Kevin Drum - August 2009

Regulating the Regulators

| Sun Aug. 23, 2009 9:28 AM PDT

MattY points us to a Gillian Tett column in the Financial Times, which ends with this:

If regulators and politicians are to have any hope of building a more effective financial system in future, it is crucial that they start thinking more about power structures, vested interests and social silence. That might sound like an irritatingly abstract or pious plea. However, it has some very practical implications about how policy is formulated. I will seek to flesh out some of those in next week’s column....

This is a surprisingly underdiscussed point, but it's something that's critical to how we think about financial regulation.  If we want regulation to work, the regulatory structures need to be set up so that their institutional power bases push them in the direction we want them pushed.  That's why, for example, I don't like the idea of the Fed gaining more power over consumer regulation: it's institutionally and culturally oriented toward the financial community and macroeconomic management.  Consumer regulation will never be taken seriously there no matter how many laws we write.

I'm not sure if this means that an entirely separate agency needs to be set up or not, but whatever we do has to take account of how power actually works.  Not only does consumer financial regulation need to be in the hands of someone who considers it their prime responsibility, but it needs to have committee support in Congress and some kind of natural constituency with serious political juice and a financial interest in making sure consumer regulation works.  Otherwise it will sink into bureaucratic oblivion.  Suggestions welcome.

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Happy Blogoversary!

| Sat Aug. 22, 2009 4:00 PM PDT

Today is my seventh blogoversary.  Hooray!  We celebrated by having a system crash this morning, which is kind of appropriate in a way.  After seven years, I have yet to work on a truly reliable blogging platform.

But an even more appropriate way to celebrate is by putting up some bonus catblogging.  So here it is: a picture of Inkblot snapped three minutes ago.  If I had a cat-cam set up in my living room, this is what you'd see in real time.  In fact, it's what you'd see most of the time in real time.  And if I had a people-cam set up in my study, you'd see me staring at a glowing screen and typing some words into a box.  Which is also what you'd see most of the time.  In other words, if you substitute "blogging" for "snoozing," I'm an awful lot like a housecat.  Funny how that works.

Crash and Burn

| Sat Aug. 22, 2009 3:41 PM PDT

From the Washington Post today:

"Anything with Z seems like there's some slight irreverence about it. So it was as simple as putting Z in front of politics!" explains Republican media consultant John Brabender....With a four-program lineup, Zolitics bills itself as a bipartisan potpourri of "original scripted content, current events with a twist, and reality based shows unlike you have ever seen before."

....It's the place to see, for example, Rick Santorum squire Donna Brazile to a NASCAR race....The NASCAR sojourn is what Santorum has expressed interest in doing for the debut episode of "My America," a show that will pair ideologically divergent bedfellows and allow each to show the other "their America." The show, Zolitics crowed in a press release this week, "just may also become America's favorite buddy story."

....Santorum calls himself "a great fan of Donna's" and looks forward to milling around with the "red-blooded Americans out there" while watching cars go Zoom.

This sounds like possibly the worst idea in the history of western civilization.

Friday Cat Blogging - 21 August 2009

| Fri Aug. 21, 2009 12:06 PM PDT

You can't really see it through the shadows, but Domino is viciously attacking some errant blanket trolls on the left.  You can't perceive them, of course, limited as you are to a measly three spacial dimensions, but they were there just moments before this picture was taken.  Honest.  Inkblot, meanwhile, is enjoying a nice summer day in the garden.  And by "enjoying," of course, I mean "napping."

Pharmaceutical Innovation

| Fri Aug. 21, 2009 11:41 AM PDT

Right now, it's arguable that government ground rules give pharmaceutical companies too little incentive to innovate.  If FDA regs forced them to demonstrate more than just superiority to a sugar pill, drug company incentives might be aligned a little more strongly toward finding genuinely effective new therapies instead of yet another statin or ED pill or a slightly different heartburn formulation.

Or maybe not.  It's an argument worth having.  But the current system is by no means the free market juggernaut conservatives like to pretend it is.  Changing the ground rules might very well increase innovation, not stifle it.

Quote of the Day

| Fri Aug. 21, 2009 11:11 AM PDT

From James Fallows, after watching Jon Stewart's show last night:

I have been far too soft on Betsy McCaughey.

Yep.  Here's the conversation I had with Marian last night at about 11:10 pm:

M: Do you want to watch the interview?

K: Who is he having on?

M: Um, some former lieutenant governor of New York or something.

K: Oh shit.

I was appalled that Stewart chose to have McCaughey on, and I agree with Fallows that he was unable to handle her.  Partly this was because McCaughey affects a winsome, faux innocent style that makes it hard for Stewart to bully her.  Partly it's because she's ruthlessly devoid of scruples.  Partly it's because she knows she doesn't have to "win" the debate.  She merely has to sew a tiny seed of doubt.

McCaughey is pure poison.  She cares about nothing except making sure that no healthcare reform of any kind is ever adopted in the United States, and in that cause she's willing to say or do anything.  It was a mistake giving her yet another forum to spread her lies.

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How to Win

| Fri Aug. 21, 2009 10:03 AM PDT

Does Barack Obama really believe that calm bipartisanship is a successful political strategy in modern Washington DC?  Well, it got him elected, didn't it?  Matt Yglesias takes it from there:

My worry would be that it strikes me as very plausible that a political strategist could overlearn the lessons of his own success. The fact of the matter is that Obama’s margin of victory was more-or-less exactly what you would expect based on fundamentals-driven models of presidential elections. We know that the strategy Obama employed “worked” (he won, after all) but there’s no clear evidence that it was particularly brilliant. But you can easily imagine Obama and David Axelrod and other key players becoming overconvinced by their own success.

Nobody ever, ever, ever believes this.  There's always a narrative behind presidential victories, and there always will be, despite the fact that 90% of them are dead wrong.  Obama ran an excellent primary campaign and a perfectly decent general election campaign, but the latter boiled down to one word: "Change."  That's what most elections boil down to: "Time for a change" vs. "Experience counts."  They both work fine in alternate cycles, but neither is especially brilliant or especially new.  Pericles pioneered them both in his long career, and that was 25 centuries ago.

The post-partisan schtick might yet work.  But even though it was effective during last year's campaign, it's not really what won him the presidency.  A little bit of ruthlessness vs. Hillary Clinton got him through June, and repeating a nice, simple message over and over and over kept him on top throughout the fall.  That's a combination he might want to remember.

"Yes, But"

| Fri Aug. 21, 2009 9:40 AM PDT

Charles Krauthammer writes today that he'd like to hold a reasoned discussion about end-of-life counseling.  "We might start by asking Sarah Palin to leave the room," he says.

That's "close to reasonable," says Joe Klein.  But no, it isn't.

Krauthammer is part of the swelling "Yes, but" crowd, and for my money these guys are infinitely worse than the flat-out nutters themselves.  I mean, at least nutters have the excuse of being nutters, right?  They can be dismissed or mocked or yelled at or whatever.  But everyone outside the nutter base understands that they're crazy.

Then there's the "Yes, but" contingent.  Sober.  Serious.  Looking at all sides of the issue.  Stroking their chins.  Coming to conclusions.

And what are those conclusions?  Well, golly, the nutters might be nuts, but they have a point!  Allowing Medicare to reimburse doctors for advance care counseling might be the first tiny step toward turning them into junior Dr. Mengeles after all.  Krauthammer bases this conclusion primarily on his belief that living wills are pretty much useless:

So why get Medicare to pay the doctor to do the counseling? Because we know that if this white-coated authority whose chosen vocation is curing and healing is the one opening your mind to hospice and palliative care, we've nudged you ever so slightly toward letting go.

It's not an outrage. It's surely not a death panel. But it is subtle pressure applied by society through your doctor. And when you include it in a health-care reform whose major objective is to bend the cost curve downward, you have to be a fool or a knave to deny that it's intended to gently point the patient in a certain direction, toward the corner of the sickroom where stands a ghostly figure, scythe in hand, offering release.

Subtle pressure indeed.  The only thing that's subtle here is Krauthammer's faux evenhandedness.  Up until two minutes ago, politicians and pundits across the political spectrum universally believed that advance care counseling was an entirely sane and uncontroversial practice, one that any compassionate society would encourage.  Those same politicians and pundits knew perfectly well that it was never about guiding patients in any particular direction and has never been motivated by cost savings in any way.  They knew that other countries reimburse for advance care planning — just like any other use of a doctor's time — and it hasn't led to any pressure, subtle or otherwise, to pull the plug on grandma.

They knew this.  Until two minutes ago.  But now they're pretending — subtly, temperately — that maybe it isn't true after all.  And they're doing this not because they've changed their minds, but because they want to kill healthcare reform for political reasons and they don't care whether innocent bystanders get hurt in the process.  Their "Yes, but" campaign might ensure that patients forevermore mistrust doctors who talk about advance care directives, but they also know that sober, serious, subtle op-eds endorsing this point of view are more likely to derail healthcare reform among the chattering classes than Sarah Palin's Facebook maunderings.  It is intellectual venality of the first order.

Too Much Compassion

| Fri Aug. 21, 2009 8:49 AM PDT

I tend to be pretty squishy and bleeding heart over things like compassionate release for prisoners with terminal diseases.  Usually, though, they're 70 years old and have served 40 years in prison or something.  Releasing a mass murderer after eight years is another thing entirely.  Compassion ought to have its limits, and the Scottish government seems to have lost its mind in the case of Lockerbie bomber Abdel Basset Ali al-Megrahi.  The Libyans aren't exactly helping matters either.  What a mess.

Healthcare Ripoffs

| Fri Aug. 21, 2009 8:10 AM PDT

Miller-McCune glosses some recent research about the exorbitant rates the uninsured are forced to pay for medical care:

For example, one doctor billed $4,500 for an office visit when Medicare would have paid just $134. Another doctor billed $14,400 for removal of a gallbladder when Medicare would have paid $656. And a hip replacement cost $40,000 when Medicare would have paid $1,558.

....[Jeffrey] Rice said people should know they have a choice even when their insurance company is paying the bill. "Everyone knows you don't buy a car without knowing what the Blue Book value is. Well the same should be true in health care," he said.

....Previous research published in 2007 in the journal Health Affairs showed the "uninsured and other 'self-pay' patients for hospital services were often charged 2.5 times what most health insurers actually paid and more than three times the hospital's Medicare-allowable costs." The study by Gerard Anderson also found the "gaps between rates charged to self-pay patients and those charged to other payers are much wider than they were in the mid-1980s."

"Blue Book," of course, is a little harder to figure out for triple bypass surgery than it is for a 2003 Honda Civic.

In any case, this practice demonstrates both the pros and cons of going to the mattresses over inclusion of a public option in a healthcare reform bill.  On the one hand, the really important thing is to get the uninsured insured.  With anyone.  They'll get better care and their bill will be way lower, regardless of whether they have a public or private insurer.  On the other hand, private insurance is expensive, and in most of the plans on offer middle income families (above a cutoff of about $50,000) won't get any government subsidies to purchase it.  A public plan would (a) almost certainly be cheaper and (b) put price pressure on private plans to be cheaper too.  Result: more people are insured and fewer people are paying outrageous bills for common procedures.