Joe Nocera on Jon Corzine and MF Global Holdings Joe Nocera wants to complain about the $12 million severance package Jon Corzine stood to gain if he'd successfully sold his firm, MF Global Holdings, Nocera writes in The New York Times. "The idea that Corzine, who single-handedly destroyed MF Global Holdings, was in a position to command so much as a penny in severance is horrifying," Nocera says. It means there is still a culture on Wall Street where everyone wins and that even an avowed political liberal like Corzine can stand to gain. While serving as governor of New Jersey, Corzine should have learned the lessons of the financial crisis. Yet when he took over MF Global, he decided to have it "risk its own capital, trading for its own account, just like Goldman had so successfully done when he was running it." He bet big on European sovereign debt, exposing himself to "$40 of debt to every $1 of equity. It was remarkably 2008-ish." So after a poor second quarter led to a run on the firm and a failed attempt to sell it, the company declared bankruptcy Monday. Nocera was particularly interested to see the firm's compensation expenses. "64 percent of revenues went to compensation. In any industry but Wall Street, that would be obscene." Corzine has argued against Wall Street compensation culture, yet he too took an enormous salary and signing bonus. When he came on, he also negotiated an automatic severance fee, "a $12.1 million golden parachute," if for instance, he sold the firm. "There is nothing in the proxy statement about what would happen if Corzine destroyed the firm by making bad trading bets. There is nothing that links his payout to, you know, performance." We can at least take small hope from the fact that his attempt to sell fell through and thus so did his severance.
Betsy McCaughey on skewing Medicare statistics "The British medical journal Lancet reported last month that 32% of elderly American patients undergo surgery in the year before they die, a statistic culled from Medicare data," writes Betsy McCaughey in The Wall Street Journal. "In an accompanying editorial, Dr. Amy Kelley of Mount Sinai School of Medicine labeled the 32% figure a 'call to action' -- to reduce costly surgeries, intensive-care stays and other high-intensity care for the elderly." Yet these statistics are "a distortion," McCaughey says. The method of looking only at patients who died to conclude that surgery is unsuccessful is "like saying Babe Ruth struck out 1,333 times so he must have been a poor ball player -- even though he had a .342 lifetime batting average and 714 home runs." Looking at surgery data for all elderly patients shows it to be successful. "The decision to operate should be based on a patient's ability to benefit, not age," and doctors have created "frailty tests" to make that call. It is "an ethical issue" to decide whether medical resources should be reserved for younger patients, but distorting data to make that point would be harmful. President Barack Obama's former budget director, Peter Orszag has used similar distortions, looking only at data for those who died, to argue that cuts can be made to Medicare without loss in service. Yet statewide studies "show that Medicare patients treated in hospitals that provide lower-intensity, lower-cost care have a higher risk of dying." Instead, McCaughey says, "Adjusting Medicare's eligibility age and asking some patients to share more of the cost of care are safer budget options than cutting spending at the bedside."
Charles Lane on misleading U.S. infrastructure rankings All right-thinking people agree: America's infrastructure is in bad shape. The only debate is over how bad," writes Charles Lane in The Washington Post. Journalists often point it out and cite World Economic Forum data that ranks us 23rd, as well as the "D" grade given us by American Society of Civil Engineers. Yet in traveling thousands of miles of coastlines with his family, Lane says he saw "highways and byways were clean, safe and did not remind me of the Third World countries in which I have lived or worked." Looking closer at the data cited, Lane charges "U.S. infrastructure is still among the most advanced in the world -- if not the most advanced." America's 3.1 million square miles, comprising forests, deserts, and mountains, makes it one of the most difficult nations in which to maintain roads and bridges. "When you compare America’s WEF rankings with those of the 19 other largest countries, it stands second only to Canada." Among populous countries, it ranks behind France and Germany, but when considering the more comparable European Union on average, America wins. "The WEF produced its rankings based on a survey in which business executives were asked to rate their respective countries' infrastructure on an ascending scale of 1 to 7." Barbados executives rank their country higher, but that doesn't change the fact that they have one commercial airport to our 300. "And while that D from the American Society of Civil Engineers is undoubtedly sincere, the organization has a vested interest in greater infrastructure spending," he says. The U.S. infrastructure could still "use an upgrade," Lane writes, but we should calculate where and how much with clearer heads, and distorted data doesn't accomplish that.
Frank Bruni on African-Americans and gay marriage Two weeks ago the Human Rights Campaign, a leading group promoting same-sex marriage, took "an interesting tack" that "implicitly acknowledges the complicated relationship between gay Americans and another minority group not firmly on their side," writes Frank Bruni in The New York Times. The HRC is unveiling video testimonials in favor of same-sex marriage from Newark Mayor Cory Booker, entertainer Mo'Nique and Julian Bond, former chair of the N.A.A.C.P. Bruni says it is "no accident" that the campaign "has showcased three prominent black Americans in a row." There is tension between African-Americans and gays who want the right to marry. Analysis suggests black Californians voted overwhelmingly for Proposition 8, which banned same-sex marriage in the state. A smaller percentage of black voters than either white or Latino ones supported same-sex marriage in New York. In Maryland, outcry from black pastors helped stall efforts to pass same-sex marriage in the legislature. "Many African-Americans who oppose same-sex marriage do so on religious grounds," Bruni notes. "But it's also important to recognize that people lobbying for gay rights have at times given African-Americans pause by appropriating 'civil rights' language and arguments in too broad a manner." Phrases like "gay is the new black" overlook the history of slavery and inability to mask race that set the black experience apart from others. "When gay men and lesbians glide over such details, [Wade Henderson, the president of the Leadership Conference on Civil and Human Rights] said, it feels 'inherently disrespectful to the black experience in this country,'" Bruni notes. Yet, with carefully chosen language, these new ads "don't feel disrespectful," Bruni says. "They feel very, very smart, the product of a movement becoming ever savvier about precisely whom it needs to persuade and how best to persuade them."
Gideon Rachman on Europe and the U.S. election "The Republican Party's effort to choose a candidate to take on Barack Obama increasingly resembles speed-dating, with party loyalists giving swift consideration to candidate after candidate, before getting restless and moving on to the next prospect," writes Gideon Rachman in The Financial Times. Mitt Romney doesn't get voters excited. "Nobody lies awake at night dreaming of a Mitt Romney presidency -- with the possible exception of the man himself." Yet he "would make a plausible president," and so he most worries the Obama campaign. Obama also has to contend with the historical precedent which hasn't reelected anyone while employment was above 7.2 percent in 80 years. There have been positive signs of growth and financial market recovery in recent weeks, so Obama could face less of a problem than we think. "The biggest danger Obama faces is that a black economic cloud will drift across the Atlantic over the next year and explode over the US. The current US recovery is so fragile, Obama's advisers fear a sharp turn for the worse in Europe could quickly plunge the US economy back into trouble." European leaders claimed victory over their crisis last week, but it seems likely the crisis will come back in Italy, which remained "unable to borrow on favorable terms," after the deal. "The Obama administration is keenly aware of the economic and political threat Europe poses." Claiming that a European crisis isn't his fault could sound "weak" and likely wouldn't matter to those who are worse off under his administration. "The party's leaders have long suggested, in various ways, there is something un-American about Obama," and his healthcare overhaul has only strengthened the case that his ideal resembles the European one. All this means, "For better or worse, 'Europe' will loom large as the candidates battle for the White House."