The UK election has long been thought a long-gone conclusion, and indeed it is. But over the last 48 hours or so the polling news, which is still awful for Labour, has improved.
The Tories have made a few mistakes: one scheme that may hit old pensioners. Labour’s Manifesto appears to have had some impact.
It is also hard to know whether this will be short-lived.
But it is real. Labour had been suggesting breaking 200 seats would constitute success, and in fact they seem on the verge of that.
Also, in unrelated news, is a good article on the SNP in Scotland, which has faded a bit. The trajectory of the SNP is in many ways similar to the PQ in Canada. The SNP has run Scotland for over a decade, but the Party’s ratings have fallen, as well as Sturgeon’s personal rating.
https://www.theguardian.com/commentisfree/2017/may/19/the-guardian-view-on-the-election-in-scotland-
a-pivotal-poll-for-the-snp
General Election 2017: Party leaders clash at ITV debate as Theresa May and Jeremy Corbyn sit it out .
May doesn’t believe in TV debates. Good strategy on Corbyn’s part to skip this one and avoid looking desperate. (He also had allies on the stage.)
Nuttall (UKIP) had a very bad night. Farron’s (LD) passion for “protecting freedom of movement” after Brexit leaves voters cold. Sturgeon (SNP) on defense, but she got in a zinger with Mrs May “couldn’t be bothered to show up but his spokesman Paul Nuttall [is] appearing in her place”. Leanne Wood, Plaid Cymru, opened with attacks Theresa May for failing to turn up. Carolyn Lucas, Green Party, opened with highlights Brexit, climate change and the NHS as the key issues.
Christopher Hope, The Telegraph‘s chief political correspondent tweet:
Summary assessment:
May is really on the defensive over the Dementia tax.
http://www.independent.co.uk/news/uk/politics/theresa-may-dementia-tax-u-turn-pensioners-labour-corb
yn-general-election-conservative-tory-poll-a7749001.html
Why did May tout this in her campaign? Probably seemed like a good idea. Even a twofer:
1) Reminds those that hate social welfare costs that the Tories are with them. 2) And to those accessing those benefits it was, “See how generous we Tories are — we’ve more than quadrupled what the beneficiaries can inherit.”
Apparently, illnesses such as cancer were excluded from the costs that a beneficiary has to reimburse or pay for. Thus, it provided the opposition with the opening to call it a dementia tax. (At least the UK opposition to the Tories was savvy enough to pounce on it. Not like the US where it’s always the GOP that pounces.)
1) was the Tories trying to gild the lily and stepped into it by pointing out an existing policy that most people aren’t aware of unless they’ve had direct experience with it. And the policy isn’t unique to the UK — Medicaid dot Gov.
Before 1993 that “must” was a “may.” Would require some research to figure out the evolution of this (research that I won’t be doing). That age limitation suggests to me that this was a compromise to change the asset limitations for those 55 and older to qualify for Medicaid and make it up at the back end (when the beneficiary is dead). Fiscally, this was a sound change because it costs less in care costs if a beneficiary remains in his/her home than if they sell the house and use up the receipts in a care facility until they’re broke and then Medicaid steps in. However, the states may not have implemented this to any significant degree as almost all Medicaid beneficiaries are poor. As with the UK policy, it’s also limited to long-term care costs.
(Recall that Carole Moseley Braun got caught finagling her mother’s assets to qualify for Medicaid.)
The ACA Medicaid expansion increases the number of beneficiaries that do have assets. Again, this is good public policy (as long as we’re trapped in viewing health care not as a right for all and our irrational tax policies) and a good deal for beneficiaries that can defer payment without taking out a bank loan. (As of 2014 the estimated annual reimbursement to Medi-Cal was $30 million. As bit of a drop in the bucket.)
Conceptually, this is bad policy because it leaves open the door to expand its use to beneficiaries under the age of 55. And SNAP. Turning both programs into a government loan to be repaid when the means to do so exists. Simpler would be acceptance of a “we pay when an individual is in need and we collect through a graduated income tax and estate taxes” principle. Neither of which is consonant with Republicanism and a significant portion of Democrats. They all prefer to trap those of limited means in debt peonage.
According to a legal aid class I took in the mid-90’s:
In the early 80’s Reagan did a call-in on NPR. Someone called in and said she was going to lose her house because she needed a nursing home and the law said she could only have $1,500 in total assets before Medicaid would pay.
Reagan said that was awful – and an exception to the Medicaid spend down provision was created for your house.
Medicaid planning is a cottage industry.
It seems like May ran right into this.
Catch-22. If you only have $1500 in assets (later $3000), you can’t pay your property taxes and will lose the house anyway.
The idea was that a family member would live in the house and presumably pay the taxes while you were in the nursing home.
There was also an exception for a car – so the advice was buy as an expensive a car as you could.
Not quite. While her mother was in Medicaid, she inherited a house. Mosely-Braun finagled passing it directly to her and her (Carol Mosely-Braun’s) sister rather than letting the state grab it for Medicaid payback.
I remember my mother’s indignation at the news reports. “That woman did what she did to protect her family!” Mom was family-oriented to a fault. Third child of four to an immigrant family, second daughter, Mom cared for her senile father in our house. I never heard Dad object, although Grandpa had tried to stop her from marrying “that dirty Italian”. Later, when her medicine bills were twice her widow’s SS, I told her to give her pitiful remaining AT&T shares that she had bought as a “Rosie the Riveter” (actually soldered radar components) to my sister. That way she would qualify for Medicaid after three years. She was indignant at the thought of deliberately becoming poor. “We made it all through the Depression without taking welfare and I won’t start now.” I would have done it in a shot. But the experience made me an advocate for “Medicaid for all”.
It was that finagling that hurt Braun politically. iirc the dollar amount was small.
Sounds as if your mother was even more of a saint than your sister is. Dying has become very expensive in our country. My recently deceased Aunt Em’s private room and full time, top notch care during her last three years ran at least twenty thousand a month. Wasn’t exactly what she’d worked and penny-pinched her whole life for, but it only meant more for the Catholic senior community she was living in and less for the Catholic charities set to receive her estate. A difficult person buying her way into heaven. (Hope St. Peter reamed her out for choosing second rate charities.)
Mom also racked up medical and hospice bills at a high rate, but not as high as your Aunt Em. She seems to have received good legal advice though. My sister and I were joint tenants with her on her bank account (~$1,000) and my sister was named as joint tenant on that stock. She had several maxed out credit cards. She owed one TBTF bank $11,000. I said, “Way to go, Mom! You finally screwed the banks that were screwing you all your life!” My sister thought that was a terrible thing to say. I stand by it. I’m proud she hit back, although I’m sure she didn’t intend to. I found a recent letter from that bank in her effects (she was already in hospice). Figures are approximate from Memory. Letter said, ” You owe $11,000. You have failed to make the minimum payment of $3000 for six months. You have not made any payment for three months. Accordingly your credit privileges have been suspended. But if you make a token payment of $47, your charging privileges will be immediately resumed.”
Idiots deserve to be taken! However, I think there may be method to their madness. If they got that token payment and restored full credit, I bet that would tranform the $11,000 from a liability (bad debt) to an asset (performing loan). You know more about accounting than I. What do you think.
$300 not $3000, how did I let that slip through.
A non-performing loan wouldn’t be a liability (and liabilities can’t be transformed into assets or assets transformed into liabilities; double entry bookkeeping doesn’t work that way). A non-performing loan would first become a classified loan. That removes it from current assets which reduces working capital. Bank examiners (if any such regulator still exist) eliminate classified loans in their calculation of net worth. And based on the age of classification, GAAP requires formally writing off the loan. That’s a generic overview (remember I’m neither a banker nor an accountant) or simplified version. Many intermediate steps and variations (and monkey business) exist.*
Once a loan is classified, a single small payment isn’t enough to return it to current status but it would delay the write down schedule by as much as quarter. However, that would be beyond what a small loan collector knows.
*All lenders carry a balance sheet liability or contra-asset identifiable as a loan loss reserve which is the pre-booking of expected but unidentifiable bad loans made during an accounting period. So, when a bad loan becomes identifiable, the accounting entry would be a debit to loan loss reserve and a credit to loans. That was short-circuited in the housing bubble and collapse because the loan (mortgage) didn’t exist in that form and wasn’t held by a banking institution and therefore, no loan loss reserve existed (part of the original Wall St geniuses’ pitch that the expected loan loss on mortgages was zero).
So they really were stupidly greedy? Fits their reputation.
Greedy, yes. Stupid, no. Remember, they weren’t holding those mortgage loans — they chopped them up and sold them off to others too stupid not to question the zero loss ratio assumption — and earned their big bucks up front. When it all blew up, as it would sooner or later, the USG stepped in to protect the big boys.
This was a credit card. Did they slice and dice those too? I wouldn’t be surprised. Are they still doing it? I wouldn’t be surprised.
I still disagree with Booman on the banks. It wouldn’t “destroy the entire economic system” to seize the insolvent banks, pay off the depositors to the FDIC limit, fire all the senior management (have to save middle management and below, they actually know how the company is run), wipe out stock, recapitalize via issuance of new stock, gradually sold on the exchanges.
Basically, what Iceland did.
It was certainly wrong to pay the guilty with multi-million dollar bonuses. Their previous bonuses should have been clawed back.
So many steps (or fingers in the pie) from the consumer to high finance to answer your question about the debt being “chopped up” and sold off. However, the funding mechanisms for unsecured debt (credit cards) is distinct from that for secured mortgage debt. Consider one aspect (and at a simplified level) before and after the repeal of Glass-Stegall.
A mortgage loan was either held in the lender’s loan portfolio or sold off and held in Fannie/Freddy’s loan portfolios. The latter bundled the mortgages into separate portfolios that were securitized and sold to investors. Technically, banks could have done the same, but a market for bank issued mortgage backed securities (MBS) didn’t exist for two reasons. First the Fannie/Freddy loan criteria were defined and known. IOW, no bankster manipulation at the front end. Second, as GSAs, Fannie/Freddy were more invulnerable than banks. The ‘good name’ of a bank plus a slightly higher guaranteed return on a bank issued MBS was tested and didn’t work because Fannie/Freddy did the underwriting of issued securities and banks were prohibited from doing that. So, the upfront cost to banks to securitize mortgages were higher.
Repealing Glass-Steagall cleared that impediment. Then banks took another step and bundled MBS they couldn’t off-load and chopped them up into CDOs that came packaged with a guarantee (credit default swap, CDS) which made the security much easier to sell. Recall that Glass-Steagall set up iron curtains between banks and stockbrokers and insurance.* CDS is security insurance but it is a very old NY law and not Glass-Steagall that restricted multi-line insurance companies from selling such a high risk product. (Historical knowledge of such a guarantee was always a better guide in avoiding those financial time bombs than the razzle-dazzle that quant shills presented in their efforts to sell them to a guarantor.) Now they’re baack
*Recall that at the public and DC legislative level, the impetus to repeal Glass-Steagall was the Citigroup and Traveler’s Insurance merger. That was an illegal merger. The Clinton administration/regulators delayed acting on it to allow Congress time to change the law. The public was sold on how great it would be to have one-stop shopping for banking and insurance. Once the merger was made perfectly legal, Citigroup spun off Travelers as a subsidiary and a couple of years later sold it to MetLife. Further erasing the line between P&C insurance and life insurance companies, but other lines had previously been crossed:
I think we were the only people voting for her. I had no illusions about Senator Carol’s ethics, after all she came out of the Chicago Machine,but she always was a reliable party line vote and at the time that was what I wanted.
She was articulate and polished in her 2004 very long-shot Presidential run. Made me feel better about having made a small donation to her 1992 Senate campaign.
But on economic/fiscal issues she was in lockstep with the Clinton wing of the Dem party.
True, but at the time I didn’t see the danger. I just remembered Reagan-Bush. I was as bad as the Hilbots. Mea Culpa.