Blog entry

Banksters Renew Their Extortion Threat

Isaiah J. Poole — Tue, 24 Nov 2009 08:52:07 -0800

The banking industry renewed its extortion threat against Congress today: If you create an independent Consumer Financial Protection Agency that is not beholden to the banking industry, we'll make American consumers pay.

That's precisely the threat contained in a recently released set of "talking points" from the American Financial Services Association, which calls itself "the national trade association for the consumer credit industry."

Entitled, "The CFPA: Why It Could Do More Harm Than Good," the document's first argument is, "Consumers will pay more for financial products and services at a time when they can least afford it." Because the agency's costs will be covered in part through fees paid by financial institutions themselves, the association says that bankers will just wrap those costs into the fees they charge for credit cards and loan products.

But that ignores arguments made by the administration as far back as July that the consumer agency could actually reduce regulatory costs by helping to streamline regulatory responsibilities. The line of attack is also a distraction from what's really driving voter anger against the banking industry and the demand for reform: such items as the estimated $31 billion in overdraft charges levied by banks against consumers this year, often without customers realizing that their $5 debit card purchase would result in a $35 bank fee rather than the expected denial because of insufficient funds. That's not a regulatory cost. That's a naked profit grab.

Actions by the Federal Reserve and Congress, as well as public pressure, is forcing some banks to back off. But, faced with new rules in 2010 that will constrain the ability of banks to fleece consumers, the last thing the banksters want is a cop to tell them that they can't foist onto the public new financial products they can't understand that contain trap doors the public can't see.

So the ASFA proposes as its "better way" a suggestion to "empower"—whatever that means—something called the Federal Financial Institutions Examination Council. It's a behind-the-scenes agency primarily tasked with creating "uniform principles, standards, and report forms for the federal examination of financial institutions." The key point is that its five members are drawn from the top echelons of the Federal Reserve board of governors, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, the Office of Thrift Supervision and a representative from a state banking regulatory agency.

It's convenient for the financial services industry to want to park consumer protection at an agency that has had no mandate or expertise in consumer advocacy, comprised of people largely drawn from the banking industry itself or from executives whose allegiances would be to the banking industry when its interests collide with those of consumers. It's the foxes telling us to trust them with the henhouse. It's laughable, as Americans for Financial Reform say in their statement today, but it's also dead serious.

It’s laughable to think that the American Financial Services Association has any idea of the best way to protect consumers when they falsely believe that it’s only the housing market that brought us to this economic precipice. How can they be a credible voice for consumers when so many of the companies they represent are the ones responsible for putting us on this economic precipice?

Today AFSA will tell you all the horrors the Consumer Financial Protection Agency will create, but all they’re really concerned about is their companies’ bottom line. What they won’t tell is the truth about what the CFPA will do to protect Americans’ wallets.

The agency will be a strong watchdog, protecting consumers from the worst abuses of the financial industry. The CFPA will empower consumers by making contracts, such as credit card agreements, short and comprehensible and, in the process, making products easier to compare.

The goal of the Consumer Financial Protection Agency isn’t to put banks out of business or add regulation. It's to guarantee safety, encourage innovation of safer products and reduce federal regulatory layers by carving out existing regulators and moving them to a single fair and accountable agency. So the real question AFSA needs to answer is why they continue to oppose common sense safeguards that would benefit all Americans.

Here's why. The business model that much of the consumer credit industry used to rack up its profits until the start of the Wall Street crash—cheap-looking credit, profligately issued and laden with "gotcha" fees and deceptive come-ons—is broken. (That model is the subject of a documentary that debuts November 24 on the PBS documentary show "Frontline.") Fairness, straightforwardness and transparency would make for more honest financial products and more satisfied consumers in the long run, but it may mean a little more work for the industry, and it will mean that they are not the only ones calling the shots. So instead of working with Congress to fashion an agency that will stand up for consumers (and would work with other bank regulators to safeguard the soundness of financial institutions), the credit industry instead points a financial gun at consumers' wallets, threatening "tighter credit conditions"; "fewer, less flexible options," and higher costs if a true consumer watchdog is in place.

Why that's different from what we have now, with banks that received taxpayer bailouts using those funds to pad their balance sheets rather than lending to jump-start the economy—a point underscored by Shahien Nasiripour's reporting in The Huffington Post—is a mystery. Nonetheless, consumers are right to face down this extortion threat, as well as the millions of dollars the financial services industry is spending on lobbying, and demand that Congress pass a robust Consumer Financial Protection Agency.

Pelosi: No Deficit Reduction Without Job Creation

Bill Scher — Tue, 24 Nov 2009 08:22:03 -0800

On a conference call today with economists who blog and folks who blog on the economy, Speaker Pelosi sought to bridge the gap between progressive proponents of public investment to create jobs, and right-leaning Democrats touting austerity for immediate deficit reduction, by saying: "We will never have deficit reduction without job creation."

The Speaker statement is grounded on the notion that without a growing economy that creates jobs and expands the nation's tax base, the deficit cannot be tamed over the long-term.

At one point on the call, she went even further, stating she wants "a jobs bill that will reduce the deficit."

One possible way to help the bill attain that goal, according to Speaker Pelosi, is to "front load infrastructure" investment, then "pay for it over a five-year period."

She indicated it was a strong possibility that the House jobs bill would include increased aid for states and localities. Such aid was scaled back in the stimulus package by self-described "moderate" Senators, and as a result, many state and local government have cut back services and laid off workers, undermining the impact of the stimulus.

Pelosi also suggested any state and local aid would be "more prescriptive" than before, to ensure that all such aid goes toward saving jobs.

However, since Pelosi instigated the call to encourage economists to propose additional ideas for consideration, it would appear that final decisions on legislation are not exactly imminent, even though it has been reported the House leadership would like to pass a jobs bill next month.

UPDATE: Another dispatch from the Pelosi call from Wonk Room's Pat Garofalo.

Progressive Breakfast: Copenhagen Momentum

Bill Scher — Tue, 24 Nov 2009 06:46:15 -0800

The daily Progressive Breakfast serves up what progressive movement members need to know to start their day.

Obama Will Announce Emission Target To Boost Chances Of Climate Agreement

Obama to announce carbon emissions target in advance of Copenhagen. NYT: "The United States will propose a near-term target for reducing greenhouse gas emissions before the United Nations climate change meeting in Copenhagen next month, a senior administration official said Monday. President Obama, the official said, will announce the specific target 'in coming days.' ... the president would decide shortly whether and for how long he might attend the December climate meeting, which runs from Dec. 7 to Dec. 18 ... The House passed a measure in June that calls for a 17 percent reduction over 2005 levels of the domestic emissions of the gases that contribute to the heating of the planet. A Senate committee passed a bill last month that sets a 20 percent target, but that is likely to be weakened in future negotiations."

Politico notes WH looking for political boost from tripartisan trio: "U.S. negotiators are holding out hope that a bipartisan effort by Sens. John Kerry (D-Mass.), Lindsey Graham (R-S.C.) and Joe Lieberman (I-Conn.) will give them some momentum heading into the climate talks. The trio of senators is expected to release a framework laying out broad principles of their bipartisan proposal before the conference."

Climate Progress reacts: "I take this White House announcement to be another clear message that, yes, they will be insisting on an economy-wide cap-and-trade bill in the Senate "

EU may raise bar on emission cuts. NYT: "Stavros Dimas, the environment commissioner of the European Union, called on the trade bloc on Monday to pledge to cut greenhouse gas emissions by 30 percent from 1990 levels to demonstrate leadership before a landmark climate change summit meeting in Copenhagen in December ... Last year, E.U. countries agreed to cut emissions by a lesser amount, by 20 percent, by the end of the next decade ... 'In my opinion, the 30 percent commitment by the European Union would be better in our negotiations,' Mr. Dimas said. 'The moral pressure would be much stronger on the developed countries and developing countries alike.'"

Senators may have to forgo Copenhagen to vote on health care. The Hill: "This has created a conundrum for senators such as Foreign Relations Committee Chairman John Kerry (D-Mass.) and Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.), who have primary jurisdiction over the [climate] issue and were planning to attend the summit."

Danish ambassador raises expectations, lays out benchmarks for success, in Green Inc.: "Yes we can reach a strong, comprehensive and global agreement next month ... The overall aim ... will be to conclude a binding agreement that will set the path to limit global warming to a maximum of 2 degrees Celsius ... [the agreement] will contain precise language of a comprehensive political agreement covering all key issues: Commitment of developed countries to emission reductions and of developing countries to actions. Strong provisions on adaptation, finance and technology, including upfront finance for early action. In addition, there will be underlying annexes outlining the specific commitments of individual countries. We want numbers on the table in the agreement in Copenhagen."

Grist's Geoffrey Lean says Copenhagen has regained momentum: "National leaders have rushed to say they are going, elevating it to the status of a major summit. More and more commitments to action are coming in, from both developed and developing countries. And there are signs that even the United States may put an, albeit provisional, offer on the table. It has all been enough to cheer up the phlegmatic Yvo de Boer, who ... is in charge of the talks. Last month he was sounding downbeat, but now he says: 'There is no doubt in my mind that (the meeting) will yield a success.'"

Obama meets with India PM Singh today. Bloomberg: "Also on the agenda today will be climate change, where the Obama administration has been pushing the world’s fourth-biggest polluter to agree to binding emissions curbs. Singh has said India isn’t ready to set an emission- reduction target, as the nation still has a per-capita output of greenhouse gasses far lower than that of developed countries. Last night, he called negotiations on the climate treaty 'more difficult than we would have liked.'"

More evidence the U.S. Chamber speaks for a narrow slice of right-wing executives. GreenWire: "The U.S. Chamber of Commerce often says it speaks for 3 million members, businesses both large and small. What it doesn't promote as readily is that 19 supporters last year provided a third of the trade group's total revenue ... The chamber did not release the names of those supporters."

Afghan Announcement Dec. 1, As Cost Concerns Heighten

McClatchy reports on expected Dec. 1 announcement of Afghanistan strategy: "President Barack Obama met Monday evening with his national security team to finalize a plan to dispatch some 34,000 additional U.S. troops over the next year ... Obama is expected to announce his long-awaited decision on Dec. 1, followed by meetings on Capitol Hill aimed at winning congressional support amid opposition by some Democrats ... the commander of the U.S.-led international force in Afghanistan, Army Gen. Stanley McChrystal, could arrive in Washington as early as Sunday to participate in the rollout of the new plan, including testifying before Congress toward the end of next week. Secretary of Defense Robert Gates and Adm. Mike Mullen, the chairman of the Joint Chiefs of Staff, and U.S. Ambassador to Afghanistan Karl Eikenberry also are expected to appear before congressional committees ... The administration's plan contains 'off-ramps,' points starting next June at which Obama could decide to continue the flow of troops, halt the deployments and adopt a more limited strategy or 'begin looking very quickly at exiting' the country, depending on political and military progress, one defense official said. 'We have to start showing progress within six months on the political side or military side or that's it,' the U.S. defense official said."

NYT on possible Dem backlash: "White House officials are bracing for opposition in Mr. Obama’s own party ... Mr. Obey and other senior House Democrats introduced legislation last week to impose a surtax beginning in 2011 to cover the costs of the wars in Afghanistan and Iraq. While the legislation has little chance of enactment, it underscores the frustration among Democratic lawmakers and the pressure Mr. Obama is under to outline a clear exit strategy when he announces his plan for Afghanistan."

WH budget director participated in last night's war council meeting reports Politico.

Jobs, Jobs, Jobs

3Q GDP estimate revised downward by Commerce Dept. this AM, from 3.5% to 2.8%

The Hill on the work of the House "jobs caucus:" "[Rep. Marcy] Kaptur [D-Ohio], Rep. Candice Miller (R-Mich.) and Rep. Bobby Rush (D-Ill.), the top three members of the Jobs Now Caucus, have all said they’re open to using some of the roughly $600 billion left in stimulus money for new programs targeted specifically for job creation. Miller floated the proposal during a news conference last week introducing the caucus. Miller supports redirecting stimulus funds toward more infrastructure projects. When asked about using remaining stimulus money, Rush, the group’s chairman, said that the caucus would consider that idea along with others. Kaptur said she would be open to using any funds left over from the stimulus or the $700 billion Wall Street bailout."

HuffPost's Ryan Grim reports some Dems looking at direct hiring of temp workers, other Dems skeptical: "here are much more efficient ways to create jobs -- or prevent them from being lost -- such as direct aid to states that would otherwise layoff teachers, cops, firefighters and bureaucrats. That doesn't require creating a new bureaucracy, it's just a matter of cutting the check. 'Most economists are not sure that [CETA] works as well as some other things that they think would be better, like infrastructure investment and assistance to the states, which helps them retain jobs,' said [Rep. Steny] Hoyer." Wonk Room's Pat Garofalo supportive: "While I would prefer a straight, WPA-style program (both for efficiency and accountability purposes), instead of a public-private partnership, it’s encouraging to see that Congress is finally willing to put such a plan on the table, albeit far later than it should have. There’s no reason that direct job creation — particularly for young people — has been avoided for so long."

Now we can all rest easy. Newt to host his own jobs summit. CNN: "Former House Speaker Newt Gingrich will kick off a series of town halls on jobs next month, one day before President Barack Obama holds a jobs forum at the White House. Gingrich's American Solutions organization announced Monday that Gingrich will hold what it calls a 'real jobs summit' in Cincinnati, Ohio, followed by another the next day in Jackson, Mississippi."

Bank of America eager to repay TARP funds, feds making it wait reports Charlotte Observer.

AARP and AMA To Debunk Smears, Strengthen Senior Support

The Treatment's Jonathan Cohn on a new truth squad campaign from AARP and AMA: "Interest group endorsements aren't always as important as they might seem, but veteran political operatives I know all seem to think these two groups really do have a lot of sway over the way seniors think."

Wonk Room crystalizes savings for families from health care reform: "Under Senate Bill, Families Would Pay 25% Less For Health Care In Individual Market"

FireDogLake's Jon Walker finds Sen. Robert Menendez supporting the trigger compromise: "Let’s make this clear for Sen. Menedez. Supporting a 'trigger' is no different than supporting the elimination of the public option."

Time on Sen. Casey' role in finding an abortion compromise: "Casey is working on an amendment, though it might not be the one ... the U.S. Conference of Catholic Bishops ... might hope for. Casey's amendment would boost services to pregnant women to help educate them on their choices. 'I think it would help a lot of folks on both sides feel more comfortable about the bill,' Casey says. That certainly won't go far enough for pro-life advocates who say the current language in the Reid bill — a version of the separation of funds idea — is 'an enormous disappointment ... " as the U.S. Conference of Catholic Bishops wrote in a letter to the Senate last week. While Casey is speaking with other Senators on the issue and is considering other amendments, he's 'not drawing any lines in the sand,' he says..." Politico reports Catholic bishops-backed amendment does not have Senate sponsor yet.

The Hard Things We Elect Them To Solve

Natasha Chart — Tue, 24 Nov 2009 00:03:04 -0800

Sen. Claire McCaskill said last week that the Senate wasn't going to tackle the Clean Energy Jobs and American Protection Act this year because it would be "really, really hard." If the Senate doesn't handle it this year, will they deal with it in an election year? I think everyone working in progressive politics has heard the 'it's an election year' excuse for why something terribly important can't be done.

While McCaskill's comment in particular was frustrating, she has a lot of colleagues in the Senate who obviously feel the same way. So I'd like to talk about some of the hard things people who aren't Senators are facing that the CEJAPA legislation could begin fixing.

Earlier this year, a report came out on how the bottom 15 percent of the work force was having its wages stolen to the tune of $2.9 billion per year in, if you can believe it, three US cities. Workers in Chicago, Los Angeles and New York City are getting almost $3 billion dollars per year stolen from them by their employers. Workers can try to fight wage theft, but they can lose their jobs in the process, and face having to fight court battles against employers who lie and falsify records.

This means billions taken out of the pockets of people with what economists call a high marginal propensity to spend. In other words, a lack of good jobs has stripped our society of worker protections, upward pressure on working conditions and owed wages that would otherwise have been boosting our struggling economy in these difficult times.

Spurred by that story and knowing that real wages have not increased for the typical worker in over 30 years, I looked at the difference between the typical worker's economic value and median household income. Half the households in the US in 2006 made at least $15,185 (or about 24 percent) less in total, pre-tax income than the value added to the economy by one average worker.

That's not going to have gotten better in a climate of shattering unemployment, poor access to health care and increasing hunger among American households over the last two years.

Speaking of climate, scientists' concerns over the state of our planetary life support system are growing. While the scientific community was hopeful even three years ago that we could hold warming to 2 degrees Celsius, a global temperature increase that would already mean the loss of the Arctic sea ice and heat waves that might end corn production in the US Midwest, more of them are seeing signs that a business-as-usual approach will get us 6 degrees Celsius in global warming. If 6 degrees of warming happen, not only will many coastal cities go under water, but the North American and Eurasian temperate zones could become uninhabitable.

As some 350.org activists wrote, "There is no Planet B."

In keeping with the generally expected trends of more extreme weather, the US now faces serial regional droughts predicted to get much worse and already interfering with our energy supply, the UK is worried more flooding will follow the record downpours they're experiencing, Australia is still on fire as the dry heat waves that sparked fires earlier this year and last year continue. Right now, climate disruption is having a brutal effect on the world's poorest 1 billion people, mostly women, mostly farmers, who are seeing their livelihoods and community standing erode further as erratic weather makes it harder to feed their families.

Not only do each of these stories mean countless personal hardships, but the economic devastation they represent guarantees that they will be followed by yet more such tragedies, more families unable to provide for their basic needs or get life-saving help for loved ones.

When we are well and prosperous, we are each other's trading partners. When we are poor and desperate, not so much.

Which is why countries like the US who are disproportionately responsible for global emissions have an ethical obligation to try solving the humanitarian crises they face inside their borders without worsening the ones they contribute to outside their borders. Stepping up clean energy jobs programs that train people for family-wage careers in wind and solar technology shouldn't be seen as just a good idea, or a nice idea, but a necessary one. Policymakers also shouldn't be distracted by expensive fossil fuel boondoggles like doubling down on our reliance on natural gas, but should look to recreating a functional electrified rail infrastructure (pdf) which will become a progressively cleaner means of transportation as the electric grid transitions to alternatives.

The world can't wait, and neither can Americans who need good jobs and fair pay. Our leaders need to step up and correct these problems responsibly, which they were hired to do by a public that is increasingly too sick, broke and tired to keep hounding them about it all the time.

The Senate needs to do its duty by the planet and their voters. They need to start cranking the gears down on emissions and get America back to work with all possible speed.

Billionaires for Wealthcare thank Sen. Grassley, Sen. Corker, and their faithful tea partiers

Alex Lawson — Mon, 23 Nov 2009 20:23:20 -0800

Without the Koch money and buses,The Tea Partiers were able to muster about 30 people to rail against things. The Billionaires for Wealthcare joined the Tea Partiers in what was otherwise a disappointing day for them.

Over at StarkReports.com, Mike Stark has some great coverage of the Bilionaires for Wealthcare's with Sen. Corker and Sen Grassley.

I arrived at the Senate side of the Capitol at around noon and ran into the Billionaires for Wealthcare again. They attempted to join their “employees” in the Tea Party protest, but the Capitol Police thought it best if they kept the two groups separate. As time passed, it really did seem like the 5-6 Billionaires were a whole lot more exercised than the tea-partiers. The Billionaires were that loud… I’m not certain what occurred after I left, but while I was with them, the group was able to thank two of their “business partners” in the Senate, Bob Corker (R, TN) and Chuck Grassley (R, IA) in person. Corker seemed happy to see them, even thanking the Billionaires for being there; Grassley seemed a little less enthusiastic.

You can see some other great videos from that long day in the Senate here.

H1N1 & My Famiy

Terrance Heath — Mon, 23 Nov 2009 12:33:11 -0800

We'd talked about it earlier in the week, but hadn't really made a definite decision to go. Then, Sunday morning I came downstairs to find this Washington Post story on the computer monitor.

On Wednesday, Oct. 7, 6-year-old Heaven Skyler Wilson dragged herself off the school bus that dropped her in front of her home on a rural road in Jetersville, just south of Richmond. The little girl, who had never had so much as an ear infection in her life, was pale and feverish and complained of an upset stomach.

The next day, Heaven's grandmother, Pat Sparrow, took her to a nearby clinic. Heaven, usually a bright, bubbly girl with blond pigtails, dimples and effusive energy, had a sore throat and a 103-degree temperature. The doctor swabbed her for the flu, and the test was positive.

It was just something going around, Sparrow said she was told. The doctor told Sparrow to take Heaven home, give her Tylenol and chicken broth, and let her rest.

By the next morning, Heaven couldn't breathe. Sparrow called 911.

...Two weeks later, on Oct. 21, ravaged with double pneumonia and a staph infection that deprived her brain of oxygen, Heaven was disconnected from the respirator. She lived for four minutes.

At 11:18 p.m., Heaven died in the arms of her mother, Sara Wilson. "You never heard such an awful scream from someone who loved her child so much," Sparrow said, her voice shaking.

He was already packing the kids lunches at that point. So I knew that after swimming lessons, we'd be headed to the H1N1 vaccine clinic held this Sunday in Montgomery County. The end of our H1N1 saga — that is, the saga of getting the kids vaccinated — was finally in sight. And, as my husband said when he asked if I saw the article, "You just want to know you've done everything you can to protect your children."

But, until Sunday, there wasn't much we could do.

It's been months. First, Parker's school was going to have a vaccine clinic — appropriate since at least a few children at his school (that we know of) had come down with H1N1. Not to mention that some kids at Dylan's daycare had it too. But the school clinic was cancelled due to a shortage of the vaccine.

We called the kids' pediatrician and were told that they had the nasal spray vaccine. That would would work for Parker, but Dylan was too young. Then we got the kids there only to find out that they had the nasal spray for the regular flu virus. Not H1N1. There was a swine flu vaccine clinic earlier, but we weren't able to make it in time, and we found out later the if we had made it we'd have had to contend with long lines and chaos.

BETTY ANN BOWSER: That pretty well summed up the situation outside a Montgomery County public health clinic in suburban Washington, as some 2,000 area residents lined up to get vaccinated against the H1N1 virus.

It's a scene playing out across the country, demand outstripping supply. It was a particularly dramatic at this Rockville, Maryland, clinic today, as lines snaked around the building, through the parking lot, and down the block.

Within minutes of opening its doors, health care officials let the crowd know that swine flu shots were going fast to the people most at risk: pregnant women, children under the age of 2, and people with underlying health conditions.

And probably would have gone through that only to have them run out of vaccine.

The only thing more infuriating that the wait was learning that my kids would've had the vaccine by now, if they worked on Wall Street.

While thousands of at-risk Americans wait, some big Wall Street banks have already secured the hard-to-find H1N1 vaccine for their employees.

Building on a story that BusinessWeek broke, NBC reports that employees at the New York Stock Exchange, bankers at Goldman Sachs and Citigroup, and employees at the Federal Reserve have all received swine flu vaccine doses to administer to their employees.

In particular, NBC reports that Goldman Sachs has received 200 doses of the vaccine -- the same amount as Lenox Hill Hospital in New York. Wall Street banks, like many other companies, put in requests for the vaccine but seem to have had something of a leg up on securing doses.

Dr. Nancy Schnyderman, NBC's chief medical editor, chimed in on this seeming disparity:

"I think they probably played by the rules, there are corporations all over the country who put in there dibs...But, what a sore eye for Wall Street. Wouldn't have been lovely if they had said, look we put it in our dibs, we played by the rules, but we're going to donate our 200 doses."

Most infuriating, perhaps, is the idea that the reasons for the shortage are some kind of mystery.

County health departments around Maryland are receiving doses of the 2009 novel H1N1 vaccine and administering it to people in target groups, but the supply is still not what health officials would like it to be, and the reasons for the continued slow distribution pace aren't entirely clear.

"(We) have not yet gotten to the point where we're turning that trickle (of vaccine) into a stream, and certainly not at the point where we're turning that stream into a river," said David Paulson, spokesman for the Department of Health and Mental Hygiene.

Earlier this year, health officials were optimistic about having sufficient supplies of vaccine for everyone who wanted it, but their initial estimates now seem to have been greatly overestimated.

A shortage has caused vaccine seekers to wait in long lines, while others have been turned away. Vaccine clinics in Montgomery County at the end of October closed less than an hour after opening when demand far outpaced supply.

Or perhaps it's that the shortage is the result of some kind of government mix-up, or even Obama's fault (by the same congressmen who voted against an appropriations bill that contained special funding to fight H1H1, because they didn't want to vote for Cash for Clunkers).

Comments on news stories and blog posts usually include a few reading "This is the face of government-run health care." The truth is, this is what you get with the private sector handling public health.

According to Health and Human Services Secretary Kathleen Sebelius, the government was misled by these companies, which failed to report manufacturing delays as they arose. Her department, she says, was "relying on the manufacturers to give us their numbers, and as soon as we got numbers we put them out to the public. It does appear now that those numbers were overly rosy."

If, in fact, there's a political parable here, it's about Big Government's sweetly trusting reliance on Big Business to safeguard the public health: Let the private insurance companies manage health financing; let profit-making hospital chains deliver health care; let Big Pharma provide safe and affordable medications. As it happens, though, all these entities have a priority that regularly overrides the public's health, and that is, of course, profit—which has led insurance companies to function as "death panels," excluding those who might ever need care, and for-profit hospitals to turn away the indigent, the pregnant, and the uninsured.

As for Big Pharma, the truth is that they're just not all that into vaccines, traditionally preferring to manufacture drugs for such plagues as erectile dysfunction, social anxiety, and restless leg syndrome. Vaccines can be tricky and less than maximally profitable to manufacture. They go out of style with every microbial mutation, and usually it's the government, rather than cunning direct-to-consumer commercials, that determines who gets them. So it should have been no surprise that Big Pharma approached the H1N1 problem ploddingly, using a 50-year old technology involving the production of the virus in chicken eggs, a method long since abandoned by China and the European Union.

Chicken eggs are fine for omelets, but they have quickly proved to be a poor growth medium for the viral "seed" strain used to make H1N1 vaccine. There are alternative "cell culture" methods that could produce the vaccine much faster, but in complete defiance of the conventional wisdom that private enterprise is always more innovative and resourceful than government, Big Pharma did not demand that they be made available for this year's swine flu epidemic. Just for the record, those alternative methods have been developed with government funding, which is also the source of almost all our basic knowledge of viruses.

So, thanks to the drug companies, optimism has been about as effective in warding off H1N1 as amulets or fairy dust. Both the government and Big Pharma were indeed overly optimistic about the latter's ability to supply the vaccine, leaving those of us who are involved in the care of small children with little to rely on but hope—hope that the epidemic will fade out on its own, hope that our loved ones have the luck to survive it.

You'd think the meltdown and the bailout would have been a lesson to the government about trusting big business with the public good. And in the midst of a health care debate, it's worth noting that millions of Americans who had the greatest need for the vaccine had to wait for it and continue to wait for it, while the highest bidders (Wall Street) gets waved to the front of the line. More personally, my kids — and thousands like them — have been waiting while Wall Streeters got their shots first. Had I known, I'd have put them in business suits and taken them to New York to try passing them off as brokers. (Junior Associates, maybe? The very, very new guys from accounting?)

Speaking of lines and waiting, we were indeed among the hundreds waiting in line for the vaccine on Sunday.

The Centers for Disease Control says cases of the swine flu are decreasing, but it's still asking people to get vaccinated. Hundreds tried to do that Sunday at a vaccination clinic in Montgomery County (web | news) .

Some people said it was a never ending line for the first weekend clinic in Montgomery County. Hundreds of people spent part of their Sunday filling the Montgomery County campus in Rockville hoping to get the mist or shot. The vaccine was offered to those considered to be high risk, including anyone age six months to 24 years, pregnant women and people taking care of young children.

For Suvita Melehy and her family, finding a place to get the H1N1 vaccine, hasn't been easy.

Suvita Melehy said, "We have been looking for a long time to try and find some place that we would be able to give them the vaccination."

After a few anxious hours, they were finally successful at getting the vaccine.

The wait turned out not to be so bad. We raced over after swimming lessons to find a depressingly long line. After parking the car, we raced to get to the en of the line, with the hubby carrying Dylan and me bringing up the rear along with Parker. The hubby grabbed the necessary forms while I made Dylan a bottle and gave Parker the PB&J we'd packed for him. Then I went in search of the volunteer who'd been handing out clipboards and pens (to fill out the forms).

By the time I got back, we heard the two hour wait was actually more like an hour. Fortunately, that was correct. Within an hour, we were in the building and from there, it was a short wait to get the kids vaccinated. I don't know how chaotic the previous clinic was. (Though I've heard armed guards were present at the earlier clinic, I only saw a few police officers on Sunday.)

Based on what I saw, either the county government learned from the mistakes of the previous clinic, or perhaps government is perfectly capable of distributing a vaccine once if finally get it from the producers. I can only imagine that perhaps the shortage (and the ensuing parental panic) might have been less intense (and less of a surprise) if the government had more say in the production.

Why would parents be anxious? I'll refer you again to the Washington Post story above. We want to do everything we can to protect our children. But when it comes to something like H1N1 — or toxic toys in the toy box, or e. coli in the grocery cart — we can't do all that much. We can button up over coats, hand out more chewable vitamins, tell our kids to cover their coughs and sneezes (and just hope their classmates do the same), insist our kids wash their hands (and wash ours) every hour on the hour, and just hope our kids don't get sick — or that they can get treatment if they do get sick.

But we don't want them to get sick. Wanted them to get the vaccine.

And they did. Parker was nervous, but very brave and only winced a little as the needle went in and came back out so quickly he wasn't sure it was over. Dylan's vaccine happened so fast that he didn't have time to react until it was over (partly because Parker and I were doing our best to distract him). With that, I became the only member of my family (being over 24, under 64, not a health professional, and not having a chronic condition) who hasn't gotten the vaccine. My doctor's office has a sign on the door saying they don't have the H1N1 vaccine and don't know when they're going to get it. So I wait. That fine, so long as my kids aren't still waiting.

After wiping a few tears, and putting jackets back on, we went back to the car and Dylan promptly fell asleep on the way home. My husband and I breathed a sigh of relief. We're not entirely out of the woods. Both boys will need follow-up vaccines in 28 days in order to get the benefit of the vaccine. They have a pediatrician's appointment between now and then. I just hope their doctor gets the vaccine, and has it to give to them.

After all, you want to know you've done everything you can for your children, and that when you do all you can they will be able to get the help they need.

South Korea Trade Deal A Bad Deal

Clyde Prestowitz — Mon, 23 Nov 2009 11:04:12 -0800

In pledging to push for congressional passage of a U.S.-Korea Free Trade Agreement, President Obama is showing his inexperience as well as the "no change we can believe in" attitudes of his economic advisers.

Like China, Korea has an export-led, neo-mercantilist economic growth strategy. Each time the United States has negotiated trade agreements with these kinds of economies, it has wound up with dramatically higher imports and only small, if any, gains in exports. This is because the U.S. and the export-led economic systems are asymmetrical and largely incompatible.

Export-led economies don't want imports except of the raw material and components necessary to produce their exports. There are many ways to impede imports other than tariffs and quotas. In Korea, for example, antitrust enforcement is very weak. Large chaebols like Samsung and Hyundai control much of the distribution chain. So even if tariffs are zero, foreign exporters may not be able to find distributors to carry their products. Or take intellectual property: The best treaty language in the world for protection of intellectual property won't protect it if the nationalistic court system doesn't enforce the law.

A high-ranking Korean official recently admitted to me that the conclusion of the free trade deal between the U.S. and Korea would not result in any significant increase in U.S. exports to Korea.

Some are warning that the recent conclusion of a free-trade deal between the European Union and Korea will put the U.S. at a disadvantage in the Korean market. I'm not very worried about this. The Europeans are unlikely to gain much benefit from the deal and I'd be willing to bet that Korean exports to the EU will climb much more rapidly than EU exports to Korea.

If the president really wants to do a deal with Korea, then let us do a really meaningful deal which would include antitrust enforcement, currency manipulation, truly equal treatment in terms of distribution availability, buy-national policies, and investment incentives. Indeed, let's be bold and propose not a free-trade agreement, but an economic union under which conditions for all market participants would be exactly the same.

China: Smart Intern, Stupid Question

Eric Lotke — Mon, 23 Nov 2009 10:56:08 -0800

A really smart student intern I’ve had the privilege of working with (Jonathan Flack, GWU 2010) asked a really stupid question. “Why,” he asked, “Do we give China everything it wants? Why don’t we challenge them?”

This intern knows what’s going on. He knows about our $2 trillion trade deficit, the manipulation of the Yuan, and dumping of steel pipes in the US markets. Of course, he also knows about human rights and Tibet. But most importantly, he knows that economically China is eating our lunch.

He wants to know why our government doesn’t do something about it. He wants to know why we don’t take them on, rather than giving them the Olympics.

It didn’t take long for him to understand the answer. China isn’t the only winner in this U.S. trade imbalance. US corporations win big too.

-- Nike opens up sweat shops, makes sneakers in China for cheap, and sells them in America for $90 a pair. Who wins? Nike.

-- Nortel and Sun help China develop web censoring equipment. Who’s it good for? Nortel and Sun.

Our approach to China sadly indicates whose side our government is really on. The people need change. Big Business likes the status quo. The Obama administration is wrestling with priorities. Even my intern sees who’s losing.

————
PS: What if we don’t change the status quo? Check out my novel, 2044. 2044 starts where George Orwell’s 1984 left off. The problem isn’t Big Brother; it's Big Brother, Inc.

China is Unhappy with Spy Label

Steven Capozzola — Mon, 23 Nov 2009 10:03:38 -0800

The Associated Press reports that China has criticized last week's U.S.-China Commission (USCC) report for asserting that Chinese spies are aggressively stealing U.S. secrets. Beijing warns that the report is "full of prejudice" and that it could damage U.S.-China relations.

This is laughable. Not only are China's espionage, cyber attacks, intellectual property theft, piracy, and counterfeiting all widely documented, but Alliance for American Manufacturing (AAM) Senior Analyst Kerri Toloczko can relate her own personal experiences with Chinese spying. A former USCC Comissioner, Toloczko's home computer has been hacked numerous times by China--just one consequence of her Congressional appointment to the USCC. Toloczko reports that other USCC Commissioners have also endured such hacking.

Beijing may not like being called a spy, but it's no exaggeration to say that China is guilty of cheating on many, many fronts. And until a tough line is taken against their bullying, nothing will change.

The Insincerity Of The Public Option Haters

Bill Scher — Mon, 23 Nov 2009 07:41:10 -0800

When Sen. Joe Lieberman first announced he would filibuster any health care bill with a public option, I noted that he lied, falsely calling the public option an "entitlement program" that would be "trouble ... for the national debt." In fact, the public option is an "option," not an entitlement, which would help our federal government save money.

Yesterday on Meet The Press, Lieberman didn't exactly lie, but deployed -- as his Senate colleague Al Franken coined in his old radio program's "Wait, Wait, Don't Lie To Me" game show segment -- the "Weasel."

And Lieberman's Weasel brightly illuminates the blatant insincerity on the part of the crusaders against the public option.

Lieberman said on Meet The Press:

[The public option] won't even lower the cost of health insurance, which the advocates said it originally would, because the Congressional Budget Office has now said to us that the public option in Senator Reid's bill will actually charge more for insurance than the average charge by health insurance companies.

Yes, it's true that the CBO estimates that Reid's version of the public plan would end up offering premiums that are "somewhat higher than the average premiums for the private plans" it would compete against in the proposed health insurance "exchanges."

But Lieberman willfully leaves out two key pieces of information.

1. All insurance premiums would be reduced. The CBO also concluded that Reid's reform package, including the public option, would reduce the overall average premium for all plans in the exchanges, public or private. An earlier CBO report of the similarly structured House public option determined the mere existence of a public option "would place some downward pressure on the premiums of private plans".

2. The public option was weakened to appease insurance industry defenders like Lieberman. All year long conservatives, and some alleged "moderates," have accused the public option of being a Trojan Horse intended to decimate private insurance, not compete with it.

To reassure critics, both the House and Senate versions rejected the "robust public option" we at Campaign for America's Future originally championed, in which the public option could fix reimbursements to health care providers at rates akin to Medicare, currently lower than what private plans offer.

The Congressional Budget Office agreed that such a structure would provide more competitive pressure and cut more costs, without undermining the private insurance industry -- only an estimated 4 million in our nation of 300 million would end up choosing the Senate's version of a public option.

But right-leaning Dems continued to abandon their supposed interest in reducing the deficit to protect the insurance lobby, and congressional leaders had no choice but to offer a weaker version, which couldn't fix rates, but would have to negotiate with providers just as private plans do.

While CBO said the weaker version wouldn't save as much money, it still saves some and, as noted above, helps reduce premiums overall.

How does Lieberman respond to winning such a concession? He spits on it.

He twists the CBO analysis. He pretends "advocates" were misleading about the public option's potential when it was weakened to appease myopic politicians like him. He makes the completely contradictory argument that public option premiums that are a little higher than private plans somehow constitute a devastating threat to his insurance company CEO constituents.

Surely he's read the CBO report. So he knows he's a weasel. He knows he does not have a sincere argument against the public option, and he is merely shilling for the insurance industry. Which makes it incredibly difficult to deal with him, and the political reality is, his vote is needed.

But if the non-insurance industry CEO constituents of Lieberman, and those of the other holdouts Sens. Ben Nelson, Mary Landrieu and Blanche Lincoln, hold their Washington representatives accountable for their insincere arguments, those Senators may recognize that there are more people in their states worried about skyrocketing health care costs than there are CEOs worried about skyrocketing health care profits.