Robert Reich's Scathing Critique of the Obama Plan for Reforming Wall Street (from Guernica Mag)

I've been posting Robert Reich's essays (usually on matters having to do with the economy) to Guernica Magazine's blog since before Obama was president, and rarely has he had a negative thing to say about the President. Never has he torn the administration apart like he does in his post today at Guernica.

I tend to stand along with Mr. Reich on financial matters; I like what he has to say and usually agree with him. That being said, his post today worries me immensely. It seems that President Obama has lost sight of who is important in these matters (while some may argue that his sight was never on anyone but Wall Street).

Read Robert Reich's latest (and scathing) piece at Guernica, here.

Profits For Some or Health Care For All?

People like Rick Scott, and physicians and surgeons who are in bed with Big Pharma and Big Insurance are trying to scare the public out of a public option for health care, for one reason and one reason only: profit. And while it's despicable and shameful, it's anything but new. Remember when somehow George W. came out looking like the patriotic soldier and John Kerry was painted a coward? The swiftboating is in full force again. Luckily (maybe) in today's interconnected world it's getting harder and harder for these people's true intentions to be masked, and easier and easier for people to spread the word.



So, who is Rick Scott?



From Bill Moyers Journal last night:

BILL MOYERS: CPRights.org is sponsored by Richard Scott, who had to leave his company. The largest health care chain in the world, Columbia/HCA. After the company was caught ripping off the feds and state governments for hundreds of millions dollars in bogus Medicare and Medicaid payments. He waltzed away with a $10 million severance deal. And $300 million worth of stock. And here he is telling us that his way of health reform is the way the public should go. Now, how does the public get the facts about an ad like that. And a guy like Rick Scott?

BROOKE GLADSTONE: How did you get the facts? The fact is that I've seen Scott being identified, more or less, as you did, in every single story about this campaign. You know, I think that there is now a willingness, as there wasn't even during the Kerry swiftboating earlier on, and certainly not during the sinking of the Clinton health care plan, to acknowledge the source of these ads. I think that all of us, as news consumers, as the American people, are becoming more and more aware that just because you see it on TV doesn't mean that it's true.

JAY ROSEN: I think that an ad like that is assuming that the receiver of it is an isolated person, who hearing these scary tales of government-run health care will therefore pick up the phone and pressure Congress. And the way the ad imagines the viewer is in social isolation. Where no other messages will get through. And I think that is what's changing. Is that people are not isolated anymore. They're not sitting on the end of their television sets and receiving messages from the center only.

And in a way you could see these kinds of campaigns where you raise money from rich people to scare less educated people. Or low information voters, as they call them in the political trade. As a sign of weakness. The rhetoric might be more furious, the ads might be more outrageous. But it's because this kind of communication is actually weaker and it's working less.

From Robert Reich on Guernica Magazine:

"I'ved poked around Washington [yesterday], talking with friends on the Hill who confirm the worst: Big Pharma and Big Insurance are gaining ground in their campaign to kill the public option in the emerging health care bill.

You know why, of course. They don't want a public option that would compete with private insurers and use its bargaining power to negotiate better rates with drug companies. They argue that would be unfair. Unfair? Unfair to give more people better health care at lower cost? To Pharma and Insurance, "unfair" is anything that undermines their profits."

More at Guernica Magazine...

From "The Cost Conundrum" by Atul Gawande (the New Yorker, June 1)

"Health-care costs ultimately arise from the accumulation of individual decisions doctors make about which services and treatments to write an order for. The most expensive piece of medical equipment, as the saying goes, is a doctor’s pen. And, as a rule, hospital executives don’t own the pen caps. Doctors do...

Other [physicians] think of the money as a means of improving what they do. They think about how to use the insurance money to maybe install electronic health records with colleagues, or provide easier phone and e-mail access, or offer expanded hours. They hire an extra nurse to monitor diabetic patients more closely, and to make sure that patients don’t miss their mammograms and pap smears and colonoscopies.

Then there are the physicians who see their practice primarily as a revenue stream. They instruct their secretary to have patients who call with follow-up questions schedule an appointment, because insurers don’t pay for phone calls, only office visits. They consider providing Botox injections for cash. They take a Doppler ultrasound course, buy a machine, and start doing their patients’ scans themselves, so that the insurance payments go to them rather than to the hospital. They figure out ways to increase their high-margin work and decrease their low-margin work. This is a business, after all."

Contact your Representative and Senators today and tell them we need a public health option. The days of such greed in our health care system must become a thing of the past now:

Write your Representative here.

Contact the Senate here.

This is Rich

Or sickening, or maddening, or just completely ridiculous...I can't even tell anymore.

An article in today's New York Times entitled "Bailout Is a Windfall to Banks, if Not to Borrowers" begins with this precious little bit:

At the Palm Beach Ritz-Carlton last November, John C. Hope III, the chairman of Whitney National Bank in New Orleans, stood before a ballroom full of Wall Street analysts and explained how his bank intended to use its $300 million in federal bailout money.

“Make more loans?” Mr. Hope said. “We’re not going to change our business model or our credit policies to accommodate the needs of the public sector as they see it to have us make more loans.”

You have to love this. As though it wasn't the business models and credit policies of banks that got us into this whole mess. This guy acts like the banking system has been a model of prudence, and maybe his bank was. But I doubt it. I have a friend who works at a small bank, as a lender, who did act responsibly before this whole fallout and he and his bank have gotten fucked from the business models and credit policies of other banks. And his bank hasn't seen a dime of TARP I.

For this John C. Hope III (It's like a name from a movie about a Depression) to act shocked that people would expect him and his bank to do with the money it received from the government what it was supposed to do (i.e. lend) is enough to make someone sick. I can't stand the hypocrisy in all of this.

Now, to amend what I just said. I used the word "supposed," but that probably isn't quite right, is it? Because, just as it did leading up to the Iraq invasion, Congress completely panicked on this one and didn't set up any checks and balances for how the money was to be used. Check out this precious bit from this story:

"Individually, banks that received some of the first $350 billion from the Treasury’s Troubled Asset Relief Program, or TARP, have offered few public details about how they plan to spend the money, and they are not required to disclose what they do with it."

Why the hell aren't they required to do so! Why would you write a check to any institution whose business model and credit policies had sent a whole financial system into a free fall without putting in place the means to track how that check was being spent? I mean this is dumb getting dumber.

Because of Congress' lack of foresight we end up with this:

"A review of investor presentations and conference calls by executives of some two dozen banks around the country found that few cited lending as a priority. An overwhelming majority saw the bailout program as a no-strings-attached windfall that could be used to pay down debt, acquire other businesses or invest for the future."

I would be one to argue for a market-driven system, a survivor of the fittest kind of living, if the "fittest" weren't only that because of the support they are given. If banks and other financial institutions could actually keep their houses in order and everyone on Main Street were flailing about in their own financial crisis, then I'd say, we got ourselves into this, we have to get ourselves out. But, for the banks to be in such a bad way, receive loans (even though they themselves wouldn't have lent money to themselves, given that it would be such a bad investment), and then solely use it as though it is theirs to invest...and then to act as though they had some sort of inalienable right to it, as though it's a given that they should receive money while everyone else suffers, well, it's almost too much for one person to take.

For a more thorough analysis (and maybe less pissed off, or at least he doesn't swear in his analysis) of the financial crisis, follow Robert Reich's thoughts on Guernica, where three days before this story in the Times he already told us all of this when he wrote "But the easier and probably more correct argument is that American taxpayers wasted $350 billion. No one knows exactly where it went -- at least two recent reports reveal that the Treasury had no idea -- but we do know the money did not go to small businesses, struggling homeowners, students, or anyone else needing credit, which was the major public justification for the bailout."

Robert Reich on Guernica

If they're going to use the second $350 billion here are some suggestions how from Robert Reich.

And by the way is anyone else sick of hearing about how only a small percentage of the people in this country actually understand the inner workings of our financial systems and therefore those people have to stay in positions managing the money from these bailouts? They obviously don't understand it very well, otherwise wouldn't it follow that we wouldn't be in this mess? It's like if you took your car to a mechanic and he told you how everything in your car works, but then couldn't even change your battery. I don't care if you can tell me how it works. Make it work. Or change it completely and put people in charge who can actually make a new system work.

What to do About the Finacial Crisis: Some Ideas From Great Minds

I have been posting all of Robert Reich's blog posts about the issues on Wall Street lately at Guernica Mag. He was the secretary of labor under President Clinton and gives very clear explanations and solutions to the current woes. Read those here, here, here, here, and here.

And then there's this from Barack Obama late last night:

The era of greed and irresponsibility on Wall Street and in Washington has created a financial crisis as profound as any we have faced since the Great Depression.

Congress and the President are debating a bailout of our financial institutions with a price tag of $700 billion or more in taxpayer dollars. We cannot underestimate our responsibility in taking such an enormous step.

Whatever shape our recovery plan takes, it must be guided by core principles of fairness, balance, and responsibility to one another.

Please sign on to show your support for an economic recovery plan based on the following:

• No Golden Parachutes -- Taxpayer dollars should not be used to reward the irresponsible Wall Street executives who helmed this disaster.

• Main Street, Not Just Wall Street -- Any bailout plan must include a payback strategy for taxpayers who are footing the bill and aid to innocent homeowners who are facing foreclosure.

• Bipartisan Oversight -- The staggering amount of taxpayer money involved demands a bipartisan board to ensure accountability and oversight.
Show your support and encourage your friends and family to join you:

http://my.barackobama.com/ourplan

The failed economic policies and the same corrupt culture that led us into this mess will not help get us out of it. We need to get to work immediately on reforming the broken government -- and the broken politics -- that allowed this crisis to happen in the first place.

And we have to understand that a recovery package is just the beginning. We have a plan that will guarantee our long-term prosperity -- including tax cuts for 95 percent of families, an economic stimulus package that creates millions of new jobs and leads us towards energy independence, and health care that is affordable to every American.

It won't be easy. The kind of change we're looking for never is.

But if we work together and stand by these principles, we can get through this crisis and emerge a stronger nation.

Thank you,

Barack

John McCain's Disingenuous Years

The other day I was discussing my thoughts about John McCain (as I find myself doing often these days) with someone who is still on the fence and who has obviously been affected by the smear tactics used by Republicans against Barack Obama (read a fantastic short piece about this matter from Robert Reich that recently went up on Guernica). This person is one of the many who doesn't necessarily vote Republican or Democrat; he believes that neither party--or anyone in politics for that matter--has his best interest in mind. He groups them all together as one lump of disingenuous, to use his word, assholes. I can't necessarily disagree with that sentiment. I do think there is a tremendous amount of self-interest in any political endeavor. And this won't ever drastically change while we are under a strictly two-party system. There are just too many political moves one must make when adhering to a certain dogma, to which a number of other people have hitched their wagons. That being said, on this point I argued that in this particular election we at least have an option who is drastically different than any other in recent memory. I do not need to give Barack Obama's life story here, since he has done so already in a book and many others have given shortened versions elsewhere. But I don't think it's a stretch to say that that story is radically different than the upbringing--and in some cases it's more like breeding--of many of our current politicians. He is not a Clinton, a Kennedy, or a Bush (Full disclosure: I will count myself among the camp that now considers John McCain a third Bush). I told my discussion partner that if he actually wanted to cast a vote in November for someone different than what he has seen, then there is really only one choice. (To this person's credit, in my eyes anyway, he does put his money where his mouth is, so to speak, having voted for both Ross Perot and Jesse Ventura. An attempt anyway to jettison the two-party system.)

But this whole discussion isn't why I am writing this. What I have been pondering lately more than how Obama is different than those who have come before is just how far John McCain has come to being exactly the same, or worse, than those who have come before. What sparked my interest most in this discussion I was having was my discussion partner's statement that at least John McCain was "genuine," to which I replied, "I may have said the same thing eight years ago." Now, eight years ago I was a junior in college and maybe more worried about a creative writing class, the lacrosse club, and which party I was going to attend on a Friday night than about the senator from Arizona. That is to say, my political interests didn't get fully piqued until the nominees for both parties were already in place, so I wasn't fully aware of all the skullduggery that led to G.W. being awarded that nomination. But it does seem to me that at least back then John McCain stood for something. Even if what he stood for wouldn't always have fallen in line with my beliefs, he seemed to stand behind his own thoughts and opinions. His indictments of Bush in those days were scathing, to no political gain. But these last years have been nothing but a political ploy on the AZ Senator's part. Once McCain knew he could not beat Bush he started, slowly at first and now full steam ahead, to put his ducks in a row for this very moment, for the chance to be President of the United States. Beliefs be damned, the man only wants one thing. That title is his only desire, and apparently his only reason for anything he does right now. I see no other way to explain how someone who was courted by the Democrats four years ago to jump ship and run as Vice President with John Kerry could fall so in line with the Right's agenda, other than, as Robert Reich puts it, the ends justify the means. What I have seen from John McCain over the last eight years does not strike me as actions I would attribute to a "genuine" person.

Crossposted at Guernica

Links, Links, and more Links

I didn't used to like blogs that did this, but since I look at all kinds of different blogs for various jobs, I thought I'd do a link round-up or a quick links post or whatever the hell you want to call it. Here goes:

This first one centers around the idea that big companies constantly get to play big-stakes gambling games with little to no risk because the government is constantly there to bail them out: passing laws to protect them; changing laws to protect them; coughing up large sums of money to get them out of a jam -- money that, because it is provided by the government, is actually provided by us...or at least "us" 50 years from now; etc. (There is a book called Free Lunch that addresses these issues and gives many examples (I haven't read it, but I heard the author on Bill Moyers).) All in the name of protecting the economy. One argument goes that if these companies go under it'll be too devastating to our economy. So no matter how moronic their business practices and dealings are, they essentially get a free pass. They get to play big: win big if they win, lose little if they lose. Meanwhile the joe-nine-to-five gets completely screwed for trying to better his existence by buying a house. The average joe loses everything because he was swindled by people whose job it is to know better. Sure, the people getting stuck right now in the housing market and with credit card debt should have known better, but so should the people who gave out the loans, who made the numbers work, whose job it is to examine markets and know that all of that couldn't have lasted. But none of them care, because they're not the ones getting the complete shaft. They're getting bailed out. Well Mr. Average Guy is now renting a one bedroom apartment with his wife and two kids.

Why are we sympathetic to the wrong people?

Anyway, here are some links from people who actually know what they're talking about:

Robert Reich. And another one at Guernica.

Tom Philpot at Grist.org

Becker and Posner blog: some lawyer types who have this site where they go back and forth at each other.


The New York Times today