Daily Read - 3/5/10

"Federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available." Also, benefits "averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker" Particularly striking is the data showing that Federal clergy earn almost double what private clergy make. Whatever happened to separation of church and state? (USA Today)

"Fannie Mae and Freddie Mac may force lenders including Bank of America Corp., JPMorgan Chase & Co., Wells Fargo & Co. and Citigroup Inc. to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages."  Why?  "Banks that sell mortgages to Fannie Mae and Freddie Mac have to provide “representations and warranties” assuring that the loans conformed to the agencies’ standards. With more loans going bad, the agencies are demanding that banks turn over loan files, so they can scour the records for missing documentation, inaccurate data and fraud...The mortgage firms are looking at every loan more than 90 days past due" and asking for documentation from the banks.  This is a great attempt to push responsibility for the losses on these loans back to the banks that issued them.  However, the Bloomberg article also points out that the banks will lobby Congress to stop this practice, claiming it "might be counterproductive, since the Treasury and Federal Reserve are trying to help banks heal."  I hope they don't succeed - making banks responsible for their own loans will do more good than any "Consumer Financial Protection Agency."

Barney Frank "has unexpectedly called into question the safety of investing in Fannie Mae and Freddie Mac, raising the specter that investors who have lent money to the two firms or bought their mortgage-backed securities could one day suffer losses." (WaPo)  Mr Frank, where were you before the mortgage giants imploded?  Oh, now I remember -- "'These two entities -- Fannie Mae and Freddie Mac -- are not facing any kind of financial crisis,'' said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ''The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.'' (NY Times, September 11, 2003)  That exaplins why today's comments were "unexpected."

Krauthammer explains today why polls show that voters support many individual items in the health care reform proposals, but are "mystifyingly" against the bills in their entirety:

"Allow me to demystify. Imagine a bill granting every American a free federally delivered ice cream every Sunday morning. Provision 2: steak on Monday, also home delivered. Provision 3: a dozen red roses every Tuesday. You get the idea. Would each individual provision be popular in the polls? Of course.

However (life is a vale of howevers) suppose these provisions were bundled into a bill that also spelled out how the goodies are to be paid for and managed -- say, half a trillion dollars in new taxes, half a trillion in Medicare cuts (cuts not to keep Medicare solvent but to pay for the ice cream, steak and flowers), 118 new boards and commissions to administer the bounty-giving, and government regulation dictating, for example, how your steak is to be cooked. How do you think this would poll?"