Avedon's other weblog

Avedon's other weblog

PPACA: The Third Way To Lowering Health Care Prices?

Stuart Zechman

[I asked Stuart to post something here that explained one of the big reasons medical costs are so high in the United States that is unrelated to the forces we usually discuss. He felt that this comment he posted in late 2010 at Swampland helped unpack it. - Avedon]

http://swampland.blogs.time.com/2010/11/10/what-the-deficit-commission-says-about-health-care/comment-page-1/#comment-216122

Kate Pickert:

You write:

"The commission report also calls for a much stronger Independent Payment Advisory Board, the newly created commission charged with slowing the growth in Medicare spending."

What exactly is this "Independent Payment Advisory Board?"

How exactly will it "slow the growth" of Medicare's medical insurance payments?

There are two ways of achieving a slower-growing Medicare that come to mind, of course.

One is to cut spending by reducing the amount of things for which Medicare pays, like, for example, setting a limit on how many MRI's, pain-alleviating pills or doctors' visits someone may have before they have to pay more for these things in some way themselves --which, at current prices, they will simply be unable to pay.

The other is to change the way that the "Resource-based Relative Value Scale" (the price schedule for the hospital visits, laboratory tests, etc for which Medicare pays) determines pricing for health care.

Since not only Medicare, but all HMOs use this price menu to determine how much they pay for all health care spending

(from the Wikipedia entry)

Resource-Based Relative Value Scale (RBRVS) is a schema used to determine how much money medical providers should be paid. It is currently used by Medicare in the United States and by nearly all Health maintenance organizations (HMOs).

RBRVS assigns procedures performed by a physician or other medical provider a relative value which is adjusted by geographic region (so a procedure performed in Manhattan is worth more than a procedure performed in El Paso). This value is then multiplied by a fixed conversion factor, which changes annually, to determine the amount of payment.

RBRVS determines prices based on three separate factors: physician work (52%), practice expense (44%), and malpractice expense (4%).[1][2]

, adjusting the prices on the menu to grow more slowly or to be less expensive altogether would not only have the effect of reducing Medicare's burden, it would lower the price of health care for Americans in the private market as well.

In theory, the pricing of health care by Medicare, and therefore the entire private health insurance industry, should be a matter of transparent, public record. In theory, the manner in which prices were decided would be available to all kinds of public scrutiny, including yours, Kate Pickert.

Unfortunately, that's not the case currently:

The RBRVS system has been criticized on a number of grounds:

# The regulatory committee (RUC) is largely privately run, an example of regulatory capture.[3]

# The regulatory committee (RUC) is secretive, with the meetings being closed to the public and uninvited observers.[3][4]

# The data are effectively copyrighted by the AMA, but its use is required by statute.

Although the RBRVS system is mandated by the Centers for Medicare and Medicaid Services (CMS) and the data for it appears in the Federal Register, the American Medical Association (AMA) maintains that their copyright of the CPT allows them to charge a license fee to anyone who wishes to associate RVU values with CPT codes. The AMA receives approximately $70 million annually from these fees, making them reluctant to allow the free distribution of tools and data that might help physicians calculate their fees accurately and fairly.

Will the Independent Payment Advisory Board address these obviously corrupting flaws in the secretive, closed, copyrighted, regulatory capture-prone process used to decide how much Americans pay every year in health care prices, Kate Pickert?

And what about this other obvious flaw in the current, secret pricing scheme?

Paying based on effort rather than effect skews incentives, leading to overuse of complicated procedures without consideration for outcomes.[3] Contrast with evidence-based medicine (EBM), which is based on outcomes.

According to this critique, RBRVS misaligns incentives: because the medical value to the patient of a service is not included in how much is paid for the service, there is no financial incentive to help the patient, nor to minimize costs. Rather, payment is partly based on difficulty of the service (the "physician work" component), and thus a profit-maximizing physician is incentivized to provide maximally complicated services, with no consideration for effectiveness.

One effect attributed to RBRVS is a lack of primary care physicians (PCPs) at the expense of specialists – because specialist services require more effort and specialized training, they are paid more highly, incentivizing physicians to specialize, leading to a lack of PCPs.

Will the Independent Payment Advisory Board attempt to slow the growth in Medicare spending by changing the way that prices are calculated, so that a hospital can't charge the tax payer, say, $140 for a Tylenol pill, just because they're a hospital, and not a convenience store?

http://money.cnn.com/video/news/2010/03/01/n_medical_waste.cnnmoney/

Or, Kate Pickert, will the Independent Payment Advisory Board simply declare some devices, laboratory tests, drugs and procedures "less effective" using some similarly secretive and complex pricing scale set by unknown insiders, and therefore shove the burden for paying for them back on ordinary people?

Is that latter method how this Board intends to lower health care prices, by making it so that (in theory, at least) eventually providers stop lobbying the government to keep their prices high, and begin to lower their prices themselves, after average people prove year after year that they simply cannot pay --and suffer their individual fates?

I am, of course, perfectly aware that you've included mentions of the Independent Payment Advisory Board in prior reports, Kate Pickert, such as this one in September of this year:

...the [minority Republican] motion [to the 9/11 responder's bill] would have rolled back a few key provisions in the Affordable Care Act, particularly those that are highly unpopular or easy to caricature. The motion would have, for example, repealed the Independent Payment Advisory Board, a 15-member independent panel created by the ACA and charged with figuring out ways to cut Medicare payment rates to keep them from increasing so quickly. (Political attack version: “Mr. Congressman voted to ration Medicare.”)

, but you haven't (as far as I am aware) reported exactly how the Board says (or if it's willing to say) how it will reduce payments.

So, Kate Pickert, is the cost-cutting method likely to be of the first way, in which people increasingly pay more for care at current price growth rates, until the exorbitant health care prices paid by Americans come down "by themselves"?

Or will it be of the second, in which the current Resource-Based Relative Value Scale method of a private group deciding how much we will pay for health care is brought out of the shadows, and we, the people who are paying the highest prices in the world, can see for ourselves that things are fair, well and good with our money?

Can you tell us exactly, or in more key detail how the PPACA's new Independent Payment Advisory Board will reduce health care prices for Americans, Kate Pickert?

stuart_zechman (6:08 AM) permalink

The Difference Between Us and Them

by Stuart Zechman

Briefly summarizing this representative Third Way policy memo from pre-financial crash, 2007:

Laissez-faire is bad, because markets and the state would still fight.

Liberalism is bad, because the state and markets would still fight.

Both sides' agendas are burdened by the intellectual chains of obsolete ideological dogma, while we Third Way, on the other hand, pragmatically recognize that history will inevitably occur in the exact manner as we predict.

Big government (increasingly global) must partner with big industry and finance (also increasingly global) to do what's best for everyone else. Capitalism can abide a reasonable limit; anybody who claims differently must be an old, suspicious Marxist.

For optimal productivity and growth, big government must first facilitate First World workers competing with Third World workers in a global labor market, or, rather, must facilitate big industry's unmitigated access to the cheapest labor on earth --wherever the most people are the most desperate for a buck, and their totalitarian or kleptocratic bureaucracies are willing to play along. It then must facilitate big industry's access to US consumer markets, which can be driven by big loads of individual debt on peoples' backs, which can be repackaged as securities, and sold by big finance to gullible sovereign wealth funds overseas and municipal workers' pension funds at home. As complex and breakable as that scheme sounds, the world's biggest insurer says this sort of system can go on forever, judging by the soundness of the financial products insured by institutional participants. Folks will increasingly work for less and less, mostly in health care services and advertising. It's for their own good. The workers', that is. Eventually. Once the Chinese and Indian populations have a stake in this gig, state war and violence will be obsolete. Huge military invasions and occupations will never happen again, while death and terror will be confined to sporadic fits of irrational, medieval Islamicist militancy, which will be crushed from twenty thousand feet in the air by legions of expensive, armed, flying robots. By the way, did you ever read "The World is Flat" by Tom Friedman? It's an amazingly prescient book; fascinating.

Big government must not accede to neo-populist passions exemplified by the temptation to protect ordinary people from the amoral, dangerous behavior of enormous, monopolistic corporations, or to maintain independence from their organized, corrupting influence.

Middle-class pain is inevitable, but ordinary people in America have it too good as it is. Folks aren't really struggling, they're competing. There's a difference. Get used to it. It could always be worse for you.

Even though ordinary people are reveling in the spoils of middle-class luxury, they're still anxious, mainly because they're all social conservatives who are deeply confused by new neighbors of differing ethnicity, and because of the dominance of stale, old, orthodox, 20th century liberal ideas about what government should do --like Social Security and strict banking regulation.

Our optimism in the face of an admitted decline in Americans' living standards springs from the fact that we go to our think tank jobs to write policy memos every day carrying an unshakable faith that it will all work out for the best. We're realists, not theorists, though.

This faith is very different from conservatives' belief in infallible markets, because, as long as our government is being sufficiently modernized and adapted to the new rules we made up about how things are going to work going forward, forever, we will believe in infallible markets and the infallible institutions of the state.

Utopia is coming; get the crap out of its way right now, you dirty fucking hippies and gun-toting tent-revivalists. Who's in charge, pilgrim? Not you.

Think I'm joking? Read it for yourself, below.

http://content.thirdway.org/publications/57/Third_Way_Report_-_The_New_Rules_Economy_-_A_Policy_Framework_for_the_21st_Century.pdf

The Third Way Middle Class Project, February 2007

Third Way Report --The New Rules Economy -- A Policy Framework for the 21st Century

Anne Kim, Adam Solomon, Bernard L. Schwartz, Jim Kessler, and Stephen Rose

Over the past six years, conservatives have had their shot at coping with the economy’s new rules. In keeping with Reagan’s philosophy, they have tried to shrink government’s reach in the economy with massive tax cuts for mostly the wealthy, wholesale deregulation, and attempts to eliminate or privatize safety net programs for the elderly and those at lower incomes. By any objective standard, the results have been a disappointment. On the plus side, economic growth during this time of change has been generally steady. But it has also been alarmingly uneven: average wages have been flat, income disparity has widened, and there is widespread anxiety about the nation’s economic future. Other measures of economic security, such as health care and pension coverage, have declined.

On the other side of the political spectrum are a growing number of progressives whose philosophy can best be described as “neopopulism.” Neopopulists see change as mainly a threat that requires American economic policy to turn inward. They believe that the tide of change will bring an unfettered race to the bottom, in which the rich get inexorably richer while the rest of America works harder to earn less. Capitalism, they argue, must be vigorously restrained, and workers shielded from the risks of competition and from corporations in search of a better, cheaper, faster way to produce goods and services. Reviving old suspicions about capitalism and markets, neopopulists want government to rewrite the rules to recapture a bygone era. It’s an idea that itself is deeply conservative—to turn back the clock “to reinvent the managed capitalism that thrived between the late 1940s and early 1970s,” as leading neopopulist Robert Kuttner recently wrote.3

Both sides see change through an ideological prism that pits markets implacably against government. As a consequence, both conservatives and neopopulists overstate the power of their chosen “side” to rewrite the rules of the economy. And while economic conservatism is premised on the myths of an infallible market and incompetent government, neo-populism is premised on the myths of a failing middle class, a declining America, and omnipotent corporations.

We urge a different approach, which we call “progressive realism.” Realism means recognizing and understanding the economy’s new rules while accepting the limits of government’s power to stop the forces of change. But as progressives, we also believe that government policies—if modernized and adapted to the rules of the 21st century—can create the optimal conditions for increasing economic growth, expanding middle-class prosperity and protecting those who fall behind.

As progressive realists, we do not doubt that change is disruptive and, for many people, painful. Globalization has made many jobs obsolete, and both companies and individuals have been hurt by its impact. As the neopopulists note, all is not well with the middle class. But we also see the current era of change as one of tremendous opportunity and potential for the middle class.

In addition, we view the challenges faced by today’s middle class as very different from the ones that most progressives believe them to be. We perceive the middleclass as struggling to get ahead, not—as the neopopulists argue—struggling to get by. Middle-class anxiety does not stem from broad dissatisfaction with capitalism but from the shifting terrain beneath their feet and the increasing irrelevance of an outdated government.

In an earlier Third Way paper, The Politics of Opportunity, we argued that 21st century economic policy—to be both politically resonant and substantively meaningful—should reflect the hope and optimism of the American people. Thus, unlike both conservatism and neopopulism, our approach is also profoundly optimistic. In contrast to conservatism, we have a positive belief in government’s ability to foster new middle-class opportunity. And in contrast to neopopulists, we have faith in the basic strength of the American economy to grow and in the ability of middle-class Americans to succeed...

This is the dominant policy framework being implemented by the leadership of your Democratic Party, to the extent that they have one.

A former member of Third Way's board of directors, former architect of NAFTA, former lobbyist for telecom giant SBC Communications, former Commerce Sec for Bill Clinton, former Midwest regional chair of JP Morgan-Chase (in charge of "government relations") now sits at Obama's right hand, as current White House Chief of Staff. This is what this individual had to say about your Democratic Party in 2009:

"The Democratic Party -- my lifelong political home -- has a critical decision to make," Daley wrote in 2009, one year before the devastating, for Democrats, 2010 midterms. "Either we plot a more moderate, centrist course or risk electoral disaster not just in the upcoming midterms but in many elections to come." Daley, William M., The Washington Post, "Keep the Big Tent big," December 24, 2009
⁽⁴⁾

That's a threat. That's another way of saying "let us do what it says in that Third Way policy memo, or else..." That's who's in charge of your Democratic Party and of this country's future. That's what they believe about themselves...and about you.

We, the folks who are most affected by these ideologues' proximity to power, are the majority in this Party. They, the bubble-bound elites whose lives are spent making this unelectable crap up, are a tiny fraction of us. What's in this 2007 policy memo is what they want to do to us, using our votes, using our Party to do it. We simply can't let them. We, ordinary people, must take back control of the Democratic Party from them, even if it temporarily costs us --them, really-- political power to do it. It's clear that they are willing to lose elections rather than consider the validity of our "neopopulist" propositions, so why aren't we just as willing to play chicken with them? Why are we so exploitable? Why are we so predictable? Why are we so afraid?

If a gun called "right-wing nuts" weren't being held to your head by the national Democratic messaging apparatus (and their allies in the political press corps) day after day, would you ever, in a million years vote for this agenda? If you voted for Obama in 2008, you did, even though that fact might not have been clear to you at the time (it wasn't to me).

And, if you vote for Obama in 2012, you will again.

It's 2011, a year before another national election takes place.

If you don't want this agenda of theirs realized, then it's probably time to focus on how to stop being the perpetual hostages of national Democrats, isn't it?

If not now, then when?

stuart_zechman (11:01 PM) permalink

Kevin Baker's SOTU email

Responding to Obama's State of the Union address, journalist Kevin Baker sent out this email:

The real problem with Obama’s speech tonight was, once again, the historical narrative that he led off with, and that he is determined to have us believe.

That is:

Once upon a time, Americans had all sorts of really good jobs because “they only had to maybe compete against their neighbor,” and they could count on getting ahead if they worked hard, “and maybe even see life improve for their children.”

But then “over the course of a single generation, came great technological changes.” Steel mills “that had been employing thousands, now only needed hundreds of workers.” Countries such as “China and India” started “making adjustments, and teaching their kids math.”

Americans suddenly found themselves competing with the whole world, and that’s been really tough, especially since our kids have gone from best-educated in the world to only ninth. But fear not. We “still have the best innovators in the world, the best colleges and universities. We still lead the rest of the world in patents.” All it will take is a lot of education, a little social investment here and there, some strict budget-minding, and…voila! We’ll beat anyone on this planet!

Nonsense.

Well-intentioned though it may be, this whole narrative makes no sense on the face of it.

So, back in the good old days, we were the best at everything, but we did well only because “we just had to compete against our neighbors”?

Say what? Which is it? Were we the best, or were we not?

China and India sure did make changes. But of course the Chinese have been “teaching math” since long before the rest of the world knew the Americas existed, and didn’t India invent it? Were the changes so much better education, or the fact that the two countries emerged first from under Western thumbs, and then from suffocating systems of caste and communism over the course of the last couple generations?

And how DID we fall behind? I mean, while still having the world’s best universities, best innovators, most patents, etc.?

What Obama’s pseudo-history conveniently ignores is that what really changed is not Chinese students buckling down to their algebra homework, or “sweeping technological changes in the course of a generation.” What changed was government policy.

American workers have ALWAYS operated in times of rapid, sweeping technological change. They’ve ALWAYS competed with other countries, in one way or another. And they’ve generally done pretty well.

The reasons they did well included the fact that for most of our history, our government protected our industries against competition from countries with desperately underpaid labor. And because the people running the industries kept inventing new stuff, and ploughing money back into their American industries, instead of shipping their plants overseas and devoting all their time and capital to figuring out new financial Ponzi schemes.

Still, though, the old America that Barack Obama refers to used to be plagued by constant, wrenching depressions. And those old industries didn’t necessarily help people make a good living, or improve their children’s standard of living.

Being a steelworker, or an auto line worker, doesn’t INHERENTLY pay well. In fact, for many decades, such jobs didn’t pay much at all.

Then the people who did them organized themselves, and forced higher wages out of owners (who didn’t have the option of searching out child slaves abroad), and elected representatives who defended and extended their rights.

THAT’S the “magic formula” that American prosperity came out of. Innovation, education, inventiveness—sure. But also industrial policy, unionism, protectionism, real patriotism, and all those other things that Barack Obama and the whole, lovely class he hails from don’t want to hear about because they might chip away some small portion of their staggering wealth.

But without acknowledging that narrative—without letting that narrative guide our future actions, which is the whole reason to learn history in the first place—we’ll just keep butting our heads against the wall.

We can make our kids do math problems until their fingers’ fray…and they still won’t be able to compete with sweatshop dictatorships where workers make 20 cents an hour.

We can talk all we want about making social investments…and they will never be made, as long as the financial oligarchy which has severed all bonds of loyalty to this nation continues to co-opt and buy off our leaders.

But hey, in the meantime, let’s find common ground: fire all the teachers!

Avedon (2:52 PM) permalink

The Centrist Duck Test

A year-and-a-half ago, some folks thought I was bizarre for saying that Obama is an ideological centrist.

I was told back then that I was a little weird for talking about all of this "New Democrat" and "Third Way" centrist stuff, and comparing Obama's policies all of the time to the DLC's "Progresive Policy Institute" think tank policy memos.

It was relayed to me that Obama was "basically a liberal," but working within the constraints of the system in Washington, which he was sure to navigate masterfully...if I just gave him time to win 85-dimensional chess, and I withheld criticism that might turn fellow liberal Democrats into impetuous and impatient children incapable of recognizing what was good for them.

I was assured that this was the "pragmatic" way forward, and that it would all work out for the best. I was admonished that Obama surely must be a "progressive," and that, if I didn't recognize his policies as liberalism, it was because A) the secret liberalism couldn't be let out yet, lest Joe Lieberman vote against cloture, B) it was what he had to do, in order to enact some great New Deal 2.0 later, or C) it was the "most liberal" policy that could be accomplished by anyone, ever. In some extreme cases, it was edgily theorized the problem was D) that I must harbor some racist tendencies (Tim Wise's "With Friends Like These, Who Needs Glenn Beck: Racism and White Privilege on the Liberal-Left" ) that caused my misunderstanding of Obama.

And, patiently, over and over again, I replied that, if it looked like a centrist, and it walked like a centrist, and it quacked like a centrist, and its policies were straight out of the DLC's think tank, and its messaging was straight out of the New Democrat Network, and its appointed bureaucrats were Clinton-ites and Rubin-ites, and if, after it was finally elected to power after an extended primary season campaigning for the votes of a liberal Democratic base, it actually said "I am a centrist"...

...then Obama is probably a centrist.

As I can see from the commentary on this thread rebutting Michael Crowley (formerly a columnist at Third Way rag "The New Republic"), I may not have to argue that point quite as hard anymore.

stuart_zechman (3:56 PM) permalink

Is Larry Summers Really a Conservative?

http://swampland.blogs.time.com/2010/12/13/larry-summers-warning-about-the-growth-of-government-transcript/comment-page-1/#comment-223886

(At Swampland, Michael Scherer posts the wisdom of Larry Summers in the form of his exit address to the Economic Policy Institute, the transcript of which is well worth reading in full, and then after which the question is equally worth answering: Is Larry Summers a conservative or a liberal...Or is he something else? My commentary response to Scherer's applause follows.)

Michael Scherer:

So...no mention whatsoever of Larry Summers' disastrous advice with respect to dismantling New Deal banking industry regulations and deregulating credit derivatives ten years ago?

Interesting.

Isn't this sort of like having a person who, while in positions of power in government, strongly advocated (and ultimately accomplished) an invasion of Iraq --twice-- opine on today's foreign policy?

Why didn't you feel compelled, as a journalist, to mention Summers' role in the past decade's financial disaster, Michael Scherer? I assume you are aware of it...

As such, one could leave the criticism right there, but this

"He is approvingly quoting Daniel Patrick Moynihan's argument that increased government involvement in the health care sector is a risky idea."

really can't go without some kind of remedial examination --it just can't.

If you take Summers at his word, it is just incredible for its depth of denial.

Summers makes the fatuous pronouncement:

"every five years the share of GDP devoted to government spending on health care goes up by 1 percentage point"

, and one really wonders what kind of ideological hoops the guy has to jump through in order to leave the increases in private sector health care spending out of that analysis.

The thing that's particularly dishonest about Summers' orthodoxy is that he knows these data exist:

https://www.cms.gov/NationalHealthExpendData/25_NHE_Fact_Sheet.asp

CMS (Centers for Medicaid and Medicare Services), US Department of Health and Human Services

Projected National Health Expenditure, 2009-2019:

* Growth in NHE is expected to increase 5.7 percent in 2009 and average 6.1 percent per year over the projection period (2009-2019).

* The health share of GDP is projected to reach 17.3 percent in 2009 and 19.3 percent by 2019.

* Medicare spending is projected to grow 8.1% in 2009 and average 6.9% per year over the projection period.

* Medicaid spending is projected to grow 9.9% in 2009 and average 7.9% per year over the projection period.

* Private spending is projected to grow 3.0% in 2009 and average 5.2% per year over the projection period.

Summers is apparently just incapable of honesty when it comes to analysis that contradicts his favorite theories.

What other explanation is there for omitting the fact that it isn't only public spending on health care that will be wildly out of control over the next 10 years, but private health care prices that will outpace inflation, as well?

And this descent into political hackery:

"This is why the recent tax agreement concluded between the President and congressional leaders is so important. It averts what could have been a serious collapse in purchasing power and adds far more fiscal support than most observers thought politically possible through:

• An extension of unemployment insurance,

• A payroll tax holiday,

• Refundable tax credits and business expensing."

is equally disgusting, equally par for the course with Summers.

It's almost unimaginable, the effrontery with which this individual, so recently discredited by a "serious collapse" of far greater significance which they personally helped to bring about eleven years ago, speaks to the "necessity" of deal-making which serves to increase inherited wealth and privilege in the same breath as he effuses about the "middle class."

Does he really believe that serious people will fail to notice that he continues his jihad against New Deal policies that place reasonable restraints on the activities of the financier class ("We need non-traditional approaches.") at the same time as he venerates the "institutions" that he empowered to catastrophically fail the country?

His definition of American greatness as the product of its virtuous institutions --not its people-- pretty much says it all:

"our strength must come from establishing uniqueness, establishing that which is difficult to replicate, that which comes from more collective action.

Any idea or machine or even individual capacity can be transplanted. Far harder to transplant, imitate, or emulate are our great institutions – the national laboratories and the national parks and the national highway system, great universities and great cities and great technology clusters, a diverse culture, deep capital markets, and a tremendous ethic."

To Summers, the rabid, unrepentant ideologue, America's elite institutions are not the cause of its decline, but it's very identity as America!

Summers is America, in other words!

People are interchangeable, individuals (without great wealth) may be transplanted, but the combination of the force of the giant federal state, the expertise of "great universities" and the well-honed interests of "deep capital markets," on the other hand --that's what makes America uniquely wonderful in the world...at least according to Larry Summers' warped ideology.

No wonder he and his people think HAMP is a crashing success!

Do you actually take this rot seriously, Michael Scherer?

Can you not see this for what it is: a rigid, fanatical orthodoxy that sees both New Deal liberalism and market fundamentalism as its implacable foes, and is literally willing to sink the country rather than admit its obvious, profound failures?

Proclamation

"I believe that at this point the risks of deflation or stagnation in the United States exceed the risks of uncontrolled growth or high inflation. But unless we change our course, we are at risk of a profound demoralization of government.

That's why Bowles-Simpson so important."

, after proclamation

"be clear that compromises that were necessary with a weak economy in 2010 should be inconceivable as recovery accelerates in 2012."

, after proclamation

"I am not one who sees financial collapse on the imminent horizon. "

What kind of pathology allows an individual with a record of failure as great as Summers to make those kind of claims with no apparent shame?

Of course Larry Summers is not the one who sees financial collapse on any horizon! He didn't see the last financial collapse when it was staring him in the face! When has he ever successfully predicted anything?

It's more of the same high-theoretical garbage that put us in this ditch, isn't that clear?

Can't you see the ideology there, Michael Scherer?

Do you honestly believe that Larry Summers is some font of wisdom, simply because he's not a movement conservative, and he's not a movement liberal, and he says things that people at cocktail parties in your part of town all agree that Serious people should believe?

Summers is reiterating the same things that the Progressive Policy Institute has been saying for over fifteen years!

At some point, don't you think that your ethic as a journalist compels you to take a closer look at how what was prescribed decades ago is now being proclaimed again as the magical, theoretical cure-all for everything, Michael Scherer?

It doesn't disturb you that Summers' whole speech is taken right out of Progressive Policy Institute's papers from 1995 --even the bit about "orthodoxy?"

Will it never occur to you that the reason Fareed Zakaria and this guy sound exactly the same is not necessarily because they possess Merlin-like expertise and erudition about everything, but because they believe the same things?

And, if they believe the same things, what is the name of their preferred ideology? What is not rightist, but not leftist, either? What philosophy is chiefly concerned with the demoralization of big government and the empowerment of our "excellence" in the form of our "unique" financial system? What advocates "collective action" and Keynesian solutions, but worships elite institutions, venerates wealthy individuals, and finds "strength" in our "deep capital markets?"

What is that ideology called, Michael Scherer? What's its name?

Larry Summers is saying things that sound right to you and people like you, Michael Scherer, and for that, you are willing to grant him all sorts of objectively undeserved credibility...just like us rubes the voters out here do with our favorite huckster politicians.

Can you at least consider that possibility, Michael Scherer?

stuart_zechman (6:33 PM) permalink

For the Good of Fox News Democrats, Obama Must Resign...Today

(my response taken from Swampland commentary)

lauriefive:

You write:

"When asked what he's going to do about the deficit, Obama should reply loud and clear and repeatedly that he will get Americans back to work and the economy booming again."

No, he mustn't do that!

No, no!

Obama should reply loud and clear that he welcomes business leaders, Republicans and Independents (all of the Republican-leaning ones) into the fold.

It sounds crazy, as if Obama were handing a loaded revolver to terrorists, and saying "Please, take me hostage, now," but it's the best political strategy possible.

I know this because aged Democratic consultant Pat Caddell (of Jimmy Carter re-election bid fame, I'm sure you've seen him often on Fox News) told me so in the pages of a Washington Post Op-Ed:

http://www.washingtonpost.com/wp-dyn/content/article/2010/11/12/AR2010111202846.html

One and done: To be a great president, Obama should not seek reelection in 2012

By Douglas E. Schoen and Patrick H. Caddell

Sunday, November 14, 2010

President Obama must decide now how he wants to govern in the two years leading up to the 2012 presidential election.

It is clear that the president is still trying to reach a resolution in his own mind as to what he should do and how he should do it.

To that end, we believe Obama should announce immediately that he will not be a candidate for reelection in 2012.

Obama can restore the promise of the election by forging a government of national unity, welcoming business leaders, Republicans and independents into the fold.

But if he is to bring Democrats and Republicans together, the president cannot be seen as an advocate of a particular party, but as somebody who stands above politics, seeking to forge consensus. And yes, the United States will need nothing short of consensus if we are to reduce the deficit and get spending under control...

Now, I understand that Pat Caddell hasn't been associated with a winning Presidential campaign since 1976, and was recently fired from Andrew Romanoff's Senate bid in Colorado, but I trust Pat Caddell's advice to the letter.

Want to know why I place my faith in quintuple loser (George McGovern in 1972, Jimmy Carter in 1980, Gary Hart in 1984, Joe Biden in 1988, and Jerry Brown in 1992) and Fox News Democrat Pat Caddell?

Because Barack Obama apparently trusts this clown's advice, too.

How do I know that?

Well, on November 14th of this year, the influential (in the Beltway) Washington Post prints the grand advice of Pat Caddell, and then only 8 days later, Barack Obama apparently runs with Caddell's "strategy"! It's true, at least according to Bloomberg Executive News:

http://www.bloomberg.com/news/2010-11-20/obama-prepares-new-overtures-to-business-to-keep-agenda-moving.html

Obama Is Preparing New Overtures to Counter Anti-Business Image

By Mike Dorning - Nov 22, 2010 12:01 AM ET

President Barack Obama is preparing new overtures to business that may start with a walk into the headquarters of the U.S. Chamber of Commerce and a retreat with corporate chief executive officers, according to people familiar with his plans.

The Obama administration has been at odds with the Chamber, which fought Obama's health-care and financial regulatory overhauls and committed $75 million to political ads in the midterm congressional elections, mainly directed against Democrats. The CEO summit would be a way to address complaints from some executives the Democratic administration is anti- business...

How reassuring to me, as a Democrat!

Thank God that Barack Obama had the judgment to listen to the counsel of the savant Pat Caddell when he advised the President to begin "...welcoming business leaders...into the fold" (especially business leaders who had just spent $75 million dollars defeating Democrats)!

Thank God the President seems to be doing exactly what Serious Beltway publications inform him is politically necessary, "if we are to reduce the deficit and get spending under control."

Thank God the Administration has the wisdom to do the only thing that makes any sense in times of great, widespread economic suffering on the part of the American people --which, of course, is to immediately schedule "a retreat with corporate chief executive officers."

What political genius!

The only question left for me, as a voter, is whether Barack Obama has the unique foresight and leadership to take the next key step in governing. And no, I do not mean that weak half-measure suggested by Fox News' Pat Caddell. I do not mean that Barack Obama should immediately announce that he isn't going to run for re-election in 2012, as advised in the Washington Post.

No, since, as Pat Cadell points out "The president has almost no credibility left with Republicans," I'm suggesting that Barack Obama go that extra mile for bipartisanship, and step down as President, resigning effective today, November 23rd, 2010.

Wouldn't stepping down as President two years before an election in which --for the good of the nation-- he shouldn't compete send the ultimate signal of goodwill and pro-business intent on the part of the Administration?

Paltry symbolic gestures, like literally inviting corporate CEOs to run the government (from the Bloomberg piece)

To address corporate criticism, Obama is also contemplating bringing business leaders into his administration.

One possibility is retired Procter & Gamble Co. Chief Executive Officer Alan Lafley, who could be appointed to a high- level post as a Cabinet member or senior presidential adviser, said a person familiar with the deliberations.

Altman has defended the Obama administration against criticism that it is anti-business while also saying the administration has made mistakes in its approach.

Another open position that may be filled with a business executive is deputy Commerce secretary, said an administration official.

just won't cut it with either business leaders or Republicans or Republican-leaning independents (when those groups actually diverge, I mean), and so it's obviously time to do the right thing by them...I mean the country, to do the right thing by the country, and preemptively step down.

That way the President --I mean, soon-to-be-former President can't possibly "be seen as an advocate of a particular party," except maybe the Republican Party, which would be exactly what Americans are looking for in terms of Democratic leadership.

So, there it is:

At the very least, Barack Obama immediately resigns the office of the Presidency, and gets back to the task of attempting to "address both our national challenges and the serious threats to his credibility and stature," as Pat Caddell puts it, or his chances of re-election are finished.

Please, please do not demand that Barack Obama "get Americans back to work" and "reply loud and clear" to elite deficit-peacocks in the Beltway that his first concern is the people who elected him President.

He mustn't ever do that, because Pat Caddell is

...convinced that if Obama immediately declares his intention not to run for reelection, he will be able to unite the country, provide national and international leadership, escape the hold of the left, isolate the right and achieve results that would be otherwise unachievable.

, and five-time loser Pat Caddell is correct, at least about one thing:

This sort of "strategy" will, indeed, "achieve results that would be otherwise unachievable."

Thanks so much for reading and considering this, lauriefive.

Read more: http://swampland.blogs.time.com/2010/11/23/whipsawed/#ixzz168TrIAvx

stuart_zechman (7:47 PM) permalink

by Stuart Zechman

At Swampland, Kate Pickert asks the commentariat for feedback on the value of the new government web site "Healthcare.gov":

The Health Care Number of the Day - $8.7 Million

Posted by Kate Pickert Wednesday, October 6, 2010 at 1:01 pm

I've praised the web site for being easy to use and for including a gigantic amount of information about private and public insurance plans which have, until now, not been accessible in one place online. The Department of Health and Human Services amassed and organized the data and factual information on healthcare.gov in about six months and no doubt spent a premium on outside contracts who could design the web site and gather data quickly. The site is, in some ways, a preview of what health insurance exchanges might look like when they are up and running by 2014.

What do you think, Swamplanders? Worth the investment?

, to which I respond in commentary, as reprinted (with some edits) below:

Kate Pickert,

Is it worth the investment, you ask?

That's a question dealing with the value of the web application. To people who would otherwise be spending money on insurance without knowing how badly they're actually screwed by those policies (if that denial rate information is accurate, for example), I'm sure it's worth it.

The question of its worth probably remains very much to be seen. Incomplete data, or data that's only accurate up until the point at which insurers are contacted, and then representatives say "the real rates are X, the real policies are Y" will destroy the value of that investment. I'm sure we've all been to sites that advertise a price or an available item, and then found out that "the web site wasn't updated" with the real story, for whatever reason.

Also, the real worth of the investment depends on consumers' ability to shop for meaningful benefits at competitive rates, Kate Pickert.

If the anti-trust exemptions for insurers remain in place, and they're allowed to share information and fix prices, unlike normal businesses, then what good does it do consumers to "shop around" for fixed prices?

Who cares if there's a lovely, well-designed web site that lays out all of the different policies, if, at the end of the day, the prices are what the insurance industry in that state all say they are together? If there's no competition between insurers because they're allowed by law to act like cartels, and legally collude with one another on pricing, then what this healthcare.gov really provides is an expensive, tax-payer funded web site that provides the illusion of competitive price-based consumer shopping, while the prices are fixed by the industry (and maybe HHS) as usual.

Let's hypothesize for a moment that the government passed a "computer sales reform bill," the UPACA --"User Protection, Affordable Computer Act."

Now let's assume that, unfortunately for individual computer purchasers, there were only state-based markets for computer resellers, so that Dell, HP-Compaq, Sony, Toshiba, ASUS, etc, had to have a separate company in each state, and didn't "compete" nationally. Also, a crazy, 1945 law declared that, unlike normally competitive companies, these state-based Dell, HP and Toshiba were allowed to share all of their information, and therefore fix prices together, to collude, in other words. This law allowed these computer companies to form trusts, state by state. That means these companies don't all try to compete with each other by lowering the price of their computers, or adding great new features. Dell just shares its pricing and retailing information for Kentucky with HP and Sony, and vice-versa, and they all come up with the same price for computers in Kentucky. It's easier for them than competing.

So, returning to that hypothetical "UPACA" act that our hypothetical Congress just passed, if part of the government's mission is to now provide a web application like "ComputerShopping.gov," and they then spend $8.7 million dollars making one available to consumers, what's still missing, Kate Pickert?

Well, you allude to it in your piece "Need Health Insurance? Click Here.", when you wrote "the number one thing people care about when shopping for insurance – price."

The reason people care about price when shopping for things like computers --or insurance-- is because they assume that prices are competitive, something that a big web site that looks like a market would allow ordinary folks to believe.

But, if ComputerShopping.gov makes consumers enter their zip code, and finds the computers for sale by the mini-Dell and mini-Toshiba in their state, where mini-Dell and mini-Toshiba are allowed to set the prices of computers un-competitively, and according to what they agree is best for both of them, then consumers aren't really price shopping, are they, Kate Pickert?

It's just that the web site the government spent big bucks on gives the appearance of shopping, since consumers can "look up their choices" and "see what's available." The prices they will end up paying will be whatever they're set at by the companies in their state, not what occur naturally in a market in which those companies have to compete with each other based on differences in price.

As Robert Gibbs put it so well at the beginning of this year, just prior to the President signing the PPACA into law:

[T]oday the President announced the administration’s strong support for repealing the antitrust exemption currently enjoyed by health insurers. At its core, health reform is all about ensuring that American families and businesses have more choices, benefit from more competition, and have greater control over their own health care. Repealing this exemption is an important part of that effort.

Today there are no rules outlawing bid rigging, price fixing, and other insurance company practices that will drive up health care costs, and often drive up their own profits as well.

So, is "ComputerShopping.gov" worth the $8.7 million dollar expense of making it?

Well, that depends on who's asking the question, doesn't it?

If the federal agency in charge finds it useful to temporarily provide voters with the illusion that they're shopping for deals, then yes, it's probably worth it.

If you're a consumer who will ultimately pay at the end of the day whatever HP and Dell have agreed you will pay in your state, then maybe it's not that wonderful of a deal.

Is it worth the investment?

Is a big web site in which you shop for cable TV from the one monopoly that provides your area with service worth the investment? Yes for them, maybe not so much for you.

Is it worth the investment to have a government web site in which mandated-by-federal-law consumers can look up the only price-fixed health insurance plans available to them in the state in which they happen to be trapped with their un-sellable, bottom-dropped-out value homes?

You tell us, Kate Pickert.

stuart_zechman (7:50 PM) permalink

by Stuart Zechman

At Swampland, Michael Crowley casually makes the case for the PPACA, and I respond in commentary, as reprinted below:

Michael Crowley,

You write:

"The ongoing publicity around those new measures--and the tangible changes in many Americans' lives-- might warm the public to Obamacare."

What many of us movement liberals particularly resent is the tiny population of beneficiaries being trotted out like public relations hostages by the Administration and this policy's (mostly partisan) supporters, with the message being "See? Vote for Democrats, or these poor, sick folks get it!"

Health care reform was never supposed to be about charity, about welfare, about all of us middle-class people putting aside our selfish concerns and donating to the unfortunate, worst-case scenario victims of the system that doesn't work for any of us (except the wealthiest).

Moving the goal-posts in Bush/Iraq fashion only serves to underscore the failure of this policy; we're not so completely stupid out here that we don't recognize a public relations strategy when we see it.

We also happen to have memories that are longer than mosquitoes' and the political press corps', Michael Crowley.

We remember when the President campaigned against the individual mandate he then advocated and signed into law, declaring:

OBAMA: "Let’s break down what she really means by a mandate. What’s meant by a mandate is that the government is forcing people to buy health insurance and so she’s suggesting a parent is not going to buy health insurance for themselves if they can afford it. Now, my belief is that most parents will choose to get health care for themselves and we make it affordable.

Here’s the concern. If you haven’t made it affordable, how are you going to enforce a mandate. I mean, if a mandate was the solution, we can try that to solve homelessness by mandating everybody to buy a house. The reason they don’t buy a house is they don’t have the money. And so, our focus has been on reducing costs, making it available. I am confident if people have a chance to buy high-quality health care that is affordable, they will do so."

Do you, Michael Crowley? Does your profession remember? We do.

We also remember when the President campaigned on giving people a choice between the broken, expensive, denial-based system in which they're currently trapped, and a new, parallel system that didn't share the same incentives as the stock-price driven, for-profit private insurance cartels:

Specifically, the Obama plan will: (1) establish a new public insurance program, available to Americans who neither qualify for Medicaid or SCHIP nor have access to insurance through their employers, as well as to small businesses that want to offer insurance to their employees; (2) create a National Health Insurance Exchange to help Americans and businesses that want to purchase private health insurance directly...

We remember, because we were so enthused about the prospect of real change coming to compete with a health care system whose incentives are so at odds with consumers' interests. We were enthused because the Obama plan was so specific in its promised actions:

1. OBAMA’S PLAN TO COVER THE UNINSURED. Obama will make available a new national health plan which will give individuals the choice to buy affordable health coverage that is similar to the plan available to federal employees.The new public plan will be open to individuals without access to group coverage through their workplace or current public programs. It will also be available to people who are self-employed and small businesses that want to offer insurance to their employees.

The plan will have the following features:

-- Comprehensive benefits. The benefit package will be similar to that offered through the Federal Employees Health Benefits Program (FEHBP), the program through which Members of Congress get their own health care. The new public plan will include coverage of all essential medical services...

-- Subsidies. Individuals and families who do not qualify for Medicaid or SCHIP but still need assistance will receive income-related federal subsidies to keep health insurance premiums affordable. They can use the subsidy to buy into the new public plan or purchase a private health care plan.

-- Easy enrollment. The new public plan will be simple to enroll in and provide ready access to coverage.

-- Portability and choice. Participants in the new public plan and the National Health Insurance Exchange (see below) will be able to move from job to job without changing or jeopardizing their health care coverage.

-- Quality and efficiency. Participating hospitals and providers that participate in the new public plan will be required to collect and report data to ensure that standards for health care quality, health information technology and administration are being met.

The whole idea was to construct for the benefit of everyone a new system designed to compete at a national level with the old, broken one, not to hand out medical welfare with one hand, and guaranteed profits with the other.

Do you remember, Michael Crowley? Has your profession forgotten? We haven't.

Remember the pre-campaign speeches against lobbyist access, secret deals and corrupting negotiations with powerful interests?

TOPIC: Ethics & Lobbying Reform, January 26, 2006

Lobbying Reform Summit, National Press Club Washington, DC

OBAMA: ...people shouldn't lump together those of us who have to raise funds to run campaigns but do so in a legal and ethical way with those who invite lobbyists in to write bad legislation. Those aren't equivalent, and we're not being partisan by pointing that out.

...when big oil companies are invited into the White House for secret energy meetings, it's no wonder they end up with billions...

When a Committee Chairman negotiates a Medicare bill at the same time he's negotiating for a job as the drug industry's lobbyist, it's hardly a surprise when that industry gets taxpayer-funded giveaways in the same bill that forbids seniors from bargaining for better drug prices.

In 2004, over $2.1 billion was spent lobbying Congress. That amounts to over $4.8 million per Member of Congress. $4.8 million per member so that oil companies can still run our energy policy and pharmaceutical companies can still raise our drug prices and special interests can still waste our tax dollars on pet projects.

See, one of the reasons why lobbyists...and their allies in Congress have been able to manipulate the system is because most of their backroom deals are done in secret. Just the other day, we heard that because of pressure from health care industry lobbyists, Republican negotiators met behind closed doors and changed a budget bill to provide a $22 billion giveaway to HMOs...

This is an outrage...

Do you remember, Michael Crowley? Can your profession contrast this kind of campaigning with the corrupt process that actually transpired? We can.

Based on these fabricated claims, Michael Crowley, most movement liberals had very little idea that the system overhaul proposed by Obama would turn into a Third Way think tank's dream legislation.

We remember this broken promise in particular:

Remarks of Senator Barack Obama: A Change We Can Believe In

Spartanburg, SC | November 03, 2007

...this is also a moment of great promise. It's a chance to turn the page by offering the American people a fundamentally different choice in 2008 - not just in the policies we offer, but in the kind of leadership we offer. It's a chance to come together and finally solve the challenges that were made worse by George Bush, but existed long before he took office - challenges like health care...

That's how I'll pass a universal health care bill that allows every American to get the same kind of health care that members of Congress get for themselves and cuts every family's premiums by up to $2500.

That is the change that's possible in this election. That is the moment I want to seize as President. And I ask you all to join me in this journey. Thank you."

Well, Michael Crowley?

Do you remember the President campaigning on an openly-negotiated, transparently-constructed, parallel health care system that lowers prices through national economies of scale, that allows every American to get the same benefits that Congress enjoys, and cuts every family's yearly premiums by $2500?

Do you remember a liberal health care policy being campaigned upon by this President, Michael Crowley?

The kind of system we movement liberals propose would do exactly those things, because we're not devoted to a political ideology that says we can't look to Germany or France, Canada or Japan --all the countries in the First World who do health care better and cheaper than we do-- for solutions. We're neither ideologically devoted to a "uniquely American solution," nor to guaranteeing private profits, unlike the President who appeared to us in office after the 2008 campaign was over.

The kind of system we got was the DLC's long-proposed "reforms", not liberal policy:

DLC | Key Document | August 1, 2000
The Hyde Park Declaration: A Statement of Principles and a Policy Agenda for the 21st Century

3. Promote Universal Access and Quality in Health Care

That more than 40 million Americans lack health insurance is one of our society's most glaring inequities. Lack of insurance jeopardizes the health of disadvantaged Americans and also imposes high costs on everyone else when the uninsured lack preventive care and get treatment from emergency rooms. Washington provides a tax subsidy for insurance for Americans who get coverage from their employers but offers nothing to workers who don't have job-based coverage.

Markets alone cannot assure universal access to health coverage. Government should enable all low-income families to buy health insurance. Individuals must take responsibility for insuring themselves and their families whether or not they qualify for public assistance.

Finally, to help promote higher quality in health care for all Americans, we need reliable information on the quality of health care delivered by health plans and providers; a "patient's bill of rights" that ensures access to medically necessary care; and a system in which private health plans compete on the basis of quality as well as cost.

Goals for 2010

# Reduce the number of uninsured Americans by two-thirds through tax credits, purchasing pools, and other means.

# Create a system of reliable "report cards" on the quality of care delivered by health plans and providers.

Public disappointment with the legislation currently being re-sold to us is not merely about the obviously false claims about what the new system would do, it's about what kind of new system we would have.

So, we remember, Michael Crowley, we remember the new system, the change that was held out to us, the promise of something fundamentally better than what we know is going to hell beneath our feet.

It's why we're offended when images of health care hostages are waved in our faces as a defense against the indefensible, indisputable fact that we were sold a counterfeit bill of goods in 2008. It's not that we didn't "get everything we wanted," it's that we got something we know won't work, and now we're being told that these unfortunate, sick people will die, if we try to hold those responsible accountable for their promises and claims. It's disgusting, it's cynical, and it certainly isn't change we can believe in --or that even works.

Does your profession remember? Is it capable of memories not provided for it by professional public relations campaigns?

Do you remember, Michael Crowley?

We do.

stuart_zechman (7:44 PM) permalink

Imagine, if you will....

by Stuart Zechman

Imagine, if you will, that the only food that people have to eat comes
from McDonald's.

Now imagine that a strange phenomenon occurs, in which it is noticed (but, oddly, not widely reported) that Americans on the Canadian border seem to stream across into Canada to buy their Big Macs

It is discovered, and the information spreads through word of mouth on the internet, that a Big Mac in Grand Forks, North Dakota costs $7.40, but --incredibly-- McDonald's sells that same Big Mac in Winnipeg, Manitoba, Canada for $3.90.

Many people continue not to notice this strange situation. After all, most people get their information about McDonald's from the television commercials McDonald's airs, and they don't advertise their Canadian prices during Meet The Press, they advertise their "6 Dollar Menu!" specials. A huge population of Americans don't live near the Canadian border, and so remain unaware that they pay so much more than Canadians for the same sandwich. And, again, somehow these disturbing facts don't regularly make it into newspapers, magazines and television shows that depend on McDonald's for the advertising dollars for which they're starting to starve.

But, more and more, word spreads via new communications technologies that this is the case. Economic data that previously sat in dusty reports waiting for reporters to notice, and publishers to publish, is instantaneously available to anyone online. It is by this new channel that the shocking information starts to come out: the price that McDonald's charges for Big Macs in the United States is almost twice that of every other country that has McDonald's restaurants

The data shows that it's not just Canada. A Big Mac in Switzerland costs $4.41, in France it's $3.61, in Germany it's $3.58, in the UK it's $2.99, in Italy it's $2.68, in Spain it's $2.67, and --unbelievably-- in Japan it's only $2.58 for the same Big Mac.

What's different about these countries?

Lots of things, but one thing they also have in common is that their governments have special ministries set up to negotiate the price of a Big Mac with McDonald's every few years for the entire nation of tens and tens of millions of people.

The reason that the price of a Big Mac in Japan is so low is that their government has decided how much a Big Mac should cost, and told McDonald's that, if they don't like it, the Japanese government will fund a project to make their own McDonald's, complete with Golden Arches and Special Sauce, and that they're pretty confident they can make Big Macs, if they had to. Plus, they don't really respect McDonald's "worldwide patents" on Big Macs. They just don't care. So McDonald's takes the deal, otherwise they'll lose the money, and they know that the Japanese are not f*cking around.

So now it comes time in the United States to deal with the fact that McDonald's expenditures are taking up, like over 16% of the nation's wealth, because we're overpaying for Big Macs, and as the price stays low in other countries, McDonald's keeps raising the prices here to compensate and make more profits. Gradually, and then suddenly, it's getting ridiculous...and scary. Nobody can continue to bankrupt themselves paying for Big Macs, and so something must be done. The Federal government's "Medi-Mac" program, which feeds people over 65, is going broke in ten years at a desperate pace.

What does the government of the United States do?

Well, they ask economists. The economists put up big, long, complex math equations with Greek letters in them up on white boards and Power Point presentations, and they explain what the symbols mean to government officials.

One of these symbols is for the price of Big Macs, one is for the number of people who need Big Macs, and one is for the number of Big Macs. Then they draw a graph of what that equation looks like, just like kids are forced to do in algebra class. The graph radically curves upwards, like the trajectory if you shot a balloon out of a cannon.

These economists come from different schools of economic theory, so some economists say "Set the price of Big Macs lower, then run the equation!" Unfortunately, the government officials say "We can't do that! That's off the table! You're fired. Somebody shut them up!"

Other economists, though, say "Set the number of people lower! Now run the equation.", and the officials say "Sure. Now the graph looks like a cannon shot of a balloon that's got a slow leak. Great!".

The problem is that the government officials are trying to make a new Federal program called "Fast Food Reform" that actually increases the amount of people who can buy Big Macs a little bit, because those poor folks are going to get a tax break at the end of the year for all of the Big Macs they buy.

So these officials go back to the economists, and say "We've got a problem here. How do we get that number of people who need Big Macs lower again, so the graph doesn't go back to exploding?" These helpful economists say "Well, why don't you tax some of the people who buy Big Macs now? Then the resulting decrease will offset the increase you're planning by a bit. That will keep the people who need Big Macs number more or less the same!"

Did you get that?

These economists can "bend the cost curve" on that graph of Big Mac spending, if they can offset the number of new Big Mac buyers with those who are taxed, and therefore can buy less. How much will the graph change? Not much, but enough so that that the government officials can say that it's "historic legislation".

Everybody in Washington goes home happy, job well done, live to fight another day. The economists, in particular, are pleased with their equations and graphs. Science! $700,000 in US Dept. of Health and Human Services research money! Science.

Meanwhile, back in Grand Forks, North Dakota, people hear grand statements about "bending the cost curve" and "historic" and "31 million people now able to buy Big Macs", and get increasingly irritated --and desperate. They still have to go to Winnipeg to buy low-cost Big Macs, and they don't understand why they can't just go to Walmart, and get them cheap there.

They also know that, in addition to having to go to Canada to get McDonald's food, they're also paying taxes to supply revenue for the government's "Medi-Mac" program, and they know that the Feds aren't paying Canadian prices for that, so they're getting soaked no matter what. They hate the political party in charge of Washington that did this to them. Their incumbent Senator from that party actually declines to run for office again. This scenario plays out similarly in many other states, just with different degrees of anger and disappointment. The price of a Big Mac in the United States begins to climb skyward to $8.00, $9.50, $15.90, $21.20, just like a cannon shooting a leaky hot-air balloon at the horizon.

Many middle class people who used to be able to afford a Big Mac start to starve.

That's the story of this Health Care Reform legislation, if it were about Big Macs instead of health care, and McDonald's instead of Pfizer.

I hope that you all enjoyed this little novella. 18 and over,
entertainment purposes only.

Avedon (12:30 PM) permalink

BABEL
by CMike

Since World War II scores of front rank politicians, business leaders, and economists have championed globalization. John Foster Dulles, Robert McNamara, Henry Kissinger, George Shultz and Robert Rubin are some of the American cabinet secretaries who have promoted the transnational economic rights of capital. Bush 41 deserves a special mention for his role in advancing globalization. Perhaps the leading drum major for the march to globalization over the years has been banker and oil fortune heir David Rockefeller. Of course, all these folks have insisted that capitalism, local and global, is a great boon to mankind and is freeing from want hundreds of millions; billions of people.

That's one way to look at it. State of the World Forum President Jim Garrison has an alternative view. He is quoted in Perkins' Confessions of an Economic Hit Man (pp. 199-200):

Taken cumulatively, the integration of the world as a whole, particularly in terms of economic globalization and the mythic qualities of "free market" capitalism, represents a veritable "empire" in its own right...

No nation on earth has been able to resist the compelling magnetism of globalization. Few have been able to escape the "structural adjustments" and "conditionalities" of the World Bank, the International Monetary Fund, or the arbitrations of the World Trade Organization, those international financial institutions that, however inadequate, still determine what economic globalization means, what the rules are, and who is rewarded for submission and punished for infractions.

Such is the power of globalization that within our lifetime we are likely to see the integration, even if unevenly, of all national economies in the world into a single global, free market system.

Perkins explains the World Bank makes loans to developing nations with the monies going directly to transnational corporations to carry out gargantuan infrastructure projects. The developing nations are thereby both integrated into the world economy and hopelessly buried in debt, thereafter to be subject to the edicts of the IMF.

The IMF then requires the governments of those debt ridden countries to adopt severe austerity policies including the suspension of social welfare expenditures and the selling off of their resources for pennies on the market value dollar. Of course, that could never happen here in the U. S. of A.. I mean centrist economists would be giving us a heads up about that for sure, right?

Knock, knock.
Who's there?
I'm from the IMF and I'm here to help.

IMF Finally Knocks on Uncle Sam's Door
David Hurst
June 30, 2008

Der Spiegel wrote that the IMF had "informed" Federal Reserve chairman Ben Bernanke of plans that would have been unheard of in the past: a general examination of the US financial system. The IMF's board of directors has ruled that a so-called Financial Sector Assessment Program is to be carried out in the US.

[snip]

Der Spiegel reports that the IMF is threatening to seriously study the accounts of America, something President George Bush is determined to prevent at least while he is in the White House, informing the IMF that it can begin its investigation but cannot complete it until he leaves office.

[snip]

Under its by-laws, the IMF is charged with the supervision of the international monetary system. About two-thirds of IMF members - but never the US - have already endured this painful procedure...

We're becoming colonials once again, this time accepting of "taxation without representation."

Dr. Ravi Batra, who has predicted imminent economic calamity several times during the last twenty years, is in "I told you so" mode these days.

Business journalist Gretchen Morgenson has warned for years about the ethical conflicts of financial analysts associated with brokerage houses, the senselessness of some of those large compensation packages, and episodes of the break down of responsible corporate board governance from the pages of the New York Times.

In her recent article about the unfolding Fannie Mae; Freddie Mac crisis, Morgenson explains those two publicly traded, government-sponsored enterprises (GSE) have asset portfolios of $5 trillion and reminds the reader both were fined for accounting irregularities in recent years (Fannie to the tune of $400 million in 2004 and Freddie for the bargain sanction of $125 million in 2003). Morgenson cites a Bridgewater Associates estimate that losses from the eighteen month old economy wide "credit crisis" are growing and "might amount to $1.6 trillion when all is said and done."

Then there are our serious academics, centrists like Brad DeLong who remain unshaken in their belief that the road to recovery is but a few regulatory tweaks and maybe a health care program away. Centrist economists hold onto a few basic assumptions; that the equities market is fairly priced not just in a definitional sense but because prices are determined by the combined wisdom of hundreds of thousands of investors; that a brilliant employee can create great wealth for a company but might not, what, muster the energy to do so for a mere million or two dollars a year; that what ails the American economy is, in part, a mid thirty percent top income tax bracket that should be nearer to the forty percent level; and that our workers need more education and training (though it is not clear what it would be economically useful for them to learn). Understanding the big picture as they do, tenured centrist academics adjudge that the costs of globalization being borne by working class Americans are being compensated in full by the gains being made by the deserving workers in the developing world and by the international good will global trade creates.

DeLong warns against making sweeping changes to our economic system because such changes lead to unpredictable consequences likely to leave us worse off; better that any changes be made incrementally.

He is willing to "carry water" for the latest Treasury Secretary from Goldman Sachs and the current Fed Chairman because they are quite expert at their jobs. (Alan Greenspan also was seen as quite the expert while he was serving as Fed Chairman -- looking back, some of his mistakes are starting to glare.)

Secretary Paulson and Chairman Bernanke are crisis management specialists who plan in secret and speak without too much clarity. Paulson came up through the ranks at Goldman Sachs as an innovator and quick thinking trader of financial instruments. Bernanke is an academic who has made a study of the monetary causes of The '29 Crash and The Great Depression. They both know how to keep things going...one calendar quarter at a time; on recent occasions, one weekend at a time. They exude a confidence that says, if left to their own designs, they will keep most of the trains running.

Of course, there are more profound critics of the system than the pessimistic market watchers mentioned earlier in this piece. Their criticism is not about an inevitable boom-bust cycle. Rather, in a post-Keynesian world they are concerned about the status quo the capitalist class is trying create. Noam Chomsky, "economic hit man" John Perkins and Canadians Naomi Klein and Joel Bakan, a law professor and author of "The Corporation," are four commentators who make their own observations along these lines. (Batra is too much of a market watcher to fit in here.) They see modern day corporatism as relentlessly anti-democratic and anti-humanitarian.

Air America's anti-globalist Thom Hartmann supports tariffs based on wage differentials, strong unions, trial lawyers, and single payer health care. MSNBC's anti-globalist Pat Buchanan explicitly supports Ravi Batra's version of protectionism and the sometimes primary season presidential candidate has warmed up to labor unions over the years. Buchanan still opposes those trial lawyers and government paid health care.

Avedon (3:04 PM) permalink

Guess what it is

Avedon (10:01 PM) permalink

Blogosphere not as radical as pundits think

by Gene Lyons

It's no exaggeration to say that the establishment media's initial response to the blogosphere was panic. The idea of mere citizens talking back to the press was unsettling to Washington media celebrities. Pundits who'd exhibited no qualms about the sordid imaginings of, say, American Spectator or The Wall Street Journal editorial page recoiled in horror at online mockery. It was laugh-out-loud funny to see a Washington Post reporter infamous for treating Kenneth Starr's backstairs leaks like holy writ make a show of pretending that the now-defunct Web site mediawhoresonline. com had accused her of prostitution. How the system had always worked was this: They dished it out, everybody else had to take it. Now that many print and broadcast outlets feature Web logs - blogs - of their own, it's no longer common to hear the word "blogger" pronounced with utter disdain. Even so, competition from the groundlings still provokes unease. The latest high-minded worrier is a University of Chicago law professor and sometime politico, Cass R. Sunstein.

A Justice Department official during the Carter and Reagan administrations, Sunstein has written a book called "Republic. com 2. 0," essentially arguing that the Internet's "echo chamber effect" is responsible for increased political polarization and declining civility. In an interview with salon. com, he said that social scientists find that when people talk only to those who agree with them, their views become more extreme.

"I don't like that Rush Limbaugh listeners call themselves ‘ditto heads,'" Sunstein said. "It's funny, but it's kind of horrible. FOX News is a self-identified conservative outlet. The more extreme elements on the left treat their fellow citizens as if they're idiots, or as if they're rich people who don't care about anybody." A former colleague and friend of Barack Obama, he yearns for greater recognition of the truism that "that neither conservatives nor liberals have a monopoly on wisdom." No sentient person thinks they do. We're all a mix of conflicting opinions. I've had runins with what I call the anti-gravity left during my own inglorious career. (I'm pro-hunting, for example, which drives sentimentalists nuts. ) Today, however, I'd argue that Sunstein suggests a false dichotomy of little relevance to the current situation.

Among the blogs I read, there's no equivalent of the authoritarian impulses, intellectual dishonesty and rote chanting of the GOP party line that characterizes Limbaugh and his imitators on the right. Partly, that's because most are written by educated individuals who take pride in winning arguments without cheating, and to whom party orthodoxy is anathema. In a saner climate, many wouldn't be called left-wing at all.

How liberal do you have to be to defend habeas corpus, Fourth Amendment privacy rights and the rule of law, as Glenn Greenwald does on his "Unclaimed Territory" blog at salon. com ? A former constitutional litigator, Greenwald brings rare clarity and passion to political issues with legal overtones.

Here are the political blogs I read every day.

Duncan Black's "Eschaton" blog combines the analytical skills of a Ph. D. economist with the irreverent wit of a Philadelphia wiseacre. If you'd been reading Eschaton (or Paul Krugman ), you'd have seen the housing bubble and the sub-prime lending crisis coming.

Josh Marshall's Ph. D. is in history, but his talkingpointsmemo blog specializes in gritty, detailed reporting. Marshall was on top of the Jack Abramoff influencepeddling scandal from the get-go. Link through talkingpointsmemo to Greg Sergeant's saucy "Horse's Mouth" media criticism blog.

Bob Somerby's Daily Howler provides salty press criticism you'll read nowhere else. "Radicalized" by the Washington media's 2000 "War on Gore" (his Harvard roommate, Al Gore ), Bob can't abide liberal fecklessness about the way RNC-invented "narratives" dominate mainstream political coverage, and he doesn't mind offending "weak, worthless" liberal pundits who look the other way.

Eric Alterman's "Altercations" blog is another place to find impassioned disputation between the host and a wide variety of antagonists on everything from Israel's Likud party to the New York Mets. A Ph. D. in history, Alterman also is the biggest Bruce Springsteen fan on the Internet. "Slacker Fridays," when the inimitable Charles Pierce's scathing missives appear, is a must. Media Matters columnists Eric Boehlert and Jamison Foser's dissections of the vices and follies of the "mainstream" media advance a point of view similar to The Daily Howler's somewhat more politely. Kevin Drum (washingtonmonthly. com ) and the inimitable Digby (digbysblog. blogspot. com ), a writer of such analytical brilliance and prodigious output she shames the rest of us idlers, are two bloggers I never miss. Read around for a while, follow the links to related sites and you'll soon find your own favorites list. A celebrated editor once told me that reading the letters submitted for publication to his magazine had persuaded him that, contrary to media careerists in metropolitan enclaves, political intelligence and wisdom are scattered randomly across the American landscape. Thanks to the Internet, they no longer have to ask anybody's permission to speak out.

This article originally appeared in The Arkansas Democrat-Gazette, here.

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Avedon (12:36 AM) permalink

Hillary's record withstands 'character' attacks

by Gene Lyons

Maybe somebody ought to give Iowa waitress Anita Esterday a political TV talk show. She couldn't be any worse than, say, MSNBC's Tucker Carlson. Recently, the boyish pundit has been suggesting that there's something deeply weird about female voters who support Sen. Hillary Clinton because they'd like a woman president, although it's entirely reasonable for "married white men" to despise her "because she gives off the feeling that she despises them." Got that ? Women: dangerously irrational. Men: terrified of women. If you think that's an isolated example, tune in "Hardball." Now that hyperthyroidic host Chris Matthews has finally exhausted the topic of Clinton's troublesome laugh, he's recently focused several programs on her peculiarly "Chinese" manner of clapping her hands.

It's not just MSNBC's testosterone brigade that's gone all Gong Show. New York Times columnist Maureen Dowd actually favorably cited somebody scolding "Hillary's callousness in dumping Socks, the beloved White House cat and bestselling author, on Bill's former secretary, Betty Currie."

Try to believe it: Clinton's daughter grows up and leaves home, so a friend adopts her cat. To Dowd, this epitomizes the candidate's "opportunism... her secrecy, her ruthlessness."

What's wrong with these people ? It's common to compare Washington's self-infatuated media celebrities to high school kids. But even high school was never like this. Adolescents normally try to conceal their neuroses. These jokers mistake them for insights.

But let's get back to Esterday of Oelwein, Iowa. She served Clinton a sandwich during her shift at the Maid-Rite restaurant. At a later campaign stop, Clinton talked about meeting a waitress, a single mother working two jobs, exactly the kind of person her candidacy's all about.

Yeah, they all say that. So anyway, National Public Radio reporters descended upon the Maid-Rite, where Esterday, although she didn't blame Clinton personally, complained that Clinton's entourage hadn't left anybody a tip. NPR broadcast the story, a classic "gotcha." The great champion of hard-working women was too cheap to leave a tip. Good for a halfdozen "Hardball" episodes or Dowd columns, minimum.

Except apparently it was false. A Clinton spokesman said that staffers had left a $ 100 tip on a $ 157 tab at the cash register. This will scarcely be credited by anybody who's worked in a restaurant, but it seems that the money never got to the waitresses. NPR's "gotcha" fell apart, as careful reporting would have established in the first place. Some stories are too good to check closely.

Contacted by The New York Times, Esterday was properly amazed.

"You people are really nuts," she said. "There's kids dying in the war, the price of oil right now - there's better things in this world to be thinking about than who served Hillary Clinton at Maid-Rite and who got a tip and who didn't get a tip."

Amen to that. Indeed, it may be time to revise H. L. Mencken's immortal trope that nobody ever went broke underestimating the intelligence of the American people. True, scary numbers of people can't name their U. S. senators or locate Iran on a map. This leaves them vulnerable to shameless propaganda.

Today, it's the irresponsibility of Washington media celebrities that's most troubling. Consider Social Security, something that couldn't be more relevant to somebody like Anita Esterday. In 2005, Democrats defeated GOP schemes to privatize, i. e. hand over to the geniuses responsible for the sub-prime mortgage meltdown, the most successful social insurance program in American history.

So here came NBC's Tim Russert, doing his act at the recent Democratic presidential debate. Along with co-moderator Brian Williams, Russert's performance made it official: Among Beltway All-Stars, it's open season on Hillary Clinton. To the extent that rivals Barack Obama and John Edwards played along - and they did - they're fools.

There are many legitimate issues to debate - Clinton's vote for Joe Lieberman's saber-ratting Iran resolution, for example, or what many see as her excessively nuanced position on Iraq - without buying into these RNC-manufactured "character" issues. Grab the lead and it'll be your turn next, boys.

Regarding Social Security, the amiable Russert asked Clinton a question he said impinged on her "credibility." Supposedly, she'd told an AARP audience that she'd never raise taxes to augment the program and repeated herself to Russert in a New Hampshire debate, but was overheard telling an Iowa teacher that she'd consider it. "Why do you have one public position," Russert asked, "and one private position ?" Jamison Foser at mediamatters. org checked the transcripts. Guess what. Russert's accusatory query was factually false in every particular. Clinton's answers, public and private, have remained consistent: There is no Social Security "crisis." Any actuarial adjustments that may be needed should be considered only after "fiscal responsibility" has been restored. Then raising the tax limit of $ 97, 500 might be among them. She'd like a bipartisan commission. Several of the NBC stars' "character" attacks were similarly off target. Likely, they won't need Social Security. Likely you and Anita Esterday will. It's your democracy they're clowning with.

This article originally appeared in The Arkansas Democrat-Gazette.

Labels: Lyons

Avedon (2:13 AM) permalink

Politics, Sitcom-style

by Gene Lyons

Gene Lyons

(For some reason, The Arkansas Democrat-Gazette chose not to publish Gene's column this week, so he passed it on to Moose & Squirrel to post. I'm reproducing it here as a back-up.)

It's rare that this column defends Robert Novak, so listen up. After his disgrace-ful conduct in the Plame affair, how the self-styled "Prince of Darkness" appears on TV without a bag over his head I cannot imagine. But Novak's getting heat from people pretending outrage at something he said on "Meet the Press" they'd rather not think about.

"Republicans are very pessimistic about 2008," Novak said. "When you talk to them off the record, they don't see how they can win this thing. And then they think for a minute, and only the Democratic Party...would say that, 'OK, this is the year either to have a woman or an African-American to break precedent, to do things the country has never done before.' And it gives the Republicans hope."

The normally excellent mediamatters.org website jumped all over host Tim Russert for not taking issue. But Novak merely stated the obvious. Any Democrat who doesn't realize that nominating Hillary Clinton, Barrack Obama (or both) will start a political free-for-all of epic, near-psychotic proportions, must live in an imaginary United States not connected to the North American continent.

Winning that battle could be crucial to bringing the nation back to its democratic (with a small "d") senses. Deluding oneself that it'll be easy, however, is the surest way to fail. Pollsters know that many more people will claim to support minority candidates than actually do. Something Novak only implies is also true: the GOP holds losing cards on every major issue from Iraq to health care. Demonizing the Democratic nominee as unfit for office may provide their only chance of winning.

On cue, GOP sleaze merchant Floyd Brown and "Citizens United" have emerged from the shadows. He and embittered political consultant Dick Morris are collaborating on "Hillary: The Movie." ("Hillary: the DVD" is probably more like it.) David Bossie's involved too. A recent newspaper profile stressed that contrary to Democrats, Brown doesn't actually have horns, "is relaxed and quick to laugh, the deep, rich laugh of a full-grown kid."

Yeah, well, in 1992 Brown playfully transformed the 1977 suicide of a fine young woman into a lurid accusation against Bill Clinton because she'd once taken a law school class he taught. (Also a literature course I taught.) In the process, CBS News documented, Brown and Bossie harassed her family, peered into people's windows, invaded hospital rooms, and misrepresented their own motives and identity. Years later, Bossie got fired as a congressional aide for distributing doctored audiotapes smearing Hillary Clinton to reporters. They're a couple of real cutups.

Peddling lurid videos to yokels, however, isn't the worst of it. Citizen United's real triumph in 1992 was hand-feeding the bogus "Whitewater" scandal to the establish-ment press. The fool thing has a half-life like radioactive waste, even in the most exalted precincts. Elizabeth Kolbert's review of two new Hillary biographies in the New Yorker, for example, makes a big deal of her lost-and-found billing records. Kolbert is a fine reporter; I admire her book "Field Notes From a Catastrophe: Man, Nature and Climate Change" enormously.

Yet she manages to re-tell the billing records story without mentioning how it ended: when found, Clinton's records vindicated everything she'd said about her legal work for the ill-starred Madison Guaranty Savings & Loan. Kenneth Starr's wet dreams about indicting her went for naught. Elsewhere, Kolbert praises her one-time New York Times colleague Jeff Gerth's Whitewater "diligence," then suggests that Hillary's unnaturally secretive because trying to interview her about personal topics "was like talking to someone through several layers of Plexiglas."

Gee, I can't imagine why. Here she was representing the same newspaper that kept an imaginary scandal on the front page for years using precisely the same methods - hiding the Treasury Department's 1995 Pillsbury Report clearing both Clintons of Whitewater misdeeds, for example - and Kolbert wanted to play girlfriends?

It's much the same with Jennifer Senior's "Sex in the City"-style review of the same books in the New York Times. Along with ludicrous asides about genteel Arkansas women and their "quaint ladies luncheons," Senior turns a dubious tale about Hillary's political ambitions completely inside out. (Yo, Jennifer, heard of Lucinda Williams? Now there's an Arkansas woman.)

So did Hillary contemplate running for Arkansas governor in 1990 out of "pent-up frustration...and injured pride" over her husband's alleged affair? No. Carl Bernstein's book makes clear the scheme was Bill Clinton's. They abandoned it after pollsters learned Arkansas voters would compare them unfavorably to George and Lurleen Wallace. (As they surely would have.)

Feigned incomprehension at the post-Lewinsky survival of the Clinton marriage will clearly be a major media theme in 2008. For Hillary to talk about it to anybody holding a notebook would be like Barrack Obama confiding his feelings about the word "nigger" to Citizens United.

Better be thought a cold fish than proven a fool.

July 18, 2007

Labels: Lyons