Grassley: Public Option Off the Table

We shall see, Grassly is one of the 6 senators who have toiled endlessly to come up with a deal and the fact that Obama all but telegraphed he would ditch a public plan to get legislation passed does make this seem quite likely:

DES MOINES, Iowa (AP) -- Iowa Republican Sen. Charles Grassley said Monday he remains hopeful a limited health care reform measure can be negotiated but a small group working on the issue agrees a government-run public option won't be part of a package.

Grassley, the ranking Republican on the Senate Finance Committee, is among a bipartisan group of six lawmakers who are negotiating a compromise to overhaul the nation's health care system.

''I'm still hopeful, but I'm hopeful based on I think you're talking about something a little less sweeping than what we talked about before,'' Grassley said in a telephone interview with The Associated Press. ''I say that with some comfort because we hear other senators at the table say it.''

The six key Senators have scheduled a conference call Friday to discuss health care, but Grassley said nothing can be resolved until next week when Congress returns and the affect of town hall meetings can be assessed.Some issues have been settled, he said, and one is that a public health care option sought by President Barack Obama won't be in the mix.

''It's pretty clear that's something not on the table,'' said Grassley. ''It's fair to say that not every one of the six is opposed to it, but they realize the reality of it.''While Grassley is among the key bargainers on health care reform, he made it clear there are limits on what he can accept in a final version.

''There are things that for months have been things I have said can't be in a bill,'' said Grassley. ''There are some instructions from my caucus I have tried to take to the table: no public option, no rationing and tort reform.''

Of course what happens in the House is another matter and with the Democratic Caucus fraying at the edges it should be interesting to see how this plays out.

Americans Increasingly Happy With Health Care System

I had heard that insurance companies were actually please with the debate since people started taking their coverage seriously and as they looked into their Health Insurance they were pleasantly surprised by how good it was. Consider this another positive sign as people listen to Obama's scare tactics and promptly shrug it off:

WASHINGTON (Reuters) - Fewer Americans are afraid that they will be unable to pay for healthcare services and fewer expect to postpone medical treatments due to costs, according to a Thomson Reuters survey published on Monday.

Researchers found a steady increase in people's confidence about their ability to pay for healthcare services -- it rose 12 percent between March and July this year.

The survey of 3,000 households showed, unsurprisingly, that people who made more money were more confident they could pay for medical care, and people who had insurance were far more confident about paying than those who lacked insurance.

"These findings are consistent with data we've been seeing for everything from hospital discharge trends to opinions about healthcare reform," said Gary Pickens, chief research officer for the Healthcare & Science business of Thomson Reuters.

"There is growing optimism among many healthcare consumers, but (there) also is a clear disparity in outlook between those with higher income levels who have insurance coverage and those who are uninsured. This gap needs to be an area of focus for healthcare professionals and policymakers," Pickens added in a statement.

Healthcare reform is the signature policy goal of President Barack Obama, and Congress is working on several bills, most concentrating on changes in the health insurance industry.

Some interesting aspects from the Reuters Thomson Study:


1. An analysis of trends between March and July 2009 indicates improving healthcare consumer confidence.The Thomson Reuters Healthcare Index: Consumer Confidence increased by 12 percent between Marchand July 2009, following increases in the two previous survey periods. All components of theindex increased. The payment confidence index moved up approximately 18 percent, while service indexes for routine care, urgent care, testing, elective surgery, and therapies increased between8 percent and 15 percent. All improvements are statistically significant.( Click on Link for corresponding charts and graphs)

2. Groups under the age of 35 showed showed lower confidence gains, 35-64 a slightly more, and over 65 saw a massive increase in overall confidence. Its worth noting all groups increased their overall confidence in the system.

3. The biggest split was in those who earned 50,000 or more and had a higher education tended to have much higher confidence then those who earned less and had less education. But even here the lowest earners (25,000) or less showed an increase in confidence and the only group to show any decline was found in the 25,000 to 50,000 bracket.

A Summary of the Findings:

• The Thomson Reuters Consumer Healthcare Indexes™: Consumer Confidence is based on data from thePULSE™ Healthcare Survey and tracks overall healthcare confidence as well as confidence in payment forand access to services. Our study of consumer confidence between March and July 2009 found:

• An overall index increased by 12 percent between March and July 2009.

• The index reflecting respondents’ belief that they could pay for healthcare moved up approximately18 percent.

• The indexes reflecting respondents’ belief that they would be able to access necessary routine care, urgent care, medical testing, elective surgery and therapies all increased between 8 percentand 15 percent.
  

• Overall confidence levels were highest in the oldest ages in July. Improvement in overall confidence wasalso greatest in the oldest age group.

• Overall confidence increased with consumer household income level. Improvement in confidence was somewhat faster in two of the lower income groups.

• Higher levels of education are associated with higher overall confidence levels. Improvement in confidence was significant in lowest and highest education groups.
  

• Insurance coverage has a powerful effect on confidence levels. Those without insurance had overall confidence levels 80 percent less than average in July 2009. Confidence levels improved significantly for consumers with insurance.

So we have increased confidence generally across the board for the "broken" system. Nothing like the threat of losing something to make people appreciate what they have.

Iraq May Have an Airforce After All

Occasionally there are stories which illustrate how much things change but often get forgotton in the mix. I believe this is one of them:

BAGHDAD — Iraqi officials have discovered that they may have an air force, after all.The Defense Ministry revealed Sunday that it recently learned that Iraq owns 19 Russian-designed MIG-21 and MIG-23 jet fighters, which are in storage in Serbia. The ministry said Iraqi officials are negotiating with the Serbs to restore the aircraft.

The Serbian government has tentatively promised to make two of the aircraft available “for immediate use,” according to a press release from the ministry. The rest would be restored on a rush basis, the ministry said.An Iraqi delegation went to Serbia as part of aneffort by the government to locate funds stashed abroad by Saddam Hussein to evade sanctions first imposed during the 1990’s. Serbia had had friendly relations with Mr. Hussein.

During that visit, the Iraqi officials discovered that Mr. Hussein had sent the 19 jet fighters to Serbia for repairs in the 1980’s, during the Iran-Iraq war, but was unable to bring them back after sanctions had been imposed on his country.

Iraq immediately sent a technical delegation, including air force chief Gen. Anwar Mohammed Amin. The web site of the Iraqi Supreme Islamic Council, the leading Shia political party, quoted Defense Ministry spokesman Mohammed al-Askari as saying that the aircraft had been sent in 1989 “for maintenance and everything was paid for by Iraq’s money.”

More to the point there was a time when many of the fashionable wrote Iraq off, the fact that they can even consider reforming the airforce should tell you how much things have changed.

Obama Tanking

Between his crony-capitalism, corruption scandals, decision to prosecute CIA operatives, and the health care disaster, Obama has managed to squander the good will of the nation quicker then any president in living memory.

Rassmussen:

Date	Presidential Approval Index	Strongly Approve	Strongly Disapprove	Total Approve	Total Disapprove
08/30/2009	-10	32%	42%	47%	52%
08/29/2009	-8	32%	40%	50%	50%
08/28/2009	-8	32%	40%	50%	49%
08/27/2009	-8	31%	39%	50%	49%
08/26/2009	-8	31%	39%	49%	50%
08/25/2009	-11	29%	40%	49%	51%

What is the bottom?

Russian Revisionism

Yes the Soviet Union helped start World War II, this re-write by the Russians is quite pathetic. For starters it was the USSR which supplied NAZI Germany with many of the natural resources it needed to prime up its war machine. The USSR also invaded the Eastern half of Poland as part of the Non-Aggression pact additionally the Soviets managed to seized land from Romania as part of their bullying and general lawlessness . Top this off with Stalin's invasion of Finland in 1940 and you have one of the key ingredients for the outbreak of World War II.

MOSCOW (AP) -- Russia's president defended Moscow's role in World War II before the 70th anniversary of its outbreak, saying in an interview broadcast Sunday that anyone who lays equal blame on the Soviet Union and Nazi Germany is telling a ''cynical lie.''Dmitry Medvedev's remarks were the latest salvo in Russia's bitter dispute with its neighbors over the war and its aftermath. The Kremlin has launched a campaign for universal acceptance of its portrayal of the Soviet Union as Europe's liberator.

In Eastern Europe, however, gratitude for the Nazi defeat is diluted by bitterness over the decades of postwar Soviet dominance.Medvedev suggested in the interview with state-run Rossiya television that nobody can question ''who started the war, who killed people and who saved millions of lives -- who, in the final analysis, saved Europe.''

''You cannot label someone who defended himself an aggressor,'' Medvedev said.Tuesday marks 70 years since the Nazis invaded Poland on Sept. 1, 1939, shortly after Josef Stalin's Soviet Union reached a nonaggression pact with Germany that included a secret protocol dividing eastern Europe into spheres of influence.

Weeks after the German invasion, the Soviet army entered Poland from the east. After claiming its part of Poland, the Soviet Union then annexed the Baltic states and parts of Finland and Romania.

Does this mean there was even a chance of averting World War II? The answer is no as Hitler was clearly set on launching war, but the actions of Stalin and Russia clearly took the regional dangers of Hitlers actions and help transform them in a war of massive proportions.

Richardson Neither Exonerated or Charged

Considering the vastness of the scandal and the fact that politicians and financial institutions from Alabama to Europe have been accused of orchestrating black box deals, the fact that Richardson has not been exonerated isn't all that surprising:

Aug. 29 (Bloomberg) -- New Mexico Governor Bill Richardson won’t be charged in a yearlong investigation of an alleged pay- to-play scheme, even though “pressure from the governor’s office resulted in the corruption of the procurement process,” the state’s top federal prosecutor said in a letter.

The decision against seeking charges isn’t an “exoneration” of anyone’s conduct, wrote New Mexico U.S. Attorney Gregory Fouratt in an Aug. 27 letter to lawyers for Richardson and his former top aides.

The probe examined how CDR Financial Products of Los Angeles won $1.5 million of work from the New Mexico Finance Authority. CDR was hired in 2004 to provide guidance regarding interest-rate swaps and escrow funds for $1.6 billion of debt as part of Richardson’s transportation project, known as Governor Richardson’s Investment Partnership.

CDR and its president, David Rubin, donated $110,000 to Richardson political committees from 2003 to 2005, including a $75,000 contribution to ¡Si Se Puede! Boston 2004 Inc., formed to help pay expenses at the 2004 Democratic National Convention in Boston, where Richardson was chairman.

Fouratt's parting shot may not be the end of this. If the muni-bond scandal unravels in other places and only last June CDR was subpoenaed again over questionable deals in Pennsylvania who knows what could turn up.

Obama Still Disconnected From Budget Reality

Its been understood for some time now that the Obama admin has been pushing make believe budgetary numbers as a means to paper over their massive policy costs. The delayed budget released confirmed this as well, now its clear Obama is still pushing a make believe budget:

The cumulative $9 trillion deficit projected for the next decade is almost $2 trillion more than the estimate made only three months ago. Presumably this one is a more honest forecast, but even without smoking anything, one is blown away by the notion of a $9 trillion addition to debt by 2019. In 2019, debt held by the public will be 76% of GDP, compared to 56% of GDP in 2009.

Even more disturbing, this enormous increase in federal debt is the outcome of assumptions that themselves seem to suggest an overdose of feel-good substances. To be sure, White House budgets, whoever was president, have been laced with optimism. (No president has forecast a recession.)

Consider this week's projections of growth of gross domestic product in real terms, exclusive of inflation. The White House projects that GDP will grow by 3.8% in 2011 and climb above 4% a year for the next three years, followed by two years above 3%. This is far higher than historical norms-the economy has not seen such a period of growth since the 1960s.

This is self-serving optimism. By assuming higher economic growth, the forecasters can show more tax revenue and lower estimates of future deficits.Excessive Obama optimism is not limited to economic growth. Despite the enormous monetary stimulus pumped out by the Federal Reserve in 2008-2009, bank credit that is widely regarded as potentially inflationary, the administration assumes that inflation will actually decline from 2.1% in 2008 to 1.5% in 2009 and then to 1.3% in 2010 and 2011, and not rise above 1.8% through 2019.

Understand something. Obama is using rosy numbers and we still have a colossal debt.

Economist Looks at the Budget Disaster

Yup as bad as we think:

The update, known as the mid-session review, increases the White House estimates of America’s cumulative ten-year deficit by almost $2 trillion, to a new total of $9.05 trillion. The White House Office of Management and Budget (OMB) expects this year’s deficit to be smaller than first predicted: 11.2% of GDP rather than 12.9%. This is largely because money which Mr Obama had expected to use to prop up the banking system will no longer be needed. Federal debt will reach 77% of GDP in 2019, up from 41% in 2008.

The problem lies in the longer term. America’s public finances show no sign of recovering to anything near a sustainable level in the coming years. The average deficit over the next decade is now expected to be 5.1% of GDP, compared with an average of 4% in the original budget. Even in 2019, the last year of the forecast period and long after the financial crisis, Mr Obama’s team expects a deficit of 4% of GDP (see chart).

By the way, as for the cost savings in Obama's health care:

The Obama team argues, rightly, that controlling health-care costs is a big part of the long-term fiscal solution, though it is less clear that their plans achieve this. America’s fiscal mess will be also be eased if the economy grows faster than expected, which suggests team Obama should be cautious about undermining incentives to save and invest. But other spending cuts and higher tax revenues will also be needed. Otherwise, America’s depressing budget figures will get darker still

United States Attorney, on Richardson: Pressure From the Governor’s Office Resulted in the Corruption of the Procurement Process

I do wonder how much the prosceutorial team was pressured on the case by Holder at the DOJ, this little blurb makes me think more some wish to acknowledge:

In a letter sent to witnesses before the grand jury investigating accusations of pay to play in Gov. Richardson’s administration, United States attorney, Gregory J. Fouratt said that while criminal charges weren’t forthcoming, “pressure from the governor’s office resulted in the corruption of the procurement process” and that the letter “should not be interpreted as exoneration of any party’s conduct in that matter, the New York Times reported late Thursday night.

Richardson’s office had released a statement on Thursday saying, in part: “Governor Richardson has known all along that neither he nor any staff members committed any transgressions during their successful fundraising back in 2004. The U.S. Attorney’s thorough and lengthy investigation has apparently determined the same thing – that no indiscretions occurred.”

Federal investigators were investigating how CDR Financial Products Inc., of Beverly Hills, Calif., got two consulting contracts in 2004 worth about $1.4 million to advise New Mexico on a large bond issue to help pay for road projects across the state. CDR president, David Rubin, a major Democratic contributor, had given more than $110,000 to two political action committees controlled by the governor from 2003 to 2005.

The largest of those donation, $75,000, was made less than a week before CDR was chosen by the Finance Authority to handle the investment of bond proceeds. The investigation focused on whether the governor’s former chief of staff, David Contarino, played a role in hiring CDR.

The allegations of bid rigging have been around for some time now, and what happens next depends on developments in other parts of the country especially the unfolding trial in Alabama. Now even the muni-bond aspect may be out of the way, there are still a few landmines left for Richardson:

In an interview with NMI, Albuquerque pollster and analyst Brian Sanderoff pointed out that federal and state investigators are still looking into allegations in the investment scandal that began in New York and has since spread to New Mexico and other states. That case, which is separate from the probe that has ended, involves some prominent Richardson friends and donors.

The probe that we learned today has ended — the federal investigation into allegations that CDR Financial Products received a lucrative investment contract from the New Mexico Finance Authority in exchange for campaign contributions to Richardson and two political action committees he started — cost the governor the commerce secretary job in Washington. But even as President Barack Obama accepted Richardson’s withdrawal of his nomination for that post in January, the president said he looked forward to Richardson’s “future service to our country and in my administration.”

Richardson said at the time that he would continue serving as governor “for now” and was “eager to serve in the future in any way (Obama) deems useful.”Sanderoff said today that the end of the CDR case probably isn’t enough to convince the president to offer Richardson a cabinet-level job.

“My guess is things will have to settle down awhile before we’ll be seeing any talk of cabinet-level positions,” he said. “As long as there’s talk of other investigations, I think the Obama administration will be shy.”“But if some clear declaration is made by the Justice Department, at some point, that the governor has been cleared [of wrongdoing in any case],” Sanderoff said, “then that would be another story.”

In the investment scandal, the founder a company that was once New Mexico’s investment adviser is under indictment in New York in a pay-to-play investigation there. Among the allegations is that the founder of Aldus Equity, Saul Meyer, helped the son of New York’s then-state comptroller win an investment contract in New Mexico in exchange for his company getting increased business in New York.In addition, Richardson has taken $20,000 in campaign contributions from another man tied to the scandal who is reportedly negotiating a settlement in New York to avoid criminal charges.

How big is the pension scandal?

The pending investment scandal

But, as Sanderoff said, there are some pending situations that could keep Richardson in New Mexico, at least for now. Federal prosecutors have subpoenaed two state agencies in an ongoing investigation into investment practices in New Mexico. Of interest, according to a federal subpoena released in June, is Texas-based Aldus, New Mexico’s former investment adviser. Meyer, its founder, has been indicted in an ongoing New York investigation into pay-to-play allegations there.

Among the allegations in the New York inquiry is that Meyer helped the son of the New York state comptroller, Alan Hevesi, win a lucrative contract in New Mexico for a firm he was representing in return for Aldus’ increased business in New York, according to the criminal complaint. At the time, the comptroller’s son, Dan Hevesi, was acting as a third-party marketer.

Third-party marketers, once obscure figures in the investment world, act as matchmakers between private equity and hedge funds and states looking for a good return on their money. Their practices have grabbed headlines in New Mexico in recent months due to the millions of dollars paid out to them, including $22 million to Marc Correra.

Correra is the son of a friend and prominent fundraiser for Richardson.Richardson has one other direct tie to the investment scandal: Steven Rattner, the former head of Obama’s auto-bailout program, gave $5,000 to Richardson’s 2002 gubernatorial campaign and $15,000 to Richardson’s 2006 re-election bid.

Richardson heads the State Investment Council (SIC) which, in 2005, voted to invest $20 million with Quadrangle Group LLC. At the time of the 2002 and 2006 campaign contributions, Rattner was a managing principal in the company, which he left in February of this year to take the auto-bailout job.Rattner recently left that post and is reportedly negotiating a settlement with the New York attorney general in order to avoid criminal charges in that state.

The nationwide pension scandal, which has rocked New York and led to the highest echelons of the Obama admin is still unfolding, it remains to be seen how that will shake out.

Black Box Deals and Muni-Bond Scandal: European Edition!

On a day Richardson and associates were cleared, the muni-bond scandal has gone European!

Aug. 27 (Bloomberg) -- In June 2005, Milan’s city council voted to hire four banks to arrange Europe’s biggest-ever municipal bond sale at a fee of just 0.01 percent. That minuscule cost puzzled one councilman.

“I had a hunch something was wrong,” says Basilio Rizzo, one of 14 politicians on the 60-member council who tried to change the deal after becoming suspicious of the banks’ motives. “Banks can’t do things for free.”

Rizzo was onto something. Depfa Bank Plc, now a unit of Hypo Real Estate Holding AG; Deutsche Bank AG; JPMorgan Chase & Co.; and UBS AG charged Milan 168,532 euros ($239,189) to find investors for 1.69 billion euros of bonds -- the promised 0.01 percent. That wasn’t all.

As part of the deal, the same four banks were hired by the city to advise it on how to use the new bonds to restructure its existing debt in a way that would cut costs.The banks had two pieces of advice for Milan: First, the city could save money by buying interest-rate swaps, which are derivatives designed to keep monthly payments low as rates change. Second, the institutions best prepared to sell them those swaps were none other than the banks themselves.

The four banks thus play four roles -- as underwriters, advisers, swap dealers and counterparties in the derivative contracts.

Undisclosed Fees

The group of banks wrote in a June 3, 2005, letter that the bond issue would save Milan about 55 million euros over the 30- year life of the bonds.The firms never said what their fees on the swaps would be, public records show. Today, Milan faces so-called mark-to-market losses of 231 million euros on its swaps, according to council member Davide Corritore.

In all, the city’s losses include at least 101 million euros in hidden fees, according to Milan prosecutor Alfredo Robledo, who’s investigating the swap deals. The fees were buried because they were built into swap interest rates without any written explanation, the prosecutor says.

That 101 million euro price tag for Milan’s dealings with the four banks was 599 times the original figure of 0.01 percent for selling bonds and providing advice.Without seeking competitive bids, the city agreed on June 16, 2005, to let the four banks sell them swap contracts. Neither the new swap rates nor the costs associated with them had been part of the original vote by the city council.

Seeking Indictment

Robledo said in July he would ask Milan judges to indict Depfa, Deutsche Bank, JPMorgan, UBS and 14 individuals, including two city officials, on fraud charges in connection with the swap deals.He said the banks were bound by U.K. securities rules because their London-based bankers managed the transaction, which was signed in London. The banks violated regulations by failing to inform Milan in writing that for the swap deal the city was no longer a customer, but a counterparty to the banks, Robledo said.

For the Record UBS and Chase bank have been involved in numerous sketchy deals here in the United States and with the most damage in Jefferson County Alabama, so how does the fee scam work:

Step 1:Issuer sells Millions in Municipal Bonds to finance civic improvements
Step2 :Financial firms make millions in fees from bonds Sales (Some have secret agreements to make more from investment gains and insurance)
Step 3: Cities buy back bonds from investors, citizens get nothing.
Step 4: IRS says the agreement cheats taxpayers, demands a tax penalty to keep the bonds tax exempt.

Remember the Key is and always has been the fees collected on the deals. As describe in Broken Promises:

The arrangements -- often called black box deals, because they're complicated and mysterious -- sometimes contain secret agreements that promise to pay the financial middlemen higher fees if none of the money from the bond offerings is used to help the public. The agencies that issue the bonds buy them back from investors. The money goes untapped, and the advisers keep their fees.

Black Box Deals
Pay for play is something of a misnomer regarding the various Municipal Bond Scandals that have cheated the US tax payers out of 100 million dollars, undermined trust in the Bond market, and left whole communities, especially low income areas devastated. In reality they are known as black box deals. Black Box deals earned the name from being opaque in nature an designed to enrich the people who put the deals together. The schemes revolve around the raising of Municipal Bonds for local governments to finance various improvements(low income Housing, computers for schools, etc..). In regards to the scandals that have swirled around various "deals" that have been in the news lately, three key players were involved, Anchor National , which was a subsidiary of AIG, CDR Financial Products who actually put the deals together, and JP Morgan Chase which would underwrite the whole affair. A 4th player would be local government in whose name the municipal bonds would be floated. A central part of these deals was that local government would forfeit financial decisions on the dispersion of the cash to the three companies, a fatal error as it would turn out. For the companies would come to an understanding that the less money spent, the more money they could make. Leading to communities who would get their hopes up over new improvements funded by bonds floated in their name, only to see not a dime spent but millions made by AIG, CDR and JP Morgan Chase. It all came down to charging fees to carry out the deals:

``Black box deals, pooled deals, blind pools -- people call them lots of things,'' says Sherman Golden, an Atlanta-based bond lawyer, who says he experienced one of these deals firsthand when he was a municipal official. He says he's seen too many schemes that benefited banks and other promoters at the expense of taxpayers. ``The motivation is always the same: the fees,'' he says.

In New Mexico we have this:

UBS was among the four banks that split more than $5.1 million of fees for lining up buyers for the finance authority’s bonds sold in 2004, and one of five that sold the agency derivatives, bond and authority records show. According to filings with securities regulators, DuVal & Associates was paid $10,000 a month to find business for UBS in 10 states, including New Mexico.

This is just one example, in short many of the abuses that occurred in America involving the muni-bond scandal were brought over to Europe by many of the same players.

"It Was Killed in Washington": Richardson and Staff Look to Be Cleared in Muni-Bond Scandal

What is there to say, mounds of evidence, a top Democrat fundraiser, rumors that Eric Holder personally looked at the case, and surprise, it appears he will be cleared of any wrongdoing. Of course the damage has been done and now the elected Democrats, CDR Financial Products, and other financial groups which were involved in numerous deals appear to be getting off. Never forget the magic phrase that describes all if this, Convergence. Anyway for more on Mike Stratton who was Richard son's man at the Democratic governors association check here, for David Contarino check here. On a side note the New York and New Mexico Pension scandals that brought down Steve Rattner are still open.

SANTA FE, N.M. (AP) -- New Mexico Gov. Bill Richardson and former high-ranking members of his administration won't be criminally charged in a yearlong federal investigation into pay-to-play allegations involving one of the Democratic governor's large political donors, someone familiar with the case said.

The decision not to pursue indictments was made by top Justice Department officials, according to a person familiar with the investigation, who asked not to be identified because federal officials had not disclosed results of the probe.''It's over. There's nothing. It was killed in Washington,'' the person told The Associated Press.

A federal grand jury began an investigation in 2008 into a possible pay-to-play scheme in which lucrative work on state bond deals went to a Richardson donor. The federal probe derailed Richardson's appointment as commerce secretary in President Barack Obama's administration

A Quick Summary:

Prosecutors also subpoenaed records of another former Richardson aide, David Harris, and one of the governor's close political advisers, Michael Stratton.

Harris served as Richardson's deputy chief of staff and then became executive director of the New Mexico Finance Authority, which selected CDR for the bond financing work. Stratton, a Denver-based political consultant, served as a senior adviser to Richardson's 2008 presidential campaign and was a consultant to CDR and another financial firm when the Finance Authority put together the bond deals in 2004.

The state work generated almost $1.5 million in fees for CDR in 2004-2005.CDR Chief Executive David Rubin and his firm contributed $110,000 to Richardson political committees in 2003-2005. The largest of those contributions, $75,000, was made less than a week before CDR was selected in June 2004 by the Finance Authority to handle the reinvestment of idle bond proceeds. The firm earned $443,000 in fees for its reinvestment work.

CDR received more than $1 million in fees in May 2004 for serving as a financial adviser on interest rate swaps for the transportation bond issues and as the manager of bond proceeds held in escrow.The bonds financed a $1.6 billion state transportation program that was called GRIP -- Gov. Richardson's Investment Partnership. The Legislature approved the transportation plan, which included the governor's commuter rail proposal, in the fall of 2003 during a special session.

The Finance Authority is a quasi-public agency that issues bonds and helps develop low-cost financing for state and local projects. The governor indirectly controls the authority because its 12-member board is made up mostly of executive branch department administrators and gubernatorial appointees.

Well with Langford's trial delayed it appears investigations into the muni-bond scandal are in something of a hiatus. So here it is, Holder has decided to investigate CIA operatives while groups connected to various scams that damaged people across the country get a pass. As they say, Elections Have Consequences.

Your Tax Dollars at Work: 3,900 Stimulus Checks Sent to Inmates

Does this count as jobs saved?

WASHINGTON (AP) -- The federal government sent about 3,900 economic stimulus payments of $250 each this spring to people who were in no position to use the money to help stimulate the economy: prison inmates.

The checks were part of the massive economic recovery package approved by Congress and President Barack Obama in February. About 52 million Social Security recipients, railroad retirees and those receiving Supplemental Security Income were eligible for the one-time checks.

Prison inmates are generally ineligible for federal benefits. However, 2,200 of the inmates who received checks got to keep them because, under the law, they were eligible, said Mark Lassiter, a spokesman for the Social Security Administration. They were eligible because they weren't incarcerated in any one of the three months before the recovery package was enacted.

Check Your Bank Accounts: Democrat Fundraiser Out on Bail

From top echelon of influence peddling operation called the Democratic party.

Aug. 26 (Bloomberg) -- Hassan Nemazee, chairman of Nemazee Capital Corp. and a fundraiser for President Barack Obama and Hillary Clinton, was freed on $25 million bail after spending a night in jail on a bank fraud charge.

Nemazee, 59, walked out of Manhattan federal court today accompanied by his attorney, Marc Mukasey. He must remain in his $20 million Manhattan apartment, where he’ll be subject to electronic monitoring.

Nemazee was charged yesterday with using phony documents to trick Citigroup Inc. into lending him as much as $74 million. The financier got the loan by telling Citibank he held accounts with hundreds of millions of dollars that could serve as collateral, U.S. Attorney Preet Bharara said yesterday in a statement.

Nemazee, who also has an $8 million home in Katonah, New York, was held overnight in a detention center. Yesterday, U.S. Magistrate Judge Ronald Ellis called the $25 million bond, which Nemazee and prosecutors agreed to, the “most onerous” he had ever seen.

The financier used fake addresses and phone numbers controlled by him to mislead the bank, prosecutors said. The accounts “either never existed or had been closed years before Nemazee submitted the documents referencing those accounts,” Bharara said in the statement.

Just keep your mouth shut buddy, I am sure there is a pardon somewhere waiting for you.

What Happens in Massachusetts Now?

My sympathy for the family:

Changed Law

In July of that year, the Democrat-controlled legislature changed the law to require a special election to keep Romney from appointing a Republican. Then Kerry lost the election to incumbent President George W. Bush, 63.

In his July 2 letter, Kennedy said he supports the current law and asked that Governor Deval Patrick choose an interim replacement who has made “an explicit personal commitment not to become a candidate in the special election.”

A special election opens the door for a political free-for- all because any House member who wants to run can avoid a conflict with the next official congressional election in 2010. Many also expect that Massachusetts will lose a House seat during the next Census, providing another incentive.“All of them could run without risking their current spots,” said Democratic Party Chairman John Walsh.

Regardless of what happens with the law, the race for Kennedy’s seat will turn into a “mad scramble,” said Paul Watanabe, political science professor at the University of Massachusetts in Boston.“There is little turnover in the Massachusetts delegation and therefore, for those who want to move up, there are going to be a lot of suitors,” Watanabe said.

Advantage for Lawmakers

Massachusetts law prohibits state election funds being used for federal campaigns, giving the congressmen an upper hand over potential candidates such as Coakley.Republicans, who represented about 12 percent of registered Massachusetts voters in 2008, haven’t elected a U.S. senator in the state since 1972. Their only chance may be a Democratic divide.

While some say the Kennedys aren’t as powerful as they once were, Walsh said the family would loom large.“The Kennedys probably have as strong or stronger a relation with voters than they do with politicians,” he said. “Massachusetts voters have had a very long and productive and positive experience with electing members of the Kennedy family, and what that’s meant for our state is real.”

In regards to politics there goes the 60th vote for health care and if the special election is 145-160 days from now we are looking at a delay that could be 5-6 months before the Democrats get another vote in the senate. Of course the reconciliation option is open but color me skeptical that the Democrats could or even would pull it off.

Update, who might run:

That list is headed by several elected officeholders, including Massachusetts Attorney General Martha Coakley, who commissioned a poll late last year when it appeared Sen. John Kerry (D-Mass.) could be taking a position in the Obama administration.

Several members in the state’s all-Democratic Congressional delegation are expected to consider a campaign, with Bay State insiders pointing to Reps. Michael Capuano (D-Mass.) and Stephen Lynch (D-Mass.) as the most likely to run in a special election.

There’s also a chance a Kennedy will be on the special election ballot, with Joseph Kennedy II expected to consider running for his late uncle’s seat.

On a side note this makes John Kerry Senior Senator for the state.

Bush Verse Obama Polling Data

VIA RCP:

Barack Obama, George W. Bush RCP Job Approval

August 25, 2009
	51.8 Approve 42.0 Disapprove	Spread+9.8

August 25, 2001
	56.0 Approve 33.0 Disapprove	Spread+23.0

Rangel: 500,000 In Undisclosed Assests

We knew he was a pompous windbag and a likely tax cheat who crafted legislation to increase taxes, but this a mighty special nugget of gold about Rangel:

House Ways and Means Chairman Charles B. Rangel , already beset by a series of ethics investigations, has disclosed more than $500,000 in previously unreported assets.

Among the new items on Rangel’s amended 2007 financial disclosure report were an account at the Congressional Federal Credit Union worth at least $250,000, an investment account with at least $250,000, land in southern New Jersey and stock in PepsiCo and fast food conglomerate Yum! Brands. None of those investments appeared on the original report, which was filled out by hand and filed in May 2008.

According to the original report, Rangel’s net worth was between $516,015 and $1,316,000, while the amended report showed his net worth, as of Dec. 31, 2007, roughly double that amount — at least $1,028,024 and as much as $2,495,000.

Rangel also revised his disclosed investment income from 2007. The original report showed he had received between $6,511 and $17,900, but the new report shows between $45,423 and $134,700. The report also includes eight previously undisclosed financial transactions.

House rules allow lawmakers to exclude their personal residences and report asset values within broad ranges.Rangel’s office and his lawyers did not respond Tuesday to requests for comment.The forensic accounting firm he hired, Watkins, Meegan, Drury & Company, declined to comment.

Rangel, D-N.Y., filed the new paperwork Aug. 12, along with his months-late 2008 report. They were released by the House this week. The reports are required annually for members. Lawmakers frequently amend their financial statements, but rarely do they make such drastic changes.

It sounds nice to be a Democrat.

Rep. Peter King:"It’s bulls***. It’s disgraceful. You wonder which side they’re on,"

Good, make Obama explain his decision at every possible turn:

VIA JWF:

A "furious" Rep. Peter King, the hawkish, maverick Long Island Republican, blasted a "disgraceful" Eric Holder for opening an investigation of CIA interrogators and chided his own party for what he described as a weak response to the move in an interview just now with POLITICO.

"It’s bulls***. It’s disgraceful. You wonder which side they’re on," he said of the Attorney General's move, which he described as a "declaration of war against the CIA, and against common sense."

"It’s a total breach of faith, and either the president is intentionally caving to the left wing of his party or he’s lost control of his administration," said King, the ranking Republican on the House Committee on Homeland Security and a member of the House Select Committee on Intelligence.

King, channeling both the sense of outrage and of political opportunity felt in parts of the GOP, defended in detail the interrogation practices -- threats to kill a detainee's family, and or to kill a detainee with a power drill -- detailed in a CIA inspector general report released yesterday.

"You're talking about threatening to kill a guy, threatening to attack his family, threatening to use an electric drill on him – but never doing it," King said. "You have that on the one hand – and on the other you have the [interrogator's] attempt to prevent thousands of Americans from being killed."

"When Holder was talking about being 'shocked' [before the report's release], I thought they were going to have cutting guys' fingers off or something – or that they actually used the power drill," he said.

Pressed on whether interrogators had actually broken the law, King said he didn't think the Geneva Convention "applies to terrorists," and that the line between permitted and outlawed interrogation policies in the Bush years was "a distinction without a difference."

"Why is it OK to waterboard someone, which causes physical pain, but not threaten someone and not cause pain?" he asked, warning of a "chilling" effect on future CIA behavior.

"You will have thousands of lives that will be lost and the blood will be on Eric Holder's hands," he said.-Politico

Interesting how Holder's old law firm is in the business of releasing Club Gitmo terrorists and now he's aiming to prosecute the men who helped put them there.

Another point that no one has discussed yet, how is the Obama admin going to bring to trial the Al Qaeda terrorists if they are now star witnesses against CIA operatives as part of Obama's bone for the left? In other news Cheney keeps nailing Obama as well, keep it up!

WASHINGTON (CNN) -- Former Vice President Dick Cheney says documents released Monday support his view that harsh interrogation techniques used on terrorism suspects prevented attacks and yielded crucial information about al Qaeda.

Cheney also criticized the Obama administration's decision to ask a federal prosecutor to determine whether U.S. intelligence agents violated the law in interrogations that some have equated to torture.

"The documents released Monday clearly demonstrated that the individuals subjected to enhanced interrogation techniques provided the bulk of intelligence we gained about al Qaeda," Cheney said in a written statement. "This intelligence saved lives and prevented terrorist attacks."

9 Trillion and Rising

Yes, We must spend trillions to reduce our debt!

WASHINGTON — The Obama administration, citing an economic downturn that has been deeper than it had first thought, raised its estimate on Tuesday of the government’s deficit over the next decade to $9 trillion from $7.1 trillion.Despite the shortfalls, White House officials said they saw no reason to back away from President Obama’s ambitious and costly goal of overhauling the health care system. The new amount includes the cost of the health care overhaul as well as about $600 billion in additional revenue that the administration hopes to raise, two initiatives Congress has yet to approve.

“A lot of people will look at this deficit and say we cannot afford health care reform,” said Peter R. Orszag, director of the Office of Management and Budget. But Mr. Orszag said the opposite was true: the only way to control spiraling Medicare costs, he said, was to get control of overall health care costs by overhauling the system

“The size of the fiscal gap is precisely why we must enact fiscally well designed health care reform now,” he said.

By the way, I just love this gem from Orszag:

Without offering any details, the White House budget director said that President Obama will soon unveil plans to reduce long-term deficits tied to soaring costs of Medicare, Social Security and other entitlement programs.

But we can trust their Health Care prediction!

Nice Takedown of the Peak Oil Myth

The idea that we are running out of oil plays into the environmental movements static view of the world and the human race. Its emblematic of the view that there are too many people on the planet and not enough resources, as if the human race hasn't consistently adopted and prospered through lean and fat times.

Like many Malthusian beliefs, peak oil theory has been promoted by a motivated group of scientists and laymen who base their conclusions on poor analyses of data and misinterpretations of technical material. But because the news media and prominent figures like James Schlesinger, a former secretary of energy, and the oilman T. Boone Pickens have taken peak oil seriously, the public is understandably alarmed.

A careful examination of the facts shows that most arguments about peak oil are based on anecdotal information, vague references and ignorance of how the oil industry goes about finding fields and extracting petroleum. And this has been demonstrated over and over again: the founder of the Association for the Study of Peak Oil first claimed in 1989 that the peak had already been reached, and Mr. Schlesinger argued a decade earlier that production was unlikely to ever go much higher. ...

The arguments they raise make way too much sense for some people:

Let’s take the rate-of-discovery argument first: it is a statement that reflects ignorance of industry terminology. When a new field is found, it is given a size estimate that indicates how much is thought to be recoverable at that point in time. But as years pass, the estimate is almost always revised upward, either because more pockets of oil are found in the field or because new technology makes it possible to extract oil that was previously unreachable. Yet because petroleum geologists don’t report that additional recoverable oil as “newly discovered,” the peak oil advocates tend to ignore it. In truth, the combination of new discoveries and revisions to size estimates of older fields has been keeping pace with production for many years.

A related argument — that the “easy oil” is gone and that extraction can only become more difficult and cost-ineffective — should be recognized as vague and irrelevant. Drillers in Persia a century ago certainly didn’t consider their work easy, and the mechanized, computerized industry of today is a far sight from 19th-century mule-drawn rigs. Hundreds of fields that produce “easy oil” today were once thought technologically unreachable. The latest acorn in the discovery debate is a recent increase in the overall estimated rate at which production is declining in large oil fields. This is assumed to be the result of the “superstraw” technologies that have become dominant over the past decade, which can drain fields faster than ever. True, because quicker extraction causes the fluid pressure in the field to drop rapidly, the wells become less and less productive over time. But this declining return on individual wells doesn’t necessarily mean that whole fields are being cleaned out. As the Saudis have proved in recent years at Ghawar, additional investment — to find new deposits and drill new wells — can keep a field’s overall production from falling.

Predictions:

In the end, perhaps the most misleading claim of the peak-oil advocates is that the earth was endowed with only 2 trillion barrels of “recoverable” oil. Actually, the consensus among geologists is that there are some 10 trillion barrels out there. A century ago, only 10 percent of it was considered recoverable, but improvements in technology should allow us to recover some 35 percent — another 2.5 trillion barrels — in an economically viable way. And this doesn’t even include such potential sources as tar sands, which in time we may be able to efficiently tap.

Oil remains abundant, and the price will likely come down closer to the historical level of $30 a barrel as new supplies come forward in the deep waters off West Africa and Latin America, in East Africa, and perhaps in the Bakken oil shale fields of Montana and North Dakota. But that may not keep the Chicken Littles from convincing policymakers in Washington and elsewhere that oil, being finite, must increase in price. (That’s the logic that led the Carter administration to create the Synthetic Fuels Corporation, a $3 billion boondoggle that never produced a gallon of useable fuel.)

Budget Numbers Out Today

By an odd coincidence, that day after Obama releases information he might jail CIA operatives we have the release today of budgetary figures that bring discredit upon Obama's claims and projections:

HIGHER PROJECTION

The White House says its 10-year budget deficit projection will jump from $7.1 trillion to roughly $9 trillion, putting it in line with a previous CBO estimate.

Other figures in the reports could differ because the CBO bases its projections on an assumption that current policies will continue unchanged -- for example, that tax cuts enacted in 2001 and 2003 expire as scheduled in the next few years.The White House budget assumes that Obama's goals, such as keeping some of those tax cuts in place, will become law.

Obama has promised to halve the deficit by the end of his four-year term, a task that will be made easier when tax revenues increase along with a recovering economy.One-time recession-battling efforts, like the $787 billion stimulus bill passed in February and the bank rescue package, presumably will not be needed in coming years.

But the government's rock-bottom borrowing costs could go up as well when the economy improves and investors demand a higher rate of return. The government's retirement and healthcare expenses also are expected to explode over the coming decade as millions of Baby Boomers retire.

Its not like we didn't know his numbers were delusional and he and Orszag have been fuul of it since day one.

Cheney's Response to Obama's Witch Hunt

Via HA:

The documents released Monday clearly demonstrate that the individuals subjected to Enhanced Interrogation Techniques provided the bulk of intelligence we gained about al Qaeda. This intelligence saved lives and prevented terrorist attacks. These detainees also, according to the documents, played a role in nearly every capture of al Qaeda members and associates since 2002. The activities of the CIA in carrying out the policies of the Bush Administration were directly responsible for defeating all efforts by al Qaeda to launch further mass casualty attacks against the United States. The people involved deserve our gratitude. They do not deserve to be the targets of political investigations or prosecutions. President Obama’s decision to allow the Justice Department to investigate and possibly prosecute CIA personnel, and his decision to remove authority for interrogation from the CIA to the White House, serves as a reminder, if any were needed, of why so many Americans have doubts about this Administration’s ability to be responsible for our nation’s security.

Amen and drive it home to fight this foolishness..

Obama Youth AWOL on Health Care

Well duh, as matter of fact the Obama admin should be happy that some of these young people have stayed out of the debate. How many of these guys really understand that the health care mandate is aimed at them?

It's a crucial gap in support and one the White House may have to correct if Obama is to regain the momentum and get Congress to act on his top domestic priority.

Matt Singer, a 26-year-old founder of the liberal group Forward Montana and an activist in the health care trenches, has tried to engage young people.

''Right now we're seeing a big conversation with seniors, but you're not seeing the same mobilization among young people who are President Obama's core constituency,'' Singer said. ''The age demographic most supportive of reform has not been engaged, and it makes me very nervous.''

Younger people are generally healthier and rely on less medical care, particularly young working men who make up the largest group that goes voluntarily without health insurance. They also are less likely to be as vocal at contentious town halls; many are either working or in school during the daytime forums.

Consider this further evidence that Rasmussen is onto something with his "passion" index.

Obama's High-Value Detainee Interrogation Group

On a day that word comes out that CIA operatives might be prosecuted, this nugget is also being released:

WASHINGTON (AP) -- President Barack Obama has moved more forcefully than ever to abandon Bush administration interrogation policies, approving creation of a special White House unit for questioning terrorism suspects, as Attorney General Eric Holder weighs a Justice Department recommendation to reopen and pursue prisoner abuse cases.

A senior administration official told The Associated Press Monday that Obama has approved establishment of the new unit, to be known as the High-Value Detainee Interrogation Group, which will be overseen by the National Security Council. The official spoke on condition of anonymity because the program has not yet been officially announced.

A U.S. intelligence official said Monday that the CIA welcomes the change, saying the agency does not want to be in the long-term detention business. The official spoke on grounds of anonymity because he was not authorized to discuss it publicly.

And what will this new organization do:

While information on the new interrogation unit, known by the acronym HIG, will be made public later Monday, the task force working on questions about Guantanamo and prisoners still held there has not completed its work.

The new group and new directives to rely soley on the Army Field Manual when interrogating prisoners is an attempt by the administration to separate itself from allegation that the Bush administration tortured some prisoners. While the practice of waterboarding -- simulated drowning -- has been banned, the field manual directives would also end the practice of subjecting prisoners to loud music for long periods and sleep deprivation.

The administration is announcing the new interrogation unit on the same day that the CIA inspector general was to unveil a report on Bush administration handling of suspects. Details were expected to show that highly questionable tactics were used.

Of course this centralizes more power to the Obama admin and allows them to bypass the FBI and CIA by having a group that falls directly under the NSA. It never ceases to amaze me that the left which screamed holy hell over the expansion of presidential power has been utterly mute about the use of Czars and now we have the formation of a an interrogation task force that will be directly controlled by the Executive. From the NSC:

The National Security Council (NSC) is the President's principal forum for considering national security and foreign policy matters with his senior national security advisors and cabinet officials. Since its inception under President Truman, the Council's function has been to advise and assist the President on national security and foreign policies. The Council also serves as the President's principal arm for coordinating these policies among various government agencies.

The NSC is chaired by the President. Its regular attendees (both statutory and non-statutory) are the Vice President, the Secretary of State, the Secretary of the Treasury, the Secretary of Defense, and the Assistant to the President for National Security Affairs. The Chairman of the Joint Chiefs of Staff is the statutory military advisor to the Council, and the Director of National Intelligence is the intelligence advisor. The Chief of Staff to the President, Counsel to the President, and the Assistant to the President for Economic Policy are invited to attend any NSC meeting. The Attorney General and the Director of the Office of Management and Budget are invited to attend meetings pertaining to their responsibilities. The heads of other executive departments and agencies, as well as other senior officials, are invited to attend meetings of the NSC when appropriate.

Its an extraordinary expansion of Presidential power, but as the Democrats love to say, never let a crisis go to waste.

The Democrat Culture of Corruption and the New Jersey Credit Swaps

With Corzine attacking Christie I thought it might be appropriate to re-post this on swap deals and New Jersey:

What happened and the Impact:

Swaps’ deals from McGreevey era enriched consultants and have cost the state millions
BY DUNSTAN McNICHOL STAR-LEDGER STAFF

A Star-Ledger review of those deals — built from information obtained through numerous public records requests — shows:

• Over the past 21 months, investment bankers have collected $183 million more in swap payments than they have sent to the state. To understand how money flows back and forth on a loan, think of it this way: The state sends the bankers money for rates it previously locked in, and the bankers send the state payments based on prevailing rates.

• Last year, the state paid $39.8 million to cancel or postpone two swaps gone bad to avoid even more losses.

• The state is scheduled to pay $120 million in fees for underwriters that never were disclosed to the public and lawmakers.

• The consultant under contract to help New Jersey manage and evaluate its swaps, CDR Financial Products of California, has negotiated deals being probed by the Internal Revenue Service in other states for alleged improprieties.

Investigations:

In 2004, with the state’s swaps portfolio swelling, New Jersey hired CDR Financial Products to help manage the deals for a flat fee of $250,000 per year. CDR is the California company whose deals are now under federal investigation.

Over the past two years, five communities, all outside New Jersey, revealed they were told by the Internal Revenue Service that CDR set up side-deals that steered excessive fees to the company, thus jeopardizing the tax-free status of the bonds. The IRS twice cited deals between CDR and the investment bank Bear Stearns as generating excessive fees.

Much of this occurred under the McGreevy admin, but Governor Corzine did allow a deal that CDR profited from to move forward:

State officials decided in March to allow an upcoming swaps deal to take effect as scheduled, based in part on advice from CDR. The transaction would have cost $27 million to cancel. By locking it in, Bear Stearns and six other underwriters are scheduled to get about $20 million in fees over 25 years.


Corzine and his treasurer, Bradley Abelow, said they were unaware of the IRS issues involving CDR. The treasurer said the state’s $250,000-a-year contract with the firm, which in January was extended through the end of the year, will be reviewed.

CDR Financial Products has been a heavyweight amongst the Democratic party for years and Corzine, who was a Goldman Sachs man and understood swaps, apparently had no idea what types of deals that company was alleged to have crafted . Corzine eventually terminated the contract, but why did he wait? Finally, does this not illustrate the culture of corruption that has typified New Jersey and the Democrats?

Further Opposition to Obamacare in Senate

It appears more trouble is in the works for Obamacare as Joe Lieberman has called for a scaled back approach and another Republican called for the reset button:

Washington -- Two senior senators said Sunday that President Barack Obama should back off his proposed sweeping changes to the nation's health care system while the nation is stuck in a recession.

"I'm afraid we've got to think about putting a lot of that off until the economy's out of recession," Sen. Joe Liberman, I-Conn., whose vote Democrats often rely on to get to the 60-vote margin needed in the Senate to pass controversial legislation.

"There's no reason we have to do it all now, but we do have to get started. And I think the place to start is cost health delivery reform and insurance market reforms. ... I think it's a real mistake to try to jam through the total health insurance reform, health care reform plan that the public is either opposed to or of very, very passionate mixed minds about," Lieberman added on CNN's "State of the Union.Sen. Richard Lugar, R-Indiana, added on CNN, "I would advise the president that the bringing up of the health care situation in the midst of recession ... was a mistake. Let's clear the deck and try it again next year or in subsequent times."

Additionally we have further division within the Democratic party as Senator Schumer of New York claims they have 60 votes while Kent Conrad re-iterated his belief that the Public option is a deal killer. Considering Max Baucus and Conrad, as well as other Democrat senators on the Finance committee have shown distrust and opposition, I don't know where he gets the 60 votes from, especially now that Lieberman is all but in opposition.

A Look at Arne Duncan

He is right, and the cost of any given university is absurdly high. Of course part of the reason is accessibility of students loans. By themselves they are a good thing, but the high education system has clearly taken advantage of this "free money" to raise their tuition to patently absurd levels.

Aug. 21 (Bloomberg) -- Private colleges may price themselves out of the market if they don’t hold down tuition increases, U.S. Education Secretary Arne Duncan said.

Parents and students will choose among universities offering “no-frill campuses” and three-year degree programs over those whose prices “get out of whack with reality,” Duncan said in an interview on Bloomberg Television’s “Political Capital With Al Hunt,” airing today.

The average tuition at private four-year colleges increased 5.9 percent to $25,143 in the 2008-2009 school year, according to the New York-based College Board. “At a time when going to college has never been more important, it’s never been more expensive,” Duncan said.

Private colleges raised tuition an average of 4.2 percent for the coming school year, the smallest increase in 37 years, said Tony Pals, a spokesman for the National Association of Independent Colleges and Universities, a Washington-based lobbying group that represents 955 schools.

For the record I have gone to a pricey university where I did get a good education and as well as an inexpensive private school. To top it of I spent several years getting graduate credits at CUNY queens. Having hit all three I would say this, a class is exactly what you get out of it. Other topics of note:

Some of the money is being used to prod school districts to set a “very high bar” for charter schools and hold them accountable for student performance, Duncan said. Charter schools operate under contracts with districts and are exempt from many rules that govern traditional public schools.“When you pick the best of the best, when you give them clear autonomy and clear accountability, we’re seeing great things happen,” Duncan said of charter schools.

Teacher Pay

Duncan and President Barack Obama also are pushing schools to link student achievement to teacher pay. States barring the use of student-performance data in teacher evaluations would be ineligible for $4.35 billion in competitive stimulus grants, known as Race to the Top funds, under guidelines Duncan and Obama proposed last month.

“Somehow in education, we’ve been scared to talk about excellence,” Duncan said. “I think that has to change.”

Most of the education money will go to states under a noncompetitive formula set in the stimulus legislation. Duncan said he’ll award the competitive grants, including Race to the Top, to “a relatively small number of states and districts that are going to lead the country where we need to go.

Additionally it appears Arne Duncan has a comedy tour coming up next month:

Former House Speaker Newt Gingrich, a Republican, and Reverend Al Sharpton, a Democrat, plan to join Duncan, starting next month, on a tour of four cities to field suggestions for improving U.S. schools.

“Quite a team, isn’t it?” Duncan said. “If there is anything, as a country, we can come together behind in a non- ideological manner, it’s behind education.”

Considering all of Obama's appointments ,Duncan is the one least in the news, a positive sign as far as I am concerned.