Any chance President Obama has a plan for his administration other than capitulation to the Greed-and-Selfishness Right?

Pat Bagley, in the Salt Lake Tribune [click to enlarge]

"It's hard to avoid the sense that a crucial opportunity is being missed, that we're at what should be a turning point but are failing to make the turn."

-- Paul Krugman, in today's must-read NYT column,

"All the President's Zombies"

by Ken

Howie just wrote about one of the early test moments we had where those of us who hoped for good things from the Obama administration -- better things, that is, than its merely not being the Bush regime (this is before we began having even more disturbing moments when the Obama administration was impossible to distinguish from the Bush regime -- had to choose between rival interpretations of the new president's agenda and tactics:

* Because he really seems to believe in that "bipartisanship" stuff, and in the need to moderate the tone of public discourse by rising above the all-but-armed political divisiveness of recent years, he's going to do things his way, and while the prospects don't seem good (for "bipartisanship," you need two parties to bi, and there was no indication that either the Republicans or the megacorporate interests who bankroll them had any interest in any kind of compromise, despite their crushing electoral defeats in 2006 and 2008), he's presumably got some kind of plan, and who knows? Maybe it'll work.

* We never really did know what he believes in, and he never claimed to be anything but a centrist, even though the American political "center" is now floating out somewhere between Pluto and Uranus, and so maybe we just have to face the fact that he's really a Blue Dog at heart, meaning it's going to be a long four years. (This was all rendered much more confusing to puzzle out by the immediate urgencies of the economic meltdown. But even back then there were economists warning that the watered-down stimulus package wasn't going to jump-start the economy and didn't even look like it was intended to -- it looked more like a giveaway to the Wall Street gang and their bankster colleagues.)

There was, of course, the appointment of Rahm Emanuel to be the president's chief of staff, which sent shivers through a lot of us, knowing that Master Rahm's only known ideology could be summed up as: Why Should Only Republicans (and the People Who Own Them) Get Rich from Greed-and-Selfishness Politics?

And there was that moment Howie was recalling: what was to have been Holy Joe Lieberman's "day of reckoning" before the Senate Democratic caucus, the day he had to answer for his essentially having gone over to the Republicans, not just in the Senate but inescapably -- or so one thought -- in the presidential election, where he had explicitly denounced all the Democratic contenders, emphatically including the eventual nominee, and actively supported the Republican candidate.

At the time, the indications were that even Majority Leader Harry Reid, the man who had been trying to persuade us that His Holiness was "with us on everything except the war," was prepared to see the Senate Dems impose some kind of punishment in allowing him to return to the Democratic fold. Whether they would have done so remains at best uncertain. Consider, after all, how many nominally "Democratic" senators have more Republican voting records in the Senate than our Joe. And what were the chances that the caucus was going to take an action that suggested anybody, least of all the majority leader, could tell a U.S. senator what to do or how to do it?

But of course we never got to find out, because Holy Joe's hide was saved by the person you'd have expected to feel his betrayal most strongly: the president-elect he had marked for defeat. The Word clearly came down to Senator Reid: hands off the Holyman.

As Howie suggested, you had to hope that the new president had a plan, that he had at the very least extracted from Holy Joe a pledge to, well, behave. And I suppose we have to consider the possibility that by our Joe's standards, he has been behaving. Maybe it's just that we've reached a point in the health care imbroglio where his insurance-industry patrons are expecting some return on their investment, and the debate has deteriorated to the point where he feels it safe to deliver.

And what "point in the health care imbroglio" might we have reached? Glad you asked. If you go by today's Los Angeles Times, it's all over but the shouting -- game, set, and match to the insurance industry:

Healthcare insurers get upper hand

Obama's overhaul fight is being won by the industry, experts say. The end result may be a financial 'bonanza.'

by Tom Hamburger and Kim Geiger
August 24, 2009

Reporting from Washington - Lashed by liberals and threatened with more government regulation, the insurance industry nevertheless rallied its lobbying and grass-roots resources so successfully in the early stages of the healthcare overhaul deliberations that it is poised to reap a financial windfall.

The half-dozen leading overhaul proposals circulating in Congress would require all citizens to have health insurance, which would guarantee insurers tens of millions of new customers -- many of whom would get government subsidies to help pay the companies' premiums.

"It's a bonanza," said Robert Laszewski, a health insurance executive for 20 years who now tracks reform legislation as president of the consulting firm Health Policy and Strategy Associates Inc. . . .


"The insurers are going to do quite well," said Linda Blumberg, a health policy analyst at the nonpartisan Urban Institute, a Washington think tank. "They are going to have this very stable pool, they're going to have people getting subsidies to help them buy coverage and . . . they will be paid the full costs of the benefits that they provide -- plus their administrative costs. . . .


Undermining support for the public option wasn't the only gain scored by insurance lobbyists.

In May, the Senate Finance Committee discussed requiring that insurers reimburse at least 76% of policyholders' medical costs under their most affordable plans. Now the committee is considering setting that rate as low as 65%, meaning insurers would be required to cover just about two-thirds of patients' healthcare bills. According to a committee aide, the change was being considered so that companies could hold down premiums for the policies.

Most group health plans cover 80% to 90% or more of a policyholder's medical bills, according to a report by the Congressional Research Service. Industry officials urged that the government set the floor lower so insurers could provide flexible, more affordable plans. . . .


Consumer advocates argue that a lower government minimum might quickly become the industry standard, placing a greater financial burden on patients and their families.

"These are a bad deal for consumers," said J. Robert Hunter, a former Texas insurance commissioner who works with the Consumer Federation of America.

Meanwhile, companies would probably see a benefit by providing less insurance "per premium dollar," Hunter said.

"It would be quite a windfall," said Wendell Potter, a former executive at Cigna insurance company who has become an industry whistle-blower. . . .


"They have beaten us six ways to Sunday," said Gerald Shea of the AFL-CIO. "Any time we want to make a small change to provide cost relief, they find a way to make it more profitable."

The LAT piece reports, "In the first half of 2009, the health service and HMO sector spent nearly $35 million lobbying Congress, the White House and federal healthcare offices, according to data from the Center for Responsive Politics," and notes that among the 900 lobbyists on the payroll is none other than former Senate Majority Leader Tom Daschle, who's flacking for UnitedHealth (at $2.5M the industry's leading spender in the first-half-of-2009 tabulation). Remember how, if he had been confirmable as secretary of health and human services, he was going to be the point man for the president's health care reform drive? Well, I guess a guy's gotta make a living.

Am I the only one who's wondering whether the kind of bill we're likely to get now is apt to be significantly worse than no bill? No amount of mindless repetition of that hideous phrase "public option" at this point increases the chance that we're going to get one with any shot at working, which would require enormously careful structuring by parties who want it to succeed, not fail; substantial subsidies to make mandated coverage affordable to people who would now be required to come up with the dough for what will probably be exceedingly crappy coverage; and substantial, tough, enforceable regulation of American health insurance.

I don't see any of this happening, and without all of it, any public option that makes it through the legislative process is likely to be doomed from the outset, and the likely outcome is that poor Americans will in effect be paying a whopping new tax to pay for coverage that isn't going to cover much of anything. (Already people familiar with the tactics of Your Friendly Insurance Industry are painting horrific portraits of the worthless policies they'll be snookering us poor saps into buying, with all that gov't subsidy money as well as the poor slobs' last bucks pouring into their coffers.)

The reality, alas, is that in the Shining Spirit of Bipartisanship (and here, once again, I have to recall Digby's brilliant description of Republicans' understanding of bipartisanship as "date rape"), we now have to have a bill that (a) will be supported by 80 senators, and (b) will have to be further contaminated to satisfy the objections of the other 20.

It's getting harder and harder to figure out which part of this the president doesn't understand. Maybe Paul Krugman can help us work this one through. Professor Krugman?

August 24, 2009
OP-ED COLUMNIST

All the President's Zombies

By PAUL KRUGMAN

The debate over the "public option" in health care has been dismaying in many ways. Perhaps the most depressing aspect for progressives, however, has been the extent to which opponents of greater choice in health care have gained traction -- in Congress, if not with the broader public -- simply by repeating, over and over again, that the public option would be, horrors, a government program.

Washington, it seems, is still ruled by Reaganism -- by an ideology that says government intervention is always bad, and leaving the private sector to its own devices is always good.

Call me naïve, but I actually hoped that the failure of Reaganism in practice would kill it. It turns out, however, to be a zombie doctrine: even though it should be dead, it keeps on coming.

Let's talk for a moment about why the age of Reagan should be over.

First of all, even before the current crisis Reaganomics had failed to deliver what it promised. Remember how lower taxes on high incomes and deregulation that unleashed the "magic of the marketplace" were supposed to lead to dramatically better outcomes for everyone? Well, it didn't happen.

To be sure, the wealthy benefited enormously: the real incomes of the top .01 percent of Americans rose sevenfold between 1980 and 2007. But the real income of the median family rose only 22 percent, less than a third its growth over the previous 27 years.

Moreover, most of whatever gains ordinary Americans achieved came during the Clinton years. President George W. Bush, who had the distinction of being the first Reaganite president to also have a fully Republican Congress, also had the distinction of presiding over the first administration since Herbert Hoover in which the typical family failed to see any significant income gains.

And then there's the small matter of the worst recession since the 1930s.

There's a lot to be said about the financial disaster of the last two years, but the short version is simple: politicians in the thrall of Reaganite ideology dismantled the New Deal regulations that had prevented banking crises for half a century, believing that financial markets could take care of themselves. The effect was to make the financial system vulnerable to a 1930s-style crisis -- and the crisis came.

"We have always known that heedless self-interest was bad morals," said Franklin Delano Roosevelt in 1937. "We know now that it is bad economics." And last year we learned that lesson all over again.

Or did we? The astonishing thing about the current political scene is the extent to which nothing has changed.

The debate over the public option has, as I said, been depressing in its inanity. Opponents of the option -- not just Republicans, but Democrats like Senator Kent Conrad and Senator Ben Nelson -- have offered no coherent arguments against it. Mr. Nelson has warned ominously that if the option were available, Americans would choose it over private insurance -- which he treats as a self-evidently bad thing, rather than as what should happen if the government plan was, in fact, better than what private insurers offer.

But it's much the same on other fronts. Efforts to strengthen bank regulation appear to be losing steam, as opponents of reform declare that more regulation would lead to less financial innovation -- this just months after the wonders of innovation brought our financial system to the edge of collapse, a collapse that was averted only with huge infusions of taxpayer funds.

So why won't these zombie ideas die?

Part of the answer is that there's a lot of money behind them. "It is difficult to get a man to understand something," said Upton Sinclair, "when his salary" -- or, I would add, his campaign contributions -- "depend upon his not understanding it." In particular, vast amounts of insurance industry money have been flowing to obstructionist Democrats like Mr. Nelson and Senator Max Baucus, whose Gang of Six negotiations have been a crucial roadblock to legislation.

But some of the blame also must rest with President Obama, who famously praised Reagan during the Democratic primary, and hasn't used the bully pulpit to confront government-is-bad fundamentalism. That's ironic, in a way, since a large part of what made Reagan so effective, for better or for worse, was the fact that he sought to change America's thinking as well as its tax code.

How will this all work out? I don't know. But it's hard to avoid the sense that a crucial opportunity is being missed, that we're at what should be a turning point but are failing to make the turn.

Now, do we all feel better? Er, does anyone feel better?

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