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## Comment Re:Statute of limitations (Score 1)467

I'm fairly sure that means testing those loans to people making less than \$100K/year will effectively put anyone who has pull with a Congressman off limits.

One also has to consider groups of individuals that form constituencies. Would a Senator or Congressman put pressure on Fannie or Freddie to make more loans to certain classes or groups of people? I think that the answer to that is yes and it probably wouldn't be too difficult to go back and find instances in Congressional hearings where officials from Fannie or Freddie were "encouraged" to buy more loans made to low income borrowers or other groups whose credit was marginal compared to the more typical borrower. In that sense it could be argued that pressure was brought, that it was political and that the politician was pandering to a perceived constituency of voters who might then be expected to support that Senator or Congressmen in the next election or at the very least receive endorsement from interest or pressure groups that are known or visible to that constituency.

## Comment Re:Take medicine away from the wizards (Score 1)255

Alright, I'm going to walk you through this step by step. I'm not trying to patronize here, but each step follows from and builds upon the previous step so it's important to understand all of the steps from start to finish. So with that in mind here we go:

1. What is the purpose of insurance, any insurance not just health insurance? The concept is simple enough, it's about offsetting risk. Suppose that we want to insurance against the costs of a certain adverse event, whether that be a major medical expense or property loss or whatever, that has low probability but high costs when it does occur. We can say that the probability that the event occurs is P and that the probability that the event does not occur is 1 - P. In theory, we should be willing to pay a premium amount, call it A, which exactly balances the amount of the loss, call it L, should the event occur. So the formula for the balanced equation is:

A * ( 1 - P ) = P * L

A rational person should be willing to pay the premium amount A (or less) that balances the cost of the adverse event should it occur with probability P.

2. Different people have different financial situations coming into the event. Some people might have substantial assets, be they houses or cars or stocks or bonds or maybe even their bodies themselves if they make their livings with their hands or their looks or even just what's in their heads. The point here is that the consequences of a bankruptcy are not the same for all people. A person with fewer assets to protect is not willing (or even able) to pay the same amount of insurance premium that a wealthier person with more to lose in bankruptcy is. In this case I'm viewing bankruptcy strictly as an expedient financial decision, apart from any moral considerations which are necessarily subjective. Companies declare bankruptcy all the time, so an individual should not allow moral compunctions to prevent them from taking advantage of the rights afforded them under the same legal system used by corporations. Which leads into the next point.

3. Each person or household must decided for themselves, based upon their own perceived risk factors, tolerance for risk and the dollar value of any assets how much insurance they need to carry. To use an example from the auto insurance business you can carry the minimum amount required by state law or you can carry extra liability, medical or property damage insurance for a higher premium. Some people choose to carry more insurance than the minimum required because they feel that the benefits of this extra insurance equal or outweigh the additional premium costs.

4. So the point of all this is that insurance is a risk pricing exercise, nothing more and nothing less. People inject emotion into the argument, especially when it comes to health insurance, but that does nothing other than to distract from the essential issue which is cost.

What does the requirement to provide life-saving treatment have to do with anything? It helps people who are so broke that they have no assets, but it doesn't help anyone else.

It helps to the extent that your life was saved. I will grant you that debt or bankruptcy are not pleasant, but at least you're still alive (hopefully) after receiving treatment. I would argue that having your life saved counts as being helped, apart from how large or small the bill ends up being.

You have a heart attack, you get treated at a hospital which is required to do so; you're insured but not adequately, and you get a bill for \$50,000 more than your insurance covers. Welcome to medical bankruptcy.

So what? If you have assets to protect then be smart and carry enough insurance. If you don't have assets or at least not substantial assets, buy what insurance you think you need or can afford and accept that bankruptcy is a possibility. Why the fear of bankruptcy BTW? In the corporate world bankruptcy is viewed as just another tool in the financial toolbox, one that you shouldn't be afraid to use if you really need it. That's why we have bankruptcy, to allow a fresh start in the face of adverse circumstances. Did you also know that many assets are protected against creditors even in a bankruptcy? For example, your primary residence is protected and your retirement savings accounts, like 401K and IRA, are also protected. So even a bankruptcy should not wipe out all of your savings provided that you've planned ahead and saved in protected accounts. If you need help setting up these accounts, it's readily available in the marketplace at reasonable prices. These options, or similar in the case of 401K (depending upon employment situation), are available to all citizens.

Now, how exactly are you supposed to shop around, rather than just taking the first-available treatment? Sure, they're required to provide that treatment whether or not you can pay -- but if you can pay, they're going to do everything in their power to be sure that you will.

In the case of an emergency, you don't shop around. You are taken to the hospital, probably the nearest one, and receive treatment. As for them doing whatever is in their power to collect, you let insurance handle it and if it blows through your coverage than you either make a payment arrangement with them, if they're willing to be reasonable, or file for bankruptcy protection, discharge the debt, and move on. It's not pleasant, but that's life.

In my wife's case, it wasn't a heart attack, but brain surgery -- and while she was in the hospital, her employer went out of business. Her insurance policy disappeared with them, and she was personally on the hook for follow-up care, wiping out years of savings.

That's most unfortunate and I'm sorry to hear that. Nobody takes pleasure in the suffering of another, or at least most normal people don't, but I find myself compelled to ask whether or not you two carried additional long term disability insurance? Many life insurance companies offer products designed to pay out in the event that you become disabled or incapacitated due to a serious accident or illness. These types of policies help pay for ongoing care or long term needs or things that health insurance doesn't usually cover or covers for only a limited period of time. Again, I'm sorry to hear about your wife, but if anyone else is reading this I would definitely recommend both life and disability insurance so that your family or significant other is taken care of should something catastrophic, like illness requiring brain surgery and follow up care, occur.

I hope you understand that I'm not trying to be mean or vindictive about your situation or that of anybody else. I'm just trying to explain what health insurance should be like, but isn't, because of bad government policies that have incentivized the bad system that we have today and why I don't think that ObamaCare is the answer to either our collective health insurance problems or the problem of high health care costs in general.

## Comment Re:Take medicine away from the wizards (Score 1)255

if I'm having a hart attack my best course of action is to be a smart shopper, make sure I select the best offer before proceeding with being treated?

Every hospital in the United States is required to provide life saving treatment, regardless of whether you have insurance or not. That hasn't changed and it's not the issue here. The "heart attack" example is a liberal canard used to distract attention from the issue of costs and how best to address them.

## Comment Re:Take medicine away from the wizards (Score 2)255

There are basically two choices. You can either eliminate all subsidies and allow the insurance market to become a real insurance market, like auto, fire, life or any other type of insurance where risk is priced at market rates OR you can go all the way with single payer and make the government the single buyer of all major medical services. Obamacare does neither of these things. It combines the worst parts of both paths into a disastrous course down the middle. It's frustrating because Obama has probably now blown any chance at reforms that would actually begin to address high costs. Even if more people end up ensured the costs are only being shifted onto the taxpayers. The costs themselves aren't being reduced, merely shifted and hidden beneath more layers of bureaucracy, subsidies and mumbo jumbo about more people being able to afford insurance while the national debt continues to increase like the odometer on the Starship Enterprise.

## Comment Re:Statute of limitations (Score 1)467

A big part of why the Federal Reserve exists is to remove, to the extent possible, the chance for politically motivated meddling in monetary policy decisions. Imagine if Congress made these decisions directly, we'd have interest rates tied to election cycles and other political horse trading. That might work short term for rewarding cronies and punishing enemies, but it wouldn't be very good for the real economy. The Fed is a compromise solution with many problems but we shouldn't be eager to make those problems worse by introducing politically motivated lending directly from the Fed to favored individuals. That's a recipe for the sort of extreme corruption and vicious politics that we see in Africa and other places where the politics and the money are one in the same. If you think that money in US politics and lobbying is bad now, just let Congress start ordering the central bank to make loans to their clients and you will see how much worse it can get.

## Comment Re:Statute of limitations (Score 1)467

When the determining factor of who gets a loan is politicized, as it would be if the government "stepped in" and started making "loans" directly to individuals, then any notions of risk management or underwriting standards are pretty much thrown out the window. If somebody's a member of a politically favored class there will be pressure for the government to make "loans" to these people. It would become a stealth welfare program made all the more insidious by the promise (ha-ha) that the "loan" will be paid back by the recipient. A quick glance at the default rate on student loans demonstrates clearly enough the pitfalls of government making unsecured loans to borrowers with bad credit or no credit history at all.

## Comment Re:Take medicine away from the wizards (Score 1)255

Keeping the cost of it high seems to be.

That's an uninformed position. There are many factors contributing to the high prices in US health care, but the heart of the matter is third party payer. Whenever you pay someone else to pay the bill for you, especially when the goods or services delivered are opaque as they are in health care, the cost tends to escalate. Combine this with government tax incentives that have historically tied health care to employment, adding another layer of payment indirection between the consumer and the health care providers, and the litigious nature of American society in general and you have a recipe for sky high prices. All of this began as an accident of history with wage controls during WWII and grew from there reinforced by decades worth of bad government policies. Incidentally, this is also why Obamacare will fail to control costs. They did nothing to address the underlying causes of high prices, they just subsidized the escalating prices so that people are even further insulated from the true costs of their care. If you don't believe that government subsidies raise prices then I ask you to explain how the cost of College has increased at several times the rate of inflation since the 1980s. Whenever the government opens the public purse to subsidize or pay for something prices tend to skyrocket. Who wouldn't raise prices if they knew the government would pay for it?

## Comment Re:Statute of limitations (Score 2)467

When banks can borrow from the Fed at zero or close to zero percent interest and loan the money back to the government at between 3 and 4 percent interest on a 30 year T-Bill, which is basically guaranteed to be repaid, why should they make you a 30 year mortgage loan for basically the same interest but higher risk that you won't pay them back? The government, through the policies of the Federal Reserve, which have been holding down long term interest rates and flooding the banking system with liquidity, created the disincentive for banks to make loans. Your brilliant solution is for the government to interfere even more in the credit markets by making direct loans to consumers without regard to risk? At that point you would have to ask yourself what's the point of having money if we're going to do everything possible to render it worthless as a unit of account or medium of exchange?

## Comment Re:Statute of limitations (Score 1)467

If lenders are not able to foreclose on collateral pledged as a condition of receiving a loan then you will find a great deal less credit made available in the economy, especially to working class and poor people. If you've ever been in a situation where you couldn't get credit or good credit anyway then you know how much that hurts financially. So no, making foreclosures harder is not good for society, at least in the long run. A few lucky people are helped but secretly the payday lenders, rent to own and pawn shop owners would be rubbing their hands with glee at the prospect of more ordinary citizens being cut off from credit cards, bank loans and other traditional forms for credit. Why do you think the Obama Administration is trying to get basic banking and small lending going through the post offices? Because being cut off from credit makes people poor and keeps them poor. So as much as you don't like foreclosures, understand that sticking it the lenders hurts the poor not the rich.

## Comment Re:Posting anonymously for obvious reasons... (Score 1)236

What you're describing are classic examples of the "management mentality". You see, managers are taught in business school or learn from experience that problems are "obstacles" to their "success" (read bonus) and are therefore to be minimized quickly even if that means sweeping it under the rug or kicking the can down the road. Of course, the manager intends to be long gone before any short term decision actually comes back to bite so from their point of view the pesky IT employee is just another "obstacle" to be "minimized". That is why they blow you off.

## Comment Re:NBCs coverage online makes me rage (Score 1)578

I can't think of a reason why they don't make this an option...

In a word: money. The cable companies pay big fees to content producers for exclusivity so that shows people most want to watch, especially live sports, will be "cable only". There is some experimentation around the edges now with exclusive apps for limited direct broadcast to diehard fans of NBA, MLB and NFL willing to pay a hefty premium for the privilege, but it's still small potatoes compared to cable and there's no way that NBC is going to do that with the Olympics. Your offer of a modest fee cannot hope to compete with what the cable companies are paying them not to offer it to you. The cable and broadcast business in the United States is about as far away from market competition as you can get with exclusivity agreements and other anti-consumer practices being the rules, not the exceptions.

## Comment Re:Why is a pipeline needed? (Score 1)301

It's largely not up to the Obama administration, but rather the individual states and the state where the proposed pipeline terminates, Texas, already has many very large refineries with a collective capacity of billions of barrels per day of refined products and easy access to rail, road, and ship networks for transporting those finished products to market.

## Comment Re:Why is a pipeline needed? (Score 1)301

There is a certain fixed cost in building and maintaining a refinery. Large capital investments in acquisition and maintenance of specialized equipment, storage and related support businesses, including rail and pipeline amongst many others, are all required for practical and effective refinery operations. Consider also that most crude oil deposits occur in remote locations where none of these support requirements are readily available. So what arrangement minimizes overall costs? Building your refinery in a large industrialized port city with easy access to continental rail connections, pipelines and ocean going shipping. There's your answer in a nutshell. Now obviously the real world is complex and many factors, ranging from local demand to regulation and politics, can impact these decisions on the margins but as with many other production decisions in the real economy, things are done the way they're done because it's cheaper than the alternatives and any business that doesn't pay attention to costs tends to go out of business.

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