The recent downswing in the housing sector was a predictable response to a market that had lost sight of fundamentals.  Lenders loosened too many longstanding requirements for borrowers.  The debtors were more than happy to voluntarily extend themselves to the breaking point to get the most house that they could “afford.”  Risky mortgages were lumped together with other risky mortgages and sold, inconceivably, as a low risk investment.  After the bottom fell out Congress piously hauled in leaders of industry to dress them down in one of their frequent public spectacles.

It is an unspoken fact that governmental social engineering aimed at expanding home ownership has played a key role in inflating home prices and exposing unprepared borrowers to the unforgiving world of mortgage debt.  Little did I know until just last week that this year Congress went even further down the path of reckless intervention.  In 2007 Private Mortgage Insurance (PMI) became tax deductible.  For the uninitiated, PMI is insurance paid by borrowers who make a down payment of less than 20%.  There are mortgage options that circumvent PMI, but they carry an effective interest rate higher than a single mortgage.

All Congress has done by making PMI deductible is to encourage further indebtedness.  Their action will ultimately result in more foreclosures.  When the time comes they will wring their hands and blame the greedy lending industry while turning a blind eye to their own culpability.

A new federal law has capped interest rates that can be charged to members of the military at 36% per year.

In an effort to cut down on predatory lending to service members and their families, the Department of Defense has issued a new regulation capping the interest rates on payday loans, vehicle title loans and tax refund anticipation loans.

Lending companies are now required to ask loan applicants if they are in the military or a military dependent. The regulation caps the annual percentage rate at 36 percent for service members and their families.

The response of lenders in at least one state has been predictable: don’t lend to the military.  The reason is straightforward.  Payday lenders charge high rates because they lend money to people with limited capability to repay.  The high interest rates allow them to make money even with high default rates.  If they can’t assess a rate or fees commiserate with the risk involved with the loan they simply won’t loan the money.

Now I personally hold payday lenders in the utmost contempt.  They are lowlifes who profit on the misery of the poor.  But the role of the government is not to protect us from our own bad decisions.  Hell, they have a monopoly on educating Americans - why can’t they at least teach people enough about personal finance so that citizens can see that payday loans are a bad, bad idea so lawmakers don’t have to make laws inhibiting our freedoms?

A perfect example of why government shouldn’t be looking out for the idiots is the so-called “toxic” mortgage.  Despite being derided as a terrible product proffered to prey on the ignorant it is actually the best - that’s right, the best - mortgage option for those wise enough to use them properly.  When the government acts to protet the stupid the smart suffer.  In all financial transactions you, the consumer, must fully understand every facet of the transaction.  Otherwise you set yourself up for a fall.

In the end it all comes back to personal responsibility and the freedom to do whatever the hell you want - even take out a payday loan.

Alabama state representative Cam Ward has a post up at Doc’s Political Parlor outlining the paltry sum that education lotteries across the country actually contribute to education budgets.  His data seems to come from a recent New York Times article.

Personally, I have no moral convictions against gambling.  I have been to a casino, twice actually, and a dog track once.  I frequently buy a lottery ticket (that’s right, a single ticket, read on).  But I have the good sense to know that the odds are on the house.  I work too hard to just give my money away by playing a game whose outcome is entirely outside of my control.  I’ll admit that going to a casino can be entertaining and, if you are responsible, that you can have a fun evening for the same cost as going to a concert or the theater.

When it comes to lotteries - or most forms of gambling for that matter - let’s be frank about what they are: a tax on stupidity (I take no credit for that phrase).  Go to any gas station that sells lottery tickets and observe who is buying dozens of dollars of scratchers.  Hint: it’s not the upper middle class.  It’s the poor.  Freely handing over their limited money in the futile hope that they can hit the big one.  They actually think that is the best avenue to “success”.  (Author’s note: I personally don’t relate success with wealth)

I mentioned that I frequently buy a single lottery ticket.  The reason is all mathematical.  If you don’t have a ticket your chances of winning are 0% - not too good.  If you bought a single Powerball ticket your odds of winning the grand prize are a whopping 1 in 146,107,962 (0.0000000068%).  You have a much better chance of becoming an astronaut (1 in 12,100,000).  However, I look at the percent increase of the odds of winning for that first ticket purchase, which is the previously mentioned vanishingly small number divided by zero.  This is an undefined number, but depending on your mathematical sophistication, it can be interpreted as infinity if you take the limit from the positive direction.  That means that the first ticket gives you an infinitely better chance of winning than no ticket.  I like those odds.

However, subsequent tickets yield much less marginal return (infinitely less, actually).   If you have two tickets then your odds of winning are 2 in 146,107,962 - or twice as much as when you only had one ticket.  Not bad, but not anywhere near the infinite improvement in your odds that the first ticket bought you.  The third ticket only improves your odds 1.5 times over the second ticket.  It keeps going downhill from there.

Now there is some entertainment value in the hope that a lottery ticket represents.  But, price that hope accordingly and don’t blow $100 on tickets just because the jackpot is high.

I have actually pledged to myself (and here it is in writing) that if I were fortunate enough to win with my one ticket that I would keep a very small amount of the prize money, probably less than 5%.  I strongly believe that coming into money that you did not earn has a harmful effect on your life and I don’t want to invite misery upon myself.  I’d pay off my mortgage set up college funds for the kids and that is about it.  I wouldn’t quit working because I enjoy my job and I want my kids to have a positive, hard working role model.  Plus, if I gave the lion’s share to charities then I could effectively shield it from the government’s reach and put it to good use.

Regular readers know that I have a narrow view of what government should and should not do - and lotteries most certainly don’t fall within their purview.  Quite honestly I see a conflict of interest.  The state is charged with educating children.  Simultaneously the state, well some states, funds some portion of that education with revenue that is predicated on people making very poor economic decisions.  If the state churned out graduates who were knowledgeable about probability and basic personal finance that very revenue stream would diminish.  Better to churn out idiots so that they can maintain or expand the education establishment (jobs program).

Mrs. Former President is set to announce her latest foray into socialized medicine today.  She was kind enough to leak out the basics ahead of time so that the AP could start giving her some ink.  I’ll reserve my full commentary until I get a chance to look through the gory details, but the basics aren’t pretty.

First of all it is built upon the employer based system, which is itself one of the core problems with health care in the U.S.  I don’t see why it would be wise to build a huge bureaucracy on a shaky foundation.  And of course her plan isn’t free - remember that “free” health care is anything but.  It’s going to cost, according to the story, about $110 billion per year, which probably means about half a trillion in the unfortunate event it gets implemented.  How will she pay for it?  Raising taxes, of course.

If you pull the string on a liberal you’re going to hear the raise taxes mantra.  The current batch of liberals have changed their language, but don’t be fooled.  The catch phrase of the days is “repeal Bush tax cuts.”  Folks, repealing a tax cut is a tax increase.

Clinton’s plan imposes an “individual mandate” on all citizens.  And no, she isn’t using that phrase to try to get support from Larry Craig and Barney Frank.  Every citizen will be compelled by the government to have health insurance by threat of force.  You’re a young, healthy person?  Too bad.  The article compares - probably parroting what will be one of H-Rod’s talking points - the “individual mandate” to compulsory car insurance, which is a false analogy.  States adopted mandatory auto insurance to protect drivers like me, who already carried insurance for our own economic reasons, from bozos who drove around recklessly without insurance.  In that situation compulsory insurance protects me from others.  There is absolutely no comparison with compulsory health insurance other than she is using that analogy to seize upon the familiarity of the populace with governmental force.

And make no mistake about it, under H-Rod’s plan every business will make a cold hard decision about whether to offer insurance or drop coverage and pay the government imposed fee.  That will effectively eliminate your choice in the matter and force you into the government program because current tax policy and regulations make it prohibitively expensive to purchase insurance privately.  Here’s how it will likely go down.  At first the government fee on businesses will be comparable to what they currently pay for, say, Blue Cross/Blue Shield.  However, the government insurance will probably not be quite as good.  Many businesses will drop coverage and opt for the fee as a rational business decision.  The affected people who find themselves in the substandard government plan will have no option but to petition the government for better coverage, which politicians will be more than happy to do - more power for them.  Taxes on businesses will increase, but so will premiums for private plans because they are now spreading the cost over a smaller group of people.  Eventually there will be few hold outs and a large swath of the country will be under full control of the government.

And make no mistake about it; H-Rod’s program is just a stepping stone to the U.S. adopting a British type health care system.  And in Britain they are predictably moving towards using their socialized health care system to manipulate the lives of private citizens.

Failing to follow a healthy lifestyle could lead to free NHS treatment being denied under the Tory plans.

Patients would be handed “NHS Health Miles Cards” allowing them to earn reward points for losing weight, giving up smoking, receiving immunisations or attending regular health screenings.

Like a supermarket loyalty card, the points could be redeemed as discounts on gym membership and fresh fruit and vegetables, or even give priority for other public services - such as jumping the queue for council housing.

But heavy smokers, the obese and binge drinkers who were a drain on the NHS could be denied some routine treatments such as hip replacements until they cleaned up their act.

A comment with the article left by Neal Asher of Chelmsford, England says it best:

State run health care results in the next power grab: we make you pay for the maintenance of your body, therefore we own your body and can tell you what you must do with it.

First of all, let me apologize for the lack of content here lately and in the coming days.  I’ve been both busy at work and I’ve finally started working on a long delayed side project in my spare time.

Apparently Huntsville has a law dating back to 1972 that they are beginning to enforce again for some unknown reason.  The law bars businesses from painting murals and other artwork on their building to advertise the products they sell.  The businesses, however, are free to paint anything else they so desire.  For example, a pizza place would not be permitted to paint a small picture of a slice of pizza, but could paint a toilet the size of a Winnebago on the side of their building.

Artwork gracing the buildings of some of Huntsville’s most popular businesses - such as Garden Cove Produce Center and the Po-Boy Factory - are undergoing renovation, but it’s not as intensive as some people might think.

Only those aspects that advertise what the business sells or the name of the company have to go from the exterior brick, wood or concrete block walls.

“We had to spray paint over our apples and pumpkins,” said Garden Cove health food store Manager Pam Breece. “But the painting of the man can stay. We don’t sell men.”

I like the snarky quote from Breece.  It is a shame they painted over part their mural, which was very good.  The store is also a fine place to go for organic produce, by the way.

The city actually has a “sign enforcement officer” - the advertising gestapo - who rides around looking for offenders.

Earlier this summer, while Huntsville’s sign enforcement officer Johnnie Dodson was driving on Andrew Jackson Way, he noticed that the Po-Boy Factory had some new scenes painted on it. Its old plywood sign was gone, and the Cajun restaurant’s name was painted directly on the wall. A big basket of catfish, crawfish, potatoes, corn and oysters was painted nearby.

And on another wall, owner Donnie Thigpen was pictured standing in a fishing boat with buckets of seafood.

“You can’t paint your name or product on your structure,” Dodson said. “Plain and simple. It’s in the code.”

I looked through Huntsville’s Code of Ordinances (click on “City Laws Online”) to find the specific code being violated and the closest I could come was this:

72.5.3. Signs painted or pasted directly on the structures are expressly prohibited.

Sign is defined in the ordinance as “A structure or device designed or intended to convey information to the public in written or pictorial form. The term “sign” shall be construed to include any decorative or structural framework, supports or attachments necessary for or incidental to such sign.”  Nowhere did it state as clearly as Dodson implied that businesses can’t paint their name or product on the structure.  I suppose one could assume that a sign consists of a business’ name and product sold, but that isn’t what is defined in the ordinance.  According to the definition of a sign any image that conveys information to the public is a sign.

As a public service, I thought I would paste the full list of regulations pertaining to political signs for those of you interested in getting out your message here in Huntsville:

In addition to all other signs herein authorized, temporary, attached and ground signs advertising political parties, issues, or candidates, when the same are related to or concerning a pending election to be held within the city or county, may be erected and maintained temporarily prior to said election and shall be removed no later than ten days after the election or any runoff election.

The following terms and conditions shall apply:

72.6.1. In residence 1, 1-A, 1-B, 1-C, 2, 2-A, and planned development-housing districts the size of such signs shall not exceed six square feet.

72.6.2. In residence 2-B, neighborhood business C-1, C-1A and C-2, general business C-3, highway business C4, airport commercial, and planned development-shopping center and planned development-highway commercial districts, said signs shall not exceed 16 square feet in area.

72.6.3. In light and heavy industry, disposal-storage, and heavy manufacturing districts, said signs shall not exceed 32 square feet in area.

72.6.4. No such sign shall be allowed in research park, research park west, research park applications, medical, commercial recreation C-5, commercial industrial park, airport industrial park, industrial park, or planned industrial districts.

72.6.5. No height or setback shall be required, except as provided in section 72.6.7, and except that no such sign shall be erected so as to violate the corner visibility provisions of this ordinance.

72.6.6. A $25.00 annual permit fee shall be paid to the manager of inspection by each candidate or campaign organization erecting temporary political signs within the City of Huntsville. The application form for temporary political signs shall be signed by the person responsible for removing or having removed said signs within the authorized time period. The name and address of the candidate or the campaign organization shall be clearly printed on the face of said signs.

72.6.7. No such sign shall be erected in or on any public right-of-way, public park, public building, public grounds, or other public place, except that in residentially zoned districts such signs shall be erected a minimum of ten feet from the back of the curb or from the edge of the pavement if there is no curb regardless of the actual location of said right-of-way. No such sign shall be affixed to any tree, fence post or telephone or utility pole, and it shall be unlawful for any person to erect or maintain any such sign upon the property of another without first having secured authorization or permission of the owner or person in possession of the property.

Now I personally feel that those laws are overly restrictive in a society based on public participation in the political process.  If I have my own pet political cause and I place a small sign in my yard, below the six square foot maximum, I would technically have to pay the city $25 each year.  That is asinine at best and an unconstitutional restriction of my free speech at worst.

I also know for a fact that I have seen political signs on people’s private property mounted within ten feet of the curb.  I’m sure they only enforce it based on the candidate or cause.

There is one element of the regulation could pose problems for grassroots people who craft homemade signs.  The regulation states that the name and address of the candidate or campaign organization must be included.

In summary, no advertising your products in Huntsville and enjoy participating in the political process as long as you do so in a controlled fashion on small, well marked signs placed in low traffic areas so that you can’t get out your message.

From the Telegraph:

A pregnant woman has been told that her baby will be taken from her at birth because she is deemed capable of “emotional abuse”, even though psychiatrists treating her say there is no evidence to suggest that she will harm her child in any way.

Social services’ recommendation that the baby should be taken from Fran Lyon, a 22-year-old charity worker who has five A-levels and a degree in neuroscience, was based in part on a letter from a paediatrician she has never met.

Hexham children’s services, part of Northumberland County Council, said the decision had been made because Miss Lyon was likely to suffer from Munchausen’s Syndrome by proxy, a condition unproven by science in which a mother will make up an illness in her child, or harm it, to draw attention to herself.

Under the plan, a doctor will hand the newborn to a social worker, provided there are no medical complications. Social services’ request for an emergency protection order - these are usually granted - will be heard in secret in the family court at Hexham magistrates on the same day.

From then on, anyone discussing the case, including Miss Lyon, will be deemed to be in contempt of the court.

I can’t wait until John Edwards or one of his compatriates implements UK styled government preventative health care here.

From AL.com:

Gov. Bob Riley’s finance director on Monday made clear that requests for public documents by the media or the public should be “expeditiously handled” by the agency’s divisions.

In a new memo issued to all division heads in the Finance Department, Director James Main said previous guidelines regarding inquiries from reporters or the public do not apply to public documents.

Last week, Kathy Johnson, the department’s public affairs director, said any request by the media to view a public contract or other public document under the finance department’s control must first be approved by Main.

From AL.com:

Gov. Bob Riley’s finance director has cracked down on reporters’ access to all branches of the agency.

Instead of being able to deal separately with the divisions under Director Jim Main - ranging from the budget office to the comptroller to purchasing to the state motor pool - reporters are being told that they must speak directly with Main.

And any request by the media to view a public contract or other public document under the Finance Department’s control must first be approved by Main, said Kathy Johnson, the department’s public affairs director.

In my opinion the change raises questions about what the department might have to hide.  The funny part of the article is that calls to various officials in the department were referred to Kathy Johnson, the department’s public affairs director (a.k.a. spokeswoman).  Johnson, the department’s spokeswoman, responded to questions from the Huntsville Times by saying, “Mr. Main is the person to talk to. He’s the spokesperson for the department first and foremost. I’m secondary.”  So why the hell are we paying for them to have a spokeswoman who is not allowed to be the spokeswoman?  I see an opportunity for cost savings.

From The Hill:

Department of Labor Secretary Elaine Chao is criticizing a House vote that cuts funding for an agency that oversees union financial disclosures and is aimed at preventing union corruption.

The House effectively approved cuts to the budget for the Office of Labor-Management Standards (OLMS) late Tuesday night when it rejected an amendment from Rep. John Kline (R-Minn.) that would have restored the budget to its current level. Kline’s amendment was defeated 186-237 on a mostly party-line vote, with eight Democrats breaking ranks.

Labor unions are notoriously corrupt.  One can’t even hear the word Teamsters without thinking about persuasion through aggression.  The corruption fighting statistics for the OLMS speak for themselves.

Since 2001, OLMS investigations have increased by 20 percent, according to DoL, and convictions are up 26 percent. Courts have ordered the restitution of more than $70 million in union member dues that DoL says were stolen by union officials. OLMS also obtained 760 convictions of union officers and employees, according to information from DoL.

The Democrats with the good sense to vote for the Kline amendment include my own representative, Bud Cramer, as well as other conservative Democrats like Dan Boren (OK) - Boren is a FairTax co-sponsor, by the way - and Heath Shuler (NC).  The only member of Alabama’s congressional delegation to vote in favor of increased union corruption was Artur Davis.  Sizteen GOP members also voted against the increased funding.

This is just sad.

A Louisiana couple named Kermit and Dolores Atwood that have owned their house mortgage-free since 1968 had their house sold at a tax sale, without their knowledge, after their 1996 property tax bill was sent to the wrong address.  The bill amount: $1.62.  The couple wasn’t even expecting a tax bill because they were previously “totally state homestead exempt, meaning there was no tax bill.”  Their house was sold for about $127.  They first learned of the sale seven days after the three year redemption period.  The state Tax Commission invalidated the sale, but the company that “owns” their house sued and the matter is now tied up in the courts.

On the other side of the coin, the company that bought the rights to the house, Jamie Land Co., from the company that originally purchased it claims they have invested about $20,000 in this process and that they followed all laws and regulations.  They have tried to settle with the Atwoods for between $2,000 and $5,000.  The Atwoods have understandably declined.

Personally, I think this all points to a government screw-up and they should pay restitution to both the Atwoods and the speculator.  It would be a travesty to punish either party for following all the rules.  The government sent the tax bill to the wrong address initially and then put forth virtually no effort to reach the couple.  The house was then purchased at a tax sale in good faith.  The government didn’t even notify Jamie Land Co. that the tax sale was nullified after the redemption period ended.

After Katrina we all saw that the government in Louisiana, and New Orleans in particular, was screwed up, but this is absurd.