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Monday, December 31, 2007

It's All About Politics...

I would like to welcome Ron Marshall of the Grady Coalition for another cross posting. Anyone that is a veteran of my work on Grady will see that much of what he says has been mentioned here before as well. Now, without further adieu...

The Grady crisis has unfolded, and the media has sounded a drumbeat that we need an "independent" private board to remove the board from politics, and insulate Grady from conflict of interest.

Now, here is the flip-flop we've been predicting. Emory wants to control this board.
Instead of nominating truly independent persons, the chairman nominated has been a top Emory official, and even a member of Emory's trustee board. What gives? This is the independent person we've been promised? This is not about thepolitics? Come on. Now we know what we suspected from day one, this is entirely about the politics, and it appears that Emory (who dominates the Grady task force) is the dominant player looking to achieve power. Emory is feeding on Grady like dolphins feed on minnows.

To be clear, this is not an attack on the man, but on the principle. The purported purpose was to get someone totally neutral. Instead, it appears Emory wants their own man to run Grady behind closed doors.

The chilling effect of a private board running a publicly-funded hospital became all too clear in the Fulton County report, in which examples are given of public hospitals that went private solely to hide their books and operations from Open Records requests. Attorney Anthony L. Cochran filed suit against Thomasville's Archbold Memorial Hospital for evading Open Records requests by establishing a private board, the exact move that Grady is attempting.

How long will Atlanta and Georgia be run by secrecy, and without open government, or behind closed doors? The Atlanta Captains are on the right track but on the wrong train.

We do not have a single detail of the purported private board plan. The Atlanta Journal Constitution is the most distinguished paper in this area, and surely, it should find out the details before it advocates a major reform. The AJC claims that “Running Grady by a private board does not amount to "privatization".

Oh? What dictionary are they using? Why does the AJC continue to duck my good-faith query to find out what exactly do they mean? How can the AJC say with a straight face that private does not mean private?

I'm sure the citizens of Thomasville were also reassured that private does not mean private, and that they would always have a transparent system. Up until the day it actually became private. Then, the hospital locked their books. No one is going to see what happens in that hospital again, ever.

Do we really want the same fate for Grady?

No matter how you slice the salami, Grady is going to remain publicly funded, and thus remain a tax-payer controlled hospital. Claiming a private board will find millions or billions from thin air is a pipe dream. No sane person is going to donate the money. Our nation was founded on the idea of "no taxation without
representation." The AJC calls this notion "outdated." Since when? Who is really going to pay tax dollars without representation on how Grady spends that money?

The entire private board plan appears to be an attempt to avoid oversight, regulation and accountability. No one has said what this private board will do. It is a secret. I don't like secrets. I would like Open Government, and for everything to be spelled out why we need such a board. Now the board is talking about a lease. To whom at what price? The board decided to hold a public meeting two days after Christmas, why? Trying to maintain the secret?

Private boards sure have gotten hospitals into trouble in other cities. Privatization did not work for Los Angeles. Would Grady be turned over to private interests aligned with Tenet or HCA? HMOs and private boards have created some of the worst disasters in US history. Health Corporation of America (HCA) has paid the largest criminal fines in US history, more than $1.7 Billion dollars. HCA is Emory University's largest partner. How can we be certain that HCA does not use this opportunity to eliminate Grady as a competitor, or to sell off Grady's assets, such as Grady's real estate?

Someone is going to benefit from this transfer of Grady to private hands. I hope the media will help us find out who will benefit first. It certainly looks like an attempt to
put the fox in charge of the henhouse. I see another cover-up.

How could a truly private board respond to anyone? The whole point of several AJC articles seems to be that we need to insulate Grady from "politicians". But in a democracy, politicians must report to the people. How would Grady respond to the people, if it is insulated from elected politicians and the people they serve?

Again, private interests may plan to "save" Grady by chopping it up and selling its
assets.How much is Grady worth, the land and other assets.

What the plan doesn't do.The plan ignores the issues of Emory University's one-sided contract to manage Grady, Emory's billings and the fact that Emory is Grady's chief competitor through Crawford Long Hospital. Tens of millions of dollars are being lost every year because of inadequate documentation and poor oversight. W asked to see the books many times and to this day the Grady officials have denied our request.

Emory now appears determined to pick the actual board. There is no hope of
re-adjusting the relationship between Emory and Grady if Emory controls the private board controlling Grady.

Follow the awarded contracts and who is connected to them!

Mismanagement of Grady by former and current officials must be explained.
How did the past administration allow Grady to slip into a free-fall? This must be cleared up. Robert Brown and other Grady officials have never explained the corruption that led to the 2005 conviction of Charles Walker and the subsequent investigation of Grady by the federal CMS.

The New Grady coalition has submitted more than 50 open records requests, but Grady refuses to answer. Until Grady obeys open record and open meeting laws, why would the public have confidence? We want to know where all the money is going.

If Georgia's people want a private/public Grady board, we need a strong legislative oversight committee, enactment of strong conflict-of-interest laws and renegotiation of the one-sided sweetheart no-bid contracts. We need clear audits and explanations for past and present mismanagement. Nothing can be covered up. We need an absolutely clear sky.

How could any debate about a $700 Million dollar institution not be political? If people were angels, we would not need government. But, things being what they are, we need Open Government with public oversight.

We need a media that will investigate and find out exactly why Emory is attempting take advantage of this situation. We need to know our exact options, potential consequences, and then the people must decide with a vote.

Media, I ask you. Why would the task force recommend a man with incredible conflict of interest? Who is to benefit? Exactly how is this supposed to restore confidence in Grady, and how does this raise a single dime for Grady? Atlanta's Captains of Industry are telling us to "trust us." We are willing to trust them, but only if they trust us with what they are really up to.

Where is the JCAHO report?

Most important, why has the JCAHO report not been released? How can the problems at Grady be solved until the single most important document concerning Grady is released? If JCAHO actually pulls Grady's accreditation (and they very well might) saving Grady is going to be extremely expensive and possibly impossible. We need to transform this debate and make certain that Grady is brought up to code and is safe. Until that happens, nothing else matters.

We have a twin problem. We need to save Grady, but we also need to find out why the media is not asking the hard questions.

Several things to add... First, the media's role in this corruption cannot be understated. It is exactly because of the lack of reporting on this story that the corruption continues. The still not released JCAHO report is just one example. JCAHO's step is nearly unprecedented. Only King Drew has ever had their accreditation threatened with revocation. Yet, we still haven't seen the details of JCAHO's report because Grady won't release. Given the magnitude of the step, the citizens have a right to know what specifically lead JCAHO to move this way.

The Grady board is nothing but a sham and the privatization plan is the same. First, privatization doesn't address any of the systemic problems that clearly affect Grady that lead to JCAHO's actions. Second, the creators of this purported plan have never explained how privatization will solve the corrupting of the finances that have plagued Grady.

If Emory is using this crisis in order to make one more power play vis a vis Grady that should also not surprise anyone reading my work in the slightest because Emory has used Grady for years for less than noble reasons.

Singing in the Rain

Post Kenyan Election Round Up

I initially got interested in the story of the Kenyan elections because of a long and fairly well done article in my hometown newspaper, the Chicago Tribune.

Security guard John Nakitere, 30, said he is voting for Odinga because he is frustrated by stagnant salaries, inflation and unemployment. But Nakitere also has his eye on the 2012 election. "If Odinga doesn't do any better, we'll use the same knife to remove him from power in five years.

"The campaign has been punctuated by isolated instances of violence, chiefly involving local races, and a few allegations of schemes to buy votes or tamper with ballots. One candidate for parliament was shot to death this month in a possible election-related assassination.But most leaders, Western diplomats and voters expressed optimism that the vote will pass freely and peacefully."

Do not hate your neighbor because he is supporting another party," Kibaki recently urged Kenyans. "Do not assault him. Vote for the one you like. We shall be friends even after the elections."

The upcoming ballot pits two of Kenya's best-known career politicians against one another. Both Kibaki and Odinga served stints inside the government and outside as opposition leaders. At times they've been political allies, other times rivals.

There was several things that were fascinating in the article. Several of the voters interviewed spoke about their choices with the sort of explanation that almost reminded me of our own political situation. While we can all be quite cynical about our own politics, I think it is a huge step when I read folks in Africa approaching politics in a similar fashion. Throughout the article it was indicated that things would be run relatively fairly in this election and the incumbent even had a legitimate shot of losing. That is quite rare in the part of the world. It was combined with the sort of gritty, back room, corrupt politics that I expect there...

After his release in the 1990s, Odinga surprised everyone by joining sides with his jailer in a political alliance. But he quit when it became clear that Moi would not name Odinga as his successor.

In 2002, Odinga and Kibaki joined forces. Odinga agreed to set aside his own ambitions and supported Kibaki at the top of the ticket. But Kibaki allegedly agreed in secret to repay Odinga by backing his bid to become prime minister.

After the election, the partnership fell apart when, according to Odinga, Kibaki reneged on the agreement. Kibaki denied the deal existed.

All of this combined to make for an interesting and very important story. I firmly believe that the evil and chaos that goes on in the continent of Africa will eventually spill over and the rest of the world will have to deal with it at some point. This is the sort of story that gives hope that maybe a new day will dawn.

Well, it appears that the early optimism may just have been overblown.

Police fired tear gas and bullets Monday as they struggled to contain tens of thousands of opposition supporters accusing President Mwai Kibaki of stealing his re-election. The death toll in the demonstrations and ethnic clashes rose to at least 125 people, police and witnesses said.

Three police officers said they had orders to shoot to kill, while opposition supporters said they would risk death to protest what they called a stolen election.

The vote ignited smoldering resentment between Kenya's two largest tribes, with supporters of Raila Odinga, a Luo who officially came in second, clashing with members of Kibaki's Kikuyu. The head of Kenya's Red Cross said many of the dead were killed in ethnic violence across the country.

The Kikuyu comprise the largest ethnic group in Kenya, and are frequently accused by other tribes of monopolizing business and political power.

Here is another view.

Kenya's government has suspended all live television broadcasts as violence engulfed Nairobi following the re-election of incumbent president Mwai Kibaki.

Opposition supporters march at the entrance to the Mathare slum in Nairobi on Sunday.

A senior official from the Kenyan Television Network said it had been ordered to stop live broadcasts as rioters went on the rampage.

Kenyan television had earlier broadcast an address from the chairman of the electoral commission announcing that Kibaki had narrowly defeated Raila Odinga, of the opposition Orange Democratic Movement, winning by slightly more than 231,000 votes of the more than 8.9 million votes cast.

A top media executive said on condition of anonymity that the decision to suspend broadcasts had "taken back democratic process by 15 years."

About 100 people have been killed across Kenya in violence blamed on the disputed presidential election.

A BBC reporter at a mortuary in the opposition stronghold of Kisumu saw about 40 bodies with gunshot wounds. A witness said police had opened fire.

There were running battles in Nairobi slums, and violence was reported in the coastal town of Mombasa.

Mwai Kibaki was officially re-elected president while Raila Odinga says he was robbed of victory by voting fraud.

I will stay on this as this is an important and developing story.

Gary Peters walks away from questions

Adding Some Context to the Fiasco at Central Michigan University

The Peters Report has an excellent summary of the fiasco at CMU and there are several things that I didn't know earlier.

Public records, obtained through Freedom of Information Act requests, indicate Peters was one of several applicants for the $65,000-a-year position that involves teaching once a week for three hours and organizing a public policy-related forum each semester. But the former candidate for attorney general and governor was the only candidate interviewed when the Department of Political Science voted to hire him on February 26.


According to campaign finance reports with the Michigan Secretary of State’s Office, CMU Trustees Sam Kottamasu and Brian Fannon along with former Griffin chairman Craig Ruff have financially supported Peters’ political campaigns over the years, though this was never disclosed during the hiring process. Kottamasu has supported Peters in every campaign since 1998 and the two traveled to India together on a lobbying trip in 2000. As for Ruff, he gave Peters $200 on two separate occasions in 2002. CMU says no trustee was involved in the hiring process, and the school hasn’t said what role Ruff played other than being consulted for his opinion.


The school’s lobbyist, former Michigan State University trustee Kathleen Wilbur, was concerned enough to e-mail CMU President Michael Rao on February 28, stressing that “folks need to know Gary (Peters) is seriously considering running for Congress.”

“Joe Knollenberg is someone who we deal with relative to any CMU federal funding so this could get sticky,” she said.

Here are a few things I learned. First, initially Peters was the only one that was interviewed. It wasn't until the provost stepped in that someone else was even interviewed. Several prominent members of the CMU administration have contributed to prior campaigns of Peters. Peters was offered a position through 2010 even though this would be impossible if he actually won his seat. Peter's opponent in the congressional race has a lot of influence with regards to funding at CMU and thus that would mean that so would Peters.

This story is now unfolding for me. We have a corrupt process in which a clearly conflicted individual is not only hired but initially he is the only one even interviewed. Several emails paint not only this process but the entire climate at CMU as entirely too ideologically driven. Several prominent members of CMU have financial ties to prior campaigns of Peters. Furthermore, Peters would clearly be in a position to affect funding for CMU as well. The administration was quick to dismiss the concerns of its student body and yet paid great deference to the recommendation of the Governor.

Furthermore, when student Dennis Lennox tried to get to the bottom of the story, the administration tried to intimidate him and at one point even threatened to expel him. Stay tuned this story is not going away.

Sunday, December 30, 2007

Responding to the Mortgage Crisis: Capitalists, Socialists and Fair Weather Capitalists

There are three economic systems that account for much of the world's economic system: capitalism, socialism and communism. Here is a brief description of capitalism.

Capitalism generally refers to an economic system in which the means of production are predominantly owned and controlled privately, rather than by the state.

Here is a brief description of communism.

Communism is a socioeconomic structure that promotes establishment of a classless, stateless society based on common ownership of the means of production. It is usually considered a branch of the broader socialist movement that draws on the various political and intellectual movements that trace their origins back to the work of Karl Marx. Opponents say that communism is an ideology, whereas promoters say that it is the only political system without ideology.

...and socialism

Socialism is a broad array of ideologies and political movements with the goal of a socio-economic system in which property and the distribution of wealth are subject to control by the community for the purposes of increasing social and economic equality and cooperation.[1] This control may be either direct, exercised through popular collectives such as workers' councils, or indirect, exercised on behalf of the people by the state. As an economic system, socialism is often characterized by state or community ownership of the means of production.

History has proven that the only economic system that has proven to work in the long term is capitalism. We fought a long Cold War over the communist system. Socialism is being tried in states like Cuba and Venezuela. Even in Europe they are learning the hard way what happens when the state replaces the market. (for an excellent dissertation of the failings of Europe's economic systems check out America Alone by Mark Steyn)

Despite all of this, the government insists on responding to every crisis caused by our capitalistic system with a heavy dose of socialism. At this point, we must all decide if we want to be capitalists, socialists or communists. The reason I say this is that too many of us are what I refer to as fair weather capitalists. We know from sports what happens when a sports team has a good year. Their television viewership goes up and their stadium is filled. That's because folks that would never watch the team if it is bad suddenly become fans. We refer to those folks as fair weather fans. The same can be said of fair weather capitalists. They only believe in capitalism as long as things are going well. When entrepeneurs used the capitalistic system to create the technological revolution of the nineties, everyone was on board with capitalism. On the other hand, when folks used poor judgement and recklessness to create the current mortgage mess, the same folks scream for government intervention.

The problem is that government regulations, government bailouts, and governments stepping in to re arrange private contracts are the hallmark of socialism and communism not capitalism. Those are just a few of the plethora of nonsensical ideas that the government has proposed and implemented. In fact, the mortgage mess has become a campaign issue. Here is a snippet of what Hillary Clinton is using in her latest campaign.

What if we had a different president this year? Hillary Clinton called for action on America's housing crisis in March, in June, in August. George Bush and Wall Street did nothing. Since then home prices have plummeted and millions may lose their homes. Hillary's plan: freeze home foreclosures, freeze rates on adjustable mortgages, provide real tax relief for the middle class. When we choose a president next year, let's choose one that would have started fixing our economy this year."

The problem is that when government freezes the mortgage rates of private banks, stops contracturally agreed foreclosures, and creates a fund to bailout dilinquent borrowers the government is no longer overseeing a capitalistic system but a socialistic system. Even though these systems have been proven over and over to fail, there continues to be those that respond to any economic crisis with a healthy dose of socialism. Economic crisis are an unfortunate, though standard, part of any capitalistic system. That is because when you give private citizens the freedom to make their own way, there will be times when they use that freedom foolishly. The market is both cruel and perfect. It will treat the foolish with absolutely no love and it will correct all the mistakes the foolish created.

That is exactly what has happened in response to the mortgage crisis. Dozens of banks went out of business and millions of borrowers are either in foreclosure or near it. The whole entire indsustry is in chaos, and mortgage programs are changed and eliminated constantly. I know because I am in it. The market has also eliminated the excesses all on its own. Sub prime has nearly eliminated all so called stated income loans. There are few if any sub prime programs that go above 90% loan to value. That's because the two biggest culprits of the crisis were stated loans and no money down loans. These are also the loans that politicians want to legislate out of existence. In other words, politicians want to legislate what the market has long ago eliminated on its own.

The politicians, like Clinton and Bush, want to freeze adjustable rates. Keep in mind that mortgages are private contracts. The rates that are adjusting are adjusting based on terms agreed upon by two private parties. Now, the government is stepping in to stop a private contract. In other words, we will make a private contract a function of the federal government. Call me cynical but that sounds much like nationalizing an industry and it is what we scream bloody murder of when someone like say Hugo Chavez does it. Yet, when one of our politicians suggests something similar, they are extolled by certain quarters as caring.

Everyone needs to know that when these politicians step into care they are replacing the judgement of the market with their own. Now if you really believe that Hillary Clinton, Barack Obama, President Bush, Congress, and even the Federal Reserve understand mortgages better than the mortgage market itself, then you are not only naive but also likely a fair weather capitalist.

The mortgage crisis has created a struggle for the very fiber of our economic systems. We must all decide if we are really capitalists, folks that believe in the free market in good and BAD times, or we are really socialists, folks that let government regulate everything for any reason. I have pointed out before how effective socialism can be if packaged right as an election tool. Make no mistake...there will be those that will use the mortgage crisis to try and increase regulation, government control and the size of government itself. Those folks will take us one step closer to socialism. We must all decide which way our economy should go.

Napoleon Dynamite vs. World of Warcraft

UBL Speaks and Iraqi Sunnis Respond

UBL just released another audio tape. The tape focuses on Iraq and touches upon Palestine indicating it was made prior to Bhutto's murder. Here is a bit of what he said...

Bin Laden said U.S. and Iraqi officials are seeking to set up a "national unity government" joining the country's Sunnis, Shiites and Kurds.

"Our duty is to foil these dangerous schemes, which try to prevent the establishment of an Islamic state in Iraq, which would be a wall of resistance against American schemes to divide Iraq," he said.

He called on Iraq's Sunni Arabs to rally behind the Islamic State of Iraq, the insurgent umbrella group led by Al Qaeda. Besides the Awakening Councils, some Sunni insurgent groups that continue to fight the Americans have rejected the Islamic State.

Bin Laden said Sunnis should pledge their allegiance to Abu Omar al-Baghdadi, the little known "emir" or leader of the Islamic State of Iraq. U.S. officials have claimed that al-Baghdadi does not exist, saying Al Qaeda created the name to give its coalition the illusion of an Iraqi leadership.

"Failure to give allegiance to the emir after he has been endorsed leads to great evils," bin Laden warned. "Emir Abu Omar would rather have his neck severed than betray the Muslims ... Emir Abu Omar and his brothers are not one of those who accept compromise or meeting the enemy halfway."

Sunni Iraqis gave their emphatic response...

Osama Bin Laden should order al-Qaeda members to stop targeting and killing Iraqi and apologize to the Iraqis for all the horrific crimes committed by the organization members," Salah al-Din awakening council said in a statement issued on Sunday and received by the independent news agency Voices of Iraq (VOI).

The announcement came in a reply to audiotape released Saturday purported to be by Osama bin Laden, in which the leader of al-Qaeda warned Iraqi Sunni Muslims against joining awakening council.

The statement pointed out “the crimes committed against Iraqis by those calling him Sheikh Osama was the main motive to establish the awakening councils and was not seeking for money, power or treason for others’ interests”.

In Anbar, the locals were so outraged and disturbed by the heavy handed tactics: cutting off fingers of smokers, raping and killing women who put the wrong sorts of vegetables together, and the worst, inviting families and literally serving their child's head on platter...that this is what lead to the Anbar Awakening.

My favorite broadcaster, Bill O'Reilly, was fond of calling on Iraqis to fight for their own freedom, and I believe this latest statement by Salah Al-Dih is an other example that more and more are.

Kenyan Elections

Kenyans went to the polls in underreported and yet very important elections. As of now, final results are still not known...

KENYA'S electoral board is expected to announce the winner of the presidential election amid claims of vote rigging and riots as the lead of opposition candidate Raila Odinga evaporated in the slow ballot counting.

The delay in counting the ballots in Thursday's election sparked violence nationwide, which claimed at least three lives on Saturday, as angry Odinga supporters accused incumbent President Mwai Kibaki of rigging the vote results.

Electoral Commission of Kenya (ECK) chief Samuel Kivuitu said Saturday that the latest count showed Mr Odinga's once clear lead of over 300,000 votes had melted away to less than 40,000 votes, with just 19 out of the 210 constituencies left to report.

Mr Odinga had held the edge over Mr Kibaki in nearly all pre-election opinion polls and enjoyed a clear lead in the early counting, and voters dealt Mr Kibaki's Party of National Unity a series of stinging defeats in parliamentary elections also held on Thursday.

What is different about these elections is three fold. It has international observers to make sure that they are as fair as possible. Those observers have reported that they have found no incidents of fraud and finally the ruling party has a legitimate chance of being voted out.

While many instances of elections have spawned optimism of real change in many parts of the world from Syria, to Ukraine, to Palestine only to have the reality of governance deal that hope a blow, I do believe this occurrence is one to be viewed with optimism.

Of course, that optimism should be tempered. In a place like Kenya, when I say the elections were fair and without fraud, that is a relative term

The Foreign Secretary, David Miliband, made a statement on the violence surrounding the Kenyan elections.

'We are disturbed at the violence surrounding the elections. The British Government calls for an end to the violence, respect for the democratic process and for all Kenyan leaders to act responsibly. This is a pivotal moment for Kenya. It is vital that the entire election process meets the expectations of the Kenyan electorate. The international community hopes that Kenya will live up to both the letter and the spirit of its democratic principles.'


Just as I was writing this, I noticed that I was initially inaccurate. The results are in and the incumbent has won a narrow victory.

MWAI KIBAKI - 4,585,721 (46.7%) (~32.3% of the registered 14.2 m voters)
RAILA ODINGA - 4,352,993 (44.3%) (~30.7% of the registered 14.2 m voters)
KALONZO MUSYOKA -879,903 (9%) (~6.2% of the registered 14.2 m voters)
Kibaki winning marging - 231,728 votes

Saturday, December 29, 2007

Deconstructing Crucial Emails in the Fiasco at CMU and Beyond

Introduction: This fiasco much like the fiasco I have been following at Emory University and beyond the fiasco at CMU involves several twists and turns. Thus, anyone that picks the story up in the middle is likely to get caught in the maze. Thus, if you are having trouble following, I suggest you use this summary as a guide. Now, here is a quick summary. At the beginning of the current school year, CMU hired Gary Peters to a fellowship position. Peters was a controversial choice because he subsequently decided to run for Congress as a Democrat in a district hundreds of miles away. Besides questions of how much time his run for Congress would take away from his duties as a fellow, there were other questions about whether or not his run would create a conflict. Now, enters CMU student Dennis Lennox. He decided to get some answers himself, and he began to engage in so called ambush journalism. He would show up with video camera in public places and confront Peters with several confrontational questions. Rather than protecting Peters first amendment rights, the administration began to circle the wagons around Peters. They even went as far as trying to create rules banning video equipment from public areas of the University and threatening to expel Lennox. The latest in the fiasco involves the release of 174 pages of internal emails and other communique from administration officials about Peters hiring.

The most intriguing email I have taken a look at it is this one...

I think there is a growing impression that CMU is a Conservative Republican baseand I and several others have heard this over and over from folks in our own administration, the faculity, and from Lansing politicians. The Department of Political Scinece has had top rate policy analysts in the first effort to fill the Griffin Chair and they percieve that they were overridden because of Ranny Ricker's call regarding (name blacked out). In the second search to fill the Griffin Chair the Department received a hassle when they found a moderate Republican to have cleared al the hurdles and a political ally and close associate of John Engler was almost foisted upon them even though the person lacked the same excellent qualifications as Bill Ballinger...

I have recently grown fond of the Latin phrase, Res Ipsa Loquitur (the facts speak for themselves) and I believe that upon analysis this Latin phrase will play a critical role regarding this email in the fiasco. First, there are only three ways to treat this email: either the author is entirely truthful, lying entirely, or is mixing lies and truth. Now, in order to invoke Res Ipsa Loquitur I will just take the author at their word and assume everything in the email is true. The email is from Political Science Department Chairman Delbert Ringquist and its contents indicate to me that Ringquist must be removed from the position. If you take Ringquist at his word, the department he runs is in chaos and it is corrupted. If you don't, he is lying and misleading in emails in order to affect a hire. Either way, he can't remain in place. Beyond that, the emails reveal several things about CMU and the powers that be there and beyond.

If we are to take Ringquist at their word, then the department he chairs is going through a professional civil war that pits folks choosing sides based on ideology. First, Ringquist indicates that the department is too conservative...

I think there is a growing impression that CMU is a Conservative Republican baseand I and several others have heard this over and over from folks in our own administration, the faculity, and from Lansing politicians.

He then follows up by accusing other elements within CMU of forcing conservative thinkers into the department...

In the second search to fill the Griffin Chair the Department received a hassle when they found a moderate Republican to have cleared al the hurdles and a political ally and close associate of John Engler was almost foisted upon them even though the person lacked the same excellent qualifications as Bill Ballinger...

In other words, we clearly have a department that is split along ideological lines and hiring all too often becomes a power play between factions that are Conservative and others that are Liberal.

Furthermore, who are these folks that have told Ringquist that CMU is too conservative and what are their motivations? Ringquist mentions a political element. Are these folks primarily Democrat, like the state? Would it be appropriate for Democratic politicians to indicate to university officials that they believe their faculty too often represents folks that occupy the ideology? How did these officials come to such a conclusion? Wouldn't such statements, true or not, corrupt future hiring searches? After all, these very statements are now being used politicize this search.

According to the Peters Report, Ringquist made a few other interesting statements regarding the hiring of Peters.

“We were looking for political diversity … another prominent Republican in the chair will create problems.”

Thus, we have a Department chair that feels the department has an ideology that is too conservative and that the hiring of the Griffin Chair (the post Peters was eventually hired to) needed to be "politically diverse". Of course, all of this is code for Ringquist seeing the post go to a liberal. Again, Res Ipsa Loquitur. If we are to take Ringquist at his word, the hiring of the Griffin Chair turned into a power play in a battle of political ideology within the Department of Political Science within Central Michigan University. A corrupted and poisoned department, as described by Ringquist himself, is the responsibility of its leader.

There is yet another interesting email that Peters Report has also publicized.

As close as he (Gary Peters) is to the governor (Jennifer Granholm), it might look bad for CMU if he is not offered the position after such a recommendation."

Now, he is referring to Governor Granholm having a close relationship to Peters and also giving Peters a high recommendation. Ringquist indicates that not hiring Peters after such a recommendation would make CMU look bad. Now, this is interesting on several levels. First, let's compare what Ringquist sees with this governor's recommendation to that of another governor...

In the second search to fill the Griffin Chair the Department received a hassle when they found a moderate Republican to have cleared al the hurdles and a political ally and close associate of John Engler was almost foisted upon them even though the person lacked the same excellent qualifications as Bill Ballinger...

John Engler is the former Governor of Michigan up until 2003 in fact. Clearly, in this case Ringquist felt a candidate was forced down the department's throat because they were close to the governor. In this case, Ringquist feels obligated to hire Peters because Peters is close to another governor. To me this is a distinction without a difference. The only conclusion I can draw is that Peters views each slightly differently only because one governor's ideology mirrors his own and the other's doesn't.

Finally, here is another email that is of note...

Furthermore, this continued diatrobe from (again name blacked out) and his friends does not represent the majority of CMU students nor does it present accurate facts to the public. This is an Endowed Chair- not one that is supported by student tuition dollars. To allow (again name blacked out) the power to dictate who will or will not serve as the Griffein Endowed Chair for American Government is not a precedent I believe we should support.

(This email is from another member of the faculty at CMU, Pamela Gates, associate Dean of Humanities) Isn't it interesting how much weight, deference, and power the faculty treats recommendations and relationships of certain governors, and contrast to how quickly they dismiss the concerns of students. I don't believe that either students or Governors should be making hiring decisions for a University. I do believe that genuine concern from your student body should carry at least as much weight as any recommendation from the Governor of your state.

On the one hand, if the governor has recommended someone, then the faculty feels an obligation to hire that person. Whereas, if a student's concerns are heeded then that is

a precedent I believe we should not support.

Of course, giving the Governor de facto hiring power is a precedent the same administration whole heartedly embraces.

A while back I said this about this story...

If the decision to hire (Gary) Peters had anything to do with political favortism then the whole search was corrupted."

If we are to take the emails that Ringquist authored at face value, we are only lead to conclude that in fact that is exactly what happened. To me, given what has been discovered in these emails, I can only conclude that Ringquist is no longer fit to serve the post he occupies. Either they are overseeing a department in such chaos that it has been split into ideological factions with hiring decisions taking on political power plays, or Ringquist is lying and mischaracterizing the situation to make it look that way. Either way, Res Ipsa Loquitur and I believe Ringquist must go.

Hillary Brings Her Rate Freeze to Georgia

A hat tip goes to my cohort at Georgia Unfilitered for bringing this local story to my attention.

Hillary Clinton has outlined a bold plan to combat the housing crisis that is plaguing Georgia, which has the 7th -highest rate of foreclosure filings in the country, according to the latest available data.

Georgia has about 26,800 mortgages in some state of foreclosure right now, 45% of which are subprime (even though subprime composes less than 12% of all the mortgages in the state). According to reports earlier this year, Georgia has the 7th-highest rate of foreclosure filings in the country.


Nationally, more than 1.8 million foreclosure notices have been sent out this year, an increase of 74% from last year. And with the monthly payments set to rise on more than 1 million subprime loans next year, the situation is likely to worsen unless something is done. Experts now say that the foreclosure crisis is weakening the economic outlook, hurting industries from construction to autos, and making banks reluctant to lend companies the capital they need to expand and create jobs. Cities face the prospect of vacant properties marring neighborhoods, cutting tax receipts, and dragging down property values. With the decline in property values, home equity is also falling, and in the process families are losing a major source of wealth (home equity makes up 60% of the wealth of the middle class) and disposable income (in 2005, home equity withdrawals were 8% of families’ disposable income). Hillary’s three-step plan to address the foreclosure crisis includes:

Observing a foreclosure moratorium of at least 90 days on subprime, owner-occupied homes

Freezing the monthly rate on subprime adjustable rate mortgages, with the freeze lasting at least 5 years or until the mortgages have been converted into affordable, fixed-rate loans.

Providing status reports on the number of mortgages being modified.In addition, Hillary will establish a one-time $5 billion Community Support Fund to help hard-hit communities and distressed homeowners weather the foreclosure crisis.

This plan is very little different than the one she has proposed nationally...

Democratic presidential candidate Hillary Clinton called for a 90-day moratorium on foreclosures for homeowners who default on subprime mortgages.

The New York senator, is also seeking a five-year freeze on the monthly rate for subprime adjustable mortgages and a requirement that the industry report how many mortgages have been modified. In a letter to Treasury Secretary Hank Paulson, Clinton said she may consider legislation to protect lenders from lawsuits and let them convert certain mortgages into ``stable, affordable loans.''...

Clinton also proposed a fund of as much as $5 billion to help communities suffering from high rates of foreclosures. The moratorium on foreclosures would be at least 90 days and only apply to owner-occupied homes.

First off, we should all be weary of any national politician that isolates one region and develops a bailout for them. It is one thing for the President to declare a state of emergency, however once Presidential candidates come up with financial bailouts isolated to certain geographic areas, they have begun to use power they should not be using.

That said everything I said before about the faults of the plan apply today...

It seems that Hillary Clinton has forgotten several simple business rules. The first rule is that contracts have stipulations and each party must meet their end of the contract or face consequences (no matter how sympathetic each party is). ...

Despite what Hillary Clinton believes, changing any contract in a wholesale manner, as she wants with mortgages, is neither good policy, nor good for the economy. Banks paid out hundreds of thousands of dollars up front with the intention of receiving that money back one month at a time. If that money wasn't received, the banks would take the collateral, the property


Second, Hillary Clinton wants to freeze ARM's (Adjustable Rate Mortgages). This is ludicrous. The reason that any loan has the rate that it has is ALL the factors that went into that loan, including the fact that the rate on that loan would move later. (In other words an ARM almost always has a lower rate than a fixed rate everything else being equal) Hillary Clinton wants to freeze rates even though banks offered a lower rate with the intention of having that rate move in a future period.


Finally, and here is the worst part, the people that Hillary wants to save from foreclosure, for 90 days at least, are almost entirely in over their heads. They bought property they simply can't afford. I don't care if her moratorium is 900 days, this dynamic isn't going to change. If you can only afford a home that is 200K and you buy one for 250k, no moratorium is going to save you from yourself.

This plan is no better for the state of Georgia than it is for America...

More Iraq Surge News

If you are either a political junkie or you have an affinity toward military strategy, then the counter insurgency manual authored by General Petraeus is for you. In it he describes counter insurgency in three phases: clear, hold and build. The clear portion entails the military goes into the bad areas and clear out the bad guys. This is the most difficult and most dangerous portion of counter insurgency. It often involves hand to hand fighting in urban environments.

Once, the clear portion is completed the military leaves a presence in the newly cleared areas so that the bad guys don't come back. This is what is referred to as the hold portion of counter insurgency. By holding a presence, the locals are more likely to believe that any lull in violence will not merely be a lull but rather a new reality.

The last portion is the build portion. This involves money and infrastructure coming in and economically turning around areas. The locals must see that there are possibilities beyond the violence past they remember, and economic activity is vital to any new reality.

When there are signs of economic revival that is strong evidence that the counter insurgency strategy is not only working but is now entering some of its later stages.

Thus, this story is not only remarkable but should be heartening to all that consider victory in Iraq vital like myself...

So has the dinar, up 10% against the dollar this year. Now the dollar, admittedly, is no monetary fortress, and the dinar is one of the few Middle Eastern currencies left free by its issuing government to float in value (the exchange rates of most of the region's scrip are lashed to the dollar). The price of a barrel of oil, of which Iraq is a leading producer, has had a pretty good year itself. Still, during the 2007 New Year prediction season, how many guessed that the dinar would outperform the communist Chinese renminbi (up 6.3%) or the Russian ruble (up 6.8%)? The name of no such monetary prophet jumps to mind.

As for the Iraqi stock market, it is as much a hope as an institution. Trading is spotty, financial information is scarce, and the state-of-the-art technology is a white board. Yet the prices scrawled in marking pen have been in a strong uptrend. At last report, they were ahead by 36.8% on the year. For the plucky foreigner who got in at the lows, the total return — stock-price gain augmented by currency appreciation — would have topped 50%.

Of course, Iraq's economy was in tatters at the beginning of the year so many of these numbers should be taken with a grain of salt. There is still plenty of hard work left however signs that the economy is expanding, and these clearly are, are quite positive and only show more evidence of the remarkable success of Petraeus' surge strategy.

Friday, December 28, 2007


The Whole Entire Government Responds to the Mortgage Mess: Another Study in Cynicism, Opportunism and Incompetence

There is a saying in sales: throw enough s$%t at the wall and some of it sticks. It means that in order to get business try as much as possible and that is the way to ensure success. It appears that the government among most of the branches believes that in order to resolve the mortgage crisis we also need to follow the same philosophy. That's because we have had so many proposals, bills, law changes, and policy actions, that it appears the government believes that as long as they try everything something will work. Of course, policy is not like sales and trying every policy imaginable in the hopes that one will work is not quite the same as calling everyone you can think in the hopes that some of them will become clients. A while back, I pointed out that the entire fiasco surrounding the alternative minimum tax is a study in cynicism, opportunism and incompetence, and unfortunately the entire response to the mortgage mess can be qualified much the same.

I first noticed the cynicism, opportunism and incompetence when several Presidential candidates came out with plans to fix the mortgage mess. First, there was Hillary. Her plan involved five main points. First, she wanted to create yet another disclosure and the worst part is that this disclosure already existed as part of several other disclosures. She wanted to eliminate pre payment penalties which I continue to point out the market has long ago eliminated for her. She then wanted to force escrows upon mostly poor folks. Here is the problem with forcing escrows upon mostly poor folks...

Here is how escrows work. The account needs to be filled up at the closing, be it a purchase or a re finance. There must be enough in the account to cover the tax bill. Let's look at an example. Let's say someone has a yearly tax bill of three thousand, or fifteen hundred every six months. Let's say the taxes are due September and March first. Let's say the closing is in May. This means the first payment is July 1st. That means there would be three payments before the taxes are due. This means the account would need to be filled up with three months worth of taxes. There is just one more thing. Banks require an extra two months of taxes as cushion. This means this particular borrower would need an extra five months worth of taxes, $1250 brought into closing. Keep in mind this $1250 is on top of everything else. Sub prime borrowers routinely struggle to make ends meet to figure out how to get a loan closed, and now the Fed has made that process even harder.

In other words, Hillary wants to force poor folks to come up with one or more thousands in EXTRA dollars at each closing. Finally, she wanted to establish a fund to bail out the very folks that took on loans they couldn't afford. Never mind that this policy is counter productive and the ultimate example of throwing good money after bad, Hillary saw a cynical opportunity to score cheap political points and she took it.

Next, it was Obama's turn to offer his two cents in the mortgage debate. Obama's first action was also to create yet another piece of useless documentation that the borrower would need to sign and this piece of useless documentation was also a rehash of other documents already created.

Obama then made the bold proclamation that fraud would no longer be legal. This is frankly a stunning and obscenely naive statement. Fraud is now and always has been illegal. The problem with mortgage fraud has never been about making new laws but rather enforcing the laws already on the books. First, the governing bodies of mortgages, the office of banks and real estate for me, are usually weak and understaffed. Second, it is the bank itself that is charged with the responsibility of reporting fraud. The problem is there is no win and only loss for banks to aggressively report fraud. If they do that, that becomes known in the mortgage broker community and brokers are less inclined to send that bank business. Of course, Obama didn't address, and likely know, those issues.

Obama then took a few shots at his villain, in this case lobbyists, and made some vague references to the vague and nebulous term predatory lending. Predatory lending has become a theme for most of the government agencies and I will go into a much further discussion of it in a bit.

Of course, the mortgage nonsense was bi partisan. The President was next to spring into action.

Urge Congress to pass legislation that would give the Federal Housing Administration more flexibility in assisting mortgage holders with subprime mortgages. — Pledge to work with Congress to reform the tax code to help troubled borrowers rework their loans.— Call for rigorously enforcing predatory lending laws and strengthening lending practices...

On the first idea, the President showed the same type of naivety that the other pols did. FHA loans by nature are more conservative. They have significantly stricter guidelines on such things as Debt to Income. They haven't been affected by the crisis for exactly this reason. It is unclear what the President wants to do, however this point will have one of two effects: either he will create a situation in which the next crisis is in FHA itself, or it will have negligible effect.

The second idea maybe a good idea however I don't see how it will have one iota of effect on people struggling to pay their mortgages. The third idea revisits the nebulous and mysterious predatory lending. We will find a theme from all politicians about this term, and I will show just how absurd it is.

Next, it was Congress' turn with the insidious H.R. 3915. My initial interest in the law came because it threatened to eliminate Yield Spread Premium, which is a tool I use to make money. Given that H.R. 3915 threatened to eliminate my industry entirely, my radar went way up. Here is how I described the ridiculous and counter intuitive nature of eliminating YSP.

Yield Spread Premium is the fee that the banks pay me, the mortgage broker, that is embedded in the rate that is charged to the client. At the risk of treating the reader like a third grader, the higher the rate the higher the YSP. Congress wants to outlaw any YSP that mortgage brokers can charge. The practical effect would put me specifically out of business. The bulk of my clients have excellent credit and at all times a great deal of my business is from refinancing those clients into lower rates. Many times I do this by paying for their closing costs. I accomplish this by raising the rate enough so that the YSP covers the closing costs and leaves enough for me. If this law is enacted, that entire portion of my business is gone.

For every mortgage broker, this means that the only way they can make money is by charging up front fees, or points, at the closing. Here is where the law is insidious. This law doesn't apply to any bank. That means that someone working for Washington Mutual, Countrywide, Chase, Wells Fargo, Bank of America (which all have retail divisions) is exempt from this law. In fact, banks currently are exempt from even revealing how much in YSP they charged as Baton indicated. In fact, banks are exempt from most laws and regulations that apply to brokers.

This latest law leads me to conclude only one thing. Congress has decided to make it their mission to end the industry of mortgage brokers altogether. They figure that if it is impossible for brokers to make money that there won't be any left. They are right. If this law is enacted, the industry will crumble. The key in my industry is flexibility and options. Some people look for the lowest rate possible and aren't as concerned with fees, and others are the opposite. This law would limit the options of mortgage brokers. Obviously, if they are forced to charge points to every borrower they aren't going to be able to compete. It is the equivalent of one basketball team only being allowed four players on the courty while the other has the standard five.I have already pointed out that I have no use for most of my industry.

Now, it is still unclear if Congress will in fact eliminate YSP and the bill has stalled in the Senate so for now, everything is in limbo. That said, YSP was one of several problems with the bill, and it really all starts with the title, Mortgage Reform and Anti-Predatory Lending. Once again, there is that nebulous term, predatory lending. Here is the problem...

There is no specific definition about what exactly predatory lending entails, though most observers believe that the description applies when lenders take advantage of borrowers by charging high interest rates and consider only the value of a borrower’s assets, as opposed to what the borrower can afford to pay.

We have now had multiple Presidential canididate, one house of Congress, and the President, all claim that they will make laws against "predatory lending" and none of them have defined it, and in fact, no one has. Now, it goes without saying that vague and undefinable terms are by nature a problem, however in my business there is a practical effect when they are legislated...


That's because banks must respond to the vague and undefined legislation. They have to cover themselves and there is only one way to cover themselves and that is to create more paperwork.

H.R. 3915 has several instances in which the practical effect would be more useless paperwork. It really should come as no surprise to anyone that Congress would propose or make legislation that would only create more paperwork. Why do you think there is already so much paperwork?

I recently discovered just how hypocritical this law is.

prohibiting the financing of points and fees,

(this particular portion applies only to so called sub prime loans) What this means is that if I charge points or other fees I can't merely increase the loan amount so that they can be rolled into the loan so to speak. In other words, all fees and points must be paid for by the borrower at closing. Keep in mind the logic behind such a law is that points and fees are easier to hide when they are financed, and thus, by disallowing it, mortgage brokers are less inclined to charge higher fees.

The reason that this is hypocritical is that this is the exact opposite of the way FHA, a government sponsored loan, works. I just ran into such a situation with FHA. Now, FHA requires a 1.5% Mortgage Insurance Premium. This is a fancy sounding word for a fee of 1.5% charged at closing that goes on top of all other normal fees. Where this is different than other points, is this fee doesn't go to me, the mortgage broker, but to FHA, or in other words the government itself. With FHA, current rules allow up to 97.15% loan to value. I recently closed a loan in which the property appraised for 195,000. I need every bit of that 97.15% in order to get the deal done. Now, 97.15% of 195,000 is 189,442.5. Yet, FHA allowed this loan to become 192,367. Why...because with FHA, that MIP is financed within the loan as a stipulation of the loan. In other words, FHA, the government sponsored loan, not only allows for its fee to be financed, it stipulates that it be financed.

What does all of this mean? It means the same government that wants to ban financing of closing costs on sub prime loans, not only allows it on its own loans, it stipulates that it work that way. In other words, the very same fees that they want to ban from being hidden, they themselves not only allow to be hidden but stipulate and demand be hidden. Keep in mind FHA loans are mandated to increase by 1.5%, the exact amount of the MIP, specifically so that the government fee be financed within the loan. In other words, for my loan, I couldn't balloon the loan amount to cover my fees as well, that wasn't allowed, but I wasn't only allowed but mandated to beef up my loan by 1.5% so that the government's fees be rolled into the loan amount.

The final blow came when the Fed weighed in and through their regulatory power imposed several rules and regulations of their own. While politicians naivety and ignorance is understandable if not excusable, the Fed's utter ignorance is troubling, mind boggling, and down right unacceptable.

Creditors would be prohibited from engaging in a pattern or practice of extending credit without considering borrowers’ ability to repay the loan.

Creditors would be required to verify the income and assets they rely upon in making a loan.

Prepayment penalties would only be permitted if certain conditions are met, including the condition that no penalty will apply for at least sixty days before any possible payment increase.

Creditors would have to establish escrow accounts for taxes and insurance.


Lenders would be prohibited from compensating mortgage brokers by making payments known as “yield-spread premiums” unless the broker previously entered into a written agreement with the consumer disclosing the broker’s total compensation and other facts. A yield spread premium is the fee paid by a lender to a broker for higher-rate loans. The consumer’s written agreement with the broker must occur before the consumer applies for the loan or pays any fees.

Creditors and mortgage brokers would be prohibited from coercing a real estate appraiser to misstate a home’s value.

Companies that service mortgage loans would be prohibited from engaging in certain practices. For example, servicers would be required to credit consumers’ loan payments as of the date of receipt and would have to provide a schedule of fees to a consumer upon request.

Now, many of the mandates should be recognizable and have already been addressed. The first mandate is patently ridiculous and unless it is defined more narrowly will only lead to mountains of new paperwork. The mandate regarding YSP has already been addressed by several existing disclosures, namely the Good Faith Estimate. In other words, the Fed wants to create a disclosure that already exists because there are so many disclosures that even the Fed doesn't know which does what.

The Fed again naively believes that it is now legal for someone like me to in any way shape or form manipulate anyone else into producing false information. It isn't. Just like with other areas of fraud, the problem is NOT legislation but enforcement.

Now, one thing that you will notice in all of the plethora of ideas, regulations, and bills is that none of them in any substantive way addresses the crisis. That's because this crisis can't be legislated. First, the market long ago dealt with all the problem loans by eliminating them as any market will do. The current problem loans can't be dealt with through legislation because those folks are in over their heads. They over bought. They can't afford the home they live in. There is no legislation for that.

The nebulous and vague "predatory lending" is also something that can't be legislated because it results from stupidity and a lack of sophistication. You cannot legislate that someone become smarter when it comes to mortgages. The reason so many folks are ripped off is simply because mortgages are too damn confusing and complicated for them to understand and they are manipulated, and there is no law that can fix that. Creating more useless legislation which will create more useless documentation only contributes doesn't solve the problem. The problem is that most in government know how to get elected. They don't know mortgages. They can find legislation that will get them re elected but they can't necessarily find legislation that will make good policy in a field they know nothing about. Unfortunately, and this is scary, the Fed is no more wise on mortgages than the politicians.

Bhutto's Death: The Day After

As the dust settles, the mourning begins, the geopolitical significance has more questions than answers. It is still unclear who was responsible though Al Qaeda appears to be the main suspect.

The attack yesterday at Rawalpindi bore the hallmarks of a sophisticated military operation. At first, Bhutto's rally was hit by a suicide bomb that turned out to be a decoy. According to press reports and a situation report of the incident relayed to The New York Sun by an American intelligence officer, Bhutto's armored limousine was shot by multiple snipers whose armor-piercing bullets penetrated the vehicle, hitting the former premier five times in the head, chest, and neck. Two of the snipers then detonated themselves shortly after the shooting, according to the situation report, while being pursued by local police.

A separate attack was thwarted at the local hospital where Bhutto possibly would have been revived had she survived the initial shooting. Also attacked yesterday was a rival politician, Nawaz Sharif, another former prime minister who took power after Bhutto lost power in 1996.

A working theory, according to this American source, is that Al Qaeda or affiliated jihadist groups had effectively suborned at least one unit ofPakistan's Special Services Group, the country's equivalent of Britain's elite SAS commandos. This official, however, stressed this was just a theory at this point. Other theories include that the assassins were trained by Qaeda or were from other military services, or the possibility that the assassins were retired Pakistani special forces.

If Pakistani ISI was involved, that would come as little surprise to anyone who has been following the sitution. If they were it will be that much more imperative for Musharraf to confront Al Qaeda once and for all. If not, the next assassination in Pakistan will likely be his.

The geopolitical implications are as yet unsettled as I mentioned. Thus, let's look at some of the analysis. Let's look at the National Review first.

In the very short term, Pervez Musharraf is likely to declare another state of emergency or even martial law. Friends calling from the Pakistani capital tonight say that cars are being torched in the street as members of Benazir’s party, the Pakistani Peoples’ Party (PPP), express their anger and grief. This could easily grow into widespread civil unrest, especially in the wake of her funeral tomorrow.


Looking beyond the next few days it seems unlikely that an election will be held on the 8th of January (though both Benazir and Nawaz Sharif were both technically barred from standing for prime minister). As for Musharraf, he’ll be badly damaged at least in the short term.

While Benazir had plenty of enemies, including jihadis who detested the idea of a woman leader and who were furious at her newly robust pro-Western antiterrorist stance (she had said she would let U.S. troops hunt for Osama bin Laden within Pakistani territory...

I think it goes without saying that there will need to be a state of emergency and that elections will be postponed. Here is another...

The assassination of former Pakistani Prime Minister Benazir Bhutto has dealt a severe blow to U.S. efforts to restore stability and democracy in a turbulent, nuclear-armed Islamic nation that has been a critical ally in the war on terror.

While not entirely dependent on Bhutto, recent Bush administration policy on Pakistan had focused heavily on promoting reconciliation between the secular opposition leader who has been dogged by corruption allegations and Pakistan's increasingly unpopular president, Pervez Musharraf, ahead of parliamentary elections set for January.

In Washington and Islamabad, U.S. diplomats urged that Jan. 8 elections should not be postponed and strongly advised against a reimposition of emergency rule that Musharraf had lifted just weeks ago.

One more...

Her killing also quashes hopes of Western governments that the charismatic, two-time former prime minister could team up with President Pervez Musharraf and galvanize Pakistan's fight against Taliban and al-Qaida militants after Jan. 8 elections.

"This assassination is the most serious setback for democracy in Pakistan," said Rasul Baksh Rais, a political scientist at Lahore's University of Management Sciences. "It shows extremists are powerful enough to disrupt the democratic process. Musharraf's major concern now will be to maintain law and order and make sure this does not turn into a major movement against him."

Michael Medved has some interesting thoughts...

The terrorist threat remains the most important issue confronting the next president. In the campaign so far, candidates have spent most of their time debating domestic issues -- health care, immigration, the weak dollar, abortion, Congressional earmarks, tax reform, US attorney firings, energy independence, sub-prime mortgages, environmental warming and so forth. The Pakistani crisis reminds us that none of this matters as much as very real terrorist threats


With all our complaints about the quirks our electoral system, the Bhutto assassination should renew our gratitude for our stable, honorable, and functioning democracy. The assassin gunned down Madame Bhutto as she left a campaign rally for parliamentary elections scheduled for January eighth (three days after our New Hampshire primary)...


The isolationist arguments of Ron Paul and leftist Democrats look ridiculous in the face of Pakistan’s agony. The “Blame America” school of international relations loves to ascribe any danger or setback to the failed policies of the Bush administration, the machinations of the CIA or the “neo-cons,” U.S. support of Israel, or...

Here is the gloomiest and most concerning analysis I found...

SLAIN opposition leader Benazir Bhutto was laid to rest in her family crypt last night as the shock of her assassination drew angry crowds on to the streets of Pakistan for riots that threatened to push the country into civil war.

With al-Qa'ida claiming responsibility for a murder that has provoked the most serious crisis in the 60-year history of the nuclear-armed country, President Pervez Musharraf was under intense pressure from Washington to ensure
Pakistan returned to democracy through elections scheduled for January 8.

But Mr Musharraf, who has become a key ally in the war on terror, was facing a furious backlash from his own people, with mobs chanting "Killer Musharraf, go" as they set fire togovernment offices, shops and cars.

If Pakistan, a key ally, and a nuclear power heads into civil war, then that is the worst case scenario and the likely hope of the killers themselves.

Finally, the reaction from both sides of the blogosphere is so obscene. I won't link to any of it. It ranges from stepping on her grave, to political opportunism of all sorts. If ever there was a time to put petty things like that aside it was now, but unfortunately such decorum isn't found in the blogosphere.

Thursday, December 27, 2007


Emory Wheel/Emory University = Pravda/Soviet Union

Introduction: If this is your first exposure to the matters revolving around the troubled plight of Grady Hospital and the corruption that I believe surrounds it at Emory University and forces in the counties around there, then I suggest that you read the summary that I link to at the end and several times throughout the piece. This story has many mazes and it is difficult to follow and that is one reason that I believe that the obscene amounts of corruption has continued. People simply don't understand the whole story. I believe that what is going on there must be exposed and the piece you are going to read is integral to the whole puzzle and I hope that that if anyone is confused they DON'T merely move on, but read the summary which gives an outline of the entire fiasco. If you do, you should be able to follow this piece as well.

This is the first amendment to the Constitution.
Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances.

There is a reason why the first amendment is first, not second third or tenth. It is the most important amendment and to me the most important part is the establishment of a free press. While the right to speak freely is virtuous and deeply important, the right of the press is especially important because the press has a reach and power that single individuals don't have.

To understand how important the first amendment is one only needs to look at press that aren't free. In despotic regimes all over the world the press hides the truth from its citizenry and instead engages in the practice of being a mouth piece for their administration. In despotic regimes everywhere the press is a tool of propaganda rather than truth telling.

I believe that the Emory Wheel is engaged in exactly such a practice for the administration at Emory vis a vis Grady Hospital and other malfeasance as any press in any corrupt and despotic regime. The only difference is that in regimes like Iran they cover up murder, slaughter, torture and terrorism while at Emory University they are "merely" covering up the administration's contribution to the pilfering of one of the biggest hospitals in the world, while poor folks get nighmarish treatment and the tax payers have millions of dollars corrupted. Obviously, everything is relative however in this case merely being mentioned in the same breath is not only shameful it is downright tragic.

The unfortunate thing is that the right role of the Emory Wheel is to be a watchdog of its own powerful forces and in their case those forces are the administration itself. Rather than use their first amendment powers to check the administration, that newspaper has become nothing more than a mouthpiece.

The first evidence is a simple word search of the Emory wheel. If you enter Grady Hospital into the Emory Wheel word search, you find 26 articles. Let's compare that to some other searches. The girl's basketball team leads the word searches with 520 articles. (all right the cynic will say that given their sports section this would be natural...fine...) Even the shuttle service is covered more than Grady Hospital. It has 50 articles. The absurdity doesn't end there. The Dalai Lama is referenced more in the Emory Wheel (86 times) than the main teaching hospital at its own medical school.

Keep in mind. Grady isn't merely one of the three biggest hospitals in the country. It isn't merely the main teaching hospital for the Emory University Medical School. The medical school doesn't merely account for about 75% of the revenues at Emory University. Grady hospital is in a state of financial crisis. It has also been cited by JCAHO for patient care. JCAHO is now threatening to revoke Grady's accreditation. This is only the second hospital in the history of hospitals to have such a step taken. The other one being King Drew in California. In other words, there is all sorts of big news all around Grady Hospital. Thus, it isn't merely inexcusable that Grady has a near communication shut down at the Emory Wheel but it is corrupt. I am fond of the Latin phrase, Res Ipsa Loquitur (the facts speak for themselves). Given everything that I just mentioned Res Ipsa Loquitur applies when trying to prove that the Emory Wheel has become a corrupt mouth piece for the administration.

The cynic would argue that incompetence and youth could explain the facts I just laid out. The cynic might be right if those were the only facts.

Let's look at the case of Steve Stein. On September 9th, he wrote this...

It’s not exactly a smoking gun, but the latest revelation in the Grady hospital saga — that Emory may be taking advantage of its influence with the struggling trauma center — raises questions the University must answer soon. State Senator David Shafer (R-Duluth) went on the attack in a recent blogpost (, implying that Emory doctors improperly bill Grady for their services. Similar allegations have already been made, but Shafer outlines the most compelling critique of Emory yet.

Shafer, who based his blog post on a two and a half year old audit of Emory’s record keeping he acquired through an open records request, writes:“[I]n a practice that is denounced by the auditors, its faculty physiciansrecord their time at Grady a mere four weeks each year (one week per quarter)and then make a guess at how much time they spend at Grady for the remaining 48weeks of the year, using the four weeks of recorded time as a guide. Emory thenbills Grady for the full 52 weeks of work. Doing the math, that means there is no documentation for 92 percent of Emory’s bills for supervisory and administrative services.”

This was a rather damning and incendiary article. That's why it was quite peculiar to find the same author eight days later writing this...

A town hall meeting about Grady Memorial Hospital last week served as a perfect metaphor for the troubled trauma center’s saga: snide attacks superseded solutions, chaos trumped compromise and Emory became the focus of unjustified attacks — again.One thing is certain: The crusade against Emory by people like loca lactivist Ron Marshall and state Sen. David Shafer (R-Duluth) has officially turned into a witch hunt.

Last week, I wrote that Shafer had raised important questions in his blog about the Emory-Grady relationship that the University had to answer. Most importantly, I wanted to know whether allegations that Emory doctors improperly billed Grady for their services were accurate.

Emory has answered these questions and has done so convincingly —the answer is a definite “no.” In a recent press release, School of Medicine Dean Thomas Lawley and Executive Vice President for Health Affairs Michael Johns provided evidence to show that the University’s time-recording practices compare favorably to those at other hospitals. Lawley and Johns made a more than adequate defense of their position. The attacks, however, have not abated.

That is a near 180 degree turn around in eight days. Only Stein knows what motivated him, however the facts as they have come out since have shown that his first article was a lot closer to the truth than his second. If Emory is the victim of "unjustified attacks", why is the hospital that is staffed 90% by their faculty now being threatened with revocation of their accreditation. Furthermore, it was the work of Ron Marshall, the activist that Stein claims was conducting a witch hunt, that was most vital in forcing JCAHO's hand in this matter.

As for Shafer, the other person that Stein refers to as the aggressor in a witch hunt. It was Shafer that lead the charge to unseal the records in the case of Dr. Jim Murtaugh. In it we found out that Dr. Murtaugh was paid off to the tune of 1.6 million dollars and silenced at the exact same time that the NIH was investigating Grady Hospital. Furthermore, Shafer discovered this...

Former Grady trustee Bill Loughrey tells me that the settlement with Dr. Murtagh was never approved or even accurately described to Grady’s board of trustees. He says that he was stunned to learn that tax dollars were paid to Dr. Murtagh, conditioned on his silence. He thinks the agreement is invalid and that the judicial process has been misused.

In other words, a public hospital used public funds to pay off and silence an employee without the permission of its board. Again, Stein can claim that Marshall and Shafer are on a witch hunt however the facts speak for themselves.

Keep in mind that Marshall was a main driving force in the subsequent decision by the JCAHO to threaten Grady with revocation of its accreditation. Again, this isn't a small step but a huge step. This has only happened once before and that was to King Drew. This is the story that force JCAHO's hand.

It might have gone down as the death of a "quasi-transient" woman with a history of abusing drugs. That's how the May 9 death of Edith Isabel Rodriguez was initially reported to the Los Angeles County coroner's office.But five weeks later, her demise has become a cause celebre, a symbol of bureaucratic indifference. It is fraught with significance not just for one struggling inner-city hospital but for political and health leaders in the Los Angeles area and perhaps beyond. The county Sheriff's Department, health officials and the Board of Supervisors all are feverishly trying to determine who was to blame and how to prevent a recurring...

Despite a long history of problems at Martin Luther King Jr.-Harbor Hospital, two things set the Rodriguez case apart: the existence of a security videotape showing the woman writhing for 45 minutes on the floor of the emergency room lobby and the public release this week of two 911 calls in which witnesses unsuccessfully pleaded with sheriff's dispatchers for help.

Grady is now in a dubious category with a hospital that stood by while a patient pleaded for help for forty five minutes before collapsing on the floor an dying. In other words, JCAHO didn't move simply because some records were misplaced. They moved because the patient care at Grady was equivalent to the case at King Drew. So, while Stein referred to Shafer and Marshall as perpetrators of a witch hunt, it is clear that their concerns weren't merely demagoguery. Stein's contribution to this story end there.

The Wheel's don't. Then, there is this commentary from the editorial staff. (This was entitled Baby Steps for Grady)

It’s two steps forward, one step back for Grady Hospital.

After a two-month recess, Grady’s board of directors has finally agreed to cede power over to a non-profit organization. Such a move follows the recommendations made to the hospital months ago by state politicians, area businesspeople and Emory itself and will allow the hospital to seek funding more easily from outside sources, not just Fulton and DeKalb counties.

But the changeover comes with a catch: The board will allow the new management to take charge only if the Georgia legislature and local business leaders pledge in writing to raise nearly half a billion dollars for Grady — $50 million of which would be due before the board changes power. The legislature will be required to pledge an additional $30 million annually to help keep the hospital up and running. Of particular note to Emory, which along with Morehouse supplies the doctors who work at Grady, the board also wants to freeze current staffing levels at the hospital.

More money for Grady isn’t a bad thing. With funding like that requested, the hospital could pay back its debts, including nearly $45 million in labor costs owed to Emory. Unfortunately, now is not the time for ultimatums from the hospital’s directors. State officials have made it clear they aren’t willing to be told what to do by the governing board of a hospital. If the board can’t reach an agreement with the legislature and other sources of funding, then they say there may be no restructuring, and Grady will be back to square one, struggling to stay afloat.

The reason that I say that this is laughable is that this piece came a week before JCAHO's damning indictment. JCAHO's action means that this hospital is in need of a complete overhaul not baby steps. More importantly, JCAHO's damning indictment or any analysis of it wasn't ever reported in the Emory Wheel. Just this semi puff piece in which they claimed that a privatization plan would allow Emory to seek funds more easily was published in the Wheel.

Next, there is the case of Eileen Smith. Smith is a former veteran staffer, twenty plus years even, of the Emory Wheel. Here is a brief rundown of her story.

The surprise departure of the longtime general manager of Emory University’s student newspaper has journalists there accusing administration officials of trying to assert more control over the twice-weekly paper’s operations.

On Wednesday, Karen Salisbury, assistant dean for campus life and director of student activities at Emory, sent an e-mail to the editor of the Emory Wheel, Geoff Pallay, indicating that Eileen Smith had resigned her position as the paper’s general manager. In that position, Smith helped students garner advertising revenue to fund the operations of the paper.

“I expect that you may want a statement for the paper and also that you may have questions (both from a journalistic standpoint and as a practical matter) about what steps will be taken and when to go about finding a replacement for Eileen,” Salisbury said in the e-mail. “I’m not sure what those answers are just yet.… I’m sure you understand that as a personnel issue all information is confidential, and I am not at liberty to speak to you or anyone else about any details of this matter.” Salisbury was unavailable to elaborate on her comments for this article.Pallay was incredulous. “I talked to Eileen the day before and everything was fine,” he said in an interview Wednesday. “She talked about being in the office the rest of the week.”

Smith had also recently moved to a house closer to Emory’s campus, and she e-mailed several current and former newspaper staff members to share the news of her departure. She declined to comment for this article. Her daughter indicated that she is seeking legal advice about her situation.

First, what is really peculiar is that the article I referenced comes from a blog I found through a Google search not from the Emory Wheel. The story is this. Smith, suddenly over one week end, either resigned or was fired and then immediately became silent regarding the details of her departure. I have been able to discover some more back ground details. First, Smith had been in contact with former Emory student Kevin Kuritzky in the weeks leading up to her dismissal. Kuritzky was a former med student (who just happened to be expelled 41 days prior to graduation) that had leveled serious charges against Emory and Grady Hospital. Kuritzky told me that Smith was ready to publish his story right before she was dismissed. I also found out that Smith's daughter attended Emory at the time of her dismissal and subsequent silence.

A search of Emory Wheel for Eileen Smith finds all of seven articles and NONE, NONE, related to her sudden dismissal and silence. It appears that the sudden, unexpected, and mostly unexplained dismissal of a twenty year staffer from the Emory Wheel is not worthy of being covered in the Emory Wheel. In fact, blogs, the AP, and other outside sources had significantly more information about this story than anything published in the very paper she worked at.

What about Kevin Kuritzky? He has leveled some serious charges against Emory and he has been expelled 41 days prior to graduating from medical school. I would say this is a story. There are two references to Kevin Kuritzky in the Emory Wheel. The first is a story that talks about the initial suit Kevin filed. This story spent far more time discussing Emory's motion to dismiss than anything Kevin had to say and it spent no time detailing any of the specific charges that Kuritzky made against Emory vis a vis their care at Grady and the VA. The second is this one by Dua Hassan claiming that the suit against Emory by Kuritzky had been dismissed. The problem is that the suit hasn't been dismissed but rather Emory won a motion and it has been appealed. This is a peculiar piece of misinformation.

What is more peculiar is that a medical student is mysteriously expelled 41 days prior to graduating. That student claims to have leveled serious and DOCUMENTED charges against the school and the hospital they run (the same hospital that is now in need of 500 million dollars to stay afloat and also is being threatened by JCAHO with revocation of its license) and the school newspaper doesn't see fit to run more than two stories about the matter. Is it not news that a medical student was expelled? What if Kuritzky's allegations are true? Isn't that something the student body needs to know? If an Emory student read the Wheel, they wouldn't know if he was or wasn't telling the truth because his allegations aren't investigated or reported.

Like I said, when proving that the Emory Wheel is nothing more than a corrupt mouthpiece for a corrupt administration, the Latin phrase, Res Ipsa Loquitur, applies.

Now, some cynics may even ask, why should I care? So what if some college newspaper is run poorly or even in a corrupt manner. I believe that the Emory Wheel is vital in the plans of the administration at Emory University. In order for their pilfering of Grady Hospital to continue (If you are still unconvinced that Grady is being pilfered and Emory is in the middle, I suggest you read this summary or a full dossier can be found here) the students at Emory must be kept in the dark. In fact, the administration must even be portrayed in a positive light. Information must disseminated in a very careful manner. God forbid that any student sees something that isn't controlled by the administration. That's why my blog is such a threat to the administration and why their admin IP pays my blog a visit daily. If anything but the carefully crafted image that Emory has wielded is ever discovered by enough of the student body, the perverbial wheels, no pun intended, would come off. Thus, it is my supposition that the Emory Wheel must remain a mouth piece not an independent newspaper in order for the corruption, I believe exists, to continue.


Much of the information that I have provided in this piece was actually discovered a while ago. I initially held out in writing this piece because I attempted to reach out to the Wheel in an attempt to insist that they do their duty and expose the truth. Because they didn't respond to my request, I am forced to pen this piece. I warned the Wheel that history will judge the heroes and the villains in this case. I warned them that I would play a significant role in the way history was written on this matter. I warned them that if they didn't reach back they would be painted as the corrupt mouthpieces for the corrupt administration that they are. They didn't heed my warning and I was left with this.

Finally, as I mentioned earlier, this story has many mazes that can be difficult to follow. You can either read the entire Grady Hospital tag, or more realistically, you can read this summary. Also, Grady Hospital is in need of an overhaul. Despite what the Emory Wheel claims I believe the privatization plan is nothing but a sham. I believe it will only lead Grady further down the abyss. Here are the recommendations that I along with mostly my colleagues have put together.