Mojo - July 2009

Nuking Dinner Takes On Whole New Meaning

| Fri Jul. 17, 2009 1:39 PM EDT

In a speech in Chicago today, Defense Secretary Robert Gates (again) called on Congress to resist the urge to pack the defense budget full of pork. And because certain lawmakers have been digging in their heels this week, Gates wasn't mincing words. The best bits (emphases mine):

We must also get control of what is called “requirements creep”—where more features and capabilities are added to a given piece of equipment, often to the point of absurdity. The most flamboyant example of this phenomenon is the new presidential helicopter...Once the analysis and requirements were done, we ended up with choppers that cost nearly half a billion dollars each and enabled the president to, among other things, cook dinner while in flight under nuclear attack...

The F-22, to be blunt, does not make much sense anyplace else in the spectrum of conflict. Nonetheless, supporters of the F-22 lately have promoted its use for an ever expanding list of potential missions. These range from protecting the homeland from seaborne cruise missiles to, as one retired general recommended on TV, using F-22s to go after Somali pirates who in many cases are teenagers with AK-47sa job we know is better done by three Navy SEALs. These are examples of how far-fetched some of the arguments have become for a program that has cost $65 billion—and countingto produce 187 aircraft, not to mention the thousands of uniformed Air Force positions that were sacrificed to help pay for it.

h/t: Danger Room.

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Bush's Alzheimer's Drama And Other Tabloid Political News

| Fri Jul. 17, 2009 1:17 PM EDT

We haven't heard much about the former President Bush lately, but this week, the Globe is reporting the delicious (if dubious) news that former President Bush is suffering from suicidal depression "since leaving his office with his legacy in tatters." Making matters worse, Laura supposedly thinks he's come down with Alzheimer's because he keeps forgetting to call Dick Cheney. According to the ever-reputable Globe, Laura, described as loyal and long-suffering, had moved to Dallas without him, repulsed by his "out-of-control boozing." But she's now sticking by his side through this latest drama. Says the Globe:

"She's actually afraid he's going to wander off into the fields on the ranch and forget how to get back to the house."

Meanwhile, the National Enquirer is reporting that the REAL reason Sarah Palin quit her job as governor is that she's afraid of the coming firestorm promised by, yes, Levi Johnston's tell-all book. "She's bracing for what Levi may write about her," declares the Enquirer. And updates on the John Edwards-Rielle Hunter scandal: "Could their lovemaking have been videotaped?" Inquiring minds want to know. But you'll have to buy a copy for the inside dish. No links! The tabs are strictly a paper product.

Hedge Funder Cliff Asness Returns To Teach You About Health Care

| Fri Jul. 17, 2009 11:12 AM EDT

Libertarian hedge funder Cliff Asness, who we last saw thinking it was a good idea to pick a fight with union workers over their pensions, has returned to grace us with another screed. This time, he's mad about health care. His incredibly long essay can be boiled way, way down:

  1. We pay more for health care now than we did in the past because it's better.
  2. The reason other countries pay less for health care than we do is because health care companies charge Americans more to cover the fixed costs of developing, say, Viagra, but only charge Canadians et. al. based on the costs of each individual pill.
  3. Follows directly from (2): Our health care system provides all the innovation in the world. "Even the successes you gin up for [other countries' systems] would not be possible without the last best hope of humankind (the US) on the front lines again making the miracles for the world."
  4. By its very nature, the public option will cheat and force the private insurance companies out of business.
  5. We have to ration health care.
  6. Health care is not a right because only negative rights (i.e., freedom of speech) are valid rights.
  7. Liberals are rushing to expand health care because they "know they're wrong" and they want to expand their own power.
  8. Regulation, taxes, and trial lawyers are the real problems with health care.

None of these points are original, of course, and Asness admits as much: "Much, or even all, of what I’m saying has been said elsewhere." But it's worth responding to (some) of these points on their merits:

  1. Just because something is new and we're buying it doesn't mean we need it or it makes us healthier. We're actually overtreated (and rich people like Asness often suffer the most from that), and your health outcomes don't actually have much to do with how much you spend.
  2. A lot of those "development" costs include bribing doctors to prescribe pharmaceutical companies' brand-name drugs. Moreover, seventy percent of the drugs developed in the US represent no improvement over existing drugs. And actually, the main reason that drugs are so expensive is because the government grants patent monopolies to drug companies. Economist Dean Baker: "The country is projected to spend almost $250 billion for prescription drugs this year (more than $800 per person). In the absence of government patent monopolies, we would spend close to one-tenth of this amount. Those generic drugs that Wal-Mart can profitably sell for $4 a prescription are not chemically distinct from the brand name drugs that can cost several hundred dollars." Bottom line: "[P]atents are simply one option for financing research, not essential at all."
  3. Baker: "The story he's trying to tell makes no sense. Under trade law, if I do the innovations in Zimbabwe, I receive the exact same protection in the United States, Europe and Canada as if I did them in Washington, DC. Yeah, a disproportionate share of the research goes on here. Guess why? Because of socialism: the National Institutes of Health spends $30 billion a year subsidizing research."
  4. Baker: "If he wants to say private plans can't compete, I won't quarrel: public plans tend to be more efficient, for obvious reasons. They don't pay their CEOs tens of millions of dollars, they don't have to establish themselves through advertising. There are lots of reasons why they're cheaper... so they will tend to dominate. But if you look to other countries where they do have public systems and private systems side-by-side, [private plans] continue to exist. If he wants to argue that most people would opt for the public plan—yeah, I think that's probably true."
  5. Well, yes.
  6. Baker: "The fact is most people will say that when they see someone dying and we have the means to help them they think we should. Whether you want to call it a right or not, polls show that people behave that way. If it makes him feel better to say it's not a right, he can say that, but the fact is the overwhelming majority of people feel the need to help people who are in need of help."
  7. Asness thinks Chris Dodd, Rahm Emanuel, Barack Obama, and Barney Frank know "they will lose if freedom wins." Seriously? How about a little presumption of your opponents' good faith?
  8. Baker: "Insurance companies make money by avoiding insuring sick people. That's an easy thing to show because a relatively small minority of people account for the vast majority of health care expenses. If you deregulate the insurance market, that would mean the insurance market would find ways not to insure sick people, which isn't that hard to do." Baker agrees with Asness about the tax treatment of health care plans, but says it "doesn't have much to do with" the problems for health care in America today. He also points out that states like Texas that have limited malpractice awards haven't seen major decreases in health care costs.

The broader point is that we've heard a lot of these arguments before, and they're pretty easy to refute. But the libertarian argument about health care has one, broader, more fundamental problem. If we have, as they argue, the most "free" health care system in the world, and "freer" systems are better, why is our standard of care lower and our costs higher than other, "less free" systems? They want to move away from models that seem to work and towards new, untested free-market utopian systems. The burden of proof should be on them. Because what we have now ain't working.

Conservative Pay to Play

| Fri Jul. 17, 2009 10:51 AM EDT

It's not just an Illinois thing. Politico has a scoop revealing that the American Conservative Union, a prominent rightwing player in Washington, tried to sell its influence for big bucks:

The American Conservative Union asked FedEx for a check for $2 million to $3 million in return for the group’s endorsement in a bitter legislative dispute, then flipped and sided with UPS after FedEx refused to pay.

For the $2 million plus, ACU offered a range of services that included: “Producing op-eds and articles written by ACU’s Chairman David Keene and/or other members of the ACU’s board of directors. (Note that Mr. Keene writes a weekly column that appears in The Hill.)”

The conservative group’s remarkable demand — black-and-white proof of the longtime Washington practice known as “pay for play” — was contained in a private letter to FedEx , which was provided to POLITICO.

The letter exposes the practice by some political interest groups of taking stands not for reasons of pure principle, as their members and supporters might assume, but also in part because a sponsor is paying big money.

This is a big deal. The ACU mounts the annual Conservative Political Action Conference, a signficant gathering of thousands of conservative activists in Washington, where GOP presidential wannabes often work the crowd. And Keene is a go-to pundit of the right—and a much-used source for political journalists seeking guidance on what's going on within conservative circles. He has always sold himself as a conservative first, a Republican second. But now it seems that he is just selling himself, period.

Conservative blogger Ed Morrissey is not happy about this. In an item titled "ACU puts conservatism up for sale," he huffs,

When we said that conservatives needed to do a better job selling the philosophy of limited government and fiscal responsibility, this isn’t exactly what we meant

He continues:

The range of services offered [by ACU] calls into question the integrity of the entire organization. Does the ACU normally offer its public commentary for rent?  Who else has paid for endorsements in David Keene’s columns, or those of the ACU board members? It would be also fair to ask Keene or the board knew of [this] proposal before it went out, although it would be difficult to imagine that Whitfield could have offered so much in services for that much compensation without having approval from Keene and/or the board in the first place.  The ACU’s about-face on the issue right after FedEx’s refusal would be difficult to explain as well.

Though the ACU has put out a response to the Politico story (kudos to Mike Allen for breaking it), Morrissey still is not satisfied. Leave it to the ACU to make the Washington Post look good.

And another thing: Politico notes that with this exposé it has uncovered evidence of the longtime Washington practice of pay to play. But it should be noted that the pay-to-players of this sort usually are on the right side of the fence. Remember Armstrong Williams? The ideological advocates of the right in Washington tend to be tied more to lobbying and influence-peddling than those of the left. Jack Abramoff, for instance, used several conservative policy groups to launder his ill-gotten treasure.

Is anyone at the Campaign for America's Future, which runs the liberal counterpart to CPAC, selling his or her access and influence for millions of bucks to corporations? Don't make me laugh. True, there are plenty of former Democratic officials and staffers who have left public service for private profit as lobbyists, and some simultaneously associate with policy shops. But there has long been a tighter nexus on the right between for-profit influence-wielders and for-ideology policy advocates. ACU is proof of that.

You can follow David Corn's postings and media appearances via Twitter.

Card Check RIP?

| Fri Jul. 17, 2009 10:19 AM EDT

The New York Times reports that Democrats seem to be giving up on card check, the part of the Employee Free Choice Act that would allow unions to be certified if a majority of workers sign a card attesting to their desire to join. The Times explains "moderate" Democrats'  opposition to the provision:

Several moderate Democrats, including Blanche Lincoln of Arkansas, have voiced opposition to card check, convinced that elections were a fairer way for workers to unionize. They were swayed partly by business’s vigorous campaign, arguing that card check would remove confidentiality from unionization drives and enable union organizers to bully workers into signing union cards.

The Times could have better informed its readers by exploring how much money "moderate" Democrats like Blanche Lincoln received from anti-union forces, and how much money pro-card check Democrats received from unions. For example, Sen. Tom Harkin, who introduced EFCA in the Senate, has received $1.7 million from the labor sector—more than any other senator—since 1989. Sen. Lincoln, for her part, has received $5.5 million from business PACs over the course of her career. If the Times didn't want to get into the purchase prices of individual senators, something like this paragraph, via OpenSecrets, would have done just fine:

Members of Congress who voted in favor of the Employee Free Choice Act in 2007, when the bill wasn't passed, had collected 10 times more on average from union PACs during their careers ($862,065) than those who didn't ($86,538), and those who opposed the bill had collected more on average from business PACs ($2.5 million), than those who supported the legislation ($1.7 million).

Some Good News About Afghanistan?

| Fri Jul. 17, 2009 9:52 AM EDT

The notion that Afghanistan could become Obama's Vietnam has been picking up supporters lately—see this Newsweek cover, plus more airings here and here and here. In this month's Washington Monthly, terrorism analyst and MoJo contributor Peter Bergen argues forcefully that there's nothing to see here, folks: "Afghanistan will not be Obama’s Vietnam, nor will it be his Iraq. Rather, the renewed and better resourced American effort in Afghanistan will, in time, produce a relatively stable and prosperous Central Asian state."

Bergen is no wide-eyed optimist: In the July/August 2007 issue of Mother Jones, he took stock of the many avoidable mistakes made by the Bush administration in Afghanistan that led to the "Iraqization" of the conflict there. So it's notable that the Obama administration's increased investment in Afghanistan has him feeling more upbeat about the country's prospects. Check out the whole thing here.

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Author Bio of the Day

| Fri Jul. 17, 2009 9:48 AM EDT

"Michael Osinski, a former computer programmer, is an oyster farmer."

(From Mr. Osinki's op-ed in Friday's New York Times.)

'Recovery' You Can't Believe In

| Thu Jul. 16, 2009 4:36 PM EDT

If there was any doubt before today who the federal government's $13 trillion bailout was truly meant to benefit—homeowners and small businesses or megabanks like Goldman Sachs  and JPMorgan Chase—a pair of telling, yet depressingly familiar, headlines should put that to rest.

Reuters reports:

Foreclosures at Record High in First Half 2009 Despite Aid

New York - U.S. home foreclosure activity galloped to a record in the first half of the year, overwhelming broad efforts to remedy failing loans while job losses escalated.

Foreclosure filings jumped to a record 1.9 million on more than 1.5 million properties in the first six months of the year, RealtyTrac said on Thursday.

The number of properties drawing filings, which include notices of default and auctions, jumped 9.0 percent from the second half of 2008 and almost 15 percent from the first half of last year.

"Despite everybody's best efforts to date we're not really making any headway against the problem," Rick Sharga, senior vice president at RealtyTrac in Irvine, California, said in an interview.

Meanwhile, The New York Times reported this today as well:

JPMorgan Earnings Soar as It Finds Profit in Slump

Even as it weathers the worst economic downturn in decades, JPMorgan Chase on Thursday announced a $2.7 billion second-quarter profit from stellar trading and investment banking results.

The strong showing may put to rest some worries that the bank was allowed to pay back its $25 billion taxpayer investment too early, after it passed the Treasury Department’s stress test in May. But its quick resurgence in earnings, along with Goldman Sachs’s announcement of a $3.4 billion quarterly profit on Tuesday, is bound to raise fresh concerns about soaring pay levels and growing influence in Washington.
 

Toss in Goldman Sachs' announcement on Tuesday that it had recorded its richest quarterly profit in the bank's 140-year-history and that it has so far earmarked $11.4 billion in compensation this year (NYT headline: "With Big Profit, Goldman Sees Big Payday Ahead"), and the writing is on the wall. Treasury Sec. Tim Geithner called these absurdly large profit announcements an "important sign of recovery." For the financial behemoths in whose pockets he so neatly fits, recovery it sure is. But for the 1.9 million homeowners who filed for foreclosure in the first half of this year and the small businesses teetering on the brink of bankruptcy, "recovery" couldn't be farther from the truth.

Ricci Speaks. Finally.

| Thu Jul. 16, 2009 4:28 PM EDT

New Haven firefighter Frank Ricci has been the invisible man of Sonia Sotomayor’s confirmation hearings. For four straight days, members of Congress have endlessly rehashed, dissected and debated the case that bears his name. Republicans have lionized Ricci and used his lawsuit against New Haven, Connecticut to bash Sotomayor for everything from shoddy analysis and perfunctory opinion-writing to reverse racism.

So it was with great anticipation that the man himself arrived in the witness chair today. But in case it wasn’t obvious from his uniform, Ricci is a firefighter, not a legal expert. So in his testimony, Ricci largely stuck to what he knew. He opened with a lecture on how “technology and modern threats have changed our profession.” He detailed the dangers of his job and why lieutenants and captains need to understand the “dynamic fire environment.” His point, eventually, was that the test he took was designed to promote only those who’d mastered all this tricky stuff. By refusing to promote on the basis of the test results, the city of New Haven risked putting incompetents behind the hose.

“When your house is on fire or your life is in jeopardy, there are no do-overs,” he said with the delivery of someone who has given this speech before, possibly to third-graders on career day. (The soliloquy prompted Sen. Lindsey Graham to tell him later, “Mr. Ricci, I would want you to come to my house if it was on fire.”)

 

Fiore Cartoon: Making Billions Like Goldman Sachs

Thu Jul. 16, 2009 3:59 PM EDT

Jobless Jack was down on his luck—until he followed the Goldman Sachs steps to success. Satirist Mark Fiore chronicles his rags-to-riches tale: