No pre-existing conditions, now everyone pay up for your higher premium, higher deductible insurance plan.

Christopher Beam makes the case that subjecting cosmetic procedures to the “botax” (a 1% tax), that is currently in the health care reform legislaion because people that get cosmetic surgery may earn more money after surgery.

But surgeons say there’s plenty of anecdotal evidence to suggest that a larger cup size (or smoother nasal curvature or tighter buttocks) leads to a higher tax bracket.

[…] [Economics Professor Daniel] Hamermesh, who conducted the most-cited study on beauty and income, disagrees. Yes, his survey found that beauty does lead to higher wages. But he also says that attempts to improve one’s attractiveness, whether with clothing, or surgical intervention, make no difference when it comes to income. The reason, he says, is that people can tell the difference between natural beauty and artificial beauty.

[…]

If it turns out there’s no connection between surgery and increased productivity, the case for a tax might be slightly stronger.

via The Senate wants to put a “botax” on plastic surgery. That’s a bad idea. – By Christopher Beam – Slate Magazine.

I would not even touch this anecdotal argument against a cosmetic surgery tax. Beam does make an empirical argument against the botax: most people who get cosmetic procedures are buying them with credit. The tax would penalize them.

For one: Hamermesh’s point is right on: an elective cosmetic procedure doesn’t necessarily make one more attractive to others and often tends to warp or damage a person’s appearance. Example? Olympic gold medalist and former Wheaties spokesperson Bruce Jenner.

The simplest arguments against this tax would be the same for keeping access to abortions safe and affordable: people will take surgery vacations to countries with cheaper options and less guidelines or domestically undergo procedures at discount prices by unlicensed surgeons if the costs of surgery pass a certain threshold. (I would guess that threshold is probably higher than the 1% tax if most people pay for procedures with credit)

Many cosmetic surgeries help correct a variety of physical defects caused by injuries, intensive medical procedures and various natural defects that may truly impede normal physical function. These should be protected from this tax, but creating even more classes of surgery would add to administrative and processing charges for the tax and undercut the bottom line of the “botax” revenue. The real question is (since we don’t know if cosmetic surgery increases income) is there a negative cost to society for these people that elect to have a cosmetic procedure? If so, tax it.

Is it just me that thinks when someone says: It’s safe to do A because B has never happened.

B is about to happen because if A has never happened, there is a first time for everything? Well, Never and it’s friends Nobody and No one show up in the FDIC’s Suze Orman and Julie Stav (en Espanol) powered series of PSA’s telling people to stop pulling money out of their local bank. FDIC chair Sheila Bair shows up in the spots, on short break between dealing with the most FDIC insured financial institution failures in a year since the S&L crisis of 1989, to tell us everything will be fine because the banks pay insurance premiums to keep the FDIC solvent. Except when they don’t.

The new premiums were proposed by the FDIC in late September and opened to public comment. They come atop a special emergency fee that took effect at midyear, estimated to have brought in about $5.6 billion.

The deposit insurance fund stood at $10.4 billion at the end of June – already its lowest point since 1992 – and since has fallen into deficit. That hasn’t occurred since the savings-and-loan crisis of the late 1980s and early 1990s.

Still, depositors’; money is guaranteed – up to $250,000 per account – by the FDIC.

via Banks to prepay $45 billion to insurance fund – Washington Times.

That’s right, a shortfall. How could this happen? Short Answer: 95% of banks didn’t pay any premiums to the FDIC for a decade.

WASHINGTON – The federal agency that insures bank deposits, which is asking for emergency powers to borrow up to $500 billion to take over failed banks, is facing a potential major shortfall in part because it collected no insurance premiums from most banks from 1996 to 2006.

The Federal Deposit Insurance Corporation, which insures deposits up to $250,000, tried for years to get congressional authority to collect the premiums in case of a looming crisis. But Congress believed that the fund was so well-capitalized – and that bank failures were so infrequent – that there was no need to collect the premiums for a decade, according to banking officials and analysts.

[…] Last week, FDIC chairwoman Sheila Bair wrote to Senate Banking Committee chairman Christopher Dodd, a Connecticut Democrat, that her agency could need more money because the existing fund “provides a thin margin of error” given the government’s responsibility “to cover unforeseen losses.” The March 5 letter, provided to the Globe, said the additional borrowing authority is necessary to “leave no doubt” that the FDIC can “fulfill the government’s commitment to protect insured depositors against loss.”

Bair said yesterday that the agency’s failure to collect premiums from most banks “was surprising to me and of concern.” As a Treasury Department official in 2001, she said, she testified on Capitol Hill about the need to impose the fees, but nothing happened. Congress did not grant the authority for the fees until 2006, just weeks before Bair took over the FDIC. She then used that authority to impose the fees over the objections of some within the banking industry.

[…]

But James Chessen, chief economist of the American Bankers Association, said that it made sense at the time to stop collecting most premiums because “the fund became so large that interest income on the fund was covering the premiums for almost a decade.” There were relatively few bank failures and no projection of the current economic collapse, he said.

The FDIC has never failed to make good on its promise to pay for the insured deposits when a bank fails, and officials said that will not change. The fund ran short of money during the savings and loan crisis of the 1980s, prompting the agency to increase fees to make up for the shortfall.

Then, a booming economy left banks flush with cash, and by 1996 the insurance fund was considered so large that it could grow through interest payments and fees charged only to banks with high credit risk. Congress agreed that premiums didn’t need to be collected if the fund was sustained at a level that was considered safe. Thus, about 95 percent of banks paid no premiums from 1996 to 2006, including some new ones that did not have to pay a premium, the FDIC said.

via Now-needy FDIC collected few premiums from banks for decade – The Boston Globe.

No matter what the head economist paid by the bankers says, the nature of an insurance product never changes. The more value the insured’s assets are appraised to be worth, the higher the premiums the insurer should charge. In addition, in the case of a loss event occurring and claims against the policy being made, (aka bank failures), more cash reserves are needed to pay the claims. So in 1996, the US just cleared the S&L scandal, had to erase the deficit in FDIC funding with emergency fees, recovered from a recession, and congress (GOP led from ’96 to 2004) got the grand idea to let the banks just skip their premium payments because “the interest income…was covering the premiums” according to the chief economist of the American Bankers Association aka the banker’s lobbyists’ economist.

Long story short: the FDIC is currently insolvent. I wonder if Dodd’s reforms include anything to combat FDIC insolvency this as no doubt wide spread bank failures will happen again because greed will never go anywhere.

Good move is apologizing.

Ratigan is loud, but his show isn’t useless. He constantly harps on the government’s inability to effectively regulate the financial sector and investigate wrong doing in the securities market, and that’s good. I am not sure if it will prove to be dated, most people never knew cared about a CDS until the dollar was going to break last September. Executive producers always feel they have to have some kind of cute or funny segment, and too often they are stale bits that detract from the time a political/analytical show host has to actually debate and discuss important topics.

US Representative Joe Sestak debunks the utility of torture, notes that as an Admiral he was in the Pentagon when the attacks occurred, that Bush 43’s military tribunals were incomplete and still believes that Article III of the US Constitution exists and has served as well.

O’Reilly is mad, that Zacarias Moussaoui was able to say nasty things about America, before he was convicted and sentenced to life in a super max prison by a jury in federal criminal court. O’Reilly says he “believes in the military” inferring that he is taking the paternalistic view that you can’t count on judges, federal prosecutors and juries comprised of American citizens.

O’Reilly also complains about it taking four years and “millions and millions of dollars” for Moussaoui to be detained and convicted. He obviously believes it is cheaper to detain and torture Khalid Shaikh Mohammed and other 9/11 co-conspirators for 6 years without any conviction.

David Brooks on This Week:

Here is Brooks’ review of the VP debate for the 2008 Presidential Election:

Like the last debate, this one was surprisingly wonky – a lifetime subscription to Congressional Quarterly. Palin could not match Biden when it came to policy detail, but she never obviously floundered.

She was surprisingly forceful on the subject of Iran (pronouncing “Ahmadinejad” better than her running mate) though she stepped over the line in claiming that Democrats sought to raise the “the white flag of surrender.”

[…]

Still, this debate was about Sarah Palin. She held up her end of an energetic debate that gave voters a direct look at two competing philosophies. She established debating parity with Joe Biden. And in a country that is furious with Washington, she presented herself as a radical alternative.

By the debate’s end, most Republicans will not have been crouching behind the couch, but standing on it. The race has not been transformed, but few could have expected as vibrant and tactically clever a performance as the one Sarah Palin turned in Thursday night.

via David Brooks: The Palin rebound – The New York Times

It would be good to remember that one wink-filled, shallow and evasive debate performance in 2008 made Brooks comfortable enough to ignore the shocking ignorance Palin displayed in interviews (with Couric, Gibson) and her refusal to hold a press conference w/the presidential race press corps. Who’s the real joke?

Jamila, left, plays on a seesaw with children of other female inmates on the prison yard of Pul-e Charkhi prison in Kabul, Afghanistan April 17, 2008. Jamila, age 7, and her mother Najiba who is serving a seven year sentence for adultery, have been in prison for 10 months. There are 226 young children in Afghanistan’s prisons, including many who were born there. They have committed no crime, but they live among the country’s 304 incarcerated women. (AP Photo/David Guttenfelder)

via Captured Photo Collection » Photographer Collection: David Guttenfelder in Afghanistan Photos

I didn’t know that Afghani prisons also imprisoned the Children along with the mothers. (h/t Images Of War – The Daily Dish | By Andrew Sullivan.)

covering Sarah Palin’s ghost written vendetta settling book, troops in the state she bailed on was hosting 44 at Elmendorf AFB.

Apparently some Army Reservists are in Philadelphia this week, en route to Iraq. I found this out in my barbershop, Maxamillion’s Gentlemen’s Quarters Barber Parlor?. Max’s is a kind of unique barbershop in these times: no cell phones, no rap music, no cursing. It’s an intentionally modest, but sharply fitted parlor with wooden floors, burgundy leather classic style barber chairs and matching trim at each barber station, right on Chestnut St. between 20th and 21st here in Philadelphia. An Army Reservist from Fort Hood was getting his shoes shined when I walked in. He had been to Max’s shop before (and it isn’t rare for out of town-ers to be semi-regulars). Before the shootings at Fort Hood he had taken his wife to Austin for a bit of a vacation before he shipped out. I asked him what he thought of Austin,he said he loved it and would recommend it to anyone. He chopped it up with us a bit and then after the complimentary shine was done, and right before he was about to leave pulled out his camera to take some pictures to send back to his friends back home.

“They don’t do it like this anymore”. He used to go to a nice shop back home, where they did it like Max’s, but he returned to find it shut down after the owner died and his son couldn’t maintain the business. He had told his friends about Max’s and this time, wanted them to see it for themselves. He took some pics on his digital camera to send home (Max’s shop is swagged out), and then said goodbye. Max dapped him up and thanked him for his service, a few of us wished him good luck. At my gym later that day, all service men and women worked out for free. You could recognize the new faces in the gym as soldiers coming in a slow but steady stream, wearing camouflage getting in a jog on the treadmill or going to lift some weights. To see them around and about, heading to Iraq, the last bit of America they got to see was Philadelphia. Hope they enjoy bit of it, and I hope they pay for nothing.

In Alaska, Obama talked about spending more money on troops and their families away from the battlefield during and after wars. Recession, Deficit or not, we can definitely afford that. I’m glad 44 is making that a priority.

Transcript of Remarks below…

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