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2009-07-13T13:47:00.002-04:00

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Insurance, health interests fill Baucus' coffers

2009-06-20T11:02:00.002-04:00

By Mike Dennison, Billings Gazette, State Bureau, published June 14

As Sen. Max Baucus has taken the lead on health reform legislation in the U.S. Senate, he also has become a leader in something else: campaign money received from health and insurance industry interests.

In the past six years, nearly one-fourth of every dime raised by the Montana Democrat and his political action committee has come from groups and individuals associated with drug companies, insurers, hospitals, medical supply firms, health service companies and other health professionals.

These donations total about $3.4 million, or $1,500 a day, every day, from January 2003 through 2008.

Baucus, who chairs the Senate Finance Committee, which is drafting a major health care reform bill this month, insists that this cascade of money is not unduly influencing his work.

"No matter the issue, Max always puts Montana first," said his spokesman, Ty Matsdorf. "Max will continue to do what's right for our state, and groups like SEIU (a union representing thousands of health care workers) and AARP (a senior citizens' group) wouldn't line up in support of his health care reform effort if this wasn't true."

Baucus' office also lists numerous examples of how his proposed reforms are challenging the health care and insurance industries, such as requiring insurers to accept all customers, regardless of health condition.

Yet some reform activists and others who watch the political system say it's foolish to think this money doesn't hold some sway.

"When you spend so much of your time raising money, as members of Congress do, from those who have a compelling interest in the outcome of legislation, it has to change what you think about it, and the viewpoints that you have," said David Donnelly, director of Campaign Money Watch, a Washington, D.C., group that tracks money in politics. "It's just human nature. ... and members of Congress are human."

Advocates of national, public health insurance for all -- a proposal largely excluded from the health reform debate -- say their exclusion points to the power of moneyed interests in Congress.

"I'm convinced that this (money) has a profound influence," said Quentin Young, national coordinator for Physicians for a National Health Program. "Otherwise, how could Baucus, an otherwise respected and wise politician, say categorically that single-payer (national health insurance) is off the table?"

Only Baucus' Republican counterpart on the Finance Committee, Sen. Charles Grassley of Iowa, rivals him in terms of percentage of funds from these business sectors.

The Gazette State Bureau examined fundraising data for Baucus, Grassley, Sen. Edward M. Kennedy (who chairs the Senate Health Committee, which is drafting health reform legislation), the other two members of Montana's congressional delegation, and President Barack Obama.

The data are compiled by the Center for Responsive Politics, a nonprofit group that tracks and sorts campaign donors by profession and industry. Here's a summary of what the State Bureau discovered:

From 2003 to 2008, the Baucus campaign and his Glacier PAC, which raises money and distributes it to other candidates, received 23 percent of their $14.8 million from health care and insurance interests.

The $3.4 million from these sectors includes $853,000 from pharmaceutical and health products, $851,000 from health professionals, $467,000 from hospitals and nursing homes, $466,000 from health service and HMO interests, and $784,000 from insurance.

The insurance sector money includes donations from all types of insurance company interests, including health insurance.

• Five of the top 10 specific donor sources for Baucus were drug companies, health insurers or health-related firms. For example, employees of Schering-Plough Corp., a major drug firm, gave him $92,000 over the period, more than any other single source.

• Grassley, the highest-ranking Republican on the Finance Committee, received 23.5 percent of his funds from health and insurance interests but a lesser dollar amount than Baucus ($2.3 million out of $9.8 million total funds).

• Kennedy, a Massachusetts Democrat and a longtime advocate of health care reforms, received only 7.5 percent of his funds from health and insurance interests, or about $1.2 million.

• Sen. Jon Tester, D-Mont., and Rep. Denny Rehberg, R-Mont., had minimal contributions from the health and insurance sectors.

• Obama, whose campaign raised a whopping $745 million in 2007 and 2008, received a relatively small share from health care interests ($19 million, or 2.5 percent) and insurance interests ($2 million, or 0.3 percent).

Baucus has been leading the charge on health care reform in the U.S. Senate since early 2008, holding numerous hearings and Finance Committee meetings on the issue. He released a lengthy "white paper" last November, outlining his reform ideas, and a major bill is expected to be introduced this month.

The general thrust of his proposals is to require all citizens to buy health insurance while also forcing the private insurance industry to stop practices that make coverage unaffordable for many. He supports subsidies to those who may have trouble affording insurance.

However, on a reform bitterly opposed by the insurance industry and most health care interests - a public, nonprofit insurance plan offered by the government - Baucus has been more ambivalent, saying he supports the idea but declining to specify in what form.

Baucus's office supplied nearly 20 examples of stances he has taken in direct opposition to drug, insurance and banking interests that have donated to his campaign funds.

He has supported importing lower-cost prescription drugs from Canada, allowing the government to negotiate for lower drug prices for Medicare recipients, funding research that would show when generic drugs are a better deal than brand-name drugs and reducing Medicare payments to private insurers by $13 billion over five years.

His office also points to an April 2007 Wall Street Journal article in which Baucus was quoted as telling medical industry contributors at a fundraiser, "You should worry about me coming after you."

Donnelly, the Campaign Money Watch director, says the proof on health care reform will be in the final product - and that he's not terribly optimistic.

Health and insurance interests are clearly targeting Baucus and his Finance Committee, which often have shown themselves to be receptive to their influence, he said.

"This debate on health care is a microcosm ... that even after a 'change' election, how much the special interests view (Washington) as their fiefdom," Donnelly said.

Supporters of national health insurance are even less optimistic, noting how Baucus, Obama and leaders in Congress won't even consider their proposal, which they believe would have broad public support.

"I can't think of any reason other than fidelity to your donors, to explain why they would keep us out of the debate," said Young of the physicians group. "Until we get campaign finance reform, it will be very difficult to do anything to challenge the status quo (in health care), and the status quo had better be challenged, because it's a very bad status quo."

Peru Suspends Decree That Fueled Amazon Violence

2009-06-17T13:23:00.002-04:00

compiled from reports by Agence France Presse, Indymedia, and Democracy Now!
Peruvian lawmakers suspended one of several controversial laws that eased restrictions on lumber harvesting in the Amazon rain forest, days after it sparked clashes between police and indigenous protesters, killing dozens of people.

The legislature agreed by a 59 to 49 vote to suspend Decree 1090 -- dubbed the "Law of the Jungle" -- that covers forestry and fauna in Peru's northeastern Amazon rain forest, said Javier Velasquez, the head of Peru's single-chamber Congress.

Ten decrees opening indigenous lands to resource extraction are vehemently opposed by the approximately half-million Indians of 65 ethnic groups who live there. They see the development of the jungle as an assault on their way of life and have been holding protests since April across the region. The decrees were issued in 2007 and 2008 by Peruvian president Alan Garcia to bring Peruvian regulations in synch with conditions imposed by the US-Peruvian Free Trade Act.

The Amazon protest peaked Friday and Saturday when some 400 police officers moved in to clear protesters blocking a highway near the northern city of Bagua. Protesters fought back. According to Indymedia, a raid by police to free 38 police hostages taken by protesters resulted in the deaths of nine of the hostages. (AFP reports that the hostages were killed by the protestors). Subsequent reports on Indymedia say that as many as 84 protesters have been killed, with another 150 arrested.

The decrees were originally to be suspended for 90 days, but in the final vote legislators agreed on an indefinite suspension "to negotiate without pressure," said Aurelio Pastor, a legislator with
President Alan Garcia's APRA party.

Angry legislators with the opposition Nationalist Party (PNP) called for the decrees to be overturned, and waved signs as they held a protest in the chamber after the vote.

"No to transnational (corporations) in the Amazon," read one sign. "The land and water are not for sale," read another.

The vote suspending the decree is seen as a compromise allowing the government to resume talks with the protesting indigenous groups who have been blocking key regional highways, said spokesmen for legislators that voted for the measure.

The vote also comes on the eve of a strike called by the country's powerful leftist labor umbrella group, the General Confederation of Workers of Peru (CGTP). Other protest marches, including those held by indigenous protesters in Amazon cities and towns, are planned in Peru's main cities.

Internationally, groups supporting the protesters are calling for solidarity protests at Peruvian consulates and embassies and revocation of the Peru FTA. Amazon Watch asks individuals to send protest emails to key people in the Peruvian government through this link: http://amazonwatch.org/peru-action-alert.php

Meanwhile some 3,000 Indians from 25 ethnic groups continue to block a key Amazon highway linking the cities of Tarapoto and Yurimaguas, some 700 kilometers (435 miles) north of Lima.

"We want an immediate derogation of those laws," said Segundo Pizango, an apu -- indigenous leader -- at a roadblock near Yurimaguas.

The repercussions of the violence have rocked the government, with Women's Affairs Minister Carmen Vildoso resigning Monday in protest over the government's crackdown, and Prime Minister Yehude Simon planning to resign at a future date when protests ease.

The crisis even extended its reach to foreign affairs after Nicaragua granted political asylum to Alberto Pizango, the main indigenous protest leader, who earlier took refuge in Managua's
embassy in Lima. The Garcia administration has issued an arrest warrant for Pizango on charges of sedition, conspiracy and rebellion.

Pennsylvania Town Fights Big Coal on Mining Rights

2009-06-16T12:37:00.002-04:00

by John Hurdle. Published by Reuters June 15.
A small Pennsylvania town is trying to ban coal mining in a battle being played out across the state as rural communities try to assert control over mining, gas drilling and other businesses.

Blaine Township, a community of 600 about 40 miles southwest of Pittsburgh, hopes to trigger a legal battle that could determine the rights of municipalities throughout the United States to control corporate activity.

Some legal experts say the township is highly unlikely to win that fight. For now the dispute is in federal district court, where major energy companies have sued the township over three ordinances that would ban coal mining and require companies in any business to disclose their activities to local officials.

Penn Ridge Coal LLC, a unit of Alliance Resource Partners, and Allegheny Pittsburgh Coal Co., a unit of Allegheny Energy, say Blaine's laws violate their corporate rights.

The companies say the ordinances would prevent them from mining 10.6 million tons of recoverable coal beneath the township -- enough to supply electricity for 2 million people for a year.

The township has gone further than any of the 120 U.S. municipalities -- most of them in Pennsylvania -- that have passed ordinances to curb corporate activity such as factory farming or spreading sewage sludge, said its lawyer, Tom Linzey of the Community Environmental Legal Defense Fund.

Of three townships sued by corporations over their ordinances, only Blaine has refused to back down, Linzey said.

Elsewhere in Pennsylvania, towns are resisting efforts by energy companies to extract natural gas from the massive Marcellus Shale formation amid fears that toxic chemicals used in drilling are contaminating ground water and endangering human health.

Creeks Diverted
In Blaine, residents are seeking to prevent coal mining -- which they expect to begin there in 2011 -- because they fear it will ruin their houses and disrupt water supplies, as they say it has in surrounding areas.

They want to block longwall mining, a technique that rips tons of coal from underground without putting anything in its place, causing the land above to sag. The practice, which has been used in coal-rich southwest Pennsylvania since the 1970s, has cracked the walls, roofs and basements of homes and opened fissures in the land, diverting or draining creeks and ponds.

In neighboring Morris Township, Tammy Bowman pointed to a pile of broken wood and concrete -- all that's left of an outbuilding she said was destroyed by shifting ground from mining beneath her 19th century farmhouse.

"It just started to drop and drop," she said. "It got so bad, you couldn't even walk in the door."

One section of her house is held up with mechanical jacks.

Near the village of Graysville, the 62-acre (25-hectare) Duke Lake, once used for fishing and boating, now sits empty after the shifting ground opened a crack in its retaining wall, environmentalists say.

Blaine's three ordinances, passed in 2006, 2007 and 2008, also assert that communities have a right under the U.S. Constitution to control business within their boundaries and that corporations do not have constitutional rights as "persons" to sue municipalities for passing laws that would hurt corporate interests.

"This illegitimate bestowal of civil and political rights upon corporations prevents the administration of laws within Blaine Township and usurps basic human and constitutional rights guaranteed to the people of Blaine Township," says the township's Corporate Rights Ordinance of 2006.

To implement the ordinances, township supervisors are now campaigning for "home rule," a legal code that transfers some powers from state to local control and is commonly used to raise taxes or increase the number of supervisors on a board.

Establishing Home Rule
Blaine supervisors want to use home rule to establish what they say is the township's constitutional right to control corporate activity. Voters on May 19 approved a plan to set up a commission to study the proposal and recommend whether to adopt it.

A third lawsuit has been brought by Range Resources, a natural gas company, asking the court to invalidate Blaine's demand that corporations disclose their activities.

Penn Ridge Coal and Allegheny Pittsburgh Coal are asking U.S. Judge Donetta Ambrose of the Western District of Pennsylvania to declare Blaine's ordinances invalid and unenforceable.

In April, Judge Ambrose denied the township's motion to dismiss the case. She is expected to rule late this year.

Linzey predicted the case will eventually go to the U.S. Supreme Court because it pits energy companies who want to exploit one of America's richest coal seams against residents who are determined to resist what they see as rapacious mining.

He conceded the court is unlikely to overturn more than 100 years of established law that gives corporations rights as "persons" under the constitution, but he said the expected outcome would become a springboard for a popular campaign for a constitutional amendment to strip corporations of those rights.

Blaine's supervisors said they want to establish a principle of local self-government that will inspire other communities.

"Who dictates how we are going to live here?" asked Board spokesman Michael Vacca. "Should it not be us?"

(Editing by Daniel Trotta and Cynthia Osterman)© 2009 Reuters

Up in Smoke: Health insurers hold billions in tobacco stocks

2009-06-15T16:03:00.001-04:00

by Desiree Evans, published at Facing South, the Journal of the Institute for Southern Studies

A recent study published in the New England Journal of Medicine found that major U.S., Canadian and British life and health insurance companies are investing billions of dollars in tobacco company stock.

Researchers first revealed that health and life insurance companies had major investments in tobacco companies in 1995 in an article in the British medical journal Lancet. More than 10 years later, insurance companies are still deeply invested in "big" tobacco, despite the national calls upon them to divest.

"Despite calls upon the insurance industry to get out of the tobacco business by physicians and others, insurers continue to put their profits above people's health," said Wesley Boyd, the new report's lead author and a faculty member of Harvard Medical School. "It's clear their top priority is making money, not safe-guarding people's well-being."

The report found that seven health and life-insurance companies in both the United States and overseas have nearly $4.5 billion invested in companies whose affiliates produce cigarettes, cigars and chewing tobacco.

"Although investing in tobacco while selling life or health insurance may seem self-defeating, insurance firms have figured out ways to profit from both," Boyd said. "Insurers exclude smokers from coverage or, more commonly, charge them higher premiums. Insurers profit -- and smokers lose -- twice over."

The study highlights New Jersey-based Prudential Financial Inc., which sells life insurance and long-term disability coverage. With total tobacco holdings of $264.3 million, Prudential Financial is a major investor in three tobacco firms, including America's biggest cigarette maker, Virginia-based Philip Morris.

Health advocates point out that these private, for-profit insurers have repeatedly put their own financial gain over the public's health. "It's the combined taxidermist-and-veterinarian approach: either way, you get your dog back," study co-author David Himmelstien explained. "If you own a billion dollars [of tobacco stock], then you don't want to see it go down, you are less likely to join anti-tobacco coalitions, endorse anti-tobacco legislation, basically, anything most health companies would want to participate in."

Moreover, healthcare advocates point to this study as another reason why health insurance coverage should not be left in the hands of private insurers. Himmelstein asked, "Is this who we want running our health care system?"

Going Down Tobacco Road
Worldwide, tobacco is considered the leading cause of lung cancer and a major risk factor for heart attack, stroke, pulmonary disease and cancer. It is the leading cause of preventable deaths, and the leading cause of cancer deaths among men and women, according to U.S. and world health officials. Each year, about 443,600 people in the United States die from tobacco-related illnesses, and worldwide it is a contributing factor in 5.4 million deaths a year. Tobacco kills more Americans than alcohol, car accidents, suicide, AIDS, homicide, and illegal drugs combined, according to the American Cancer Society.

Tobacco is an issue that the South knows a lot about, considering the region's historical dependence and ties to the tobacco industry. Experts have shown that strong economic and cultural ties to tobacco in the South have often correlated with high rates of tobacco use. While cigarette consumption has been declining and is expected to continue to decline nationwide, the consumption of smokeless tobacco - snuff and chewing tobacco - has actually increased over the past decade, especially in the South. Several Southern states lead the nation in smokeless tobacco use, including West Virginia, Alabama, Kentucky, North Carolina, South Carolina, Tennessee and Mississippi. Yet, research has shown that smokeless tobacco can be just as dangerous as cigarette smoking. Not only can it lead to mouth cancer, smokeless tobacco may also play a role in other cancers, heart disease and stroke.

Several of the Southern states that lead in smokeless tobacco use and have traditional ties to the tobacco industry also comprise what health experts have come to refer to as the "stroke belt" - a swath of states that include North Carolina, South Carolina, Georgia, Tennessee, Alabama, Mississippi, Arkansas, and Louisiana. Americans living in this region have a 15-percent higher stroke risk, and the death rate from stroke is 30 to 40 percent higher than in the rest of the country. Health experts suspect that tobacco use could be one of the contributing behaviors leading to these high rates.

Sweeping Legislative Changes around Tobacco
This has been an exciting week for health advocates. Sweeping changes in how the government controls tobacco are likely to be approved by the Senate despite strong opposition from tobacco interests and the tobacco lobby. The U.S. Senate is set to vote on new laws that for the first time will permit the Food and Drug Administration to regulate the production, sale, and marketing of tobacco products, including limiting how much nicotine is in each cigarette, and banning advertising and marketing aimed at children.

Tobacco regulation has been a long, hard fought for cause due to the power and influence of "big " tobacco and its lobby. Congress has been trying for more than a decade to give the FDA powers over tobacco products, particularly after a 2000 Supreme Court decision that the FDA could not regulate tobacco unless Congress changed the law.

A final vote on the bill is expected Thursday, and Democrats say they have enough votes to win final passage. The House passed a very similar bill earlier this year, and resolution of the minor differences would send the bill to President Obama, who supports it. The lone Democrat voting against the move to end debate on the bill Wednesday was Senator Kay Hagan, the newly elected official from North Carolina, one of the historically recognized tobacco growing states.

Supporters of the legislation, including health advocacy groups, have linked reducing the financial costs of tobacco illnesses, about $100 billion a year, to the overall drive to improve the healthcare system. The bill's opponents have voiced concerns that the changes could prove costly in tobacco-growing states such as Kentucky and North Carolina.

Single-Payer Off the Table?
A step forward and a step back, some say. While health advocates celebrate the changes in tobacco laws, the health reform debate of the last couple of months has instead left health advocates with much to be desired.

Currently, the Obama Administration is pushing Congress to pass a healthcare reform bill by the end of the year that would cover most of the nation's 47 million uninsured. As Reuters reported:

Obama has declared this summer "make-or-break" time for healthcare reform and has called on Congress to pass comprehensive legislation by the end of the year, saying America can no longer afford the costs of a system dominated by profit-driven insurance and healthcare companies which leaves 46 million people uninsured.

Though he is leaving the details to Congress, Obama has said reform must ensure a public health insurance option operating alongside private plans, a reduction in basic costs, and assurance that no one is denied insurance.
But healthcare reform advocates are upset that lawmakers have taken a "single-payer" plan off the table. For years health advocates have been calling for a government-financed nationalized health plan - in the form of single-payer legislation. Even though most physicians, health officials and health advocates support single-payer legislation, the option has been excluded from the current debate in Congress. In a single-payer system, as envisioned by most advocates, the federal government would pay for basic medical care delivered by public and private health professionals. The money would come from taxes, and medical bills would go directly to a government insurance plan, similar to Medicare.

Last month, single-payer advocates took to the streets across the country to protest the exclusion of single-payer medical plan from the debate to revamp the nation's troubled health system. During Senate Finance Committee hearings in May, 13 doctors, nurses, lawyers and activists stood up to complain that no single-payer proponent had been invited to take part and were arrested for disrupting the proceedings.

The Harvard doctors involved in writing the recent study published in the New England Journal of Medicine also support a single-payer plan and point to their report as just another reason why health insurance coverage shouldn't be left in the hands of private insurers. Boyd and his colleagues also believe that their findings call into question whether insurers ought to have a voice in the ongoing debate in Washington over healthcare reform.

As they write in their letter published in NEMJ:
"The Obama administration is proposing a major overhaul of the U.S. health care system, and the insurance industry is poised to play a major role in the process. Insurance firms, like any business, are driven by profit, and this fact compromises any health care plan that includes them. In case there is any doubt that insurers place profit above health, consider their investments in tobacco.
...
These facts should discomfit Canadian and British readers as their countries consider further privatization of health insurance. For those of us in the United States, these data are a reminder of the true priority of the insurance industry, which is making money, not ensuring health and wellbeing. These data raise a red flag about the prospect of opening vast new markets for private insurers at public expense, as has happened in our state of Massachusetts, whose recent health care reform is often cited as a model for national reform.
Not only have health insurers and drugmakers contributed millions of dollars to members of Congress, but the powerful private health insurance lobby, along with other corporate and political interests, have been derailing efforts at healthcare reform for years. Observers say this intense lobbying is likely the reason the single-payer option has been largely dismissed from the healthcare reform debate.

Currently Democrats are debating several alternative options for "public" plans, some of which could include a government-financed purchasing pool that people could buy as an alternative to individual health policies offered by private insurers. Private insurers would play a role in all of the proposed plans.

Single payer health care is the only way to control costs

2009-06-15T12:18:00.002-04:00

by Dr. Peter Mahr
Our current healthcare system is a mess for both those who carry health insurance and those without. Only a single payer national health insurance program that provides public financing for privately delivered healthcare services can clean up this mess and provide all Americans access to needed medical services regardless of ability to pay.

In a study released last week we learned that healthcare debt contributed to 62% of personal bankruptcies in 2007. And, surprisingly, 77% of those going bankrupt were insured when they first fell ill. The same year 47% of Americans reported some medical debt or payment problem and 16% of Americans had been contacted by medical debt collection agencies. Despite spending 16% of GDP on healthcare and increases in insurance premiums that dwarf growth in family income, millions are left bankrupt and 50 million more are uninsured. These figures highlight, in the starkest terms, how broken our employer-based private for-profit health insurance system is.

For all our money spent, the result is a fragmented complex healthcare system with poor outcomes. We are far behind other industrialized nations in terms of public health measures. Regional healthcare spending varies dramatically and has more to do with how many doctors there are per capita than other factors. The United States performs poorly on benchmark measures of preventative care and our management of chronic illness mirrors our chaotic and disorganized payment system. We consistently fail to meet evidence-based guidelines for chronic illnesses like diabetes and chronic lung disease.

At the same time business is booming for those who profit from healthcare. From 2003- 2007, the profits of the nation’s largest insurers rose 170.2 % to $12.6 billion. Pharmaceutical companies continue to gross billions of dollars with the top ten firms profiting a total of $75 billion in 2008. For-profit hospital chains and dialysis centers make millions while delivering worse outcomes when compared to non profit alternatives. Surgical sub-specialists make 3-4 times what generalists make.

So what do we do with a healthcare non-system that is a big money maker for insurers, some hospitals and the pharmaceutical industry but leaves one in seven people lacking insurance and most with insurance that is too costly and inadequate? How do we repair a delivery system that is expensive, focuses on moneymaking services rather than primary and preventative care and has little emphasis on evidence-based medicine?

Clearly the solution is to adopt a single payer national insurance program: publicly funded and privately delivered. We already pay for our current system with out of pocket payments and taxes.

Personal income taxes pay for Medicare, Medicaid, public employee health insurance, tax breaks to employers who provide health insurance to their employees and healthcare coverage for military personnel and veterans. The sum total comes to 60% of our total health insurance costs. In essence, we are paying for national health insurance now. We just aren’t getting it. Instead, a single payer system would use tax dollars to provide true comprehensive healthcare coverage for all.

Furthermore, a single payer system is the only reform proposal that would drastically reduce the staggering administrative costs that accompany our private insurance industry. Profit margins, overhead and administrative costs associated with our current private insurance industry remove $350 billion from the healthcare system each year. In reducing administrative costs a single payer plan would save enough money to cover the 50 million uninsured.

Single payer health insurance also holds great promise for reforming the delivery of healthcare. With single payer, a reimbursement system can realign the delivery of healthcare services from one of maximizing profit to one in which we maximize health. Reimbursement for primary and preventative care can be emphasized while specialist and end of life care can be more rationally utilized. Regional spending can be leveled. And a one payer system can bargain effectively with the pharmaceutical
industry, driving down medication costs which currently add $98 billion a year to the cost of our healthcare system.

In short, only a single payer system that eliminates for-profit, private health insurance can generate the cost savings to pay for a truly universal healthcare system. And, only a single payer system, with the tools of bulk purchasing, negotiated fees and global purchasing, can realign our delivery system to emphasize primary preventative care while bringing sanity to our skyrocketing healthcare s pending. A majority of the public and a majority of physicians support the adoption of single payer health insurance.

Now is our chance to embrace true reform.

Dr. Mahr is a family physician who works for the Multnomah County Health Department at East County Health Center in Gresham, OR. He is also chairman of the Portland Oregon chapter of Physicians for a National Health Program.

Max Baucus, the "Senator for K Street," Should Not Be Deciding Health Care for America

2009-06-09T10:58:00.002-04:00

by Kevin Zeese. Published by the Baltimore Chronicle on May 31

Why aren’t single payer advocates allowed to testify before Baucus’ committee? Follow the money.

Senator Max Baucus and the Senate Finance Committee are too corrupted by corporate health industry profiteers donations to give America the health care policy it needs.

Health care is 15% of the U.S. gross domestic product. U.S. health care expenditures, which have been rising rapidly for several years, surpassed $2.4 trillion in 2007, more than three times the $714 billion spent in 1990. The cost of health care is projected to reach $4.4 trillion by 2018. There is a lot of room for corporate profiteering in the increasing cost of health care. The millions the health care industry has invested in Baucus and the Senate Finance Committee could therefore turn out to be very profitable.

It is evident that any bill that comes out of the Senate Finance Committee will be a pro-industry bill that will ensure trillions in profits for the health insurance industry, HMOs and the pharmaceutical industry.

Baucus has held two hearings so far and has refused to allow advocates for the most popular reform—a single payer national health policy—to even testify. Single payer "improved Medicare for all" is favored by more than 60% of Americans as well as majorities of doctors, nurses and economists. It is the most cost-effective and efficient way to provide health care to all Americans from cradle to grave.

Why aren’t single payer advocates allowed to testify before Baucus’ committee? Follow the money. Campaign donations explain why, and demonstrate that the Senate Finance Committee should not be in charge of health care. Senator Reid should remove the health care reform bill from Baucus and start all over before the Health Committee in the Senate.

Here’s why Baucus is not doing the people's business:

According to OpenSecrets.org, over his career he has taken donations from:

* The Insurance Industry: $1,170,313
* Health Professionals: $1,016,276
* Pharmaceuticals/Health Products Industry: $734,605
* Hospitals/Nursing Homes: $541,891
* Health Services/HMOs: $439,700

Baucus has shown his bias and should be removed from leading the health care reform effort by the Democratic Party leadership.

That is a grand total of $3,902,785. Can we trust Baucus to put aside the profits of the industries that have kept him in the Senate? Will he put the people’s necessities ahead of the profits of his contributors? Baucus has shown his bias and should be removed from leading the health care reform effort by the Democratic Party leadership.

In 2008 Baucus had virtually no challenger in Montana. A little-known Republican was on the ballot, and Baucus won with 73% of the vote. But, Baucus sought big donations from big business anyway. He used his connections to corporations with business before his committee to raise an immense campaign fund of more than $11 million. In 2008, 91% of his donations come from individuals living outside of Montana, which is why he is more the “Senator for K Street” then the Senator for Montana. Corporate health profiteers who invested in Baucus will now benefit from his stewardship over health care reform. His 2008 donations from health care profiteers included:

* Insurance: $592,185
* Health Professionals: $537,141
* Pharmaceuticals/Health Products: $524,813
* Health Services/HMOs: $364,500
* Hospitals/Nursing Homes: $332,826

That is $1,826,652 Baucus took from these industries, and now he can reward them by deforming health care reform.

The health care profiteers knew that Baucus would determine their fate and ponied up. Now the only thing standing between them and their payback is a single payer national health care plan. Yet single payer, which would end private insurance and control the cost of pharmaceutical drugs, is not being considered—not even allowed to participate in the conversation before Baucus.

It is not just the chairman of the committee who has received massive donations. The full Finance Committee is a gluttonous embarrassment of campaign pay-offs. In 2008 the committee members received a total of $13,263,986 from industries affected by health care reform. Can we trust this committee to put the interests of the people before their donors?

The donations to the Finance Committee in 2008 included:

* Insurance: $5,103,900
* Pharmaceuticals/Health Products: $3,308,831
* Hospitals/Nursing Homes: $2,809,353
* Health Services/HMOs: $2,041,902

These industries expect to be rewarded with billions, even trillions, in profits and hundreds of millions in corporate welfare. Senator Baucus’s behavior shows they have made a good investment—they've bought themselves a senator who should be called Chairman Blagojevich. He is doing his best to make sure the single payer message is not heard because he knows it is the fairest, most efficient and cost-effective way to ensure health care access for all Americans—but he can't let that be implemented because it would put some of his donors out of business and control the profits of others.

It is time to remove Baucus from the leadership of health care reform. It is time to move the critically important priority of reforming America’s health care system from the Finance Committee and put it before the Senate Health, Education, Labor and Pensions Committee. At least their mission is health care, not money.

Kevin Zeese is the executive director of the FreshAirCleanPolitics.net, which is urging a single payer national health care system as part of its ProsperityAgenda.US project. Along with seven others, Zeese was arrested when he testified from the audience of a recent Senate Finance Committee meeting on health care. See the video on YouTube.

Doctor Critical of Baucus Promotes Single-Payer Plan

2009-06-06T22:29:00.003-04:00

by Mike Dennison. Published on June 6 by The Billings Gazette (Montana).

Maryland psychiatrist Carol Paris is calling herself one of the "Baucus 13" these days - in other words, one of the 13 doctors, nurses and activists arrested last month while protesting before a Washington, D.C., health reform hearing chaired by Sen. Max Baucus, D-Mont.

On Friday, Paris was in Montana, doing what got her arrested: urging Baucus, Congress and the president to consider a single-payer system of national health insurance that covers all citizens equally.

Psychiatrist Carol Paris, one of 13 people arrested last month while protesting before a health-reform hearing chaired by Sen. Max Baucus, spoke at a rally Friday in Helena in favor of single-payer insurance. (Eliza Wiley Independent Record)

"The next 60 days are critical," she told a rally of 150 single-payer supporters in Helena. "We need to keep the heat on Sen. Baucus (and Congress and the president)."

Single-payer advocates held rallies in six Montana cities on Friday.

Paris, 56, is a member of Physicians for a National Health Program, whose 16,000 members are pushing for a national, publicly funded insurance plan that would replace private health insurance. The group paid for her trip to Montana.

In an interview Friday with the Gazette State Bureau, Paris said she used to believe that the private health insurance market could be reformed to improve health care, and she spent several years lobbying the Maryland Legislature.

"After a few years, I came to the conclusion that it was just a phenomenal waste of time," she said. "At that point, I just said, there has to be a better place for me to put my time and energy."

That was just six months ago, when she joined PNHP, to push for a single-payer system.

But Paris and other Maryland-area members found themselves basically ignored by Congress. They planned to protest - and get arrested - at a Senate Finance Committee hearing on health reform, chaired by Baucus.

Paris and her colleagues showed up the morning of May 5, spread themselves among the gallery and, one by one, interrupted Baucus as he started the meeting.

"I interrupt this so-called public hearing to bring you the following unpaid political announcement: Put single-payer on the table," Paris said before she was arrested. "My name is Dr. Carol Paris, and I approved this message."

Capitol police arrested the protesters, who have been charged with disrupting Congress.

Baucus, a key senator in drafting health reform legislation, said last week that he'll ask that the charges be dropped. He's said repeatedly that a single-payer system won't be considered as a reform and is backing changes that maintain private health insurance.

Baucus spokesman Ty Matsdorf said Friday that the senator and single-payer advocates have the same goal of providing "quality, affordable health care to every American," and that Baucus is confident that Congress will pass meaningful reform to "make this goal a reality."

Paris, however, said her experience in private practice has convinced her that true reform can happen only if private health insurance is replaced with national, public insurance for all.

No longer would physicians' staff have to spend hours dealing with multiple insurers on billing, no longer would patients have to do the same, and no longer would patients have to worry about which doctor is "in network," she said. "You can go to any doctor you want," Paris said. "It's the private insurance industry where you can't go to any place you want."

Paris's arrest was covered prominently by her local newspaper but received little or no attention from national news outlets.

She said she's not surprised: "The mainstream, national media have blacked us out as much as Congress has. ... I would say they're following the lead of the president and Congress and simply not giving us a voice."

Yet Paris said the reaction from her patients, as well as many fellow physicians, has been overwhelmingly positive.

She said she hears "over and over and over again" how people are frustrated by the current system, particularly dealing with their insurer, and that as soon as they understand how single-payer would work, they usually support it.

"I think that the only thing that keeps this from happening is the lack of political will by the president and our Congress," Paris said.

Facing Down the Private Insurance Industry

2009-06-06T22:25:00.001-04:00

by Robert Kuttner. Published on June 4 by The Boston Globe
Despite budget pressures, President Obama has not backed off his commitment to universal healthcare reform. But the devil is in the details. And if he is not careful he could end up with a reform worse than nothing.

A crucial question is whether the law will include a public, Medicare-style plan. This public plan could be used by people who otherwise lack good insurance, or by employers who conclude that the public plan is a better deal for themselves and their workers.

The public plan would be the gold standard of both good coverage and cost-containment. Without the public option, a system to cover everyone by relying on the existing private insurance industry will realize few cost savings. The result would be increased pressures over time to cut care and shift out-of-pocket costs from insurers to consumers.

The administration's projections have relied heavily on the supposed savings of better use of computerized medical records. However, absent a single unified system, or a strong public option, better computerization will not realize major savings.

The US healthcare system is the most expensive and least cost-effective in the advanced world mainly because private insurance companies waste about 25 cents on the dollar on claims, profits, administration, and marketing. They have no serious financial incentives to emphasize prevention, and every possible incentive to avoid sick people. Doctors and hospitals, meanwhile, make their money from increasing costs.

Other countries get better results at lower cost because a universal system naturally emphasizes wellness and prevention, and spends its money on the most cost-effective treatments, not the most expensive ones. Every nation faces similar inflationary pressures because of advances in technology and an aging population; but other advanced countries, using single-payer systems, do a fine job of covering everyone for 10 percent of gross domestic product or less, while we spend upwards of 15 percent and leave out nearly 50 million souls and under-insure tens of millions more.

Obama's plan is a variant of an astute strategy first proposed by the political scientist Jacob Hacker as a solution to two political obstacles to health reform. First, how do you enlist the uninsured and the anxious insured in the same coalition? Second, how do you build momentum for a single-payer system recognizing that there are not the votes to legislate it all at once?

Hacker's insight was that if the government offered a public insurance option, people who liked their present private insurance could keep it, while others could elect the public plan. Coalition problem solved. And the superior efficiencies of the public plan would gradually overtake the rival private plans. Momentum problem solved.

But Hacker neglected one key political detail - the immense power of the private insurance industry. Not surprisingly, the industry's stance is that any public plan must compete on disadvantageous terms. And most Republicans oppose a public plan outright.

Obama, the great conciliator, has chosen to work with the private insurance industry rather than targeting it as the primary obstacle to meaningful health reform. Periodic leaks from the White House suggest that if push came to shove, Obama would ditch the public plan in order to get a bill through Congress.

Senator Max Baucus of Montana, chair of the Senate Finance Committee, is no enthusiast of a public plan. After the New York Times last week reported Baucus sparring with Senator Ted Kennedy on whether to include a public plan, the two senators quickly cobbled together a statement insisting they were really in harmony.

However, in the push to get legislation in the face of fierce industry and Republican opposition, a good public plan could well be tossed overboard. That would leave a legacy of expanded coverage, but a time bomb of exploding costs, underinsurance, and a squeeze on actual care.

I would much rather see Obama battling for public health insurance, making it clear to Americans that the obstacle to real reform is the private health insurance industry. That, however, is not the president we have.

We'll see what kind of public plan, if any, survives.

Media Quarantine of Single-Payer Continues: Fifteen Years Later, Public Health Insurance Still Taboo

2009-06-06T22:12:00.004-04:00

by Julie Hollar & Isabel Macdonald. Published on Thursday, June 4, 2009 by Extra!, a publication of Fairness and Accuracy in Reporting. Reposted on Commondreams.org

As a big healthcare policy debate looms once again in Washington, one thing remains as certain as it was in 1993: A single-payer plan that would provide government health insurance to everyone is off the media agenda.

CNN senior medical correspondent Elizabeth Cohen recently explained why healthcare "reform" is more possible now than it was under the Clinton administration (3/5/09): "Fifteen years ago you sometimes heard-actually you heard quite a bit-people saying: 'Let's have a single-payer system like in Canada. The government is going to be the health insurer for everybody.' You don't hear that as much as you used to. So more people are on the same page more than they once were."

Cohen is right that there were many people in favor of single-payer 15 years ago; as Extra! pointed out back then (7-8/93), polls consistently found majorities supporting tax-financed national health insurance. And the numbers today? A January New York Times/ CBS poll (1/11-15/09) found 59 percent in favor of government-provided national health insurance. In other words, contrary to Cohen's claim, people are on pretty much the same page today as they were 15 years ago.

Her suggestion that it was those loud single-payer voices that stymied "reform" is likewise unfounded; as Extra! reported in 1993, corporate media were then solidly behind the Clinton administration's big insurer-friendly "managed competition" plan-single-payer was hardly discussed in the press. ("The debate over healthcare reform is over. Managed competition has won," the New York Times had already editorialized on October 10, 1992. "The outcome is as wondrous as it is surprising.")

And just as big media silenced single-payer back then, Cohen and her colleagues continue the tradition today. In the week leading up to Obama's March 5 healthcare summit, hundreds of stories in major newspapers and on NBC News, ABC News, CBS News, Fox News, CNN, MSNBC, NPR and PBS's NewsHour mentioned healthcare reform, according to a recent FAIR study (3/6/09). But the idea of single-payer was mentioned only 18 times-and only five of those included the views of single-payer advocates.

On March 31, PBS's Frontline took an in-depth look at the U.S. healthcare system in Sick Around America, offering a prime opportunity to explore single-payer-or so thought the correspondent originally slated to do the show, T.R. Reid. In Frontline's 2008 special Sick Around the World, Reid examined healthcare systems in other developed countries, concluding that in nations where there is some private-sector role in health financing, one of the central lessons is that they "all impose limits"-including that insurance companies "can't make a profit on basic care." The show discussed single-payer alternatives, including Taiwan's healthcare system.

But in Sick Around America, the only alternative to the current U.S. healthcare system that was examined in any depth was Massachusetts' system of mandating that people buy insurance from for-profit health insurance companies. Reid, who was contracted to be the correspondent for the new documentary, quit over concerns that it contradicted his earlier research (Corporate Crime Reporter, 4/2/09): I said to them, mandating for-profit insurance is not the lesson from other countries in the world.... I said, I'm not going to be in a film that contradicts my previous film and my book. They said I had to be in the film because I was under contract. I insisted that I couldn't be. And we parted ways.

After FAIR criticized the film (4/7/09), Frontline pointed out that the show's narrator mentions that "other developed countries bar health insurance companies from making profits on basic care and cap their administrative costs." Of course, one brief mention in an hour-long show hardly constitutes a fair hearing.

As FAIR's study found, most mentions of single-payer tend to come from its critics, who bring it up in order to shoot it down-such as when Fox's Sean Hannity argued (2/19/09), "If we look at England, if we look at France, if we look at Canada, the single-payer, the worst thing we can do if we really care about kids is let the government run the healthcare system."

Single-payer did recently get a new proponent in corporate media with MSNBC's hiring of populist radio host Ed Schultz to fill its 6 p.m. slot. Since going on the air April 6, Schultz has questioned guests about single-payer multiple times, as when he asked why the Democrats won't put such a plan on the table (4/27/09): "The majority of the health providers, the majority of Americans want single-payer. You've got a president with a 69 percent approval rating. What are they waiting for?"

Schultz ought to ask the question not just of Democrats, but of his corporate media colleagues as well.

© 2009 Extra! Magazine (FAIR) Julie Hollar is the managing editor of FAIR's magazine, Extra!. Isabel Macdonald is the communications director at FAIR.

Baucus: Single payer advocates won't be invited to speak

2009-06-04T08:27:00.010-04:00

by David Swanson. Posted June 3 on AfterDowningStreet.org
Senator Max Baucus met Wednesday with advocates for single-payer healthcare, including Senator Bernie Sanders, and told them that he might drop criminal charges against 13 people arrested for speaking up in his hearings, but that he would not include any supporters of single-payer health coverage in any future hearings. According to one report, Baucus suggested that he'd been mistaken to exclude single-payer but asserted that the process of creating healthcare reform legislation was too far along now to correct that omission.

Senator Sanders said after the meeting that if healthcare reform did not create a single-payer system it shouldn't be done at all, and that within three or four years we would realize we'd solved nothing. He said that it would be better to increase funding for community health centers and take steps to make it easier for medical students to go into primary care, than to enact major reforms that didn't go to the root of the problem.

Sanders has a bill (S 486) that makes some of the changes he advocates, as well as a bill (S 703) to facilitate the creation by states of single-payer healthcare systems. Congresswoman Tammy Baldwin has introduced resolutions on the same topic in the House. Dr. Margaret Flowers, co-chair of the Maryland chapter of Physicians for a National Health Program (PNHP), attended a press conference following the meeting on Wednesday and filled me in. She said that while states are pursuing single-payer legislation, it would be much easier for them to succeed if they had waivers allowing federal healthcare dollars to go to the states, and if needed changes were made to the Employee Retirement Income Security Act.

Advocates of single-payer emerged from the meeting with Baucus declaring their determination to push ahead with what they see as a fundamental struggle for human rights. Rose Ann DeMoro, executive director of the California Nurses Association/National Nurses Organizing Committee and national vice president of the AFL-CIO, said the fight for single-payer is a civil rights movement, and that people "have to turn up the heat." When someone questions the political viability of single payer, she said, we should question "allowing people to die and suffer for lack of political will."

The press conference, in which Baucus did not participate, was attended by the New York Times, Politico, the Associated Press, Pacifica Radio, Congressional Quarterly, and a camera that Flowers believed belonged to CNN. Sanders opened the press conference with a statement on the domination of the private for-profit health insurance companies wasting $350 billion per year in billing, profiteering, and complexity. If we were serious about healthcare reform, he said, we would be having a serious discussion of single-payer.

Dr. Marcia Angell, former editor-in-chief of the New England Journal of Medicine and senior lecturer at Harvard, said that in her diagnosis the disease was market-driven healthcare in which access is based on the ability to pay.

Dr. David Himmelstein, co-founder of PNHP and associate professor medicine at Harvard Medical School, reported that Baucus had said he might be willing to drop charges of unlawful conduct and disruption of Congress against 13 people but had no intention of opening up any hearings to include single-payer. Himmelstein also announced the release of two new studies. The first, being released Wednesday, reportedly finds that some of the largest investors in tobacco stock are private health insurance companies. The second, to be released Thursday, reportedly shows that not only are personal bankruptcies increasing, but 62 percent of them are now due to medical debt.

Geri Jenkins, RN, co-president of the California Nurses Association/National Nurses Organizing Committee and a practicing registered nurse, reported that Baucus had implied he'd made a mistake in not including single-payer but that it was too late now.

And, finally, Dr. Oliver Fein, president of PNHP and associate dean at Weill Medical College of Cornell University, said that he and his colleagues had asked Baucus for a full hearing on the merits of single payer and asked for the Congressional Budget Office to create a comparison of single payer with whatever plan Congress produces that is not single payer. Senator Sanders said that he would continue to push Baucus to hold a hearing.

Dr. Flowers said that in her analysis the single-payer movement is largely inclined to go in the direction that Sanders stated on Wednesday: support for a single-payer bill or nothing. I asked her whether she believed that those pushing for single payer would ever support a public option as doing more good than harm and whether she thought those pushing for a public option would ever advocate allowing states to enact single payer. Flowers acknowledged that there are many (perhaps even most) people in the public option movement who prefer single payer. In fact, it is difficult to find a supporter of the public option who does not claim to "personally" want single payer but to find it "politically unfeasible." But Flowers said that PNHP does not support a public option and backs only single payer. And she said she was unaware of any advocates of a public option also advocating for allowing states to create single payer.

Author David Swanson has been a journalist and communications director for the Kucinich 2004 presidential campaign, International Labor Communications Association, and ACORN, and is co-founder of AfterDowningStreet.org and Washington Director of Democrats.com.

Tap Water Worries Have You Buying Bottled? Safeway Loves You!

2009-06-03T15:21:00.002-04:00

by Jonah Owen-Lamb. Published June 2 by the Merced (California) Sun-Star, and posted on Commondreams.org

Wells are drying up across the county from an overtaxed and sinking water table.

Drought and climate change threaten the future of local water supplies.

And Merced has been selling its tap water since 2002 to a water bottling plant, which then sells that water at rates far above what it costs the plant to buy it from the city.

The Safeway Inc.'s water bottling plant in Merced -- one of the top five commercial/industrial water users in the city, which bottles Safeway's in-house purified and spring water brand Refreshe -- uses roughly 50,000 gallons a day, five days a week, for its bottling operation.

The plant, which provides most Refreshe drinking and spring water to Safeway stores in the state, filters city water, puts it in bottles and sells it as purified water. The bottles note that the water was bottled in Merced, but not that it was pumped out of the ground by the city. (Refreshe spring water is shipped in from a spring and then bottled in Merced.)

Some say the operation is just like any other business that buys water from the city. But others claim it represents a troubling trend. Environmentalists and water rights activists contend that the increasing commercialization of public water and the selling of tap water not labeled as such isn't how water pumped out of the ground by cities is meant to be used. They claim that bottled water sells itself as safer and healthier than tap water, but in many cases is not.

The Sierra Club's Water Privatization Task Force noted that the growth of the bottled water industry -- spearheaded by companies like Nestle, Coca Cola and Pepsi Cola -- is not only depleting aquifers and springs across the country, but also represents a step toward increasing water privatization.

The task force also noted that the industry advertises bottled water as better than tap water -- even though much of the water in bottles comes from the tap. "The bottled water industry promotes bottled water as a healthy, trendy drink, without mentioning that it can cost 500 to 4,000 times more than tap water," commented the task force.

In Safeway's case they pay more than $1,000 a month for more than a million gallons of water. The retail cost for that much purified bottled water at Safeway is just under $3 million. Safeway would not say how much it costs them to produce their water.

Despite these concerns, the public's taste for the stuff is growing.

According to a 2009 report on the industry by Bottled Water Reporter, bottled water sales in the U.S. accounted for more than $11 billion in 2008. Over the last decade bottled water consumption jumped from more than $4 billion in 2000 to double that by 2008. According to Food & Water Watch, over 112 bottling plants exist in the state and over 1 billion gallons of bottled water are sold in California every year.

In the report, tap water was distinguished from bottled water. "Clearly," noted the report, "consumer perceptions matter, and consumers regard bottled water very differently from tap water. Even where tap water may be safely potable, many people prefer bottled water, which they regard as superior in taste."

Safeway spokeswoman Teena Massingill said that criticisms about commercializing municipal water and replacing it with expensive bottled water are baseless and unfounded. "There will always be critics of products," she said. "We are providing a product that did not exist previously. So I think that the argument that they are making is unfounded," she said.

As for the Safeway's operation in Merced, Merced spokesman Mike Conway said the city treats Safeway as it would any other industrial water consumer.

"There's no difference between any kind of water user who uses our water to process a product -- whether it's bottled water or anything else," said Conway.

"As for some additional perspective," wrote Conway in an e-mail, "if the city pumps about 21 million gallons of water a day, and Safeway uses 50,000, that works out to be 0.238 percent of our total gallons pumped."

But the plant doesn't only use water. It also produces waste. The plant's purification process discharges roughly 52,000 pounds of salts a year into the city's wastewater system, according to their permit.

Safeway's in-house brand Refreshe, bottled in Merced with well water, doesn't say on its label that it was originally municipal tap water.

Massingill's reply is simply that the product that Safeway provides -- fresh water -- isn't tap water.

But a new law could force water bottlers to at least let consumers know the source of their bottled water -- not just where it was bottled.

Assembly Bill 301 would require bottling facilities to register with the state and disclose the source of their water. Currently, the state's Department of Public Health only requires that bottled water labels list where the water was bottled, not the actual source of that water.

Another area of concern with bottled water, says Ruth Caplan, the national coordinator for the Defending Water for Life campaign, is that while bottled water sells itself as better than tap water, it contributes to pollution and has been found to be less healthy than tap water -- at least in some cases.

Many of the bottles end up in landfills, Caplan added, and in some cases contain industrial chemicals and bacteria above state and industry standards. According to the Sierra Club, nine out of 10 plastic water bottles end up as garbage or litter.

The National Resources Defense Council tested a wide array of bottled waters in the late '90s and found the majority contained either industrial chemicals and other contaminants, such as chloroform, that were above levels set by the state and the industry. The study included Safeway-brand bottled waters whose labels indicated they had gone through reverse osmosis filtration like the purified water in Safeway's Merced plant.

Safeway's Massingill declined to comment on NRDC's study, but said that Safeway is fully conscious of its environmental footprint and the healthfulness of its products. The company uses as little packaging as possible in its products. For instance, its plastic bottles are among the thinnest in the industry.

In addition, Safeway uses wind and solar energy on a wide scale. "We operate in the most environmentally conscious manor possible," she said. Safeway is one of the largest retail users of renewable energy in the United States as well, she said.

On top of the company's efforts to be green, Massingill said it provides jobs for roughly 70 people at its Merced plant. It's also actively involved in the community through the sponsorship of events, among other contributions.

The Wild West was founded partly over water wars. It's clear some are still being fought, even inside the bottle.

The Looting of America

2009-05-27T13:01:00.002-04:00

by Greg Coleridge, Ohio American Friends Service Committee

An accurate term to describe the causes of and prescriptions to the current economic crisis is "the looting of America." That is also the title of a new book by Les Leopold, co-founder and director of the Labor Institute and Public Health Institute and among those who formed the labor-environmental Blue-Green Alliance.

Leopold attempts through the book the near impossible: to clearly and simply describe the root causes of the global economic crisis, the bizarre and complex financial instruments created which resulted in astonishing profits by transformed liabilities into assets, and a range of moderate to radical policy changes to reign in the fantasy-finance casino perpetrated by giant financial corporations and others.

The root of the current crisis goes back to the 1970's when worker productivity and real worker wages began to diverge. Between 1945 and 1973, as productivity increased (more products and services were produced by workers per hour), firms sought more workers to increase their own profits. This drove up the price of labor.

It all changed beginning in 1973 when corporate owners no longer reinvested productivity profits back into firms (the real economy) or with workers to the same degree. Capital owners kept productivity profits for themselves. The percentage of wealth owned by the top 1% began to sour. Capital owners began looking for alternatives sources of profit of their extra wealth with high rates of return and little risk. The era of fancy financial instruments, led by derivatives, was born.

The derivative, credit default swap, collateralized debt obligation, and other fantasy finance "instruments" are defined and explained with excellent analogies in many cases. Derivatives, for examples, are compared to fantasy baseball where hundreds if not thousands of persons compete by betting on the statistics of real players yet none of whom actually own any of the real baseball teams or have any control over any of the real players. Similarly, derivatives derive their value from some real entity - a stock or bond. Hundreds, if not thousands, can own bets on the same single stock or bond. It's a financial casino.

The flood of hundreds of billions of dollars into the casino economy fueled more and riskier bets and the housing boom. It enriched the financial corporations that were involved in this new business. As wages declined, debt increased and consumer spending eventually slowed. Meanwhile, real businesses were unable to secure credit for innovation as financial institutions looked to fantasy finance as more profitable.

The housing and debt bubbles burst because that what bubbles do.

Leopold devotes the last two chapters to solutions - divided between, as he says, "Proposals Wall Street Won't Like" and ones they really won't like. In the former category are:

Financial Disaster Insurance - premiums from every conceivable financial sector transaction to pay back taxpayers from the current raid on the treasury and for the recession caused by the financial casino and for the next one. He estimates this could amount to $500 billion per year.

Financial Product Safety Commission - creation of an FDA-like product-approval process before any type of financial "instrument" is permitted on the market.

More radical proposals include wage caps - a $500,000 salary cap of any employee at any financial corporation, equal to the salary of the US President; passage of the Employee Free Choice Act to give workers a chance to increase their collective power raising the minimum wage to guard against deflation and to shift wealth away from the fantasy-finance casino, and public takeover the largest pieces of the private financial sector to protect taxpayers, our economy and what's left of our democracy.

Leopold has provided a valuable tool to demystify Wall Street's destructive actions and a variety of tools for public actions to assert greater public control over money and finance.

For more, see the AFSC webpage on Corporations and Democracy.

Fasting for our future, climate activist enter fifth week of hunger strike

2009-05-18T10:18:00.005-04:00

A hunger strike for strong climate legislation has entered its fifth week just as a weak climate action bill begins its Congressional mark-up.

Seven people—Kathleen Breault, SKCM Curry, Ted Glick, Jere Locke, Cathy Luna-Desaulnier, Vincent Pawloski and Diane Wilson, acting as part of Fast For Our Future, today criticized the draft legislation released last Friday by Congressman Henry Waxman and scheduled for “mark up” beginning today.

“This legislation is very problematic,” said fast coordinator Ted Glick. “It’s not even close to being a solution to our urgent climate crisis. 60% or more of the potential revenues that would come from putting a cap on carbon emissions are given free to coal, natural gas, oil and energy-intensive industries. The whole idea of a cap is to increase the price of carbon-based fuels to drive the transition to clean, renewable energy, and this legislation doesn’t do that.

“Further, the requirement for utilities to get their electricity from renewable sources is so weak it might be worse than having no federal renewables requirement at all, given the number of states that have enacted stronger renewable mandates. This is in no way the kind of legislation we need.”

Jere Locke, Director of the Texas Climate Emergency Campaign, criticized the weak target for reductions of greenhouse gas emissions. "The world’s climate negotiators are calling for the world’s industrialized countries to reduce their emissions by at least 25-40% by 2020, with 1990 as the baseline year. This bill would require no more than a few percentage points. As someone with close ties to Africa and Asia and who has worked internationally for many years, I fear for those people in the countries of the Global South who have had little to do with the carbon pollution in the air who will be seriously hurt if we don’t act soon and strongly to address the climate crisis.”

Organizers of the Fast For Our Future intend to issue a call later this week for a worldwide “rolling fast” that would continue for the next seven months leading up to the United Nations Climate Conference in Copenhagen, Denmark in mid-December.

The Cure for Layoffs: Fire the Boss!

2009-05-15T18:47:00.003-04:00

by Naomi Klein & Avi Lewis. Posted Thursday, May 14 on CommonDreams.org

In 2004, we made a documentary called The Take about Argentina's movement of worker-run businesses. In the wake of the country's dramatic economic collapse in 2001, thousands of workers walked into their shuttered factories and put them back into production as worker cooperatives. Abandoned by bosses and politicians, they regained unpaid wages and severance while re-claiming their jobs in the process.

As we toured Europe and North America with the film, every Q&A ended up with the question, "that's all very well in Argentina, but could that ever happen here?"

Well, with the world economy now looking remarkably like Argentina's in 2001 (and for many of the same reasons) there is a new wave of direct action among workers in rich countries. Co-ops are once again emerging as a practical alternative to more lay-offs. Workers in the U.S. and Europe are beginning to ask the same questions as their Latin American counterparts: Why do we have to get fired? Why can't we fire the boss? Why is the bank allowed to drive our company under while getting billions of dollars of our money?

Tomorrow night (May 15) at Cooper Union in New York City, we're taking part in a panel that looks at this phenomenon, called Fire the Boss: The Worker Control Solution from Buenos Aires to Chicago. We'll be joined by people from the movement in Argentina as well as workers from the famous Republic Windows and Doors struggle in Chicago.

It's a great way to hear directly from those who are trying to rebuild the economy from the ground up, and who need meaningful support from the public, as well as policy makers at all levels of government. For those who can't make it out to Cooper Union, here's a quick round up of recent developments in the world of worker control.

Argentina
In Argentina, the direct inspiration for many current worker actions, there have been more takeovers in the last 4 months than the previous 4 years.

One example: Arrufat, a chocolate maker with a 50 year history, was abruptly closed late last year. 30 employees occupied the plant, and despite a huge utility debt left by the former owners, have been producing chocolates by the light of day, using generators.

With a loan of less than $5,000 from the The Working World, g a capital fund/NGO started by a fan of The Take, they were able to produce 17,000 Easter eggs for their biggest weekend of the year. They made a profit of $75,000, taking home $1,000 each and saving the rest for future production.

UK
Visteon is an auto parts manufacturer that was spun off from Ford in 2000. Hundreds of workers were given 6 minutes notice that their workplaces were closing. 200 workers in Belfast staged a sit-in on the roof of their factory, another 200 in Enfield followed suit the next day.

Over the next few weeks, Visteon increased the severance package to up to 10 times their initial offer, but the company is refusing to put the money in the workers' bank accounts until they leave the plants, and they are refusing to leave until they see the money.

Ireland
A factory where workers make legendary Waterford Crystal was occupied for 7 weeks earlier this year when parent company Waterford Wedgewood went into receivership after being taken over by a US private equity firm. The US company has now put 10 million Euros in a severance fund, and negotiations are ongoing to keep some of the jobs.

Canada
As the Big Three automakers collapse, there have been 4 occupations by Canadian Auto Workers so far this year. In each case, factories were closing and workers were not getting compensation that was owed to them. They occupied the factories to stop the machines from being removed, using that as leverage to force the companies back to the table - precisely the same dynamic that worker takeovers in Argentina have followed.

France
In France, there's been a new wave of "Bossnappings" this year, in which angry employees have detained their bosses in factories that are facing closure. Companies targeted so far include Caterpillar, 3M, Sony, and Hewlett Packard. The 3M executive was brought a meal of moules et frites during his overnight ordeal. (That's mussels and fries--not too shabby.)

A comedy hit in France this spring was a movie called "Louise-Michel," in which a group of women workers hires a hitman to kill their boss after he shuts down their factory with no warning.

A French union official said in March, "those who sow misery reap fury. The violence is done by those who cut jobs, not by those who try to defend them."

And this week, 1,000 steelworkers disrupted the annual shareholders meeting of ArcelorMittal, the world's largest steel company. They stormed the company's headquarters in Luxembourg, smashing gates, breaking windows, and fighting with police.

Poland
Also this week, in Southern Poland, at the largest coal coking producer in Europe, thousands of workers bricked up the entrance to the company's headquarters, protesting wage cuts.

US
And then there's the famous Republic Windows and Doors story: 260 workers occupied their plant for 6 world-shaking days in Chicago last December. With a savvy campaign against the company's biggest creditor, Bank of America ("You got bailed out, we got sold out!") and massive international solidarity, they won the severance they were owed. And more - the plant is re-opening under new ownership, making energy-efficient windows with all the workers hired back at their old wages.

And this week, Chicago is making it a trend. Hartmarx is 122-year old company that makes business suits, including the navy blue number that Barack Obama wore on election night, and his inaugural tuxedo and topcoat. The business is in bankruptcy. Its biggest creditor is Wells Fargo, recipient of 25 billion public dollars in bailout money. While there are 2 offers on the table to buy the company and keep it operating, Wells Fargo wants to liquidate it. On Monday, 650 workers voted to occupy their Chicago factory if the bank goes ahead with liquidation.

To be continued...

Naomi Klein is an award-winning journalist, syndicated columnist and author. To read all her latest writing visit www.naomiklein.org. Avi Lewis Avi is a filmmaker, journalist, and the host of Fault Lines on Al Jazeera English.

Vote to test corporate water rights

2009-05-12T14:26:00.001-04:00

By Ann S. Kim, Staff Writer; published May 11 by the Portland (ME) Press-Herald

A key battle in Maine's ongoing war over water will be decided in Wells on Saturday.

Voters at a town meeting will decide whether theirs will become the latest community to ban water extraction by companies like Poland Spring.

Rather than trying to regulate water extraction, the ordinance takes a "rights-based" approach by asserting that ecosystems have rights to exist, flourish and evolve naturally in town. Wells and any of its residents would have standing to seek damages in court against any company that interfered with those rights.

Under the ordinance, corporations would have no constitutional rights within the town. The Supreme Court has found that corporations have some constitutional rights – such as a right to free speech and against government taking of property without due process – but not others, such as the right against self-incrimination.

Two other Maine towns – Shapleigh and Newfield – used such an approach to adopt similar measures this year. The neighboring towns acted after Poland Spring, a subsidiary of Nestle Waters North America, started the process to drill test wells in search of a potential new water source.

In Wells, the controversy stems from a proposed 30-year contract between Poland Spring and the Kennebunk, Kennebunkport and Wells Water District. Under that proposal – tabled indefinitely last summer because of a public outcry – the company would have been able to draw a maximum of 432,000 gallons a day from the Branch Brook aquifer. By comparison, the district's average daily water usage is about 2.8 million gallons, and peak use is about 7 million gallons a day.

The town attorney for Wells has advised selectmen that she believes the proposed rights-based ordinance violates federal and state constitutional principles, as well as state law and the town charter. Selectmen declined by a vote of 3-2 to put the ordinance on a town ballot, but supporters of the measure gathered enough petition signatures to force a town meeting.

The town's Ordinance Review Committee, meanwhile, is working on regulations for water extraction. A draft may be presented to selectmen May 27, said Bill Gosbee, the group's chairman.

The Pennsylvania-based Community Environmental Legal Defense Fund promotes the rights-based approach of the water ordinances and others dealing with issues ranging from sludge spreading to corporate agriculture to mining.

Regulatory schemes have failed to protect ecosystems and have instead helped "the corporate boys build a better permit," said Gail Darrell, the fund's community organizer in New England. A different view of nature – as something that must be able to preserve itself, rather than being plundered for profit – was needed, she said.

"If we treat nature as though it has rights, we can protect it," Darrell said. "So if a corporation understands, if it destroys nature, they have to fix it. They need to be responsible for the destruction."

Darrell questions why a corporation's goals should trump those of people when people are the source of governing power and corporations are only "creations of the state." She considers court decisions giving corporations constitutional rights "illegitimate."

"'Corporation' is not in our Constitution," she said.

While corporations are artificial legal entities, courts decide whether to treat them like people when it comes to constitutional rights, said H. Cabanne Howard, a University of Maine School of Law professor. No state or municipality has the authority to negate the rights that courts say corporations have, he said.

"You can't just pass a statute saying those decisions don't matter," he said.

Dave Owen, another Maine Law professor, said a local ordinance can't trump state law, which includes a regulatory scheme that allows the extraction of water by companies like Poland Spring, with certain limitations.

Owen, who specializes in environmental law, worked as a lawyer in California with environmental groups that tried to limit water extraction and with counties that defended groundwater management ordinances against constitutional challenges.

"The better approach, if this group is frustrated with that state scheme, would be to try to change it at the state level. Passing an inconsistent local ordinance would be only a symbolic act," Owen wrote in an e-mail message.

Leah Rachin, the attorney for Wells, says the ordinance would likely be found illegal in a challenge.

If the ordinance passes at the town meeting, she said, it could be challenged by a party that has standing, one that could point to a particular injury.

Selectmen would have the option to ask a court for a determination of the ordinance's legality, Rachin said.

Poland Spring would have no legal standing in Shapleigh or Newfield, where the company has no property or business operations, said Mark Dubois, the company's natural resource manager. More work has been done in Wells, he said, but it is too early to look into whether the company would have legal standing there.

In Pennsylvania, Belfast Township in Fulton County repealed its ban on corporate farming after the state attorney general's office took action.

The office targeted the ordinance, based on others by the Community Environmental Legal Defense Fund, because it tried to restrict activities allowed in the state constitution, said Nils Frederiksen, a spokesman for the office. Under a state law, the attorney general has the authority to challenge local ordinances that violate farming-related state laws.

Skip Clark of Wells, a supporter of the rights-based ordinance, worries that the water district could enter into a deal before residents fully understand the issue. In the meantime, he said, the rights-based ordinance offers protection.

"The courts decide it's not constitutional – that's no problem," he said. "It gains time for this entire issue to be thrashed out."

The Single-Payer Taboo

2009-05-12T14:06:00.002-04:00

by Ralph Nader. Posted May 11 at Counterpunch.

Among the giant taboos afflicting Congress these days is the proposal to create a single payer health insurance system (often called full Medicare for everyone).

How can this be? Don’t the elected politicians represent the people? Don't they always have their finger to the wind?

Well, single payer is only supported by a majority of the American people, physicians and nurses. They like the idea of public funding and private delivery. They like the free choice of doctors and hospitals that many are now denied by the HMOs.

There are also great administrative efficiencies when single payer displaces the health insurance industry and its claims--denying, benefit--restricting, bureaucratically-heavy profiteering. According to leading researchers in this area, Dr. David Himmelstein and Dr. Stephanie Woolhandler, single payer will save $350 billion annually.

Yet, on Capitol Hill and at the White House there are no meetings, briefings, hearings, and consultations about kinds of health care reforms that reform the basic price inflation, indifference to prevention, and discrimination by health insurers.

There is no place at the table for single payer advocates in the view of the Congressional leaders who set the agenda and muzzle dissenters.

Last month at a breakfast meeting with reporters, House Speaker Nancy Pelosi (D-CA) responded to a question about health care with these revealing and exasperating words: "Over and over again, we hear single payer, single payer, single payer. Well, it's not going to be a single payer."

Thus spake Speaker Pelosi, the Representative from Aetna? Never mind that 75 members of her party have signed onto H.R. 676-the Conyers single payer legislation. Never mind that in her San Francisco district, probably three out of four people want single payer. And never mind that over 20,000 people die every year, according to the Institute of Medicine, because they cannot afford health insurance.

What is more remarkable is that many more than the 75 members of the House privately believe single payer is the best option. Hillary Clinton, Barack Obama, Ted Kennedy, and Nancy Pelosi are among them. But they all say, single payer "is not practical" so it's off the table.

What gives here? The Democrats have the numbers and procedures to pass any kind of health reform this year, including single payer. President Obama could sign it into law.

But "it's not practical" because these politicians fear the insurance and pharmaceutical industries--and seek their campaign contributions--more than they fear the American people. It comes down to the corporations, who have no votes, are organized to the teeth and the people are not.

So, when Senator Baucus, chairman of the Senate Finance Committee and a large recipient of health insurance and drug company donations, held a public roundtable discussion on May 5, fifteen witnesses were preparing to deliver their statements. Not one of them was championing single payer.

As Senator Baucus started his introductory remarks, something happened. One by one, eight people in the audience, most of them physicians and lawyers, stood up to politely but insistently protest the absence of a single payer presentation.

One by one, the police came, took them out of the hearing room, arrested and handcuffed them. The charge was "disruption of Congress"--a misdemeanor.

They call themselves the "Baucus Eight". Immediately, over the internet and on C-Span, public radio, and the Associated Press, the news spread around the country. You can see the video on http://singlepayeraction.org.

To the many groups and individuals who have labored for single payer for decades, the Baucus Eight's protest seemed like an epiphany.

Dr. Quentin Young, a veteran leader for single payer and a founder of Physicians for a National Health Program (PNHP) e-mailed his reaction: "For our part, when the history of this period is written, we believe your action may well be noted as the turning point from a painful, defensive position to a more appropriate offensive position vis-à-vis Senator Baucus and his health industry co-conspirators."

Webster's dictionary defines "taboo" as "a prohibition against touching, saying, or doing something for fear of a mysterious superhuman force." For both Democrats and Republicans in Congress it is a fear of a very omnipresent super-corporate force.

However, moral and evidential courage is coming. On May 12, 2009, Senator Baucus is having another roundtable discussion with thirteen more witnesses, including those from the business lobbies and their consultants. Word has it that the Senator is about to invite a leading single payer advocate to sit at the table.

Here come the people! Join this historic drive to have our country join the community of western, and some third-world, nations by adopting a state of the art single payer system.

Visit http://singlepayeraction.org and break the taboo in your Congressional District.

Is Obama Naive About the For-Profit Health Industry's Commitment to Real Reform?

2009-05-12T13:53:00.002-04:00

by M.S. Bellows, Jr. Posted May 11 at Huffington Post

Optimism is a virtue; it leads us to see the best in people despite their worse sides, and to envision a better future even when we can clearly see the obstacles we currently face. But blind optimism is no virtue. Naive or overeager optimism can lead us to ignore the fact that most people have mixed motives, and to envision a bright future so clearly that we are blind to the obstacles that stand between a hard now and a better then. Wise optimists trust - but verify; they have faith in the better, but do not ignore the worse, angels of human nature.

On Sunday afternoon, two senior Obama Administration officials called a telephonic press conference to announce a huge, positive new development in the healthcare reform effort. When I say senior, I mean pretty darn senior. And they seemed genuinely, sincerely excited about this mysterious new development - excited enough to buzz every national journalist's BlackBerry with an invitation to the conference call in the middle of Mother's Day. They considered the development significant enough to declare an embargo, forbidding journalists to write about it until 9 p.m. Eastern Standard Time. Because the President himself will be announcing this development officially tomorrow morning, they made the call - arranged by the White House press office - "on background," asking not to be identified by name or position.

The big news? Just this: a coalition of health insurance, hospital, pharmaceutical company, and physician trade groups, plus a major union, will promise the President Monday that they will reduce the rate of future growth in the cost of healthcare by 1.5% per year for the next decade.

That's it. And the President will be announcing it himself Monday morning, presumably with equal excitement.

Healthcare will continue to be increasingly expensive for consumers, but not quite as quickly as it was going to be. 7% per year inflation will become 5.5% per year inflation -- that is, if the participants keep their promise. Which, according to the officials, they'll do, not because there's any kind of enforcement mechanism - there isn't one - but simply because they're "Americans."

(That's a quote: Big Pharma, the health insurance lobby, the American Medical Association, hospital industry groups, et al. are going to reduce costs, and presumably profits, solely because they're good "Americans.")

The senior administration officials were hyperbolic, if not hyperventilated. One, focusing on the political battle to enact healthcare reform, called this promise by industry trade groups "a game changer."

The other official, focusing on economic issues, saw this as nothing less than the salvation of the entire federal budget:

"I don't think there could be a more significant step to help struggling families and to help the federal budget than reducing the growth rate of healthcare spending by 1.5 percentage points per year. With regard to the federal budget... the only way that we are going to restore the nation to a sound fiscal path over the long term is to reduce the growth rate in health care costs... Reducing the growth rate of health care costs overall by 1.5% per year would virtually eliminate the nation's long term fiscal gap. ... This, by an order of magnitude, is far more important [than Social Security or related reforms] to the fiscal trajectory that we're on, especially over the long term, than anything else that could be done."

Remember, we're talking about slightly reducing the rate of growth in health care costs, not a reduction in health care costs themselves. That's what's supposedly going to save both American families and the nation's fiscal problems "over the long term."

The journalists on the call, understandably, were more skeptical. The biggies queued up to ask questions: reporters from the New York Times, Wall Street Journal, Associated Press, Washington Post, NBC News, CNN, Los Angeles Times, Reuters. Some asked for wonkish, green-eyeshade details (answers were rarely forthcoming).

Other reporters questioned what mechanisms were in place for making sure those promises are kept (answer: there are none).

In response to a question from Reuters, one of the officials put his trust in the bully pulpit and the Fourth Estate, saying, "I don't know how many of you have made, in-person, a commitment to the President of the United States... There will be accountability not only through regular check-ins with the President of the United States but also through the media, because I have no doubt that you all will be checking up on them."

The other official simply believes that pharmaceutical, insurance and hospital trade groups are acting in patriotic good faith, saying, "These are very sophisticated trade associations which in the past have, one could argue, dragged their feet when it came to the subject of health care reform and certainly cost containment. They're coming forward voluntarily, approaching this President and saying, we want to be part of the solution, we want to be part of getting health care reform done... That fundamentally aligns these major provider groups with the President's goal of getting health care reform done this year. That is a game changer in our opinion."

Eliza Marcus of Bloomberg and Michael Fletcher of the Washington Post asked outright whether the healthcare industry was buying something with this concession. One of the officials dismissed the possibility denied that there have been any discussions at all about the public plan or any other quid pro quo, instead casting the industry coalition in purely patriotic terms: "They put it to me that everybody must share responsibility... they want to get everybody covered..., and they said to me, we know we have to do our part... this is them coming forward as Americans to get this done."

Am I the only one who is puzzled at the Administration taking these groups at their word? Big Pharma, for example, hasn't made a concession yet without something being in it for them. Many of the groups participating in this initiative historically have opposed health care reform and are large donors to the Republican and Vichy Dem politicians who are preparing to mount a political and rhetorical battle against health care reform, as evidenced most recently by the leak of Republican pollster Frank Luntz's so it sounds like Mandatory Gay Nazi Communism.

It's difficult to believe that the concessions being made by the for-profit members of this "patriotic" coalition are unrelated to any hope that Obama can be persuaded to drop his current proposal to include an inexpensive, government-backed, single-payer-style healthcare plan among the options available to consumers once healthcare reform passes later this year. That government-backed option scares the for-profit healthcare industry, because they know they can't compete with it; Medicare, for all its faults, still has the lowest administrative costs than any other health provider in the country, and delivers competent care to millions of Americans who otherwise would go uninsured. For-profits can't top that -- and they know that if millions of Americans sign up for federally-run healthcare and see that it works, the inertia towards single-payer healthcare for everyone may become a juggernaut.

The last question of the call, happily, went to me. I wanted, first, to confirm that the grand announcement was merely about a reduction in cost increases, not a reduction in cost, and second, to know whether Obama, himself, considered a public health care option to be beyond negotiation.

I didn't like the answers I got, though. The first tells me that the Administration is getting too excited about too little. The second fell short of the adamant reassurance I wanted to hear. But decide for yourself:

Bellows: "I have two questions. The first is following up on Michael Fletcher's and Eliza Marcus' questions: is the President still insistent that a public health plan will be among the options offered to people, or is that a bargaining chip in any way? And the second question, following up on Andrew Beatty's: is it correct that the cost per capita will still increase, just not as much as it previously was projected to?

Senior Administration Official #1: "On the second question, the answer to that is yes. Again, what we're talking about here is reducing the growth rate, so yes, health care costs, you should anticipate health care costs will continue to rise, but achieving a slowdown in the rate at which they increase is a, would be a huge accomplishment in terms of freeing up resources for other priorities and in terms of relieving pressure on the federal budget."

The official continued with a justification for accepting continued healthcare cost increases: "One of the reasons that you should expect health care costs to continue to increase is not only that the population is aging, which puts some upward pressure on health spending, but also that as incomes rise over time, it is natural that people want to spend part of their additional income on health care...."

Senior Administration Official #2 on questions one: "On the public plan, this event with the President tomorrow is not about the public plan, we've had no discussion with this group about the public plan, in fact, if I look at the list of trade associations that are part of this, there are different views about it, but the President likes the public plan, it's part of his campaign platform."

I'm not normally a knee-jerk cynic, but this simply sounds naive to me. One of the Obama administration's mantras is "don't let the perfect become the enemy of the good." But in these times, with this mandate and the American people's rare but undeniable hunger for radical change, their motto ought to be: "Don't let the good be the enemy of the perfect."

Radical health care reform - reform that doesn't shave health care costs for regular people, but slashes them; reform that doesn't force single-payer healthcare on the American people too soon, but sets the stage for their eventual, uncomplaining acceptance of it - is within Obama's grasp. He'd be wrong to settle for merely "good" health care - for health care that merely slows the rate at which costs increase, or health care that doesn't include a government-payer option that would demonstrate that a government-sponsored plan can provide better care at lower cost than any profit-driven private plan is capable of.

Single-payer, low-cost healthcare is America's future. By taking for-profit corporate lobbyists at their word, is Obama setting himself up to agree to step off the path to that future? Obama has, within his grasp, that once-in-a-lifetime rarity: a plan that is both nearly perfect, AND achievable. Will he reassure us that nothing less will do for the American people -- people who have put their trust in his commitment to do more than compromise?

Causes of the Crisis

2009-05-04T17:01:00.003-04:00

by James K. Galbraith, posted May 1 at the Texas Observer

Editor’s note: These remarks were delivered to a meeting of the Texas Lyceum in Austin on April 3, at a debate between University of Texas professor James Galbraith, an Observer contributing writer, and former Majority Leader Richard Armey, chief instigator of the recent Astroturf “tea party" protests. Armey had begun his remarks by noting that his rule in life was “never trust anyone from Austin or Boston,” and proceeded to declare his allegiance to the “Austrian School” of economics, a libertarian view that regards public intervention in private markets as socialism.

It is of course a pleasure to be with you today. I was born in Boston, and I am proud of it. And I have lived 24 years in Austin—and I’m proud of that.

Leader Armey spoke to you of his admiration for Austrian economics. I can’t resist telling you that when the Vienna Economics Institute celebrated its centennial, many years ago, they invited, as their keynote speaker, my father [John Kenneth Galbraith]. The leading economists of the Austrian school—including von Hayek and von Haberler—returned for the occasion. And so my father took a moment to reflect on the economic triumphs of the Austrian Republic since the war, which, he said, “would not have been possible without the contribution of these men.” They nodded—briefly—until it dawned on them what he meant. They’d all left the country in the 1930s.

My own economics is American: genus Institutionalist; species: Galbraithian.

This is a panel on the crisis. Mr. Moderator, you ask what is the root cause? My reply is in three parts.

First, an idea. The idea that capitalism, for all its considerable virtues, is inherently self-stabilizing, that government and private business are adversaries rather than partners; the idea that freedom without responsibility is a viable business principle; the idea that regulation, in financial matters especially, can be dispensed with. We tried it, and we see the result.

Second, a person. It would not be right to blame any single person for these events, but if I had to choose one to name it would be a Texan, our own distinguished former Senator Phil Gramm. I’d cite specifically the repeal of the Glass-Steagall Act—the Gramm-Leach-Bliley Act—in 1999, after which it took less than a decade to reproduce all the pathologies that Glass-Steagall had been enacted to deal with in 1933. I’d also cite the Commodity Futures Modernization Act, slipped into an 11,000-page appropriations bill in December 2000 as Congress was adjourning following Bush v. Gore. This measure deregulated energy futures trading, enabling Enron and legitimating credit-default swaps, and creating a massive vector for the transmission of financial risk throughout the global system. When the Washington Post caught up with me at an airport in Parkersburg, West Virginia, a year ago to ask for a comment on Gramm’s role, I said very quickly that he was “the sorcerer’s apprentice of financial instability and disaster.” They put that on the front page. I do have to give Gramm some credit: When the Post called him up and read that to him, he said, “I deny it.”

Third, a policy. This was the abandonment of state responsibility for financial regulation: the regulation of mortgage originations, of underwriting, and of securitization. This abandonment was not subtle: The first head of the Office of Thrift Supervision in the George W. Bush administration came to a press conference on one occasion with a stack of copies of the Federal Register and a chainsaw. A chainsaw. The message was clear. And it led to the explosion of liars’ loans, neutron loans (which destroy people but leave buildings intact), and toxic waste. That these were terms of art in finance tells you what you need to know.

Subprime securities are inherently unsafe and should never have been permitted. They are based on loans to borrowers who cannot document their income and who may have bad credit histories, and they are collateralized by houses with fraudulently inflated appraisals, rated by agencies that did not examine the loan files. Writing in The Washington Post, Richard Cohen described one case, of Marvene Halterman of Avondale, Arizona:

At age 61, after 13 years of uninterrupted unemployment and at least as many of living on welfare, she got a mortgage. She got it even though at one time she had 23 people living in the house (576 square feet, one bath) and some ramshackle outbuildings. She got it for $103,000, an amount that far exceeded the value of the house. The place has since been condemned. ... Halterman’s house was never exactly a showcase—the city had once cited her for all the junk (clothes, tires, etc.) on her lawn. Nevertheless, a local financial institution with the cover-your-wallet name of Integrity Funding LLC gave her a mortgage, valuing the house at about twice what a nearby and comparable property sold for. ... Integrity Funding then sold the loan to Wells Fargo & Co., which sold it to HSBC Holdings PLC, which then packaged it with thousands of other risky mortgages and offered the indigestible porridge to investors. Standard & Poor’s and Moody’s Investors Service took a look at it all, as they are supposed to do, and pronounced it ‘triple-A.’”

The consequence of tolerating this and like behavior is a collapse of trust, a collapse of asset values, and a collapse of the financial system. That is what has happened, and what we have to deal with now.

Can “stimulus” get us out?

As a matter of economics, public spending substitutes for private spending. It provides jobs, motivates useful activity, staves off despair. But it is not self-sustaining in the absence of a viable private credit system. The idea that we will be on the road to full recovery and returning to high employment in a year or so therefore seems to me to be an illusion. And for this reason, the emphasis on short-term, “shovel-ready” projects in the expansion package, while understandable, was a mistake. As in the New Deal, we need both the Works Progress Administration, headed by Harry Hopkins, to provide employment, and the Public Works Administration, headed by Harold Ickes, to rebuild the country.

The desire for a return to normal is very powerful. It motivates both the ritual confidence of public officials and the dry numerical optimism of business economists, who always see prosperity just around the corner. The forecasts of these people, like those of official agencies such as the Congressional Budget Office, always see a turnaround within a year and a return to high employment within four or five years. In a strict sense, the belief is without foundation. Liquidation of excessive debt is now, and will remain for a time, the highest priority of American households. That is in part because for the moment they want to hold on to cash, and therefore they do not wish to borrow, and in part because with the collapse of house values, they no longer have collateral to borrow against. And so long as that is the case, there can be no strong recovery of private spending or business investment.

The risk we run, in public policy, is not inflation. It is lack of persistence, a premature reversal of direction, and of course the fear of large numbers. If deficits in the trillions and public debt in the tens of trillions scare you, this is not a line of work you should be in.

The ultimate goals of policy are not measured by deficits or debt. They are measured by the performance of the economy itself. Here Leader Armey and I agree. He spoke with approval, in his remarks, of the goals of 3 percent unemployment and 4 percent inflation embodied in the Humphrey-Hawkins Full Employment and Balanced Growth Act of 1978. Which, as a 24-year-old member of the staff of the House Banking Committee in 1976, I drafted.

Protectors Are Sabotaging Our Chance for True Reform

2009-04-28T11:26:00.000-04:00

by Marie Cocco, Washington Post Writers Group. Posted on Alternet on April 24

Every so often, I remember Ronald Reagan fondly -- not for his policies but for his skill at the art of persuasion. Right now, for example, I'd like to call the Gipper back to cock his head, give us that quizzical look and say "There you go again."

Yes, there they go again. They are the defenders of the health care status quo -- that is, the insurance industry and its protectors in both parties on Capitol Hill. And they have been frantically arguing these past few weeks that any coming reform of the health insurance system cannot, should not -- and will not, if they have their way -- include a public insurance plan that uninsured individuals can turn to if they find themselves without affordable insurance, or any coverage at all.

Maintaining what amounts to a monopoly on insurance for the working-age population has become a central goal of the insurance industry, which rightly fears that the government will provide more comprehensive coverage at a lower cost. This is, of course, the whole point of overhauling the insurance system. But never mind.

The industry worries that Americans will find out not only that government-supported health insurance isn't a socialist catastrophe (see, for example, Medicare) but a fairer, lower-cost and more efficient system than the expensive, inefficient -- and failing -- market-based system we have now.

Insurers have gone so far as to offer to stop charging people with existing medical conditions more for coverage, if only Congress and the Obama administration would continue to go along with a system more like the one we have now than the one that we actually need. The goal is to have health insurance reform automatically give insurers access to more customers, but without the competition they would face if the government created a plan that offered better value. In other words, universal coverage (and the taxpayer subsidies that would presumably be required to allow uninsured people to buy policies) would benefit insurance companies at least as much as it would consumers.

In essence, this is what the proponents of such a system want: a new and "reformed" health insurance system that works essentially like ours does today.

But the very reason we are again going down the politically treacherous path of attempting reform is that the system we have doesn't work, not by any standard.

At last official count, it failed to cover 45 million Americans. And that was before the recession struck with force, with millions losing their jobs and their insurance coverage with them. Based on Kaiser Family Foundation estimates, more than 6 million additional people have been left without insurance due to recent job losses.

Per capita health expenditures in the United States "are by far the highest" among the 30 countries that make up the Organization for Economic Cooperation and Development, in which the prevailing system of insurance is a national, government-supported health care system, according to a February study by three OECD economists. And though we pay more, we don't get better health in return. "The overall health status of the U.S. population, as reflected in variables such as life expectancy and potential years of life lost, appears to rank among the lower third of OECD countries," the report said.

We have known all this for some time. And for some time what we've done is take the same stale approach that relies on the private sector and the presumed magic of the market to cure our system's chronic failures.

We've tried insurance-industry managed care. We've introduced private health savings accounts for individuals, and the use of private insurance plans in Medicare to provide both overall medical coverage and prescription drug benefits. None of these efforts led to more people being covered. None led to lower costs.

In fact, government data shows that the introduction of private insurers into the Medicare system has meant higher taxpayer costs for those beneficiaries who are covered by the managed-care plans, when compared with beneficiaries of roughly the same age and health status who remain in government-sponsored Medicare.

So far we have "reformed" the health insurance system by reinforcing precisely what's wrong with it. To do this again would yield precisely the same result.

It wouldn't be a reformed system. It would be just another way for the insurance industry to game the one we already have.

Marie Cocco is a prize-winning syndicated columnist on political and cultural topics for The Washington Post Writers Group. She is a frequent commentator on national TV and radio shows.

Budget Deal Includes Fast-Track for Health Reform

2009-04-27T12:37:00.000-04:00

by Walter Alarkon. Originally published in The Hill, Friday April 24

Democrats in Congress and the White House have struck a tentative budget deal that includes reconciliation instructions that will make it easier to push through healthcare reform this year.

The deal, which still needs approval from the full House and Senate, would allow Democrats to pass healthcare reform with just a simple majority in the Senate, instead of the 60 votes needed to pass most controversial legislation, according to a congressional aide.

The budget agreement does not include reconciliation instructions for climate change legislation, which both Senate Republicans and Democrats have argued against.

The decision to include reconciliation instructions will likely rile Republicans, who portrayed the use of the maneuver as an attack on Senate rules. But top Democrats have said that they'll resort to reconciliation rules if Republicans remain unwilling to cooperate on long-awaited healthcare legislation.

Senate Budget Committee Chairman Kent Conrad (D-N.D.) stressed that the deal has yet to be finalized. He noted that he and House Budget Committee Chairman John Spratt (D-S.C.), who held talks on the budget Thursday night, still need to present "options" on the budget resolution to their fellow colleagues.

"There is still a fair amount of work to be done and colleagues to check with before we can reach a final agreement," Conrad said. "But we are hopeful we will be able to complete work next week."

Sen. Judd Gregg (N.H.), the top Republican on the Senate Budget Committee, said that using the reconciliation process goes against Democrats' talk of bipartisanship.

"A reform of our health care system – a massive legislative undertaking that will impact every American – should be done through the normal debate and amendment process," Gregg said in a statement. "To circumvent that process in favor of ramming through a partisan plan that needs only a simple majority to pass is a far cry from the bipartisanship that has been promised."

Obama administration officials, including White House Chief of Staff Rahm Emanuel and White House Budget Director Peter Orszag, have been meeting with congressional Democrats this week to hammer out an agreement before President Obama's 100th day in office, which is Wednesday. Senate Majority Leader Harry Reid (D-Nev.) said he hopes to hold a final Senate vote on passing the budget resolution on Wednesday, which is also when Obama will hold a primetime news conference.

If it passes, the president will be able to tout progress toward his goals of energy independence and healthcare and education reform. The budget calls on lawmakers to pass legislation that will reform the healthcare system, reduce the country's dependence on foreign oil and increase access to higher education without adding to the deficit. The budget, however, does not specify how those goals would be reached and how they would be paid for.

The tentative budget deal would set the non-defense discretionary spending in 2010 at levels lower than Obama and the House's requests but greater than the request from the Senate. Obama's budget called for $540 billion in such spending, the House called for $533 billion and the Senate called for $525 billion.

The agreement would also prevent the Alternative Minimum Tax (AMT) from hitting upper-middle-class taxpayers for another three years, which is what Senate Democrats had called for. The House plan wanted an AMT patch that would expire after one year, while the Obama administration had called for indexing the threshold at which taxpayers are hit by the tax to inflation, a proposal that would have generated more revenue but increased the tax burden on above-average earners.

The Profiteers of Suffering--The Top 10 Enemies of Single-Payer

2009-04-22T18:36:00.003-04:00

by Russell Mokhiber. Posted on CommonDreams.org on April 16

Most people, when they arrive in Washington, D.C., see it for what it is--a cesspool of corruption.

Two reasonable reactions to the cesspool.

One, run away screaming in fear.

Two, stay and fight back and bring to justice those who have corrupted our democracy.

Unfortunately, many choose a third way--stay and be transformed.

Instead of seeing a cesspool, they begin seeing a hot tub.

The result--profits and wealth for the corporate elite--death, disease and destruction for the American people.

Nowhere does this corrupt, calculating transformation do more damage than in the area of health care.

Outside the beltway cesspool/hot tub, the majority of doctors, nurses, small businesses, health economists, and the majority of the American people--according to recent polls--want a Canadian-style, single payer, everybody in, nobody out, free choice of doctor and hospital, national health insurance system.

Inside the beltway cesspool/hot tub, the corrupt elite will have none of it.

They won't even put single payer on the table for discussion.

Why not?

Because it will bring a harsh justice--the death penalty--to their buddies in the multi-billion dollar private health insurance industry.

The will of the American people is being held up by a handful of organizations and individuals who profit off the suffering of the masses.

And the will of the American people will not be done until this criminal elite is confronted and defeated.

(Remember, virtually the entire industrialized world--save for us, the U.S.--makes it a crime to allow for-profit health insurance corporations to make money selling basic health insurance.)

Before we confront and defeat the inside the beltway cesspool/hot tub crowd, we must first know who they are.

To wit, we present the Top Ten Enemies of Single Payer (listed here in alphabetical order):

American Association of Retired Persons (AARP)
AARP, one of DC's most powerful lobbying groups, has worked inside the beltway for years to defeat single payer. Why? AARP makes about a quarter of its money selling insurance through its affiliate, United Healthcare Group, the nation's largest for-profit insurance company. AARP must defeat single payer--which if enacted, would wipe out that revenue stream.

American Health Insurance Plans (AHIP)
The private health insurance industry. Public enemy number one. The health insurance corporations must die so that the American people can live. Of course, facing the death penalty, AHIP is the most aggressive opponent to single payer. No compromise with AHIP.

American Medical Association
With a shrinking base of doctors (only 25 percent of doctors nationwide belong), the AMA is the most conservative of the doctors' organizations. I just returned from a health care policy forum at the Center for American Progress. As usual, not one of the panelists mentioned single payer. Only during the question period did a self-identified patient/citizen ask the single payer question. And a pit bull-like Nancy Nielsen, president of the AMA, ripped into the questioner. "Sounds more like a statement than a question," Nielsen said. "And clearly you have a point of view about that. And I donít happen to share that point of view." Clearly she doesn't. But just as clearly, the majority of doctors, probably even a majority of doctors who belong to the AMA, support single payer. Nielsen is in denial and must be defeated.

Barack Obama
He was for it when he was a state Senator in Illinois. Now, ensconced in the corporate prison that is the White House, he says single payer is off the table. To get off the list, Obama needs to put single payer back on the table.

Business Roundtable
Dr. David Himmelstein, co-founder of Physicians for a National Health Program (PNHP), was at a health care forum a couple of years ago sponsored by the Business Roundtable. And the moderator asked the audience--made up primarily of representatives of big business--to indicate their preference of health care reforms. And the majority came out in favor of single payer. Why then is the Business Roundtable opposed? Himmelstein put it this way: "In private, they support single payer, but they're also thinking--if you can take away someone else's business--the insurance companies' business--you can take away mine. Also, if workers go on strike, I want them to lose their health insurance. And it's also a cultural thing--we don't do that kind of thing in this country."

Families USA
A major inside the beltway liberal foundation and long-time foe of single payer. Its chief executive, Ron Pollack, was once an advocate for single payer. But no more. In November 1991, Pollack was at a Washington hotel debating Yale University professor Ted Marmor in front of then Arkansas Governor Bill Clinton. Marmor was making the argument for single payer. Pollack against. A November 1994 article in the Washington Monthly, co-authored by Marmor, reported the result this way: "After the two advocates finished, Clinton looked thoughtful, pointed to Marmor and said, 'Ted, you win the argument.' But gesturing to Pollack, Marmor recalls, the governor quickly added, 'But weíre going to do what he says.' Even considering the Canadian system, everyone in the room agreed, would prompt GOP cries of 'socialized medicine'--cries that the press would faithfully report."

Health Care for American Now
The largest coalition of liberal groups promoting a choice between a public plan and private insurance companies. "They are saying--we can't do single payer because Americans donít want it," said Kip Sullivan of the Minnesota chapter of PNHP. "That's based on junk research conducted by Celinda Lake for the Herndon Alliance. It is bad enough to say we can't do single payer because the insurance industry is too powerful to beat. But it is just plain insidious to say we can't do single payer because the American people don't want it. In fact, polling data indicates that two-thirds of Americans support a single payer system. And that level of support exists despite the fact that there is little public discussion about it."

Kaiser Family Foundation
One of the most prestigious liberal inside the beltway think tanks on health reform policy. Saul Friedman is a reporter for Newsday. In February, Friedman wrote an article for Newsday arguing that single payer is suffering from a conspiracy of silence. And he says Kaiser is the most culpable of the co-conpsirators. Kaiser, funded initially by insurance industry money, regularly keeps single payer off the table, Friedman says. When single payer advocates released a study in January asserting that Congressman John Conyers' single payer bill (HR 676) could create 2.6 million new jobs and would cost far less than the private insurance currently paid for by individuals and employers, ìthe Kaiser Family Foundation's daily online report on health care developments at kff.org didn't mention it, Friedman reported. "Nor has Kaiser, the most comprehensive online source of health care information, made any mention of single-payer or the Conyers bill since it was introduced in 2003, despite widespread support for such a plan according to Kaiser's own polls." After a number of insistent inquiries, Kaiser told Friedman that they would publish charts in March comparing the Stark and Conyers bills. They never did.

The Lewin Group
The go-to consulting firm for health reform studies. The most recent study, released last week and widely quoted in the press, of the public plan option, showed that the insurance industry would lose 32 million policy holders if a public plan is enacted. Lewin's health reform policy guru, John Sheils, told the Associated Press: "The private insurance industry might just fizzle out altogether." What the mainstream press didnít report was that The Lewin Group is a wholly owned subsidiary of Ingenix, which is in turn owned by UnitedHealth Group, the nation's largest health insurance corporation. Lewin Group has conducted studies on single payer at the state level--and their studies consistently show that single payer is the most efficient cost saving system. But Lewin Group has never done a study on HR 676--which would create a single payer for the entire country and drive The Lewin Group's parent--UnitedHealth Group--out of business. When asked why Lewin Group never has done a study on HR 676, Sheils said "the President didn't propose single payer, did he?" No, he didn't. Thatís why he too is on this list. (Sheils says The Lewin Group has studied national single payer. He points to a recent comparison of the different health reform proposals floating on Capitol Hill--including one by Congressman Pete Stark (D-California). Stark's bill would give every American the option of opting into Medicare. But that's not single payer, because it keeps the private insurance industry in the game. Sheils counters that he modeled the Stark bill as single-payer. "The employer coverage option under the Stark bill is made so unfavorable that no employer would do it. We have everyone in Medicare, with the resulting savings." Sheils says that of all the plans studied, the Stark bill saves the most money.)

Pharmaceutical Research and Manufacturers Association of America (PHRMA)
PHRMA chief executive Billy Tauzin says that under single payer, the government would become a "price fixer." By which he means, the government, as a single payer, will have the power to negotiate drug prices downward, thus costing the drug corporations millions in excess profits. In recent years, PHRMA has infiltrated liberal sounding groups like America's Agenda--Health Care for All. PHRMA's Vice President for Government Affairs and Law, Jan Faiks, now sits on the board of America's Agenda and PHRMA contributes money to the group--which has worked in recent years to undermine single payer at the state level. (America's Agenda Mark Blum wonít say how much money PHRMA gives to his group.)

We have met the enemy.

And they ain't us.

Russell Mokhiber is editor of Corporate Crime Reporter and founder of singlepayeraction.org

The Real Boston Tea Party was an Anti-Corporate Revolt

2009-04-16T09:59:00.003-04:00

by Thom Hartmann. Posted on Wednesday, April 15, 2009 at CommonDreams.org

CNBC Correspondent Rick Santelli called for a "Chicago Tea Party" on Feb 19th in protesting President Obama's plan to help homeowners in trouble. Santelli's call was answered by the right-wing group FreedomWorks, which funds campaigns promoting big business interests, and is the opposite of what the real Boston Tea Party was. FreedomWorks was funded in 2004 by Dick Armey (former Republican House Majority leader & lobbyist); consolidated Citizens for a Sound Economy, funded by the Koch family; and Empower America, a lobbying firm, that had fought against health care and minimum-wage efforts while hailing deregulation.

Anti-tax "tea party" organizers are delivering one million tea bags to a Washington, D.C., park Wednesday morning - to promote protests across the country by people they say are fed up with high taxes and excess spending.

The real Boston Tea Party was a protest against huge corporate tax cuts for the British East India Company, the largest trans-national corporation then in existence. This corporate tax cut threatened to decimate small Colonial businesses by helping the BEIC pull a Wal-Mart against small entrepreneurial tea shops, and individuals began a revolt that kicked-off a series of events that ended in the creation of The United States of America.

They covered their faces, massed in the streets, and destroyed the property of a giant global corporation. Declaring an end to global trade run by the East India Company that was destroying local economies, this small, masked minority started a revolution with an act of rebellion later called the Boston Tea Party.

On a cold November day in 1773, activists gathered in a coastal town. The corporation had gone too far, and the two thousand people who'd jammed into the meeting hall were torn as to what to do about it. Unemployment was exploding and the economic crisis was deepening; corporate crime, governmental corruption spawned by corporate cash, and an ethos of greed were blamed. "Why do we wait?" demanded one at the meeting, a fisherman named George Hewes. "The more we delay, the more strength is acquired" by the company and its puppets in the government. "Now is the time to prove our courage," he said. Soon, the moment came when the crowd decided for direct action and rushed into the streets.

That is how I tell the story of the Boston Tea Party, now that I have read a first-person account of it. While striving to understand my nation's struggles against corporations, in a rare book store I came upon a first edition of "Retrospect of the Boston Tea Party with a Memoir of George R.T. Hewes, a Survivor of the Little Band of Patriots Who Drowned the Tea in Boston Harbor in 1773," and I jumped at the chance to buy it. Because the identities of the Boston Tea Party participants were hidden (other than Samuel Adams) and all were sworn to secrecy for the next 50 years, this account is the only first-person account of the event by a participant that exists. As I read, I began to understand the true causes of the American Revolution.

I learned that the Boston Tea Party resembled in many ways the growing modern-day protests against transnational corporations and small-town efforts to protect themselves from chain-store retailers or factory farms. The Tea Party's participants thought of themselves as protesters against the actions of the multinational East India Company.

Although schoolchildren are usually taught that the American Revolution was a rebellion against "taxation without representation," akin to modern day conservative taxpayer revolts, in fact what led to the revolution was rage against a transnational corporation that, by the 1760s, dominated trade from China to India to the Caribbean, and controlled nearly all commerce to and from North America, with subsidies and special dispensation from the British crown.

Hewes notes: "The [East India] Company received permission to transport tea, free of all duty, from Great Britain to America..." allowing it to wipe out New England-based tea wholesalers and mom-and-pop stores and take over the tea business in all of America. "Hence," wrote, "it was no longer the small vessels of private merchants, who went to vend tea for their own account in the ports of the colonies, but, on the contrary, ships of an enormous burthen, that transported immense quantities of this commodity ... The colonies were now arrived at the decisive moment when they must cast the dye, and determine their course ... "

A pamphlet was circulated through the colonies called The Alarm and signed by an enigmatic "Rusticus." One issue made clear the feelings of colonial Americans about England's largest transnational corporation and its behavior around the world: "Their Conduct in Asia, for some Years past, has given simple Proof, how little they regard the Laws of Nations, the Rights, Liberties, or Lives of Men. They have levied War, excited Rebellions, dethroned lawful Princes, and sacrificed Millions for the Sake of Gain. The Revenues of Mighty Kingdoms have entered their Coffers. And these not being sufficient to glut their Avarice, they have, by the most unparalleled Barbarities, Extortions, and Monopolies, stripped the miserable Inhabitants of their Property, and reduced whole Provinces to Indigence and Ruin. Fifteen hundred Thousands, it is said, perished by Famine in one Year, not because the Earth denied its Fruits; but [because] this Company and their Servants engulfed all the Necessaries of Life, and set them at so high a Price that the poor could not purchase them."

After protesters had turned back the Company's ships in Philadelphia and New York, Hewes writes, "In Boston the general voice declared the time was come to face the storm."

The citizens of the colonies were preparing to throw off one of the corporations that for almost 200 years had determined nearly every aspect of their lives through its economic and political power. They were planning to destroy the goods of the world's largest multinational corporation, intimidate its employees, and face down the guns of the government that supported it.

The queen's corporation
The East India Company's influence had always been pervasive in the colonies. Indeed, it was not the Puritans but the East India Company that founded America. The Puritans traveled to America on ships owned by the East India Company, which had already established the first colony in North America, at Jamestown, in the Company-owned Commonwealth of Virginia, stretching from the Atlantic Ocean to the Mississippi. The commonwealth was named after the "Virgin Queen," Elizabeth, who had chartered the corporation.

Elizabeth was trying to make England a player in the new global trade sparked by the European "discovery" of the Americas. The wealth Spain began extracting from the New World caught the attention of the European powers. In many European countries, particularly Holland and France, consortiums were put together to finance ships to sail the seas. In 1580, Queen Elizabeth became the largest shareholder in The Golden Hind, a ship owned by Sir Francis Drake.

The investment worked out well for Queen Elizabeth. There's no record of exactly how much she made when Drake paid her share of the Hind's dividends to her, but it was undoubtedly vast, since Drake himself and the other minor shareholders all received a 5000 percent return on their investment. Plus, because the queen placed a maximum loss to the initial investors of their investment amount only, it was a low-risk investment (for the investors at least-creditors, such as suppliers of provisions for the voyages or wood for the ships, or employees, for example, would be left unpaid if the venture failed, just as in a modern-day corporation). She was endorsing an investment model that led to the modern limited-liability corporation.

After making a fortune on Drake's expeditions, Elizabeth started looking for a more permanent arrangement. She authorized a group of 218 London merchants and noblemen to form a corporation. The East India Company was born on December 31, 1600.

By the 1760s, the East India Company's power had grown massive and worldwide. However, this rapid expansion, trying to keep ahead of the Dutch trading companies, was a mixed blessing, as the company went deep in debt to support its growth, and by 1770 found itself nearly bankrupt.

The company turned to a strategy that multinational corporations follow to this day: They lobbied for laws that would make it easy for them to put their small-business competitors out of business.

Most of the members of the British government and royalty (including the king) were stockholders in the East India Company, so it was easy to get laws passed in its interests. Among the Company's biggest and most vexing problems were American colonial entrepreneurs, who ran their own small ships to bring tea and other goods directly into America without routing them through Britain or through the Company. Between 1681 and 1773, a series of laws were passed granting the Company monopoly on tea sold in the American colonies and exempting it from tea taxes. Thus, the Company was able to lower its tea prices to undercut the prices of the local importers and the small tea houses in every town in America. But the colonists were unappreciative of their colonies being used as a profit center for the multinational corporation.

Boston's million-dollar tea party
And so, Hewes says, on a cold November evening of 1773, the first of the East India Company's ships of tax-free tea arrived. The next morning, a pamphlet was widely circulated calling on patriots to meet at Faneuil Hall to discuss resistance to the East India Company and its tea. "Things thus appeared to be hastening to a disastrous issue. The people of the country arrived in great numbers, the inhabitants of the town assembled. This assembly, on the 16th of December 1773, was the most numerous ever known, there being more than 2000 from the country present," said Hewes.

The group called for a vote on whether to oppose the landing of the tea. The vote was unanimously affirmative, and it is related by one historian of that scene "that a person disguised after the manner of the Indians, who was in the gallery, shouted at this juncture, the cry of war; and that the meeting dissolved in the twinkling of an eye, and the multitude rushed in a mass to Griffin's wharf."

That night, Hewes dressed as an Indian, blackening his face with coal dust, and joined crowds of other men in hacking apart the chests of tea and throwing them into the harbor. In all, the 342 chests of tea-over 90,000 pounds-thrown overboard that night were enough to make 24 million cups of tea and were valued by the East India Company at 9,659 Pounds Sterling or, in today's currency, just over $1 million.

In response, the British Parliament immediately passed the Boston Port Act stating that the port of Boston would be closed until the citizens of Boston reimbursed the East India Company for the tea they had destroyed. The colonists refused. A year and a half later, the colonists would again state their defiance of the East India Company and Great Britain by taking on British troops in an armed conflict at Lexington and Concord (the "shots heard 'round the world") on April 19, 1775.

That war-finally triggered by a transnational corporation and its government patrons trying to deny American colonists a fair and competitive local marketplace-would end with independence for the colonies.

The revolutionaries had put the East India Company in its place with the Boston Tea Party, and that, they thought, was the end of that. Unfortunately, the Boston Tea Party was not the end; within 150 years, during the so-called Gilded Age, powerful rail, steel, and oil interests would rise up to begin a new form of oligarchy, capturing the newly-formed Republican Party in the 1880s, and have been working to establish a permanent wealthy and ruling class in this country ever since.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning New York Times best-selling author, and host of a nationally syndicated daily progressive talk program The Thom Hartmann Show. His newest book is Threshold: The Crisis of Western Culture. Learn more at www.thomhartmann.com.

"Roll Call" names the ten congressional health care staffers to know

2009-04-07T07:54:00.005-04:00

The DC insider take on who's who in health care. In their profiles, most are long on "consensus," short on constituent and human need. Are these folks part of the problem? Can they be part of a single-payer solution? Most are Senate staffers, where Sen. Bernie Sanders (I-VT) has introduced a version of HR 676, S703, which also needs co-sponsors.

by Stephen Langel and Katie Kindelan, CongressNow Staff and Roll Call Staff; posted at Roll Call, March 31

While President Barack Obama has made reform of the nation's health care system one of his priorities, the real work tends to get done in the legislative trenches. The responsibility for reaching an elusive bipartisan deal will fall to a number of talented legislative staff in both chambers. Here are 10 Hill staffers who will play a crucial role in whatever health care legislation is enacted.

David Bowen, staff director for Senate Health, Education, Labor and Pensions Committee, majority staff
Age: 43
Birthplace: Summit, N.J.
Education: B.S., Brown University; Ph.D., neurobiology, University of California at San Francisco

Bowen serves as Sen. Edward Kennedy's (D-Mass.) "alter ego," taking an approach to developing policy that is based on deal-making and team building.

"I look to Sen. Kennedy as an example," Bowen said. "Throughout his Senate career, he has found his way around legislative obstacles once seen as insurmountable." And for many of those obstacles, Bowen added, he has found a way to turn "what others perceived as an obstacle into a path forward."

David Nexon, now the No. 2 at AdvaMed, the medical device trade association and Bowenís predecessor at the committee, agreed that Bowen takes such an approach. In following Kennedyís lead, Bowen goes into negotiations knowing that he needs to seek common ground in order to develop a lasting deal on policy, Nexon said. And the way to do that is to focus on broad goals rather than narrow policy differences.

Conservative health lobbyists agree. Bowen is "willing to listen to both sides and work to find common ground in order to promote good public policy," one lobbyist said.

Bowen also enjoys his work as a mentor to junior staff.

"The thing I'm most proud of is when former fellows, interns and other colleagues come up to me long after they have left the office and say that working here was the best professional experience of their career," he said. The desire to mentor comes from his own experience as a fellow in Kennedyís office, he added.

Chuck Clapton, health policy director for the HELP Committee's minority health policy office
Age: 40
Birthplace: Boston
Education: B.A., Boston College; J.D., Catholic University's Columbus School of Law

Clapton is the top health care staffer in the HELP minority office and works closely with the majority in finding health care compromises.

Clapton coordinates the health activities of the minority staff and assists his boss, Sen. Mike Enzi (R-Wyo.), in developing policy positions on health reform.

Clapton's cooperative approach follows the lead of his boss, who has a history of working closely with Kennedy and who believes in the 80/20 rule. That means negotiators first identify the 80 percent of a topic where there is agreement, and then try to find a compromise on the remaining 20 percent.

Like many other health care staffers, Clapton points to the Medicare Prescription Drug, Improvement and Modernization Act as his greatest accomplishment. Enacting the Medicare Modernization Act is "the most significant change to Medicare in a generation," he said, and demonstrates the potential to use a "competitive, market-based structure to deliver a high-quality health care benefit in a cost-effective way." (blog editor's note: You might remember that this legislation prohibits the Federal government from negotiating discounts with drug companies and was characterized by Former US Comptroller General David M. Walker as "...probably the most fiscally irresponsible piece of legislation since the 1960s... because we promise way more than we can afford to keep.")

Clapton is seen as a strong asset to the HELP minority because of his experience working in health care in both chambers, one insurance lobbyist said.

Debbie Curtis, chief of staff to Rep. Pete Stark (D-Calif.); professional staff, House Ways and Means Subcommittee on Health
Age: 42
Birthplace: Arlington, Va.
Education: B.A., Boston University

Curtis is quick to minimize the influential role she has played for more than a decade in setting health policy agenda on Capitol Hill.

"I am part of a talented team on the Ways and Means Committee working to pursue better health care policy," Curtis said. "We shine by the policy we accomplish."

Lobbyists say Curtis does not give herself enough credit for the many policy items she has shepherded through the House, from securing preventive benefits in Medicare to passing both the Children's Health and Medicare Protection Act of 2007 and the Patients' Bill of Rights.

"She's like a great player-manager in baseball," said a Democratic health care lobbyist. "She brings out the best in her boss and then can take the field and pitch a no-hitter."

Curtis says achieving health care reform will hinge on both securing a public health insurance option and the willingness of all stakeholders to approach the issue with an open mind.

"Success hinges on consensus and the ability to maintain the momentum President Obama has clearly given to health care reform," Curtis said. "It will be the difference in our ability to put together what is a very large bill in a time frame that is not very long."

Liz Fowler, senior counsel and chief health counsel to Senate Finance Chairman Max Baucus (D-Mont.)
Age: 42
Birthplace: Taipei, Taiwan
Education: B.A., University of Pennsylvania; Ph.D., Johns Hopkins School of Public Health; J.D., University of Minnesota

Fowler leads the Finance Democrats' health care team. She coordinates health care reform efforts and works closely with the staff of ranking member Chuck Grassley (R-Iowa), along with Senate and House leadership.

The role requires Fowler to be a troubleshooter. "It is my job to find that common ground and mend fences if they need to be mended," she said.

That skill was put to the test when Fowler helped pass the Medicare Modernization Act, which provided a prescription drug benefit for seniors and was one of the hallmark health care accomplishments of the Bush administration. (blog editor's note: see above under Clapton)

This effort was "personally and professionally, one of the most challenging times in my life," Fowler said, because the issues were so complex and Democrats found themselves left out of much of the Republican-led negotiations.

Fowler believes the biggest challenge this year will be "getting the numbers to work" by ensuring that the votes are there to pass health care reform.

Various health care lobbyists cited Fowler's work on the prescription drug benefit as an example of her skill in finding compromises.

Still, Fowler's willingness to work with Republicans and the Bush administration on the MMA could be a hindrance to future negotiations, said one Senate Democratic aide, who added that many Democrats felt that Baucus undercut Senate leadership by reaching a deal with the Bush administration.

"I think a lot of old-timers are going to remember the fights over the MMA," the staffer said.

Mark Hayes, health policy director and chief health counsel for the Senate Finance Committee Republican staff
Age: 42
Birthplace: Shelbina, Mo.
Education: B.S., pharmacy, University of Missouri-Kansas City; J.D., American University's Washington College of Law

Hayes is the lead health care adviser to Iowa Republican Sen. Chuck Grassley, the ranking member of the Finance Committee, and he prepares his boss for negotiations with Chairman Max Baucus (D-Mont.) on a number of issues, including the ongoing health care reform effort.

Hayes, who also serves as a resource for other Republican committee members, has so much authority that one former Senate Democratic aide referred to him as the "101st Senator."

In working to forge a deal on health care, Hayes says he tries to step back and look at the big picture, figuring out policy differences among members and a way to bridge the gaps between them.

Like his Democratic counterpart, Hayes counts passage of the prescription drug benefit as his greatest health care accomplishment.

He served as the principal Republican staff person responsible for moving the drug benefit through committee and into law, at a time when the GOP was in the majority.

In moving his bosses' agenda forward, Hayes uses his ability to explain complex issues in easy-to-understand language, a health insurance lobbyist said. His preparation is also an asset, said Dean Rosen, the former health care adviser to then-Majority Leader Bill Frist (R-Tenn.). (blog editor's note: the Hospital Corp. of America heir) "Almost no staff person comes to a debate more prepared than Mark Hayes," added Rosen, who now is a lobbyist at Mehlman Vogel Castagnetti (blog editor's note: a firm that carries more than $2.25 million in contracts with pharmaceutical and insurance corporations, according to OpenSecrets.org)

Kate Leone, senior health counsel to Senate Majority Leader Harry Reid (D-Nev.)
Age: 37
Birthplace: Princeton, N.J.
Education: B.A., Cornell University, American studies; J.D., Columbia University

While Leone may see herself as a troubleshooter -- watching for potential problems within the Democratic caucus -- her health care peers view her as a deal-maker.

Leone, said one health care activist, is "more of a realist than an activist" who's not interested at "tilting at windmills." This approach is necessary because part of her job is to balance the various interests of the Senate Democratic Conference.

A Senate Democratic aide agrees. "I think she is going to want to guide any health reform to whatever is best for the caucus, not for what's best for certain Members' legacies." (blog editor's note: And what about what's best for the American people?)

The aide added that one of Leone's greatest strengths is to know where the caucus is on any particular issue, where individual Members are and where she can lose a Senator or two without hurting the legislationís overall goal.

Leone says her greatest accomplishment in health care thus far is helping to pass a slew of bills in 2006, including shortfalls in funding for the State Children's Health Insurance Program and problems with the Medicare program -- issues that had been long stalled in Congress.

Liz Murray, senior policy adviser to House Majority Leader Steny Hoyer (D-Md.)
Age: 33
Birthplace: Rochester, N.Y.
Education: B.A., Yale University; M.P.P., Harvard University, Kennedy School of Government

Murray has spent her entire career focused on health care issues. And lobbyists say it shows, describing her as someone with unmatched expertise on the issues and an ability to bring people together to get things done.

"People in my job need to be willing to meet with everyone to bring as many viewpoints back to our bosses as possible," Murray said. "The most productive meetings are ones in which people are informed and can speak to their issue, as a lobbyist but also from the perspective of an everyday American." (blog editor's note: What would she hear about health care if she listened to everyday Americans directly? Even when you call it something scary like "socialized medicine," most Americans support single payer!)

In her 10 years on Capitol Hill, Murray points to President Barack Obama's signing this year of the State Children's Health Insurance Program bill as her proudest achievement to date.

She sees today's health care debate as the greatest opportunity so far for real reform because the public is finally ready for more certainty and affordability in their health care services, and an inspirational president who has made the issue a priority.

"This debate is going to have so many varied interests," said a health care lobbyist who is following the debate closely. "Liz will be the one to build consensus." (blog editor's note: This begs a serious question: consensus among whom? Constitutents? Most Americans back a single payer system. And a majority of one of the most important class of stakeholders--health care professionals--do as well. It's sad to hear the phrase "varied interests" and immediately decode it as "not us".)

Karen Nelson, deputy committee staff director for health for the House Energy and Commerce Committee
Birthplace: Elgin, Ill.
Education: B.A., Cornell University, graduate work at Harvard University

Nelson brings more than 30 years of health care and legislative experience to her role as the top health care staffer on the House Energy and Commerce Committee, including 18 years with Chairman Henry Waxman (D-Calif.).

Lobbyists say it shows in her ability to harness a talented staff and execute her bossís legislative priorities.

"Karen is the heart and soul of the health team," said Rich Tarplin, a Democratic lobbyist and former Clinton health care administration official. "She applies strong policy expertise with strategic ability and strong management skills to get things done."

Nelson has had a hand in almost every piece of major health care legislation to pass through the chamber in the past three decades, from holding the earliest hearings on the AIDS epidemic to developing a food labeling system and securing the Hatch-Waxman provisions that brought generic drugs to market in the 1980s.

"It helps to work for a Member who's both very dedicated to the issues and a skilled legislator," Nelson said. "That, and having a talented and able staff who can define solutions to problems and move legislation forward."

Nelson says high on the agenda for the committee this year is securing a health care reform bill that will meet the goals laid out by the president and largely shared by the Caucus and members of the committee.

"Our job is to find consensus around the goals of quality, affordable coverage for all Americans," she said, "and move that legislation forward."

Bill Pewen, senior health policy adviser to Sen. Olympia Snowe (R-Maine)
Age: 52
Birthplace: Pasadena, Calif.
Education: B.S., health education, Southern Oregon State University; M.P.H., epidemiology, University of Pittsburgh; Ph.D., infectious diseases and microbiology, University of Pittsburgh

During a time of closely divided government, moderates in both parties are in high demand. Snowe is one of the leading Republican moderates, and Pewen is the leader of her health care shop.

Pewen says he likes the role Snowe plays. "I appreciate representing a Member who has worked to bridge divides and build consensus, as that is critical to making reform sustainable over the long term."

Snowe's unique position as a key vote to help Democrats reach the magic filibuster-proof 60 votes puts Pewen in demand and makes for an intense schedule. "He definitely has his hand in nearly everything," one Senate Democratic aide said. "He is the only person I know who carries two BlackBerrys."

Pewen's role was apparent in the fight over health information technology, where the results of his central role in ensuring more stringent privacy protections for electronic medical records were included in the economic stimulus package.

Specifically, Pewen made certain that the bill included a provision requiring that certain unintentional disclosures of patient medical data be considered breaches and thus subject to penalties.

Wendell Primus, senior policy adviser for budget and health to Speaker Nancy Pelosi (D-Calif.)
Age: 62
Birthplace: Eldora, Iowa
Education: B.A., Ph.D., economics, Iowa State University

Primus encompasses the mind of a policy wonk with the political skills acquired through a 30-year career on Capitol Hill. Now, as the Speaker's right-hand man on one of the top issues before Congress, lobbyists say Primus has hit his career stride.

"Throughout his career, this is the job where Iíve seen him be the most impressive," said a longtime health care lobbyist.

Primus began his legislative career on the House Ways and Means Committee, working on issues from income security and welfare reform to Medicare.

He began working for Pelosi four years ago, and today he oversees the complex task of moving legislation from the committee table to the president's desk.

"My role is to advise the Speaker on health care reform and manage legislation at the staff level," Primus said. "Itís making sure that all the bases are touched, from policy development and cost estimates to the press and various stakeholders."

Primus will no doubt play a leading role in crafting legislation aimed at achieving the ambitious overhaul of the current health care system both the Speaker and the president have called for.

"It is a tremendous challenge and opportunity all wrapped into one," he said. "This, how we get health care costs under control, should be a bipartisan issue."

A Scary Corporate Coup is Underway--We've Got to Stop It

2009-03-31T12:43:00.003-04:00

The Rip Off Must Be Stopped! Big bankers ruined our economy and now they are gaming the political system so they can profit even more off the crisis they caused. On April 11th, 2009, the public will come out in cities across the country to express their frustration and disapproval with how our elected officials have handled the economic crisis. No one has been left unscathed; this protest is yours.. for more information see www.anewwayforward.org.

by William Greider, posted on Alternet on March 31.

A reassuring new story line is emanating from our leaders. I heard Rep. Barney Frank, D-Mass., chairman of the House Banking Committee, explain it. Then I read the same line in a Washington Post news story. That tells me people in high places are selling it.

Dynamic capitalism, they explain, invents ways to create greater wealth, but sometimes it goes a little too far. Then government has to step in to correct things. This need typically occurs every generation or so, all in a day's work.

The Obama administration is proposing "sweeping" new regulatory laws so capitalism can continue its good works.

The story makes disturbing current events sound practically normal. But what are the storytellers leaving out?

They aren't saying that this financial catastrophe was not merely an inevitable development of history but a manmade disaster. Greedheads on Wall Street did their part, but so did Washington. The reason we need new rules is that a generation of Democrats and Republicans systematically repealed or gutted the old ones -- the regulatory controls enacted 80 years ago to remedy the last breakdown of capitalism (better known as the Great Depression).

The White House executed a nifty two-step this week to re-educate the public and deflect anger. On Tuesday, Treasury Secretary Timothy Geithner relaunched the massive bailout of banking and finance. Knowing how unpopular this is with the people at large, Geithner followed on Thursday with his "sweeping" plans to re-regulate the bankers and financiers.

Whenever official plans are called "sweeping," it indicates that they really, really mean it this time.

Most Americans are not financial experts. It's very difficult, nearly impossible, for normal mortals to sort through the dense policy talk and conflicting opinions to figure out if the rhetoric of reform is real.

Confusion is widespread in the land. Most Americans want to believe this president is leading us out of the swamp, but how can they know? I say, trust your gut feelings. They are as reliable as the learned experts.’

Many Americans want to believe because they think that returning to "normal" means their decimated 401(k) retirement accounts might somehow recover the 30-40 percent that disappeared during the past year. If it takes monster bank bailouts to restore stock-market prices, let's have bailouts.

Good luck with that.

The Dow has regained 21 percent in two weeks of rallies, but I remind friends that steep, short bursts in the stock market do not foretell the future of the economy. Banks may be relieved of their losses without changing the general economic outlook. After the crash of 1929, there were occasional stock rallies, followed by fierce bears. It took 25 years (until 1954) for the Dow to regain its old peak.

Another way to assess the Obama plan for reform is ask: Who likes it? The verdict was swift and sure after Geithner's twin announcements. Wall Street likes it.

The blueprint for regulatory reforms was applauded by the Securities Industry and Financial Markets Association; the American Insurance Association; and the Private Equity Council, the trade group for the major private funds that will get public money and backup insurance to buy the banking system's rotten assets.

This could be born-again patriotism. Or it could be the animal appetites of financiers smelling gorgeous opportunity for returns.

This may be one of those moments where people can find some guidance from their moral convictions. They do not need to know all the details to ask simple questions.

Does the outline of what's happening to rescue major financial institutions seem morally wrong? Or is it justified by the larger necessities of the national predicament? Is the government insufficiently tough in demanding reciprocal commitments from the beneficiaries? Should Washington pursue larger structural changes in the banking system?

Trying to imagine alternatives to the bankers-first bailouts is a good place to start. What follows are suggestions I produced at the request of young people organizing demonstrations around the country for April 11. They call themselves A New Way Forward. I hope they light lots of bonfires.

This rough outline leaves out lots of particular regulatory issues, but the core goal of reform is to create a banking and financial system that serves the society and the economy, not the other way around.

Everything being done to rescue and restore the old order gets in the way of creating something truly new and valuable for the future. Those of us throwing logs in the path of the bailouts are dismissed as naysayers or worse, but the financial titans are trying to foreclose just solutions by stampeding Congress and the president to adopt ill-considered ideas.

If Wall Street gets its way, the "reforms" may further consolidate power and ratify a corporate state -- a grotesque hybrid that combines the worst aspects of socialism and capitalism.

The reform ideas announced by Geithner would plant the seeds by creating a "systemic risk" regulator, presumably the Federal Reserve, to oversee the largest, most politically adept banks and financial firms that qualify as "too big to fail." Capitalism, with its inherent tendency toward monopoly, would have the means to monopolize democracy (see my recent Washington Post article.)

My new book, Come Home, America, asks people to enunciate their versions of "patriotic realism."

That is the essence of an alternative vision: de-concentrate power, liberate people and smaller enterprises, workers and middle managers and investors, to help shape the country's future from many different perspectives. This is how democracy was supposed to work. It can again.

Some points I recommend people consider:

1. Euthanasia for insolvent banks. Transferring their losses to the public will not restore the trillions in capital the bankers helped destroy. It would merely relieve the banks, their creditors and shareholders of the pain.

Government must take control of the system to supervise a just unwinding of the mess -- whether we call it nationalization or something else. Handing out money and leaving bankers in control of how it's spent is nutty and morally wrong. People everywhere understand this. Only Washington seems oblivious to the irrationality of what it is attempting.

2. The Federal Reserve must be democratized and effectively stripped of its peculiar, anti-democratic status as an unaccountable island of power within the government. A new federal agency -- accountable to Congress and the president -- can be refashioned from the working parts of the Fed. Call it a central bank or something else, but its governing power must not rest with heavyweight bankers on the board of directors at the 12 regional banks. (To understand why, consider that the New York Federal Reserve Bank was headed until recently by Geithner.)

3. The reformed Fed would be stripped of its regulatory functions and confined to conducting monetary policy. A different section of the Treasury or a new free-standing regulatory agency can assume responsibility for regulation and be armed with strong antitrust laws and other rules to ensure that "too big to fail" institutions are redefined as "too big to save."

4. The federal law against usury can be restored to halt predatory lending. Persistent violators would not be fined with trivial penalties, as they are now, but stripped of their government protections and subsidies -- that is, doomed.

5. A new banking system -- smaller and more diverse and responsible to the public interest -- can fill the hole left by the demise of major banks like Citigroup. Vast public resources should be devoted to creating this system, not to saving the mastodons. Public banks (like the North Dakota State Bank) and nonprofit savings-and-lending cooperatives can also serve as an important cross-check on private commercial banking -- a competitive model that offers credit on nonusurious terms and keeps the big boys honest.

6. Once the Federal Reserve is domesticated in a democratic fashion, then it can be reformed to assume broad supervision of the nonbank financial firms in the "shadow banking system" -- hedge funds, private equity firms, pension funds, mutual funds, insurance companies. (For more on this, see my recent Nation article, "Fixing the Fed.")

7. Our first political challenge is to disturb business as usual in Washington and prevent Congress from taking hasty action to adopt Wall Street's "reform" agenda. Congress is rattled by the exploding popular anger and listening nervously. The people need to speak louder -- loud enough for the president to hear.

William Greider is the author of, most recently, The Soul of Capitalism (Simon & Schuster).

$5 billion in political contributions bought Wall Street freedom from regulation and restraint

2009-03-27T11:42:00.002-04:00

Steps to financial cataclysm paved with industry dollars, according to Essential Information and Consumer Education Foundation

March 4 - The financial sector invested more than $5 billion in political influence purchasing in Washington over the past decade, with as many as 3,000 lobbyists winning deregulation and other policy decisions that led directly to the current financial collapse, according to a 231-page report issued today by Essential Information and the Consumer Education Foundation.

The report, "Sold Out: How Wall Street and Washington Betrayed America," shows that, from 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists, a financial juggernaut aimed at undercutting federal regulation. Nearly 3,000 officially registered federal lobbyists worked for the industry in 2007 alone. The report documents a dozen distinct deregulatory moves that, together, led to the financial meltdown. These include prohibitions on regulating financial derivatives; the repeal of regulatory barriers between commercial banks and investment banks; a voluntary regulation scheme for big investment banks; and federal refusal to act to stop predatory subprime lending.

"The report details, step-by-step, how Washington systematically sold out to Wall Street," says Harvey Rosenfield, president of the Consumer Education Foundation, a California-based non-profit organization. "Depression-era programs that would have prevented the financial meltdown that began last year were dismantled, and the warnings of those who foresaw disaster were drowned in an ocean of political money. Americans were betrayed, and we are paying a high price -- trillions of dollars -- for that betrayal."

"Congress and the Executive Branch," says Robert Weissman of Essential Information and the lead author of the report, "responded to the legal bribes from the financial sector, rolling back common-sense standards, barring honest regulators from issuing rules to address emerging problems and trashing enforcement efforts. The progressive erosion of regulatory restraining walls led to a flood of bad loans, and a tsunami of bad bets based on those bad loans. Now, there is wreckage across the financial landscape."

12 Key Policy Decisions Led to Cataclysm
Financial deregulation led directly to the current economic meltdown. For the last three decades, government regulators, Congress and the executive branch, on a bipartisan basis, steadily eroded the regulatory system that restrained the financial sector from acting on its own worst tendencies. "Sold Out" details a dozen key steps to financial meltdown, revealing how industry pressure led to these deregulatory moves and their consequences:
1. 1. In 1999, Congress repealed the Glass-Steagall Act, which had prohibited the merger of commercial banking and investment banking.
2. Regulatory rules permitted off-balance sheet accounting -- tricks that enabled banks to hide their liabilities.
3. The Clinton administration blocked the Commodity Futures Trading Commission from regulating financial derivatives -- which became the basis for massive speculation.
4. Congress in 2000 prohibited regulation of financial derivatives when it passed the Commodity Futures Modernization Act.
5. The Securities and Exchange Commission in 2004 adopted a voluntary regulation scheme for investment banks that enabled them to incur much higher levels of debt.
6. Rules adopted by global regulators at the behest of the financial industry would enable commercial banks to determine their own capital reserve requirements, based on their internal "risk-assessment models."
7. Federal regulators refused to block widespread predatory lending practices earlier in this decade, failing to either issue appropriate regulations or even enforce existing ones.
8. Federal bank regulators claimed the power to supersede state consumer protection laws that could have diminished predatory lending and other abusive practices.
9. Federal rules prevent victims of abusive loans from suing firms that bought their loans from the banks that issued the original loan.
10. Fannie Mae and Freddie Mac expanded beyond their traditional scope of business and entered the subprime market, ultimately costing taxpayers hundreds of billions of dollars.
11. The abandonment of antitrust and related regulatory principles enabled the creation of too-big-to-fail megabanks, which engaged in much riskier practices than smaller banks.
12. Beset by conflicts of interest, private credit rating companies incorrectly assessed the quality of mortgage-backed securities; a 2006 law handcuffed the SEC from properly regulating the firms.

Financial Sector Political Money and 3000 Lobbyists Dictated Washington Policy
During the period 1998-2008:
• Commercial banks spent more than $154 million on campaign contributions, while investing $363 million in officially registered lobbying:
• Accounting firms spent $68 million on campaign contributions and $115 million on lobbying;
• Insurance companies donated more than $218 million and spent more than $1.1 billion on lobbying;
• Securities firms invested more than $504 million in campaign contributions, and an additional $576 million in lobbying. Included in this total: private equity firms contributed $56 million to federal candidates and spent $33 million on lobbying; and hedge funds spent $32 million on campaign contributions (about half in the 2008 election cycle).
The betrayal was bipartisan: about 55 percent of the political donations went to Republicans and 45 percent to Democrats, primarily reflecting the balance of power over the decade. Democrats took just more than half of the financial sector's 2008 election cycle contributions.
The financial sector buttressed its political strength by placing Wall Street expatriates in top regulatory positions, including the post of Treasury Secretary held by two former Goldman Sachs chairs, Robert Rubin and Henry Paulson.

Financial firms employed a legion of lobbyists, maintaining nearly 3,000 separate lobbyists in 2007 alone. These companies drew heavily from government in choosing their lobbyists. Surveying 20 leading financial firms, "Sold Out" finds 142 of the lobbyists they employed from 1998-2008 were previously high-ranking officials or employees in the Executive Branch or Congress.

Rolling Stone: The Big Takeover

2009-03-27T11:17:00.003-04:00

by Matt Taibi, posted March 19, and in print in the April 2 edition

It's over -- we're officially, royally fucked. No empire can survive being rendered a permanent laughingstock, which is what happened as of a few weeks ago, when the buffoons who have been running things in this country finally went one step too far. It happened when Treasury Secretary Timothy Geithner was forced to admit that he was once again going to have to stuff billions of taxpayer dollars into a dying insurance giant called AIG, itself a profound symbol of our national decline -- a corporation that got rich insuring the concrete and steel of American industry in the country's heyday, only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate in the waning days of the British Empire.

The latest bailout came as AIG admitted to having just posted the largest quarterly loss in American corporate history -- some $61.7 billion. In the final three months of last year, the company lost more than $27 million every hour. That's $465,000 a minute, a yearly income for a median American household every six seconds, roughly $7,750 a second. And all this happened at the end of eight straight years that America devoted to frantically chasing the shadow of a terrorist threat to no avail, eight years spent stopping every citizen at every airport to search every purse, bag, crotch and briefcase for juice boxes and explosive tubes of toothpaste. Yet in the end, our government had no mechanism for searching the balance sheets of companies that held life-or-death power over our society and was unable to spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

So it's time to admit it: We're fools, protagonists in a kind of gruesome comedy about the marriage of greed and stupidity. And the worst part about it is that we're still in denial -- we still think this is some kind of unfortunate accident, not something that was created by the group of psychopaths on Wall Street whom we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, the party line was that poor AIG was just a victim of a lot of shitty luck -- bad year for business, you know, what with the financial crisis and all. Edward Liddy, the company's CEO, actually compared it to catching a cold: "The marketplace is a pretty crummy place to be right now," he said. "When the world catches pneumonia, we get it too." In a pathetic attempt at name-dropping, he even whined that AIG was being "consumed by the same issues that are driving house prices down and 401K statements down and Warren Buffet's investment portfolio down."

Liddy made AIG sound like an orphan begging in a soup line, hungry and sick from being left out in someone else's financial weather. He conveniently forgot to mention that AIG had spent more than a decade systematically scheming to evade U.S. and international regulators, or that one of the causes of its "pneumonia" was making colossal, world-sinking $500 billion bets with money it didn't have, in a toxic and completely unregulated derivatives market.

Nor did anyone mention that when AIG finally got up from its seat at the Wall Street casino, broke and busted in the afterdawn light, it owed money all over town -- and that a huge chunk of your taxpayer dollars in this particular bailout scam will be going to pay off the other high rollers at its table. Or that this was a casino unique among all casinos, one where middle-class taxpayers cover the bets of billionaires.

People are pissed off about this financial crisis, and about this bailout, but they're not pissed off enough. The reality is that the worldwide economic meltdown and the bailout that followed were together a kind of revolution, a coup d'Ètat. They cemented and formalized a political trend that has been snowballing for decades: the gradual takeover of the government by a small class of connected insiders, who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de gr‚ce: Given virtually free rein over the economy, these same insiders first wrecked the financial world, then cunningly granted themselves nearly unlimited emergency powers to clean up their own mess. And so the gambling-addict leaders of companies like AIG end up not penniless and in jail, but with an Alien-style death grip on the Treasury and the Federal Reserve -- "our partners in the government," as Liddy put it with a shockingly casual matter-of-factness after the most recent bailout.

The mistake most people make in looking at the financial crisis is thinking of it in terms of money, a habit that might lead you to look at the unfolding mess as a huge bonus-killing downer for the Wall Street class. But if you look at it in purely Machiavellian terms, what you see is a colossal power grab that threatens to turn the federal government into a kind of giant Enron -- a huge, impenetrable black box filled with self-dealing insiders whose scheme is the securing of individual profits at the expense of an ocean of unwitting involuntary shareholders, previously known as taxpayers.

I. PATIENT ZERO
The best way to understand the financial crisis is to understand the meltdown at AIG. AIG is what happens when short, bald managers of otherwise boring financial bureaucracies start seeing Brad Pitt in the mirror. This is a company that built a giant fortune across more than a century by betting on safety-conscious policyholders -- people who wear seat belts and build houses on high ground -- and then blew it all in a year or two by turning their entire balance sheet over to a guy who acted like making huge bets with other people's money would make his dick bigger.

That guy -- the Patient Zero of the global economic meltdown -- was one Joseph Cassano, the head of a tiny, 400-person unit within the company called AIG Financial Products, or AIGFP. Cassano, a pudgy, balding Brooklyn College grad with beady eyes and way too much forehead, cut his teeth in the Eighties working for Mike Milken, the granddaddy of modern Wall Street debt alchemists. Milken, who pioneered the creative use of junk bonds, relied on messianic genius and a whole array of insider schemes to evade detection while wreaking financial disaster. Cassano, by contrast, was just a greedy little turd with a knack for selective accounting who ran his scam right out in the open, thanks to Washington's deregulation of the Wall Street casino. "It's all about the regulatory environment," says a government source involved with the AIG bailout. "These guys look for holes in the system, for ways they can do trades without government interference. Whatever is unregulated, all the action is going to pile into that."

The mess Cassano created had its roots in an investment boom fueled in part by a relatively new type of financial instrument called a collateralized-debt obligation. A CDO is like a box full of diced-up assets. They can be anything: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So as X mortgage holder pays his bill, and Y corporate debtor pays his bill, and Z credit-card debtor pays his bill, money flows into the box.

The key idea behind a CDO is that there will always be at least some money in the box, regardless of how dicey the individual assets inside it are. No matter how you look at a single unemployed ex-con trying to pay the note on a six-bedroom house, he looks like a bad investment. But dump his loan in a box with a smorgasbord of auto loans, credit-card debt, corporate bonds and other crap, and you can be reasonably sure that somebody is going to pay up. Say $100 is supposed to come into the box every month. Even in an apocalypse, when $90 in payments might default, you'll still get $10. What the inventors of the CDO did is divide up the box into groups of investors and put that $10 into its own level, or "tranche." They then convinced ratings agencies like Moody's and S&P to give that top tranche the highest AAA rating -- meaning it has close to zero credit risk.

Suddenly, thanks to this financial seal of approval, banks had a way to turn their shittiest mortgages and other financial waste into investment-grade paper and sell them to institutional investors like pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered higher rates of return than truly safe products like Treasury bills, it was a win-win: Banks made a fortune selling CDOs, and big investors made much more holding them.

The problem was, none of this was based on reality. "The banks knew they were selling crap," says a London-based trader from one of the bailed-out companies. To get AAA ratings, the CDOs relied not on their actual underlying assets but on crazy mathematical formulas that the banks cooked up to make the investments look safer than they really were. "They had some back room somewhere where a bunch of Indian guys who'd been doing nothing but math for God knows how many years would come up with some kind of model saying that this or that combination of debtors would only default once every 10,000 years," says one young trader who sold CDOs for a major investment bank. "It was nuts."

Now that even the crappiest mortgages could be sold to conservative investors, the CDOs spurred a massive explosion of irresponsible and predatory lending. In fact, there was such a crush to underwrite CDOs that it became hard to find enough subprime mortgages -- read: enough unemployed meth dealers willing to buy million-dollar homes for no money down -- to fill them all. As banks and investors of all kinds took on more and more in CDOs and similar instruments, they needed some way to hedge their massive bets -- some kind of insurance policy, in case the housing bubble burst and all that debt went south at the same time. This was particularly true for investment banks, many of which got stuck holding or "warehousing" CDOs when they wrote more than they could sell. And that's were Joe Cassano came in.

Known for his boldness and arrogance, Cassano took over as chief of AIGFP in 2001. He was the favorite of Maurice "Hank" Greenberg, the head of AIG, who admired the younger man's hard-driving ways, even if neither he nor his successors fully understood exactly what it was that Cassano did. According to a source familiar with AIG's internal operations, Cassano basically told senior management, "You know insurance, I know investments, so you do what you do, and I'll do what I do -- leave me alone." Given a free hand within the company, Cassano set out from his offices in London to sell a lucrative form of "insurance" to all those investors holding lots of CDOs. His tool of choice was another new financial instrument known as a credit-default swap, or CDS.

The CDS was popularized by J.P. Morgan, in particular by a group of young, creative bankers who would later become known as the "Morgan Mafia," as many of them would go on to assume influential positions in the finance world. In 1994, in between booze and games of tennis at a resort in Boca Raton, Florida, the Morgan gang plotted a way to help boost the bank's returns. One of their goals was to find a way to lend more money, while working around regulations that required them to keep a set amount of cash in reserve to back those loans. What they came up with was an early version of the credit-default swap.

In its simplest form, a CDS is just a bet on an outcome. Say Bank A writes a million-dollar mortgage to the Pope for a town house in the West Village. Bank A wants to hedge its mortgage risk in case the Pope can't make his monthly payments, so it buys CDS protection from Bank B, wherein it agrees to pay Bank B a premium of $1,000 a month for five years. In return, Bank B agrees to pay Bank A the full million-dollar value of the Pope's mortgage if he defaults. In theory, Bank A is covered if the Pope goes on a meth binge and loses his job.

When Morgan presented their plans for credit swaps to regulators in the late Nineties, they argued that if they bought CDS protection for enough of the investments in their portfolio, they had effectively moved the risk off their books. Therefore, they argued, they should be allowed to lend more, without keeping more cash in reserve. A whole host of regulators -- from the Federal Reserve to the Office of the Comptroller of the Currency -- accepted the argument, and Morgan was allowed to put more money on the street.

What Cassano did was to transform the credit swaps that Morgan popularized into the world's largest bet on the housing boom. In theory, at least, there's nothing wrong with buying a CDS to insure your investments. Investors paid a premium to AIGFP, and in return the company promised to pick up the tab if the mortgage-backed CDOs went bust. But as Cassano went on a selling spree, the deals he made differed from traditional insurance in several significant ways. First, the party selling CDS protection didn't have to post any money upfront. When a $100 corporate bond is sold, for example, someone has to show 100 actual dollars. But when you sell a $100 CDS guarantee, you don't have to show a dime. So Cassano could sell investment banks billions in guarantees without having any single asset to back it up.

Secondly, Cassano was selling so-called "naked" CDS deals. In a "naked" CDS, neither party actually holds the underlying loan. In other words, Bank B not only sells CDS protection to Bank A for its mortgage on the Pope -- it turns around and sells protection to Bank C for the very same mortgage. This could go on ad nauseam: You could have Banks D through Z also betting on Bank A's mortgage. Unlike traditional insurance, Cassano was offering investors an opportunity to bet that someone else's house would burn down, or take out a term life policy on the guy with AIDS down the street. It was no different from gambling, the Wall Street version of a bunch of frat brothers betting on Jay Feely to make a field goal. Cassano was taking book for every bank that bet short on the housing market, but he didn't have the cash to pay off if the kick went wide.
In a span of only seven years, Cassano sold some $500 billion worth of CDS protection, with at least $64 billion of that tied to the subprime mortgage market. AIG didn't have even a fraction of that amount of cash on hand to cover its bets, but neither did it expect it would ever need any reserves. So long as defaults on the underlying securities remained a highly unlikely proposition, AIG was essentially collecting huge and steadily climbing premiums by selling insurance for the disaster it thought would never come.

Initially, at least, the revenues were enormous: AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees were paid a total of $3.5 billion; Cassano himself pocketed at least $280 million in compensation. Everyone made their money -- and then it all went to shit.

II. THE REGULATORS
Cassano's outrageous gamble wouldn't have been possible had he not had the good fortune to take over AIGFP just as Sen. Phil Gramm -- a grinning, laissez-faire ideologue from Texas -- had finished engineering the most dramatic deregulation of the financial industry since Emperor Hien Tsung invented paper money in 806 A.D. For years, Washington had kept a watchful eye on the nation's banks. Ever since the Great Depression, commercial banks -- those that kept money on deposit for individuals and businesses -- had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also prevented banks of any kind from getting into the insurance business.

But in the late Nineties, a few years before Cassano took over AIGFP, all that changed. The Democrats, tired of getting slaughtered in the fundraising arena by Republicans, decided to throw off their old reliance on unions and interest groups and become more "business-friendly." Wall Street responded by flooding Washington with money, buying allies in both parties. In the 10-year period beginning in 1998, financial companies spent $1.7 billion on federal campaign contributions and another $3.4 billion on lobbyists. They quickly got what they paid for. In 1999, Gramm co-sponsored a bill that repealed key aspects of the Glass-Steagall Act, smoothing the way for the creation of financial megafirms like Citigroup. The move did away with the built-in protections afforded by smaller banks. In the old days, a local banker knew the people whose loans were on his balance sheet: He wasn't going to give a million-dollar mortgage to a homeless meth addict, since he would have to keep that loan on his books. But a giant merged bank might write that loan and then sell it off to some fool in China, and who cared?

The very next year, Gramm compounded the problem by writing a sweeping new law called the Commodity Futures Modernization Act that made it impossible to regulate credit swaps as either gambling or securities. Commercial banks -- which, thanks to Gramm, were now competing directly with investment banks for customers -- were driven to buy credit swaps to loosen capital in search of higher yields. "By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market," said Eric Dinallo, head of the New York State Insurance Department.

The blanket exemption meant that Joe Cassano could now sell as many CDS contracts as he wanted, building up as huge a position as he wanted, without anyone in government saying a word. "You have to remember, investment banks aren't in the business of making huge directional bets," says the government source involved in the AIG bailout. When investment banks write CDS deals, they hedge them. But insurance companies don't have to hedge. And that's what AIG did. "They just bet massively long on the housing market," says the source. "Billions and billions."

In the biggest joke of all, Cassano's wheeling and dealing was regulated by the Office of Thrift Supervision, an agency that would prove to be defiantly uninterested in keeping watch over his operations. How a behemoth like AIG came to be regulated by the little-known and relatively small OTS is yet another triumph of the deregulatory instinct. Under another law passed in 1999, certain kinds of holding companies could choose the OTS as their regulator, provided they owned one or more thrifts (better known as savings-and-loans). Because the OTS was viewed as more compliant than the Fed or the Securities and Exchange Commission, companies rushed to reclassify themselves as thrifts. In 1999, AIG purchased a thrift in Delaware and managed to get approval for OTS regulation of its entire operation.

Making matters even more hilarious, AIGFP -- a London-based subsidiary of an American insurance company -- ought to have been regulated by one of Europe's more stringent regulators, like Britain's Financial Services Authority. But the OTS managed to convince the Europeans that it had the muscle to regulate these giant companies. By 2007, the EU had conferred legitimacy to OTS supervision of three mammoth firms -- GE, AIG and Ameriprise.

That same year, as the subprime crisis was exploding, the Government Accountability Office criticized the OTS, noting a "disparity between the size of the agency and the diverse firms it oversees." Among other things, the GAO report noted that the entire OTS had only one insurance specialist on staff -- and this despite the fact that it was the primary regulator for the world's largest insurer!

"There's this notion that the regulators couldn't do anything to stop AIG," says a government official who was present during the bailout. "That's bullshit. What you have to understand is that these regulators have ultimate power. They can send you a letter and say, 'You don't exist anymore,' and that's basically that. They don't even really need due process. The OTS could have said, 'We're going to pull your charter; we're going to pull your license; we're going to sue you.' And getting sued by your primary regulator is the kiss of death."

When AIG finally blew up, the OTS regulator ostensibly in charge of overseeing the insurance giant -- a guy named C.K. Lee -- basically admitted that he had blown it. His mistake, Lee said, was that he believed all those credit swaps in Cassano's portfolio were "fairly benign products." Why? Because the company told him so. "The judgment the company was making was that there was no big credit risk," he explained. (Lee now works as Midwest region director of the OTS; the agency declined to make him available for an interview.)

In early March, after the latest bailout of AIG, Treasury Secretary Timothy Geithner took what seemed to be a thinly veiled shot at the OTS, calling AIG a "huge, complex global insurance company attached to a very complicated investment bank/hedge fund that was allowed to build up without any adult supervision." But even without that "adult supervision," AIG might have been OK had it not been for a complete lack of internal controls. For six months before its meltdown, according to insiders, the company had been searching for a full-time chief financial officer and a chief risk-assessment officer, but never got around to hiring either. That meant that the 18th-largest company in the world had no one checking to make sure its balance sheet was safe and no one keeping track of how much cash and assets the firm had on hand. The situation was so bad that when outside consultants were called in a few weeks before the bailout, senior executives were unable to answer even the most basic questions about their company -- like, for instance, how much exposure the firm had to the residential-mortgage market.

III. THE CRASH
Ironically, when reality finally caught up to Cassano, it wasn't because the housing market crapped but because of AIG itself. Before 2005, the company's debt was rated triple-A, meaning he didn't need to post much cash to sell CDS protection: The solid creditworthiness of AIG's name was guarantee enough. But the company's crummy accounting practices eventually caused its credit rating to be downgraded, triggering clauses in the CDS contracts that forced Cassano to post substantially more collateral to back his deals.

By the fall of 2007, it was evident that AIGFP's portfolio had turned poisonous, but like every good Wall Street huckster, Cassano schemed to keep his insane, Earth-swallowing gamble hidden from public view. That August, balls bulging, he announced to investors on a conference call that "it is hard for us, without being flippant, to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions." As he spoke, his CDS portfolio was racking up $352 million in losses. When the growing credit crunch prompted senior AIG executives to re-examine its liabilities, a company accountant named Joseph St. Denis became "gravely concerned" about the CDS deals and their potential for mass destruction. Cassano responded by personally forcing the poor sap out of the firm, telling him he was "deliberately excluded" from the financial review for fear that he might "pollute the process."

The following February, when AIG posted $11.5 billion in annual losses, it announced the resignation of Cassano as head of AIGFP, saying an auditor had found a "material weakness" in the CDS portfolio. But amazingly, the company not only allowed Cassano to keep $34 million in bonuses, it kept him on as a consultant for $1 million a month. In fact, Cassano remained on the payroll and kept collecting his monthly million through the end of September 2008, even after taxpayers had been forced to hand AIG $85 billion to patch up his fuck-ups. When asked in October why the company still retained Cassano at his $1 million-a-month rate despite his role in the probable downfall of Western civilization, CEO Martin Sullivan told Congress with a straight face that AIG wanted to "retain the 20-year knowledge that Mr. Cassano had." (Cassano, who is apparently hiding out in his lavish town house near Harrods in London, could not be reached for comment.)

What sank AIG in the end was another credit downgrade. Cassano had written so many CDS deals that when the company was facing another downgrade to its credit rating last September, from AA to A, it needed to post billions in collateral -- not only more cash than it had on its balance sheet but more cash than it could raise even if it sold off every single one of its liquid assets. Even so, management dithered for days, not believing the company was in serious trouble. AIG was a dried-up prune, sapped of any real value, and its top executives didn't even know it.

On the weekend of September 13th, AIG's senior leaders were summoned to the offices of the New York Federal Reserve. Regulators from Dinallo's insurance office were there, as was Geithner, then chief of the New York Fed. Treasury Secretary Hank Paulson, who spent most of the weekend preoccupied with the collapse of Lehman Brothers, came in and out. Also present, for reasons that would emerge later, was Lloyd Blankfein, CEO of Goldman Sachs. The only relevant government office that wasn't represented was the regulator that should have been there all along: the OTS.

"We sat down with Paulson, Geithner and Dinallo," says a person present at the negotiations. "I didn't see the OTS even once."

On September 14th, according to another person present, Treasury officials presented Blankfein and other bankers in attendance with an absurd proposal: "They basically asked them to spend a day and check to see if they could raise the money privately." The laughably short time span to complete the mammoth task made the answer a foregone conclusion. At the end of the day, the bankers came back and told the government officials, gee, we checked, but we can't raise that much. And the bailout was on.

A short time later, it came out that AIG was planning to pay some $90 million in deferred compensation to former executives, and to accelerate the payout of $277 million in bonuses to others -- a move the company insisted was necessary to "retain key employees." When Congress balked, AIG canceled the $90 million in payments.

Then, in January 2009, the company did it again. After all those years letting Cassano run wild, and after already getting caught paying out insane bonuses while on the public till, AIG decided to pay out another $450 million in bonuses. And to whom? To the 400 or so employees in Cassano's old unit, AIGFP, which is due to go out of business shortly! Yes, that's right, an average of $1.1 million in taxpayer-backed money apiece, to the very people who spent the past decade or so punching a hole in the fabric of the universe!

"We, uh, needed to keep these highly expert people in their seats," AIG spokeswoman Christina Pretto says to me in early February.

"But didn't these 'highly expert people' basically destroy your company?" I ask.

Pretto protests, says this isn't fair. The employees at AIGFP have already taken pay cuts, she says. Not retaining them would dilute the value of the company even further, make it harder to wrap up the unit's operations in an orderly fashion.

The bonuses are a nice comic touch highlighting one of the more outrageous tangents of the bailout age, namely the fact that, even with the planet in flames, some members of the Wall Street class can't even get used to the tragedy of having to fly coach. "These people need their trips to Baja, their spa treatments, their hand jobs," says an official involved in the AIG bailout, a serious look on his face, apparently not even half-kidding. "They don't function well without them."

IV. THE POWER GRAB
So that's the first step in wall street's power grab: making up things like credit-default swaps and collateralized-debt obligations, financial products so complex and inscrutable that ordinary American dumb people -- to say nothing of federal regulators and even the CEOs of major corporations like AIG -- are too intimidated to even try to understand them. That, combined with wise political investments, enabled the nation's top bankers to effectively scrap any meaningful oversight of the financial industry. In 1997 and 1998, the years leading up to the passage of Phil Gramm's fateful act that gutted Glass-Steagall, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying. Gramm alone -- then the chairman of the Senate Banking Committee -- collected $2.6 million in only five years. The law passed 90-8 in the Senate, with the support of 38 Democrats, including some names that might surprise you: Joe Biden, John Kerry, Tom Daschle, Dick Durbin, even John Edwards.

The act helped create the too-big-to-fail financial behemoths like Citigroup, AIG and Bank of America -- and in turn helped those companies slowly crush their smaller competitors, leaving the major Wall Street firms with even more money and power to lobby for further deregulatory measures. "We're moving to an oligopolistic situation," Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.

The situation worsened in 2004, in an extraordinary move toward deregulation that never even got to a vote. At the time, the European Union was threatening to more strictly regulate the foreign operations of America's big investment banks if the U.S. didn't strengthen its own oversight. So the top five investment banks got together on April 28th of that year and -- with the helpful assistance of then-Goldman Sachs chief and future Treasury Secretary Hank Paulson -- made a pitch to George Bush's SEC chief at the time, William Donaldson, himself a former investment banker. The banks generously volunteered to submit to new rules restricting them from engaging in excessively risky activity. In exchange, they asked to be released from any lending restrictions. The discussion about the new rules lasted just 55 minutes, and there was not a single representative of a major media outlet there to record the fateful decision.

Donaldson OK'd the proposal, and the new rules were enough to get the EU to drop its threat to regulate the five firms. The only catch was, neither Donaldson nor his successor, Christopher Cox, actually did any regulating of the banks. They named a commission of seven people to oversee the five companies, whose combined assets came to total more than $4 trillion. But in the last year and a half of Cox's tenure, the group had no director and did not complete a single inspection. Great deal for the banks, which originally complained about being regulated by both Europe and the SEC, and ended up being regulated by no one.

Once the capital requirements were gone, those top five banks went hog-wild, jumping ass-first into the then-raging housing bubble. One of those was Bear Stearns, which used its freedom to drown itself in bad mortgage loans. In the short period between the 2004 change and Bear's collapse, the firm's debt-to-equity ratio soared from 12-1 to an insane 33-1. Another culprit was Goldman Sachs, which also had the good fortune, around then, to see its CEO, a bald-headed Frankensteinian goon named Hank Paulson (who received an estimated $200 million tax deferral by joining the government), ascend to Treasury secretary.

Freed from all capital restraints, sitting pretty with its man running the Treasury, Goldman jumped into the housing craze just like everyone else on Wall Street. Although it famously scored an $11 billion coup in 2007 when one of its trading units smartly shorted the housing market, the move didn't tell the whole story. In truth, Goldman still had a huge exposure come that fateful summer of 2008 -- to none other than Joe Cassano.

Goldman Sachs, it turns out, was Cassano's biggest customer, with $20 billion of exposure in Cassano's CDS book. Which might explain why Goldman chief Lloyd Blankfein was in the room with ex-Goldmanite Hank Paulson that weekend of September 13th, when the federal government was supposedly bailing out AIG.

When asked why Blankfein was there, one of the government officials who was in the meeting shrugs. "One might say that it's because Goldman had so much exposure to AIGFP's portfolio," he says. "You'll never prove that, but one might suppose."

Market analyst Eric Salzman is more blunt. "If AIG went down," he says, "there was a good chance Goldman would not be able to collect." The AIG bailout, in effect, was Goldman bailing out Goldman.

Eventually, Paulson went a step further, elevating another ex-Goldmanite named Edward Liddy to run AIG -- a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.

V. REPO MEN
There are plenty of people who have noticed, in recent years, that when they lost their homes to foreclosure or were forced into bankruptcy because of crippling credit-card debt, no one in the government was there to rescue them. But when Goldman Sachs -- a company whose average employee still made more than $350,000 last year, even in the midst of a depression -- was suddenly faced with the possibility of losing money on the unregulated insurance deals it bought for its insane housing bets, the government was there in an instant to patch the hole. That's the essence of the bailout: rich bankers bailing out rich bankers, using the taxpayers' credit card.

The people who have spent their lives cloistered in this Wall Street community aren't much for sharing information with the great unwashed. Because all of this shit is complicated, because most of us mortals don't know what the hell LIBOR is or how a REIT works or how to use the word "zero coupon bond" in a sentence without sounding stupid -- well, then, the people who do speak this idiotic language cannot under any circumstances be bothered to explain it to us and instead spend a lot of time rolling their eyes and asking us to trust them.

That roll of the eyes is a key part of the psychology of Paulsonism. The state is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening directly in the economy, for the sole purpose of preserving the influence of the megafirms. In essence, Paulson used the bailout to transform the government into a giant bureaucracy of entitled assholedom, one that would socialize "toxic" risks but keep both the profits and the management of the bailed-out firms in private hands. Moreover, this whole process would be done in secret, away from the prying eyes of NASCAR dads, broke-ass liberals who read translations of French novels, subprime mortgage holders and other such financial losers.

Some aspects of the bailout were secretive to the point of absurdity. In fact, if you look closely at just a few lines in the Federal Reserve's weekly public disclosures, you can literally see the moment where a big chunk of your money disappeared for good. The H4 report (called "Factors Affecting Reserve Balances") summarizes the activities of the Fed each week. You can find it online, and it's pretty much the only thing the Fed ever tells the world about what it does. For the week ending February 18th, the number under the heading "Repurchase Agreements" on the table is zero. It's a significant number.

Why? In the pre-crisis days, the Fed used to manage the money supply by periodically buying and selling securities on the open market through so-called Repurchase Agreements, or Repos. The Fed would typically dump $25 billion or so in cash onto the market every week, buying up Treasury bills, U.S. securities and even mortgage-backed securities from institutions like Goldman Sachs and J.P. Morgan, who would then "repurchase" them in a short period of time, usually one to seven days. This was the Fed's primary mechanism for controlling interest rates: Buying up securities gives banks more money to lend, which makes interest rates go down. Selling the securities back to the banks reduces the money available for lending, which makes interest rates go up.

If you look at the weekly H4 reports going back to the summer of 2007, you start to notice something alarming. At the start of the credit crunch, around August of that year, you see the Fed buying a few more Repos than usual -- $33 billion or so. By November, as private-bank reserves were dwindling to alarmingly low levels, the Fed started injecting even more cash than usual into the economy: $48 billion. By late December, the number was up to $58 billion; by the following March, around the time of the Bear Stearns rescue, the Repo number had jumped to $77 billion. In the week of May 1st, 2008, the number was $115 billion -- "out of control now," according to one congressional aide. For the rest of 2008, the numbers remained similarly in the stratosphere, the Fed pumping as much as $125 billion of these short-term loans into the economy -- until suddenly, at the start of this year, the number drops to nothing. Zero.

The reason the number has dropped to nothing is that the Fed had simply stopped using relatively transparent devices like repurchase agreements to pump its money into the hands of private companies. By early 2009, a whole series of new government operations had been invented to inject cash into the economy, most all of them completely secretive and with names you've never heard of. There is the Term Auction Facility, the Term Securities Lending Facility, the Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (boasting the chat-room horror-show acronym ABCPMMMFLF). For good measure, there's also something called a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.

While the rest of America, and most of Congress, have been bugging out about the $700 billion bailout program called TARP, all of these newly created organisms in the Federal Reserve zoo have quietly been pumping not billions but trillions of dollars into the hands of private companies (at least $3 trillion so far in loans, with as much as $5.7 trillion more in guarantees of private investments). Although this technically isn't taxpayer money, it still affects taxpayers directly, because the activities of the Fed impact the economy as a whole. And this new, secretive activity by the Fed completely eclipses the TARP program in terms of its influence on the economy.

No one knows who's getting that money or exactly how much of it is disappearing through these new holes in the hull of America's credit rating. Moreover, no one can really be sure if these new institutions are even temporary at all -- or whether they are being set up as permanent, state-aided crutches to Wall Street, designed to systematically suck bad investments off the ledgers of irresponsible lenders.

"They're supposed to be temporary," says Paul-Martin Foss, an aide to Rep. Ron Paul. "But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it."

None other than disgraced senator Ted Stevens was the poor sap who made the unpleasant discovery that if Congress didn't like the Fed handing trillions of dollars to banks without any oversight, Congress could apparently go fuck itself -- or so said the law. When Stevens asked the GAO about what authority Congress has to monitor the Fed, he got back a letter citing an obscure statute that nobody had ever heard of before: the Accounting and Auditing Act of 1950. The relevant section, 31 USC 714(b), dictated that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, as Foss notes, "basically includes everything." According to the law, in other words, the Fed simply cannot be audited by Congress. Or by anyone else, for that matter.

VI. WINNERS AND LOSERS
Stevens isn't the only person in Congress to be given the finger by the Fed. In January, when Rep. Alan Grayson of Florida asked Federal Reserve vice chairman Donald Kohn where all the money went -- only $1.2 trillion had vanished by then -- Kohn gave Grayson a classic eye roll, saying he would be "very hesitant" to name names because it might discourage banks from taking the money.

"Has that ever happened?" Grayson asked. "Have people ever said, 'We will not take your $100 billion because people will find out about it?'"

"Well, we said we would not publish the names of the borrowers, so we have no test of that," Kohn answered, visibly annoyed with Grayson's meddling.

Grayson pressed on, demanding to know on what terms the Fed was lending the money. Presumably it was buying assets and making loans, but no one knew how it was pricing those assets -- in other words, no one knew what kind of deal it was striking on behalf of taxpayers. So when Grayson asked if the purchased assets were "marked to market" -- a methodology that assigns a concrete value to assets, based on the market rate on the day they are traded -- Kohn answered, mysteriously, "The ones that have market values are marked to market." The implication was that the Fed was purchasing derivatives like credit swaps or other instruments that were basically impossible to value objectively -- paying real money for God knows what.

"Well, how much of them don't have market values?" asked Grayson. "How much of them are worthless?"

"None are worthless," Kohn snapped.

"Then why don't you mark them to market?" Grayson demanded.

"Well," Kohn sighed, "we are marking the ones to market that have market values."

In essence, the Fed was telling Congress to lay off and let the experts handle things. "It's like buying a car in a used-car lot without opening the hood, and saying, 'I think it's fine,'" says Dan Fuss, an analyst with the investment firm Loomis Sayles. "The salesman says, 'Don't worry about it. Trust me.' It'll probably get us out of the lot, but how much farther? None of us knows."

When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what's happening in the Fed amounts to something truly revolutionary -- a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. "We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension."

Count Sanders among those who don't buy the argument that Wall Street firms shouldn't have to face being outed as recipients of public funds, that making this information public might cause investors to panic and dump their holdings in these firms. "I guess if we made that public, they'd go on strike or something," he muses.

And the Fed isn't the only arm of the bailout that has closed ranks. The Treasury, too, has maintained incredible secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. To this date, no one knows exactly what criteria the Treasury Department used to determine which banks received bailout funds and which didn't -- particularly the first $350 billion given out under Bush appointee Hank Paulson.

The situation with the first TARP payments grew so absurd that when the Congressional Oversight Panel, charged with monitoring the bailout money, sent a query to Paulson asking how he decided whom to give money to, Treasury responded -- and this isn't a joke -- by directing the panel to a copy of the TARP application form on its website. Elizabeth Warren, the chair of the Congressional Oversight Panel, was struck nearly speechless by the response.

"Do you believe that?" she says incredulously. "That's not what we had in mind."

Another member of Congress, who asked not to be named, offers his own theory about the TARP process. "I think basically if you knew Hank Paulson, you got the money," he says.

This cozy arrangement created yet another opportunity for big banks to devour market share at the expense of smaller regional lenders. While all the bigwigs at Citi and Goldman and Bank of America who had Paulson on speed-dial got bailed out right away -- remember that TARP was originally passed because money had to be lent right now, that day, that minute, to stave off emergency -- many small banks are still waiting for help. Five months into the TARP program, some not only haven't received any funds, they haven't even gotten a call back about their applications.

"There's definitely a feeling among community bankers that no one up there cares much if they make it or not," says Tanya Wheeless, president of the Arizona Bankers Association.

Which, of course, is exactly the opposite of what should be happening, since small, regional banks are far less guilty of the kinds of predatory lending that sank the economy. "They're not giving out subprime loans or easy credit," says Wheeless. "At the community level, it's much more bread-and-butter banking."

Nonetheless, the lion's share of the bailout money has gone to the larger, so-called "systemically important" banks. "It's like Treasury is picking winners and losers," says one state banking official who asked not to be identified.

This itself is a hugely important political development. In essence, the bailout accelerated the decline of regional community lenders by boosting the political power of their giant national competitors.

Which, when you think about it, is insane: What had brought us to the brink of collapse in the first place was this relentless instinct for building ever-larger megacompanies, passing deregulatory measures to gradually feed all the little fish in the sea to an ever-shrinking pool of Bigger Fish. To fix this problem, the government should have slowly liquidated these monster, too-big-to-fail firms and broken them down to smaller, more manageable companies. Instead, federal regulators closed ranks and used an almost completely secret bailout process to double down on the same faulty, merger-happy thinking that got us here in the first place, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.
In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world's most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.

In other words, it's AIG's rip-roaringly shitty business model writ almost inconceivably massive -- to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that's been allowed to build up without adult supervision. How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what the hell is going on? And on the linear spectrum of capitalism to socialism, where exactly are we now? Is there a dictionary word that even describes what we are now? It would be funny, if it weren't such a nightmare.

VII. YOU DON'T GET IT
The real question from here is whether the Obama administration is going to move to bring the financial system back to a place where sanity is restored and the general public can have a say in things or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It might not bode well that Geithner, Obama's Treasury secretary, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner -- himself a protÈgÈ of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm -- picked a former Goldman lobbyist named Mark Patterson to be his top aide.

In fact, most of Geithner's early moves reek strongly of Paulsonism. He has continually talked about partnering with private investors to create a so-called "bad bank" that would systemically relieve private lenders of bad assets -- the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.

God knows exactly what this does for the taxpayer, but hedge-fund managers sure love the idea. "This is exactly what the financial system needs," said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, there aren't many people who don't run hedge funds who have expressed anything like that kind of enthusiasm for Geithner's ideas.

As complex as all the finances are, the politics aren't hard to follow. By creating an urgent crisis that can only be solved by those fluent in a language too complex for ordinary people to understand, the Wall Street crowd has turned the vast majority of Americans into non-participants in their own political future. There is a reason it used to be a crime in the Confederate states to teach a slave to read: Literacy is power. In the age of the CDS and CDO, most of us are financial illiterates. By making an already too-complex economy even more complex, Wall Street has used the crisis to effect a historic, revolutionary change in our political system -- transforming a democracy into a two-tiered state, one with plugged-in financial bureaucrats above and clueless customers below.

The most galling thing about this financial crisis is that so many Wall Street types think they actually deserve not only their huge bonuses and lavish lifestyles but the awesome political power their own mistakes have left them in possession of. When challenged, they talk about how hard they work, the 90-hour weeks, the stress, the failed marriages, the hemorrhoids and gallstones they all get before they hit 40.

"But wait a minute," you say to them. "No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to ex-strippers on work release and Taco Bell clerks. Actually, come to think of it, why are we even giving taxpayer money to you people? Why are we not throwing your ass in jail instead?"

But before you even finish saying that, they're rolling their eyes, because You Don't Get It. These people were never about anything except turning money into money, in order to get more money; valueswise they're on par with crack addicts, or obsessive sexual deviants who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.

Good luck with that, America. And enjoy tax season.

Dr. Ravi Batra: New Thinking on the Economy

2009-03-24T11:31:00.003-04:00

by Matt Renner, posted on Truthout.org, March 16

Maverick Southern Methodist University economics professor Ravi Batra says the financial crisis is just one symptom of a long-festering economic disease - a disease caused by neglecting basic economic principles over the past 30 years. Comments made by President Obama seem to echo Dr. Batra's understanding of a domestic economy choked by consumer debt.

"Even as we're focused on the financial system and the credit markets, we are laying the foundation for what I'm calling a post-bubble economic growth market," Obama said Friday afternoon, adding "the days when we are going to be able to grow this economy just on an overheated housing market or people spending - maxing out on their credit cards, those days are over."

Dr. Batra insists that pursuing economic policies that begin to reverse a decline in the real wages of individual consumers is the only way to heal the limping economy. Changes in the "wage-productivity gap" - or the difference between how much consumers earn and the value of goods and services an economy produces - can explain the current situation and can help guide policy-makers out of it.

I spoke with Professor Batra about the current meltdown and how it can be viewed through the lens of the wage-productivity gap.

Matt Renner: What is the wage-productivity gap and how does it affect the health of an economy?

Dr. Ravi Batra: The wage-productivity gap is the gap between the real wage and labor productivity. The real wage is the purchasing power of the average salary. If productivity rises fast and the real wage rises slowly, then a wage-productivity gap develops and grows.

MR: When there is production and wages don't keep pace, what is the result?

RB: Productivity is the main source of supply, whereas wages are the main source of demand. If this wage-productivity gap keeps rising over time, supply will rise faster than demand and then we face the problem of overproduction.

Many like [former Federal Reserve Chairman Alan] Greenspan and other economists love the productivity rise, but if it leads to overproduction, that leads to high unemployment such as we are seeing now. Overproduction is a disaster and it leads to depressions.

If businesses don't sell what they produce, they lose money, and when they lose money, they have to lay off people.

MR: In the United States, how did the recent wage-productivity gap begin to rise?

RB: It started off with [President Ronald] Reagan. The wage-productivity gap started to develop in 1981. Reagan's economic policies increased productivity while restraining wages. One example is "free trade," which increased productivity but also reduced the real wage in the United States.

Also, the policy of regressive taxation. Reagan raised every tax that burdens the poor, but sharply reduced the income tax; all this caused a fall in consumer demand. Economic growth fell after Reagan's policies were introduced. Slow economic growth leads to pressure on wages because low growth means low demand for labor relative to labor's supply, so wages fall.

The third reason the wage-productivity gap grew as a result of Reagan was the "merger mania." Big firms were permitted to merge with each other. Each time there was a merger, there were layoffs, which also exerted downward pressure on wages. Mergers also increase productivity, further widening the gap. Reagan's anti-union policies were also responsible for the falling wages.

MR: If the wage-productivity gap was widening, how did policy-makers prevent the inevitable overproduction and economic contraction?

RB: Each time the wage-productivity gap goes up, the economy will contract because of overproduction. What they did was come up with a scheme to create debt in the economy because, by creating debt, they could raise demand to the level of supply.

Initially they started off with increased government debt. The deficit went up under Reagan, which raised demand to the level of supply. Then Greenspan took over as Federal Reserve chairman and whenever there was the threat of overproduction, like when the stock market crashed in 1987, he brought interest rates down sharply. By bringing interest rates down, he lured people into borrowing. This began to create private debt on a larger scale.

This really postponed the wage-productivity gap problems for the future because under these policies, productivity rose every year, so debt had to increase every year unless wages were to rise. Since productivity rises exponentially, debt had to rise exponentially as well. In such a situation, it is not hard to imagine a day when the credit system would simply explode. That's what happened starting in 2006 or 2007.

MR: The financial emergency, or the freeze in lending, is being touted as the most pressing aspect of the crisis. Why are banks unable or unwilling to lend?

RB: The biggest problem is that consumer debt is so high and the public has used up all its collateral. The banks don't feel confident enough to lend to anybody. The banks have lost so much money that they are feeling gun-shy now.

What we are seeing now is called "debt-unraveling" which is the biggest pain in the world. The potential for this scenario is worse than what happened in the Great Depression. During the Great Depression, consumers did not have that much debt.

The situation could be as bad as the Great Depression because, while banks are protected by the government, the 401ks and other investment plans are not protected. People are losing their savings through the fall in stock prices. The end result is the same: their savings are disappearing - the same thing that happened in the Great Depression.

MR: What policies close a wage-production gap?

RB: We should be following policies that close a wage-production gap, but that means you have to go against policies that created it: free trade, regressive taxation, and merger mania. This is not going to be easy and it will require a revolution in thinking.

This will entail breaking up companies, raising taxes on the rich and lowering them for the poor. I'm not sure the country is ready for this yet, but it will be once we fall deeper into the abyss.

MR: What do you think about the current steps the Obama administration is taking to address the economy?

RB: First of all, they are confusing cause with effect. They think the cause is the financial crisis, but actually that is the effect. The cause is the rise in the wage-productivity gap. The gap between supply and natural demand [as opposed to artificial demand created by easy access to debt] is so vast now. That gap cannot be plugged easily, especially if you're not looking in the right place.

Freeing the credit markets won't end the recession, because why would a bank lend money when it's afraid that it won't come back? When the borrowers are not creditworthy and have no collateral, why would a bank want to lend them money?

The Obama administration should focus on trying to help the economy grow. The stimulus package will help in the sense that it will slow down the bleeding, but it won't stop it. If all the policies that led to the growing wage-production gap remain in place, the stimulus package will not end the recession. Balancing trade - reducing the trade deficit to zero - would be a huge step in the right direction.

Look at the economic policies of the 1950's and 1960's - balanced trade, breaking up monopolies - for example, Exxon-Mobil will have to become Mobil and Exxon; raise taxes on the wealthy and cut them on the poor. Those economic policies will close the wage gap. Those were the decades in which growth was very strong, between four and four and a half percent every year. Since Reagan took over, growth has been three percent or less.

People's News from 5th World Water Forum: Democratic forum demands public water for all

2009-03-19T13:33:00.003-04:00

A statement from www.peopleswaterforum.org, March 19

International water justice activists converged at the People's Water Forum today to affirm the human right to water and present diverse visions of existing public and community-led water management practices that protect water for people and nature, and can ensure water access for all regardless of their ability to pay.

Maude Barlow, Senior Advisor on Water to UN General Assembly President Miguel D'Escoto, delivered a statement from him. D?Escoto was clear: "Water is a public trust, a common heritage of people and nature, and a fundamental human right. We must challenge the notion that water is a commodity to be bought and sold on the open market. Those who are committed to the privatization of water are denying people a human right as basic as the air we breathe."

A diverse group of water justice activists also presented their forward-looking visions. Mary Ann Manahan, of Focus on the Global South in the Philippines said "Access to water and sanitation is not only about efficiency and effective delivery but about justice, gender equity, human dignity and ultimately, democracy."

Sebahat Tuncet, a member of Turkey's Parliament, issued a strong statement against the construction of large dams, condemning especially the Ilisu and Munzur dams and others under consideration for construction throughout the region.

Adriana Marquisio, a member of Public Services International and President of Uruguay's Public Water Union, urged that water be managed publicly and not for profit. "But let us be clear," she added, "that the meaning of 'public' extends beyond state control. Public management must recognize alternative, community-led structures of governance.?

Philipp Terhorst of Transnational Institute, speaking for the European Water Network, criticized the recent EU Parliament?s resolution that fails to recognize the human right to water.

Also speaking at the conference was Al-hassan Adam, Coordinator of the Africa Water Network, who condemned the repression of activists, which, he said, reflects the larger exclusion of the majority of people from basic human rights.

These speakers represent a wide spectrum of visionary leaders offering practical, equitable, and just solutions to the world's current water crisis, said organizers of the Peoples Water Forum.

Homegrown Terrorism Part II? A bad bill may have a second life

2009-03-19T13:24:00.003-04:00

Is HR 645, a bill "To direct the Secretary of Homeland Security to establish national emergency centers on military installations", a reprise of the Violent Radicalization and Homegrown Terrorism Act? That bill was pulled from the Senate floor after protest by citizens outraged at its infringement on basic civil rights. According to Chossudovsky, there's no time like an economic meltdown to introduce legislation to establish detention camps, and like its predecessor, HR 645 will only be stopped by the same broad-based popular outcry.

by Michel Chossudovsky, Global Research, published on March 18

The financial meltdown has unleashed a latent and emergent social crisis across the United States.

What is at stake is the fraudulent confiscation of lifelong savings and pension funds, the appropriation of tax revenues to finance the trillion dollar "bank bailouts", which ultimately serve to line the pockets of the richest people in America.

This economic crisis is in large part the result of financial manipulation and outright fraud to the detriment of entire populations, to a renewed wave of corporate
bankruptcies, mass unemployment and poverty.

The criminalization of the global financial system, characterized by a "Shadow Banking" network has resulted in the centralization of bank power and an unprecedented concentration of private wealth.

Obama's "economic stimulus" package and budget proposals contribute to a further process of concentration and centralization of bank power, the cumulative effects of

which will eventually resul in large scale corporate, bankruptcies, a new wave of foreclosures not to mention fiscal collapse and the downfall of State social programs. (For further details see Michel Chossudovsky, "America's Fiscal Collapse," Global Research, March 2, 2009).

The cumulative decline of real economic activity backlashes on employment and wages, which in turn leads to a collapse in purchaisng power. The proposed "solution" under the Obama administration contributes to exacerbating rather than alleviating social inequalities and the process of wealth concentration.

The Protest Movement
When people across America, whose lives have been shattered and destroyed, come to realize the true face of the global "free market" system, the legitimacy of the Wall

Street, the Federal Reserve and the US administration will be challenged.

A latent protest movement directed against the seat of economic and political power is unfolding.

How this process will occur is hard to predict. All sectors of American society are potentially affected: wage earners, small, medium and even large businesses, farmers,

professionals, federal, State and municipal employees, students, teachers, health workers, and unemployed. Protests will initially emerge from these various sectors.

There is, however, at this stage, no organized national resistance movement directed against the administration's economic and financial agenda.

Obama's populist rhetoric conceals the true nature of macroeconomic policy. Acting on behalf of Wall Street, the administration's economic package, which includes close to a trillion dollar "aid" package for the financial services industry, coupled with massive austerity measures, contributes to precipitating America into a bottomless

crisis.

"Orwellian Solution" to the Great Depression: Curbing Civil Unrest
At this particular juncture, there is no economic recovery program in sight. The Washington-Wall Street consensus prevails. There are no policies, no alternatives

formulated from within the political and economic system.

What is the way out? How will the US government face an impending social catastrophe?

The solution is to curb social unrest. The chosen avenue, inherited from the outgoing Bush administration is the reinforcement of the Homeland Security apparatus and the militarization of civilian State institutions.

The outgoing administration has laid the groundwork. Various pieces of "anti-terrorist" legislation (including the Patriot Acts) and presidential directives have been put in place since 2001, largely using the pretext of the "Global War on Terrorism."

Homeland Security's Internment Camps
Directly related to the issue of curbing social unrest, cohesive system of detention camps is also envisaged, under the jurisdiction of the Department of Homeland Security and the Pentagon.

A bill entitled the National Emergency Centers Establishment Act (HR 645) was introduced in the US Congress in January. It calls for the establishment of six national emergency centers in major regions in the US to be located on existing military installations. http://www.govtrack.us/congress/billtext.xpd?bill=h111-645

The stated purpose of the "national emergency centers" is to provide "temporary housing, medical, and humanitarian assistance to individuals and families dislocated due to an emergency or major disaster." In actuality, what we are dealing with are FEMA internment camps. HR 645 states that the camps can be used to "meet other appropriate needs, as determined by the Secretary of Homeland Security."

There has been virtually no press coverage of HR 645.

These "civilian facilities" on US military bases are to be established in cooperation with the US Military. Modeled on Guantanamo, what we are dealing with is the

militarization of FEMA internment facilities.

Once a person is arrested and interned in a FEMA camp located on a military base, that person would in all likelihood, under a national emergency, fall under the de

facto jurisdiction of the Military: civilian justice and law enforcement including habeas corpus would no longer apply.

HR 645 bears a direct relationship to the economic crisis and the likelihood of mass protests across America. It constitutes a further move to militarize civilian law

enforcement, repealing the Posse Comitatus Act.

In the words of Congressman Ron Paul: "...the fusion enters, militarized police, surveillance cameras and a domestic military command is not enough... Even though we know that detention facilities are already in place, they now want to legalize the construction of FEMA camps on military installations using the ever popular excuse that the facilities are for the purposes of a national emergency.

With the phony debt-based economy getting worse and worse by the day, the possibility of civil unrest is becoming a greater threat to the establishment. One need only look at Iceland, Greece and other nations for what might happen in the United States next." (Daily Paul, September 2008, emphasis added)

The proposed internment camps should be seen in relation to the broader process of militarization of civilian institutions. The construction of internment camps predates the introduction of HR 645 (Establishment of Emergency Centers) in January 2009.

There are, according to various (officially unconfirmed) reports, some 800 FEMA prison camps in different regions of the U.S. Moreover, since the 1980s, the US military has developed "tactics, techniques and procedures" to suppress civilian dissent, to be used in the eventuality of mass protests (United States Army Field Manual 19-15 under Operation Garden Plot, entitled "Civil Disturbances" was issued in 1985)

In early 2006, tax revenues were allocated to building modern internment camp facilities. In January 2006, Kellogg Brown and Roots, which at the time was a subsidiary of Halliburton, received a $385 million contract from the Department of Homeland Security's Immigration and Customs Enforcement (ICE):

"The contract, which is effective immediately [January 2006], provides for establishing temporary detention and processing capabilities to augment existing

ICE Detention and Removal Operations (DRO) Program facilities in the event of an emergency influx of immigrants into the U.S., or to support the rapid development of new programs...

The contract may also provide migrant detention support to other U.S. Government organizations in the event of an immigration emergency, as well as the development of a plan to react to a national emergency, such as a natural disaster. (KBR, 24 January 2006, emphasis added)

The stated objectives of U.S. Immigration and Customs Enforcement (ICE) are to:

"protect national security and uphold public safety by targeting criminal networks and terrorist organizations that seek to exploit vulnerabilities in our immigration

system, in our financial networks, along our border, at federal facilities and elsewhere in order to do harm to the United States. The end result is a safer, more secure America." (ICE homepage)

The US mainstream media is mum on the issue of the internment camps on US soil. While casually acknowledging the multimillion dollar contract granted to Halliburton's

subsidiary, the news reports largely focused their attention on possible "cost overruns" (similar to those which occurred with KBR in Iraq).

What is the political intent and purpose of these camps? The potential use of these internment facilities to detain American citizens under a martial law situation are not an object of media debate or discussion.

Combat Units Assigned to the Homeland
In the last months of the Bush administration, prior to the November 2008 presidential elections, the Department of Defense ordered the recall of the 3rd Infantry's 1st Brigade Combat Team from Iraq. The relocation of a combat unit from

the war theater to domestic front is an integral part of the Homeland Security agenda. The BCT was assigned to assist in law enforcement activities within the US.

The BCT combat unit was attached to US Army North, the Army's component of US Northern Command (USNORTHCOM). The 1st BCT and other combat units would be called upon to perform specific military functions in the case of civil unrest:

The 1st BCT's soldiers also will learn how to use

"the first ever nonlethal package that the Army has

fielded," 1st BCT commander Col. Roger Cloutier said,

referring to crowd and traffic control equipment and

nonlethal weapons designed to subdue unruly or dangerous

individuals without killing them.(

(See Gina Cavallaro, Brigade homeland tours start

Oct. 1,

2008. Army Times, September 8, 2008).

Under the proposed withdrawal of US forces from Iraq

under the Obama administration, one expects that other

combat units will be brought home from the war theater and

reassigned in the United States.

The evolving national security scenario is characterized

by a mesh of civilian and military institutions:

-Army combat units working with civilian law

enforcement, with the stated mission to curb "social

unrest".

- the establishment of new internment camps under

civilian jurisdiction located on US military facilities.

The FEMA internment camps are part of the Continuity of

Government (COG), which would be put in place in the case of

martial law.

The internment camps are intended to "protect the

government" against its citizens, by locking up protesters

as well as political activists who might challenge the

legitimacy of the Administration's national security,

economic or military agenda.

Spying on Americans: The Big Brother Data Bank

Related to the issue of internment and mass protests,

how will data on American citizens be collected?

How will individuals across America be categorized?

What are the criteria of the Department of Homeland

Security?

In a 2004 report of the Homeland Security Council

entitled Planning Scenarios, pertaining to the defense of

the Homeland, the following categories of potential

"conspirators" were identified:

o "foreign [Islamic] terrorists" ,

o "domestic radical groups", [antiwar and civil

rights groups]

o "state sponsored adversaries" ["rogue states",

"unstable nations"]

o "disgruntled employees" [labor and union

activists].

In June of last year, the Bush administration issued a

National Security Presidential Directive (NSPD 59- HSPD 24)

entitled Biometrics for Identification and Screening to

Enhance National Security (For Further details see Michel

Chossudovsky, "Big Brother" Presidential Directive:

"Biometrics for Identification and Screening to Enhance

National Security, Global Research, June 2008)

Adopted without public debate or Congressional approval,

its relevant procedures are far-reaching. They are related

to the issue of civil unrest. They are also part of the

logic behind the establishment of FEMA internment camps

under HR 645. .

NSPD 59 (Biometrics for Identification and Screening to

Enhance National Security) goes far beyond the narrow issue

of biometric identification, it recommends the collection

and storage of "associated biographic" information, meaning

information on the private lives of US citizens, in minute

detail, all of which will be "accomplished within the law":

"The contextual data that accompanies biometric data

includes information on date and place of birth,

citizenship, current address and address history, current

employment and employment history, current phone numbers and

phone number history, use of government services and tax

filings.

Other contextual data may include bank account and

credit card histories, plus criminal database records on a

local, state and federal level. The database also could

include legal judgments or other public records documenting

involvement in legal disputes, child custody records and

marriage or divorce records." (See Jerome Corsi, June 2008)

The directive uses 9/11 and the "Global War on

Terrorism" as an all encompassing justification to wage a

witch hunt against dissenting citizens, establishing at the

same time an atmosphere of fear and intimidation across the

land.

It also calls for the integration of various data banks

as well as inter-agency cooperation in the sharing of

information, with a view to eventually centralizing the

information on American citizens.

In a carefully worded text, NSPD 59 "establishes a

framework" to enable the Federal government and its various

police and intelligence agencies to:

"use mutually compatible methods and procedures in

the collection, storage, use, analysis, and sharing of

biometric and associated biographic and contextual

information of individuals in a lawful and appropriate

manner, while respecting their information privacy and other

legal rights under United States law."

The NSPD 59 Directive recommends: "actions and

associated timelines for enhancing the existing

terrorist-oriented identification and screening processes by

expanding the use of biometrics".

The procedures under NSPD 59 are consistent with an

earlier June 2005 decision which consisted increating a

"domestic spy service", under the auspices of the FBI. (For

further details see Michel Chossudovsky, Bush Administration

creates "Secret State Police", June 30, 2005)

Working hand in glove with Homeland Security (DHS), the

proposed "domestic intelligence department" would combine

FBI counterterrorism, intelligence and espionage operations

into a single service.

The new department operating under the auspices of the

FBI would have the authority to "seize the property of

people deemed to be helping the spread of WMD": They would

be able to "spy on people in America suspected of terrorism

or having critical intelligence information, even if they

are not suspected of committing a crime." (NBC Tonight, 29

June 2005).\

News from the World Water Forum: 24 Hours in Police Custody

2009-03-19T12:24:00.004-04:00

The fifth World Water Forum began this week in Istanbul. While the forum is billed as a venue for international work to avert water shortages, activists have denounced it as a front for multinationals promoting privatization of a common good for private gain. The following is a report from two activists who were arrested and deported for protesting at the forum. You can read daily updates from those critical of the World Water Forum's narrow approach and non-inclusive debate at WorldWaterForum.blogspot.com

Account of 24 hours in police custody in Istanbul from 10am on March 16,
2009 to the morning of March 17, 2009

By Ann-Kathrin Schneider, International Rivers

On March 16, 2009 at 9.30am, Payal Parekh and me unfolded a banner that read "No RISKY DAMS" just before the opening ceremony of the World Water Forum in Istanbul, Turkey. We also shouted "No Risky Dams" about five times. We were in the middle of the balcony of room 7 at the Sütlüce Conference Center in Istanbul.

The banner stayed up for about one minute -- after that, security forces took the banner. One minute later, security forces asked us to leave the room. We stayed outside of the conference room with about ten security and police officers for some minutes, while they checked our IDs, which they kept.

After that, they escorted us to a police room inside of the Sütlüce Conference Center where they wrote a statement of events, in Turkish. They asked us to sign the statement, which we refused because we didn't understand what the statement said. We asked for a translation of the statement, sentence by sentence, which we did not get.

After that, they led us to a car and drove us to a hospital. They did not take our cell phones away from us, so we were able to inform our friends about the developments. At the hospital, they led us to a doctor who asked us whether we had suffered any injuries, we said that we hadn't, she signed some papers, and we were escorted back to the car.

The police drove us to Hadic Merkezi Police Station in Beyoglu, Istanbul. There, a female policy officer did a body search on the two of us and they took our jewellery and our money, recorded everything we had, and gave it back to us.

Two lawyers, organized with the help of Turkish friends, arrived. We told them what had happened. The police finalized their statement and asked us to sign it. The lawyers translated the Turkish statement sentence by sentence. Since some details of the statement did not correspond with how we recalled the events of that morning, we refused to sign the statement and asked to give our own account of the morning's events.

Payal then reported the events of the morning to a policy officer. The lawyers helped translating her English into Turkish and the police officer wrote down the statement in Turkish. The lawyers translated the statement for us and both Payal and me signed the statement.

We then waited until about 5pm when our lawyers were called to talk to the head of the police station. The lawyers came back informing us that we had to leave the country within a couple of hours if we did not want to be put in prison for more than one year. They explained to us that our crime was that we tried to influence public opinion with the unfolding of the banner.

With the help of friends from Turkey and abroad we organized plane tickets for Payal to go back to the United States and for me to go back to Germany in the morning of Tuesday, March 17.

We were then taken to another police station and had photographs and fingerprints taken and were measured and weighed. After about one hour, we were sent back to the other police station, where we had spent the early afternoon, and spent the night there on some chairs in an office. We declined the invitation to sleep in the downstairs women's cell. A Turkish friend brought us our luggage from the hotel and we left the police station at about 6am in the morning towards the airport, in a police car.

We reached the airport at around 6.30am on Tuesday, March 17 and spent another one and a half hours at the police station at Istanbul airport, before being escorted to the check-in desk and the gate by a police officer.

The customs officer told me that I was banned from entering Turkey for two years. At the gate, the police officer gave me my boarding pass and ID.

We did not receive any documents describing what crime we were convicted of and the charges. We do not know who ordered our deportation, whether it was the police or a public prosecutor.

Labor Leaders Disappointed by Lack of Working People's Voices at Vermont Healthcare Reform Discussion

2009-03-18T16:27:00.002-04:00

by the Labor Campaign for Single Payer Healthcare, posted on CommonDreams.org on March 18

Working people's voices were not heard at the Obama Administration's second regional Health Care Summit in Burlington, VT on March 17.

"Despite the fact that several union spokespersons attended the meeting, we were not called upon and unfortunately the voice of workers was shut out of the discussion," said Peter Knowlton, president of the Northeast Region of the United Electrical Workers Union (UE). "When it came to the financial discussion, Gov. Douglas and Gov. Patrick [the two governors moderating the session] only called on wealthy special-interests from the worlds of business and professional circles."

Sandy Eaton, a nurse who attended the forum stated that nurses' voices went unheard as well. "Nurses were well represented, but our voices were not heard -- and the term "nurse" or "hospital worker" was never mentioned in the two hour forum," said Eaton who is a member of the executive board of the Massachusetts Nurses Association.

Outside the auditorium where the summit was held, over 250 labor and community members rallied in support of HR 676 and single payer healthcare. "Our system needs fundamental reform," said Dawn Stanger, President of the Vermont Workers Center-Jobs with Justice. Stanger, a UPS employee and member of Teamsters Local 597, was joined by dozens of unionized nurses who worked next door at Fletcher Allen Health Care, the largest hospital in Vermont.

"We need to build a movement to demand change," Stanger told the crowd. The Vermont Workers Center is coordinating a major statewide "Healthcare Is a Human Right" rally on May 1 at the Vermont Statehouse, which will include U. S. Senator Bernie Sanders. The rally will oppose Vermont Governor Douglas' proposed budget cuts to healthcare programs and support state and national single-payer legislation.

"I was really hopeful that these forums would finally give voice to workers concerns," added UE leader Peter Knowlton. "There were many people there who could have reminded them about the serious problems hourly workers face with skyrocketing premiums and dealing with the horrors of co-pays, deductibles, out-of-pocket expenses and the run around all workers face with managed care. If this forum is any indication of future ones, we will need to be much more aggressive to get our voices heard."

Knowlton, Eaton and Stanger were among the several labor leaders at the forum who support HR 676, the "Expanded and Improved Medicare for All" Act. HR 676 was re-introduced this year by Congressman John Conyers. It currently has 66 congressional co-sponsors. Because it eliminates the private insurance industry from profiting from people's misfortunes and, like Medicare, establishes the federal government as the "single payer" of everyone's medical bills, HR 676 can provide healthcare for all with no co-pays or deductibles in a fiscally prudent manner. HR 676 has the endorsement of hundreds of state and local labor federations and local unions as well as many other civic and religious organizations.

A Spoiler in the Health Care Debate

2009-03-18T15:42:00.002-04:00

by Matthew Murray. Published in Roll Call March 16

By inviting a vast spectrum of stakeholders to collaborate with the White House on its health care reform push, President Barack Obama is trying to pre-empt opponents of his plan from blocking his campaign promise to insure 46 million Americans.

To date, labor unions, seniors advocates, business interests, pharmaceutical companies and insurers are all assured a seat at the table during the ongoing debate - that is, provided they stick to the script and forgo attempts to sabotage the eventual proposal.

With billions of dollars at stake, not everyone is expected to be on board when the legislation is unveiled. But one group will undoubtedly be disappointed: the single-payer lobby, an allegedly 20 million-strong coalition that is pledging no compromise in the upcoming debate and is rallying around a bill recently introduced by House Judiciary Chairman John Conyers (D-Mich.).

"Single payer is the only means that we know to get the ends we seek," said Joe Jurczak, a lobbyist for the California Nurses Association. "We want to see guaranteed health care for everyone."

Jurczak's group is part of the Leadership Conference for Guaranteed Health Care, which is pushing the administration to adopt a universal health care system similar to Medicare, a program for seniors paid for by taxpayers that would use the country's existing private infrastructure of facilities and health care providers.

The California Nurses Association also runs Guaranteedhealthcare.org, which states that "only a single-payer system would assure that everyone is covered with one high standard of benefits and care ... establish effective cost controls, curb administrative waste, and end insurance industry interference with care."

"We don't want doctors to work for the federal government and hospitals to be run by the federal government. We want health care to be a right," Jurczak said. "No co-pays, no deductibles."

The Leadership Conference for Guaranteed Health Care also has written to the White House, explaining its reach. The group wrote to Obama that the coalition includes "thirty organizations representing doctors, nurses, the homeless, faith based organizations, community activists, students, consumers, seniors, women's interests, and organized labor ... organizations [that] represent over 20,000,000 members, many of whom are community and political leaders at the grass roots level."

According to the group's Web site, its membership includes anti-war activists CODEPINK, watchdog Public Citizen and the Ruckus Society, an Oakland, Calif.-based group that recently protested coal use at the Congressional power plant.

Jurczak said single-payer advocates host a monthly call-in for supporters and is planning a lobbying blitz on the Hill in May.
He also said supporters of a single-payer plan - whose biggest celebrity advocate undoubtedly is documentary filmmaker Michael Moore - will be "very visible" at an April 6 White House Forum on Health Reform in Los Angeles.

The California Nurses Association and the National Nurses Organizing Committee are distributing polling that the organizations claim shows public opinion on their side. In one March 2008 survey conducted by Indiana University, 59 percent of those polled supported a single-payer system.

Despite the their apparent support, it appears unlikely their proposals will win out. A White House spokesman said any ultimate health care fix is unlikely to resemble Medicare or any other federally implemented system.

Still, along with major insurance providers, pharmaceutical companies, insurers and other major stakeholders, the White House invited single-payer advocates like Conyers and the Physicians for a National Health Program to the recent White House summit, according to the spokesman.

"We don't expect that the plans they produce will be single-payer plans," the spokesman said. "We are working with partners on the Hill from both parties and they're the ones that ultimately will craft legislation.

"The plan the president laid down during the campaign was not a single-payer proposal," he said.

Health insurance industry works on an image makeover

2009-03-16T22:34:00.002-04:00

by Ricardo Alonso-zaldivar, Associated Press, March 15

WASHINGTON – The health insurance industry is working on a transformation that could come right out of "Extreme Makeover."

Long cast as villains for denying coverage or refusing to pay for treatment, insurers now are representing themselves as indispensable partners in health care overhaul. In their pitch to lawmakers, the companies say they are in a unique position to help improve quality and root out waste, saving money so everyone can be covered.

"They are making inroads," said John Rother, public policy director for AARP. "They are getting past the rhetoric and starting to talk about more concrete ideas for improving quality and getting value."

In a big change from three or four years ago, insurers are writing bigger campaign checks to Democrats, now the party of power in Washington. The insurance industry gave $10.7 million to Democratic candidates for federal office in the 2006 elections, according to OpenSecrets.org. Last year, it was $20.7 million.

The stakes are high.

If the industry's pitch succeeds, insurers will be guaranteed many more customers. The industry wants all people in the United States to be required to carry medical coverage, with government providing financial help for those who cannot afford it.
Even if insurers end up making less per customer because of anticipated consumer safeguards, they still could come out ahead.

But if the overhaul that President Barack Obama has promised goes against them, insurers could find themselves trying to compete against a new government-run health plan offering cut-rate premiums to middle-class families. That's exactly what many liberal Democrats want, and Obama hasn't taken the option off the table.

"No one is naive enough to believe that insurers aren't going to have problems with parts of this," Rother said. "But they are pushing back in a rather quiet way."

Said Karen Ignagni, president of America's Health Insurance Plans and the industry's top strategist in Washington: "We understand we need to come to the table with very specific solutions."

Ignagni is hedging her bets by building ties to groups such as small businesses, whose conservative outlook and grass- roots clout could be crucial.

Yet the industry has won a measure of respect from some longtime adversaries. "I have seen very few groups, including the insurance industry, that are willing to exercise the nuclear option and torpedo reform," said Ron Pollack, executive director of Families USA, a liberal advocacy group. "They have participated in a good faith manner."

Others on the left are not convinced. "Private insurance is the problem," said Carmen Balber of Consumer Watchdog, a California-based group. "Individuals can't afford to be forced into buying private insurance."

If insurers have come to see government as a partner, that's not as strange as it may seem. Employer coverage has dwindled in recent years, but government programs for older people, children and the poor have grown into a vital business. The Medicare prescription drug benefit is delivered by private insurers. Also, about 10 million older people are signed up in Medicare managed care plans. Many states operate their Medicaid programs through private insurers. The same goes for the federally backed State Children's Health Insurance Program.

Government programs "are a significant contributor to growth for us," said Angela Braly, chief executive of Wellpoint, which covers 35 million people in 14 states. "We think we can be a significant part of the solution for the uninsured."

Insurance companies can do more than just pay claims, Braly said. They can use the data in their files to monitor whether doctors and hospitals are providing the right level of care — not too little, not too much.

For example, a soon-to-be released study by Wellpoint looks at treatment of back pain, a condition that costs roughly as much as cancer or diabetes to treat. Most back pain clears up in about six weeks, and national guidelines recommend postponing surgery and sophisticated imaging tests. But the study found that 35,000 patients had imaging tests and an additional 1,000 had surgery before the six weeks were up. Potential savings over a 12-month period: $23.6 million.
In the future, insurers could use such findings to cajole doctors into changing the way they practice.

"We think we can play a central role in delivering value," said Braly.

Wellpoint says such studies don't always endorse the low-tech option. Its research also found that a costly medication for multiple sclerosis was worth the investment, because it helped patients avoid relapses. But there's concern that insurers and government could one day use such studies to deny coverage for expensive new treatments and diagnostic tests.

It's hard to tell whether the industry's makeover will work. So far, the Obama administration doesn't seem to be sold. While Obama invited Ignagni to the White House health care summit, he's also asking Congress to slash payments to private insurance plans in Medicare. Far from being efficient, Obama says the plans get 14 cents more on the dollar than it costs to care for older people in the traditional program.

Newfield, Maine, joins neighbor Shapleigh in banning large scale water extraction

2009-03-16T12:17:00.002-04:00

Video from Portland's WCSH-6 news is available here.

NEWFIELD (NEWS CENTER) -- The town of Newfield is now the second in Maine to ban large-scale water extraction.

Saturday's vote was 228 in favor of the new ordinance and 146 against. The vote is a reaction to interest from Poland Spring Water and its parent company, Nestle, in pumping water from an aquifer shared by Newfield and Shapleigh.

Shapleigh voted for the same ban on water extraction two weeks ago. However, there is some concern that that ordinance could be overturned in court. As a result, townspeople voted on a different ordinance at town meeting Saturday that would lay out what a water company would have to do to be able to extract water from the aquifer.

That ordinance, which environmentalists felt was too weak, passed by a single vote.

The Business Roundtable spotlights a US health care "value gap"

2009-03-16T11:37:00.003-04:00

The Business Roundtable does a good job explaining the problem, but falls short on the solution!

by Ricardo Alonso-Zaldivar, Associated Press, published March 12

If the global economy were a 100-yard dash, the U.S. would start 23 yards behind its closest competitors because of health care that costs too much and delivers too little, a business group says in a report to be released Thursday. (note: you can read the report here)

The report from the Business Roundtable, which represents CEOs of major companies, says America's health care system has become a liability in a global economy.

Concern about high U.S. costs has existed for years, and business executives — whose companies provide health coverage for workers — have long called for getting costs under control. Now President Barack Obama says the costs have become unsustainable and the system must be overhauled.

Americans spend $2.4 trillion a year on health care. The Business Roundtable report says Americans in 2006 spent $1,928 per capita on health care, at least two-and-a-half times more per person than any other advanced country.

In a different twist, the report took those costs and factored benefits into the equation. It compares statistics on life expectancy, death rates and even cholesterol readings and blood pressures. The health measures are factored together with costs into a 100-point "value" scale. That hasn't been done before, the authors said.

The results are not encouraging.

The United States is 23 points behind five leading economic competitors: Canada, Japan, Germany, the United Kingdom and France. The five nations cover all their citizens, and though their systems differ, in each country the government plays a much larger role than in the U.S.

The cost-benefit disparity is even wider — 46 points — when the U.S. is compared with emerging competitors: China, Brazil and India.

"What's important is that we measure and compare actual value — not just how much we spend on health care, but the performance we get back in return," said H. Edward Hanway, CEO of the insurance company Cigna. "That's what this study does, and the results are quite eye-opening."

Higher U.S. spending funnels away resources that could be invested elsewhere in the economy, but fails to deliver a healthier work force, the report said.

"Spending more would not be a problem if our health scores were proportionately higher," Dr. Arnold Milstein, one of the authors of the study, said in an interview. "But what this study shows is that the U.S. is not getting higher levels of health and quality of care."

Other countries spend less on health care and their workers are relatively healthier, the report said.

Medical costs have long been a problem for U.S. auto companies. General Motors spends more per car on health care than it does on steel. But as more American companies face global competition, the "value gap" is being felt by more CEOs — and their hard pressed workers.

One thing the report does not do is endorse the same solution that countries like Canada have adopted: a government-run health care system.

The CEOs of the Business Roundtable believe health care for U.S. workers and their families should stay in private hands, with a government-funded safety net for low-income people.

If Private Insurers Compete with Government, They'll Lose

2009-03-12T13:05:00.003-04:00

Should government bolster the public good by instituting universal Medicaid, or protect the profits of insurance companies?

by Dean Baker. Posted Tuesday, March 10 on CommonDreams.org

We all know that people have different ideologies about the proper role of government. Some people, who tend to be left of center, think that the government's role is to try to promote the general good, by providing basic services, protecting the poor and the sick, and ensuring a well-working economy. On the other hand, there are others, who usually place themselves right of center, who believe that the proper role of government is to redistribute as much income as possible to the wealthy.

These competing views of government are coming to a head in the debate over national health care reform. Those who think that the role of government is to serve the public good are likely to favor some form of universal Medicare. Such a system would almost certainly save a huge amount in administrative costs at the level of insurers, providers and government oversight.

Private insurers spend more than 15 percent of the money they collect in premiums on administrative costs. By contrast, Medicare spends about 2 percent. Part of the insurers' administrative expenses go toward marketing - an expense that would be unnecessary in a universal Medicare system.

The other major factor driving administrative costs with private insurers is associated with their efforts to game the system. Gaming is the best way to make profits in the current system. If insurers can find effective mechanisms for either keeping sick people from being insured, or finding ways to deny coverage for expensive care, then they stand to make large profits. Naturally, profit-maximizing
insurers will therefore devote substantial resources to trying to avoid ways to provide health care to people who need it.

At the level of providers, the wide range of divergent forms and policies employs hundreds of thousands of people in administrative positions in hospitals, doctors' offices, nursing homes and other providers. These people are often quite adept at dealing with various insurers, which is an important skill in our current system, but a task that would disappear if we had a universal Medicare system.

Finally, the state and federal governments must devote substantial resources for oversight to police the practice of insurers. Oversight agencies are essential for limiting abuse. This task would be much simpler if there were not corporations that stood to profit by keeping people from getting needed care.

While we could in principle shift to a universal Medicare system immediately, this would be an extremely difficult task politically and would present some serious practical problems as well. During his campaign, President Obama proposed something far more modest: give employers and individuals the choice to buy into a public Medicare-type program. Under this system, if people are happy with their current health care insurance, they would have the option to keep it. However, if they decided that the plan offered by the government was better, they could buy into it.

In this situation, insurers would compete with the government plan in the market. If private insurers could offer health insurance that provided better coverage or charged less, then people would have the option to buy into a private plan. Of course, the government would also regulate the market so that private insurers could not cherry-pick their way to profitability by insuring only healthy people and dumping them when they became sick.

The insurance industry already recognizes that it will lose out in this sort of competition. A government-run plan will be more efficient. We already know this based on the experience with Medicare. When private insurers have competed side by side with the traditional government Medicare plan, in the absence of government subsidies, the overwhelming majority of beneficiaries opted to go with the traditional Medicare plan.

This is why the insurers are yelling that they don't want to face "unfair" competition from a government plan. But, their complaint should be all the endorsement that the public needs to support a public Medicare-type plan. The public
plan will be cheaper and better than what the private insurers have to offer. Why shouldn't the public then have this option?

We all know that the insurance industry executives and the company shareholders want to make lots of money, but maybe they should try to find an industry where they can compete. If the government can provide health insurance better and cheaper, then why do we need private insurers?

Dean Baker is the co-director of the Center for Economic and Policy Research (CEPR). He is the author of The Conservative Nanny State: How the Wealthy Use the Government to Stay Rich and Get Richer (www.conservativenannystate.org) and the more recently published Plunder and Blunder: The Rise and Fall of The Bubble Economy. He also has a blog, "Beat the Press," where he discusses the media's coverage of economic issues. You can find it at the American Prospect's web site.

Amy Goodman: Put Single-Payer on the Table

2009-03-12T12:54:00.002-04:00

Posted Wednesday, March 11, 2009 at TruthDig.com

President Barack Obama promises health-care reform, but he has taken single-payer health care off the table. Single-payer is the system that removes private insurance companies from the picture; the government pays all the bills, but health-care delivery remains private. People still get their choice of what doctor to go to and what hospital to use. Single-payer reduces the administrative costs and removes the profit that insurance companies add to health-care delivery. Single-payer solutions, however, get almost no space in the debate.

A study just released by Fairness and Accuracy in Reporting, a media watchdog group, found that in the week before Obama's health-care summit, of the hundreds of stories that appeared in major newspapers and on the networks, "only five included the views of advocates of single-payer-none of which appeared on television." Most opinion columns that mentioned single-payer were written by opponents.

Congress is considering H.R. 676, "Expanded and Improved Medicare for All," sponsored by John Conyers, D-Mich., with 64 co-sponsors. Yet even when Rep. Conyers directly asked Obama at a Congressional Black Caucus meeting if he could attend the White House health-care summit, he was not immediately invited. Nor was any other advocate for single-payer health care.

Conyers had asked to bring Dr. Marcia Angell, the first woman editor in chief of The New England Journal of Medicine, the most prestigious medical journal in the country, and Dr. Quentin Young. Young is perhaps the most well-known single-payer advocate in America. He was Martin Luther King Jr.'s doctor when King lived in Chicago. "My 15-minute house calls would stretch into three hours," he told me.

But he came to know Barack Obama even better. Though his medical partner was Obama's doctor, Young was his neighbor, friend and ally for decades. "Obama supported single-payer, gave speeches for it," he said.

This past weekend, hundreds turned out to honor the 85-year-old Young, including the Illinois governor and three members of Congress, but the White House's response to Conyers' request that Young be included in the summit? A resounding no. Perhaps because Obama personally knows how persuasive and committed Young is.

After much outcry, Conyers was invited. Activist groups like Physicians for a National Health Program expressed outrage that no other single-payer advocate was to be among the 120 people at the summit. Finally, the White House relented and invited Dr. Oliver Fein, president of PNHP. Two people out of 120.

Locked out of the debate, silenced by the media, single-payer advocates are taking action. Russell Mokhiber, who writes and edits the Corporate Crime Reporter, has decided that the time has come to directly confront the problem of our broken health-care system. He's going to the national meeting of the American Health Insurance Plans and is joining others in burning their health-insurance bills outside in protest. Mokhiber told me, "The insurance companies have no place in the health care of American people. How are we going to beat these people? We have to start the direct confrontation." Launching a new organization, Single Payer Action, Mokhiber and others promise to take the issue to the insurance industry executives, the lobbyists and the members of Congress directly, in Washington, D.C., and their home district offices.

Critical mass is building behind a single-payer system. From Nobel Laureate in Economics Joseph Stiglitz, who told me, "I've reluctantly come to the view that it's the only alternative," to health-care providers themselves, who witness and endure the system's failure firsthand. Geri Jenkins of the newly formed, 150,000-nurses-strong United American Nurses-National Nurses Organizing Committee said: "It is the only health-care-reform proposal that can work. ... We are currently pushing to have a genuine, honest policy debate, because we'll win ... the health insurers will collapse under the weight of their own irrelevance."

Dr. Young has now been invited to a Senate meeting along with the "usual suspects": health-insurance providers, Big Pharma and health-care-reform advocates. I asked Young what he thought of the refrain coming from the White House, as well as from the leading senator on the issue, Max Baucus, that "single-payer is off the table." "It's repulsive," sighed Young. "We are very angry." But not discouraged. I asked him what he thought about Burn Your Health Insurance Bill Day. "Things are heating up." he chuckled. "When things are happening that you have nothing to do with, you know it's a movement."

Denis Moynihan contributed research to this column. © 2009 Amy Goodman

Thomas L. Friedman: The Inflection Is Near?

2009-03-09T16:45:00.003-04:00

Published March 8 in the New York Times

Sometimes the satirical newspaper The Onion is so right on, I can't resist quoting from it. Consider this faux article from June 2005 about America's addiction to Chinese exports:

FENGHUA, China - Chen Hsien, an employee of Fenghua Ningbo Plastic Works Ltd., a plastics factory that manufactures lightweight household items for Western markets, expressed his disbelief Monday over the "sheer amount of [garbage] Americans will buy. Often, when we're assigned a new order for, say, 'salad shooters,' I will say to myself, 'There's no way that anyone will ever buy these.' ... One month later, we will receive an order for the same product, but three times the quantity. How can anyone have a need for such useless [garbage]? I hear that Americans can buy anything they want, and I believe it, judging from the things I've made for them," Chen said. "And I also hear that, when they no longer want an item, they simply throw it away. So wasteful and contemptible."

Let's today step out of the normal boundaries of analysis of our economic crisis and ask a radical question: What if the crisis of 2008 represents something much more fundamental than a deep recession? What if it's telling us that the whole growth model we created over the last 50 years is simply unsustainable economically and ecologically and that 2008 was when we hit the wall - when Mother Nature and the market both said: "No more."

We have created a system for growth that depended on our building more and more stores to sell more and more stuff made in more and more factories in China, powered by more and more coal that would cause more and more climate change but earn China more and more dollars to buy more and more U.S. T-bills so America would have more and more money to build more and more stores and sell more and more stuff that would employ more and more Chinese ...

We can't do this anymore.

"We created a way of raising standards of living that we can't possibly pass on to our children," said Joe Romm, a physicist and climate expert who writes the indispensable blog climateprogress.org. We have been getting rich by depleting all our natural stocks - water, hydrocarbons, forests, rivers, fish and arable land - and not by generating renewable flows.

"You can get this burst of wealth that we have created from this rapacious behavior," added Romm. "But it has to collapse, unless adults stand up and say, 'This is a Ponzi scheme. We have not generated real wealth, and we are destroying a livable climate ...' Real wealth is something you can pass on in a way that others can enjoy."

Over a billion people today suffer from water scarcity; deforestation in the tropics destroys an area the size of Greece every year - more than 25 million acres; more than half of the world's fisheries are over-fished or fished at their limit. "Just as a few lonely economists warned us we were living beyond our financial means and overdrawing our financial assets, scientists are warning us that we're living beyond our ecological means and overdrawing our natural assets," argues Glenn Prickett, senior vice president at Conservation International. But, he cautioned, as environmentalists have pointed out: "Mother Nature doesn't do bailouts."

One of those who has been warning me of this for a long time is Paul Gilding, the Australian environmental business expert. He has a name for this moment - when both Mother Nature and Father Greed have hit the wall at once - "The Great Disruption."

"We are taking a system operating past its capacity and driving it faster and harder," he wrote me. "No matter how wonderful the system is, the laws of physics and biology still apply." We must have growth, but we must grow in a different way. For starters, economies need to transition to the concept of net-zero, whereby buildings, cars, factories and homes are designed not only to generate as much energy as they use but to be infinitely recyclable in as many parts as possible. Let's grow by creating flows rather than plundering more stocks.

Gilding says he's actually an optimist. So am I. People are already using this economic slowdown to retool and reorient economies. Germany, Britain, China and the U.S. have all used stimulus bills to make huge new investments in clean power. South Korea's new national paradigm for development is called: "Low carbon, green growth." Who knew? People are realizing we need more than incremental changes - and we're seeing the first stirrings of growth in smarter, more efficient, more responsible ways.

In the meantime, says Gilding, take notes: "When we look back, 2008 will be a momentous year in human history. Our children and grandchildren will ask us, 'What was it like? What were you doing when it started to fall apart? What did you think? What did you do?' " Often in the middle of something momentous, we can't see its significance. But for me there is no doubt: 2008 will be the marker - the year when 'The Great Disruption' began.

Bruce E. Levine: The Case for Giving Eli Lilly the Corporate Death Penalty

2009-03-09T15:44:00.004-04:00

In January, Eli Lilly pled guilty to illegal drug marketing, the latest in a long, sorry history of irresponsibility for profit. Is it time to revoke its corporate charter, or does it still have too many friends in high places?

Published on AlterNet March 3, 2009
Eli Lilly & Company's rap sheet as a public menace is so long that for Lilly watchers to overcome the "banality-of-Lilly-sleaziness" phenomenon, the drug company must break some type of record measuring egregiousness. Lilly obliged earlier this year, receiving the largest criminal fine ever imposed on a corporation.

If Americans are ever going to revoke the publicly granted charters of reckless, giant corporations -- well within our rights -- we might want to get the ball rolling with Lilly, whose recent actions appalled even the mainstream media. And with Lilly's chums, the Bush family, out of power, now might be the right time.

On January 15, 2009, Lilly pled guilty to charges that it had illegally marketed its blockbuster drug Zyprexa for unapproved uses to children and the elderly, two populations especially vulnerable to its dangerous side effect. Lilly plead guilty to a misdemeanor charge and agreed to pay $1.42 billion, which included $615 million to end the criminal investigation and approximately $800 million to settle the civil case.

One of the eight whistle-blowers in this case, former Lilly sales representative Robert Rudolph, says the settlement will not completely change Lilly's business practices, and he wants jail time for executives. "You have to remember, with Zyprexa," said Rudolph, "people lost their lives."

Rudolph is not exaggerating. Zyprexa, marketed as an "atypical" antipsychotic drug, has been promoted as having less dangerous adverse effects than "typical" antipsychotic drugs such as Thorazine and Haldol. However, on February 25, 2009, the Journal of the American Medical Association reported that the rate of sudden cardiac death in patients taking either typical or atypical antipsychotic drugs is double the death rate of a control group of patients not taking these drugs.

Zyprexa -- though not nearly as well known as Lilly's previous blockbuster Prozac -- is today one of the biggest-selling drugs in the world. Zyprexa has grossed more than $39 billion since its approval in 1996, with $4.8 billion of that in 2007 (and it was projected to equal or surpass that gross in 2008 when earnings are reported).

Lilly has had other Zyprexa scandals, but in this current one, Lilly executives matched Charles Dickens scoundrels. Zyprexa is approved by the Food and Drug and Administration (FDA) for schizophrenia and bipolar disorder, but Lilly illegally marketed it for sleep difficulties, aggression, and other unapproved uses. Lilly sales reps aggressively pushed Zyprexa as a wonderful drug to chill out disruptive children and the elderly who were not schizophrenic or bipolar. The lawsuit against Lilly stated, "In truth, this was Lilly's thinly veiled marketing of Zyprexa as an effective chemical restraint for demanding, vulnerable and needy patients."

Doctors can prescribe drugs for unapproved uses (called "off-label prescribing"), but drug companies are not allowed to market drugs for unapproved uses. Many drug companies break this rule, but Lilly broke it with gusto. “The company made hundreds of millions of dollars by trying to convince health care providers that Zyprexa was safe for unapproved uses," said Laurie Magid, acting U.S. Attorney for the Eastern District of Pennsylvania where the case was prosecuted. Magid said that Lilly was responsible for "putting thousands and thousands of patients at risk."

One marketing effort consisted of the Lilly sales force urging geriatricians to use Zyprexa to sedate unruly nursing home and assisted-living facilities patients. Lilly sales reps distributed a study claiming that elderly patients taking Zyprexa required fewer skilled nursing staff hours than were necessary for patients taking competing medications. Magid stated that Lilly sales reps were "trained to use the slogan five at five, meaning five milligrams at 5 o'clock at night will keep these elderly patients quiet." Illegally marketing Zyprexa for elderly patients was especially troubling for prosecutors because Zyprexa increases the risks of heart failure and life-threatening infections such as pneumonia in older patients.

In addition to targeting the misbehaving elderly, Lilly also targeted annoying kids. New York Times reporters Gardiner Harris and Alex Berenson, who have been covering Eli Lilly and Zyprexa for several years, reported on January 14, 2009, "The company also pressed doctors to treat disruptive children with Zyprexa, court documents show, even though the medicine's tendency to cause severe weight gain and metabolic disorders is particularly pronounced in children ... The children receiving Zyprexa gained so much weight during the study that a safety monitoring panel ordered that they be taken off the drug."

Mainstream reporters were so appalled by Lilly's recent actions that some voiced caustic commentaries about the relatively small price Lilly paid for its transgressions. CBS reporter Sharyl Attkisson (January 15, 2009) noted, "Eli Lilly has pled guilty to marketing the sometimes dangerous drug Zyprexa in ways never proven safe or effective ... Lilly has agreed to pay $1.4 billion, including the largest criminal fine ever imposed on a corporation. Ironically, that's about as much as the company's Zyprexa sales in the first quarter last year." However, the mainstream media failed to provide the context of Lilly's horrendous history which goes back decades.

The New York Times 2009 article did at least go back as far as 2006, reminding readers of the Times exclusive on another Zyprexa scandal. In December 2006, a whistle blower handed over to the Times hundreds of internal Lilly documents and e-mail messages among top company managers that showed how Lilly had downplayed Zyprexa's association with weight gain and metabolic disorders such as diabetes.

A Rolling Stone piece earlier this year ("Marketing Lilly's Zyprexa, a Phony ‘Miracle' Drug") details how Lilly minimized Zyprexa's relationship with dramatic weight gain. In 1995, prior to FDA approval of Zypexa , Lilly's own panel of experts concluded that Zyprexa produced an average weight gain of 24 pounds in a single year (one in six patients gained more than 66 pounds); that kind of weight gain can elevate blood-sugar levels and cause diabetes. This data, however, was not submitted by Lilly to the FDA.

Lilly-Zyprexa scandals didn't just start in 2006. A 2003 Lilly-Zyprexa scandal involved Medicaid and the National Alliance for the Mentally Ill (NAMI), ostensibly a consumer organization. That year, Zyprexa grossed $2.63 billion in the United States, 70 percent of that attributable to government agencies, mostly Medicaid. Zyprexa cost approximately twice as much as similar drugs, and state Medicaid programs, going in the red in part because of Zyprexa, were attempting to exclude it in favor of similar, less expensive drugs. When Kentucky's Medicaid program attempted to exclude Zyprexa -- its single largest drug expense -- from its list of preferred medications, NAMI bused protesters to hearings, placed full-page ads in newspapers, and sent faxes to state officials. What NAMI did not say at the time was that the buses, ads, and faxes were paid for by Lilly.

The Lilly-NAMI financial connection had already been exposed by Ken Silverstein in Mother Jones in 1999. Silverstein reported that NAMI took $11.7 million from drug companies over a three-and-a-half-year period from 1996 through 1999, with the largest donor being Lilly, which provided $2.87 million. Lilly's funding also included loaning NAMI a Lilly executive, who worked at NAMI headquarters but whose salary was paid for by Lilly.

Beyond Zyprexa, in 2002 fingers were pointed at Lilly for tampering with the Homeland Security Act. On November 25, 2002, soon after George W. Bush signed the Act, New York Times columnist Bob Herbert discovered what had been slipped into it at the last minute, "Buried in this massive bill, snuck into it in the dark of night by persons unknown . . . was a provision that – incredibly – will protect Eli Lilly and a few other big pharmaceutical outfits from lawsuits by parents who believe their children were harmed by thimerosal."

While it was recently revealed that research published in 1998 that linked vaccine use to autism was fraudulent, in 2002 the harmfulness of thimerosal (a preservative that contains mercury and used by Lilly and other drug companies in vaccines) was not clear. Specifically, in 1999 the American Academy of Pediatrics and the Public Health Service had urged vaccine makers to stop using thimerosal, and in 2001 the Institute of Medicine concluded that the link between autism and thimerosal was "biologically plausible." So in 2002, drug companies such as Lilly which had used thimerosal in vaccines were nervous about what scientists and the courts would ultimately determine.

How then did a drug-company protection provision get inserted in the Homeland Security Act? Here's my bet for one of Herbert's "persons unknown." In June 2002, then President George W. Bush had appointed Lilly's CEO, Sidney Taurel, to a seat on his Homeland Security Advisory Council. Ultimately even some Republican senators became embarrassed by the drug-company protection provision, and by early 2003, moderate Republicans and Democrats agreed to repeal that particular provision from the Act.

The year 2002 was a banner one for "Lillygates," with "60 Minutes II" ultimately airing another juicy Lilly scandal. Lilly's patent for Prozac had run out, and the drug company began marketing a new drug, Prozac Weekly. Lilly sales representatives in Florida gained access to patient information records, and, unsolicited, mailed out free samples of Prozac Weekly. Though they primarily targeted patients diagnosed with depression who were receiving competitor antidepressants, at least one such Prozac Weekly sample was mailed to a sixteen-year-old boy with no history of depression or antidepressant use. Law suits followed.

The most cinematic of all Lilly scandals began in 1989 and culminated in1997. One month after Joseph Wesbecker began taking Lilly's antidepressant Prozac, he opened fire with his AK-47 at his former place of employment in Louisville, Kentucky, killing eight people and wounding twelve before taking his own life. British journalist John Cornwell covered the trial for the London Sunday Times Magazine and ultimately wrote a book about it. Cornwell's The Power to Harm is not simply about a disgruntled employee becoming violent after taking Prozac; the book is about Lilly's power to corrupt a judicial system.

Victims of Joseph Wesbecker sued Lilly, claiming that Prozac had pushed Wesbecker over the edge. The trial took place in 1994 but received little attention as America was obsessed at the time by the O.J. Simpson spectacle. While Lilly had been quietly settling many Prozac violence suits, the drug company was looking for a showcase trial that it could actually win. Although a 1991 FDA "Blue Ribbon Panel" investigating the association between Prozac and violence had voted not to require Prozac to have a violence warning label, by 1994 word was getting around that five of the nine FDA panel doctors had ties to drug companies -- two of them serving as lead investigators for Lilly-funded Prozac studies. Thus with the FDA panel now known to be tainted, Lilly wanted a Prozac trial it could win, and it believed that Wesbecker's history was such that Prozac would not be seen as the cause of his mayhem.

A crucial component of the victims' attorneys' strategy was for the jury to hear about Lilly's history of reckless disregard. Victims' attorneys especially wanted the jury to hear about Lilly's anti-inflamatory drug Oraflex, introduced in 1982 but taken off the market three months later. A U.S. Justice Department investigation linked Oraflex to the deaths of more than one hundred patients, and concluded that Lilly had misled the FDA. Lilly was charged with 25 counts related to mislabeling side effects and plead guilty.

In the Wesbecker trial, Lilly attorneys argued that Oraflex information would be prejudicial, and Judge John Potter initially agreed that the jury shouldn't hear it. However, when Lilly attorneys used witnesses to make a case for Lilly's superb system of collecting and analyzing side effects, Judge Potter said that Lilly itself had opened the door to evidence to the contrary, and he ruled that Oraflex information would now be permitted. To Judge Potter's amazement, victims' attorneys never presented the Oraflex evidence, and Eli Lilly won the case.

Later it was discovered why victims' attorneys remained silent about Oraflex. In a manipulation Cornwell described as "unprecedented in any Western court," Lilly cut a secret deal with victims' attorneys to pay them and their clients not to introduce the Oraflex evidence. However, Judge Potter smelled a rat and fought for an investigation, and in 1997 Lilly quietly agreed to the verdict being changed from a Lilly victory to "dismissed as settled."

If Americans want to take on Lilly, they might want to do it during a time when the Bush family is out of power. Sidney Taurel, former Lilly CEO and George W. Bush appointee to the Homeland Security Advisory Council, is not the only Bush family-Lilly connection. George Herbert Walker Bush once sat on the Eli Lilly board of directors, as did Bush family crony Ken Lay, the Enron chief convicted of fraud before his death. Mitch Daniels, George W. Bush's first-term Director of Management and Budget, had actually been a Lilly vice president, and in 1991 he had co-chaired a Bush-Quayle fundraiser that collected $600,000. This is the same Mitch Daniels who is now governor of Indiana, Lilly's home state.

Currently, the public's right to revoke corporate charters is still recognized by the courts, but attorneys general today rarely exercise this option, and then only against small corporations. Loyola Law School Professor Robert Benson, who in 1998 petitioned California's attorney general to revoke the corporate charter of Union Oil of California (Unocal), notes that state attorneys general "don't hesitate to draw this particular arrow from their quivers when the target is some small, unpopular or socially marginal enterprise." But when it comes to egregious large multinationals, Benson concludes, "They don't even want you to know about it because they don't want to appear to be soft on corporate crime."

In his book When Corporations Rule the World, David Korten, former Harvard Business School Professor writes, "In the young American republic, there was little sense that corporations were either inevitable or always appropriate." Early in American history, Americans were very much concerned about any entity achieving too much power, and so in corporate charters there were clear limits placed on: years permitted to exist, borrowing, land ownership, extent of enterprise, and sometimes even on profits. Korten notes that in the first half of the nineteenth century, "Action by state legislators to amend, revoke, or simply fail to renew corporate charters was fairly common."

The Program on Corporations, Law & Democracy (POCLAD) was created in 1994, in part to inform Americans that they can in fact revoke corporate charters. In 1890, POCLAD explains, the highest court in New York State revoked the charter of the North River Sugar Refining Corporation in this unanimous decision: "The judgment sought against the defendant is one of corporate death ... the defendant corporation has violated its charter, and failed in the performance of its corporate duties, and that in respects so material and important as to justify a judgment of dissolution."

Giant drug corporations -- especially ones that make a killing selling dangerous drugs by hyper-pathologizing people who can't defend themselves -- get my adrenaline going; and so my candidate to get the ball rolling is Lilly, which has now made themselves vulnerable by getting in so much damn trouble. But with Lilly's man Mitch Daniels currently governor of Lilly's home state, Lilly still has pull; and so I won't be upset if some other giant sleazebag corporation receives the death penalty before Lilly.

Given the fact that Americans already have a history of revoking corporate charters, why shouldn't this practice be continued? Yes we did, yes we still can, and so yes let's do it.

Bruce E. Levine, Ph.D., is a clinical psychologist and author of Surviving America’s Depression Epidemic: How to Find Morale, Energy, and Community in a World Gone Crazy (Chelsea Green Publishing, 2007). His web site is www.brucelevine.net

Robert Weissman: Wall Street's Best Investment: Paying for Policy in Washington

2009-03-06T08:33:00.002-05:00

By Robert Weissman, March 4, 2009

Financial deregulatory mania over the last three decades led directly to the current financial meltdown.

Were the deregulators acting out of principle? Perhaps.

But it couldn't have hurt that the financial sector invested a staggering $5.1 billion in political influence purchasing in the United States over the last decade.

The money flows are laid out in gruesome detail in "Sold Out: How Wall Street and Washington Betrayed America," a report that my colleague Jim Donahue and I wrote, along with a team of contributors from the Consumer Education Foundation and my organization, Essential Information. The report is available at: www.wallstreetwatch.org.

The entire financial sector (finance, insurance, real estate) drowned political candidates in campaign contributions, spending more than $1.7 billion in federal elections from 1998-2008. Primarily reflecting the balance of power over the decade, about 55 percent went to Republicans and 45 percent to Democrats. Democrats took just more than half of the financial sector's 2008 election cycle contributions.

The industry spent even more -- topping $3.4 billion -- on officially registered lobbyists during the same period. This total certainly underestimates by a considerable amount what the industry spent to influence policymaking. U.S. reporting rules require that lobby firms and individual lobbyists disclose how much they have been paid for lobbying activity, but lobbying activity is defined to include direct contacts with key government officials, or work in preparation for meeting with key government officials. Public relations efforts and various kinds of indirect lobbying are not covered by the reporting rules.

During the decade-long period:
● Commercial banks spent more than $154 million on campaign contributions, while investing $383 million in officially registered lobbying;
● Accounting firms spent $81 million on campaign contributions and $122 million on lobbying;
● Insurance companies donated more than $220 million and spent more than $1.1 billion on lobbying; and
● Securities firms invested more than $512 million in campaign contributions, and an additional nearly $600 million in lobbying. Hedge funds, a subcategory of the securities industry, spent $34 million on campaign contributions (about half in the 2008 election cycle); and $20 million on lobbying. Private equity firms, also a subcategory of the securities industry, contributed $58 million to federal candidates and spent $43 million on lobbying.

Individual firms spent tens of millions of dollars each. During the decade-long period:

● Goldman Sachs spent more than $46 million on political influence buying;
● Merrill Lynch threw more than $68 million at politicians;
● Citigroup spent more than $108 million;
● Bank of America devoted more than $39 million;
● JPMorgan Chase invested more than $65 million; and
● Accounting giants Deloitte & Touche, Ernst & Young, KPMG and Pricewaterhouse spent, respectively, $32 million, $37 million, $27 million and $55 million.

The number of people working to advance the financial sector's political objectives is startling. In 2007, the financial sector employed a staggering 2,996 separate lobbyists to influence federal policy making, more than five for each Member of Congress. This figure only counts officially registered lobbyists. That means it does not count those who offered "strategic advice" or helped mount policy-related PR campaigns for financial sector companies. The figure counts those lobbying at the federal level; it does not take into account lobbyists at state houses across the country. To be clear, the 2,996 figure represents the number of separate individuals employed by the financial sector as lobbyists in 2007. We did not double count individuals who lobby for more than one company the total number of financial sector lobby hires in 2007 was a whopping 6,738.

A great many of those lobbyists entered and exited through the revolving door connecting the lobbying world with government. Surveying only 20 leading firms in the financial sector (none from the insurance industry or real estate), we found that 142 industry lobbyists during the period 19982008 had formerly worked as "covered officials" in the government. "Covered officials" are top officials in the executive branch (most political appointees, from members of the cabinet to directors of bureaus embedded in agencies), Members of Congress, and congressional staff.

Nothing evidences the revolving door -- or Wall Street's direct influence over policymaking -- more than the stream of Goldman Sachs expatriates who left the Wall Street goliath, spun through the revolving door, and emerged to hold top regulatory positions. Topping the list, of course, are former Treasury Secretaries Robert Rubin and Henry Paulson, both of whom had served as chair of Goldman Sachs before entering government. Goldman continues to be well represented in government, with among others, Gary Gensler, President Obama's pick to chair the Commodity Futures Trading Commission, and Mark Patterson, a former Goldman lobbyist now serving as chief of staff to Treasury Secretary Timothy Geithner.

All of this awesome influence buying has enabled Wall Street to establish the framework for debates in Washington, and to obtain very specific deregulatory actions, with devastating consequences.

Nobel support for single payer

2009-03-06T08:27:00.002-05:00

Here's an excerpt from Amy Goodman's February interview with Nobel economist Joseph Stiglitz. You can read the transcript online here.

Amy Goodman: He’s [President Obama] called for universal healthcare, but he does not call for single-payer healthcare.

Joseph Stiglitz: I think that there are some fundamental problems in the efficiency of our healthcare system. And what we’ve seen is that the private healthcare insurers do not know how to deliver an efficient way.

Amy Goodman: Do you support single-payer healthcare?

Joseph Stiglitz: I think I’ve reluctantly come to the view that it’s the only alternative. You know, we’ve tried a lot of other things. And we’ve been—you know, I was in the Clinton administration, and we debated a lot of alternatives, and I’ve watched things as they’ve emerged and, you know, evolved over the last twelve, sixteen years, and I think there’s a growing consensus that the private market exclusion is not going to work.

New York Times: Obama Taps Health Aide With Links to Industry

2009-03-06T07:36:00.003-05:00

By Sheryl Gay Stolberg. Published March 2 in the New York Times

WASHINGTON — In picking Nancy-Ann DeParle to champion an overhaul of the nation’s health system, President Obama selected someone with deep roots in the Washington bureaucracy, an intimate familiarity with health policy and respect on both sides of the political aisle — not to mention degrees from Harvard Law School and Oxford University.

But in putting Ms. DeParle in charge of an issue that has bedeviled presidents for decades, Mr. Obama also chose to overlook Ms. DeParle’s business ties to companies that have a direct stake in the health care debate.

In announcing her appointment Monday as the director of the White House Office of Health Reform, Mr. Obama expressed “absolute confidence” in Ms. DeParle, who ran the agency that oversaw Medicare and Medicaid during the Clinton administration. But the White House instantly faced questions about whether her appointment was skirting the spirit, if not the letter, of the president’s tough conflict-of-interest policy.

Since leaving the Clinton administration, Ms. DeParle has been managing director of a private equity firm, CCMP Capital, and a board member of companies like Boston Scientific, Cerner and Medco Health Solutions. White House officials said Ms. DeParle was severing ties with those companies and would recuse herself from participating in any matter that was “directly or substantially” related to former clients or employers.

“It is our view, and the view of counsel here, that the incidence of that will be very low,” an administration official said of the need for Ms. DeParle to recuse herself from decisions. The official, who was not authorized to speak publicly, said Ms. DeParle would be working mostly with federal agencies and lawmakers, and not directly with companies.

Allies of Ms. DeParle described her work in the private sector as a plus, because her familiarity with the industry would enable her to lean on companies to make tradeoffs essential in expanding access to the uninsured.

“She can call their bluff far more credibly and say, ‘Come on, guys, I’ve seen the books, I know you can do this with lower margins and higher market share, and you’ll do quite well,’ ” said Chris Jennings, who was President Bill Clinton’s top health policy adviser. “To me that’s very, very helpful.”

The appointment drew praise from some Republicans, including Bill Thomas and Jim McCrery, both former House members who worked closely with Ms. DeParle on health care. Mr. McCrery described her as “very knowledgeable, and very reasonable.”

At 52, Ms. DeParle, who is married to a New York Times reporter, Jason DeParle, is also no stranger to personal hardship. She grew up in a small town in eastern Tennessee and was raised by a single mother who died of lung cancer when Ms. DeParle was 17.

She went to college on scholarships and loans (she was the first woman president of the student body at the University of Tennessee) and attended Oxford on a Rhodes scholarship. At 29, she was hired by Ned McWherter, then the governor of Tennessee, to run the State Department of Human Services.

After working as a lawyer in Washington, Ms. DeParle joined the Clinton administration in the budget office and later oversaw a vast overhaul of the way Medicare operated.

Donna E. Shalala, a good friend of Ms. DeParle’s who was health secretary to Mr. Clinton, called Ms. DeParle “smart, fair, highly ethical and tough as nails,” and said her appointment, and the nomination of Gov. Kathleen Sebelius of Kansas as health secretary, should erase any concern about the withdrawal of the man Mr. Obama originally wanted for both jobs, Tom Daschle, the former Senate Democratic leader.

“This is a very good one-two punch,” Ms. Shalala said. “This is as good as it gets if you can’t have Daschle.”

This article has been revised to reflect the following correction:

Correction: March 6, 2009
An article on Tuesday about the appointment of Nancy-Ann DeParle to run the White House Office of Health Reform referred incorrectly to the ancestry of Ms. DeParle’s mother. She was a native-born American, not a Chinese immigrant. (Ms. DeParle’s father was from China.)

Michael Parenti: Capitalism's Self-inflicted Apocalypse

2009-03-05T15:08:00.003-05:00

Posted January 2009 at michaelparenti.org

After the overthrow of communist governments in Eastern Europe, capitalism was paraded as the indomitable system that brings prosperity and democracy, the system that would prevail unto the end of history.

The present economic crisis, however, has convinced even some prominent free-marketeers that something is gravely amiss. Truth be told, capitalism has yet to come to terms with several historical forces that cause it endless trouble: democracy, prosperity, and capitalism itself, the very entities that capitalist rulers claim to be fostering.

Plutocracy vs. Democracy
Let us consider democracy first. In the United States we hear that capitalism is wedded to democracy, hence the phrase, "capitalist democracies." In fact, throughout our history there has been a largely antagonistic relationship between democracy and capital concentration. Some eighty years ago Supreme Court Justice Louis Brandeis commented, "We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can’t have both." Moneyed interests have been opponents not proponents of democracy.

The Constitution itself was fashioned by affluent gentlemen who gathered in Philadelphia in 1787 to repeatedly warn of the baneful and dangerous leveling effects of democracy. The document they cobbled together was far from democratic, being shackled with checks, vetoes, and requirements for artificial super majorities, a system designed to blunt the impact of popular demands.

In the early days of the Republic the rich and well-born imposed property qualifications for voting and officeholding. They opposed the direct election of candidates (note, their Electoral College is still with us). And for decades they resisted extending the franchise to less favored groups such as propertyless working men, immigrants, racial minorities, and women.

Today conservative forces continue to reject more equitable electoral features such as proportional representation, instant runoff, and publicly funded campaigns. They continue to create barriers to voting, be it through overly severe registration requirements, voter roll purges, inadequate polling accommodations, and electronic voting machines that consistently "malfunction" to the benefit of the more conservative candidates.

At times ruling interests have suppressed radical publications and public protests, resorting to police raids, arrests, and jailings—applied most recently with full force against demonstrators in St. Paul, Minnesota, during the 2008 Republican National Convention.

The conservative plutocracy also seeks to rollback democracy’s social gains, such as public education, affordable housing, health care, collective bargaining, a living wage, safe work conditions, a non-toxic sustainable environment; the right to privacy, the separation of church and state, freedom from compulsory pregnancy, and the right to marry any consenting adult of one’s own choosing.

About a century ago, US labor leader Eugene Victor Debs was thrown into jail during a strike. Sitting in his cell he could not escape the conclusion that in disputes between two private interests, capital and labor, the state was not a neutral arbiter. The force of the state--with its police, militia, courts, and laws—was unequivocally on the side of the company bosses. From this, Debs concluded that capitalism was not just an economic system but an entire social order, one that rigged the rules of democracy to favor the moneybags.

Capitalist rulers continue to pose as the progenitors of democracy even as they subvert it, not only at home but throughout Latin America, Africa, Asia, and the Middle East. Any nation that is not "investor friendly," that attempts to use its land, labor, capital, natural resources, and markets in a self-developing manner, outside the dominion of transnational corporate hegemony, runs the risk of being demonized and targeted as "a threat to U.S. national security."

Democracy becomes a problem for corporate America not when it fails to work but when it works too well, helping the populace move toward a more equitable and livable social order, narrowing the gap, however modestly, between the superrich and the rest of us. So democracy must be diluted and subverted, smothered with disinformation, media puffery, and mountains of campaign costs; with rigged electoral contests and partially disfranchised publics, bringing faux victories to more or less politically safe major-party candidates.

Capitalism vs. Prosperity
The corporate capitalists no more encourage prosperity than do they propagate democracy. Most of the world is capitalist, and most of the world is neither prosperous nor particularly democratic. One need only think of capitalist Nigeria, capitalist Indonesia, capitalist Thailand, capitalist Haiti, capitalist Colombia, capitalist Pakistan, capitalist South Africa, capitalist Latvia, and various other members of the Free World--more accurately, the Free Market World.

A prosperous, politically literate populace with high expectations about its standard of living and a keen sense of entitlement, pushing for continually better social conditions, is not the plutocracy’s notion of an ideal workforce and a properly pliant polity. Corporate investors prefer poor populations. The poorer you are, the harder you will work—for less. The poorer you are, the less equipped you are to defend yourself against the abuses of wealth.

In the corporate world of "free-trade," the number of billionaires is increasing faster than ever while the number of people living in poverty is growing at a faster rate than the world’s population. Poverty spreads as wealth accumulates.

Consider the United States. In the last eight years alone, while vast fortunes accrued at record rates, an additional six million Americans sank below the poverty level; median family income declined by over $2,000; consumer debt more than doubled; over seven million Americans lost their health insurance, and more than four million lost their pensions; meanwhile homelessness increased and housing foreclosures reached pandemic levels.

It is only in countries where capitalism has been reined in to some degree by social democracy that the populace has been able to secure a measure of prosperity; northern European nations such as Sweden, Norway, Finland, and Denmark come to mind. But even in these social democracies popular gains are always at risk of being rolled back.

It is ironic to credit capitalism with the genius of economic prosperity when most attempts at material betterment have been vehemently and sometimes violently resisted by the capitalist class. The history of labor struggle provides endless illustration of this.

To the extent that life is bearable under the present U.S. economic order, it is because millions of people have waged bitter class struggles to advance their living standards and their rights as citizens, bringing some measure of humanity to an otherwise heartless politico-economic order.

A Self-devouring Beast
The capitalist state has two roles long recognized by political thinkers. First, like any state it must provide services that cannot be reliably developed through private means, such as public safety and orderly traffic. Second, the capitalist state protects the haves from the have-nots, securing the process of capital accumulation to benefit the moneyed interests, while heavily circumscribing the demands of the working populace, as Debs observed from his jail cell.

There is a third function of the capitalist state seldom mentioned. It consists of preventing the capitalist system from devouring itself. Consider the core contradiction Karl Marx pointed to: the tendency toward overproduction and market crisis. An economy dedicated to speedups and wage cuts, to making workers produce more and more for less and less, is always in danger of a crash. To maximize profits, wages must be kept down. But someone has to buy the goods and services being produced. For that, wages must be kept up. There is a chronic tendency—as we are seeing today—toward overproduction of private sector goods and services and underconsumption of necessities by the working populace.

In addition, there is the frequently overlooked self-destruction created by the moneyed players themselves. If left completely unsupervised, the more active command component of the financial system begins to devour less organized sources of wealth.

Instead of trying to make money by the arduous task of producing and marketing goods and services, the marauders tap directly into the money streams of the economy itself. During the 1990s we witnessed the collapse of an entire economy in Argentina when unchecked free marketeers stripped enterprises, pocketed vast sums, and left the country’s productive capacity in shambles. The Argentine state, gorged on a heavy diet of free-market ideology, faltered in its function of saving capitalism from the capitalists.

Some years later, in the United States, came the multi-billion-dollar plunder perpetrated by corporate conspirators at Enron, WorldCom, Harkin, Adelphia, and a dozen other major companies. Inside players like Ken Lay turned successful corporate enterprises into sheer wreckage, wiping out the jobs and life savings of thousands of employees in order to pocket billions.

These thieves were caught and convicted. Does that not show capitalism’s self-correcting capacity? Not really. The prosecution of such malfeasance— in any case coming too late—was a product of democracy’s accountability and transparency, not capitalism's. Of itself the free market is an amoral system, with no strictures save caveat emptor.

In the meltdown of 2008-09 the mounting financial surplus created a problem for the moneyed class: there were not enough opportunities to invest. With more money than they knew what to do with, big investors poured immense sums into nonexistent housing markets and other dodgy ventures, a legerdemain of hedge funds, derivatives, high leveraging, credit default swaps, predatory lending, and whatever else.

Among the victims were other capitalists, small investors, and the many workers who lost billions of dollars in savings and pensions. Perhaps the premiere brigand was Bernard Madoff. Described as "a longstanding leader in the financial services industry," Madoff ran a fraudulent fund that raked in $50 billion from wealthy investors, paying them back "with money that wasn’t there," as he himself put it. The plutocracy devours its own children.

In the midst of the meltdown, at an October 2008 congressional hearing, former chair of the Federal Reserve and orthodox free-market devotee Alan Greenspan confessed that he had been mistaken to expect moneyed interests--groaning under an immense accumulation of capital that needs to be invested somewhere--to suddenly exercise self-restraint.

The classic laissez-faire theory is even more preposterous than Greenspan made it. In fact, the theory claims that everyone should pursue their own selfish interests without restraint. This unbridled competition supposedly will produce maximum benefits for all because the free market is governed by a miraculously benign “invisible hand” that optimizes collective outputs. (“Greed is good.”)

Is the crisis of 2008-09 caused by a chronic tendency toward overproduction and hyper-financial accumulation, as Marx would have it? Or is it the outcome of the personal avarice of people like Bernard Madoff? In other words, is the problem systemic or individual? In fact, the two are not mutually exclusive. Capitalism breeds the venal perpetrators, and rewards the most unscrupulous among them. The crimes and crises are not irrational departures from a rational system, but the converse: they are the rational outcomes of a basically irrational and amoral system.

Worse still, the ensuing multi-billion dollar government bailouts are themselves being turned into an opportunity for pillage. Not only does the state fail to regulate, it becomes itself a source of plunder, pulling vast sums from the federal money machine, leaving the taxpayers to bleed.

Those who scold us for "running to the government for a handout" are themselves running to the government for a handout. Corporate America has always enjoyed grants-in-aid, loan guarantees, and other state and federal subventions. But the 2008-09 "rescue operation" offered a record feed at the public trough. More than $350 billion was dished out by a right-wing lame-duck Secretary of the Treasury to the biggest banks and financial houses without oversight--not to mention the more than $4 trillion that has come from the Federal Reserve. Most of the banks, including JPMorgan Chase and Bank of New York Mellon, stated that they had no intention of letting anyone know where the money was going.

The big bankers used some of the bailout, we do know, to buy up smaller banks and prop up banks overseas. CEOs and other top banking executives are spending bailout funds on fabulous bonuses and lavish corporate spa retreats. Meanwhile, big bailout beneficiaries like Citigroup and Bank of America laid off tens of thousands of employees, inviting the question: why were they given all that money in the first place?

While hundreds of billions were being doled out to the very people who had caused the catastrophe, the housing market continued to wilt, credit remained paralyzed, unemployment worsened, and consumer spending sank to record lows.

In sum, free-market corporate capitalism is by its nature a disaster waiting to happen. Its essence is the transformation of living nature into mountains of commodities and commodities into heaps of dead capital. When left entirely to its own devices, capitalism foists its diseconomies and toxicity upon the general public and upon the natural environment--and eventually begins to devour itself.

The immense inequality in economic power that exists in our capitalist society translates into a formidable inequality of political power, which makes it all the more difficult to impose democratic regulations.

If the paladins of Corporate America want to know what really threatens "our way of life," it is their way of life, their boundless way of pilfering their own system, destroying the very foundation on which they stand, the very community on which they so lavishly feed.

Mark Weisbrot: Health Care Reform Is Needed Now More than Ever

2009-03-04T11:40:00.002-05:00

Published on Monday, March 2, 2009 by McClatchy Newspapers

With the U.S. economy's downward spiral still accelerating and the federal government looking at its largest budget deficits since World War II, some are saying that this is not the time to expand health care coverage to all Americans.

But this is exactly the time for the Obama administration to move boldly on its campaign promise to implement a universal health care system.

Obama wants spending that stimulates the economy in the short term, but he also wants to reduce the long-term deficit problem after the economy recovers. This is exactly what health care reform will do.

In the short run, health care spending, like other government spending on goods and services, creates jobs and generates income. This will help arrest the economy's downward spiral.

With the collapse of private spending, the federal government must act as the consumer of last resort - hence the vital importance of the $787 billion stimulus package that Congress passed last week. Fortunately this package did contain at least some health care stimulus. In included $87 billion for Medicaid payments to the state governments, $25 billion towards helping unemployed workers extend their employment-based health insurance after being laid off, and $19 billion for health information technology.

But health care reform would do vastly more. President Obama has proposed a reform that would, while keeping the employer-based health insurance that covers most Americans, create a public health insurance system for the 46 million that do not have insurance. Large employers would be required to either pay into this system or provide their employees with insurance that is at least as good as the federal system. Individuals without insurance could buy into the public system, and the federal government would subsidize these payments so that they would be affordable for low-income households and those without ties to the labor force.

The White House estimates that their plan would cost $50-65 billion annually, but it would be better to spend much more than this, with more federal subsidies to employers to cover uninsured workers and improve existing coverage. As big as it may seem, the $787 billion stimulus bill passed by Congress amounts to less than 2.7 percent of GDP. This is not nearly enough to counteract our deep recession: the Congressional Budget Office estimates the output gap (i.e., how much output is below the economy's potential) at $2.9 trillion over the next three years.

Besides saving thousands of lives by providing health care to the uninsured, and supplementing the fiscal stimulus, health care reform has another huge advantage: it can drastically reduce future federal budget deficits. The vast majority of our government's long-term shortfall is due to exploding health care costs in the private sector. These spill over to the public sector, which currently finances about half the nation's health care costs. The United States spends about twice as much per person on health care as other high-income countries, and yet has worse health outcomes, including life expectancy and infant mortality.

The main economic reason for this colossal failure is that our system of private insurance and powerful monopolies is vastly more wasteful and inefficient than the health care systems of other developed countries. Insurance companies spend tens of billions trying to insure the healthy, avoid the sick, and deny payment for claims. Pharmaceutical companies take $350 billion of our health care dollars for drugs that cost a small fraction of that sum to produce.

The Obama health care plan won't eliminate most of these perverse incentives and waste - eventually we will need a truly national, single-payer system like Medicare to accomplish that. But it would be a big step in that direction, creating a nearly universal insurance system and laying the foundation for a sustainable system that can contain costs.

Mark Weisbrot is Co-Director of the Center for Economic and Policy Research (CEPR), in Washington, DC. His column is distributed to newspapers by McClatchy-Tribune Information Services.

Katrina vanden Heuvel: Revolutionizing Primary Healthcare

2009-03-04T11:12:00.003-05:00

originally posted on The Nation's Editor's Cut blog on February 28

“"If you are willing to volunteer in your neighborhood or give back to your community or serve your country, we will make sure that you can afford a higher education.”
-- President Obama, Address to Joint Session of Congress

I’'ve always believed it’s important that we redefine national service so that it isn'’t the exclusive province of the military. That is why this line in President Obama’'s powerful speech on Tuesday night was good to hear. One critical achievement in the Recovery bill was that it tripled funding for the National Health Service Corps (NHSC) to $300 million to provide incentives -- including debt forgiveness and grants -- for physicians and dentists, medical and dental students, to practice in underserved areas.

Thursday, Senator Bernie Sanders and House Majority Whip James Clyburn announced legislation that is very much in sync with the President’s stated priorities. The Access for All Americans Act -- with 21 Senate cosponsors and 72 cosponsors in the House -- would greatly expand the Federally Qualified Health Centers (FQHC) program
that currently provides primary care to 18 million Americans in 1,100 community health centers so that every American in a medically underserved area would have access to care. (Even George Bush supported this program.) It would also increase funding for the NHSC over the next five years to $1.1 billion, providing loan repayment and scholarships to those who pursue primary medical and dental care careers in underserved communities, recruiting 24,000 new healthcare professionals to serve those areas.

“"Insurance coverage is not the only health care crisis that we face,"” Sen. Sanders said Thursday at a press conference at the Capitol. “"Today, over 56 million Americans -- insured and uninsured--are finding it extremely difficult to gain access to a doctor. They'’re looking all over their community, they cannot get into a doctor’'s
office. This means that when [many] Americans get sick... they delay going to a doctor, then they end up getting sicker... and then go into an emergency room or end up in a hospital at great cost to our society and to themselves."” He noted that 18,000 Americans die annually due to their inability to afford insurance or care.

The legislation is timely since President Obama--who Sen. Sanders noted was the first co-sponsor of a similar bill he introduced last session--signaled Tuesday night that he intends to focus on "“preventive care, because that is one of the best ways to keep our people healthy and our costs under control.”" Also, President Obama
announced that his 10-year budget will include a $634 billion reserve fund for health care reform, half of which “"would come from proposed cost savings in Medicare, Medicaid and other health programs,”" according to the New York Times.

Both Sen. Sanders and Rep. Clyburn pointed out that federal community health centers in mostly impoverished areas--providing doctors, dentists, mental health counselors and low-cost prescription drugs on a sliding-scale fee so that no one is turned away--are one of the best ways to achieve those cost savings.

“"The American Academy of Family Physicians found that total medical expenses for health center patients were 41 percent lower compared to patients seen elsewhere, okay?”" Sen. Sanders later told me. “"On average, Medicaid patients seen at health centers have total medical expenses per year that are almost $1,000 less than Medicaid patients who use other providers--due to inappropriate emergency room use and unnecessary hospital admissions.”"

Sen. Sanders said that fully funding the bill would raise fifth-year spending from the current $2 billion for 1100 health centers, to $8.3 billion for 4800 health centers that would provide care to 56 million Americans. It’s estimated that about 17 million Medicaid patients would be among those receiving care. Just through reducing expenses by $1,000 per Medicaid patient, this would save the health care system $17 billion, more than twice the amount Sen. Sanders and Rep. Clyburn propose spending on the health centers.

Rep. Clyburn reflected on the history of the program that was created in 1966 by one of the cosponsors of the current legislation, Senator Edward Kennedy. Sen. Kennedy was inspired by a clinic opened in Boston by two graduates of Tufts Medical School. The Majority Whip said that the centers have become “"pillars in their communities”" throughout South Carolina, "often serving people who are “50 or 60 miles away from an emergency room.”"

In a statement, Sen. Kennedy -- who chairs the Health, Education, Labor and Pensions Committee -- said: “"At a time when the cost of health care and the number of uninsured are rising, community health centers and the National Health Service Corps are more important than ever. From inner city clinics to low-income communities across the country, they make a large difference in the health of millions of our people... I look forward to working with my colleagues to strengthen these two vital programs as part of our commitment to achieve quality, affordable health care for all Americans.”"

Rep. Clyburn said he would be speaking with President Obama about the legislation later in the day at a Congressional Black Caucus meeting at the White House.

“"Through these proven cost-effective programs, we have an opportunity, over the next five years, to provide comprehensive primary medical care, dental care, mental health counseling, and low cost prescription drugs in every medically-underserved region in the country, and remarkably, to actually save money in the process,”" Sen. Sanders later told me. “"In this hour of deepening economic crisis, President Obama has called on us to invest in programs that work and that meet our people’s needs. Community health centers and the National Health Service Corps do both.”"

With reporting from Capitol Hill by Nation Reporter/Researcher Greg Kaufmann.

SPP Action Alert & Flyers - Index

2009-03-03T12:00:00.000-05:00

Say No to the Corporate SPP Coup d'État
Exposing the Security and Prosperity Partnership
for what it is ...
the Stealth, Profit and Power Corporate Take-Over

AfD's Main Page for SPP
Brochure - New

Print - 12 page color brochure. Print on 3 8.5X11 sheets back to back, fold and staple.

Action Alerts

View, Print - URGENT!!! CALL CONGRESS TODAY TO OPPOSE THE SPP

View, Print - There is no time to lose!

Poster Print - We must join Canada and Mexico in mobilizing resistance!!!

SPP Articles In The News View
AfD SPP Articles View

SPP Articles In The Progressive Populist by Ruth Caplan and Nancy Price

April 1, 2008 View, Print - The Stealth, Profit and Power Corporate Take-Over

May 1, 2008 View, Print - SPP - What Corporate Takeover Means for Heartland

Fact Sheets Additional Fact Sheets will be added as they are completed. Please read and print for wide distribution.

Fact Sheet #1 View, Print - The Corporate Vision
Fact Sheet #2 View, Print - Super Corridors Linking Mexico, the U.S. and Canada
Fact Sheet #3 View, Print - Corporate Control, Trade and Transport of Water
Fact Sheet #4 View, Print - West Coast Corridor

Maine Town Takes a Stand: Closes Tap on Water Privatization

2009-03-02T13:39:00.003-05:00

Residents say no to Nestlé's plan to pump local water, and to their Board of Selectmen's attempt to regulate water takings

By Edward D. Murphy. Published March 1 by the Maine Sunday Telegram; reposted on CommonDreams.org

Shapleigh residents have banned companies from drawing or selling its water.

During a special town meeting Saturday morning, residents voted 114 to 66 to adopt the ban drafted by Protecting Our Water and Wildlife Resources, which had opposed Poland Spring's efforts to test, draw, bottle and market the town's water.

The ban had been opposed by the town's Board of Selectmen, which had favored instead a set of regulations on drawing water in the town that will be on the warrant for the regular town meeting on March 14.

"The problem in Shapleigh is that all three selectpeople want Nestlé (Poland Spring's parent company) in here," said Shelly Gobeille, one of the leaders of POWWR. "This vote says they can't come in."

In September, residents adopted a six-month moratorium on water testing, which was seen as a precursor to Poland Spring's plans to set up a pumping operation. The town's planning board used the time to work on rules and regulations for drawing the town's water, but POWWR wanted to ban all major water extraction operations.

When the Board of Selectmen refused to put POWWR's proposed ban on extraction on the town meeting warrant - arguing that two legal opinions said it was unconstitutional - proponents circulated a petition that led to the special town meeting.

Gobeille said POWWR is now concerned that the selectmen could seek to derail the ban, but Bill Hayes, one of the three selectmen, said he's inclined to let the ban go into force without the selectmen getting involved. However, he said, others could challenge its legality.

"The townspeople voted to enact it," Hayes said. "If they want to incur the legal expenses of defending it if it's challenged, that's up to them."

Hayes said that if Poland Spring wants to draw the town's water, it would be better to regulate the company's operations and make sure the town benefits financially. He said talks with the water bottler never got to the point where a dollar figure was discussed, but the amount the town would earn "would have been significant. This would have been an opportunity to defer" some property taxes.

Mark Dubois, natural resource manager for Poland Spring, said he was disappointed by the vote at the special town meeting.

"It's kind of disconcerting as a company with 400 jobs right now in York County," he said. "It's our home, too, and we're very discouraged we can't have a basic discussion about what we do and do well."

Dubois said the company draws water from nine sites in the state now and has sufficient supplies of water for its current needs. He said the company would have been looking to draw water from Shapleigh in 2011 or 2012, but noted that it takes a long time to gain the state and local permits that are needed.

A Mother Asks President Obama To Be Honest About Healthcare

2009-02-28T11:15:00.004-05:00

Note: The video from Wednesday's briefing on the Massachusetts healthcare system, which Donna Smith discusses here, is available online from Healthcare-Now.

by Donna Smith. Published on Friday, February 27 at CommonDreams.org

I am haunted again. Two stories told in very different venues and for very different reasons are nagging at my conscience. And I ponder the President's budget points designed to begin some down payment on healthcare reform. All I know for certain is that the two stories and the human suffering associated with them do not add up with Obama's confident campaign assertion of healthcare as a human right or the 10-year plan he'll now support as he charges Congress to work on larger reform issues.

We need honesty going forward. We need full disclosure of our options. We need courage and clarity. And we cannot have that if this President and this Congress participate is a pre-choreographed dance to reward the big health industry interests at the expense of the rest of us. Simply asking for-profit insurance giants to bid on Medicare Advantage business that is robbing many seniors and disabled folks of access to care they were promised under traditional Medicare is simply a poor attempt at gilding the lily - it is not reform.

During a briefing held in DC on Wednesday, Dr. David Himmelstein of Harvard Medical School (we still think those credentials adequate, do we not?) recounted the shortcomings of the Massachusetts model for health reform. Plan after state plan has cost more than anticipated, covered fewer than the promised universal claims and left states like Massachusetts and those that came before them in the same mess now faced throughout the land with soaring costs, inadequate delivery of what is sold as the financial protection called "health insurance," and with health systems begging for more cash.

Yet it was Dr. Himmelstein's final points that left me shaken. He said he has just treated yet another cancer patient who has decided to decline chemotherapy because he or she cannot afford the co-pays associated with the treatment. Dr. Himmelstein will have no choice but to honor the patient's declination of treatment for what they both know is a curable cancer. My heart breaks just thinking about it. Getting a cancer diagnosis stinks. I know. My cancer ripped open my life. I had to fight like Obama's mother to make sure I kept my job and got care - even though I had insurance. And knowing another cancer patient is deciding to die due to a lack of cash in the state some want us all to model is barbaric. And I didn't fight for this hope for change to remain in a barbaric state of healthcare delivery and financing.

I do not think for one minute that my new President has truly internalized this struggle - nor that of his own mother - as this Massachusetts cancer patient decides to die rather than bankrupt his or her family. Some kill themselves more abruptly. Others live longer but often fight with insurance companies as Obama's mother did. But this person in Massachusetts is hurting - this American citizen is dying a preventable death. And I am at a loss about how President Obama would explain his down payment on reform to this patient or the patient's kids or spouse... especially when it could be fixed.

Then I listened to ABC News tell the story about a McDonalds employee in Arkansas who came to the defense of a female customer being attacked in the restaurant by another man. The abuser shot the McDonalds employee in the chest. And now the McDonalds workers comp insurance company has decided that the employee's medical bills of more than $300,000 should not be covered because the employee was not acting during the normal scope of employment. Huh? Apparently, McDonalds thinks employees who see crimes being committed should first remember that flipping burgers and salting fries are their duties, not defending customers. Again, how very barbaric. But no sign of our President on this one either, no siree.

But, he tells us, he gets it. Really? Either I need to take President Obama at his word that he gets the immediate suffering of the American people and is willing to allow insurance companies to dictate life and death - quite literally - for years longer and become even more powerful dictators of the value of American life or he is just flat lying and he doesn't get it at all. I don't really like either of those possibilities.

If either of these patients - one with cancer in Massachusetts or the other trying to recover from a gunshot wound to the chest in Arkansas - lived in any one of the other industrialized nations on earth, they'd be treated with dignity and get the care they need without going broke. Maybe hero pilot Sully can fly them to another nation that respects human life enough to help? Somehow I think that would be fitting. Sick Americans need a hero long about now - a 10-year plan or a lousy expansion of the defective product known as private health insurance won't cut it.

Making the insurance industry bigger and more powerful through expansions of "coverage" to the millions of uninsured is not the only answer. It isn't even the best answer. And the severity of the crisis demands intellectual and policy design honesty from the get-go. If the American people get three years down the road and have another and deeper mess in healthcare robbing them of health and financial security brought to them by this President and this Congress, it won't matter much who inherited what - especially if this part of the process was tainted by dishonesty and special interest powers.

Lofty rhetoric cannot hide a basic dishonesty of discourse and this President knows it. Doing what's right requires us to fully explore every option available. "Ye Shall Know the Truth and the Truth Shall Set You Free," seems maybe a verse we may want to explore. And this President is not allowing that -- yet. He is tightly controlling who offers opinion and testimony, and only those already friendly to his pre-selected agenda are welcomed.

Let's open next week's summit to all plans and ideas - all we have to fear is - well, we know the finish to that line. If we see all reform ideas explained, studied for their costs (and scored by the Congressional Budget Office), their benefits and evidence of their viability, and we hear testimony from clinical RNs and practicing doctors invited and prized in the same way as the opinions from corporate docs and industry vetted officials and industry friendly voices, then we'll know that our President is serious about honest reform.

So far, many who advocate for the publicly financed, privately delivered option for health reform have been purposely and carefully screened out. That's dishonest and shows a lack of confidence that if all the facts were known clearly by the American people that they would choose the currently preferred political strategy -- to keep the defective product of for-profit health insurance and expand it and truss it up with massive amounts of taxpayer money and package it as healthcare reform. If that is the outcome that has already been promised to the health insurance industry that so heavily invests in this President and his friends, then tell us that up front, skip the expense of the forums and the summits and the exercises in self-congratulatory polls and just tell the patients in Massachusetts and Arkansas that you don't give a damn - you have friends to whom you are beholden above and beyond the citizens of this nation.

On the other hand, if Dr. Himmelstein's cancer patient in Massachusetts deserves at least some of the care afforded another prominent Massachusetts cancer patient - Senator Ted Kennedy - then let's open up the process, be as honest as we can and get to it. Because if we let another 10 years go by, more than a million Americans will die preventable deaths with the life and death decisions administered by those who don't care about any one of us anywhere near as deeply as they care about profits.

Mr. President, fully vet and fully disclose every available option for healthcare reform. Invite all voices into the summit - even a patient or two. To do otherwise would dishonor your mother's struggle and the two patients haunting my thoughts. And as the mother of three sons, I hope I can trust that even political ambition cannot trump a son's love for the woman who gave him life and fought for his welfare even as she fought her own cancer.

Donna Smith is a community organizer for the California Nurses Association and National Co-Chair for the Progressive Democrats of America Healthcare Not Warfare campaign.

Josh Gerstein: It's Not Universal Health Care, but…

2009-02-26T08:30:00.002-05:00

Published on Wednesday, February 25, 2009 by Politico.com

To the casual listener, President Barack Obama's promises on health care Tuesday may have sounded like an unequivocal vow to get all Americans health insurance coverage by the end of 2009.

But in reality, that's not exactly what he pledged Tuesday night.

Obama stressed the importance of "quality, affordable health care for every American" and struck an urgent tone. "Let there be no doubt: health care reform cannot wait, it must not wait and it will not wait another year," Obama said.

But in truth, Obama's speech contained several caveats and deliberately avoided language that could box in Obama as he turns swiftly toward health reform in coming weeks.

For one thing, Obama spoke of making a "down payment on the principle" of getting affordable health care for every American. It's a phrase that shows Obama believes that it could take some time to get everyone on board, and that helping everyone is a goal rather than a reality that will be achieved in the near future.

Parsing his statements even more closely, Obama never actually said he would get insurance coverage for all, just "quality, affordable health care."

And he stopped well short of setting any final timetable on broad-based healthcare - and also avoided the sweeping notion of providing "universal health care" to Americans, a phrase Obama himself largely avoids.

During his campaign, he was more specific than he was last night. ''We can have universal health care by the end of the next president's first term, by the end of my first term,'' Obama told a union convention in March 2007.

But if Obama left himself some wiggle room on the timing and particulars of a plan, he made clear he'll tackle it soon - even amidst the economic meltdown.

In fact, Obama said he believes solving the health-care crunch is an integral part to solving the recession - that he must do one to accomplish the other. In fact, Obama's talk on health-care often seems to spring more from the brain of an economist than the heart of a caregiver, as he often paints the solution in budgetary terms rather than in humanitarian ones.

"It's a step we must take if we hope to bring down our deficit in the years to come," Obama said.

Obama pledged to convene a health-summit next week that will bring together "businesses and workers, doctors and health care providers, Democrats and Republicans to begin work on this issue."

And advocates on both sides at the issue will get a clearer picture of what Obama has in mind when he releases his first budget Thursday.

Already some who favor universal coverage are watching Obama's words - and actions - very closely.

Ron Pollack of Families USA said he would accept a bill that phased in universal coverage. But he said before Obama's address that "piecemeal" legislation that covered some people now and left others to be dealt with later would be "truly troublesome."

Obama's delicate dance on health care reform is made more difficult by the fight he had with Hillary Clinton over the issue during the Democratic primary contest last year. Clinton favored requiring all Americans to get insurance-in policy parlance, a mandate.

Obama rejected that approach, saying he expected that most uninsured people would buy coverage if it was cheap enough. Obama isn't expected to endorse the mandate many experts say is essential to achieve "universal" coverage - but he's also expected to go along in the likely event that Congress includes one in health reform legislation.

A blogger with the American Prospect, Ezra Klein, reported Tuesday that Obama's new budget will strike an aspirational tone, by urging Congress to "aim for universality." White House spokesmen declined to confirm that language, though one top budget official did take issue with a portion of the Prospect report that said the budget's wording on health care "is changing hourly."

"The budget overview has been at the printer since Friday," said the official, who asked not to be named.