In two succeeding articles, the Wall St. Journal recently reported that the large banks at the heart of the current recession, Citibank, Bank of America, and so forth, all have followed the practice of falsifying their capital to loan ratios in the quarterly reports they are obliged to give to the federal banking authorities. They have done so, apparently, by using off-balance sheet maneuvers, like those that Lehman Brothers employed, to "move" many of their liabilities off their balance sheets. By doing so, they make their equity to debt ratio look healthy when in fact it is not.
They claim that in doing so they are adhering to the letter of the law, in that on the exact day in question, the last day of the quarter, they do not have the liability. They also claim that despite the uniformly favorable result for them, these maneuvers happen in the ordinary course of business.
I don't know the details, but on the surface, at least, they are violating criminal prohibitions against filing false reports and conspiring to defraud others (bank examiners, investors). Their technical defense should not hold water; plenty of people have claimed that they adhered to the letter of the law in avoiding taxes, only to have the courts invalidate their action because it had no legitimate business reason other than tax avoidance. I am sure there are many other examples in which the deliberate circumvention of a law and its goals have resulted in criminal prosecutions. As t their second claim, it is so preposterous that it calls out for investigation at the very least. I am waiting for Attorney General Holder to launch a criminal inquiry.
Wednesday, June 02, 2010
Monday, May 10, 2010
Tea Party: the New Black Panthers
As it happens I have been reading "White Dog," Romain Gary's memoir of 1968, when King and Robert Kennedy were assassinated, the Black Panthers were riding high, and students in Paris and elsewhere were revolting. Then, yesterday, I also read Mark Lilla's diatribe in the NY Review of Books, April 29 edition, against the Tea Party. There is a striking resemblance between the anarchic tendencies of the 1968 Left, and the 2010 Teaparty Right. Both think that nihilism is a productive response to the undeniable troubles they see around them. Both are ignorantly idealistic. The Black Panthers and the students of 1968 carried on for ideals of equality, justice, and an end to oppression; the Teaparty Right does so for individual autonomy, at least in Lilla's credible view. While both have been eye-catching and irresistably newsworthy, neither has ever enunciated a plausible program to achieve what they scream for. Each has seemed dangerous, but ultimately works as part of the ongoing parade of entertaining spectacles.
Friday, April 09, 2010
Dishonesty Today
One factor that has rarely been mentioned in the national discussion about the current recession is the rise of dishonesty. There have always been crooks and liars, of course, but for centuries if not longer, lies and thievery have been socially disapproved. In the 21st century United States, however, blatant dishonesty has become commonplace not only by people who are sociopathic, needy, or crazy, but also by society’s leaders—our most important politicians and businessmen, leading corporations, and others whose attainments formerly earned them public respect.
Although it may not be politically correct, I also observe that this normalization of dishonesty is taking place largely under Republican auspices. Obviously, Democrats have their usual complement of crooks and liars, just as Republicans do. But what we are seeing today is something extraordinary. A political scientist friend, deeply immersed in contemporary politics and a former liberal Republican, says that what has happened is the takeover of the Republican Party by the South, and with it the traditional Southern political style which is rooted in dishonesty. He's usually right about such things, but in any event the national success of dishonesty reflects its one-sided nature. If the Democrats used dishonesty as a normal tool of political competition the way Republicans do, they would not be reduced to ineffectual sputtering whenever the Republicans perpetrate another lie. Yet time and again, that has been their reaction to Republican lies. We have seen this with the Swift Boat ads, with Republican propaganda about the healthcare bill, and with their outlandish claims about President Obama, just to mention a few of the better known examples. The Democrats remain perpetually surprised and shocked by such lies, still taking honesty and honor as the norm.
The spread of blatant dishonesty to the highest reaches of private society, which traditionally consists largely of Republicans, has occurred in step with the Republican use of dishonesty for political ends. Republican policies have been highly influential in creating the current atmosphere in which dishonesty is accepted as a normal part of the “game.” For example, George W. Bush’s administration refused to pursue illegal offshore entities and practices that allowed corporations to avoid billions of dollars in taxes, and gutted the enforcement capabilities of the SEC as well as of the EPA, OSHA, the Bureau of Mine Safety, the FDA, the FCC, and the Consumer Product Regulatory Commission.
The current recession traces almost entirely to dishonesty practiced by the largely Republican financial establishment. At its base were the firms that extended mortgage loans to people they knew to be unqualified. They then sold those loans to highly respected financial intermediaries who, with little examination, packaged and sold them to professional investors with unfounded assurances that they were safe, supported by the lies of rating agencies that had examined them only formally, and in some cases hardly understood them. The investors, in turn, falsely assured the pensioners, workmen, and others who depended on their expertise that they were working hard to protect their assets. The investment advisers who got their institutions to buy these securities fought tooth and nail against regulatory requirements designed to provide transparency, and won important victories like preventing the Commodity Futures Trading Corp. from regulating the “shadow” financial structure that had become the largest of these institutions.
Finally, what prompted this note from me was a Wall St. Journal article of April 9, 2010, stating that according to a NY Federal Reserve Bank study, all the major banks have, for the last 5 quarters, submitted false statements about their loan levels, with the falsehood designed to make their riskiness seem less than it truly was. The article states that the false submissions were not criminal in nature since, at the moment of submission, they were technically true. But when Al Capone “proved” that he was not a crime boss because his tax returns showed only a small income, he was convicted of perjury if not of other crimes. Why, then, should a banker escape prosecution for perjury if he reports in a sworn statement that his hands are clean, simply by virtue of handing off his excessive loans for one or two days?
It is time that we start severely punishing the liars, cheats and thieves at the upper levels of society. Let’s make it once again socially disgraceful to engage in such behavior.
Although it may not be politically correct, I also observe that this normalization of dishonesty is taking place largely under Republican auspices. Obviously, Democrats have their usual complement of crooks and liars, just as Republicans do. But what we are seeing today is something extraordinary. A political scientist friend, deeply immersed in contemporary politics and a former liberal Republican, says that what has happened is the takeover of the Republican Party by the South, and with it the traditional Southern political style which is rooted in dishonesty. He's usually right about such things, but in any event the national success of dishonesty reflects its one-sided nature. If the Democrats used dishonesty as a normal tool of political competition the way Republicans do, they would not be reduced to ineffectual sputtering whenever the Republicans perpetrate another lie. Yet time and again, that has been their reaction to Republican lies. We have seen this with the Swift Boat ads, with Republican propaganda about the healthcare bill, and with their outlandish claims about President Obama, just to mention a few of the better known examples. The Democrats remain perpetually surprised and shocked by such lies, still taking honesty and honor as the norm.
The spread of blatant dishonesty to the highest reaches of private society, which traditionally consists largely of Republicans, has occurred in step with the Republican use of dishonesty for political ends. Republican policies have been highly influential in creating the current atmosphere in which dishonesty is accepted as a normal part of the “game.” For example, George W. Bush’s administration refused to pursue illegal offshore entities and practices that allowed corporations to avoid billions of dollars in taxes, and gutted the enforcement capabilities of the SEC as well as of the EPA, OSHA, the Bureau of Mine Safety, the FDA, the FCC, and the Consumer Product Regulatory Commission.
The current recession traces almost entirely to dishonesty practiced by the largely Republican financial establishment. At its base were the firms that extended mortgage loans to people they knew to be unqualified. They then sold those loans to highly respected financial intermediaries who, with little examination, packaged and sold them to professional investors with unfounded assurances that they were safe, supported by the lies of rating agencies that had examined them only formally, and in some cases hardly understood them. The investors, in turn, falsely assured the pensioners, workmen, and others who depended on their expertise that they were working hard to protect their assets. The investment advisers who got their institutions to buy these securities fought tooth and nail against regulatory requirements designed to provide transparency, and won important victories like preventing the Commodity Futures Trading Corp. from regulating the “shadow” financial structure that had become the largest of these institutions.
Finally, what prompted this note from me was a Wall St. Journal article of April 9, 2010, stating that according to a NY Federal Reserve Bank study, all the major banks have, for the last 5 quarters, submitted false statements about their loan levels, with the falsehood designed to make their riskiness seem less than it truly was. The article states that the false submissions were not criminal in nature since, at the moment of submission, they were technically true. But when Al Capone “proved” that he was not a crime boss because his tax returns showed only a small income, he was convicted of perjury if not of other crimes. Why, then, should a banker escape prosecution for perjury if he reports in a sworn statement that his hands are clean, simply by virtue of handing off his excessive loans for one or two days?
It is time that we start severely punishing the liars, cheats and thieves at the upper levels of society. Let’s make it once again socially disgraceful to engage in such behavior.
Wednesday, March 10, 2010
Why Congress Can't Act
The reason Congress cannot act is that bipartisanship is now a term for what happens within the Democratic Party. The Blue Dogs are the new Republicans, and those who call themselves Republicans constitute a new party, the Radicals. They cannot be reasoned with, so their presence in Congress is as though the voters had decided to elect 41 lunatics from an asylum to the Senate, and whatever their number is to the House. Before Reagan, or perhaps Bush I, a bill required just 50 or 60% of the members to pass; a bipartisan goal that was often attainable. Now, however, the bipartisan goal to pass a bill is virtual unanimity, since the Radicals are out of it entirely. What is now impossible in the Senate would become merely very difficult if Reid would restore the true filibuster, or change the rules to prevent it entirely. 50 Senate votes would still require 85% agreement among the liberal and conservative Democrats.
Tuesday, February 09, 2010
As Germany entered the Depression of the 1930s, angry voices began to blame the economic disaster on outsiders: Jews, Communists, foreign conspirators, bankers, and the like. They were increasingly strident; their stupid and incendiary claims were highly newsworthy; their appeal to military force resonated with German tradition; and the simple core message--that the ordinary, hardworking German volk were innocent victims of evil forces--was very attractive to people who never normally thought much about public affairs. So they elected a demagogue named Adolph Hitler.
In the United States today, a similar scenario has been shaping up. Without a tradition of anti-Semitism, or a serious threat from Communism, the alleged conspirators are somewhat different: Terrorists, Moslems the Chinese, liberals, immigrants, and of course bankers. But like their radical predecessors in Germany, America's radical right makes stupid and incendiary claims that capture the media's attention; their love of force appeals to traditional values; and their simple core message--that the ordinary, hardworking middle-class American is the innocent victim of it all--is wonderfully appealing, especially to those unaccustomed to thinking about public affairs.
There are, however, significant differences. Unlike in Germany, the radical right's perspective clashes with important American values. Despite repeated claims to love liberty, their programs obviously trample the Constitution and traditional commitments to human rights. And to a certain degree, the radical right in America had a much larger role in creating the current problems than did Germany's radical right. The current crisis is really the culmination of a decades-long trend that began in California under Ronald Reagan, when an anti-tax movement focused on cutting services to the poor and the lower middle class took hold. Since then, the radical right has repeatedly cut taxes and public services, including regulation, but at the same time ran up huge deficits by spending vastly more on armaments and wars.
In the United States today, a similar scenario has been shaping up. Without a tradition of anti-Semitism, or a serious threat from Communism, the alleged conspirators are somewhat different: Terrorists, Moslems the Chinese, liberals, immigrants, and of course bankers. But like their radical predecessors in Germany, America's radical right makes stupid and incendiary claims that capture the media's attention; their love of force appeals to traditional values; and their simple core message--that the ordinary, hardworking middle-class American is the innocent victim of it all--is wonderfully appealing, especially to those unaccustomed to thinking about public affairs.
There are, however, significant differences. Unlike in Germany, the radical right's perspective clashes with important American values. Despite repeated claims to love liberty, their programs obviously trample the Constitution and traditional commitments to human rights. And to a certain degree, the radical right in America had a much larger role in creating the current problems than did Germany's radical right. The current crisis is really the culmination of a decades-long trend that began in California under Ronald Reagan, when an anti-tax movement focused on cutting services to the poor and the lower middle class took hold. Since then, the radical right has repeatedly cut taxes and public services, including regulation, but at the same time ran up huge deficits by spending vastly more on armaments and wars.
Thursday, December 17, 2009
Requiescat in infernus
Today Obama's personal approval rating has sunk to 47%, a larger percent disapproves of his performance, and nearly 50% more poll respondents reject the healthcare plan than want it. Lieberman and Nelson seem on the verge of scuttling the healthcare bill, Obama's cap and trade law seems DOA, and the merger between the Republican Party and the Teabaggers is being consummated. It seems like a good time to take stock.
As far as I can tell, the Great American Voter (GAV) reasons as follows: (1) The Republicans left the country in the biggest mess since the Republicans last messed up the economy in 1929. (2) Th Democrats have failed to clean it up, thanks to Republican obstructionism. (3) Therefore the GAV should support the Republicans.
It is entirely possible, even likely, that this reasoning will prevail next November, and even more in 2012. Apart from the crazy logic, there may actually be a coherent philosophy behind these developments, and it is worth considering whether, in fact, most of the GAV doesn't actually subscribe to that philosophy.
That philosophy denies that we share a national community in the normal sense of the term. Tony Judt noted in the NY Review of Books, December 17 2009, "And indeed, it is not by chance that social democracy and welfare states have worked best in small, homogeneous countries, where issues of mistrust and mutual suspicion do not arise so acutely. A willingness to pay for other people's services and benefits rests upon the understanding that they in turn will do likewise for you and your children: because they are like you and see the world as you do. Conversely, where immigration and visible minorities have altered the demography of a country, we typically find increased suspicion of others and a loss of enthusiasm for the institutions of the welfare state."
The Republican/Teabagger view sees Americans as a highly diverse federal union whose citizens hold in common only a minimal number of common interests: defense against foreign attack or interstate internal disorder; protection of commercial interests and interstate commerce (but not of citizens from commerce); the creation and maintenance of interstate public works; the management of US government property; the protection and promotion of traditional social values; etc. In this view, many of the federal programs that now exist or are proposed have no legitimacy at the federal level. Social security, medicare and medicaid, welfare, tax subsidies for the poor, and other programs to assist the weak or afflicted are for private charity or local efforts. The federal government's obligations in this regard run only to its own employees or veterans.
In this conception, we are on the national level a competitive and individualistic society in which the successful or lucky ones have no obligation toward the rest. As Margaret Thatcher reportedly said (see Judt, above), "there is no such thing as society. There are only individual men and women and families." Another foundational belief seems to be that largely unregulated businesses will efficiently meet all our needs, or at least the needs of those who count, the ones able to pay, in a free market; and yet another is that a claim for the existence of externalities or interstate consequences must be taken with great skepticism since those who make it have suspect personal motives. The federal government should do no more than is necessary to satisfy the selfish needs that are common to ALL its citizens.
This is a coherent point of view, heavily drawn from libertarian thought, and its basic theory--that government has no business acting where it is unnecessary or unwanted--can hardly be disputed. Unfortunately, it is also premised on a false view of how society, the physical environment, and the world economy now work. It ignores realities that largely negate the effect of purely local action, such as the ease of travel and communication, the interconnectedness of things, the short-sightedness of business, and the impacts of technology. One might compare this view to Newtonian physics: an admirable intellectual achievement, and highly functional under circumstances that prevailed in the 17th century and in some places today; but no longer a realistic or usable framework for understanding or working with the world as we now know it.
As far as I can tell, the Great American Voter (GAV) reasons as follows: (1) The Republicans left the country in the biggest mess since the Republicans last messed up the economy in 1929. (2) Th Democrats have failed to clean it up, thanks to Republican obstructionism. (3) Therefore the GAV should support the Republicans.
It is entirely possible, even likely, that this reasoning will prevail next November, and even more in 2012. Apart from the crazy logic, there may actually be a coherent philosophy behind these developments, and it is worth considering whether, in fact, most of the GAV doesn't actually subscribe to that philosophy.
That philosophy denies that we share a national community in the normal sense of the term. Tony Judt noted in the NY Review of Books, December 17 2009, "And indeed, it is not by chance that social democracy and welfare states have worked best in small, homogeneous countries, where issues of mistrust and mutual suspicion do not arise so acutely. A willingness to pay for other people's services and benefits rests upon the understanding that they in turn will do likewise for you and your children: because they are like you and see the world as you do. Conversely, where immigration and visible minorities have altered the demography of a country, we typically find increased suspicion of others and a loss of enthusiasm for the institutions of the welfare state."
The Republican/Teabagger view sees Americans as a highly diverse federal union whose citizens hold in common only a minimal number of common interests: defense against foreign attack or interstate internal disorder; protection of commercial interests and interstate commerce (but not of citizens from commerce); the creation and maintenance of interstate public works; the management of US government property; the protection and promotion of traditional social values; etc. In this view, many of the federal programs that now exist or are proposed have no legitimacy at the federal level. Social security, medicare and medicaid, welfare, tax subsidies for the poor, and other programs to assist the weak or afflicted are for private charity or local efforts. The federal government's obligations in this regard run only to its own employees or veterans.
In this conception, we are on the national level a competitive and individualistic society in which the successful or lucky ones have no obligation toward the rest. As Margaret Thatcher reportedly said (see Judt, above), "there is no such thing as society. There are only individual men and women and families." Another foundational belief seems to be that largely unregulated businesses will efficiently meet all our needs, or at least the needs of those who count, the ones able to pay, in a free market; and yet another is that a claim for the existence of externalities or interstate consequences must be taken with great skepticism since those who make it have suspect personal motives. The federal government should do no more than is necessary to satisfy the selfish needs that are common to ALL its citizens.
This is a coherent point of view, heavily drawn from libertarian thought, and its basic theory--that government has no business acting where it is unnecessary or unwanted--can hardly be disputed. Unfortunately, it is also premised on a false view of how society, the physical environment, and the world economy now work. It ignores realities that largely negate the effect of purely local action, such as the ease of travel and communication, the interconnectedness of things, the short-sightedness of business, and the impacts of technology. One might compare this view to Newtonian physics: an admirable intellectual achievement, and highly functional under circumstances that prevailed in the 17th century and in some places today; but no longer a realistic or usable framework for understanding or working with the world as we now know it.
Thursday, December 10, 2009
Obama's Nobel Prize Speech
I have heard fine and noble talks, JFK's "ask not" speech, MLK's "free at last" speech, but I believe that Obama's Nobel Prize speech was the greatest of all. It was brilliantly constructed, starting with gracious acknowledgements of his famous and unsung predecessors and of the controversial nature of his own selection at such an early point in his public life. He then used the apparent irony of his selection while leading the US in fighting two wars as the launching pad for a searching discussion of the uses and abuses of war. Recognizing that there is evil in the world, and that nonviolent resistance could not have stopped Hitler's armies, he persuasively made the case for the use of force. But he also made the case for doing so justly, only as a last resort, to the degree necessary, in compliance with the Geneva Convention, and in a way that as much as possible avoids injury to innocent bystanders. This led to another point, that acting to bring about peace is a very difficult task that goes far beyond the mere assertion of its desirability or the blanket condemnation of war. He stated that despite its 60 year history of protecting the world from a 3rd world war, the US can no longer act alone. The changing nature of war requires concerted action if malefactors are to suffer the consequences for their evil behavior. As war has become increasingly hard on civilians it has also become increasingly important to reduce nuclear arsenals, an effort that the President said was the centerpiece of his foreign policy. The President made many other important and thought-provoking points as well. To choose just one example of the brilliance and originality of his thinking, he noted that while we rightly glory in the bravery, accomplishments, and self-sacrifice of the soldiers who fight in war, war itself is Hell. I am writing this before having heard all the rest of his speech, but this was enough. I am proud of our President, and of our nation for having elected him. Whatever the difficulties with democracy, and they are many, the election of Obama and the continuing support for him as he navigates the incredible mess that Bush et al have left vindicate the democratic idea.
Thursday, November 05, 2009
Either We Hang Together or We Hang Separately
The Nov 2009 elections have little significance in themselves, but they do suggest that if the Democrats fail to enact significant healthcare and climate change legislation, they will face severe defeat, Blue Dogs first. With bad candidates and a depressed economy, the NJ and VA Democratic base hardly bothered to vote, leaving the field to right-wing ideologues and people hoping for change, any change. The Democrats had nothing to offer, and their control of Congress made it seem all the worse.
In reality, on the same day as the election, the business news made it clear that the Obama measures to deal with the economy are working, but as the President has repeatedly said, it takes time. It now seems likely that the economy will be visibly improving by the November 2010 elections.
But if the Democrats get distracted by passing uproars manufactured or capitalized upon by Republicans and the broadcast media, they could still lose. There is a repeating pattern here, folks: Republican Presidents screw up the economy, then Democrats spend all their effort and credibility fixing it up again, with Republican opposition forcing them to sacrifice their other agenda goals to that end. Happened to Carter and Clinton, now Obama.
In reality, on the same day as the election, the business news made it clear that the Obama measures to deal with the economy are working, but as the President has repeatedly said, it takes time. It now seems likely that the economy will be visibly improving by the November 2010 elections.
But if the Democrats get distracted by passing uproars manufactured or capitalized upon by Republicans and the broadcast media, they could still lose. There is a repeating pattern here, folks: Republican Presidents screw up the economy, then Democrats spend all their effort and credibility fixing it up again, with Republican opposition forcing them to sacrifice their other agenda goals to that end. Happened to Carter and Clinton, now Obama.
Sunday, September 13, 2009
Preventive Detention
After reading Adam Serwer's good article in the September 2009 issue of The American Prospect, I realize that the fundamental issue in preventive detention is political risk management. Obama can't just release all the detainees who can't be convicted or sent away, because one of them might do something for which the Limbaugh Republicans could beat up the Democrats. If we did not have a Constitution and a Bill of Rights the same reasoning would lead to the detention of half the country, or at least everyone in NY and SF (Limbaugh and Beck presumably excepted). Given the current mad dog nature of the Republican Party's leadership, Obama's best choice is probably what he seems to be doing: trying to make the problem disappear by sending all these people far away.
Wednesday, July 29, 2009
Will health reform pass?
As I write, at the end of July 2009, the fate of Obama's health bill seems uncertain. Listening to public commentary, the most likely outcomes are either outright defeat of anything, or passage of something that just rearranges the deck chairs on the Titanic. But quite possibly something better is being forged behind the scenes; we won't know until we see it.
If the result is a debacle, I believe that it will again illustrate a hard truth about popular democracy. Liberals, and intelligent conservatives, tend to look at trends, forecast future consequences, and advocate action to deal with those consequences. But most voters do not operate that way; their forward vision stops at the tip of the nose. Given the desire of vested interests to preserve the status quo that enriches them, and the persuasive power of propaganda, this voter orientation towards the immediate makes change very difficult. Change happens only when the problems with the present course of action hit home broadly and forcefully. That's why the villainous Bush and Cheney team got close enough to re-election in 2004 that Kerry's blunders put them over the top. While any thinking person could see how terribly they were governing, the robust stock market and high employment at the time kept their evils from hitting home broadly and forcefully enough.
In other words, if the health plan loses, it will not be due to Obama's errors. He has in fact proceeded with enormous care and skill, building on the brilliant Clinton White House's effort and correcting its errors. The loss, if it occurs, will be due to timing: the fact that not enough voters have suffered sufficiently from the present setup, so that they remain susceptible to the mendacious scaremongering of the Republicans and the special interests who wish to maintain the present lucrative system.
Perhaps the loss will politically cripple Obama. Whether it does or not, though, it will mean that health reform must wait a while longer: until more employers drop the coverage, more obese people lose their insurance, and more people are turned away from overwhelmed emergency rooms to die in the streets.
If the result is a debacle, I believe that it will again illustrate a hard truth about popular democracy. Liberals, and intelligent conservatives, tend to look at trends, forecast future consequences, and advocate action to deal with those consequences. But most voters do not operate that way; their forward vision stops at the tip of the nose. Given the desire of vested interests to preserve the status quo that enriches them, and the persuasive power of propaganda, this voter orientation towards the immediate makes change very difficult. Change happens only when the problems with the present course of action hit home broadly and forcefully. That's why the villainous Bush and Cheney team got close enough to re-election in 2004 that Kerry's blunders put them over the top. While any thinking person could see how terribly they were governing, the robust stock market and high employment at the time kept their evils from hitting home broadly and forcefully enough.
In other words, if the health plan loses, it will not be due to Obama's errors. He has in fact proceeded with enormous care and skill, building on the brilliant Clinton White House's effort and correcting its errors. The loss, if it occurs, will be due to timing: the fact that not enough voters have suffered sufficiently from the present setup, so that they remain susceptible to the mendacious scaremongering of the Republicans and the special interests who wish to maintain the present lucrative system.
Perhaps the loss will politically cripple Obama. Whether it does or not, though, it will mean that health reform must wait a while longer: until more employers drop the coverage, more obese people lose their insurance, and more people are turned away from overwhelmed emergency rooms to die in the streets.
Tuesday, July 21, 2009
Health Insurance
Costs and Revenues
For whatever reason, US ideology makes it impossible to have a single payer system. In addition, the major players in the for-profit health system are too powerful to attack directly. That is why we have this repellent spectacle of the Democrats dancing around trying to make fundamental improvements in outcome by snipping and tugging at the system's edges.
Everybody knows that a number of measures, if seriously pursued, would sharply reduce costs. I would start by beefing up enforcement to prevent the endemic fraud in Medicare, Medicaid, and other gov't programs. There are plenty of other good ideas around.
Dealing with malpractice would also have a major impact. The basic problem is that medical communities don't police themselves, government won't, so the lottery-like litigation system is all we have. I suggest that states create boards consisting of retired professionals (doctors, lawyers, accountants, actuaries, etc.) to review every malpractice claim in what would be essentially an arbitration hearing. The board's opinion would be appealable, and if reversed a board with different members would hear the case all over again. A worker's comp system of valuing such intangibles as pain and suffering could be created as well.
One of the striking things about the debate on revenues is how much everyone seems to ignore Obama's clear and simple point: that of all the possibilities, doing nothing is the most expensive. So if the CBO says this plan will "cost" x billion, that's without subtracting the cost of the present system; it's comparing the new cost, not with the higher one currently in place, but with no cost at all. Idiotic!
There are also various ways of generating revenue that don't seem to be on the table at all. For example, increase the Medicare copay. Or, since so much of the cost falls in the last 6 months of life, require a copay by the estates of the deceased.
For whatever reason, US ideology makes it impossible to have a single payer system. In addition, the major players in the for-profit health system are too powerful to attack directly. That is why we have this repellent spectacle of the Democrats dancing around trying to make fundamental improvements in outcome by snipping and tugging at the system's edges.
Everybody knows that a number of measures, if seriously pursued, would sharply reduce costs. I would start by beefing up enforcement to prevent the endemic fraud in Medicare, Medicaid, and other gov't programs. There are plenty of other good ideas around.
Dealing with malpractice would also have a major impact. The basic problem is that medical communities don't police themselves, government won't, so the lottery-like litigation system is all we have. I suggest that states create boards consisting of retired professionals (doctors, lawyers, accountants, actuaries, etc.) to review every malpractice claim in what would be essentially an arbitration hearing. The board's opinion would be appealable, and if reversed a board with different members would hear the case all over again. A worker's comp system of valuing such intangibles as pain and suffering could be created as well.
One of the striking things about the debate on revenues is how much everyone seems to ignore Obama's clear and simple point: that of all the possibilities, doing nothing is the most expensive. So if the CBO says this plan will "cost" x billion, that's without subtracting the cost of the present system; it's comparing the new cost, not with the higher one currently in place, but with no cost at all. Idiotic!
There are also various ways of generating revenue that don't seem to be on the table at all. For example, increase the Medicare copay. Or, since so much of the cost falls in the last 6 months of life, require a copay by the estates of the deceased.
Friday, July 17, 2009
Sotomayor Hearings
These disgraceful hearings have allowed the Republicans to define what constitutes appropriate judicial behavior, framing the issue in an extremely false and childishly simplistic way, as Professor Gerken notes. This has seriously misled the viewing public about judges and the Constitution. These hearings have allowed Justice Roberts’s simplistic and misleading baseball umpire analogy to become the dominant image of judging. If that’s all judging amounts to, as the Republicans have loudly claimed, then why shouldn’t we elect know-nothing judges rather than have high-level committees select qualified appointees? Why should the American Bar Association have a say? Why should they be paid so much? And if big corporations and political ideologues want to waste their millions getting sympathizers elected, what’s the harm? These hearings have publicized and legitimized a bufoon’s idea of the judicial function, in place of the traditional American understanding that sees the judge, particularly the Supreme Court justice, as one who applies to difficult issues a wisdom rooted in high intelligence, broad experience, and deep learning.
Wednesday, June 10, 2009
The Woes of California
Responding to a discussion of CA's woes at http://www.truthout.org/060909T#comment-58675, I wrote:
As another ex-resident who loved CA in the 70s, I have thought a lot about what's up there. The question is not why 12% of voters voted as they did, but why so few turned out. I think there are two factors at work: 1. The voters are silently revolting against the pay and benefits that the public sector receives, enormous, non-negotiable and relentless costs, since the state employee unions won't budge, that can only be reduced by the bankruptcy of the state. I think that's what a lot of people really want. 2. The wealthy who live in their gated communities have not yet been touched by the financial distress hitting everyone else. They have no concept of what the destruction of the state will do to them personally, and they believe, I think mistakenly, that their private measures can largely protect them. Until they get a reality check, CA will continue to see their $ and votes aligned against the public interest.
As another ex-resident who loved CA in the 70s, I have thought a lot about what's up there. The question is not why 12% of voters voted as they did, but why so few turned out. I think there are two factors at work: 1. The voters are silently revolting against the pay and benefits that the public sector receives, enormous, non-negotiable and relentless costs, since the state employee unions won't budge, that can only be reduced by the bankruptcy of the state. I think that's what a lot of people really want. 2. The wealthy who live in their gated communities have not yet been touched by the financial distress hitting everyone else. They have no concept of what the destruction of the state will do to them personally, and they believe, I think mistakenly, that their private measures can largely protect them. Until they get a reality check, CA will continue to see their $ and votes aligned against the public interest.
Thursday, June 04, 2009
Israeli Settlements
Israel’s problem is that, confronted by a terrifying situation, its political leaders and opinion-makers have for decades mostly followed the dictates of their gibbering guts rather than the promptings of their rational minds. Fear-mongering is good politics, but when it leads to treating the Palestinians in needlessly humiliating fashion, blatantly disregarding the UN and other international bodies, and looking to all the world (except its diehard defenders and apologists) like a neighborhood bully, it’s lousy diplomacy. And for Israel that could be fatal, given that time is not on its side. Bush was like an alcoholic’s drinking buddy (”Hey, I’m with you all the way. You want another shot? Go for it!” Obama is Israel’s best friend, not its drinking buddy, and probably its last hope.
Response to WSJ letter attacking Sotomayor
Professor Graglia,
It is a sad thing to see a lawyer, a law professor at that, so strangely distort logic and language as you do in your unfortunate letter. You misquote Judge Sotomayor (she said she would HOPE that...). You compare her noting a lack of Hispanics in heavily Hispanic states to the lack of Italians or Greeks in those same states, a logic that totally escapes me. And you abuse the respect and deference that would normally be due to a law professor when you write for publication such a prejudiced and misleading letter.
For shame, sir,
It is a sad thing to see a lawyer, a law professor at that, so strangely distort logic and language as you do in your unfortunate letter. You misquote Judge Sotomayor (she said she would HOPE that...). You compare her noting a lack of Hispanics in heavily Hispanic states to the lack of Italians or Greeks in those same states, a logic that totally escapes me. And you abuse the respect and deference that would normally be due to a law professor when you write for publication such a prejudiced and misleading letter.
For shame, sir,
Saturday, May 23, 2009
Due Process for "Dangerous" Guantanamo Prisoners
The essence of the problem with detaining allegedly dangerous prisoners is the endless nature of the terrorism war. When we fought Germany we detained prisoners, dangerous or not, until the war ended. No problem. But when the war doesn't end, whether because the opposition is not politically legitimate, or cannot reasonably be expected to control its warriors after a "peace" is agreed (such as, say, Hamas), then fundamental fairness requires some process for judging the dangerousness of battlefield prisoners, and those found to pose risks must be endlessly detained. To release them is suicidal.
What I think Obama wants to do, as do I, is to ensure that the judging process be as fair as possible--due process. But what is due process under these circumstances? We know what due process means for people accused of crimes. And as Sen. Whitehouse recently noted, we even have due process standards for citizens facing endless detainment in civil proceedings. But those standards work here because they apply to people living in a reasonably ordered civil society where there exists a great deal of information about people who have been observed under normal circumstances, and witnesses who can testify under oath. Those circumstances don't usually exist in the case of battlefield prisoners. Consequently, we must create a different set of procedures to provide as much due process as possible under the circumstances of their capture. To summarize: our notions of due process simply don't apply to battlefield prisoners facing endless imprisonment. We need to develop the best notions possible to fit the circumstances of those battlefield prisoners.
What I think Obama wants to do, as do I, is to ensure that the judging process be as fair as possible--due process. But what is due process under these circumstances? We know what due process means for people accused of crimes. And as Sen. Whitehouse recently noted, we even have due process standards for citizens facing endless detainment in civil proceedings. But those standards work here because they apply to people living in a reasonably ordered civil society where there exists a great deal of information about people who have been observed under normal circumstances, and witnesses who can testify under oath. Those circumstances don't usually exist in the case of battlefield prisoners. Consequently, we must create a different set of procedures to provide as much due process as possible under the circumstances of their capture. To summarize: our notions of due process simply don't apply to battlefield prisoners facing endless imprisonment. We need to develop the best notions possible to fit the circumstances of those battlefield prisoners.
Thursday, May 21, 2009
Guns in National Parks
Plainly, no Republicans or friends or relatives of Republicans use the National Parks. Should anyone be shot by some crazed carrier of a concealed gun permit, the Republican senators and NRA lobbyists who made concealed guns in the parks would rightfully be guilty of felony-murder.
Tuesday, April 14, 2009
Roots of the Financial Crisis
Many conservative people share a concern about the recent level of borrowing, and blame excessive borrowing and lax credit standards for the current financial crisis. What seems to trouble them is not just the borrowing itself, but the lack of prudence suggested by the vast increase in borrowing from historical standards. The underlying suggestion is that a greatly increased flow of credit means that there's something seriously wrong; probably, that someone isn't watching the store. But this reading of the data is mistaken. It doesn't take into account the fact that there are excellent reasons why both lenders and borrowers can now expect repayment with far more good reason than was the case a generation ago, and accordingly lend and borrow more than used to be possible. Both lenders and borrowers today enjoy a vastly improved ability to predict financial behavior and to reduce the risk of failure.
It probably sounds idiotic to say this now, but the reality is that even the improvements that make a greater flow of credit reasonable, even those improvements, cannot overcome the kind of faults that created the current mess. Those faults come down to 3: the improper alignment of financial incentives within the financial industry, particular the part dealing with mortgages; the massive growth of key financial institutions, which renders them at the same time "too big to fail" and too big to govern; and the decline of regulation for ideological reasons since Reagan's presidency, culminating of course in the ideologues of W. Bush.
It probably sounds idiotic to say this now, but the reality is that even the improvements that make a greater flow of credit reasonable, even those improvements, cannot overcome the kind of faults that created the current mess. Those faults come down to 3: the improper alignment of financial incentives within the financial industry, particular the part dealing with mortgages; the massive growth of key financial institutions, which renders them at the same time "too big to fail" and too big to govern; and the decline of regulation for ideological reasons since Reagan's presidency, culminating of course in the ideologues of W. Bush.
Monday, December 22, 2008
The Greatest Plunder Ever: a Story
They had planned and tried and failed, and planned and tried and failed, and lain in the weeds and planned and planned some more. Finally, the stars aligned, and by the slimmest of possible margins—one Supreme Court vote—they got in. Everybody assumed that after such a close election their feckless and indifferent Presidential candidate would become the compromiser he had promised to be. But their man in the White House, Dick Cheney, along with his brilliant staff of socioopaths, noting the liberal disarray after the corrupt Supreme Court decision, guided George W. Bush to take an uncompromising, highly ideological position that favored the massive looting that they had been waiting and hoping for.
Part of the looting plan had always been to foster a major war, which created unrivaled looting opportunities for many of them, the aerospace people, the defense contractors, the commodities manufacturers, the consultants and the like. The obvious target was Sadaam Hussein’s Iraq. Not everyone agreed, however, since the confinement tactics pursued by NATO seemed to be working. For months the decision hung in the balance. It was the crafty Cheney who found a solution. While Bush, bored with government and interested in physical conditioning, ignored his security staff and met with his foreign policy advisor only because he admired her good looks, Cheney pored over the intelligence reports. He, along with his pal the Secretary of Defense Donald Rumsfeld, noticed increasing references to terrorists stealing airplanes and attacking US targets with them. But by isolating the experienced and savvy Secretary of State, Colin Powell, keeping the inexperienced and ineffectual National Security advisor Condeleeza Rice confused, ordering the silly Attorney General John Ashforth to keep the FBI out of it, and intimidating the hold-over CIA director George Tenet, they kept the intelligence buried. Then, sure enough, on September 11, 2001 their efforts paid off, and from that date forward the whole nation was primed for war.
It has been estimated that the war in Iraq will end up costing $4 trillion, and apart from expenditures on the salaries of the troops, virtually all of this money has gone to them or their cronies on a cost-plus basis. But that isn’t all! I have been describing the war first, because nothing else lends itself to such massive looting. But the group’s efforts on the domestic front have been both heroic and highly lucrative as well. They have received gifts of the nation’s natural resources, including national forest timber, grazing lands, mining rights, offshore drilling rights, and even reductions in the miniscule royalties that oil companies have to pay for those rights. They have enjoyed enormous tax reductions, reduced or terminated scrutiny of their tax returns, foreign shelters, and accounting tricks, forgivenesses of past fiscal crimes, and virtual complete freedom from regulation in every area, whether health and safety, food, mining, the financial markets, or labor relations. Then there are the actions in violation of the Constitution, and the tawdry efforts to justify them. The catalogue is so long that it becomes tedious to recite.
The result has been to bring the US to the edge of moral and financial bankruptcy. Never in history has any nation so quickly lost its honor among other nations and peoples. Never in history, short of being conquered in war, has a nation lost so much wealth. Can we recover? Will this evil gang of sociopaths be punished in any way?
These are, to some degree, mutually exclusive possibilities. The new President appears capable of using this crisis as an opportunity to do many essential things that would otherwise have proven difficult to do. Such actions promise to make a substantial fiscal recovery possible; more importantly, to restore the health of the society, which in the course of this evil empire has been severely challenged. But if the new administation becomes diverted by pursuing and bringing to justice this evil gang, the redemptive and transformative possibiities of this Presidency will have been wasted. To be sure, if criminal cases can be made, they should be. If the pursuit of these villains costs them their ill-gotten gains and their peace of mind, so much the better. But this matter cannot be a priority, at a time when crisis and opportunity in equal measure require our full attention and effort.
Part of the looting plan had always been to foster a major war, which created unrivaled looting opportunities for many of them, the aerospace people, the defense contractors, the commodities manufacturers, the consultants and the like. The obvious target was Sadaam Hussein’s Iraq. Not everyone agreed, however, since the confinement tactics pursued by NATO seemed to be working. For months the decision hung in the balance. It was the crafty Cheney who found a solution. While Bush, bored with government and interested in physical conditioning, ignored his security staff and met with his foreign policy advisor only because he admired her good looks, Cheney pored over the intelligence reports. He, along with his pal the Secretary of Defense Donald Rumsfeld, noticed increasing references to terrorists stealing airplanes and attacking US targets with them. But by isolating the experienced and savvy Secretary of State, Colin Powell, keeping the inexperienced and ineffectual National Security advisor Condeleeza Rice confused, ordering the silly Attorney General John Ashforth to keep the FBI out of it, and intimidating the hold-over CIA director George Tenet, they kept the intelligence buried. Then, sure enough, on September 11, 2001 their efforts paid off, and from that date forward the whole nation was primed for war.
It has been estimated that the war in Iraq will end up costing $4 trillion, and apart from expenditures on the salaries of the troops, virtually all of this money has gone to them or their cronies on a cost-plus basis. But that isn’t all! I have been describing the war first, because nothing else lends itself to such massive looting. But the group’s efforts on the domestic front have been both heroic and highly lucrative as well. They have received gifts of the nation’s natural resources, including national forest timber, grazing lands, mining rights, offshore drilling rights, and even reductions in the miniscule royalties that oil companies have to pay for those rights. They have enjoyed enormous tax reductions, reduced or terminated scrutiny of their tax returns, foreign shelters, and accounting tricks, forgivenesses of past fiscal crimes, and virtual complete freedom from regulation in every area, whether health and safety, food, mining, the financial markets, or labor relations. Then there are the actions in violation of the Constitution, and the tawdry efforts to justify them. The catalogue is so long that it becomes tedious to recite.
The result has been to bring the US to the edge of moral and financial bankruptcy. Never in history has any nation so quickly lost its honor among other nations and peoples. Never in history, short of being conquered in war, has a nation lost so much wealth. Can we recover? Will this evil gang of sociopaths be punished in any way?
These are, to some degree, mutually exclusive possibilities. The new President appears capable of using this crisis as an opportunity to do many essential things that would otherwise have proven difficult to do. Such actions promise to make a substantial fiscal recovery possible; more importantly, to restore the health of the society, which in the course of this evil empire has been severely challenged. But if the new administation becomes diverted by pursuing and bringing to justice this evil gang, the redemptive and transformative possibiities of this Presidency will have been wasted. To be sure, if criminal cases can be made, they should be. If the pursuit of these villains costs them their ill-gotten gains and their peace of mind, so much the better. But this matter cannot be a priority, at a time when crisis and opportunity in equal measure require our full attention and effort.
Monday, December 15, 2008
The Great Democratic Party Non-response
One of my gripes is the complete inability of ordinary citizens like myself to engage with the Democratic Party on a national level, apart from sending them money. I have sent many letters and emails to Congressmen, Senators, and organizations in and around the Democratic party over the years. I even joined one of them, New Democratic Network, because it seemed to promise just such a dialogue. Membership was quite expensive, and I did get to speak from time to time to its leader. But as for participation, nada. Typical, if more extreme than most, was the non-response of Sen. Schumer’s office. In 2004, a number of the residents in my apartment building pledged to donate $10,000 to a deserving Democrat. I repeatedly tried to contact the senator or someone on his staff, even dangling the $10,000 as bait, hoping that they could send someone to one of our meetings to give us their ideas about who to support. We never got any response whatsoever.
Recently, however, I logged onto Obama’s website, change.gov and was most pleasantly surprised by the significant efforts being made there to solicit public input. While I haven’t yet joined any of the groups on the site, I am hoping that this is an exception to the great Democratic Party Non-response.
Recently, however, I logged onto Obama’s website, change.gov and was most pleasantly surprised by the significant efforts being made there to solicit public input. While I haven’t yet joined any of the groups on the site, I am hoping that this is an exception to the great Democratic Party Non-response.
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