Rally Around Free Heath Care Choices
Tomorrow, Thursday July 9th at 12 Noon a rally will be held on the Allen County Courthouse Square (The Green). David McIntosh who was an Indiana Congressman, will be the highlight speaker. The first 150 people will get free Coney Island hot dogs, chips and drinks!
The sponsors of this event are AMERICANS FOR PROSPERITY and PATIENTS UNITED NOW.
Support real health care reform! Attend this event!
Sheep Get Slaughtered
Robert Johnson, from the Roosevelt Initiative, had an insight into our modern political system that I thought I should share. He’s referring to the sad state of national politics but I think it rings true for local politics as well. Enjoy:
What we are witnessing, as I have written elsewhere, is a perverse form of insurance pay off. Let’s call it political insurance. Ordinarily when insurance is offered, a premium is paid and, over time, the provider of insurance sets the rate on the premium so that they make a bit of money despite periodic payouts for accidents. What we have here is different. The financial sector, and other large patronage donors, spend billions of dollars on lobbyists and campaign contributions. Politicians then run their expensive election marketing campaigns with the proceeds. And finally, the contributors buy downside loss protection from the politicians and their appointees.
Who provides that downside protection? You and me. The taxpayer. The body politic. We get used by this refracted process, and our system is mislabeled as a representative democracy. And, to add insult to injury, we are forced to endure the the horror of the awful marketing campaigns of politicians using the their payoff money to protect donors with our the tax base. The media is on the take, too, collecting advertising revenue from financial companies and from political campaigns. Far be it for them to step outside this circular flow of funds that impedes our political system from incorporating feedback from evidence of its own dysfunction.
We are amidst a crisis of political legitimacy. The leaders of our complex financial firms have failed. They have failed as stewards of our nation’s future. They have failed as protectors of our public Treasury.
Parkview Field to break even?
Ben Lanka in a column on the front page of the Sunday JG covered how the city ”hopes” that it wil “break-even” in revenue it collects from events after it pays expenses. His analysis fails to cover all the facts as listed below:
Attendance for a First Year at a new stadium has generally exceeded that for all succeeding years. For example, 1993, the first year for the Wizards at the destroyed Memorial Stadium was 318,506 paid fans in 68 home games or 4,684 per game average. The total for the Wizard’s after the first year ran from a high of 278,631 in 2005 to a low of 201,395 in 1999. With 253,564 in 2006, 253,564 in 2006, 237,966 in 2007 and 256,693 last year at Memorial, these are the figures we can predict for future years.
The Tin Caps, for the first 41 games (through This Sunday) have had 199,656 attend of which over 15,794 have been free uncounted tickets, resulting in a net to date of 183,862 (4,484 per game average) toward the 275,000 after which the city gets the agreed $1.00 per attendee for the season. This means that for the remaining 29 regular season games plus a possible 4 playoff games to finish the season, the Tin Caps need another 171,138 paid fans for the City of Fort Wayne just to break even on the $230,000 that it is required to put into the Stadium Maintenance Fund this year. That means that they need to average 5186 paid fans at EVERY one of these 33 games! (This Sunday’s game had an attendance of 4,525 or 661 short of that average!). So, it does not look like they will make it - it may even be difficult to reach the 318, 506 record year(1993) total.
In addition, remember that by the Stadium License Agreement with Hardball, the city has to pay ALL utilities for the stadium - elecricity, gas, water and sewer. A good guess of the amount for a year is about $50,000. So for the city to break even, we will need another 50,000 paid fans in the 33 games remaining or another 1,515 fans per game. That gets us up to a required average of 6,701 paid fans per game, a number which has only been reached at 5 games out of the 41 played this season. Anyone want to guess how much will have to come out of the city’s tax revenues this year? It looks like over $75,000 will be required - AND THIS IS NOT IN ANY PART OF THE CITY 2009 BUDGET!
The city gets NO cut on any of the Hardball event concessions profit - it ALL goes to Hardball!
The city gets none of the yearly lease revenue from the 16 suites - ALL goes to Hardball! Hardball’s first year income from this lease will more than pay the cost of Hardball’s “contribution” of $600,00 toward the cost of the extra 4 suites that were added to the stadium at Hardball’s request. So, in advance, in one year, Hardball gets the $600,000 back - so it is NO COST TO THEM AT ALL!!!
If Hardball/Barry ReaL Estate ever gets to actually build The Harrison, they get to sell (or use) the almost $5 million Indiana State Income Tax Credits - so, again, Hardball/Barry claim to have made a $5 million investment in Parkview Field, when they net out to NO INVESTMENT AT ALL!!!
That means that Hardball/Barry have zilch - nada- zero-nothing invested in the stadium, yet they get ALL PROFITS from it’s operation. So Fort Wayne has invested over $50 million in a new stadium/ parking garage and Hardball Capital who has invested a net of nothing, GETS EVERY CENT OF PROFIT from the city investment.
Can you say, “Boy has Fort Wayne been smart on this deal!” -NO !!!!!
Definition of Insanity
There’s a must-read story in today’s NY Times about the current foreclosure crisis and the idiocy behind the banking sector’s response to it. A Valparaiso study has looked at some recent data and found that while banks refuse to reduce the principle on mortgages, they seem completely happy to take massive losses in foreclosure sales:
Alan M. White, an assistant professor at the Valparaiso University law school in Indiana, analyzed data on 3.5 million subprime and alt-A mortgages in securitization pools overseen by Wells Fargo.
[...]
Mr. White found that mortgage modifications peaked in February and have declined in all but one month since. While servicers modified 23,749 loans in these trusts in February, they changed only 19,041 in May and 18,179 in June. This is exactly when servicers were supposed to be responding to the government’s loan modification urgings.Foreclosures, meanwhile, keep rising. In June, 281,560 were in process, slightly above the 277,847 in May. Last January, there were about 242,000 foreclosures in the pipeline among the Wells Fargo trusts.
“I was hoping we would see some impact in June of the government’s program,” Mr. White said. “Is ‘Home Affordable’ working? My short answer is no.”
[...]
But the most fascinating, and frightening, figures in the data detail how much money is lost when foreclosed homes are sold. In June, the data show almost 32,000 liquidation sales; the average loss on those was 64.7 percent of the original loan balance.Given losses like these, Mr. White said he was perplexed that lenders and their representatives were resisting reducing principal when they modify loans. His data shows how rare it is for lenders to reduce principal. In June, for example, 3,135 loans — just 17.2 percent of the total modified — involved write-downs of principal, interest or fees. The total loss from these write-downs was just $45 million in June.
And yet, the losses incurred in foreclosure sales involving loans in the securitization trusts were a staggering $4.59 billion in June. “There is 100 times as much money lost in foreclosure sales as there was in writing down balances in modifications,” Mr. White said. “That is not rational economic behavior.”
Rational economic behavior? Why would anyone expect the same bozos that handed out loans without requiring people to prove they even had a job, to now make “rational economic” decisions? The problem is these guys aren’t using their money. You can bet that if the government stopped propping these failed banks up they would start modifying loans in the most efficient way possible.
I’m not a big proponent of loan modifications - at least not government subsidized modifications. Everyone involved who made poor decisions needs to be held accountable. But right now the Obama administration’s policies are only hurting homeowners while giving lending institutions a free pass.
Their foreclosure prevention policies have been a failure. It’s past time they recognize that and change course…
Change we can’t believe in, post one
This post is the first post of a series of posts that will document some of the failed promises of President Obama and some of his poorer decisions.
President Obama ran on a platform of change and hope.
His first five months in office have been marred by numerous broken campaign promises and little of the change that he promised.
This article is well worth your time. Most worthy of your attention is this paragraph:
This tension can be traced back to Mr. Obama’s claim during last year’s campaign that President George W. Bush engaged in an “extraordinary politicization of foreign policy.” Mr. Obama said he instead would ensure that hires are based on merit, rather than party or ideology. The American Academy of Diplomacy, an association of former diplomats, seized on the comments in lobbying him to lower the portion of ambassadors drawn from outside the foreign-service establishment to as little as 10% from the 30% average since President John F. Kennedy’s tenure. (Mr. Bush’s score was 33%.)
First off Republican and Democrat Presidents have often appointed large campaign donors to various ambassadorships. This policy is 100% wrong. It should stop. Instead Presidents should appoint those people who are the most qualified.
Appointing those people who donated large sums of money to your campaign is wrong.
President Obama specifically attacked President Bush on this topic; then once elected he continued the practice; in fact, he may well appoint even more of his large donors than President Bush did.
I would imagine that the only person reading this blog who would think that President Obama is right to appoint large donors to ambassadorships would be Kevin Knuth…
I have a feeling this is going to be a long series of posts before President Obama’s first (and only) term is up.
Mike Sylvester
They are so stupid in Washington DC that it baffles the mind
I think everyone reading this blog would agree that most of the drop in real estate prices has been due to the fact that our lending institutions (with government encouragement) lent Americans more money than they should have.
I hope that everyone reading this blog also remembers that the taxpayers now own Freddie Mac and Fannie Mae and that we are responsible for the debts of those two failing mortgage institutions. In my opinion it will take billions upon billions of dollars to prop up these failing companies…
Up until yesterday these two mortgage giants could only refinance loans through President Obama’s “housing fix” program when the loan-to value-ratio was 105%. What this meant in simple terms was that through these two government lenders you could refinance a maximum of $105,000 on a house that was worth $100,000. In my opinion 105% is far too high; I would be more comfortable with 80%.
The idiots in Washington DC decided to increase the maximum ratio to 125%. This means if your house is worth $100,000 you can refinance $125,000 on that house through Fannie and Freddie through this program.
Please read this article about it.
I especially like this quote “By expanding refinance eligibility, we can bring relief to more struggling homeowners more quickly,”Treasury Secretary Timothy Geithner said in a statement.”
Where does President Obama find these idiots?
The real estate market crashed because the banks loaned too much money to Americans. This easy money drove up home prices. When the real estate market crashed this then caused many Americans to default on their home mortgages; which in turn caused many financial instruments (Those consisting of these bad mortgage loans) to plummet in price. This in turn caused many financial institutions to fail. This in turn caused the Federal Government to pour billions of dollars of tax payer money into these financial institutions.
The idiocy must stop.
I am scared for the future of this country…
Mike Sylvester
Fort Wayne’s Looming Budget Crisis
I suppose it’s never too early to talk about city budget issues but I think 2010 and 2011 will be much worse than anyone has predicted. As of last year the projected budget shortfall for 2010 was over $9 million and the city council rightfully made a down payment on that by cutting $2.5 million from this year’s budget.
With the economic recession in full force I would expect state revenues (income tax, sales tax, etc) to be down from the original estimates. This will certainly put pressure on the 2010 budget but the real crisis appears to be the 2011 budget.
Currently ~$100 million of the city budget is collected via property taxes. While we might not be affected as other communities we are certainly not immune to falling real estate values. The reason this will be felt more in the 2011 budget is because the trending analysis done by the county assessor uses data from the prior 2 years to adjust the current assessed value. Falling values in 2008 and 2009 will show up in 2010 assessments which are payable in 2011. Now one might think that even if property values fall, the rates will just go up and thus the city will still be collecting the same amount of money.
Well that might have been true a couple years ago but HEA 1001 now limits a homeowner’s property tax bill to no more than 1% of assessed value. So as home prices fall the number of people hitting the 1% cap will increase, and this will result in less revenue for ALL local government (not just city government).
At this point I cannot predict what the shortfall will be because we don’t have the necessary data on decreasing home prices, income and sales tax. However, last year the city controller was predicting a $7 million shortfall for the 2010 budget and that was before the economy fell off a cliff. I don’t think it is out of the realm of possibility that the updated budget shortfalls could be double the original estimates. That would have the city staring down the barrel of at least $7 million for next year and perhaps $16 million for 2011.
The administration and the city council will have serious work to do over the next two years on the budget and the sooner they get started the better. I’m sure the Hooverites in the administration will, once again, push to double the income tax but that should be a non-starter in this economy. I think we need to identify what essential services we want from local government and everything else needs to be cut to the bone…
Framing the Renaissance Square Debate
Your brother is spending $1200/month to rent a house and you’re trying to convince him that he’s paying too much. You talk to your buddy Cliff and he says he’s got a house he’ll rent your brother that’s just as good and he says he’ll rent it for $1000/month.
You know for a fact that Cliff hasn’t had any tenants for a few years and he’d like nothing else than to finally get that place rented so it’s not a drain on his pocket every month. You figure Cliff would probably take $800/month but after all he’s your buddy and it’s not your money so why not pay the $1000/month? Besides you’re still helping your brother save $200/month. It’s a win-win right?
So did you save your brother $200/month or cost him $200/month?
Health Care Debate
Both sides of this argument have not presented a very compelling case. At the end of the day nobody has addressed the fundamental issue - namely that Americans are fat, lazy and gorge themselves with low quality foods. Until somebody figures out how to address that issue we aren’t going to make any progress.
How will “finding efficiencies” pay for more coverage? Does anybody really believe that? We will still spend the same amount of money regardless and that’s the real problem - the current growth in health care costs are unsustainable.
And what about the “private insurance for all” nonsense? What are we to do about the fact that some people are completely uninsurable? For example the cost of their care (perhaps even in one year) vastly outweighs the wages they will likely earn over their lifetime. They want to force a private insurer to cover this person? It guarantees that they will lose money. So why would they agree to it; because they can overcharge everyone else of course.
That’s not insurance by any stretch of the imagination. That’s socialization - pure and simple. In fact we’ve already got a socialized system. People with health insurance are paying for those that don’t. Private coverage for all is just a way to socialize the risk and privatize the profits - something government has always done remarkably well…
