And So I Go: Yesterday, Today and Tomorrow

Archive for the ‘Consumer Financial Protection Bureau’ Category

Americans elected him so now Americans can just suck up what is ahead for them.   Obama’s most destructive hit to our freedoms are in his administrations massive issuance of regulations.  The government  intends to control everything in your life and have made much headway during Obama s first term.  With nothing and no one to stop him these next four years he will put into effect regulations that will take decades to  overcome.  This following article from Heritage Institute explains a few laws that Obama has already broken where regulatory law is concerned.  We can look forward to many more instances of this kind.  Any other president would have been impeached for this type of behavior, but then this President can lie and cover-up and Americans just keep on loving him.  BB

Administration Ignores Law, Delays Exposing New Regulations

After three years of hyper-regulation, the Obama Administration has noticeably slowed its rulemaking in recent months. A variety of major rules have been parked in prolonged “review” by the White House, while the regulatory agenda required by statute has failed to materialize—twice. This flouting of the law is disturbing enough, but it’s made worse by the mounting regulatory uncertainty that has ensued.

Congress mandated a regulatory agenda from each agency in 1980, under the Regulatory Flexibility Act. The statute calls for release every April and October of a summary of all rules likely to have a “significant economic impact” on a substantial number of small firms. Subsequent executive orders extended the requirements to all regulations under development or review by some 60 departments, agencies, and commissions.

President Obama has ignored both the April 2012 and October 2012 agenda deadlines. The last agenda from the Administration, with 2,676 regulations, was published in fall 2011. The President’s neglect of the law contradicts his promise of an “unprecedented level of openness in government transparency.”  (AND, breaks the LAWS of the United States of America!  BB)

Notice of upcoming regulatory actions is an essential tool of government transparency and accountability. The agenda enables citizens to participate in the rulemaking process, businesses to plan, and Congress to engage in oversight. The stakes are especially high now because of the hundreds of rules yet to be finalized relating to the Dodd-Frank financial regulation statute and Obamacare.

The Administration has postponed action of late on some of its most ambitious regulations. For example, stricter standards on ozone emissions have been shelved until 2013. The original proposal by the Environmental Protection Agency would cost $90 billion or more annually and, potentially, jeopardize millions of jobs.  (Remember the Carbon Tax flak awhile back?  Go to my topics and read up on just what the Carbon Tax is and how Obama and friends will benefit from this and how We the People will pay thru the nose for our energy.  Even breathing the air will cost us!  BB)

Also on hold are various regulations to control power plant emissions of so-called greenhouse gases that would dramatically increase energy costs, as well as the designation of coal ash as a “hazardous substance”—estimated to cost $79 billion to $110 billion and thousands of jobs in Pennsylvania, West Virginia, Missouri and Ohio.  (Obama’s war on coal in these states has caused thousands of job losses and dozens of coal fired power plants to close down:  all this costs you more  for your energy.  BB)

There is ample reason to believe that this recent “draw-back” of rulemaking portends a regulatory tsunami in the coming year. Of particular note is the large number of proposed regulations that are piling up at the Office of Information and Regulatory Affairs (OIRA), the department within the Office of Management and Budget which reviews rules before they are published in the Federal Register.

According to OIRA data, a whopping 78 percent of the 151 regulations awaiting review have been pending at the office for more than 90 days—thus exceeding the maximum time allotted under executive order.

Among the most costly:

  • A Department of Transportation rule to require a rear-view camera and video    display for all new cars and trucks, at an estimated cost of up to $2.7 billion.
  • Revisions to the so-called Boiler MACT rules that impose stricter limits on industrial and commercial boilers and incinerators. The EPA pegged the cost of its original proposal at $9.5 billion, but independent analysts estimated the cost to be as much as $20 billion.
  • Energy conservation standards for walk-in coolers and freezers as well as commercial refrigeration, which would apply to virtually all equipment used in retail food stores. This is estimated by the Department of Energy to increase manufacturing costs by $500 million over four years.
  • Department of Labor restrictions on worker exposure to crystalline silica (fine particles of sand common to mining, manufacturing and construction). One analysis submitted to OIRA by engineering and economic consultants estimated compliance costs would be $5.5 billion annually, the loss of 17,000 “person-years” of employment, and $3.1 billion of economic output each year.

It would be good news for both the economy and consumers if the rulemaking delays are a result of more thorough cost analysis or consideration of regulatory alternatives. But there’s no indication that the Administration has embraced a newfound skepticism toward red tape. The evidence instead suggests that a multitude of major rules are simply awaiting release next year.

No one knows for certain, of course. But that very uncertainty is itself damaging to the economy. That is one important reason Congress requires the Administration to disclose its regulatory intentions in semi-annual agendas. President Obama should follow that law.

Read the full report: Obama’s Regulatory Agenda: Calm Before the Superstorm

It has been said and it is true that people get the government they deserve.  Republicans stayed away from the voting polls in droves this year of our Lord 2012 and we got another four years and at least 6 decades of evil.  BB

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Big Nannies of the Year – Michelle Malkin – National Review Online.

When we have one too many government employees for getting the specified job done  they have nothing to do but push pencils and complain that their job responsibilities are too heavy and that they require an assistant.  This  continues and continues and continues until we now have our federal government made up of a million or more pencil pushers.  Requirements for any given job, especially at the top rank, is knowing the man who does the hiring or a person of higher rank than him.  Hell, you don’t even have to know how to say or spell the name of the  position you are going to fill someone will check the right box for you.  AND, you certainly needn’t concern yourself about the required functions of that position because they are unimportant as you have your own agenda.  This then is the nanny State.  The United States governments at all levels are crowded with these  creatures who know better what is best for the public than the public itself.  This article lists some really unbelievable Nannies,  the only thing is that the are real and they are functioning alive and well in real time for your and my benefit and good.  BB

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December 29, 2010 12:00 A.M.

Big Nannies of the Year
God save us from more busybody bipartisanship in 2011.

It was a nefarious year for nettlesome busybodies employed by the Nanny State. Here are the top power-grabbers of 2010 — those who just can’t leave us alone:

New York City mayor Michael Bloomberg
Two feet of snow paralyzed trains, buses, snowplows, and emergency vehicles in the Big Apple this week. Perhaps if Bloomberg — the nation’s top self-appointed municipal food cop — spent more of his time on core government responsibilities instead of waging incessant war on taxpayers’ salt, soda, trans-fat, and sugar intakes, his battered bailiwick would have been better equipped to weather the storm.

Transportation Secretary Ray LaHood
He proposed meddling mileage taxes, mused about a system to track drivers’ routes, lobbied for high-speed-rail boondoggles, and promoted a “livability initiative” to limit suburban growth and force suburb-dwellers into public transportation. Then America’s driving czar floated a plan to disable cell phones in automobiles. LaHood backed off that creepy crusade, but he is still intent on waging war against drivers who choose to use cell phones, entertainment systems, and GPS devices on the road. Just last week, the unstoppable control freak proposed a new rule banning truck and bus drivers from any use of cell phones while driving — including emergency calls on hands-free devices. His anti-car agenda is stuck in overdrive.The city of Cleveland (Cleveland by the way is one of those Rust Bel;t cities that is just about flat on it’s can with unemployment in double digits so naturally all the government can think to do is make it more difficult for the economy and their city to get up off of it knees.  BB)
The green police in this Midwestern metropolis made headlines in February with an intrusive plan to roll out snooping trash cans — “smart” rubbish bins bugged with electronic identification chips and bar codes to monitor residents’ recycling habits. Violators could be fined $100. Federal stimulus money has gone to fund a similar program in Dayton, Ohio. The technology originated in Germany, was adopted by eco-authoritarians in England (where at least 500,000 trash cans now have snitch chips embedded in them), and has spread across Europe. Welcome to the age of Bin Brother.

The city of San Francisco (Another  city now flat on its back and on life support in a state in the same morbid condition.  BB)
The board of supervisors recently took the “happy” out of McDonald’s Happy Meals by forbidding all restaurants to offer toys with children’s meals that exceed limits on calories, fat, salt, and sugar. Even the mayor of the People’s Republic of San Francisco opposes this latest food-control scheme. But the bossy City by the Bay continues to assault consumer freedom with bans on everything from plastic bags to pet sales to soda pop. This summer, Mayor Gavin Newsom issued an executive order banning Coke, Pepsi, and Fanta Orange drinks from vending machines on city property. The decree dictates that “ample choices” of water, “soy milk, rice milk, and other similar dairy or non-dairy milk” must instead be offered. (Have you ever tasted soy milk? YUCK! BB  ) It’s not clear how vendors will be able to circumvent the city’s hostility toward plastic bottles. Maybe beverages will be served straight out of those noxiously trendy reusable cloth bags?

The architects of Obamacare
After ramming a trillion-dollar package of unconstitutional federal health mandates down our throats, they said children and seniors would be saved, we could keep our doctors, costs would go down, and the economy would get a boost. Reality: Premiums have continued to skyrocket. Insurers nationwide have dropped child-only plans in the individual market. Obamacare taxes forced the AARP to raise its members’ rates. Hospitals have stepped up layoffs and shutdowns. And millions of Americans have been able to keep their doctors and coverage only because their employers, unions, or health-care providers begged the feds for special waivers. Heckuva job, health bureaucrats.

First lady Michelle Obama and former governor Mike Huckabee
Mrs. Obama first played the childhood-obesity card in September 2009, as a rationale for using her office to crusade for taxpayer subsidies for the Olympics bid of her hometown, Chicago. Her argument: Kids would stay fat, lazy, and uninspired if the Daley machine didn’t get its share of massive sports corporate welfare. Next came Mrs. O’s push for the $5 billion expansion of federal child-nutrition programs. As I first reported in February 2010, the legislation was a pet project of the Service Employees International Union, which seeks to swell the ranks of dawn-to-dusk year-round public-school food-service workers, who organize under the progressive activist slogan “serving justice and serving lunch.” In addition to school breakfasts and lunches, the kiddie-food patrol is now pushing subsidized dinners and summer food service to create a “stronger nutrition safety net.” 

Nanny State Republican Mike Huckabee, who used his bully pulpit as Arkansas governor to campaign for Big Government–endorsed “healthier living” in public schools and private life, naturally sided with Mrs. Obama — and took a swipe at Sarah Palin last week for criticizing the White House’s usurpation of parental responsibility and rights. Huckabee scoffed at the idea that the feds are “trying to force the government’s desires on people.” But school bake sales are already under siege, and Mrs. Obama’s childhood-obesity task force has already called for new and dramatic controls on the marketing of unhealthy foods. Did Huckabee miss (or does he agree with) Mrs. Obama’s officious rallying cry on child nutrition: “We can’t just leave it up to parents”? God save us from more busybody bipartisanship in 2011.

— Michelle Malkin is the author of Culture of Corruption: Obama and His Team of Tax Cheats, Crooks & Cronies. © 2010 Creators Syndicate, Inc.

Eugene Robinson – Tax cut fight highlights Democrats’ missing convictions.

I just could not resist bringing your attention to this article by the Rabid Right Winger Eugene Robinson.  How can otherwise intelligent people be so very stupidly absurd when it comes to their political views?  How?  I hear them or read them and if I am not angry or sickened by  idiocy I am  amazed at how they can twist and turn and bend the hall of goofy mirrors to  rant for the impossible.

The rant over the Bush Tax Cuts which will be the Obama Tax hikes is typical.  By the way I have to say that these tax hikes are typical of everything Obama and his Democrats have done: monstrous!

Anyhow, getting back to Robinson’s rant:

In other words, there’s no additional money in the national coffers for the victims of the most devastating recession since the Great Depression. But to help investment bankers start the new year right, perhaps with a new Mercedes or a bit of sun in the Caribbean? Step right up, and we’ll write you a check.”

 

Don’t look now Mr. Robinson but it was the Democrats that handed out all those bail-outs and buy-outs (GM and AIG), stimulus packages that went to banks also after first being bailed out so they could disperse the money to small businesses but they kept it instead and then gave themselves those bonuses while the Republicans (Party of No) repeatedly voted No to all that out of control nation destroying spending the last four years.  The Dems have been in power since 2006 remember and refused to curb the mortgage lending urged on by Dem Rep. Barney Frank and Dem Senator Chris Dodd that ultimately led to all the Wall Street  smoke and mirrors trading because they knew that Freddie Mac and Fannie mae would buy the toxic paper and the US Treasury (tax payers) would bail-out Freddie and Fanny.  Actually we the tax payers thanks to our Congress now own Fanny and Freddie along with GM and AIG.

And while I am here I would like to remind you that the “most devastating recession since the Great Depression.” can also be laid at the feet of the Democrats and Obama because the unholy spending   has caused businesses to pull back and stop hiring and start instead to trim their workforce.  Then Obama came along later and stopped all drilling in the Gulf of Mexico thus making for 400,000 more jobs lost.  It just amazes me that you are a national columnist but you seem to have missed these events.  BB

You can now read the whole article if you want :),  and then if you want you can rant a bit in the comment section.  It doesn’t do any real good except to empty your spleen.  Then again that’s a good thing too.  BB

Meet The Porkers: 20 Politicians That Know How To Bring It Home For Their Districts.

See the porkers on these videos and see what they have taken you all for over the year.   And someone has the nerve to suggest we should not get rid of ear marks and that there are few ways to cut the federal spending.  BB

» Is America Becoming A House of Cards? – Big Government.

This is a very good article from Big Government  (of course most of them are so if you don’t subscribe to Big Government you certainly should).   I am posting this one in it’s entirety (with my comments natch!)  because it is a good reminder of where we are now, how we got here and our possible future.  That future is very very close to happening.  All it will take is China and the other lenders, or I should say “supporters of  America’s outrageous spending, to stop buying our Treasury Notes.  China is the biggest and all they have to say is “No more!”.    I haven’t read anywhere that they have done so as yet, but I have read hints  and rumors that the China is very upset with our out of control government spending.

I am sure most of you have seen the latest Americans for Prosperity ad   showing a Chinese teacher telling his students that Americans now work for them.  This is so true!  I believe it is impossible to buy anything that isn’t made in China.    I have always bought American when I could get what I wanted and the quality I wanted.  I was willing to pay more for the product, but it has become next to impossible to find the Made in America label.  So the  ad certainly is correct because we are working for them now.

The following article reminds us again why we are a House of Cards, or soon will be.  BB

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Is America Becoming A House of Cards?

by Of Thee I Sing 1776

House of Cards: – “a speculative scheme that depends on unstable factors that the planner cannot control,” (WordNet – Princeton University). While we don’t believe America has, by any stretch of the imagination, yet become a house of cards, we do strongly believe the federal government and state and local governments have been, for a long time, pursuing policies that fit that definition to a tee.  And, according to last week’s Rasmussen Poll, two thirds of Americans described as likely voters sense that something is very wrong and, what is worse, could, if triggered by any surprise world event, spin out of control.

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They are very worried about the course we are on, and, we believe, with good reason. Notwithstanding President Obama’s lament last week that the public has become disenchanted with the Administration and the Democratic Congress because “we’re hard-wired not to always think clearly when we’re scared,” we believe the people are thinking quite clearly because they know there is really something about which to be scared.   ( Americans are too stupid to understand all that The One has done for them!  That’s why they voted for all those Republicans and not because Americans actually do understand very well what Obama and the Democrats have done to our nation.    He still doesn’t get it.  He isn’t faking and neither is he in denial because to be in denial a person really does see the truth but is trying not to.  Obama actually believes what he is saying and that he has given Americans so much good and they just don’t understand and appreciate his efforts .  BB)

We don’t want to dismiss all that is positive about our economy.  As Fed Chairman Bernanke testified before the U.S. House Committee on the Budget on June 9. “Our economy is large, diversified, and flexible; our financial markets are deep and liquid;” and, as Bernanke correctly points out, in the midst of financial turmoil, global investors have continued to view Treasury securities as a safe haven…at least, so far.   But we wouldn’t break out the champagne just yet.  And we’re willing to bet Chairman Bernanke doesn’t see much about which to celebrate either.

He ended his testimony with the warning (certain to be ignored, at least by the current Congress) “that history makes clear that failure to achieve fiscal responsibility will, over time, sap the nation’s economic vitality, reduce our living standards, and greatly increase the risk of economic and financial instability.”  (IN his latest reports to the Congress he has tried again to make this fact understood.  But with the Senate in Dems control and Obama’s veto there is much the House can do but refuse to pass spending bills for Obama’s programs.  there is only one problem with that strategy:  These programs have been scattered thru out the government in many agencies  so they will get funding no matter what the Congress tries to do.  The only thing that will stop these programs is complete repeal of the bills creating them.  BB)

As we noted in last week’s essay, “unsustainable” seems to be the new buzzword in Washington.  What the government is, and has been, doing is clearly unsustainable. Chairman Bernanke knows it, and we believe the Congressional Budget Office and the vast majority of the American public knows it as well.  (I am so tired of hearing Congressmen and Obama use the word “unsustainable” and then go out and pass a bill spending more money that must be borrowed from other nations.  BB)

The White House projections for economic growth upon which estimates of future deficits and public debt are predicated are optimistic to the point of wishful thinking.  The Administration assumes five consecutive years of annual GDP growth in excess of 3.5 percent beginning this fiscal year (which began one month ago).  That is beyond a very bullish  near term expectation of economic growth, and its authors, who have access to statistics of past economic results, must know the premises to be false. Projections of that kind from any public corporation in the private sector would trigger SEC scrutiny (assuming the SEC was doing its job) to make sure the private company warned the public as soon as it had knowledge that its projections could not be achieved. Very stiff penalties would await the private firm that made irresponsible projections that it could not achieve.

Consider the consequences.  Each 1.0 percent shortfall in GDP growth compared to these assumptions results in a substantial further deterioration in the national deficit and, therefore, the national debt as well.  With the government currently borrowing approximately 40 cents of every dollar it is currently spending, any further escalation of our deficit and, hence, our public debt portends a very rocky future, one that all but guarantees that our children and grandchildren will not fare as well as their parents – a first in American history.

The American public cannot take much comfort from the Administration’s projections for inflation either.  The government’s projections of future deficits and public debt are, of course, dependent on the actual rate of economic growth as well as the actual rate of inflation The concern looking forward is compounded when considering the White House projections for inflation together with their projections for GDP growth.  Not only does the nation have to achieve GDP growth in excess of 3.5 percent for the next five years, but also, if the Administration’s forecast is to be achieved, we have to hold inflation below 2.1 percent every year for the next decade.  That is a very tall order, not achieved in any recent 10-year period, and especially so with an Administration and a Democratic controlled Congress that shows virtually no restraint in spending.

If these projections are achieved America will be able to breathe a sigh of relief.  If, however, they prove to be as fanciful as on their face they appear, then the economy the country is building for posterity may well prove to be a house of cards.

Government, at all levels, but unfortunately not the American economy, has been on an incredible growth spurt. In recent years, it is government that has been growing at an unprecedented and an unsustainable pace.  The public sector has been, at all levels, growing impressively (well, maybe not so impressively, but certainly rather spectacularly).  Public payrolls have grown, as have public health-care and retirement benefits all of which, in the final analysis, are paid for with the taxes paid by private sector wage earners whose jobs have been dwindling, as have their benefits.  (This is due to the unionization of public employees.  The teachers unions, the transportation workers unions, the garbage collectors unions  and all the others have We the people over a barrel.  they get what they want or else they shut the services the government privates down.  The average public employees salary is $70,000 a year as compared to us Joe’s working our buns off in privately owned businesses who average $45,000 a year.  And that doesn’t include the generous  benefits like premier healthcare, vacations and days off with pay and a whole range of goodies.  BB)

Public sector health benefits frequently require little or no deductible and little or no co-pay and public sector retirement benefits are often predicated on the highest salary earned (usually the salary earned during the last working year or two prior to retirement).  To justify these lavish tax-funded benefits, the public sector pension programs are invariably based on economic assumptions or investment returns that are just as unrealistically optimistic as the Administration’s budget and inflation assumptions.   The liabilities incurred by the cities and states whose employees are the beneficiaries of this largesse are generally cast in concrete. The growth assumptions for investment earnings, of course, are not.  They are, to borrow from the house-of-cards definition, truly a speculative scheme that depends entirely on factors the planners cannot control.  For example, these pension funds typically are predicated on long-term investment growth of 8 percent.  Typical bond yields are, today, around 2 percent and, according to Bill Gross of PIMCO, one of the largest and most successful fixed income fund managers, public sector pension programs are typically weighted 60 percent toward equities and 40 percent toward bonds or fixed-income investments.  These bond yields require a long-term return on equities of around 12 percent for these pension plans to meet their projections.  Unfortunately, the current yield of the S&P 500 (the broadest equity index) is barely 2 percent.  Dividends would have to grow, according to Gross, by 9-10% a year to hit that target.  And, to make matters worse, the further the government succeeds in pushing down bond yields, even more unrealistic return assumptions from equities are required.  These kinds of returns bear no basis to reality, and yet public officials use them in order to justify the benefit packages they give to their friends in the public sector unions.  That is why public sector benefit and pension plans are the major contributors to the red ink in which state and municipal governments are drowning…red ink estimated to now be running about $3 trillion.  These plans are, in fact, built on a house of cards.

We have another structural problem that raises the specter of a future built on a house of cards.  As we blithely continue with our statist European-model entitlement policies we will require a strong ratio of new tax-paying workers entering the work force to balance out the aging workers who are exiting the work force and retiring. We are now entering a cycle where, for the next decade or so, nearly 80 million baby boomers will begin retiring and collecting their social security checks and calling on the health-care establishment to care for them under Medicare, a program already facing future insolvency and under further strain as a result of Obamacare.  While America enjoys, relative to our European trading partners, a larger 18-to-38 year old population, the positive infusion of young workers into our system is largely driven by prior immigration into the United States.

Our indigenous (non-immigrant) birth rate is about the same as the weak birth rates found in virtually all industrialized European countries today and America, in reaction to the huge illegal immigration problem we have and which successive. Administrations have refused to address, is in danger of becoming an anti-immigration country. Nothing could be more self-defeating.  Without the population growth provided by legal immigration, the imbalance of aging, retired Americans compared to young workers who are required to support them will produce a crisis from which there may be no escape.

The current American birth rate without the larger families produced by new arrivals in the United States will not support the entitlements we owe to senior America. And without a steady stream of new, taxpaying workers offsetting the ever-growing steady stream of retiring workers, our economy could sag, if not collapse, of its own weight.

We began by stating that we do not believe that the American economy is built on a house of cards…not yet anyway.  But our economy (in fact any country’s economy) is always a work in progress; it is being built every day.  The decisions we make today will, indeed, determine whether what we are building is a future with a strong foundation, or, is instead, a future built on a house of cards.

by Hal Gershowitz and Stephen Porter

Todd Zywicki: In Elizabeth Warren We Trust? – WSJ.com.

Obama appointed a new czar right over the heads of our Congress  and this new czar is answerable only to Obama.  He has instructed the Treasury Department to do anything she wants. This Harvard Law School professor  has what amounts to complete control over our whole economy because she has control over the credit sector, all of the credit sector.  Once more Obama made her agency completely independent of any control by Congress by taking the funding of the agency out of the hands of Congress and allowing the funding to come directly from the Federal Reserve.  When she wants money she simply has more printed!

This lady is dangerous!

The following article is from an op-ed page but it gives us some understanding of just who Elizabeth Warren is and how she operates.  If she had been made to go thru the confirmation process mush would have come out and it is doubtful that even the Democrats would have confirmed her.  Obama knew this and that is why he  waited for A recess by Congress  to slip her in undercover.

This week Congress has put in place measures that would make it unlawful for the President to make any appointments with out the approval of Congress.  The  so-and-so’s on The Hill are finally catching on to the fact that even they are  now superfluous!   Obama doesn’t listen to the people, he  doesn’t listen to Congress, he only listens to the Communists and Socialist, union leader thugs and criminals that he has allowed to infiltrate the West Wing.  BB

In Elizabeth Warren We Trust?

The unaccountable head of the new Consumer Financial Protection Bureau has repeatedly used shoddy data to push policies she favors.

By TODD ZYWICKI

The Obama administration has promised that the Federal Reserve’s new Consumer Financial Protection Bureau will be independent from politics, a model of regulatory expertise grounded in sound data and economics. Naming Harvard Law Prof. Elizabeth Warren as de facto agency head undermines both goals.

By appointing another White House czar to avoid Senate confirmation, the administration politicized the powerful new bureaucracy from its birth. And by appointing an individual with a track record of using questionable research to advance policy ends, it has jeopardized the second goal as well.

Consider Ms. Warren’s much-ballyhooed study on the alleged link among health problems, medical expenses and personal bankruptcy filings. Published in the February 2005 issue of Health Affairs, the report was timed to head off bipartisan bankruptcy legislation that was enacted later that year. Ms. Warren and her co-authors claimed that “at least” 46% of personal bankruptcy filings in 2001 (the year from they collected the data) were the result of “medical causes,” and that this represented a 23-fold increase over 20 years.

Associated PressElizabeth Warren is announced as the head of the new Consumer Financial Protection Bureau, Sept. 17.

zywicki

zywicki

Both conclusions are extremely suspect. First, the study provided an implausibly broad definition of “medical bankruptcy”—including any filer who reported uncontrolled gambling, drug or alcohol addiction, or the birth or adoption of a child.

Equally dubious, the authors classified a bankruptcy as having a “major medical cause” if the individual had accumulated more than $1,000 in out-of-pocket medical expenses (uncovered by insurance) over the course of two years prior to filing—regardless of income, and even if the debtor did not cite illness or injury among the reasons for bankruptcy.

In 2001, average per capita out-of-pocket medical expenses were $683. During the two-year period Ms. Warren and her co-authors studied, in other words, Americans spent an average of $1,366 on uninsured medical expenses, or 30% more than their threshold definition of a “major medical cause.” There was no larger context for their threshold figure: A debtor with $1,001 in uncovered medical expenses and $50,000 on a Saks card would constitute a “medical bankruptcy” in their study.

The claim of a 23-fold increase in medical bankruptcies was based on a comparison of their 2001 data with Ms. Warren’s research in a 1981 study—which appears to count only those who self-reported as having filed bankruptcy for medical reasons. This is a completely different and much narrower definition of “medical bankruptcy” than the one she used 20 years later, and obviously inflates the increase.

In contrast to Ms. Warren’s studies, a battery of analysis, including research done by the Department of Justice’s Executive Office of the United States Trustee (which oversees the administration of bankruptcy cases), and by Daniel Dranove and Michael Millenson of Northwestern University, concluded that fewer than 20% of bankruptcies are caused by health problems or medical expenses.

Last year Ms. Warren and her co-authors were back with an even more dramatic study, in the American Journal of Medicine, timed to promote President Obama’s health-care reform law. Drawing on 2007 filings, the authors concluded that 62% of bankruptcy filings were the result of medical issues and that the odds that a bankruptcy had a medical cause had doubled between just 2001 and 2007. This study was also flawed.

After Congress made it harder for people to skip out on their debts in 2005, the number of bankruptcy filings plummeted. In 2001, the year Ms. Warren used for the first study, there were 1,452,030 personal bankruptcy filings; in 2007 there were 822,590. Even if we are to accept the methodologies of the two studies for the sake of argument, there were 670,838 “medical bankruptcies” in 2001 and 510,828 medical bankruptcies in 2007—a drop of 160,000 per year. Yet Ms. Warren’s article nowhere acknowledges that the absolute number of bankruptcies and purported medical bankruptcies declined.

Concerns about Ms. Warren’s presentation and interpretation of data have been longstanding. As I wrote in these pages in August 2007, her book “The Two-Income Trap” willfully ignores the obvious in her own data: that spiraling taxes—and not living expenses—were a major cause of middle class financial woes.

Similarly, reports of the Congressional Oversight Panel of the Troubled Asset Relief Program (TARP)—a panel of which she was chair—uniformly treated home foreclosures as the result of bank fraud and the bullying of helpless homeowners. Fraud and bullying there was, but her panel consistently ignored the many foreclosures that have resulted from a homeowner’s strategic decision to walk away from a house whose value has fallen below the amount still owed on the mortgage. Economists and housing analysts widely agree that a substantial number of defaults occur for this reason. That reality is largely absent from the TARP panel’s reports.

(Gee this sounds a whole lot like how they determined the  Global Warming thing, doesn’t it?    Just grab some figures out of the air that fit what you want the report to verify.  Good work for a Harvard prof! BB)

The head of the Consumer Financial Protection Bureau is one of the most powerful bureaucratic positions ever created in the American political system. It can regulate or ban almost every consumer credit product in the country, yet it is beyond Congress’s power of the purse because its budget is guaranteed as a percentage of the Fed’s annual revenues. Under normal circumstances, the Senate would have the opportunity to ask Ms. Warren to explain the way in which she has sometimes interpreted data in her research before entrusting her with control of the agency.

By doing an end-run around the confirmation process, the Obama administration has eliminated our opportunity to find out. And by installing the head of the agency as an assistant to the president inside the White House, it has insulated her from meaningful congressional oversight.

Mr. Zywicki teaches bankruptcy and contracts at the George Mason University School of Law, and is the co-editor of the University of Chicago’s Supreme Court Economic Review.


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