Saturday, August 22, 2009

Obama's Secret Deal with Big Pharmas

In case you missed it (and in case you are wondering why the pharmaceutical industry and AMA are the big supporters of the administration's health care "reform"), here's an article from Huffington Post:

Internal Memo Confirms Big Giveaways In White House Deal With Big Pharmas (Ryan Grim, 8/13/09 Huffington Post) [emphasis is mine]

"A memo obtained by the Huffington Post confirms that the White House and the pharmaceutical lobby secretly agreed to precisely the sort of wide-ranging deal that both parties have been denying over the past week.

"The memo, which according to a knowledgeable health care lobbyist was prepared by a person directly involved in the negotiations, lists exactly what the White House gave up, and what it got in return.

"It says the White House agreed to oppose any congressional efforts to use the government's leverage to bargain for lower drug prices or import drugs from Canada -- and also agreed not to pursue Medicare rebates or shift some drugs from Medicare Part B to Medicare Part D, which would cost Big Pharma billions in reduced reimbursements.

"In exchange, the Pharmaceutical Researchers and Manufacturers Association (PhRMA) agreed to cut $80 billion in projected costs to taxpayers and senior citizens over ten years. Or, as the memo says: "Commitment of up to $80 billion, but not more than $80 billion.

"Representatives from both the White House and PhRMA, shown the outline, adamantly denied that it reflected reality. PhRMA senior vice president Ken Johnson said that the outline "is simply not accurate." "This memo isn't accurate and does not reflect the agreement with the drug companies," said White House spokesman Reid Cherlin.

"Stories in the Los Angeles Times and the New York Times last week indicated that the administration was confirming that such a deal had been made.

"Critics on Capitol Hill and online responded with outrage at the reports that Obama had gone behind their backs and sold the reform movement short. Furthermore, the deal seemed to be a betrayal of several promises made by then-Sen. Obama during the presidential campaign, among them that he would use the power of government to drive down the costs of drugs to Medicare and that negotiations would be conducted in the open."

And opponents look at "business as usual" at the White House with weary eyes. (Remember then-Vice President Cheney's confab with energy company executives?)

The Huffington Post article has this image of the memo:
For those of you who don't want to click on the image and back, here's what it says:

July 7 --

Commitment of up to $80 billion, but not more than $80 billion.
1. Agree to increase of Medicaid rebate from 15.1 - 23.1% ($34 billion)
2. Agree to get FOBs done (but no agreement on details -- express disagreement on data exclusivity which both sides say does not affect the score of the legislation.) ($9 billion)
3. Sell drugs to patients in the donut hole at 50% discount ($25 billion)This totals $68 billion
4. Companies will be assessed a tax or fee that will score at $12 billion. There was no agreement as to how or on what this tax/fee will be based.
Total: $80 billion

In exchange for these items, the White House agreed to:
1. Oppose importation
2. Oppose rebates in Medicare Part D
3. Oppose repeal of non-interference
4. Oppose opening Medicare Part B

If this "is simply not accurate" as PhRMA Senior VP says, or "isn't accurate and does not reflect the agreement with the drug companies" as White House spokesman Reid Cherlin says, then what is exactly the deal that they secretly reached? The White House spokesman's comment indicates that there is indeed an agreement with the drug companies.

Also, when the government say "it is not accurate", more often than not they mean semantics and phraseology. "We don't use word "oppose". We form a committee to study the matter."

By the way, PhRMA is responsible for putting up an awful advertisement promoting the health care "reform" of the administration. When you are unfortunate enough to see the ad featuring "Harry" and "Louise", you can curse PhRMA. (It's a good thing I decided not to upgrade to digital TV, though I miss baseball games and golf tournaments.)

Friday, August 21, 2009

Bank Closure Update - 8/21/2009

FDIC closed 4 banks today, including Guaranty Bank in Texas, bringing the August bank closure tally to 12. With the last week's closure of Colonial Bank and this week's Guaranty Bank, FDIC's reserve would be very close to zero at least, if not negative. (For more on later post. Stay tuned.)

Obama: Deficit Will Be $9 Trillion, But I'm Off To Vacation on Martha's Vineyard

An ironic juxtaposition of news links on Drudge Report today. President leaves Washington for summer vacation, after he hiked 10-year budget deficit projection from $7 trillion to $9 trillion.

The AP article about presidential vacation says the Obamas will pay their share of $35,000 per week rent on their vacation home. (Wonder how big their share is...)

For those of you who are jealous because you don't get to vacation in Martha's Vineyard (or for that matter anywhere else), the U.S. president earns $400,000 a year salary, along with $50,000 a month expense account, $100,000 non-taxable travel account, and $19,000 for entertainment (, and free housing.

President Obama is, just like his predecessor, independently rich, mostly from his book royalties. By one estimate, his net worth is over $8 million.

(By the way, today's (8/21) Mega Million Jackpot is $207 million. Good luck.)

Zero Hedge: Fed Proposed to Become Next AIG

The Hilarity of the Day goes to this article from Zero Hedge.

Two MIT economists are proposing at today's annual Fed meeting at Jackson Hole, Wyoming that the Federal Reserve enter the Credit Default Swaps (CDS) business in order to prevent the future crisis. Wouldn't it be better to just the experts do it? AIG comes to mind. Or let AIG take over the Fed.

Fed Proposed To Become Next AIG (Tyler Durden, 8/21/09 Zero Hedge) [my comment in the bracket]

You thought the Fed had a lot of freedom? You ain't seen nothing yet. According to two MIT economists, Ricardo Caballero and Pablo Kurlat, the Fed should directly get into the credit default swap business to "prevent the next crisis." Says the WSJ:

Their proposal will be debated today at the Fed’s annual Jackson Hole, Wyo., symposium by the world’s leading central bankers and economists. Harvard’s Kenneth Rogoff, former chief International Monetary Fund economist, will present a critique.

Just in case you missed what destroyed AIG, and what, contrary to the current CEO's desire, will be the reason why AIG will be subsidized by taxpayers for centuries, is selling gluts of CDS on virtually anything that had any risk in it. But the MIT guys think next time around AIG should actually be the Fed:

The two professors say the underlying idea — selling insurance against extreme financial risk — should be in the Fed’s arsenal to manage financial

“Insurance is an effective and cheap tool during a panic,” they say in their Jackson Hole paper. The Fed did provide an ad-hoc form of insurance during the crisis -– guarantees to Citigroup Inc. and Bank of America Corp. on the value of more than $400 billion in assets they held. More broadly, the Fed provided insurance to the whole financial system when officials there vowed to
do “whatever it takes” to stabilize markets last fall and extended their safety
net beyond banks to AIG. The professors say the bank guarantee program should be formalized in instruments called tradable insurance credits which could be
triggered by banks and even hedge funds if another crisis erupts.

Alas, some red light ahead of this proposal are imminent:
There are some practical problems with the idea. The Fed was able to offer these guarantees to Bank of America and Citigroup using legal authority only
allowed during “unusual and exigent” emergencies. To make ‘TICs’ a formal part of its toolkit, it would likely need congressional approval. That would likely be a tough sell with Congress now populated by many restive lawmakers who complain the Fed used its power too expansively during the crisis.

This may be a tough nut to crack as lately over 280 members of Congress have been pushing for limited the Fed's powers, not expanding it.

Yet most interesting, is that the Fed may have well already entered the CDS arena. Recent TIC data (not Tradable Insurance Credits, but the Treasury International Capital variety) indicate that beginning in March the Fed started getting involved in derivatives classified as "Other Contracts By Risk Type", to the tune of over $1.3 trillion dollars!

[Then he has an image capture from this page in TIC (Treasury International Capital System).]

Perhaps before the Fed decides to wholeheartedly dominate CDS trading in addition to every other component of the financial system, the can clarify what exactly is the nature of these various "other" derivatives. Granted, while trillion is the new million, US taxpayers may be quite curious to know why since the start of QE the fed has been involved with not only Credit, but Equity and All Other types of this new form of derivative contract.

(end of Zero Hedge article)

I don't know though, why Zero Hedge refers to TIC (Treasury International Capital System) plays in the Fed going into CDS business. As I've understood, TIC is about statistics on U.S. financial accounts as an aggregate vis a vis foreign entities. The Wall Street Journal article's "TIC" clearly refers to "tradable insurance credits".

Peter Schiff: Warren Buffett Is Dead Wrong

Thursday, August 20, 2009

OT: ONN Says Children Oppose Health Care

Onion News Network (ONN), America's finest news source, said back in 2008 that children were strongly opposed to health care.

"It's clear these children are worried that increased government funding for health insurance is a slippery slope to socialized health care."

"So you're saying this is a political issue for them."

"And a moral one. When we asked them if they see universal health care as an unfair burden to certain taxpayers and would they like a lollipop almost all children said yes."

Health Care "Reform" Gets Religioius

(Update 5:43 PM)

It gets hilarious. According to Tevi Troy, who was deputy secretary of health and human services from 2007 to 2009 and served as the White House Jewish liaison under Bush, says in his article about yesterday's conference call with 1000 rabbis in National Review Online today:

"...the hold music on the line, through no apparent fault of the White House or the Religious Action Center, which sponsored the call, was “Deutschland Über Alles.” A number of rabbis apparently expressed discomfort with this choice of music as well."

(I would be rather upset if I were Jewish.)

Mr. Troy also doubts the wisdom of invoking Rosh Hashanah prayer:

"Second, and more surprisingly, is this really the context in which he wishes to discuss health reform — a powerful and unseen being making determinations of life and death? One would think that he would want to avoid anything that could raise the specter of rationing, death panels, or the like."

He quotes the prayer in the article, too. There's much more than just life and death:

"On Rosh Hashanah will be inscribed and on Yom Kippur will be sealed how many will pass from the earth and how many will be created; who will live and who will die; who will die at his predestined time and who before his time; who by water and who by fire, who by sword, who by beast, who by famine, who by thirst, who by storm, who by plague, who by strangulation, and who by stoning. Who will rest and who will wander, who will live in harmony and who will be harried, who will enjoy tranquillity and who will suffer, who will be impoverished and who will be enriched, who will be degraded and who will be exalted. But REPENTANCE, PRAYER, and CHARITY remove the evil of the decree. "

(Original post)

The previous administration was quite often accused of blending politics with religion. The present administration is doing the same, and no one bats an eye (that I know of).

'We are God's partners in matters of life and death'
(Ben Smith, 8/19/09 Politico)

"A reader points out that President Obama's call with the rabbis today — as recorded in Rabbi Jack Moline's and other clerics' Twitter feeds — freights health care reform with a great deal of religious meaning, and veers into the blend of policy and faith that outraged liberals in the last administration.

""We are God's partners in matters of life and death," Obama said, according to Moline (paging Sarah Palin...), quoting from the Rosh Hashanah prayer that says that in the holiday period, it is decided "who shall live and who shall die." [emphasis is mine]

"The president ended the call by wishing the rabbis "shanah tovah," or happy new year — in reference to the High Holidays a month from now."

Now that's scary. The President (and/or his surrogates) will decide who shall live and who shall die. Like those in charge of certain camps about 70 years ago in certain parts of Europe, who decided who should go left, and who should go right.

Just for your information, from
"Narcissistic Personality: The sufferers of this disorder have a very lofty perception of themselves. They believe they are “special” or even God-like in appearance and status. They have strong delusions of grandeur, putting themselves above others’ emotions and feelings. They usually have no remorse for their behavior, and will sometimes exhibit jealousy towards others, or, more commonly, think others jealous of them. " [emphasis is mine]

Congressman Ross: Insuring the Uninsured Not Top Priority

So now a Democratic Congressman says insuring the uninsured is not the top priority in the health care "reform". On top of it, he claims it has never been the top priority.


When I saw the headline, I instantly recalled the WMD (weapons of mass destruction) being touted by the previous administration (including Congressional leaders like then-Senators Biden and Hillary Clinton) as the primary reason to go to war with Iraq. It was conveniently dropped after the U.S. was in Iraq, mostly because of the fact that they didn't exist.

But this time around, the pretext for pushing the "reform" is being dropped even before the "reform" becomes law.

Leading Blue Dog: Covering uninsured not top priority of health reform (8/20/09 The Hill's Blog Briefing Room)

"Rep. Mike Ross (D-Ark.) said on Wednesday that providing healthcare to uninsured Americans is "not what this healthcare reform debate is about."

"In making his comments, Ross, who is the centrist Blue Dogs' health reform point man, questioned one of the primary healthcare goals of the White House and Democratic leaders.

""That is a side benefit to healthcare reform and an important one," Ross told the Arkansas Educational Television Network. Instead, the fifth-term congressman said the bill should focus on "cost containment."

That must be news to both supporters and opponents. The health care "reform" has been sold as a way to insure 40 to 50 million Americans who do not have health insurance. (The number has crept up from initial 40 million or so to 50 million. Makes you wonder if it will be 60 million by the end of the recess, and 70 or 80 million by the time Congress start debating.)

The President himself have been harping on the point over and over, and presenting it as central to his "reform". You can read it here, here, and here.

For Congressman Ross, the deal breakers would be:

"Providing government subsides for abortions, coverage for illegal immigrants, rationing of care, and deficit increases comprised Ross' deal-breakers."

How he thinks cost containment is possible without rationing is a mystery to me. Maybe he simply means "without overt act of rationing". It will happen by default. And the rest, they are already happening or will happen also (particularly the last one). Congressman Ross is kidding himself if he thinks otherwise.

From ancient Rome onward, an effort to control/supress cost always results in disaster - runaway inflation, shortage, and black market. If I simply apply these outcome to the future health care, we will have costlier service we have less access of, and if we need treatment in a timely manner we will do what Canadians have been doing - we head south to Mexico (or further south like Costa Rica) for quality care that is provided promptly at less cost.

Wednesday, August 19, 2009

Government Blowing Subprime Bubble Anew

News headlines these days are dominated by the administration's health care "reform" (this blog included), but we should be on the lookout for what may be slipping through with very few of us even noticing.

Like securitization of subprime mortgages.

If you think that's so 2007 and 2008, think again. Here's a healine from Wall Street Journal last week.

The Next Fannie Mae (8/11/09 Wall Street Journal): [emphasis is mine]

"Ginnie Mae and FHA are becoming $1 trillion subprime guarantors.

"Much to their dismay, Americans learned last year that they “owned” Fannie Mae and Freddie Mac. Well, meet their cousin, Ginnie Mae or the Government National Mortgage Association, which will soon join them as a trillion-dollar packager of subprime mortgages. Taxpayers own Ginnie too.

"Only last week, Ginnie announced that it issued a monthly record of $43 billion in mortgage-backed securities in June. Ginnie Mae President Joseph Murin sounded almost giddy as he cheered this “phenomenal growth.” Ginnie Mae’s mortgage exposure is expected to top $1 trillion by the end of next year—or far more than double the dollar amount of 2007. (See the nearby table.) Earlier this summer, Reuters quoted Anthony Medici of the Housing Department’s Inspector General’s office as saying, “Who would have predicted that Ginnie Mae and Fannie Mae would have swapped positions” in loan volume?

"Ginnie’s mission is to bundle, guarantee and then sell mortgages insured by the Federal Housing Administration, which is Uncle Sam’s home mortgage shop. Ginnie’s growth is a by-product of the FHA’s spectacular growth. The FHA now insures $560 billion of mortgages—quadruple the amount in 2006. Among the FHA, Ginnie, Fannie and Freddie, nearly nine of every 10 new mortgages in America now carry a federal taxpayer guarantee.

"Herein lies the problem. The FHA’s standard insurance program today is notoriously lax. It backs low downpayment loans, to buyers who often have below-average to poor credit ratings, and with almost no oversight to protect against fraud. Sound familiar? This is called subprime lending—the same financial roulette that busted Fannie, Freddie and large mortgage houses like Countrywide Financial."

"On June 18, HUD’s Inspector General issued a scathing report on the FHA’s lax insurance practices. It found that the FHA’s default rate has grown to 7%, which is about double the level considered safe and sound for lenders, and that 13% of these loans are delinquent by more than 30 days. The FHA’s reserve fund was found to have fallen in half, to 3% from 6.4% in 2007—meaning it now has a 33 to 1 leverage ratio, which is into Bear Stearns territory."

Is anyone listening? Not on Capitol Hill, not at the White House. They are busy further "empowering FHA" in order to help American people buy/keep their homes. FHA's downpayment requirement is mere 3.5%; with the first-time buyer credit it can be below 2%. FHA refinances mortgages of the borrowers who are 25% underwater.

This is just mind-boggling to me. We're back to subprime bubble, this time 100% government job. The government is directly blowing a subprime bubble, with explicit government guarantee.

Ginnie Mae is a U.S. government-owned corporation within HUD (Department of Housing and Urban Development), and FHA is a U.S. government agency.

This will not end well, I'm afraid.

Public Option: Off Again, On Again...Which Is It?

It was only last Sunday that the White House apparently signaled it would abandon the so-called "public option" from the health care "reform". After the (old) new resolve, seemingly, to go it alone which emerged just yesterday, now the "public option" is back on again.

The White House Press Secretary blames it on media's misunderstanding the President's words. (Mais bien sûr. Aber natürlich. Ma naturalmente. 当然.)


"WASHINGTON -- The White House fell into full retreat yesterday from its earlier surrender of Democratic plans for a massive new government-run insurance agency as part of its health-care reform bid.

"The Obama administration now says it remains fully behind the idea of a "public option" for government-run insurance, despite clear signals over the weekend from top officials that the public option is not a deal-breaker and is just a "sliver" of the overall reforms it seeks.

"White House spokesman Robert Gibbs blamed the media for misunderstanding the administration's support.

""The president prefers the public option as a way of doing that," he said. "If others have ideas, we're open to those ideas and willing to listen to those details. That's what the president has said for months."

"The public-health option would be a federally run health-insurance program, similar to Medicare or Medicaid, that would provide insurance to millions of low-income and uninsured Americans. Supporters believe it would compete with private insurers, forcing them to lower prices."[emphasis is mine]

Medicare and Medicaid are broke, if we care to recall.

How could these supporters believe the government-run program would compete with private insurers, when the President himself compares the government-run program with United States Postal Service?? Since when USPS is a competitive, viable service? (Answer: never.)

Here's an article from Bloomberg on Obama going postal:

Obama Goes Postal, Lands in Dead-Letter Office: Caroline Baum (8/18/09 Bloomberg) [emphasis is mine]

"Aug. 18 (Bloomberg) -- “UPS and FedEx are doing just fine. It’s the Post Office that’s always having problems.” -- Barack Obama, Aug. 11, 2009

"No institution has been the butt of more government- inefficiency jokes than the U.S. Postal Service. Maybe the Department of Motor Vehicles...."

"That didn’t stop President Barack Obama from holding up the post office as an example at a town hall meeting in Portsmouth, New Hampshire, last week.

"When Obama compared the post office to UPS and FedEx, he was clearly hoping to assuage voter concerns about a public health-care option undercutting and eliminating private insurance.

"What he did instead was conjure up visions of long lines and interminable waits. Why do we need or want a health-care system that works like the post office?

"What’s more, if the USPS is struggling to compete with private companies, as Obama implied, why introduce a government health-care option that would operate at the same disadvantage?"

You can read the rest of the article by following the above link.

(One of the favorite antics of the local post office in my area seems to be to close one or two of the 4 windows when the line is the longest, around noon-time. So the postal workers get their deserved lunch break on time, and the customers get their deserved wait doubled.)

NY Car Dealers Pull Out of Cash for Clunkers Program

Just as I heard on the radio that it might happen. I wrote in my post on Friday August 14, that:

"A local radio show host gave another possible reason this morning. He was talking about the cash for clunkers program and how cumbersome the program was for the car dealers. According to this radio show host who talked to enough number of dealers in the area, the participating dealers have had their cash for clunkers applications (40-page long) returned, because of some minor error here and there. Instead of correcting only those errors and re-submitting the applications, the dealers have to restart the application process from the scratch.

"It seems that the government computers are still mainframe computers from 1970s.

"Maybe it is a matter of time before the dealers say "@#$% it, it's not worth anyone's time.""

Well, the time seems to be now.

NY dealers pull out of clunkers program (8/19/09 AP via

"Hundreds of auto dealers in the New York area have withdrawn from the government's Cash for Clunkers program, citing delays in getting reimbursed by the government, a dealership group said Wednesday.

"The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said about half its 425 members have left the program because they cannot afford to offer more rebates. They're also worried about getting repaid.

"The program offers up to $4,500 to shoppers who trade in vehicles getting 18 mpg or less for a more fuel-efficient car or truck. Dealers pay the rebates out of pocket, then must wait to be reimbursed by the government. But administrative snags and heavy paperwork have created a backlog of unpaid claims.

"Schienberg [the Association's president] said the group's dealers have been repaid for only about 2 percent of the clunkers deals they've made so far.

"Many dealers have said they are worried they won't get repaid at all, while others have waited so long to get reimbursed they don't have the cash to fund any more rebates, Schienberg said. "

With the government computer system that forces the dealers to re-submit a new application from scratch if there is ever a slight mistake in the original application, it shouldn't be a surprise that the dealers haven't seen much money and that they are pulling out. It's so unbelievably mainframe process and mentality it's hard to believe it is the work of supposedly tech-savvy Information czar and Technology czar of the administration. (Maybe it isn't, I don't know. )

This pales in comparison to what the health care "reform" would require in terms of information technology and system. Good luck with that, if the Congressional Democrats actually "go it alone".

Bank Auctions Florida Woman's House, Kicks Her Out By Mistake

Nice people at Washington Mutual, which was acquired by J.P. Morgan Chase last year after FDIC shuttered the bank, auctioned off a house and kicked the owner and her family out the door with their belongings. Except it was clearly a wrong house.

My Bad! Woman's House Mistakenly Auctioned by Bank
(8/19/09 NBC Miami)

"You know times are tough when people are getting kicked out of their house when it’s not even for sale.

"That’s what happened to Anna Ramirez after she found all of her stuff out on the front lawn of her Homestead home last week and a strange man demanding she get out of his newly purchased house.

"The eviction came after Ramirez’s home was mistakenly auctioned off to the highest bidder by her bank, Washington Mutual...."

"The man who bought the house told Ramirez he paid $87,000 for it, which shocked Ramirez, who bought the house for $260,000.

"What's worse is her husband, daughter and grand children were also kicked out by Homestead and Miami-Dade police officers, said Martha Taylor, who witnessed the unexpected eviction..."

"The sale was eventually reversed by a Miami-Dade judge, allowing Ramirez to return to her old digs. Ramirez said she wants to sue for the damage to her furniture."

She should sue for more than that.

Tuesday, August 18, 2009

No Health Care Reform by Congress, Majority Say

(Update 8:40PM PST - Link to New York Times article (about Dems going it alone) is attached to the Drudge Report headline toward the end of the post. Or click here.)

Therefore Congressional Democrats and the White House may just go it alone (which they have been saying since the beginning; probably planned that way all along anyway).

According to Rasmussen Reports,

54% Say Passing No Healthcare Reform Better Than Passing Congressional Plan (8/15/09 Rasmussen Reports) [emphasis is mine]

"Thirty-five percent (35%) of American voters say passage of the bill currently working its way through Congress would be better than not passing any health care reform legislation this year. However, a new Rasmussen Reports national telephone survey finds that most voters (54%) say no health care reform passed by Congress this year would be the better option.

"This does not mean that most voters are opposed to health care reform. But it does highlight the level of concern about the specific proposals that Congressional Democrats have approved in a series of Committees. To this point, there has been no Republican support for the legislative effort although the Senate Finance Committee is still attempting to seek a bi-partisan solution.

"Not surprisingly, there is a huge partisan divide on this issue. Sixty percent (60%) of Democrats say passing the legislation in Congress would be the best course of action. However, 80% of Republicans take the opposite view. Among those not affiliated with either major party, 23% would like the Congressional reform to pass while 66% would rather the legislators take no action."

Voters who would be likely to bear the burden of funding this program, if passed, seem increasingly to oppose action in favor of no action. They are not fooled by the plan "to be funded by the rich".

"Voters who earn less than $20,000 a year are evenly divided but a majority of all other voters would prefer no action. Middle income voters, those who earn from $40,000 to $75,000 a year, are most strongly in favor of taking no action.

"From the beginning of the debate, voters have indicated support for the concept of health care reform and for some of the specific ideas that have been suggested. However, they are skeptical about what has been presented thus far in Congress. One reason is skepticism about Congress itself. By a two-to-one margin, voters believe that no matter how bad things are Congress could always make it worse."

Voters are no dummies.

"One reason that the President has been careful to distinguish between his idea of health care reform and a single payer system is that just 32% favor Single-Payer health care while 57% are opposed. "

Now, taken together with the latest Gallup's poll that indicates there are more Conservatives than Liberals in each and every state except for Washington D.C., you would think it would be wise to at least delay the health care "reform" that's very quickly turning into a single most divisive issue in the country.

But no! That's not the Chicago style. A headline at Drudge Report informs us:

I wish I could say the headline under the picture of Obama, Reid and Pelosi: "Own It". Because U.S. taxpayers will end up owning it, whether they like it or not, with virtually no way of undoing it.

Isn't it time we give them a change, instead?

Matt Taibbi: Health Care "Public Option" Was Just for the Show

Matt Taibbi, a Rolling Stones magazine editor who has gained notoriety by attacking Goldman Sachs as "great American bubble machine", says Obama's "public option" was meant to be ditched from the beginning, a dog and pony show to placate the supporters. He thinks that there was a hand-shake deal from the beginning with the insurance industry and the pharmaceutical industry that the administration would initially push for "public option" but that the option would be quickly ditched ("so don't worry"?).

He suspects this (dropping the public option) is what they wanted to do all along. If they want to placate Republicans, dropping the public option wouldn't do the job, he argues, and shakes his head saying "it doesn't make sense...", that the White House and Democrats are kowtowing to Republicans for nothing.

Well, if he thinks the opposition is Republicans only, he's mistaken. At least he doesn't use the words like "evil-mongers", "un-American" or "right-wing wackos", as lots of left-leaning blogs like to call them.

He still allows a possibility that the White House says the public option will be dropped, but Republicans don't seem to change their minds, then the White House and Democrats can say "OK if that's the case we'll go it alone" and the public option will be on again.

Here's a clip from Rachel Maddow's show on MSNBC.

(She gets her news from Daily Kos?? Oh boy.)

Monday, August 17, 2009

"Reforma, the Obama-Pelosi Prescription

for building a government takeover of heath care..." and

"Recommended by more lobbyists than any other health care reform..."

I found it on's Blog section. It's pretty good for an ad created by the RNC.

You can also watch one of the ad blitz in support of the "reform" put out by the health care industry at the blog page: "Health Care Clash: the Commercials" (Karen De Coster, 8/17/2009 The LRC Blog). It's so horrible it makes you want to jump off the cliff and die instantly. The ad was created by PhRMA, the Pharmaceutical Research and Manufacturers of America which represents leading pharmaceutical research and biotechnology companies in the U.S.

Good News Is Bad News (Bad News Remains Bad News)

Clearly the stock market expectations are much higher than what the Main Street can deliver. The markets go down on good news, because the news was less good than expected.

It started off in Japan last night: "Japan Economy Grows 3.7%, Emerges From Worst Postwar Recession" (8/17/09 Bloomberg)

Japanese economy grew at an annualized rate of 3.7% in the second quarter, the first growth quarter in the last 5 quarters. Following France and Germany, Japan emerged from the recession, technically. The problem here was that the economists were expecting 3.9% (Bloomberg survey) to 4.0% (Nikkei survey). With that kind of disappointment, the Nikkei 225 Stock Average fell 328.72, or 3.1 percent, to 10,268.61 at the close in Tokyo, the steepest retreat since March 30.

Then, this morning at 8:00 am EST, "Empire Manufacturing Index Turns Positive" (8/17/2009 Econompic Data)

The New York Empire State Manufacturing Index for August came in at 12.08; it was expected to come in at 3.00. The latest figure marked the first positive reading since April 2008 and the strongest reading since November 2007. With this outstanding number, did the futures improve? Not a chance.

Then again, at 10:00 am EST, "Homebuilder sentiment index rises in August" (8/17/2009 AP).

The index rose from 17 to 18, highest since June 2008. The stock market turned further south on the news (though it is now back to pre-announcement level), because they were expecting 19.

Also at 10:00 am EST, the Treasury Department announced today's auction result. Overall, good numbers, but no movement whatsoever in the stock market, probably because today's auction was short-term bills only.

The major indices are off the day's lows, but still sport sizeable losses. At 2:14 pm EST, Dow Jones Industrial Average is down 161 points (1.73%) to 9159, S&P 500 down 21 points (2.12%) to 982, Nasdaq is down 48 points (2.45%) to 1936.

Sunday, August 16, 2009

Great Depression-Era Cartoon

Nothing has changed much since the last Big One.

Here's a cartoon from 1931.

"Sorry I have to reduce you to fifteen dollars a week but you can do your share in bringing back prosperity by buying, buying, buying."

There are a whole bunch more cartoons from the Great Depression era at this site.

Here's another good one:

"I see by the papers that everything is all right."

White House to Drop Public Option?

Or are they simply changing the label?

According to AP,

White House appears ready to drop 'public option' (8/16/09 AP) [emphasis is mine]

WASHINGTON – Bowing to Republican pressure, President Barack Obama's administration signaled on Sunday it is ready to abandon the idea of giving Americans the option of government-run insurance as part of a new health care system.

"Facing mounting opposition to the overhaul, administration officials left open the chance for a compromise with Republicans that would include health insurance cooperatives instead of a government-run plan. Such a concession probably would enrage Obama's liberal supporters but could deliver a much-needed victory on a top domestic priority opposed by GOP lawmakers."

Health insurance cooperatives??

"With $3 billion to $4 billion in initial support from the government, the co-ops would operate under a national structure with state affiliates, but independent of the government. They would be required to maintain the type of financial reserves that private companies are required to keep in case of unexpectedly high claims."

So the "seed money" to the tune of $4 billion to be paid by taxpayers (whether the taxpayers like it or not; I've seen much higher numbers, too) will create these co-ops, national structure with state affiliates (i.e. structure clearly mandated by the government) but "independent of the government" - you mean like Fannie Mae and Freddie Mac (government-sponsored enterprise) independent, or Social Security Administration ("independent agency" of the government) independent?

If it walks, talks, quacks like a duck, it is a duck, and the duck is called "the government".

The mastermind behind this co-op plan is Senator Kent Conrad (D-ND), Chairman of the Budget Committee and a member of the Finance Committee.

"Conrad, chairman of the Senate Budget Committee, called the argument for a government-run public plan little more than a "wasted effort." He added there are enough votes in the Senate for a cooperative plan.

""It's not government-run and government-controlled," he said. "It's membership-run and membership-controlled. But it does provide a nonprofit competitor for the for-profit insurance companies, and that's why it has appeal on both sides.""

Mr. Conrad thinks it is membership-run when the government provides $4 billion dollars and the board appointed by the Health Secretary dictates the national and state structures. He dare calls it "a competitor" for the for-profit insurance companies. Talk about unlevel playing field. But clearly Mr. Conrad and his supporters on both sides of the isle at Congress don't seem to care a bit.

"Obama, writing in Sunday's New York Times, said political maneuvers should be excluded from the debate.

""In the coming weeks, the cynics and the naysayers will continue to exploit fear and concerns for political gain," he wrote. "But for all the scare tactics out there, what's truly scary — truly risky — is the prospect of doing nothing.""

At this point, I have no idea what the President is babbling about. Cynics and naysayers? They are the people who don't want to fund your grandiose projects with their hard-earned dollars. Scare tactics? You mean the actual sections and subsections of the bill H.R. 3200 that an increasing number of taxpayers are actually reading? They are scary indeed. As for "doing nothing", I have a feeling that if this bill dies, Dow Jones Industrial Average, which has lagged the other indices around the world, will do a very rapid catch-up by jumping 3, 5% in a day.

(Mr. President, didn't you say just about the same thing when you rammed through the so-called "stimulus" package back in February, that if Congress did nothing it would be a catastrophe? And as soon as it was passed and the stock market tanked afresh in response, you recommended Americans buy stocks because they were cheap.)

The AP article then mentions Section 1233 (Advanced Care Planning) of the House health care bill H.R. 3200:

"Congress' proposals, however, seemed likely to strike end-of-life counseling sessions. Former Alaska Gov. Sarah Palin has called the session "death panels," a label that has drawn rebuke from her fellow Republicans as well as Democrats.

"Sen. Orrin Hatch, R-Utah, declined to criticize Palin's comments and said Obama wants to create a government-run panel to advise what types of care would be available to citizens.
"In all honesty, I don't want a bunch of nameless, faceless bureaucrats setting health care for my aged citizens in Utah," Hatch said. "

"Sebelius [Health Secretary] said the end-of-life proposal was likely to be dropped from the final bill."

Is the Secretary saying this because this particular section has caused such an uproar throughout the country, or was the section merely a trial balloon from the beginning, a bait, if you will, to lure the critics and brand them "evil-mongers" and "un-American" - if they get away with it, great; if not, no big deal?

I wouldn't hold my breath.

What about other monstrosities like:

  • Section 141 Presidential appointee to run Health Choices Administration, that will decide every aspect of the health care for the "rest of us" (remember, Congress will be exempt)
  • Section 163 The government will have direct electronic access to your bank account to make sure you have money to pay for the service
  • Section 401 Surtax for people without health care plan that is "acceptable to the government" (who knows what's "acceptable" to the government?)
  • All the porks scattered throughout to fund "community-based" activities (there's no definition of "community" but you can make a good guess).
The whole bill should be ditched, as far as I'm concerned. While we're at it, ditch the climate bill, ditch the financial "reform" bill, too. We simply cannot afford it. Even if we can afford it, what's being offered is the worst possible solution that will increase the government intrusion into private lives and further disrupt the market.