2010-01-23

The Supreme Court acted justly in Citizens v. FEC

Citizens United v. Federal Election Commission is somewhat of a landmark decision.  The Supreme Court ruled that it is unconstitutional to restrict campaign spending by corporations.  It seems that many on the left are very angry about this, saying that corporations will run the country.  But I'm sure that unions are just as happy about this, and we all know how they vote.

The bigger picture is that this is a victory for the freedom of speech, and freedom of speech includes paying for that speech.  The government has absolutely no right to tell anyone (or any corporation) how they can donate money to political campaigns.  When speech is restricted in anyway, it brings us down an Orwellian path, in which the government has a bigger role in deciding the type of information that can be disseminated.

In this case, it was about an anti Hillary Clinton movie being banned, but next time it could easily be an anti-GOP movie.  The bottom line is that people deserve to be heard.

2010-01-22

DC Area Bicycling Laws Need Improvement

Greater Greater Washington has a list of 12 ideas that could make bicycling safer in this area.  I agree with most of these, especially #'s 1, 8 and 11.  I can't believe that VA, MD, and DC still have contributory negligence; how rediculous.

And as for #11, I generally already treat a stop sign as a yield, and a red light as a stop sign.

2010-01-20

FHA imposes new standards - house prices to plummet?

Today the FHA has proposed new underwriting standards.

For those of you who do not know how an FHA loan works, here is the gist:
If you want a house, but don't have much of a down payment, or you have bad credit, the federal government will guarantee your loan.  A normal bank still issues it.  In return, you pay private mortage insurance (PMI), have a somewhat higher interest rate.  But almost everyone gets approved and the down payment is 3.5%.

The changes being proposed could end a lot of this easy money lending.  First of all, a minimum credit score of 580 will be required for 3.5% down payments, otherwise you'll need 10%.  This won't deter too many, in my opinion, because if you have a score of lower than 580 it is doubtful you are currently in the market for a house.

Here are the changes you need to pay attention to:

  1. A .5% increase in PMI.  This means that a $300,000 house will require $1500 more up front, plus an extra $125 per month payment.  This is pretty substantial.
  2. Worse yet: a reduction in seller concessions from 6% to 3%.  This is a huge deal.  On a $300,000 house that would mean $9,000!  This covers a lot of the (ridiculous) fees that realtors, mortgage brokers, and settlement companies charge.
I predict that home prices could easily fall 3-5% if all of the US or more in places that have a lot of FHA loans.  But overall this is a good thing, because homes are still mostly overvalued.

2010-01-19

Revisiting the healthcare odds post MA election

In my last post, I predicted that healthcare had a 65% chance of passing.  With the election of Scott Brown, this would give us about a 30% chance of healthcare passing in its current form.

There are a few ways healthcare could still pass soon:

  1. The House can pass the Senate version of the bill, bypassing the need for a revote in the senate
  2. It will take 15 days to certify the vote, per MA state law.  Congress could reconcile and vote within that time frame.
  3. Come up with a compromise with the GOP, or a bill that is good enough that while the GOP won't vote for it, at least 1-2 in the Senate would vote to break a filibuster.  
I think that option 1 is a bit more likely, as much as I detest the Senate bill.  Why do I dislike it so much?  It does a fair amount of damage to the best healthcare plans out there: HSA's.  My HSA costs me $10 a month to cover two people.  I also set aside several thousand per year into a tax advantaged account that I can use to pay the up to $4,000 deductible.  What the senate version of the bill would do is prevent me from spending my HSA dollars on over the counter medicines, and also double the penalty if I withdraw funds early.

What I'm hoping is that options 2 or 3 are in play, especially 3, since some bipartisanship could go a long way toward preserving some good things about the current system (like HSA's) while possibly also fixing some of the other problems that the first bill is silent on (like tort reform).