Martin Shkreli Isn't The Only Greedy Little Monster Driving Up The Price Of Medicine

More great investigative reporting from David Sirota at the International Business Times, this time on how proposed healthcare insurance mergers between Anthem-Cigna and Aetna-Humana will harm the public by reducing competition and raising costs for consumers. He reports how Kathleen Sebelius, "one of the key architects of President Obama’s Affordable Care Act is raising questions about the potential consequences of two giant healthcare insurance mergers that could affect millions of Americans now facing rising premiums." Sebelius is worried that going from 5 major insurance companies down to just 3 will impact the entire American population negatively.

The two mergers, which were announced in 2015, are now undergoing reviews by both federal and state regulators charged with making sure they do not restrict competition and hard consumers. Sebelius said that “part of the premise of the Affordable Care Act” was to engender the kind of competition that mergers can threaten.

“Creating a marketplace structure and encouraging additional companies to come into the market [was] certainly part of the overall strategy” of the Affordable Care Act, she said.

“Competition actually is a great price lever, and competition gives not only more choices to consumers but typically better prices to consumers.”

Executives for the companies have argued that the mergers will bring greater efficiencies and cost savings, ultimately benefiting consumers.

"It's going to increase choice, not decrease choice. It's going to increase affordability, not decrease affordability," said Cigna CEO David Cordani, who Bloomberg News says could reap a personal $58 million windfall if the deal goes through, depending on the personnel changes at the new company. That payout is second only to the $131 million that could be made by Aetna’s CEO Mark Bertolini, who told congressional lawmakers in September that a merger “will enable us to offer more consumers a broader choice of products and access to higher quality and more affordable health plan options.”

Sebelius is no stranger to the supercharged regulatory debates around healthcare mergers: as Kansas insurance commissioner in 2002, the Democrat blocked Anthem’s proposed acquisition of Kansas Blue Cross Blue Shield in what at the time was seen as a precedent-setting case . Back then, she said the transaction “would cost Kansas businesses, small employers and families millions of dollars.” Campaigning on the issue in her first successful bid for governor, she called Anthem “an aggressive, for-profit holding company whose primary objective is to beat its national competitors” -- which, she said, “may be fine for Anthem, but it's simply wrong for the health care and economic security of the people of Kansas.” (Anthem challenged her move in a lawsuit and won an initial victory, only to see it overturned by the state’s Supreme Court, which backed Sebelius).

Fourteen years later, Anthem has only grown bigger: It went on to merge with Wellpoint, and now stands to become the single largest health insurer in American history-- with 53 million customers-- if its acquisition of Cigna is approved. That proposed transaction was supported by the company’s shareholders, just as it was by Cigna’s shareholders-- and just as Aetna and Humana shareholders supported their separate merger.

Sebelius, however, said that shareholders and regulators face different questions when they consider approving mergers.

“Overwhelmingly the shareholders have signed off on this with all four companies, and so they clearly are confident that these mergers will produce more profitable insurance companies,” she said. “What the regulators want to know-- and it sort of gets flipped-- is what happens to consumers? Is this bad or good for consumers? And they are not necessarily the same answers.”

Following an IBT investigative report last week, consumer and ethics watchdog groups have criticized Connecticut Democratic Gov. Dan Malloy for appointing a former longtime Cigna lobbyist to the regulatory position now leading 26 states’ review of the Anthem-Cigna deal. Sebelius said that in general, questions about potential conflicts are “appropriate.”

“There’s always a concern about whether there is conflict or whether there are interests involved,” she said. “The connection with the specific company involved is maybe a little unusual, but it is not at all unusual to have a state regulator who actually has been deeply involved in the industry and it does bring a level of expertise. I think it is appropriate to ask, and I’m sure this question will be asked all along, are there any conflicts? Are consumers going to be adequately represented?”

She added that regardless of the controversy over the Malloy administration’s appointment, others in Connecticut such as U.S. Sen. Richard Blumenthal-- a former state Attorney General-- have in the past made sure that mergers get the scrutiny they need.

“I don’t think there are any shortage of people who will be engaged and involved in the Connecticut situation,” she said.

It sounds very similar to an argument over healthcare raging in Vladimir Putin's Russia, where his prime minister, Dmitry Medvedev, was caught on camera being confronted by angry pensioners demanding higher pensions to cover the increased costs of medicine and food. "There's no money, but take care," he told them cavalierly. In a similar exchange with the public, Putin told angry questioners about rising costs of medicine-- gargantuanly rising, like on a Shkreli level-- that he tries to steer clear of medicines "by leading a healthy lifestyle." If eating fresh fruits and vegetables and fish are part of that, it's also out of reach for increasing numbers of Russians as they watch the prices rising for food stables out of reach.

Medicine sales have fallen for the first time in Russia since 2008: Analysts recorded a 10 percent drop in drug sales in the first quarter of this year. During a severe economic crisis, a growing number of Russians can no longer afford to buy medicine.

The figure is the latest indicator of falling living standards in Russia, and has alarmed some experts, who say that medicine is the last commodity for people to cut back on. Writing in Slon magazine, Yevgeny Gontmackher said more and more Russians are turning to home remedies to cure illnesses.

Russia's deteriorating health care system will also have long-term effects. Staff cuts in hospitals and growing pressure on doctors mean an increasing number of Russians, especially in remote regions, are losing access to free medicine.

...[Marina Krasilnikova, an economist at the Moscow-based Levada Center] says medicine sales show that life is about to become much harder for families with chronically ill family members and pensioners.

"The prices just keep soaring," says Irina Kuninskaya, a woman buying prescription drugs for her 78-year-old mother in a Moscow pharmacy. "With my mother's miserable pension and my income falling, we don't know how to feed the family anymore," she says.

The drugs Kuninskaya bought are foreign-made. She expressed hope that Russia would soon be able to produce affordable medicine of the same quality.

The Russian government has tried to boost self-sufficiency in drug production by limiting imports of foreign substances for pharmaceutical companies. Moscow introduced new laws last year forcing Russian companies to import less from European companies in a bid to increase the amount of Russian-made drugs on the market from 30 percent to 50 percent by 2020.

While there may be more domestically produced drugs in Russian pharmacies, many prices are, in fact, rising faster than those of imported medicine. According to a study by Moscow's Higher School of Economics, the price of Russian-made essential medicines rose by 28.9 percent in 2015, compared to just 4.9 percent for imported drugs. In that same year, prices for life-saving medicine, whose prices are regulated by the government, rose by as much as 32 percent.

The Kremlin has said it will crack down on pharmaceutical businesses not selling products at the regulated price. Starting this week, pharmacies not adhering to these rules could be shut down for up to 90 days.

But Russian pharmaceutical companies say they cannot compete in a foreign-dominated market. The crash of the ruble meant foreign substances used in drug production became more expensive, further straining Russian companies. During the call-in with Putin, the owner of a pharmaceutical company from Samara asked the Russian president to scrap government price restrictions. "We are forced to sell goods at the same price as six years ago," he said.

Pensioners are perhaps the group most affected by increasingly expensive medicine in Russia. This year, the government increased pensions by only 4 percent, set against double-digit inflation in food and medicine.

What would Putin-admirer Donald Trump say? Probably something derogatory about Pocahontas.

Forget The Beltway Pundits-- Could Kathleen Sebelius Win Back Voters In Kansas' Senate Race?

In 2002, Democrat Kathleen Sebelius, then the state's Insurance Commissioner, was elected Governor of Kansas over fringe Republican extremist Tim Schallenberger, 441,858 (53%)- 376,830 (45%). She ran on a platform that was pro-Choice, anti-capital punishment and against people carrying concealed weapons, called for a $1,000 per student increase in public education spending and refused to take the conservative "no new taxes" pledge.

Her 4 years in office made an excellent impression on Kansas voters and in 2006 she was reelected with a whopping 491,993 votes (58%) against Republican state Senator Jim Barnett's 343,586 votes (40%). She led in every single poll taken in 2006, almost all of them by GOP polling firm Rasmussen.

Not everybody remembers all that. But everyone remembers that Obama appointed her Secretary of Health and Human Services in 2009 and that she was charged with implementing the Affordable Care Act. Some Catholics are also aware that the fascist Cardinal Raymond Burke, recently fired from his key job and sidelined by Pope Francis, had denied her the right of communion.

Yesterday, the NY Times reported that Sebelius is considering running for the Kansas Senate seat currently being contested by out-of-touch, doddering incumbent Pat Roberts and extremist kook Milton Wolf.

Several Democrats said this week that Ms. Sebelius had been mentioned with growing frequency as someone who could wage a serious challenge to Mr. Roberts, 77, who is running for a fourth term and is considered vulnerable. One person who spoke directly to Ms. Sebelius said that she was thinking about it, but added that it was too soon to say how seriously she was taking the idea.

Beltway pundits, of course, say she has no chance at all. That's what they do. "Sebelius is not (popular) in Kansas anymore" and "[s]he is the person most closely associated with Obamacare's implementation" is how its viewed Inside-the-Beltway. That's true, but she has 'til June 3 to decide and then 'til November to remind Kansans how much they liked her-- and what a good job she did-- when she was governor. And who will she be running against? One of two Republicans who are absolutely destroying each other now. Beltway knows best? Rarely.

And a lot could happen between now and then… including the continued success of the Affordable Care Act that will eventually (but how soon?) make her into an American heroine. And don't you think Kansas voters would love the idea of electing their first Democratic senator since… the 1930s!


UPDATE: Sebelius Won't Run… Maybe

The NY Times is reporting that Sebelius isn't running, kind of. "Secretary Sebelius is continuing her important work at H.H.S. and is not considering a run for the Senate," the spokeswoman said. OK, but what about after her replacement is confirmed and she isn't continuing her important work at H.H.S.? Will be consider a run then?

Guest Post From Paul Clements, The Progressive Democrat Opposing Fred Upton In Western Michigan

Fred Upton's "monkey court"

Today Congressman Fred Upton grilled Health and Human Services Secretary Kathleen Sabelius over the error-plagued launch of HealthCare.gov, the federal government’s enrollment website for mandatory health insurance. Would that he were so assiduous in his support for Americans’ access to high quality, affordable health care!

This is the same Upton who voted 40 times to defund the Affordable Care Act. The same one who required healthcare navigators to fill out arduously voluminous paperwork before they could help people figure out how to get new health insurance. The same one who blocked Americans’ access to cheaper generic drugs from Canada, and who tried and failed to block a measure to reduce prescription drug abuse with pain pills (requiring patients to get new prescriptions after 90 days for widely abused drugs). The same Upton who has often blocked the Environmental Protection Agency and the Nuclear Regulatory Commission from applying normal health and safety regulations.

The Affordable Care Act will prevent denials of insurance to millions of Americans with pre-existing conditions. It is already allowing millions of young adults to stay on their parents’ insurance. Millions of life threatening conditions will be identified by primary care physicians rather than in emergency rooms. Yet Upton has been a constant obstructionist.

Congressman Upton routinely and repeatedly puts corporate profits before citizens’ health. He routinely and repeatedly puts narrow partisan advantage before compromise to solve problems.

The good news is that citizens in Upton’s district are tired of him. He now gets the lowest approval ratings of his career-- 34% in an early October PPP poll, versus 53% disapproval. Even his Tea Party challenger accuses him of crony capitalism.

I am building the strongest Democratic challenge Upton has ever faced. I have degrees from Harvard and Princeton, and I have devoted my career to increasing the impacts and enhancing accountability of government programs.

Please take a look at my website: ClementsforCongress.com, and consider a contribution.

Some Blunt Words

The Conservative War Against Women

For organizations which argue that if we just had more gays... or women... or African-Americans (you pick the group) everything would be so much better (at least for that group), I say, look at the Senate vote on the Blunt Amendment yesterday. Blunt's Amendment was meant to deny women access to contraceptives. There are 10 Democratic women and 5 Republican women in the Senate. All the Democratic women (plus one Republican, Maine's Olympia Snowe, who just announced she's retiring) voted against it. But all the other Republican women-- Kelly Ayotte (NH), Susan Collins (ME) Kay Bailey Hutchison (TX) and Lisa Murkowski (AK)-- voted with the right-wing boys-- including shameful Democrats Ben Nelson, Joe Manchin and Bob Casey.

When EMILY's List dredged up and endorsed a woman, Nikki Tinker, against a male congressman in Memphis, Steve Cohen, they screwed up totally. Cohen is so much better on every issue important to women and to working class families than Tinker that it was scandalous. And when Tinker ran an anti-Semitic campaign against Cohen, EMILY's List-- fearing their Jewish donors would get pissed off-- withdrew the endorsement... on election day, after the damage was done. Similarly they just picked a rich, pro-business flake, Stacey Lawsen, over potentially the best congressman in our lifetimes-- Norman Solomon. They never learn.


We need more women in Congress and throughout our political system-- but more progressive women, not unqualified idiots that EMILY's List digs up because they happen to be women. David Dreier is 100% gay but what does he do for the LGBT community? Spits in its face every opportunity he gets. His voting record on gay issues is a zero. He voted against the LGBT community every single time a rollcall on one of their issues came up. And it isn't even like he's trying to fool someone into thinking he's not gay the way fearful closet cases like Patrick McHenry (R-NC), Aaron Schock (R-IL), Trent Franks (R-AZ) and Adrian Smith (R-NE) do. Everyone in DC already knows Dreier is gay. He doesn't talk about it publicly, but he doesn't deny it either and when Hastert tried making him Minority Leader, the far right of his party-- particularly Blunt from yesterday's Blunt Amendment-- started screaming they're not being lead by some (you can imagine)! But as for the gay community, they're much better off with a straight ally-- take José Serrano from the Bronx-- who is operating out of progressive principles and values not because of identity group politics. And back to Memphis... do you think that city's overwhelmingly African-American population was better off with a corrupt, conservative corporate hack like Harold Ford, Jr. than they are with a stalwart progressive white guy, Steve Cohen? Nope; Ford was looking out for the banksters and for whomever would give him a schmeer; Ford is diligently super-serving his constituents.

Health and Human Services Secretary Kathleen Sebelius sent out a press release on Blunt's Amendment that probably would have been similar to one sent out by a male secretary. It's about the right policy, not the gender. Half the Cabinet should be women and half the Congress should be women and half the Supreme Court should be women-- give or take-- and the next president should be a woman but I'll take a progressive man over a conservative woman any day. Sebelius' statement, while we're on the topic:

Earlier this month, the Department of Health and Human Services reported that over 20 million American women in private health insurance plans have already gained access to at least one free preventive service because of the health care law. Without financial barriers like co-pays and deductibles, women are better able to access potentially life-saving services, and cancers are caught earlier, chronic diseases are managed and hospitalizations are prevented.

A proposal being considered in the Senate this week would allow employers that have no religious affiliation to exclude coverage of any health service, no matter how important, in the health plan they offer to their workers. This proposal isn't limited to contraception nor is it limited to any preventive service. Any employer could restrict access to any service they say they object to. This is dangerous and wrong.

The Obama administration believes that decisions about medical care should be made by a woman and her doctor, not a woman and her boss. We encourage the Senate to reject this cynical attempt to roll back decades of progress in women’s health.

Now a woman (or a man) who thinks the way Darcy Burner thinks... that's the kind of candidate, regardless of gender (but I'm glad she's a woman) deserves to be supported-- and you can do that right here. Here, in part, is what she wrote after the Senate beat back Blunt's amendment yesterday:

Thankfully the amendment didn't pass, but it reflects a disturbing Republican worldview that women's control over their own pregnancy is a luxury. That is, to be blunt, outrageously obnoxious.

The fact is, thousands of women's lives are saved every year by treatment to prevent or end pregnancy, and many millions more have dramatically improved quality of life because they can decide whether and when to get pregnant. I understand how important that is, because I am one of those women.

My husband Mike and I tried very early in our marriage to have children. But while I was pregnant with our daughter Deirdre, I developed a life-threatening infection; only prompt medical care and nearly a week of hospitalization saved me. Our daughter was born prematurely and died while we held her.

When nearly a decade later I became pregnant again with our son Henry, that pregnancy too was life-threatening. I was on strict bed rest for twenty weeks. We finished the pregnancy in January 2003 with fluid filling my liver and lungs, my life in clear danger-– and Henry was early, but we were eventually able to bring him home from the hospital healthy and thriving. I lost count of how many things went wrong during that pregnancy. It seemed like every two weeks I was having another conversation with my doctor about how much I was willing to risk. I’m glad the story has a happy ending, but the idea that some politician thinks they have more standing to make such decisions than I do is patently absurd.

For me, pregnancy is life-threatening. And it isn’t just me: the maternal mortality rate in the U.S. is 8.8 deaths for every 100,000 pregnancies. Every year people lose wives, daughters, sisters, and mothers to pregnancies gone wrong. The costs of childrearing are high, as well. Women are entitled to decide for themselves whether they want to take such risks, whether to bear such costs, and it’s offensive that Republican politicians have the gall to claim that women have no standing to make decisions about their own bodies and health if their bosses or random politicians disagree.

No politician is entitled to make those decisions for any women. No employer is entitled to make those decisions for any woman. And it’s long past time that women’s healthcare stopped being a political football.

Now you know a little more about why Blue America supports her with such enthusiasm. It's not her gender per se; it's her mind.

Kathleen Sebelius Confirmed As Secretary of Health and Human Services

Republicans have been coming under increasing pressure to stop their frivolous and useless sandbagging of President Obama's nomination of Kathleen Sebelius as Secretary of Health and Human Services, particularly in the midst of the swine flu epidemic. Late today Reid called for a vote and she was confirmed 65-31, five votes more than was needed in the toxic, obstructionist atmosphere the Republican Party has created in the formerly collegial Senate. Republicans were whining because she's pro-choice and because they oppose health care reform. They view her as too much on the side of consumers and not deferential enough to their campaign contributors at the big insurance companies and HMOs.

In his first vote as a Democrat, Arlen Specter voted to confirm, as did Swine Flu Sue (R-ME), Kit Bond (R-MO), Sam Brownback (R-KS), Judd Gregg (R-NH), Richard Lugar (R-IN), Pat Roberts (R-KS), Olympia Snowe (R-ME), and George Voinovich (R-OH). The rest of the GOP extremists and obstructionists voted no, as they do on everything. Sebelius was the last cabinet member who the Senate Republicans were holding hostage to their sore loser insanity.

Is Barack Obama Still Listening To People? Or Just Emanuel?

Howard Dean once told me that if a president can just keep the country going and accomplish one major goal on top of that, he would be a successful president. He told me his major goal-- the reason he jumped from a family medical practice to politics-- was reforming the health care system. At the time he was polling in the single digits, the low single digits, in the national polls. It's been quite a trip for him since then but no one, except perhaps an intellectually dishonest Rahm Emanuel, could say he was anything less than the best chairman the DNC has had in recent memory. Governor Dean and his 50 state strategy certainly contributed to the Democrats taking over the House, the Senate, lots of state legislatures and governors mansions and, now, the White House.

Obama doesn't owe anything to anyone. That's the way it should be. Oh, except the American people. He owes us someone who understands health care and how to reform it. His first choice was a consummate Washington insider whose very GOP-like modus operandi revolted the whole country and forced the new Administration to beat a hasty and shabby-looking retreat. For many of us, it wasn't just the tax problems which, after all, may possibly have been honest mistakes, but, as Frank Rich put it in yesterday's Times, but "his post-Senate immersion in the greedy bipartisan culture of entitlement and crony capitalism that both helped create our economic meltdown (on Wall Street) and failed to police it (in Washington). Daschle might well have been the best choice to lead health-care reform. But his honorable public record was instantly vaporized by tales of his cozy, lucrative relationships with the very companies he’d have to adjudicate as health czar." We expect that from George Bush. We expect that from Republicans. We elected Barack Obama because we thought the end of that kind of corruption was part of the Change he was promising.


He can easily make up for that slip-- very easily. But not by nominating some HMO shill like Tennessee Gov. Phil Bredesen who spent his time as governor stripping 170,000 people of their health care-- the polar opposite of what Howard Dean accomplished when he was governor of Vermont. In the last few days some of the members of Congress most committed to universal health care, Tom Harkin (D-IA), Raul Grijalva (D-AZ), Alan Grayson (D-FL) and Peter Welch (D-VT) have asked President Obama to appoint Dean to lead the Health and Human Services Department.

I don't know how you can say who's the very best member of Congress but I do know that if you had to make a list of half a dozen senators who live and breath representing working families first and foremost you couldn't do it without including Bernie Sanders. And today Bernie sent President Obama a letter asking him to appoint Dr. Dean. Here's what Senator Sanders had to say about it on his website:

Senator Bernie Sanders (I-Vt.) said today that he supports Howard Dean to head the Department of Health and Human Services. 

In a letter to President Barack Obama, Sanders wrote that the physician and former Vermont governor is “eminently qualified” for the key post in the president’s cabinet.

“Governor Dean's background as a physician and as a governor makes him eminently qualified for this extremely important position. 

“Governor Dean understands, as you do, that all Americans are entitled to health care as a right of citizenship, and that we must pay far more attention to the needs of our children if we are to have a healthy and prosperous society.

“As a result of Governor Dean’s leadership, Vermont has developed one of the strongest health insurance programs for children in the country, the Dr. Dynasaur program, and has also been in the vanguard in a number of other health-related areas.

“As you well know, reforming our health care system will not be easy.  It will take somebody with determination and focus to lead that effort.  I think that Howard Dean is that person.”

Sanders is a member of the Senate Health, Education, Labor & Pensions Committee.

Meanwhile Emanuel is frantically leaking that Kansas Gov. Kathleen Sebelius has the gig. She certainly wouldn't be a bad choice by any means... it's just that many Democrats were hoping she would be the next senator from Kansas. Unlike Bredesen she's probably more on the side of the people than the insurance companies and HMOs. But she's no Howard Dean. If you care enough to want to help, why not join one of the Howard Dean for HHS Facebook groups-- or both! And here's the new DeanForHHS website that's keeping all the news on this flowing. Hasn't Emanuel already done enough harm to the new Administration in the first month?


UPDATE: THE MOMENTUM FOR HOWARD DEAN KEEPS BUILDING

I guess there are a lot of Democrats who aren't afraid of Rahm Emanuel after all. Another progressive fighter for working families, Pat Leahy, endorsed Howard Dean for HHS Secretary today:

"I think Howard Dean would do a great job," Leahy told the Huffington Post at an event at Georgetown University. "He is a physician. As governor he had to deal with everything that went right with HHS and with everything that went wrong. He can tell us that these are the things that a governor has to face, Medicare especially and other things, he is very knowledgeable. He would be very good ... And he is obviously a tireless worker."

Two GOP Political Dwarves Square Off For The Honor Of Being Pulverized By Katherine Sebelius

Sam Brownback, a suspected Opus Dei cultist and admitted far right religious fanatic, obsessed with bizarre morbid sexuality, decided to retire from the Senate and run for the Kansas governor's mansion in 2010. The current governor, wildly popular Democrat Katherine Sebelius, is serving her second and last term and is likely to trade jobs with him.

But a couple of Republican hack pols have decided to fight it out in a primary contest over who will have the honor of being defeated by her. Todd Tiahrt announced his bid yesterday in Topeka. The other one, who announced after winning re-election to his House seat in November is Jerry Moran. Although the differences between them are barely perceptible, Tiahrt is considered to the right of the Nazi Party and Moran is just a garden variety conservative extremist. In terms of their congressional voting records, they were both absolute rubber stamps for Bush. Moran has a 5.16 (out of 100) on the Progressive Punch score of crucial partisan votes and Tiahrt has a 2.23. In the arcane world of right wing fanaticism, that makes one (Tiahrt) purer than the other (Moran). Neither has ever voted in favor of anything that would benefit working families and each is considered a complete shill for Big Business.

Polls show Moran way ahead of Tiahrt, who is perceived by the Kansans who even know who he is as an extremist and kind of a far right fringe candidate. The fact that he's further right will tend to help him as the primary gets really contentious, as is expected, probably by noon tomorrow.

THE INFRASTRUCTURE MESS-- THE VERY PROFITABLE DISMANTLING OF CIVIL SOCIETY

George Bush sewer system-- joke may be on us

Yesterday Scholars & Rogues featured a pretty ominous look at the serious deterioration of basic American infrastructure. The author, Dr. Denny, points out that our otherwise preoccupied government is normally only moved to action by catastrophes-- like the deadly bridge collapse in Minneapolis last year. So that bridge is nearly fixed. They're waiting for a spate of disasters before they do anything preventive. They may not have to wait long and we have far more than "failing bridges to find, fund and fix." Dr. Denny is left cold by the leadership abilities of the current presidential candidates to lead us successfully through a real crisis. Just to keep up, the U.S. would need to spend $225 billion per year for 50 years-- $11 trillion. McCain definitely has a couple wars he'd rather wage. But the country's infrastructure-- not just roads and bridges but also dams, sewage systems, drinking water systems, air traffic control, nuclear plants, electricity transmission lines, levees...-- gets a grade of D. Unfortunately, national politicians don't usually find infrastructure sexy.

Wall Street does, I found out on the radio yesterday. Tens of billions of dollars are coming out of the firms that brought us the real estate and mortgage collapse and going into buying up infrastructure. Alarm bells went off when I heard that the sleazy GOP vulture capital firm Carlisle Group-- whose real estate arm went belly up recently-- is buying up sewer systems and roadways. And they're only one of many.

Republicans want to reduce taxes and let the infrastructure go to hell so that the public supports selling it all off to for-profit companies. Democrats are too cowed to stand up for government functions that have been delegitimized by greed obsessed Republicans (and Blue Dogs and DLC Democrats). So... on to the predators. Today Morgan Stanley-- and I assure you a more unscrupulous and cut throat firm you will never find-- announced that it has raised $4 billion to target investments "that provide public goods or essential services in sectors such as transportation, energy and utilities, social infrastructure and communications." Global Infrastructure Partners (General Electric and Credit Suisse) have capped their infrastructure fund yesterday at $6.5 billion. A new Carlyle subsidiary, Carlyle Infrastructure Partners, formed specifically-- and under heavy political protection-- to rip off American taxpayers and ratepayers is investing $1.5 billion in transportation and water and wastewater facilities, including roads, bridges, tunnels, airport facilities, maritime ports, transit projects and other public benefit infrastructure in the US and Canada. Henderson Investors, CVC Capital Partners, Macquarie (Australia), Rreef, Citigroup, Ferrovial (Spain), Goldman Sachs, J.P. Morgan and Alinda are all up to the same thing.

Infrastructure assets such as utilities, toll roads and airports are attractive to financial bidders like banks and pension funds because of their stable cash flow despite having lower growth rates than other private equity opportunities. GE had disappointing first-quarter earnings, but its infrastructure segment performed better than expected.

The money being ante-ed up for infrastructure projects by private capital is at historically high levels.

New roads, railways, oil pipelines, hospitals and schools: the world is an infrastructure financier's oyster. In Mumbai, for instance, there are plans to build an extension of the city to house 15 million people - nearly double the size of London's population. One UK banker who returned from there last week said: 'I left London depressed at the state of the markets. Going there, you see that there are people making huge sums of money.'

Even in the developed world, there are signs that we do not have the infrastructure to cope with continued economic and population growth. Blackouts, road congestion and capacity problems in airports and on railways are commonplace in both the US and Europe. In addition, an ageing population means different kinds of healthcare facilities are needed.

The question is: how are these essential building blocks going to be financed? There has been a decline in governments' willingness or ability to pay for new facilities in the past 15 years. Among the developed countries, government outlays on capital projects fell from 9.5 per cent of overall spending in 1990 to 7 per cent in 2005, according to the OECD.

Increasingly, it is the private sector that world leaders now rely on to fill the funding gap.

...What attracts investors to infrastructure is solid cashflows - user charges and tolls - which provide the opportunity to borrow larger sums to pay for acquisition and investment costs. However, there have been concerns that infrastructure funds have borrowed too aggressively against cashflow, compromising the efficient running of facilities.

And globalization means this travesty won't just be happening in Mumbai... but also in Manhattan. You think the Chinese and Arabs own us now? Just wait.

A few weeks ago I met a really smart guy at a party in Virginia, Andy Stern, president of the SEIU. Last week he and Kansas Governor Kathleen Sebelius did an editorial for the Christian Science Monitor, Main Street, Not Wall Street, Should Fix Crumbling U.S. Infrastructure. They're right but swimming against a powerful, perhaps irresistible, tide. And Wall Street has the money it takes to buy off the politicians it needs to buy off. Their investments in crooked Democrats like Rahm Emanuel, Melissa Bean, Harold Ford and the like are as valuable to them as their investments in Republicans. There is no public interest; just bottom line; and just try telling Rahm Emanuel something different.

At its best, America's infrastructure has powered our economic prosperity, created well-paying jobs, and served the public interest.

Today, however, it has fallen into a dangerous state of disrepair. The Minnesota bridge collapse last summer brought home the urgency of repairing and modernizing our nation's system of highways, bridges, tunnels, power plants, transmission lines, and airports.

But doing so will be prohibitively expensive. Current plans seek to exploit the nation's need for private profit. But there's a better source of capital at hand: public pension funds.

The American Society of Civil Engineers estimates that $1.6 trillion is needed in the next five years alone just to maintain the adequacy of existing infrastructure.

...It would be a monumental mistake to turn the future of America's infrastructure over to the same crowd that brought us the subprime crisis, an economy loaded down with debt, and recession.

We should know better by now than to create a scenario where bridges and highways are sliced and diced like subprime loans into financially engineered "collateralized infrastructure obligations."

America needs a large source of stable, long-term capital to build the system of buildings, roads, and power supplies needed to sustain the country. We need a source of capital that values infrastructure because it provides a reasonable rate of return, strengthens the overall economy, and doesn't burden users with excessive fees.

Enter that source of capital:

Public pension funds, which are responsible for the retirement benefits of more than 18 million Americans, have more than $3 trillion in assets, and a long-term investment approach consistent with the stable returns that infrastructure assets generate.

Pension funds could buy and build infrastructure, putting the profits to work for the retirement of workers, not for the benefit of Wall Street CEOs.

See? Didn't I say he was a smart guy? Let's hope his support for Obama is going to mean at least this.

I spoke with a couple of the Blue America candidates about the problem with infrastructure, Regina Thomas, a long time member of the Georgia legislature and Martin Heinrich, head of the Albuquerque City Council, both of whom have spent a great deal of time and energy dealing with the problems of crumbling infrastructure in their local areas. Senator Thomas told me the deterioration in the last 7 years was symptomatic of Republican government. "They're just reactive to a situation where they should have been pro-active. Then they capitalize on catastrophic situations to make millions for themselves and their cohorts... this is shameful, at best-- oh! I forgot they have no shame when it comes to making money for themselves... We all drink the same water, breathe the same air and walk the same soil-- sooo...do they think that they can take their dollars, hide in a bubble and not be afffected by the irresponsible inactions to our environment?"

Although the disaster of Hurricane Katrina's weakened and destroyed leeves hit closer to home for Regina and her constituents, Martin has had similar experiences with the underlying philosophy of Republican governance. "For the past eight years we have been a country without a plan," he told me. "We have given no thought to the future. The voices that spoke out about long term planning fell largely on deaf ears. America's greatness comes from our innovation and foresight, and to ignore infrastructure, which plays such a critical role in commerce and Americans' daily lives, is simply short-sighted. Our country has already dug our children a hole that will be extremely difficult to climb out of and to create yet another structural disadvantage is to do them a great disservice."

Savvy members of Congress like Regina Thomas and Martin Heinrich are a first step towards climbing out of that hole and cleaning up the unimaginable mess George Bush is leaving us. Please consider visiting our Blue America page today and lending a hand to Regina and Martin. They both deserve it. (Anyone who donates to both in the next 24 hours gets a Blue America thank you CD-- a surprise.)

Is there any "debate" about the Bushies' systematic plundering of the National Guard? Haven't they merely lost another bet that it wouldn't matter?

By Monday morning, equipment was finally rolling into Greensburg, Kansas.

"I have said for nearly two years, and will continue to say, that we have a looming crisis on our hands when it comes to National Guard equipment in Iraq and our needs at home."
--Kansas Gov. Kathleen Sebelius, late Tuesday

"There's a lot of stuff available."
--White House Lying Scumbag Tony Snow, after rattling off a list of equipment currently possessed by the Kansas National Guard (hey, he's just paid to be a lying scumbag, not to know anything about how an actual state might need to respond to an actual disaster)

The strange headline on the solid report in this morning's New York Times reads:

KANSAS TORNADO
RENEWS DEBATE
ON GUARD AT WAR

Debate? Is there really a debate? When Chimpy the Prez decided to compensate for what surely must be the World's Smallest Penis by shocking and awing Iraq, the thieving sycophants who planned his war always made it part of their strategy to plunder the states' National Guard forces. They did it, we've always known it, and there have always been people--including a number of governors, not least among them Governor Sebelius--who've been screaming bloody murder about it, warning that the day would come when we would pay the price in Guard unpreparedness.

The Bush regime's response was: "Fuck you."

Is this what you would properly call a debate?

As Susan Saulny and Jim Rutenberg report in the Times:

For months, Gov. Kathleen Sebelius of Kansas and other governors have warned that their state National Guards are ill-prepared for the next local disaster, be it a tornado a flash flood or a terrorist's threat, because of large deployments of their soldiers and equipment in Iraq and Afghanistan.

Then, last Friday night, a deadly tornado all but cleared the small town of Greensburg off the Kansas map. With 80 square blocks of the small farming town destroyed, Ms. Sebelius said her fears had come true: The emergency response was too slow, she said, and there was only one reason.

"As you travel around Greensburg, you'll see that city and county trucks have been destroyed," Ms. Sebelius, a Democrat, said Monday. "The National Guard is one of our first responders. They don't have the equipment they need to come in, and it just makes it that much slower."

For nearly two days after the storm, there was an unmistakable emptiness in Greensburg, a lack of heavy machinery and an army of responders. By Sunday afternoon, more than a day and a half after the tornado, only about half of the Guard troops who would ultimately respond were in place.

It was not until Sunday night that significant numbers of military vehicles started to arrive, many streaming in a long caravan from Wichita about 100 miles away.

And as the Times team (which included reporters all over the country) also reports:

Two recent reports have raised questions about Guard preparedness. An independent military assessment council, the Commission on the National Guard and Reserves, released a report in March that stated: "In particular, the equipment readiness of the Army National Guard is unacceptable and has reduced the capability of the United States to respond to current and additional major contingencies, foreign and domestic."

Another report, released in January by the Government Accountability Office, concluded that the ongoing operations in Iraq and Afghanistan have "significantly decreased" the amount of equipment available for National Guard units not deployed overseas, while the same units face an increasing number of threats at home.

Actually, it makes sense that it's equipment more than personnel that's at stake in the Bush regime's plundering of the National Guard. Heavy reliance on National Guard and reserve units has certainly helped the regime wage war on the sly, since that's made it unnecessary for its war machine to be knocking on Middle America's doors for soldiers, and anyway, when it's not with regard to personnel that the regime is attempting to fight a war on the cheap.

After all, the heavy reliance on manpower provided by the famous contractors is surely wildly more expensive than equivalent military personnel would be. But by "appropriating" heaps of National Guard equipment, that's that much less money the regime has to squeeze out of Congress in emergency appropriations to fund its Middle East fun.

Wasn't it that pompous fraud then-Defense Secretary Donald Rumsfeld who told us that you go to war with the military you have? Now we know that that includes "with the equipment you can steal from American states."

Interestingly, the Times report notes:

Last year, all 50 governors signed a letter to President Bush asking for the immediate re-equipping of Guard units sent overseas. But officials in several states, including Kentucky, Minnesota and Texas, said Tuesday that they were not facing equipment shortages.

It just so happens that, apart from the governor of Kentucky being a known crook and the governor of Texas being a known dimwit, all three of those governors are Republicans. This raises the even more unsavory possibility that the Bush regime has been targeting the ferocity of its raping and pillaging of the states' National Guard units on political grounds.

But the main storyline is simple: The Bush regime knew exactly what it was doing to the National Guard, thought it could get away with it, and now as usual is trying to bully, lie, and bluff its way through. There's even that hint that Uncle Karl Rove has sent the good folk of Kansas--and perhaps other states as well--a message that this is what happens when you elect a governor of the Devil's, er, "Democrat" party.

Governor Sebelius has never shown signs of being a pushover, though. I like to think that the regime slimeballs may have met a more formidable opponent than they're used to on the domestic political front. I sure hope she crushes their balls--and Chimpy's tiny penis too, if anyone can find it.