2010 - %3, January

Need to Read: January 29, 2010

Fri Jan. 29, 2010 8:07 AM EST

 The must-read stories from around the web and in today's papers:

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We're Still at War: Photo of the Day for January 29, 2010

Fri Jan. 29, 2010 8:00 AM EST

we're still at war 012810

Army Staff Sgt. Chad Melanson, Provincial Reconstruction Team-Kunar security forces member from the Nevada National Guard's 1st Squadron, 221st Calvary Regiment currently assigned to Camp Wright in Asadabad, Afghanistan, speaks with other members of the security team prior to a night patrol of the camp's perimeter on Jan. 24. Photo by US Army.

R.I.P. Healthcare Reform?

| Fri Jan. 29, 2010 2:43 AM EST

OK, let's take one more crack at figuring out the likely fate of healthcare reform.  According to the Washington Post, Harry Reid and Nancy Pelosi are still at loggerheads and "congressional Democrats remained in disarray Thursday about how to move forward, with at least some pointing at the White House as the cause of the legislative standstill gripping Capitol Hill." OK then. So what's the direction from the White House? Here's the New York Times:

With Mr. Obama’s health care overhaul stalled on Capitol Hill, Rahm Emanuel, the White House chief of staff, said in an interview that Democrats would try to act first on job creation, reducing the deficit and imposing tighter regulation on banks before returning to the health measure, the president’s top priority from last year.

....Mr. Emanuel, the chief of staff, said he hoped Congressional Democrats would take up the jobs bill next week. Then, in his view, Congress would move to the president’s plan to impose a fee on banks to help offset losses to the Troubled Asset Relief Program, the fund used to bail out banks and automakers.

Lawmakers would next deal with a financial regulatory overhaul, and then pick up where they left off on health care. “All these things start and lead to one place: J-O-B-S,” Mr. Emanuel said.

Given the normal pace of congressional action — including the usual Republican obstruction — this would mean no action on healthcare for at least a month or two. Maybe more like three or four. Or maybe never.

New pronouncements seem to come almost hourly on this stuff, so I'll wait for a few other folks to chime in before coming to any conclusions. But if healthcare is now domestic priority #4, it might as well be domestic priority #100. It might not quite be dead, but no matter what Obama said in his State of the Union address, the grim reaper is starting to hover uncomfortably close by.

Corn on Olbermann: Palin and the Tea Partiers

Thu Jan. 28, 2010 10:35 PM EST

David Corn appeared on MSNBC's Countdown with Keith Olbermann to discuss Sarah Palin's recent scuffles with the Tea Party movement.

 

Financial Innovation Watch

| Thu Jan. 28, 2010 8:29 PM EST

I got distracted by a couple of other books last week, but yesterday I picked up A Splendid Exchange again and ran into a fascinating description of 17th century Dutch financial innovation that should sound eerily familiar to most of my readers. Working for the Dutch East India Company during the spice trading era, it turns out, was so hideously dangerous that they had a desperate and continuous need for raw recruits to man their ships:

This grisly recruitment effort was run by a specialized corps, composed mostly of women, the zielverkoopers (literally, "soul sellers"). Their marks were the young foreign men, mainly from Germany, who swarmed into Dutch cities seeking their fortune. In return for a cut of their signing advance and future pay from the Company, the women advertised room, board, and the sort of entertainments usually sought by unattached young men, during the weeks and months until they sailed for Asia.

....Holland being Holland, this Faustian transaction yielded a financial instrument, in this case the transportbrief — a marketable security entitling the zielverkooper to a cut of the recruit's wages, paid by the Company as they were earned. Other investors then bought these securities at a discount that reflected the high death rate of VOC1 personnel and assembled them into profitable, diversified pools of human capital. These magnates were called, naturally enough, zielkoopersbuyers of souls. When, in the eighteenth century, the mortality among VOC's soldiers and sailors soared because of lax Company procedures, many zielkoopers went bankrupt.

I imagine there were people in 17th century Amsterdam who objected to this practice. I also imagine there were 17th century equivalents of Angelo Mozilo making millions from it, 17th century equivalents of Alan Greenspan explaining how it made capital allocation more efficient, 17th century equivalents of CNBC shilling for it, 17th century equivalents of the Gaussian copula to convince everyone that pooling these securities made them safe, and 17th century equivalents of Phil Gramm to make sure nobody stopped it. The names may change, but the product remains the same.

1That is, Vereenigde Oost-Indische Compagnie, the Dutch phrase for United East Indian Company.

Whole Foods to Employees: Lose Weight

| Thu Jan. 28, 2010 7:30 PM EST

The idea that Whole Foods Markets might not be as wholesome as consumers assume isn't really news. Kate Sheppard recently reported that the grocery chain earned a 27 out of a possible 100 rating on its sustainable business practices according to a recent report, and CEO John Mackey is a climate change skeptic. An August op-ed in the Wall Street Journal by Mackey against healthcare reform led some consumers to call for a boycott. But Mackey's most recent antics have angered not only those in favor of healthcare reform, but also consumers who care about privacy issues and body policing.

According to documents received by Jezebel, employees who participate in Whole Foods' new Team Member Healthy Discount Incentive Program will be ranked according to BMI, cholesterol, blood pressure, and nicotine use. While all Whole Foods employees receive a 20 percent store discount, those who achieve the "Platinum" level in the program by having low results in all four metrics get bumped up to a 30 percent discount. But it's not just employees' lifestyles that count. The program also rewards employees simply for having good genes: Non-smoking employees who have a BMI under 24 (18.5-24.9 is considered normal), but have inherited high cholesterol, will be relegated to "the lowest-scoring biometric" and will have to make due with a 27 percent discount. Employees who do not meet Platinum requirements for other health reasons (like diabetes) are similarly out of luck.

Documents state that the initiative is "directly in line with two of our core values—supporting team member happiness and excellence and promoting the health of our stakeholders through healthy eating education." While it's common knowledge that not smoking and having lower blood pressure and total cholesterol can lead to better health, it seems a bit much to assume that hitting the questionable BMI metrics will lead to happy and healthy employees. Good thing Mackey doesn't have to worry about employee unions collectively questioning the new policy, since those, like high BMIs, are frowned upon.

In a letter sent out to employees, Mackey states that the program is being implemented to lower rising healthcare costs for both Whole Foods Markets and its employees. Mackey might do better working towards real health care reform—policies that could lower costs for all US employers and individuals—rather than whittling the waistlines of his employees.

 

 

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He's Back!

| Thu Jan. 28, 2010 7:19 PM EST

Ben Bernanke was confirmed for a second term as Fed chairman today by a vote of 70-30. Neil Irwin of the Washington Post answers the first question that popped into my mind:

Bernanke was confirmed by a narrower margin than any previous Fed chairman. The previous record for most "no" votes was Paul Volcker in 1983, when he was confirmed 84 to 16.

Bernanke has "more votes against him than any Fed chairman has ever had. And that's a signal," said Sen. Richard Shelby (R-Ala.), in an interview. "The Fed is controversial with the American people. Bailouts. Lack of supervision over [bank] holding companies."

I hope Shelby is right. But my guess is that this is mostly a manifestation of the fact that confirmations have become more contentious in recent years. Even during a bad recession I'll bet Bernanke would have been confirmed easily a few decades ago. After all, Sonia Sotomayor was no more liberal then Ruth Bader Ginsburg, but she was confirmed for the Supreme Court 68-31 compared to Ginsburg's 96-3.

Anyway, I certainly look forward to a chastened Ben Bernanke coming out strongly in favor of serious financial sector regulation. I'm not taking any bets on it, though.

Key Senator's Health Care Reform Booster Shot

| Thu Jan. 28, 2010 7:01 PM EST

Democrats' efforts to pass health care reform depend on a filibuster-proof procedural maneuver called reconciliation. If Senate Democrats can use this process to pass a package of adjustments to their version of the health care bill, Speaker Nancy Pelosi says she can muster enough votes to approve the Senate legislation in the House. But for this to work, Sen. Kent Conrad has to be with the program. The centrist North Dakota Democrat chairs the Senate Budget Committee, which handles reconciliation measures. Other centrist Democrats, such as Missouri's Claire McCaskill, have  expressed qualms about the plan. But in a brief conversation with reporters on Thursday afternoon, Conrad slammed Republican obstructionism and vigorously defended the use of reconciliation to pass important legislation.

The Senate "was not designed to have everything require 60 votes," Conrad said. "It wasn't designed to prevent important action on the problems facing the country." If a supermajority is effectively necessary to pass any piece of legislation, he added, this "puts a great deal of pressure on going to more of a reconciliation process to deal with things."

Conrad argued that it's not possible to use reconciliation—which requires merely a straight majority vote—to win passage of an entire comprehensive health care bill, as some progressives have advocated. (There are assorted rules that prevent this.) But Conrad noted that he's open to using this legislative maneuver to make limited, though significant, changes to a measure the Senate has already passed—provided that certain procedural kinks could be ironed out.

Those procedural issues involve which body would take the opening step in this legislative dance—the House or the Senate. House Democrats want the Senate to pass its changes to its health care measure first. (Otherwise, they could end up voting for a Senate bill containing provisions they don't like and then get stuck with it, should reconciliation fizzle.) Senate Democrats, however, aren't sure they can approve through reconciliation changes to a bill that hasn't yet been approved by the House. "We are being asked to pass a piece of legislation that amends another piece of legislation which does not exist yet," a Senate aide told Greg Sargent yesterday. "We are having problems with the [Congressional Budget Office] and parliamentarian on that front." The Senate just wants the House to "back off," Sargent reported. Parliamentary experts for the Democratic leaders on each side of Capitol Hill are now trying to sort all this out.

Meanwhile, President Barack Obama in his State of the Union speech didn't provide any guidance on how congressional Democrats should proceed. One House Democratic leadership aide told Mother Jones that the top Democrats on the House side assume that Obama is hesitant to tell the "touchy" Senate how to do its job at such a critical juncture. The absence of any reference to reconciliation in Obama's speech, he insists, was no indication it is off the table.

Conrad, for one, didn't sound like a man with doubts about the idea. He said, "Frankly I think we have to reconsider the rules by which this body is governed," because the Senate "is in danger of becoming dysfunctional," and "there's going to be a building demand in the country to change the system."

God Hates #micro-blogging?

| Thu Jan. 28, 2010 6:44 PM EST

Important news out of the Bay Area today: The Westboro Baptist Church, the quasi-cult from Kansas that protests at the funerals of dead soldiers and, well, everyone else, has finally found something it likes. But it's protesting anyway. The group will be picketing the San Francisco offices of Twitter today to remind the company of its higher obligation:

We're not protesting Twitter as a platform; that's like picketing televison! =) We're picketing the people who run @Twitter, who don't use their position & voice to warn a generation of rebels of the consequences of their rebellion. Same goes for those at Foursquare & Gowalla (tho I personally find their products useless -- at least relative to Twitter. =)

(For the definitive take on the WBC, check out MoJo's outstanding piece from 1999).

More on the Healthcare Timeline

| Thu Jan. 28, 2010 6:40 PM EST

Are House and Senate Democrats really planning to debate healthcare for several more months?  A knowledgable observer emails to say that it's unlikely because any deal involving reconciliation needs to happen fairly quickly:

The current continuing resolution expires February 23 (or 24). Unless Congress wants to keep doing continuing resolutions (and thus funding Bush budget priorities and not Obama’s), they'll need to get to get the 2010 budget done (via reconciliation). I would suspect that Feb 23 is the key date, not some spring or summer timeline.

Hmmm. I'm just tossing this out for comment since I don't independently know what all the procedural hurdles are here. But if this is right, then the timeline for passing healthcare reform is actually fairly short unless the House is willing to pass the Senate bill based on assurances of doing something to modify it in the next budget year. That doesn't seem very likely, though.

Further comments welcome from any congressional process nerds out there.