s interpretation of the new health care law would allow families to buy such coverage at the last minute, when children became ill and were headed to the hospital.

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The difficulty in preserving access to child-only insurance policies is the latest example of unintended consequences of the new law, the Patient Protection and Affordable Care Act. The problem may be solved in 2014. If Democrats can beat back Republican efforts to dismantle the law, most Americans will be required to carry health insurance, starting in 2014, and insurers will be required to accept all applicants, regardless of pre-existing conditions.

[Hey! Why should I have to pay for YOUR kid's problems? It's the old "house burning" question. You shoulda made plans not to have a sick kid... or not have any at all. JB]

 

• Paid to speak by Ben Smith at Politico

...Most of the people you see talking on television or quoted in stories -- who aren't in elected office -- make substantial parts of their livings giving speeches to private groups. Paid speaking, cleaner than lobbying, easier than the practice of law, cleaner than hitting up pension funds, well, safer than graft, has become the primary source of income for a broad range of political figures, beginning with Bill Clinton, who reported $7.5 million from paid speech in 2009.

The high fees for speakers like Clinton, Sarah Palin, and Stanley McChrystal occasionally draw attention, but beneath them are tiers and tiers more, with Harold Ford and Michael Steele, for instance, charging $40,000 for a package deal. In that middle tier are commentators like Coulter and high-profile television personalities. Well down the ladder are journalists, lower-profile politicians, and consultants.

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The scale of the speaking circuit also, I think, mirrors 19th Century public life, when figures like Ralph Waldo Emerson and Mark Twain charged a then-hefty $20 for a ticket to a speech, and when speaking tours constituted the main public identity for the commentariat.

It's also a bit like the music industry, where, increasingly, you give away some content and charge for the performance.

?This is as good a place as any to note this "modest proposal" from a letter to the editor of the Arkansas Democrat Gazette. The writer's tax proposal, worthy of The Onion, takes progressive income tax from the ridiculous to the extreme.

It�s past time to replace penalties on profits with incentives. Reverse the graduated income tax so that those making under $200,000 pay the bulk of taxes. By the time a taxpayer achieves $1 million per year income, the tax rate would drop to near zero. At $5 million income, a year a taxpayer pays zero. Those earning $60,000 or less would pay the highest rates.

By incentivizing higher incomes, people will strive harder, work longer and pay attention to what it takes to get into upper-income levels. It�s possible many taxpayers would report higher incomes just to get into a lower tax bracket.

If Americans are for prosperity, then follow this path. A rising tide of prosperity will become a tsumami and flow down to help the crippled, blind and orphans.

• Food Fight: Crop Failures Mean Higher Food Prices Worldwide - CBS MoneyWatch.com Readers should connect the dots linking ethanol production and the global food supply.

• Global Currency War: What It Means, And What To Do About It They don't call it a "war" for nothing. Every country becomes its own adversary as alliances with other countries begin to unravel.

• Pakistan Army Planning Assault on Al-Qaeda Terror `Epicenter,' Mullen Says We can believe it when we see it.

• Oil Rises a Second Day on Forecasts of Increased Demand, Dollar's Decline - Bloomberg [See above links to ethanol, food production and currency wars.]

A lot has happened during the dramatic rescue of those miners in Chile. A more boring narrative is shaping up in macroeconomics which will have a lasting impact on the global economy for years to come.
I'm not expert enough to understand all the implications and my attempts to learn all I want to know have left me more confused than when I started. Terms like QE and QEII have come into play, as well as increasing mention of "curency wars." QE is short for Quantitative Easing, a euphemism for what was once called printing more money, and QEII refers to yet another move on the part of policy planners to do it again. Again, see Georgie Carlin about this.

Roubini has been talking about this stuff which only confuses me further.

RGE expects the Fed to announce additional policy stimulus at its meeting in November, most likely in the form of large-scale purchases of Treasurys. Embarking on another round of quantitative easing (QE)�presumably with the expectation of weakening the dollar and thereby subtracting from other countries� growth�is in line with Japan�s recent (and less than successful) attempt to weaken the yen. Last week, the Bank of Japan (BoJ) cut interest rates to zero, and it has been making plans to buy various assets including government and corporate bonds. There�s more to come as it�s likely that the BoJ will make another attempt to weaken the yen, given the negative impact of a stronger currency on the country�s already dismal growth outlook. However, for yen interventions to succeed in the longer term, they should be supported by other policies. It remains to be seen whether the latest round of QE in Japan will be sufficient in this respect, especially if China even marginally increases its JGB holdings further.

Anyone who can make sense of what's happening is invited, seriously, to leave comments.

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Today's Rant

As a Social Security beneficiary I have a jaundiced view of the decision to have no COLA (cost of living allowance) for the second consecutive year. Yeah, I know the bump from three years ago was artificially high and that should make up for the difference, but anyone who thinks the cost of living is not going up for seniors is dreaming.

Two realities come to mind (aside from medical expenses) that have nothing to do with personal expenses. First, the economy (which now has about twenty percent of everybody getting Medicaid -- food stamps, etc., certifiably destitute) is making an increasing number of seniors pick up expenses for one or two generations not part of their job description as parents of adult children and grandparents.to their children. 

And second, despite the old saying, two do not live a cheaply as one. The death of a spouse leaves one beneficiary in the place of two, but the survivor's income, widow or widower, is dramatically reduced. The grocery bill may go down slightly, but most other expenses don't change much. I don't know the mortality statistics for people over sixty-five but I doubt younger people would want to change places. For the second consecutive year, the prayer for couples receiving Social Security is simply that they both continue to stay alive at least until December, 2011.