Mojo - March 2010

Drugsters Back On Top

| Fri Mar. 19, 2010 1:04 PM EDT

What the press refers to as "tweaks" in the new version of health care legislation would appear to hand Big Pharma a sizeable victory, allowing the companies to extend the lifetimes of brand name drugs by selling them at discounted prices within the Medicare drug plan. This is portrayed as a magnanimous gesture by the profitable pharmaceutical makers. And to help the poor guys out a little and lessen the strain on their stockholders' pocketbooks, the government apparently will come in to pay the companies some of the dough they lose in providing the discounts. Another way of putting this is that it seems the discounts aren't really discounts at all. In the world of congressional smoke and mirrors, they've miraculously become a subsidy.

Government policy ought to push less expensive generic drugs into the marketplace. Mandating their preferred use by Medicare would be one small step in that direction. Generally speaking, the brand-name drugs should be eliminated when their patents run out. The proposed legislation apparently will have the effect of lengthening the company monopoly on brand names, thereby assuring higher, not lower prices.

Although somewhat confusing, this article from the New York Times may help you get a feel for what’s going on.

Bottom line: cost control is sacrificed market monopoly.

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Ex-General: Gays Cause War Crimes

| Fri Mar. 19, 2010 12:51 PM EDT

It's been a busy week in the battle over "Don't Ask, Don't Tell," including a bogus third-party outing and a stunning photo exhibit of gay service members. More on those developments in a minute, though, because first we have to deal with the big news in DADT stupidity today: The notion that gays cause war atrocities.

As a former sailor, I tend to avoid speaking ill about United States Marines, unless it's good-natured ribbing. I respect the institution and its members, who have proven their character and professionalism time and again.

Retired Gen. John Sheehan is an exception.

This week, news broke that Sheehan—the onetime supreme allied commander of NATO forces—told the Senate Armed Services Committee that gay troops were to blame for the massacre of civilians at Srebenica, Bosnia, in 1995—Europe's worst war crime since World War II.

No, seriously, bear with us for this. CNN quotes Sheehan at length:

Lynch: Why Obama Didn't Convince Me on Health Care

| Fri Mar. 19, 2010 12:09 PM EDT

Rep. Stephen Lynch (D-Mass), who switched from "yes" to "no" on the health reform bill, is insisting that his vote will not kill the legislation, noting that the House Democrats have the votes to pass the measure this weekend without his support. He also says that during a meeting with President Barack Obama on Thursday, the president failed to win him over with a promise to make the reform package more progressive down the road.

Lynch slams the legislation as "a poor bill" that would continue the worst elements of the status quo. In explaining his switch, Lynch cites the absence of a public option, the failure to repeal the anti-trust exemption for insurance companies, and the inclusion of the excise tax on high-end insurance plans. (These are some of the key differences between the final bill and the House version, which he had supported.) "There's a difference between compromise and surrender, and this bill is surrender," Lynch tells Mother Jones. "It's a surrender to the insurance companies, it's a surrender to the pharmaceutical companies."

But Lynch doesn't see his "no" vote as a bill-killer," saying it's very likely to pass during Sunday's scheduled vote: "I don't think they would be calling the bill up on Sunday if they  didn't have the votes. if I had a bet on it, yeah, I'd probably bet that it would pass."

Obama, Lehman, and Blown Chances

| Fri Mar. 19, 2010 10:17 AM EDT

When insurance company WellPoint announced an average 25-percent rate hike last month, President Obama and his allies wasted little time seizing the insurer's move as yet more evidence of the evil of health insurers and the need to pass major health care reform. "This rate increase underscores the urgency of passing real health insurance reform," said Kathleen Sebelius, secretary of the Health and Human Services Department. 

Earlier this month, a comparable bomb dropped on Wall Street, courtesy of voluminous and exhaustive report on the downfall of Lehman Brothers. The report, thousands of pages long and numbering nine volumes, was prepared by Lehman's bankruptcy examiner. He found scores of damning evidence on the firm's legal but utterly dangerous accounting maneuvers, how it shifted losses and risk off its books to look healthier and stronger, how it deceived regulators, and how Lehman's leader, Dick Fuld, was "at least grossly negligent" in the handling of it all. The Financial Times reported this week that JPMorgan Chase, that mainstay of Wall Street, has used the "Repo 105" accounting gimmick, too. These findings are, in short, all the ammunition Obama, Sen. Chris Dodd (D-Conn.), and those clamoring for financial reform need to press for a major overhaul of how Wall Street does business. They couldn't have wished for a better opportunity.

Instead, there's been silence. Nothing from Obama, from top economic adviser Larry Summers, from Treasury Secretary Tim Geithner (more on him in a minute), from anyone, really. The SEC more or less acknowledged the report's existence, saying it would be "helpful." But that's about it. Here's Obama's big opening to highlight the worst of Wall Street's excesses and obfuscation, 2,200 pages of cold, crisp facts to back him up...and he lets the opportunity slip past. Why?

Does it prove he's too close to Wall Street? That he won't take off the kid gloves when it comes to confidantes like Jamie Dimon, CEO of JPMorgan Chase? It's worth nothing that the Lehman report does implicate one of Obama's top financial figures, Tim Geithner. Geithner, the report says, was told directly about the "Repo 105" accounting gimmick, and how Lehman used it to move toxic assets of its book to look healthier (yet never reported Repo 105 on its regulatory filings); Geithner, when interviewed by the examiner, said he didn't remember being told about Repo 105. Yves Smith at Naked Capitalism put it best: "the NY Fed, and thus Timothy Geithner, were at a minimum massively derelict in the performance of their duties, and may well be culpable in aiding and abetting Lehman in accounting fraud and [Sarbanes-Oxley] violations." Maybe Obama doesn't want to burn one of his own so he's mostly ignoring the Lehman report.

Still, that's no excuse. Obama could easily draw on the Lehman report without dragging Geithner into the fray. So why the silence, Mr. President? The only explanations that came to mind are: (1) Obama's too wrapped up in health care vote-wrangling to bother with the Lehman report and the financial reform debate, or (2) he doesn't want to battle Wall Street. It's probably both. Nevertheless, it's sad to see top GOPers foretelling their stall tactics on financial reform and blasting "punk staffers" on financial reform while Obama—and many top Dems, for that matter—let the perfect opportunity to fight back pass them by.

CBO: Homeowner Rescue a Big Bust

| Fri Mar. 19, 2010 9:09 AM EDT

For all the plaudits and praise heaped on Treasury Secretary Tim Geithner lately (profiles, for instance, in the New Yorker and the Atlantic), consistently omitted is the abysmal failure of the Treasury's homeowner relief initiative, the Making Home Affordable program. The core of that program is the Home Affordable Modification Program (HAMP), a multibillion-dollar effort that's done next to nothing to alleviate the ongoing foreclosure crisis. (Read this and this for more.) A year into HAMP, only 170,000 people have received permanent reductions in their monthly mortgage payments. (By contrast, foreclosures last year set a new record, with 2.8 million.)

Now comes the news, via the nonpartisan Congressional Budget Office, that HAMP, which was initially projected to spend $50 billion helping homeowners, will only spend 40 percent of that, or $20 billion. What that means for beleaguered homeowners is that far less help is on the way from an already wounded program. Which shouldn't come as a surprise. Whereas Obama himself said in February 2009 that the Making Home Affordable program "will help between 7 and 9 million families restructure or refinance their mortgages," the Treasury Department's goal, in the case of HAMP, has always been to "offer" 3 to 4 million modifications to homeowners—with no guarantee for help.

The revision for HAMP as well is no surprise given criticism from watchdogs like the Congressional Oversight Panel. Last October, the COP said in its monthly report that "[i]t increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now." In other words, the program was outdated a mere six months after it began. And the CBO's recent findings only confirm what others, like the COP, have stated: that Geithner and Obama's tepid homeowner rescue has fallen far short of providing the kind of relief to lift the country out of its housing and economic slump.

We're Still at War: Photo of the Day for March 19, 2010

Fri Mar. 19, 2010 4:03 AM EDT

ANSF, Coalition forces defend village from AAF attack during joi

US Army Soldiers prepare to move from cover during an attack by anti-Afghan forces in the Tantil village in eastern Afghanistan's Kunar province, on March 13, 2010. Photo via the US Army by Staff Sgt. Gary A. Witte.

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GOP Bullies Kid on Health Care

| Thu Mar. 18, 2010 8:59 PM EDT

Unsatisfied with simply denying 30 million Americans health care coverage, crying crocodile tears for the Constitution, and labeling skeptics of their point of view "socialist," right-wing retrogressives have decided they need to up the ante to halt Democratic reforms. They need to bash a kid.

The kid in question is 11-year-old Marcelas Owens, who has become a young public crusader for health insurance reform since his mother, 27-year-old fast-food worker Tifanny Owens, contracted pulmonary hypertension, lost her job due to her poor health, lost her insurance due to her unemployment, and finally died, leaving Marcelas in the care of his grandmother.

In most people's books, that would make Marcelas a sympathetic soul, deserving of compassion and maybe a little assistance. If that's how you feel about it, don't tell Rush Limbaugh, Glenn Beck, Michelle Malkin, or the semiliterates who run this "news" site. McClatchy's Les Blumenthal collected the right-wingers' anti-Marcelas vitriol in a rusty bucket and splashed it out all over the Internet, recording for posterity their emphatic "Yes!" in reply to the question: Are you douchier than a fifth-grader?

As the late sportscaster George Michael used to say, let's go to the tape:

The Right: Weak on Israel, War

| Thu Mar. 18, 2010 5:18 PM EDT

When you spend a lot of time in Iraq as I have—or, alternatively, when you spend a lot of time in the US hanging around certain war hawks who never spent time in Iraq—you're bound to hear about the concept of wasta. It's an Arabic term, one that roughly translates to "pull" or "clout," and it usually refers to one's standing to deal with the local mover-and-shaker sheikhs. But to hear the neocons tell it, wasta is the reason we went to Iraq, the reason we support Israel's most imprudent iron-fist moves, the reason for George W. Bush's cowboy diplomacy: It's that sandy, desert-heat-tempered combination of "old hatreds, confessional violence, ethnic bigotry and a culture of corruption" that only comprehends strength and only respects violence. Thugs like Saddam Hussein, Hamas, and the Al Aqsa Martyrs had wasta in the Arab world, and the only way to spread American- or Israeli-style democracy in the region was to win the wasta war. Hence the original neocon's cry, "peace through strength." The Arab will respect us as soon as he's been "liberated"—or, if necessary, broken—by us. 

Ignore the racism implicit in that worldview for a minute, and just take the neocon thesis at face value. Because there's good news and bad news. The good news is, in some sense, they were right: It turns out sentiment toward the US on "the Arab street" largely depends on how powerful America appears. The bad news is, Arabs think America's wasta is pretty much at an all-time low. And the reason for US weakness is not a Democratic administration: It's the failure of the neocons' grand game.

How do we know? According to Foreign Policy's Mark Perry, Gen. David Petraeus, the chief of US Central Command, had his staff brief Joint Chiefs Chairman Adm. Mike Mullen in January on Arab-Israeli affairs. The point of the presentation, Perry says, was to stress how bad things had gotten:

The 33-slide, 45-minute PowerPoint briefing stunned Mullen. The briefers reported that there was a growing perception among Arab leaders that the U.S. was incapable of standing up to Israel, that CENTCOM's mostly Arab constituency was losing faith in American promises, that Israeli intransigence on the Israeli-Palestinian conflict was jeopardizing U.S. standing in the region, and that [US negotiator and former senator George] Mitchell himself was (as a senior Pentagon officer later bluntly described it) "too old, too slow...and too late."

That the US military is now dipping its feathers in these controversial waters tells you just how far our standing has fallen in the Middle East, and how much of a threat has been posed to our security by neoconservative overreach. The message seems to be that peace can come through strength...but contrary to what Bill Kristol, Charles Krauthammer, and Fox News might have you believe, strength doesn't come from annexing Iraq as a 51st state. Or from rolling over to the anti-Palestinian whims of Israeli Likudniks like Arik Sharon and Bibi Netanyahu. (Our own estimable Kevin Drum the other day expressed his disbelief that Netanyahu could show up Vice President Joe Biden as he did last week in announcing new Israeli settlements in East Jerusalem.) 

Hopefully, Petraeus' concern is also a sign of changes to come in the US-Israel relationship—changes that will truly favor American security. "There are important and powerful lobbies in America: the NRA, the American Medical Association, the lawyers -- and the Israeli lobby," Perry says, "but no lobby is as important, or as powerful, as the U.S. military."  

AFL-CIO (Finally) Endorses Health Care Reform. Will It Matter?

| Thu Mar. 18, 2010 4:37 PM EDT

The AFL-CIO, the nation's largest labor federation, decided to officially endorse the final health care bill today, giving the Democrats another ally in their final scramble for votes. The group had been divided over whether to endorse the final bill due to deep-seated concerns about the excise tax—particularly a last-minute provision that increased the rate of the tax’s increase in 2020.

What finally convinced the group to come on board? The AFL-CIO had successfully lobbied for a delay in implementing the excise bill for non-unionized, as well as unionized workers—which also bought them time to push for further changes. “We have 10 years to change something,” AFL-CIO President Richard Trumka said on a conference call this afternoon. “We intend to go out and say to our members, this is what we've accomplished this is what the bill does, this is not the end of health care reform—we still have room to move and we'll continue to fight.” The group also won a commitment from the White House to pass a separate provision that would require construction contractors with more than five workers to provide insurance, which building trade unions have been pushing for.

You Have No Say About Your Military

| Thu Mar. 18, 2010 2:35 PM EDT

When was the last time you saw the headline, "Cost of [Pentagon-weapons-system-of-your-choice] halved"?  Probably never.  Still, the thought came to mind when this recent Associated Press headline caught my eye: "Pentagon: F-35 fighter jet cost doubles." 

Here's the story behind it:  Since 2001, when an F-35 Joint Strike Fighter was expected to cost an already hefty $50 million, the plane's cost has soared into the stratosphere (despite the fact that the aircraft itself has barely left the ground).  The estimated cost today is $113 million per plane.  Yes, that's per plane.  This supposed future workhorse of the US military is now priced like the planet's most precious gem.  It's also 2 ½ years behind schedule.  Keep in mind that the Marines, the Air Force, and the Navy are planning to buy a combined 2,450 of them for what's now an eye-popping $323 billion.  And if you think the costs are likely to stay in the $113 million range, given the history of Pentagon cost overruns, then I have a nice little national security bridge to Brooklyn I think the US public might love.      

In other words, if all goes well from here (an unlikely possibility), a single future weapons system is now estimated to cost the American taxpayer almost one-third of what the Obama administration's health-care plan is expected to cost over a decade.  You could even think of the Pentagon's weapons procurement process as the health-care system of the national security state.  Its costs just never stop rising.  In fact, the Government Accountability Office pegs major weapons systems cost overruns since 2001 at $295 billion, another near third of the cost of the health-care bill supposedly coming to a vote this week.