Tuesday, August 27, 2013

Our Pathetic Health Industry: How to Charge $546 for Six Liters of Saltwater

August 25, 2013

How to Charge $546 for Six Liters of Saltwater

It is one of the most common components of emergency medicine: an intravenous bag of sterile saltwater.
Luckily for anyone who has ever needed an IV bag to replenish lost fluids or to receive medication, it is also one of the least expensive. The average manufacturer’s price, according to government data, has fluctuated in recent years from 44 cents to $1.
Yet there is nothing either cheap or simple about its ultimate cost, as I learned when I tried to trace the commercial path of IV bags from the factory to the veins of more than 100 patients struck by a May 2012 outbreak of food poisoning in upstate New York.
Some of the patients’ bills would later include markups of 100 to 200 times the manufacturer’s price, not counting separate charges for “IV administration.” And on other bills, a bundled charge for “IV therapy” was almost 1,000 times the official cost of the solution.
It is no secret that medical care in the United States is overpriced. But as the tale of the humble IV bag shows all too clearly, it is secrecy that helps keep prices high: hidden in the underbrush of transactions among multiple buyers and sellers, and in the hieroglyphics of hospital bills.
At every step from manufacturer to patient, there are confidential deals among the major players, including drug companies, purchasing organizations and distributors, and insurers. These deals so obscure prices and profits that even participants cannot say what the simplest component of care actually costs, let alone what it should cost.
And that leaves taxpayers and patients alike with an inflated bottom line and little or no way to challenge it.
A Price in Flux
In the food-poisoning case, some of the stricken were affluent, and others barely made ends meet. Some had private insurance; some were covered by government programs like Medicare and Medicaid; and some were uninsured.
In the end, those factors strongly (and sometimes perversely) affected overall charges for treatment, including how much patients were expected to pay out of pocket. But at the beginning, there was the cost of an IV bag of normal saline, one of more than a billion units used in the United States each year.
“People are shocked when they hear that a bag of saline solution costs far less than their cup of coffee in the morning,” said Deborah Spak, a spokeswoman for Baxter International, one of three global pharmaceutical companies that make nearly all the IV solutions used in the United States.
It was a rare unguarded comment. Ms. Spak — like a spokesman for Hospira, another giant in the field — later insisted that all information about saline solution prices was private.
In fact, manufacturers are required to report such prices annually to the federal government, which bases Medicare payments on the average national price plus 6 percent. The limit for one liter of normal saline (a little more than a quart) went to $1.07 this year from 46 cents in 2010, an increase manufacturers linked to the cost of raw materials, fuel and transportation. That would seem to make it the rare medical item that is cheaper in the United States than in France, where the price at a typical hospital in Paris last year was 3.62 euros, or $4.73.
Middlemen at the Fore
One-liter IV bags normally contain nine grams of salt, less than two teaspoons. Much of it comes from a major Morton Salt operation in Rittman, Ohio, which uses a subterranean salt deposit formed millions of years ago. The water is local to places like Round Lake, Ill., or Rocky Mount, N.C., where Baxter and Hospira, respectively, run their biggest automated production plants under sterility standards set by the Food and Drug Administration.
But even before the finished product is sold by the case or the truckload, the real cost of a bag of normal saline, like the true cost of medical supplies from gauze to heart implants, disappears into an opaque realm of byzantine contracts, confidential rebates and fees that would be considered illegal kickbacks in many other industries.
IV bags can function like cheap milk and eggs in a high-priced grocery store, or like the one-cent cellphone locked into an expensive service contract. They serve as loss leaders in exclusive contracts with “preferred manufacturers” that bundle together expensive drugs and basics, or throw in “free” medical equipment with costly consequences.
Few hospitals negotiate these deals themselves. Instead, they rely on two formidable sets of middlemen: a few giant group-purchasing organizations that negotiate high-volume contracts, and a few giant distributors that buy and store medical supplies and deliver them to hospitals.
Proponents of this system say it saves hospitals billions in economies of scale. Critics say the middlemen not only take their cut, but they have a strong interest in keeping most prices high and competition minimal.
The top three group-purchasing organizations now handle contracts for more than half of all institutional medical supplies sold in the United States, including the IVs used in the food-poisoning case, which were bought and taken by truck to regional warehouses by big distributors.
These contracts proved to be another black box. Debbie Mitchell, a spokeswoman for Cardinal Health, one of the three largest distributors, said she could not discuss costs or prices under “disclosure rules relative to our investor relations.”
Distributors match different confidential prices for the same product with each hospital’s contract, she said, and sell information on the buyers back to manufacturers.
A huge Cardinal distribution center is in Montgomery, N.Y. — only 30 miles, as it happens, from the landscaped grounds of the Buddhist monastery in Carmel, N.Y., where many of the food-poisoning victims fell ill on Mother’s Day 2012.
Among them were families on 10 tour buses that had left Chinatown in Manhattan that morning to watch dragon dances at the monastery. After eating lunch from food stalls there, some traveled on to the designer outlet stores at Woodbury Commons, about 30 miles away, before falling sick.
The symptoms were vicious. “Within two hours of eating that rice that I had bought, I was lying on the ground barely conscious,” said Dr. Elizabeth Frost, 73, an anesthesiologist from Purchase in Westchester County who was visiting the monastery gardens with two friends. “I can’t believe no one died.”
About 100 people were taken to hospitals in the region by ambulance; five were admitted and the rest released the same day. The New York State Department of Health later found the cause was a common bacterium, Staphylococcus aureus, from improperly cooked or stored food sold in the stalls. Mysterious Charges
The sick entered a health care ecosystem under strain, swept by consolidation and past efforts at cost containment.
For more than a decade, hospitals in the Hudson Valley, like those across the country, have scrambled for mergers and alliances to offset economic pressures from all sides. The five hospitals where most of the victims were treated are all part of merged entities jockeying for bargaining power and market share — or worrying that other players will leave them struggling to survive.
The Affordable Care Act encourages these developments as it drives toward a reimbursement system that strives to keep people out of hospitals through more coordinated, cost-efficient care paid on the basis of results, not services. But the billing mysteries in the food poisoning case show how easily cost-cutting can turn into cost-shifting.
A Chinese-American toddler from Brooklyn and her 56-year-old grandmother, treated and released within hours from the emergency room at St. Luke’s Cornwall Hospital, ran up charges of more than $4,000 and were billed for $1,400 — the hospital’s rate for the uninsured, even though the family is covered by a health maintenance organization under Medicaid, the federal-state program for poor people.
The charges included “IV therapy,” billed at $787 for the adult and $393 for the child, which suggests that the difference in the amount of saline infused, typically less than a liter, could alone account for several hundred dollars.
Tricia O’Malley, a spokeswoman for the hospital, would not disclose the price it pays per IV bag or break down the therapy charge, which she called the hospital’s “private pay rate,” or the sticker price charged to people without insurance. She said she could not explain why patients covered by Medicaid were billed at all.
Eventually the head of the family, an electrician’s helper who speaks little English, complained to HealthFirst, the Medicaid H.M.O. It paid $119 to settle the grandmother’s $2,168 bill, without specifying how much of the payment was for the IV. It paid $66.50 to the doctor, who had billed $606.
At White Plains Hospital, a patient with private insurance from Aetna was charged $91 for one unit of Hospira IV that cost the hospital 86 cents, according to a hospital spokeswoman, Eliza O’Neill.
Ms. O’Neill defended the markup as “consistent with industry standards.” She said it reflected “not only the cost of the solution but a variety of related services and processes,” like procurement, biomedical handling and storage, apparently not included in a charge of $127 for administering the IV and $893 for emergency-room services.
The patient, a financial services professional in her 50s, ended up paying $100 for her visit. “Honestly, I don’t understand the system at all,” said the woman, who shared the information on the condition that she not be named.
Dr. Frost, the anesthesiologist, spent three days in the same hospital and owed only $8, thanks to insurance coverage by United HealthCare. Still, she was baffled by the charges: $6,844, including $546 for six liters of saline that cost the hospital $5.16.
“It’s just absolutely absurd.” she said. “That’s saltwater.”
Last fall, I appealed to the New York State Department of Health for help in mapping the charges for rehydrating patients in the food poisoning episode. Deploying software normally used to detect Medicaid fraud, a team compiled a chart of what Medicaid and Medicare were billed in six of the cases.
But the department has yet to release the chart. It is under indefinite review, Bill Schwarz, a department spokesman, said, “to ensure confidential information is not compromised.”

Friday, August 23, 2013

The Confidential Memo At The Heart Of The Global Financial Crises



When a little birdie dropped the End Game memo through my window, its content was so explosive, so sick and plain evil, I just couldn't believe it.
The Memo confirmed every conspiracy freak’s fantasy: that in the late 1990s, the top US Treasury officials secretly conspired with a small cabal of banker big-shots to rip apart financial regulation across the planet. When you see 26.3 percent unemployment in Spain, desperation and hunger inGreece, riots in Indonesia and Detroit in bankruptcy, go back to this End Game memo, the genesis of the blood and tears.
The Treasury official playing the bankers’ secret End Game was Larry Summers. Today, Summers is Barack Obama’s leading choice for Chairman of the US Federal Reserve, the world’s central bank. If the confidential memo is authentic, then Summers shouldn’t be serving on the Fed, he should be serving hard time in some dungeon reserved for the criminally insane of the finance world.
The memo is authentic.
I had to fly to Geneva to get confirmation and wangle a meeting with the Secretary General of the World Trade Organisation, Pascal Lamy. Lamy, the Generalissimo of Globalisation, told me,
“The WTO was not created as some dark cabal of multinationals secretly cooking plots against the people... We don’t have cigar-smoking, rich, crazy bankers negotiating.”
Then I showed him the memo.
It begins with Larry Summers’ flunky, Timothy Geithner, reminding his boss to call the Bank bigshots to order their lobbyist armies to march:
“As we enter the end-game of the WTO financial services negotiations, I believe it would be a good idea for you to touch base with the CEOs…”
To avoid Summers having to call his office to get the phone numbers (which, under US law, would have to appear on public logs), Geithner listed the private lines of what were then the five most powerful CEOs on the planet. And here they are:
Goldman Sachs: John Corzine (212)902-8281
Merrill Lynch: David Kamanski (212)449-6868
Bank of America: David Coulter (415)622-2255
Citibank: John Reed (212)559-2732
Chase Manhattan: Walter Shipley (212)270-1380
Lamy was right: They don’t smoke cigars. Go ahead and dial them. I did, and sure enough, got a cheery personal hello from Reed – cheery until I revealed I wasn't Larry Summers. (Note: The other numbers were swiftly disconnected. And Corzine can’t be reached while he faces criminal charges.)
It's not the little cabal of confabs held by Summers and the banksters that’s so troubling. The horror is in the purpose of the "end game” itself.
Let me explain:
The year was 1997. US Treasury Secretary Robert Rubin was pushing hard to de-regulate banks. That required, first, repeal of the Glass-Steagall Act to dismantle the barrier between commercial banks and investment banks. It was like replacing bank vaults with roulette wheels.
Second, the banks wanted the right to play a new high-risk game: “derivatives trading”. JP Morgan alone would soon carry $88 trillion of these pseudo-securities on its books as “assets”.
Deputy Treasury Secretary Summers (soon to replace Rubin as Secretary) body-blocked any attempt to control derivatives.
But what was the use of turning US banks into derivatives casinos if money would flee to nations with safer banking laws?
The answer conceived by the Big Bank Five: eliminate controls on banks in every nation on the planet -- in one single move. It was as brilliant as it was insanely dangerous.
How could they pull off this mad caper? The bankers' and Summers' game was to use the Financial Services Agreement (or FSA), an abstruse and benign addendum to the international trade agreements policed by the World Trade Organisation.
Until the bankers began their play, the WTO agreements dealt simply with trade in goods – that is, my cars for your bananas. The new rules devised by Summers and the banks would force all nations to accept trade in "bads" – toxic assets like financial derivatives.
Until the bankers’ re-draft of the FSA, each nation controlled and chartered the banks within their own borders. The new rules of the game would force every nation to open their markets to Citibank, JP Morgan and their derivatives “products”.
And all 156 nations in the WTO would have to smash down their own Glass-Steagall divisions between commercial savings banks and the investment banks that gamble with derivatives.
The job of turning the FSA into the bankers’ battering ram was given to Geithner, who was named Ambassador to the World Trade Organisation.
Bankers Go Bananas
Why in the world would any nation agree to let its banking system be boarded and seized by financial pirates like JP Morgan?
The answer, in the case of Ecuador, was bananas. Ecuador was truly a banana republic. The yellow fruit was that nation’s life-and-death source of hard currency. If it refused to sign the new FSA, Ecuador could feed its bananas to the monkeys and go back into bankruptcy. Ecuador signed.
And so on – with every single nation bullied into signing.
Every nation but one, I should say. Brazil’s new President, Inacio Lula da Silva, refused. In retaliation, Brazil was threatened with a virtual embargo of its products by the European Union's Trade Commissioner, one Peter Mandelson, according to another confidential memo I got my hands on. But Lula’s refusenik stance paid off for Brazil which, alone among Western nations, survived and thrived during the 2007-9 bank crisis.
China signed – but got its pound of flesh in return. It opened its banking sector a crack in return for access and control of the US auto parts and other markets. (Swiftly, two million US jobs shifted to China.)
The new FSA pulled the lid off the Pandora’s box of worldwide derivatives trade. Among the notorious transactions legalised: Goldman Sachs (where Treasury Secretary Rubin had been co-chairman) worked a secret euro-derivatives swap with Greece which, ultimately, destroyed that nation. Ecuador, its own banking sector de-regulated and demolished, exploded into riots. Argentina had to sell off its oil companies (to the Spanish) and water systems (to Enron) while its teachers hunted for food in garbage cans. Then, Bankers Gone Wild in the Eurozone dove head-first into derivatives pools without knowing how to swim – and the continent is now being sold off in tiny, cheap pieces to Germany.
Of course, it was not just threats that sold the FSA, but temptation as well. After all, every evil starts with one bite of an apple offered by a snake. The apple: the gleaming piles of lucre hidden in the FSA for local elites. The snake was named Larry.
Does all this evil and pain flow from a single memo? Of course not: the evil was The Game itself, as played by the banker clique. The memo only revealed their game-plan for checkmate.
And the memo reveals a lot about Summers and Obama.
While billions of sorry souls are still hurting from worldwide banker-made disaster, Rubin and Summers didn’t do too badly. Rubin’s deregulation of banks had permitted the creation of a financial monstrosity called “Citigroup”. Within weeks of leaving office, Rubin was named director, then Chairman of Citigroup – which went bankrupt while managing to pay Rubin a total of $126 million.
Then Rubin took on another post: as key campaign benefactor to a young State Senator, Barack Obama. Only days after his election as President, Obama, at Rubin’s insistence, gave Summers the odd post of US “Economics Tsar” and made Geithner his Tsarina (that is, Secretary of Treasury). In 2010, Summers gave up his royalist robes to return to “consulting” for Citibank and other creatures of bank deregulation whose payments have raised Summers’ net worth by $31 million since the “end-game” memo.
That Obama would, at Robert Rubin’s demand, now choose Summers to run the Federal Reserve Board means that, unfortunately, we are far from the end of the game.
Special thanks to expert Mary Bottari of Bankster USA www.BanksterUSA.org without whom our investigation could not have begun.

Monday, August 19, 2013

From Reddit/Philosophy: First hand account of how different Cuban society is than most of the world

You can't escape ideology. Unless you become a hermit i guess.
But there are some places which are very, very different from the specific things you mention. Consumerism, materialism, etc.
Out of all the places i've been, i actually found Cuba to be the most different in this sense, with the exception of Havana, which naturally bears all the traits of a relatively big tourist-attractor.
In larger cities like Santiago de Cuba, i felt more removed from the ideology of consumerism and materialism than any other place.
Even rural Africa in the places i've been to me, is less of an escape in this aspect. Even though it is sometimes way poorer and more desolate, it is a sort of ideological wasteland, into which consumerism from the rest of the world seeps quite quickly.
Fidel kept Cuba on a very strict line - and i am not being any kind of political sympathizer here. I have no special alignment towards stalinism or communism. But if what you are looking for is a place that is radically ideologically different, Cuba is my best bid.
In Santiago de Cuba i lived next to a doctor and a streetsweeper and while this is one of the most contented and clichée heavy subjects about Cuba, I really don't think you can imagine the difference in class-relationship that is Cuba vs the western world.
I mean if you educate someone highly and put them next to someone without an education, that is going to do something to their relationship, but it was nothing like what i have ever encountered in other countries.
The street sweeper had become a kind of handyman, because keeping the street clean was not that time consuming, so he basically went around and fixed stuff for everyone free of charge.
One day i broke my only pair of footwear - some really cheap sandals, and went into the doctor-dudes house to maybe borrow a pair of shoes. He was playing backgammon(i think) with the handyman, and i asked them both. The handyman asked to see my sandals. I showed him the sandals and he offered to fix them for me.
Now, the sandals had basically just broken the top from the soals, so i didn't see how he could - but he basically picked up a scrap-soda-can, cut a piece off to make a needle, sharpened it on rock, and sowed my sandals together with homemade tar string.
This is a sort of quaint story that i have remembered for a long time - but the memorable thing was actually the doctors behavior while this happened.
I've tried to explain it so some people. he wasn't fascinated with it like a doctor in my home country (Denmark) might be with a plumber doing good work - he didn't admire it from a sort of intellectual plateau which is quite common here.
He genuinly considered them equals. That really hit me in the face, because everyone in my family has always gone to the university and if i proposed to my grandmother that plumbers are as important to society as doctors - she would probably answer in agreeable terms, but wait until she thought i was clear of that "phase", to talk to me about that kind of thing again.
This class-relationship, as well as a brand of consumerism (if not absence of) that is completely unlike anything i've seen in the western world made it thorougly enlightening experience.
Of course the sky is more colors than blue, and people were unhappy about many things. From restrictions of things like internet, to rumors of neighborhood "spies" that supposedly were there to alert the government of any rising of opposition to Fidel, loads of ideological, political, economical and social problems persist in Cuba. But yeah, if you do consider moving somewhere - that would be my suggestion.
Also western money is worth a million there, if you don't live in Havana. So your financial worries is probably something you can work around with preparation and planning.

Wednesday, August 14, 2013

If we have a "liberal media," where are the liberal stories?: 15 things everyone would know if there were a liberal media


15 things everyone would know if there were a liberal media

Wed Aug 07, 2013 at 05:02 AM PDT   - Daily Kos
Prince Riebus (and apparently many others) still thinks there's a liberal media.
While I share Prince's frustration with the media, as a liberal, I'd like to go on record and state that the media isn't focusing on issues I care about. They seem to be far more focused on entertainment and making money.
Don't believe me?
 photo liberal_media_zps197d95d2.jpg
If you know anyone who still believes in a "liberal media," here's 15 things everyone would know if there really were a "liberal media" (inspired by Jeff Bezos' purchase of The Washington Post):
1. Where the jobs went.
Outsourcing (or offshoring) is a bigger contributor to unemployment in the U.S. than laziness.
Since 2000, U.S. multinationals have cut 2.9 million jobs here while increasing employment overseas by 2.4 million. This is likely just the tip of the iceberg as multinational corporations account for only about 20% of the labor force.
When was the last time you saw a front-page headline about outsourcing?
 photo outsourcing_zps2cf6f1b0.jpg
Source: Wall Street Journal via Think Progress.
2. Upward wealth redistribution and/or inequality.
In 2010, 20% of the people held approximately 88% of the net worth in the U.S. The top 1% alone held 35% of all net worth.
The bottom 80% of people held only 12% of net worth in 2010. In 1983, the bottom 80% held 18% of net worth.
These statistics are not Democrat or Republican. They are widely available to reporters. Why aren't they discussed in the "liberal" media?
 photo ownership_occupy_poster_zps7879609f.jpg
Source: Occupy Posters
3. ALEC.
If there was a corporate organization that drafted laws and then passed them on to legislators to implement, wouldn't you think the "liberal" media would report on them?
The American Legislative Exchange Council (ALEC) is such an organization. Need legislation drafted? No need to go through a lobbyist to reach state legislatures anymore. Just contact ALEC. Among other things, ALEC is responsible for:
  • Stand Your Ground laws
  • Voter ID laws
  • Right to Work laws
  • Privatizing schools
  • Health savings account bills which benefit health care companies
  • Tobacco industry legislation
Many legislators don’t even change the proposals handed to them by this group of corporations. They simply take the corporate bills and bring them to the legislative floor.
This is the primary reason for so much similar bad legislation in different states.
Hello ... "liberal media" ... over here!!!
They're meeting in Chicago this weekend. Maybe the "liberal media" will send some reporters.
4. The number of people in prison.
Which country in the world has the most people in prison?
You might think it would be China (with 1+ billion people and a restrictive government) or former Soviets still imprisoned in Russia.
Wrong. The United States has the most people in prison by far of any country in the world. With 5% of the world’s population, we have 25% of the world’s prisoners – 2.3 million criminals. China with a population 4 times our size is second with 1.6 million people in prison.
In 1972, 350,000 Americans were in imprisoned. In 2010, this number had grown to 2.3 million. Yet from 1988 – 2008, crime rates have declined by 25%.
Isn't anyone in the liberal media interested in why so many people are in prison when crime has dropped? WTF "liberal media"?
 photo incarcerated_americans_zpsb7c891bd.jpg
Source: Wikipedia/Justice Policy Institute Report.
5. The number of black people in prison.
In 2009, non-Hispanic blacks, while only 13.6% of the population, accounted for 39.4% of the total prison and jail population.
In 2011, according to FBI statistics, whites accounted for 69.2% of arrests.
Numbers like these suggest a racial bias in our justice system.
To me, this is a much bigger story than any single incident like Travyon Martin. Or, at the very least, why didn't the "liberal media" ever mention this while covering the Martin story?
6. U.S. health care costs are the highest in the world.
The expenditure per person in the U.S. is $8,233. Norway is second with $5,388.
Total amount of GDP spent on health care is also the highest of any country in the world at 17.6 percent. The next closest country is the Netherlands at 12%.
As a liberal, I’d like to ask why the market isn’t bringing down costs. I’d think a "liberal" media might too.
7. Glass-Steagall.
Glass-Steagall separated risky financial investments from government backed deposits for 66 years.
The idea is simple. Banks were prohibited from using your federally insured savings to make risky investments.
Why is this a good idea?
Risky investments should be risky. If banks can use federally insured funds, there is no risk to them. If they win, they win. If they lose, we cover the cost.
Elizabeth Warren does a great job explaining this to the "liberal news" desk at CNBC:

8. Gerrymandering.
When was the last time you saw a front page headline about gerrymandering?
Before the 2010 election, conservatives launched a plan to win control of state legislatures before the census. The idea was to be in power when national congressional districts were redrawn in order to fix them so Republicans would win a majority of districts.
The Redistricting Majority Project was hugely successful. In 2012, Barack Obama was elected President by nearly 3.5 million votes. In Congressional races, Democrats drew nearly 1.4 million more votes than Republicans yet Republicans won control of the House 234 seats to 201 seats.
How is this possible?
By pumping $30 million into state races to win the legislatures, Republicans redrew state maps in states such as Arizona, Michigan, North Carolina, Pennsylvania, Virginia, Texas, Florida and Ohio to place all of the Democrats into just a few districts.
In this manner, Democrats win heavily in a couple districts and lose the rest.
In North Carolina, the statewide vote was 51 percent Democrat and 49 percent Republican yet 9 Republicans won and only 4 Democrats.
Where is your coverage of this vote stealing, "liberal media"? You're willing to cover voter ID laws, why can't you cover real vote stealing?
 photo 5459fab1-8d5b-44e5-a728-b31ed72bf00d_zps9a434c5a.jpg
Source: Mother Jones.
9. The number of bills blocked by Republicans in Congress.
The filibuster has been used a record number of time since Obama was elected President. From 2008-2012, 375 bills weren’t even allowed to come to a vote in the Senate because Republicans threatened the filibuster.
In 2013, during the first 6 months, Congress has only passed 15 bills that were signed into law. This is 8 fewer than in the first 6 months of 2012 and 19 fewer than 2011.
Also, until the Senate recently threatened to reform the filibuster, the GOP had succeeded in holding up 79 of President Obama’s picks to the U.S. Circuit Court and Courts of Appeal. They’re blocking these appointments regardless of qualification.
Where's the coverage? Where are the reporters asking why nothing is getting done?
* crickets *
10. The Citizens' United Supreme Court decision
In a 2011 Hart poll, only 22% of those polled had actually heard of the Citizens’ United decision before taking the survey.
If 77% believe that corporations have more control over our political process than people, why isn't the liberal media talking more about the Citizens’ United decision?
11. Nixon’s Southern Strategy.
The Southern Strategy is a strategy for gaining political power by exploiting the greatest number of ethnic prejudices. Kevin Philips, Republican and Nixon campaign strategist, speaking about this strategy in a 1970 interview with the New York Times:
From now on, the Republicans are never going to get more than 10 to 20 percent of the Negro vote and they don't need any more than that...but Republicans would be shortsighted if they weakened enforcement of the Voting Rights Act. The more Negroes who register as Democrats in the South, the sooner the Negrophobe whites will quit the Democrats and become Republicans. That's where the votes are. Without that prodding from the blacks, the whites will backslide into their old comfortable arrangement with the local Democrats.
This strategy has been used since President Johnson and Democrats in Congress passed the Civil Rights Act to build the Republican party.Examples of this strategy were evident as recently as 2008 and 2012 as Republicans took up their assault on Medicaid, Social Security, labor unions, and Obamacare – programs which, though they benefit more white seniors, retirees, women, and children, have been sold to many Americans as handouts to lazy, undeserving blacks and minorities.
Yet you never hear the "liberal media" (at least since the 1970 NY Times) talking about the use of this strategy. At least not like this:
"P (President) emphasized that you have to face the fact that the whole problem is really the blacks. The key is to devise a system that recognizes this while not appearing to." - H.R. Haldeman's diary, President Richard Nixon’s White House Chief of Staff
12. Tax cuts primarily benefit the wealthy.A progressive tax program is designed to tax people very little as they are starting out and progressively increase their rates as they do better.
Republican plans seem designed to do exactly the opposite: shift the tax burden off of the wealthy and onto working people.
Take the repeal of the estate tax. In Ohio this was recently repealed by Republicans. The benefit is only realized by people with estates larger than $338,000 (as the first $338k was exempt) and realized most by people with even wealthier estates.
This also explains why Republicans want to shift the system from income taxes to consumption taxes. Consumption taxes are paid most by those at the bottom as basic consumption remains the same regardless of income.
It also explains why capital gain taxes are so low. Income through capital gains is only taxed at 20% (increased from 15% in 2012) instead of at the rate of other income (closer to 35%).
It also explains why Republicans were so willing to let the payroll tax cut expire. The payroll tax cut benefited people who were getting paid, not those issuing the paychecks. How much fight did you see to save this tax cut?
While tax cuts are sold to us as benefiting everyone, they really benefit a select few at the very top.
If everyone knew who tax cuts really benefit, would so many people vote for them?
13. What's happening to the bees?
40-50% of commercial U.S. bee hives were lost this year to colony collapse disorder.
This seems like an odd one to include, why is this important?
The Agriculture Department says a quarter of the American diet depends on pollination by honeybees.
Dating from 2006, colony collapse disorder is a relatively new problem. More "liberal media" coverage might push the urgency of the issue.
Instead here's a typical media story about bees: Thousands of Bees Attack Texas Couple, Kill Horses.
14. The impact of temporary workers on our economy.
The number of temporary workers has grown by more than 50 percent since the recession ended to nearly 2.7 million.
If freelancers, contract workers, and consultants are included, the number is nearly 17 million workers not directly employed by the companies who hire them. This equals 12 percent of the workforce.
What's the impact of a "just in time" workforce on workers and our economy? How about that for a story "liberal media"?
15. Media consolidation
Six corporations - Time Warner, Disney, News Corporation, Viacom, Comcast, and CBS - control roughly 90% of the media in the U.S.
These companies are in business to make a profit.
This is why you'll find plenty of advertisements in the media. Entertainment? Check. Sports? Definitely. Weather? Yep.
You'll also find plenty of "if it bleeds, it leads" stories designed to hook you in. Vendors, witnesses recall Venice hit-and-run horror. Fort Hood trial turns bizarre as shooter grills witnesses.
There's also plenty of political bickering: Democrats said this, Republicans said that. We let you decide (but we never weigh in with any facts or fact-checking).
What won't you hear? You won't hear the "liberal media" discuss the corporate media.
What to make of this
If the media were "liberal," it would serve the public interest and shine a light on issues like the ones above.
More people would also have a better understanding of global warming, peak oil, population growth, political lobbying, government's role in a functioning economy, how much we spend on the military, and countless other issues.
What you’re more likely to see in the media, however, are stories designed to get you to buy their paper, or watch their show, or listen to their radio station. If it bleeds, it leads. This is why the media is concerned with scandal, celebrities, gossip, and fear.
If anything, our news consists of paid advertisements and outlets too scared of offending anyone to publish much of substance. Investigative journalism is also expensive; entertainment is cheap.
The way this corporate media behaves may not be surprising. I apologize if you feel any of this is beating you over the head.
This Buzzfeed-style list wasn't intended to introduce this idea as new (others have done a much better job), but rather to highlight the sheer absurdity of a "liberal media" for an audience who may not see it.
One way to approach the topic is to simply ask: If we have a "liberal media," where are the liberal stories?

Originally posted to akadjian on Wed Aug 07, 2013 at 05:02 AM PDT.

Also republished by In Support of Labor and Unions and Daily Kos.


Tuesday, August 13, 2013

Your Mortgage Documents are Fake! [Why the Banks Resorted to Fraud]

Your mortgage documents are fake!

Prepare to be outraged. Newly obtained filings from a Florida woman's lawsuit uncover horrifying scheme

If you know about foreclosure fraud, the mass fabrication of mortgage documents in state courts by banks attempting to foreclose on homeowners, you may have one nagging question: Why did banks have to resort to this illegal scheme? Was it just cheaper to mock up the documents than to provide the real ones? Did banks figure they simply had enough power over regulators, politicians and the courts to get away with it? (They were probably right about that one.)
A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.
The 2011 lawsuit was filed in U.S. District Court in both North and South Carolina, by a white-collar fraud specialist named Lynn Szymoniak, on behalf of the federal government, 17 states and three cities. Twenty-eight banks, mortgage servicers and document processing companies are named in the lawsuit, including mega-banks like JPMorgan Chase, Wells Fargo, Citi and Bank of America.
Szymoniak, who fell into foreclosure herself in 2009, researched her own mortgage documents and found massive fraud (for example, one document claimed that Deutsche Bank, listed as the owner of her mortgage, acquired ownership in October 2008, four months after they first filed for foreclosure). She eventually examined tens of thousands of documents, enough to piece together the entire scheme.
A mortgage has two parts: the promissory note (the IOU from the borrower to the lender) and the mortgage, which creates the lien on the home in case of default. During the housing bubble, banks bought loans from originators, and then (in a process known as securitization) enacted a series of transactions that would eventually pool thousands of mortgages into bonds, sold all over the world to public pension funds, state and municipal governments and other investors. A trustee would pool the loans and sell the securities to investors, and the investors would get an annual percentage yield on their money.
In order for the securitization to work, banks purchasing the mortgages had to physically convey the promissory note and the mortgage into the trust. The note had to be endorsed (the way an individual would endorse a check), and handed over to a document custodian for the trust, with a “mortgage assignment” confirming the transfer of ownership. And this had to be done before a 90-day cutoff date, with no grace period beyond that.
Georgetown Law professor Adam Levitin spelled this out in testimony before Congress in 2010: “If mortgages were not properly transferred in the securitization process, then mortgage-backed securities would in fact not be backed by any mortgages whatsoever.”
The lawsuit alleges that these notes, as well as the mortgage assignments, were “never delivered to the mortgage-backed securities trusts,” and that the trustees lied to the SEC and investors about this. As a result, the trusts could not establish ownership of the loan when they went to foreclose, forcing the production of a stream of false documents, signed by “robo-signers,” employees using a bevy of corporate titles for companies that never employed them, to sign documents about which they had little or no knowledge.
Many documents were forged (the suit provides evidence of the signature of one robo-signer, Linda Green, written eight different ways), some were signed by “officers” of companies that went bankrupt years earlier, and dozens of assignments listed as the owner of the loan “Bogus Assignee for Intervening Assignments,” clearly a template that was never changed. One defendant in the case, Lender Processing Services, created masses of false documents on behalf of the banks, often using fake corporate officer titles and forged signatures. This was all done to establish standing to foreclose in courts, which the banks otherwise could not.
Szymoniak stated in her lawsuit that, “Defendants used fraudulent mortgage assignments to conceal that over 1400 MBS trusts, each with mortgages valued at over $1 billion, are missing critical documents,” meaning that at least $1.4 trillion in mortgage-backed securities are, in fact, non-mortgage-backed securities. Because of the strict laws governing of these kinds of securitizations, there’s no way to make the assignments after the fact. Activists have a name for this: “securitization FAIL.”
One smoking gun piece of evidence in the lawsuit concerns a mortgage assignment dated Feb. 9, 2009, after the foreclosure of the mortgage in question was completed. According to the suit, “A typewritten note on the right hand side of the document states:  ‘This Assignment of Mortgage was inadvertently not recorded prior to the Final Judgment of Foreclosure… but is now being recorded to clear title.’”
This admission confirms that the mortgage assignment was not made before the closing date of the trust, invalidating ownership. The suit further argued that “the act of fabricating the assignments is evidence that the MBS Trust did not own the notes and/or the mortgage liens for some assets claimed to be in the pool.”
The federal government, states and cities joined the lawsuit under 25 counts of the federal False Claims Act and state-based versions of the law. All of them bought mortgage-backed securities from banks that never conveyed the mortgages or notes to the trusts. The plaintiffs argued that, considering that trustees and servicers had to spend lots of money forging and fabricating documents to establish ownership, they were materially harmed by the subsequent impaired value of the securities. Also, these investors (which includes the Treasury Department and the Federal Reserve) paid for the transfer of mortgages to the trusts, yet they were never actually transferred.
Finally, the lawsuit argues that the federal government was harmed by “payments made on mortgage guarantees to Defendants lacking valid notes and assignments of mortgages who were not entitled to demand or receive said payments.”
Despite Szymoniak seeking a trial by jury, the government intervened in the case, and settled part of it at the beginning of 2012, extracting $95 million from the five biggest banks in the suit (Wells Fargo, Bank of America, JPMorgan Chase, Citi and GMAC/Ally Bank). Szymoniak herself was awarded $18 million. But the underlying evidence was never revealed until the case was unsealed last Thursday.
Now that it’s unsealed, Szymoniak, as the named plaintiff, can go forward and prove the case. Along with her legal team (which includes the law firm of Grant & Eisenhoffer, which has recovered more money under the False Claims Act than any firm in the country), Szymoniak can pursue discovery and go to trial against the rest of the named defendants, including HSBC, the Bank of New York Mellon, Deutsche Bank and US Bank.
The expenses of the case, previously borne by the government, now are borne by Szymoniak and her team, but the percentages of recovery funds are also higher. “I’m really glad I was part of collecting this money for the government, and I’m looking forward to going through discovery and collecting the rest of it,” Szymoniak told Salon.
It’s good that the case remains active, because the $95 million settlement was a pittance compared to the enormity of the crime. By the end of 2009, private mortgage-backed securities trusts held one-third of all residential mortgages in the U.S. That means that tens of millions of home mortgages worth trillions of dollars have no legitimate underlying owner that can establish the right to foreclose. This hasn’t stopped banks from foreclosing anyway with false documents, and they are often successful, a testament to the breakdown of law in the judicial system. But to this day, the resulting chaos in disentangling ownership harms homeowners trying to sell these properties, as well as those trying to purchase them. And it renders some properties impossible to sell.
To this day, banks foreclose on borrowers using fraudulent mortgage assignments, a legacy of failing to prosecute this conduct and instead letting banks pay a fine to settle it. This disappoints Szymoniak, who told Salon the owner of these loans is now essentially “whoever lies the most convincingly and whoever gets the benefit of doubt from the judge.” Szymoniak used her share of the settlement to start the Housing Justice Foundation, a non-profit that attempts to raise awareness of the continuing corruption of the nation’s courts and land title system.
Most of official Washington, including President Obama, wants to wind down mortgage giants Fannie Mae and Freddie Mac, and return to a system where private lenders create securitization trusts, packaging pools of loans and selling them to investors. Government would provide a limited guarantee to investors against catastrophic losses, but the private banks would make the securities, to generate more capital for home loans and expand homeownership.
That’s despite the evidence we now have that, the last time banks tried this, they ignored the law, failed to convey the mortgages and notes to the trusts, and ripped off investors trying to cover their tracks, to say nothing of how they violated the due process rights of homeowners and stole their homes with fake documents.
The very same banks that created this criminal enterprise and legal quagmire would be in control again. Why should we view this in any way as a sound public policy, instead of a ticking time bomb that could once again throw the private property system, a bulwark of capitalism and indeed civilization itself, into utter disarray? As Lynn Szymoniak puts it, “The President’s calling for private equity to return. Why would we return to this?”
David Dayen is a contributing writer for Salon. Follow him on Twitter at@ddayen.