The latest from The Full Feed from HuffingtonPost.com
- Steve Parker: Bulletin - Clunker program may already be over!
- Don McNay: The 95 Percent Health Insurance Solution
- Terrence McNally: Q&A with Michael Lewis (Part 1): The Rules of the Game Were Totally Screwed Up
- John Thornton: What If: The Non-Profit Media Model
- Karen Dalton-Beninato: The Hello Girl: An Interview with Author Quinn Cummings
| Steve Parker: Bulletin - Clunker program may already be over! | Top |
| Automotive News reports Thursday night: The federal "cash for guzzlers" program reached its $1 billion funding limit unexpectedly after an avalanche of business exhausted its funds, an Obama administration official said late Thursday. The White House was working with Congress to try to extend funding as lawmakers prepared to leave town for the month of August, according to the official, who was not authorized to speak for attribution. Initially, congressional and industry officials signaled that the program was going to be suspended as soon as today as funding ran out. Those reports, widely reported by national news outlets including Automotive News, triggered confusion throughout the industry. National Automobile Dealers Association spokesman Bailey Wood said earlier Thursday the organization was briefed by Department of Transportation officials on plans to suspend the program at midnight. But later, Chuck Cyrill, another NADA spokesman, said the association had no official DOT confirmation suspending the program. Backlog The plan appeared to be prompted by a NADA survey showing a huge backlog of unplaced dealer orders that would burden the government's computers and exhaust the budgeted funds, he said. NADA plans to issue advice to members at 8 a.m. EDT today( Friday). Wood said. Republican Fred Upton said he was told by Secretary of Transportation Ray LaHood earlier Thursday that the agency is accepting dealer refund applications only until midnight. They've exhausted the money," Upton said in an interview. But Upton, quoting LaHood, added, "He did not say any orders placed after midnight would not be honored." Upton said the Michigan congressional delegation spoke by telephone Thursday evening and will be meeting this morning to try to find new funding for the program. "The consensus is that this program has worked and we damn well ought to figure out how to continue it," he said. Transportation spokesman Rae Tyson declined comment. "Incredibly popular" "We are working tonight to assess the situation facing what is obviously an incredibly popular program," a White House official said in an e-mail to Automotive News. "Auto dealers and consumers should have confidence that all valid CARS transactions that have taken place to date will be honored." CARS stands for Car Allowance Rebate System, the official name for the program known popularly as cash-for-clunkers or cash-for-guzzlers. Dealers began offering the U.S.-backed rebates of as much as $4,500 in earnest a week ago. But the Transportation Department will need additional cash after a backlog of nearly 200,000 orders threatened to jam the pipeline The program was part of a congressional effort to revive slumping U.S. sales and further help domestic automakers, especially General Motors Co. and Chrysler Group, which have emerged from brief bankruptcies. Sales spiked more than regulators anticipated this week after the government began logging transactions and approving rebates that indicated consumers were opting for vehicles that get significantly better gasoline mileage than the models they were trading in. Fund sought The administration opted to keep the program in place while it sought new money. It was not clear where the administration would find additional funding in a short period of time. "We hope there's a will and a way to keep the program going a bit longer," GM said in a statement. "Any doubt that the program would jump-start auto sales is completely erased." An estimated 16,000 dealers were eligible for the program and each would have to sell more than a dozen vehicles at the maximum rebate to reach the government's funding limit, according to the NADA. U.S. Senators Dianne Feinstein of California and Susan Collins of Maine said any extension of the incentive must require greater fuel efficiency and higher reductions of auto emissions. Congress wrestled with both issues when it established the current incentive to give U.S. manufacturers a better chance of qualifying for the program. U.S. auto manufacturers are scheduled to report their July sales on Monday. NADA presented the results of a dealer survey to the Transportation Department this week, Wood said. The survey showed that there were almost 200,000 dealer transactions that had not yet been submitted for refunds to the government, he said. Data released earlier Thursday by the government showed that dealers had submitted 22,782 deals seeking $95.9 million in refunds. The NADA survey suggests that if the entire backlog of orders were filed with the government, its $1 billion budget would be depleted, Wood said. (End of Automotive News story) We've said since the program was first announced as being funded with only $1 billion and slated to last only four months that the money would run out well before the time limit. But I don't think anyone expected this! Much of the opposition to the program came from the same cabal of southern Senators who have import car and parts-making plants in their states, the same ones who were against bailing-out Detroit in order to destroy the UAW (no foreign auto plant in the US is unionized).. But I think even they must be embarrassed for their being against a program which has proven to be, to put it mildly, wily popular Have any of you taken advantage of the clunker program? What'd you trade-in and what'd you buy new? Was it worth it? Will you be rushing out this instant or calling dealers to see if the program is still in effect? More on Cars | |
| Don McNay: The 95 Percent Health Insurance Solution | Top |
| Ninety-nine and forty-four one hundreds percent pure love -Ronnie Millsap Former CIGNA executive Wendell Potter was on Bill Moyers Journal a few weeks ago and cited a stunning statistic. When the Clinton's were debating health care in the early 1990's, 95 cents on every insurance premium dollar went to pay claims. Now it is slightly above 80%. The technical term for what Potter cited is the medical loss ratio. When it is at 80%, it means one out of every five dollars that you are paying for insurance premiums is going towards health care. The rest is going to insurance company profits. I don't have a dog in the health insurance fight. I voted for President Obama and want to see Americans have coverage. I've been around the insurance business all my adult life but I stopped selling health insurance 20 years ago. I buy my own from another agent. I don't really follow the nuances of how health care is priced and I don't claim to understand it. This puts me in the same boat as most other Americans. I don't think President Obama is connecting with the American people on the issue. It is complicated and complex. People who have health insurance are afraid of paying more for it. People without health insurance don't have money for high powered lobbyists and non-stop television commercials. People who are intellectually for the idea of universal coverage don't want to pay higher taxes. It's a complicated problem but I am offering a simple solution. 1. Cap the medical loss ratio at 95%. 2. Make insurance companies cover everyone, no matter what the pre existing condition. 3. Help poor and middle income people buy coverage with a subsidy or tax credit. My simple solution achieves several goals. It gives everyone an opportunity to be covered. Poor people have Medicaid. By subsidizing the middle class and working class, we will come close to getting everyone insured. If health insurance carriers are forced to pay out 95% of what they take in, it seems that they are going to compete with each other by offering more treatments and better service. The idea of a public option is for the government to compete with the big health insurance carriers and drive down costs. I am seeing a campaign by Obama and Speaker Pelosi to denounce the health insurance company but I am not sure it is going to work. I'm not sure that people like insurance companies but getting them to march against them is an entirely different matter. Right now, people are worried about losing their homes and their jobs. It's hard to get people focused in a time of economic chaos and high unemployment. I've had my own angry, screaming battles with my health insurance carrier. It seems like everyone I've talked to has had a similar experience. I just don't see them marching on Washington about it. My plan (you can call it the McNay plan if it happens to catch on) is a compromise that everyone will like and everyone will hate. The health insurance carriers will scream that they can't make a profit on a 95% medical loss ratio. However, property and casualty insurance carriers (the people who insure your car, home etc.) have a loss ratio close to 100%. They make their profits investing the premium. Health insurance carriers operate the same way. Under my plan, they won't have a profit incentive to deny claims. Insurance companies will scream about covering everyone with no pre existing conditions but since they have an extra 15% to 20% in claims money to work with, they ought to be able to make it happen. The government subsidies will make sure everyone can afford coverage and the health insurance companies can't complain because ultimately the government subsidies are going to go back to them. Insurance companies are only going to get 5% of the medical loss ratio but if we insure 41 million uninsured Americans, the insurance companies are going to get 5% more of much, much larger pie. That ought to make their stockholders happy. It also will inspire other insurance companies to get into the health insurance business and capture premium for themselves. That is the kind of competition they were looking for. Implementing my idea makes it harder for President Obama's critics to attack it politically. Opponents can't argue that "government bureaucrats will be making your medical decisions" because it won't be government bureaucrats calling the shots. It will be the same, private, health insurance, company bureaucrats who are making the decisions now. I don't think that is better but it sure knocks a hole in the opposition's argument. I want to see President Obama get some kind of health insurance program passed. I suspect the Republican senator who thinks its defeat could cost Obama's re election has a valid point. Obama is spending a lot of political capital on this. I'm not sure it is catching on and seems to be getting away from him. The president keeps wanting to lecture us but we would rather talk about the Harvard professor and the policeman having a beer. My idea is so simple that I am sure there are many holes in it. I'm not an expert, just a guy with a lot of insurance industry designations behind his name. None of those designations make me a specialist in the health care debate but it's a different idea. I'm open to hearing from those who don't agree and finding out why. My idea works and is politically viable. It gets uninsured people covered and it will get better coverage for the rest of us. It will take away the incentive for insurance companies to gouge us on claims, in order to make the stockholders happy. Its not a perfect solution but it's a ninety nine, forty-four one hundreds percent pure idea that we can talk about. Don McNay, CLU, ChFC, MSFS, CSSC is one of the world's leading authorities in helping injured people and lottery winners deal with complex financial issues. McNay is also an award winning syndicated financial columnist and Huffington Post contributor. McNay founded McNay Settlement Group, a structured settlement and financial consulting firm, in 1983. The company's primary office is in Richmond, Kentucky. McNay has Master's Degrees from Vanderbilt and the American College and is in the Eastern Kentucky University Hall of Distinguished Alumni. McNay has written two books. Most recent is Son of a Son of a Gambler: Winners, Losers and What to Do When You When The Lottery. You can write to Don at don@donmcnay.com or read his column at www.donmcnay.com. You can reach him on Facebook at www.facebook.com/donmcnay and on Twitter at twitter.com/Donmcnay McNay is a lifetime member of the Million Dollar Round Table and has four professional designations in the financial services field. More on Barack Obama | |
| Terrence McNally: Q&A with Michael Lewis (Part 1): The Rules of the Game Were Totally Screwed Up | Top |
| I recently interviewed Liar's Poker author Michael Lewis, and I didn't even ask him if the Moneyball movie was on again. (Apparently it is, with Aaron Sorkin doing a re-write.) We talked about his new book, Home Game: An Accidental Guide to Fatherhood , but we also got into his take on the financial meltdown and the bailout. This is Part One of some excerpts. You can hear the full podcast at terrencemcnally.net. As a former Salomon Brothers trader, Lewis could understand how individuals got caught up in the high-risk bubble. ML: There's a machine out there and a market... and as a trader you can borrow money cheaply, buy sub-prime mortgage bonds, and make the spread between the two. Let's say you're a really smart guy who's sort of detached and intelligent about what's going on, and you see that this thing is totally irresponsible. The loans being made are likely to go bad; the lending standards are collapsing. The intelligent thing to do is not to buy sub-prime mortgage bonds but to bet against them, to sell them short. As a trader inside a big Wall Street firm...you would face a decision: Do I exercise my independent judgment and bet against this market, or do I just keep going along with what my firm is doing? If you exercise your independent judgment and bet against sub-prime mortgage bonds, you not only probably run into some political conflict within your firm, but you'd never make the big score for yourself... The minute you make a bunch of money from your bet, your firm is doomed. They couldn't pay you. So the smart thing was just to go along and hope it lasted long enough for you to get rich. So that accounts for single players and their firms, but what about the ratings agencies? We heard a lot of sports talk in the Sotomayor hearings. Weren't they supposed to be the impartial referees? ML: The sub-prime mortgage bonds were rated triple A by Moody's and Standard and Poor's. Why? Well, they could give you an argument, but in retrospect, it looks like a very foolish argument. TM: It looks worse than foolish to me, it looks corrupt. ML: When you think about corruption, there's the simple kind where I give you $1000 to interview me on the radio so it will promote my book. That's corrupt and we both know it. But there's a different sort of corruption where we're all part of a system that is rewarding us very well to pay attention to certain things and not pay attention to others. We're paid to have blind spots. There's an awful lot of that kind of corruption in the financial system because people's incentives are all screwed up. Ratings agencies were paid by the people who issued the bonds to put the triple A rating on them. Their incentive is to please the people who are issuing the securities. They can't at the same time independently judge the securities. TM: Arthur Andersen went out of business for doing basically the same thing with Enron. How could someone not see that they were recreating something which had already failed in a huge way? ML: Some people did see...The people I find most riveting are the people who saw the magnitude of the coming disaster. They were sane men in an insane world. They would call Standard and Poor's and Moody's and say, "How are you rating these things? Our models show that if house prices even go flat, all these bonds will be worthless." To the question of what happens to these bonds if house prices go down, Standard and Poor's would say, "We actually don't know because there's no place in our model to put a negative number." TM: Obama, Geithner and the administration are putting out plans for new regulations. This isn't in there? ML: No. It should be illegal for issuers to pay raters for ratings. It's a bribe. Instead the administration says they're going to give the regulators more authority to evaluate ratings agencies. That doesn't do anything; they already had that authority. Lewis cited another example of a conflict-of-incentives that's nowhere to be found in the regulatory reform conversation. ML: How can you possibly have a Wall Street firm that is at once owning securities, making bets on stocks and bonds for itself, and that it is also selling to customers? Inevitably, it will trade against its customers. It will deceive its customers for the sake of itself. There's no reason both these functions have to be inside one place. You can have firms that provide financial advice but that don't take any positions in securities. Then you could have other firms that have their own trading accounts, but aren't allowed to deal with customers. Those functions should not be in the same place. It creates endless problems. TM: And this also isn't in the Obama administration's reform plans? ML: No it's not in there, and no one's even brought it up. When Lewis suggests that the deeper problem is in "the air we breathe," he's not talking about the environment. ML: Arthur Andersen was in place to examine Enron, the credit rating agencies were meant to be examining bonds. In both cases they had the incentive to exercise bad judgment because they were being paid by the wrong people. The rules of the game were totally screwed up. Well, why are the rules of the game totally screwed up? This is the deeper problem, I think, and it goes back to the days of Liar's Poker . In the last 25 years, our economy has created this beast, the financial industry, that is much, much too big; that is doing lots of things that have nothing to do with productive enterprise; in which the rewards are so outlandish, they've distorted the upper tier of the income structure. The reason CEO's get paid as much as they do is that Wall Street taught them how to do it. You get a huge sum of money for doing something is actually socially and economically counter-productive. People made fortunes out of the sub-prime mortgage bond market. That's insane. So our society has created this very strange economic value system, where really smart people, the leadership class, thinks it's the done thing to go to Goldman Sachs or Morgan Stanley and get paid three or four million dollars a year -- even though you don't actually add value in any way. Now it's in the air we breathe. Look for Q&A with Michael Lewis (Part 2): There's a Real Chance There's Going to Be an Uprising about This More on Financial Crisis | |
| John Thornton: What If: The Non-Profit Media Model | Top |
| TechCrunch honcho Michael Arrington deserves much applause for his July 30 post, " What If: The New New York Times ." In it, he ponders what might happen if the top 10% of the venerable New York Times ' reporters went on walkabout and set up their own purely digital shop. From a journalistic standpoint, one presumes that harps would play and angels sing. Arrington proves that he "gets it" in a way that many others cogitating on the future of news do not when he writes, "Journalists still matter. A lot. Especially the good ones." And although I know of no such objective measure, it's hard to argue with his assertion that 5-10% of a newspaper's best journalistic talent account for half or more of the value of the enterprise. Arrington also seems to believe that the NNYT could be viable commercially, with a $25 million annual expense structure, and--if it could match the traffic of the current digital version of the Gray Lady--124 million monthly page views. Certainly, nobody should question him when he asserts that plenty of money would be available to back such a venture. If he says so, it likely is so. Nobody in Silicon Valley is more connected than Michael. Still, Arrington's analysis leaves me wondering whether--in re-imagining the New York Times as a purely commercial, digitally native team of journalistic all-stars--the game is worth the candle. To cover a little over $2 million per month in expenses, a site with traffic equivalent to the current NYT would need revenue per 1,000 page views of about $16.50. That might be doable, depending on how one feels about impressions per page, sell-through, and--most imponderably of all--the secular trajectory of display advertising rates. But still: we're talking about a business with the traffic of the NYT that only breaks even. Why would the hedgies and private equity titans bother? Even if the site grew to twice that size, it's hard to envision an enterprise that is much bigger than $50 million or so in revenue, with maybe 25% operating margins. What's a site like that worth? Not a lot more than the $100 million Arrington posits it might cost to launch the thing. But what if our cash-flush friends were to go a different route, taking cues from both Microeconomics 101 and the New Testament (stay with me here)? What if instead of trying to earn a buck on the NNYT, they were to turn it into a purely civic, not-for profit endeavor? In Micro 101, we learn that such "public goods" as clean air and national defense will not be produced in sufficient supply exclusively by market forces. Allow for the sake of argument that what I'll call "capital J" Journalism--journalism that takes on serious, complex issues and puts them in the context of how citizens interact with their government--is such a good. As for the New Testament, the apostles Peter and Luke both admonish against that most common of human frailties--the allure of attempting to serve God and Mammon simultaneously. From roughly 1960 to about the middle of this decade, newspaper publishers seemed to think they had managed somehow to roll this dictate back. A secular economic boom, shifting demographics, and sharp consolidation of newspapers led to a period when solid investigative and explanatory journalism was plentiful, even though newspaper operating margins often neared 30%. As it turns out, though, God seems to have a long memory. No such repeal was ever granted. And with newspaper margins now plunging into the single digits on a very large base of (largely leveraged) capital, nobody is talking about public service nearly as much as paying the bills. When it comes to the news business, God and Mammon are no longer BFFs. And now back to Micro 101, where we also learn that all economic decisions are made at the margin, or at the incremental unit of revenue or cost. For newspaper publishers, that means deciding between reinvesting the incremental available dollar and sending it back to shareholders. It also means deciding between keeping the Baghdad bureau open and keeping up with TMZ. But what if a bunch of financial titans decided to stick strictly to lucre in their in their day jobs, and did the NNYT out of their philanthropic coffers? A non-profit version of Arrington's conception could be a fabulously worthwhile philanthropic venture. It could produce the best journalism in the world, without confusing profit motives with the provision of a public good. And there would be no doubt that the incremental available buck could go back into the product. In Texas, a group of us is about to try a very similar play with a statewide, online, nonprofit organization we're calling Texas Tribune . We will launch with a small staff focusing on politics, government, and public policy issues of statewide interest. As a 501c3, we will try very hard to remember that we serve nobody but the people of Texas, although we'll attempt to be as profitable as we can so we can grow to match our outsized ambitions. Along with pioneering colleagues in places like San Diego and Minneapolis, our team has learned a lot about non-profit journalism down here in the Lone Star State during the last year. We'd love it if somebody with the ambition for a non-profit version of the NNYT would give us a jingle. Help us launch the Tribune, then let's tackle Gotham together. | |
| Karen Dalton-Beninato: The Hello Girl: An Interview with Author Quinn Cummings | Top |
| Quinn Cummings has written her debut book, the alternately lyrical and hilarious, Notes from the Underwire, Adventures from my Awkward and Lovely Life. From her stories about starring in The Goodbye Girl to her string of endearing domestic mishaps, this book is what my book would like to be when it grows up and writes itself. Quinn was kind enough to answer the following questions and since we stay in touch via Twitter, I'd like to add: Read @Quinncy For the Win: I love your pet stories in Notes from the Underwire , and was thrilled to learn the term feline rage. Do you believe the new study that cats control their owners? Was anyone who lives with a cat who saw that study surprised? I have known women suffering through morning sickness open cans of stinky wet food for their cats. My theory is that, down deep, the cat and the human both know that if the size ratio was inverted, they would eat us. We love our cats, but we're also appeasing them in case they suddenly have a huge growth spurt. You talk about trying your hand at sitcom writing in Notes from the Underwire (Favorite quote: "That's not just good, it's Saved by the Bell good"). What kind of writing comes the most naturally to you? That question just sent me off on a reverie about how totally sweet it would have been if my natural writing style was like Tom Clancy, only I developed this talent two years before Clancy wrote his first book. And then I made Clancy-money for decades and was writing this answer on my estate in Hawaii. Heck, I'd be writing it from my estate which was Hawaii. Anyway, I think my natural inclination is towards the quotidian and the ruminative. This is a fancy way of saying I like to think for a long time about an uncomfortable conversation I have had at the grocery store and then I like to write about it. Your QCReport was picked as a top blog on Newsweek , how soon after that did the subsequent book deal with Hyperion come about? Years later. Completely unrelated nice things which happened to me. Newsweek was alerted to my blog within three months of my starting to write it; the book came about because Abigail Breslin was nominated for an Academy Award. No, I'm not seeing patterns where none exist. Because a child was nominated, USA Today did an article about former nominees who were children. My story went something like "Didn't go to jail, never went to rehab, created The Hiphugger, has a blog now." An editor at Hyperion found the blog, read enough to think there was a book there, got the head of Hyperion and the marketing department to agree and came to me with an offer. If you have an MFA and a thick file of turndowns from agents for your really good book, I know that my story is very irritating. Sorry. You're currently on a blog book tour. Did you come up with that concept, and how cool is it to meet your readers without having to leave the house? The Quinn Cummings Seemingly Endless Blog Book Tour of 2009 has been much more fun than I could have anticipated. First of all, there's the part where you can do press without have to check your lip-gloss, which is a huge "Yeah!" in my book. Second, and I'm not sucking up to my readers, I promise, but the questions have been remarkably good. And the Q&A format works not unlike tennis, in that you're more likely to hit the ball back hard and well if it's hit hard and well to you. And the idea was offered to me by Sara J. Henry who will be using the blog book tour for her own page-turner of a novel very shortly. I wish I could say I thought of it, but I can take credit for having the sense to see a nearly perfect idea when it's handed to me. Speaking of coming up with concepts, what was your inspiration to invent the hip hugger? I don't carry many babies lately, but it's a brilliant design! I had Carpal Tunnel Syndrome when I was pregnant, which went away the second the kid was born but left me with some nerve damage in my fingers. Nerve damage which was aggravated by holding my baby and then my toddler on my hip. I wanted something which displaced the weight of holding her there across my upper body and didn't make my hands go numb. I mentioned this to a friend who had a design background. Nine months later, we had our first Hiphuggers in a store. One of the strange facts of my life is that my name is on a patent, which still strikes me as absurd; people with patents should be able to put together Ikea furniture without needing to take a sobbing break. But here I am. I've been name dropping you shamelessly and friends are happy to hear about a writer who went from a childhood in the limelight to a happy home life. With all the Michael Jackson childhood stories coming to light, what advice would you give to the parents of a precocious child looking to break into life in the public eye? I lucked out. I had parents who didn't confuse me for an ATM and a certain psychic stability which allowed me to come through my childhood with only the usual amount of scars. Then again, there was no Internet when I was a kid, no cell-phone cameras, no Twitter, no Facebook. When I wasn't in the public eye, I could hope to be anonymous. No one has that luxury anymore. And if you live even a small part of your life as an entertainer you have, in the eyes of a percentage of the population, given up all expectation of ever leading a regular life. And being a former child actor is a permanent state; unless I save the rain forest, my obit is going to be titled, "Quinn Cummings, former child star, dies of something avoidable." Which is all my way of saying, if your kid likes acting and singing, there's something called local theater. After winning an Oscar nomination for The Goodbye Girl , you starred in series including "Family" and "Blossom" - What's your favorite TV show theme song? "The Wire." First of all, best show EVER, so I have this Pavlovian response to hearing "When You Walk Through the Garden," one of "YEAH! Best show EVER, about to start!" Second of all, I love how they did a new version every season and they were all great in different ways. And there's your full circle -- New Orleans' "Treme" is the next HBO series by the creators of "The Wire," and I'm sitting in a New Orleans courtyard fretting over feline rage syndrome. If our kitten doesn't have a panther sized growth spurt, kill and eat us I'm very much looking forward to reading your next book. Notes from the Underwire is available at Amazon.com ( Here ). More on Celebrity Kids | |
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