A month after winning re-election, Harris County Tax Assessor-Collector Paul Bettencourt has resigned, effect December 10. His office issued a brief statement, which I reprint courtesy of Miya Shay:
HOUSTON – Paul Bettencourt, Harris County Tax Assessor-Collector, announced late this evening that he intends to resign his position. Bettencourt was first elected in 1998.
“I have spoken with Judge Emmett and told him of my intention to tender my resignation before Christmas. I want to give the Court time to address the vacancy and ensure an orderly transition,” Bettencourt said.
“Over the Thanksgiving holiday I have received an offer of a private business venture that I intend to pursue.
“I want to thank the good people of Harris County for allowing me the opportunity to serve. It has been an honor and a privilege.
“We have accomplished a great deal in the office, ushering in an era of smart government – a focus on customer service and technology,” Bettencourt concluded.
A full statement will be issued next week.
Bettencourt, whose job inlcuding being Harris County's voter registrar, was a bane of voting rights groups who felt he always pushed to disenfranchise voters, especially minorities and the working poor. But he was the bane of cities, counties and other governmental entities, using his position to advocate for appraisal caps and revenue caps -- ideas that would strangle local governments. He partnered with radio gadfly and, now, State Senator Dan Patrick as the spiritual godfathers of the anti-tax movement in Texas, working with Citizens Lowering Our Unfair Taxes (CLOUT) and scaring the bejeezus out of Rick Perry during the 2006 elections. He was assumed to have larger poltiical ambitions.
I suppose Bettencourt could actually be entering the private sector because ... well, just because. But I'd be nervous if I were the Texas Association of Counties or the Texas Municipal League. That's a cat I'd definitely want to bell.
The Washington Post, among others, is reporting that Sarah Palin acted, at best, improperly and, at worst, illegally in pressuring Walt Monegan to fire her sister's former husband, an Alaska state trooper.
A 263- page report released yesterday by the Alaska Joint Legislative Council found that, while Palin had legal authority to fire Public Safety Commissioner Walt Monegan,
his dismissal came in part because he refused to remove her sister's ex-husband from the Alaska State Troopers.
Investigator Stephen Branchflower found evidence that Palin actively joined her husband, Todd, in pursuing a personal vendetta against the trooper and that she used state employees to try to settle a score in a bitter family feud.
The Joint Legislative Council is a bipartisan group of legislative leaders that acts on state issues during periods when the Alaska Legislature is not in session, much like our Legislative Budget Board. They hired investigator Stephen Branchflower (no relation to Ben's Longbranch Barbecue) to conduct the investigation. According to the Post,
Branchflower found evidence that Palin actively joined her husband, Todd, in pursuing a personal vendetta against the trooper and that she used state employees to try to settle a score in a bitter family feud.
"Governor Palin knowingly permitted a situation to continue where impermissible pressure was placed on several subordinates in order to advance a personal agenda, to wit: To get Trooper Michael Wooten fired."
I've read large chunks of the report, which can be found here. The impression I'm left with can best be summed up in the phrase former faith-based initiatives czar John DiIulio used to describe the Bush-Cheney-Rove White House: Mayberry Machiavellis. The picture of Sarah and "First Dude" Todd Palin that comes acoss is petty, vindictive, and not even remotely presidential.
ABC-13 in Houston is reporting that as many as 75 Pasadena households may have been ripped off by an American National Insurance Company (ANICO) agent, who sold them windstorm coverage above and beyond the ANICO homeowners insurance he was peddling, then pocketed the premiums. The agent, Darryl Golter, has been out of town and unavailable for comment.
Stealing consumers' money is bad enough. Unfortunately, these homeowners are only finding out about the scam as they make claims for Ike-related damage.
Where is the Texas Department of Insurance (TDI) in all this? According to ABC-13:
Officials with the Texas Department of Insurance confirm an investigation into Golter is underway. In the meantime they tell consumers who thought they had insurance coverage to call FEMA if they have damage caused by Hurricane Ike.
FEMA. That worked out so well the last time. I mean, seriously, FEMA has no intention of repairing the homes of people who got rooked by the insurance companies.
TDI's job is to protect consumers from precisely these kind of depredations. But insurance regulation in Texas has reverted to what Senator Rodney Ellis would call "the Wild West" -- a Texas version of the Wall Street deregulation that is blowing up in our faces.
TDI is up for Sunset review next session. I've already written about the Sunset Commission's failure to address any reform issues thus far. Looks like we need a new sheriff in town.
The Sunset Advisory Commission met last Wednesday, September 24, to make final recommendations on Sunset issues for the Texas Department of Insurance (TDI) and the Office of Public Insurance Counsel (OPIC). The Commission considered the Sunset staff recommendations (released in May), the public testimony on those recommendations in June, and the staff response to public comments.
The Sunset Commission punted on the opportunity to strengthen industry oversight and consumer protections. Whether discussing rate oversight in the property and casualty market or improved access in the health insurance market, the Commission ducked opportunities to address the imbalance between consumers and the industry that currently exists. Two parts of the discussion were particularly enlightening:
Senator Juan Hinojosa (D-McAllen) proposed giving TDI a longer time period to review and approve rate filings, but only up to 30 days. This idea was supported by Insurance Commissioner Mike Geeslin, who thought it would give the Department more tools to monitor the market. Although this enhanced authority would apply only to insurers with 5% or more of the market, the Commission voted down the recommendation.
Senator Deuell (R-Greenville) proposed a set of modest reforms that would broaden access to health insurance in the private market, including limited authority to review rates, the ability to set a medical loss ratio standard, and giving TDI limited access to insurers’ data mining practices. Commission members reflexively opposed his ideas, regurgitating platitudes like “regulation comes with a cost,” and ultimately voted them down.
Quote of the Day, from Senator Deuell, who could never be described as a Big Government, over-regulating liberal: “There is a place for regulation in government.Generally speaking, less is better, but in this case we need to add some regulation to TDI.”
When the Sunset Commission rejects common-sense, incremental proposals that even the regulators support, there is little hope for insurance reform through the TDI Sunset process. Texas voters need to understand that the insurance industry in Texas is operating without adequate oversight, and their legislators need to wake up and pay attention.
UPDATE 2: Tuesday, 11:00 p.m. CDT ... ABC News, among other, is reporting that the Federal Reserve has made an $85 billion loan to prop up A.I..G., According to the ABC report:
... with more than $1 trillion in assets and more than 116,000 employees, AIG's looming collapse pushed the nation's central bank to take the dramatic step of bailing out the company, fearing its failure could have resulted in greater financial instability, higher borrowing costs, reduced household wealth and weaker national economic growth.
The loan to AIG will be available for two years at a current interest rate of 11 percent. ... The loan will be secured through assets AIG currently holds and the U.S. government will receive nearly 80 percent of stock in AIG. Current management of the company will be replaced, though the board of directors will stay in place for the time being.
Guess what? You own an insurance company now!
UPDATE 1: Tuesday, 5:45 p.m. CDT ... Bloomberg is reporting that New York insurance regulators say that A.I.G.'s insurance companies are, for the time being, sufficiently capitalized to meet their outstanding claims obligations. The article also quotes Kansas Insurance Commissioner Sandy Praeger, president of the National Association of Insurance Commissioners, as saying, "There can be no raid on the reserve funds that are in the insurance companies without the approval of a state regulator, and I can promise you no state regulator will allow those reserves to be drawn down,"
As I am writing this, American International Group, one of the largest insurance companies in the world, is teetering on the edge of bankruptcy.
A.I.G. has fifteen insurance subsidiaries that do business in Texas. It is unclear at this point what would happen to them in the event of an A.I.G. bankruptcy. But Texans -- and their insurance regulators -- need to keep an eye on the situation. An A.I.G. collapse could make Hurricane Ike look like a walk in the park.
In Monday's New York Times, money management company president Michael Lewitt had this to say about the A.I.G. situation:
... there is a bigger potential failure lurking: the American International Group, the insurance giant. It poses a much larger threat to the financial system than Lehman Brothers ever did because it plays an integral role in several key markets: credit derivatives, mortgages, corporate loans and hedge funds.
Late Monday, A.I.G. was downgraded by the major credit rating agencies (which inexplicably still retain an enormous amount of power in the marketplace despite having gutted their credibility with unreliable ratings for mortgage-backed securities during the housing boom). This credit downgrade could require A.I.G. to post billions of dollars of additional collateral for its mortgage derivative contracts.
Fat chance. That’s collateral A.I.G. does not have. There is therefore a substantial possibility that A.I.G. will be unable to meet its obligations and be forced into liquidation. A side effect: Its collapse would be as close to an extinction-level event as the financial markets have seen since the Great Depression.
A.I.G. does business with virtually every financial institution in the world. Most important, it is a central player in the unregulated, Brobdingnagian credit default swap market that is reported to be at least $60 trillion in size.
Nobody knows this market’s real size, or who owes what to whom, because there is no central clearinghouse or regulator for it. Credit default swaps are a type of credit insurance contract in which one party pays another party to protect it from the risk of default on a particular debt instrument. If that debt instrument (a bond, a bank loan, a mortgage) defaults, the insurer compensates the insured for his loss. The insurer (which could be a bank, an investment bank or a hedge fund) is required to post collateral to support its payment obligation, but in the insane credit environment that preceded the credit crisis, this collateral deposit was generally too small.
As a result, the credit default market is best described as an insurance market where many of the individual trades are undercapitalized. But even worse, many of the insurers are grossly undercapitalized. In one case in the New York courts, the Swiss banking giant UBS is suing a hedge fund that said it would insure nearly $1.5 billion in bonds but was unable to do so. No wonder — the hedge fund had only $200 million in assets.
If A.I.G. collapsed, its hundreds of billions of dollars of mortgage-related assets would be added to those being sold by other financial institutions. This would just depress values further. The counterparties around the world to A.I.G.’s credit default swaps may be unable to collect on their trades. As a large hedge-fund investor, A.I.G. would suddenly become a large redeemer from hedge funds, forcing fund managers to sell positions and probably driving down prices in the world’s financial markets. More failures, particularly of hedge funds, could follow.
Regulators knew that if Lehman went down, the world wouldn’t end. But Wall Street isn’t remotely prepared for the inestimable damage the financial system would suffer if A.I.G. collapsed.
The Wall Street Journal is reporting this evening that preliminary damage estimates from Hurricane Ike are in the $10 billion range. The Journal based its reporting on an analysis from AIR Worldwide, a risk-management consulting firm.
The estimate applies to both commercial and residential property insurance coverages, with a little commerical and personal auto insurance thrown in. It's too early to tell how much of the losses will be covered by wind and hail policies issued by the Texas Windstorm Insurance Association (TWIA), which has already suffered losses this year from Hurricane Dolly in July.
Homeowners insurance policies typically include coverage for wind and hail damage, but most carriers exclude that coverage in policies they sell along the Texas Gulf Coast. TWIA provides such coverage in 14 counties along the coast and in parts of Harris County. Buildings must meet a TWIA-approved code in order to be insurable and, if necessary, submit to an inspection to verify such as a precondition to coverage.
If you do not live in the coastal area, your homeowners premium does not factor in the risk of a Hurricane Dolly or a Hurricane Ike. However, insurers do have to help TWIA make up its losses, contributing to several layers of coverage.
Stay tuned for more information on Hurricane Ike losses and how they will affect the property and casualty insurance market in Texas.
Paul Burka wrote a post today about Hurricane Ike and how it could mean "Armageddon for Texas." The post is worth reading for the explanation it provides (disputed, as usual, in many of the comments) about the Texas Windstorm Insurance Association (TWIA) and the critical role it plays in providing insurance coverage along the Gulf Coast.
Unfortunately, both Burka's post and the comments miss the most important point: the TWIA "crisis" is a direct result of an insurance industry that refuses to serve the needs of all Texans and a Texas Department of Insurance that doesn't hold it accountable.
Insurance is a simple concept: an insurance company takes our money and assumes a risk in return. By spreading the risk -- of an auto accident, a house fire or a serious illness -- among a large group of people, insurance prevents an individual's misfortune from having a catastrophic impact. States license insurance companies to provide this service, which benefits individuals, businesses, and the social and economic life of the community.
But insurance is also a profitable business, and its practitioners champion the unfettered free market and its ability to provide perfect competition. Unfortunately, as in the case of TWIA, there is no such thing as a perfect competitive market. Companies will always compete, but mostly for the best risks. Most insurers avoid risks they think are too risky, or complicated, or just plain hard work to meet profit goals.
For at least two sessions now, legislators, insurers and advocates have tried to head off the possibility of a TWIA meltdown by shoring up its financing so that Texas taxpayers are not on the hook for catastrophic losses. So far, the dreaded catastrophe has not occurred, but with Hurricane Dolly already costing TWIA some $275 million, Hurricane Ike could place TWIA, the statewide homeowners insurance market, and the state budget at risk.
Watching John McCain introduce Sarah Palin. It turns out today is his 72nd birthday and her and her husband's 20th anniversary.
Audience applauds when he says something about sports ... apropos of nothing.
She speaks. Awful voice.
Five kids, including a son who's in the Army.
Telling her story. It's inspiring, but not at a national level. She's not running for Congress, for chrissakes.
Lots about ethics and corruption and integrity. She's on the wrong team and doesn't know it.
"Nobody more committed to change in American than John McCain?" Ex-squeeze me? It sounds like they are in denial.
Finally talks about McCain's toughness. Finally, an actual attempt to draw a distinction, not just gloss over their own record.
It sounds like she wrote her own speech, the kind the mayor of a town gives when he or she is introducing the candidate. Did the campaign even see this, much less write it?
"Nu-ku-lar" -- it's like a genetic aberration in the GOP.
She leads her own clapping, like she's the head cheerleader.
Reference to women's suffrage -- did the Republicans oppose it then?
Pays tribute to Geraldine Ferraro and Hillary Clinton, tries to put on their mantle.
If I'm a red-meat Republican in the audience or listening in on TV, my head must be ready to explode. She's bragged about being a union member, about having women on the ticket, etc.
Clearly appealing to women to abandon Obama and go with McCain.
"Thank you, and I God Bless America."
A new study by the Pew Forum on Religion and Public Life shows significant changes in how Americans view the relationship between personal religious faith and political behavior. In the wake of the Saddleback Church forum on faith held last Friday with presidential candidates Barack Obama and John McCain, this study shows a much different message environment for candidates and interest groups wanting to use hot-button religious issues to motivate voters.
From the report:
A new survey finds a narrow majority of the public saying that churches and other houses of worship should keep out of political matters and not express their views on day-to-day social and political matters. For a decade, majorities of Americans had voiced support for religious institutions speaking out on such issues.
As you can see from the graph, the lines have crossed since 2004, when Karl Rove and the GOP deliberately placed initiatives to ban gay marriage on the general election ballot as a way to energize social conservative voters.
The report goes on to note that
most of the reconsideration of the desirability of religious involvement in politics has occurred among conservatives. ... As a result, conservatives' views on this issue are much more in line with the views of moderates and liberals than was previously the case. Similarly, the sharp divisions between Republicans and Democrats that previously existed on this issue have disappeared. (Emphasis added.)
Another chart shows this evolution in stark terms:
Among those who think that gay marriage is a very important issue, the percentage of people who favor greater separation between religion and politics has increased 25%! Among those who think abortion is a very important issues, the percentage of people who favor greater separation between religion and politics has increased 16%! These are significant shifts in opinion among social conservatives. There could be several reasons for this.
First, on the issue of gay marriage, the war is over (for now). The self-righteous, er, social conservatives have won.
Second, other issues like the sagging economy, inflated gas prices, and the war in Iraq have supplanted hot-button social issues as concerns for Americans.
Third -- and I think this is most important -- people of faith who thought their religious values were best expressed in issues like abortion and gay marriage have watched the cavacade of corruption, venality, heartlessness and incompetence that characterizes the modern Republican Party and realized they'd been had -- that party leaders like George Bush, Dick Cheney and Tom DeLay cynically manipulated their heartfelt faith to advance a vicious, amoral agenda, all the while laughing behind their back.
In any case, the study shows that a shifting political landscape for social conservatives and the politicians who would exploit them. To be sure, the culture wars are not over, but this election season may pass without them being a central focus of the campaigns.
(On page 40 and this is already a great read. - promoted by Matt Glazer)
(Cross-posted at Life Its Ownself.)
Four years ago, Thomas Frank wrote what many thought was the definitive book capturing the zeitgeist of George W. Bush' first term and the 2004 election. What's The Matter With Kansas? was part travelogue, part small-town journalism, part Big Picture politics. Frank traveled around his home state of Kansas, seeking an answer to the question: How have Republicans mastered the art of getting people to vote against their own interests? He examines the ability of the conservative movement and its embodiment, the modern Republican Party, to get voters focused on cultural issues to the exclusion of all else in their electoral decision making. He reports on how the Democratic Party has too often played into the conservatives' game. And he takes an elegiac look at the damage that a generation of conservative, free-market policy have wreaked on his homeland.
Appearing at Book People tonight, Frank said that the goal of his new book, The Wrecking Crew: How Conservatives Rule, was to examine what happened when these same masters of campaigning try their hand at governing. The result, he says, is a disaster.
More after the jump, but it seems fitting that Frank spoke in Austin on the day that the Sunset Commission staff recommended abolishing the Texas Residential Construction Commission, created of, by and for the homebuilders to shield themselves from responsibility for their actions by creating an almost criminally-incompetent and hog-tied bureaucracy.
