The fairy tale of Wall St

As the populist revolt over Too Big To Fail banks grows, some in the media are choosing to use their forums to take on Wall Street’s perversion of their primary role in finance.

Steve Perlstein, of the Post, is among those who believe Wall St lost its way in the name of seeking ever higher profits. In his illuminating Wall Street fairy tale, he tells the tale of how Wall Street has gone astray.

Before long, the students at the kingdom’s universities noticed that they could make much more money going into finance and began to alter their career choices. Some professions, such as law and management consulting, were able to continue attracting top students by matching the starting pay at Goldman and Morgan. Many others were forced to settle for less-talented graduates or to try to attract graduates from other kingdoms.

Meanwhile, the owners of Goldman and Morgan began looking for new sources of revenue and profit to finance this never-ending bidding war for talent. The firms gathered all their financial wizards — mathematicians, engineers and economists — and set them to inventing whole new categories of securities that could be traded, in addition to sophisticated new trading strategies that would increase the number of times each security changed hands.

These innovations did little to improve the efficiency or output of the rest of the kingdom’s economy, but over time, they allowed Goldman, Morgan and their employees to capture a greater share of the realm’s income and wealth.
[...]
If there is a moral to this tale, it is that finance alone cannot make a kingdom thrive and prosper. Trading assets is largely a zero-sum game: The buyers’ gains are the sellers’ losses, or vice versa. Economies benefit to the degree that financial markets efficiently allocate capital from those who have it to those who can make the most of it.

Surely, one measure of that efficiency is how little is skimmed off by the financial middlemen. So the next time someone tells you that it’s no concern of yours if Wall Street traders are earning a king’s ransom, remind him of the story of Goldman and Morgan and the financial wizards who thought they could spin capital out of straw.

Pearlstein’s right on target with his little fairy tale. And it’s time Congress sat up and took notice of what many in the media and across the country are saying…and get over their love affair with lobbyist’s money.

$609,000 per day to Congress from pharma companies

Time magazine reports on pharmaceutical lobbying efforts in Congress.

…in the first six months of this year alone, drug and biotech companies and their trade associations spent

Pharma Lobbying by year to Congress

more than $110 million — that’s about $609,000 a day — to influence lawmakers, according to figures compiled by the nonpartisan watchdog group Center for Responsive Politics. The drug industry’s legion of registered lobbyists numbers 1,228, or 2.3 for every member of Congress. And its campaign contributions to current members of Waxman’s committee have totaled $2.6 million over the past three years.
[...]
Indeed, the biologics lobby has become one of K Street’s most powerful players. Working largely through BIO and the Pharmaceutical Research and Manufacturers of America (PhRMA), it has funded an extensive network that includes not only lobbyists but also think-tank experts and advocacy groups. “You can’t get on the phone with someone who isn’t getting paid,” says an economist who has studied the biologics issue with funding from a drug company. “They give money to everyone and anyone.”

Granted that R&D of biologics is extremely expensive for a pharma company and not one that should be dismissed lightly. But the amount being spent to lobby Congress, primarily to extend their patents to 12 years, has grown significantly in recent years, with this year and next on track to produce record amounts flowing into Congress.

The Federal Trade Comission (FTC), on the other hand, argued in June that patent extensions would stifle innovation, causing these companies to live on their profits rather than spend on new drugs, as well as reduce competition. Moreover, the patent extensions would increase costs to Americans by billions.

But it looks like pharma dollars won this round while average Americans lost out again. If Congress were really on the side of average Americans, they’d vote down the amendment giving the patent extensions and, instead, give pharma tax deductions for R&D and manufacturing to offset the huge and often losing costs of R&D and high costs of manufacturing.

But, then, Congressional members wouldn’t rake in huge dollar contributions from lobbyists.

Okay, this is just to funny to be real

This just in fromWired Science, Republican men who learned that Obama had been elected president had lowered testosterone levels, nearly matching those of women.

Comparison of testosterone levels pre- and post election of Pres. Obama

…liberal testosterone levels stayed stable, while those of male Republican voters plummeted. The latter also reported feeling submissive and unhappy.

There are many ways to read these results, which are based on saliva samples taken from 183 men and women as the polls closed, and again when President Obama’s victory was officially announced.

First, male voters get the same vicarious boost from a candidate’s political victory as they would their favorite sports team beating a rival. That’s the main academic finding of the study, published Wednesday in Public Library of Science ONE, but one that seems rather self-evident.

Much more interesting is the split. Obama voter testosterone merely stabilized. The researchers suggest that, as nighttime testosterone levels typically dip, stabilization “is conceptually similar to a rise.”

But if testosterone usually just dips at night, it positively plummeted for Republican men.

Indeed, Republican men “felt significantly more controlled, submissive, unhappy and unpleasant at the moment of the outcome” than those who voted for Obama, the researchers wrote. “Moreover, since the dominance hierarchy shift following a presidential election is stable for four years, the stress of having one’s political party lose control of executive policy decisions could plausibly lead to continued testosterone suppression in males.”

This is just too funny!

In ‘08, 92% of House members kept their seats

House re-election percentages by year

If you have ever wondered by Congress seems to ignore your needs and wishes, it may be because they feel their seats are safe. In other words, they don’t have to compete in open competition for their seat. This chart shows that over 90% of House members have been re-elected time after time, often for many decades. While this kind of experience can work for the people, it also embodies severe drawbacks in that those decades long members lose thier connection to the common people whom they were elected to represent.

Everyone has heard the euphemism of “inside the beltway.” When representatives spend so much time within the Washington beltway, they begin to think of themselves as special or forget the travails and trials which ordinary people must endure. They gladly accept large lobbyist donations to their individual PACs that they spend any way they choose in order to live a better, more elaborate lifestyle. They gladly accept corporate and lobbyist donations to their re-election campaigns to ward off competitors from both their own party as well as the opposing party. Remember the much reported stories of Tom Delay walking through the House handing out checks from K St. lobbyists?

Does anyone believe that those donations are not a bribe?

But worst of all is the complicity of the states. In drawing districts that favors one party over another, only one party has a chance to win that seat. The only competition for that seat comes from within the same party, and usually that competition is from the further extremes of the party.

That kind of representation is not what the Founders had in mind when they designed the Federal government. They believed that each member of the Congress would serve a few years at a nominal salary and then return home. They never envisioned professional politicians who would spend their entire working lives in the same or better political office.

Nor did they envision Congressional districts being drawn to create “safe seats.” Nor did they envision the institutionalized lobbying known as “K St.” such as exists today with Congressional members and aides moving from Congress to multi-million dollar lobbying jobs and using their contacts within Congress to enrich themselves, often at the expense of the American people.

The state-mandated gerrymandering which creates “safe seats” is anathema to republican democracy. Simply put, it’s wrong. It’s a perversion of the republican democratic process. The system devised by our Founders has been perverted to enrich the few at the expense of the many.

It’s long past time to take our republican democracy back! Demand an end to gerrymandering.

Vt Senator Bernie Sanders on the economy and Wall St.

While it’s true that Vt. Senator Bernie Sanders is the most liberal senator in the Senate today, one can hardly dispute the facts he presents in this video.

Given the news coming out on the House Financial Services Committee’s Reform Bill – a bill that is filled with loopholes and lacks real reform – it might be well to think about what Sen. Sanders says…and contact your Congressional representatives to remind them for whom they work and who pays their salary. Unless, of course, another financial melt-down doesn’t bother you because that’s exactly what will happen again if real reform and regulation is not passed.

Afganistan: another view by Afganis

Codepink traveled to Afanganistan to speak to the people.

Is the solution more troops as the military and Republicans want or is it more civilian help as the Afgans want?

Sunlight Foundation sheds light on Pharma big money lobbying

The Sunlight Foundation whose stated purpose is to increase governmental transparency at all levels teamed up with the Center for Responsive Politics to determine how much and who received lobbying monies in the form of contributions to various Senators and House members.

Congressional members made out big time during the health care debate, especially those members sitting on committees with direct responsibility for some aspect of health care legislation.

We found that Sen. Max Baucus, D-Mont., chairman of the powerful Senate Finance Committee and author of the main health care reform bill now being debated in the Senate, was one of the biggest beneficiaries of this one-two punch from lobbyists and the interests they represent. Between January 2007 and July 2009 (the period we studied), Baucus collected contributions from 37 outside lobbyists representing PhRMA, the pharmaceutical industry’s chief trade association, and from 36 lobbyists who listed drug maker Amgen Inc. among their clients.

In all, 11 major health and insurance firms had their contributions to Baucus boosted through extra donations from 10 or more of their outside lobbyists. (See our visualization and the full list from CRP.)

Nor was Baucus alone—other members also received contributions from the employees, their family members and political action committees of health care firms and from the outside lobbyists that represented them. Senate Minority Leader Mitch McConnell, R-Ky., collected lobbyist “bundles” from 14 major health care organizations. Sen. John McCain, R-Ariz., actually led the list, with 22 organizations—though much of that money was directed at his presidential campaign last year. (see the full list.)

Because regulations require not only reporting from the lobbyist for actual campaign contributions and the member receiving the donation also must report the donation, lobbyists circumvent the rules by donating directly to the members’ own PACs which remain loosely regulated to the point of no regulation and allowing the members to use their PAC money any way they they wish.

Interestingly, about one-third of the contributions were given not to the members’ campaign committees, but to their leadership PACs—separate funds that members control—but that get far less media scrutiny than their reelection campaigns. The leadership PACs also have higher contribution limits, enabling lobbyists to give well beyond the nominal $2,400 limit that applies to campaign committees.

The rules for politicians need to change…but they won’t be rewritten until the people in each state change the gerrymandered districts to allow new, moderate players onto the field. We must demand more of our representatives by way of looking out for our interests, rather than just the interests of lobbyists and other special interests who rig the system in their favor, preventing us from enjoying the benefits of true competition or being ripped off by companies who use the system to steal our money while leaving us to pay the bill.

We must eliminate gerrymandering which enables safe seats for Congress members who use lobbying money as a “free” money-pot from which to enjoy all the pleasures they seek while giving away our money, our futures, and our livelihoods.

Dump the bums

A few days ago while channel surfing, I stopped on a story on Fox News. According to the speaker, he and his group are developing an effort to vote out all incumbent Congressional legislators. While I understand the rage that exists over incumbents who have been in office for more years than one cares to count or who are so far to one extreme end or the other that nothing gets done but party politicking. I understand that too many Congressional people become enormously, outrageously rich as a result of their office. I understand the rage caused by too many legislators who refuse to leave office even when they are no longer able to perform their duties. And the rage caused by all of the lavish benefits they receive after they’ve left office that most of us only dream about receiving when we lose a job.

But what the people who cry, “Throw the bums out!” miss is that, as a result of gerrymandering, legislative and Congressional districts are safe for one

Florida Gerrymandered District

party or the other. The Merriam-Webster Dictionary defines gerrymandering as:
1 : to divide (a territorial unit) into election districts to give one political party an electoral majority in a large number of districts while concentrating the voting strength of the opposition in as few districts as possible
2 : to divide (an area) into political units to give special advantages to one group

Wikipedia defines the term thus:

Gerrymandering is a form of boundary delimitation (redistricting) in which electoral district or constituency boundaries are deliberately modified for electoral purposes, thereby producing a contorted or unusual shape. The resulting district is known as a gerrymander; however, that noun can also refer to the process.

Gerrymandering may be used to achieve desired electoral results for a particular party, or may be used to help or hinder a particular group of constituents, such a political, racial, linguistic, religious or class group.

Wikipedia goes on to state:

The effect of gerrymandering for incumbents is particularly advantageous, as incumbents are far more likely to be reelected under conditions of gerrymandering. For example, in 2002, according to political scientists Norman Ornstein and Thomas Mann, only four challengers were able to defeat incumbent members of the US Congress, the lowest number in modern American history.[3] Incumbents are likely to be of the majority party orchestrating a gerrymander, and incumbents are usually easily renominated in subsequent elections, including incumbents among the minority.

This demonstrates that gerrymandering can have a deleterious effect on the principle of democratic accountability. With uncompetitive seats/districts reducing the fear that incumbent politicians may lose office, they have less incentive to represent the interests of their constituents, even when those interests conform to majority support for an issue across the electorate as a whole. Incumbent politicians may look out more for their party’s interests than for those of their constituents.

Gerrymandering can have an impact on campaign costs for district elections. If districts become increasingly stretched out, candidates must pay increased costs for transportation and trying to develop and present campaign advertising across a district.[citation needed] The incumbent’s advantage in securing campaign funds is another benefit of his or her having a gerrymandered secure seat.
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Gerrymandering can also be done to help incumbents as a whole, effectively turning every district into a packed one and greatly reducing the potential for competitive elections. This is particularly likely to occur when the minority party has significant obstruction power — unable to enact a partisan gerrymander, the legislature instead agrees on ensuring their own mutual reelection.

In an unusual occurrence in 2000, for example, the two dominant parties in the state of California cooperatively redrew both state and Federal legislative districts to preserve the status quo, ensuring the electoral safety of the politicians from unpredictable voting by the electorate. This move proved completely effective, as no State or Federal legislative office changed party in the 2004 election, although 53 congressional, 20 state senate, and 80 state assembly seats were potentially at risk.

If that last paragraph does not convince you of the deleterious and non-competitive effects of gerrymandering, then think of it this way: Say you really dislike Nancy Pelosi. Given gerrymandering, Ms. Pelosi is safe. There is no way to get her out office unless a Democratic contender who is even further to the left challenges her. The same hold true for Joe Barton of Texas. He’s held his office since 1985. But the Texas legislature gerrymandered their districts years ago in such as to prevent Democratic candidates from obtaining office. In other words, Joe Barton is safe unless someone further right than he challenges him.

Is this Democracy? Is it democratic that candidates who are moderate – close to the center – are incapable of being elected because of the way legislatures have gerrymandered districts to support only one specific party? Is it democratic that the only candidate who has any chance to defeat an incumbent is someone who is even further to the extreme end of the very same party?

So, are we really being represented? Is this what Jefferson, Madison, Adams and so many other good men had in mind when they struggled to create a new nation?

Former Reagan campaign manager speaks out against “talk jocks”

In an interview with the LA Times on Sept. 20, Stuart Spenser, who ran Reagan’s “four successful campaigns for the late governor and president, laments the state of politics and punditry.” He told the Times,

The Republican California political guru who crafted four successful Ronald Reagan campaigns, two for governor and two for president, does not watch Fox News or its conservative bobblehead pundits.

Why not?

Fox News has an agenda, 82-year-old Stuart Spencer said over breakfast in Palm Desert, where he and his wife make their home. Same is true of MSNBC, he said. One goes right and the other goes left, and Spencer doesn’t see why those interested in educating themselves on matters of national importance would turn to either for reliable information.
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It’s hard, Spencer said, to pinpoint exactly where we went off the rails. There have always been cultural and social changes in the nation, he said, and over time the differences of various regions became more pronounced. House Speaker Newt Gingrich and cohorts exploited that when they tried to commandeer the policy agenda by acing out Democrats, Spencer said, and he thinks current House Speaker Nancy Pelosi is doing the same to Republicans.

I asked Spencer if part of the problem is the growing influence of money, which makes politicians more beholden to special interests and therefore more divided. Maybe, he said, but money was always a factor in politics. Today there’s also a different kind of money in play: the fortunes that TV and radio broadcasts make by having gas bag commentators fan the flames day and night.

So, what are his thoughts on the (in)famous pundits:

Rush Limbaugh -
“When I had a place in Oregon, I’d drive 25 minutes and [Rush] Limbaugh would be on three different stations,” Spencer said. “I couldn’t get rid of the son of a. . . .”

Acquaintances would ask Spencer about Limbaugh’s brilliant observations, and Spencer would politely say he never listened. His astonished pals, knowing how close he was to the Gipper, would demand to know why not.

“Because he’s an ass,” Spencer would say, only he added a second syllable that makes the insult unprintable in a family newspaper.

Keith Olbermann of MSNBC -
Spencer wants reason, not rants. He wants substance, not smirks. He has no interest in watching one side lob grenades at the other in nightly warfare that further divides the nation along cultural and political lines.

Glenn Beck -
Spencer can’t watch the maudlin Fox host, who blubbers over the destruction of the nation by a president he calls a racist.

Chris Matthews -
Spencer said the last time he appeared on “Hardball” with motormouth Chris Matthews, the host asked a question and then interrupted before Spencer uttered two sentences. So he’s scratched that show too.

Reagan was himself at times a divisive and hypocritical leader whose debacles, including the Iran-Contra scandal, have been obscured by years of myth-making. But he was civil to his political foes and built lasting relationships, political and social, with the Kennedys, among others. He worked closely with Sen. Ted Kennedy on budget matters and international disarmament, and with Soviet leader Mikhail Gorbachev on the end of the Cold War.

The tenor was different then, Spencer said, recalling that on Thursday nights, Reagan invited Democrat Tip O’Neill, the House speaker, to the White House for hours of storytelling and problem-solving.

It was a time when you sat down with your political counterparts and tried to find common ground. If the other guy got the best of you, you would look him in the eye and say, “OK, you win. But I’m going to get you next time.”

In Sacramento, Spencer said, “you could fight all day and then go have a cocktail with the other side at night.” His fix for California’s intractable budget mess would begin with redrawing legislative districts.

“The first thing I used to tell a candidate was that he had to fit his district,” Spencer said, but the districts are now drawn to be safely to the right or safely to the left, so moderates never get out of the blocks and Democrats and Republicans can’t agree on the time of day.

If today’s heated and often absurd “talk jock” rhetoric causes a long time Reagan trusted adviser to choose only to watch CNN and PBS news because of the silly partisanship and self-serving outbursts, then maybe the rest of us should listen…and maybe follow his example. And, in fitting with my own personal crusade, redraw the current insanely gerrymandered districts.

“Bending the cost curve”- Taking a lesson from Annapolis

Eli Y. Adashi, a physician, a professor of medical science and the outgoing dean of medicine and biological sciences at Brown University, writes in today’s Washington Post that the nation – not to mention, each state – could take a lesson from Maryland on “bending the cost curve” of health care.

Overseen by expert commissioners appointed by the governor, the modestly staffed HSCRC [Health Services Cost Review Commission] is an independent agency whose decisions are legally binding. The results are plain: Maryland residents receive hospital care regardless of ability to pay, but the state’s hospital costs per admission dropped from 26 percent above the national average in 1976 to well below that national benchmark by the early 1980s. Costs per admission are controlled, and the annual admission growth rate (1 percent) is on a par with the national rate, according to an analysis by executive director Robert Murray of hospital reports filed with the agency through 2008.

Over three decades, the HSCRC (current annual budget: about $4.9 million) is estimated to have reduced state health-care bills by as much as $40 billion, a return on investment of about 2,500 to 1. Had a comparable national system been created to the same effect, the commensurate savings might have been $1.8 trillion.

Maryland’s health-care market is largely free of dysfunctional (and discriminatory) hospital practices seen in many other states, such as indefensible cost markups and cost-shifting to patients. Building on its strong record, the HSCRC voted this year to approve an innovative pay-for-performance program focused on potentially preventable hospital-acquired complications and readmissions.

Consider the ingredients of Maryland’s success: Foremost is the HSCRC’s legislated independence and broad enforcement authority. Nonpartisan and apolitical, the commission is not an advisory committee but is empowered to act on its findings. Analysis and deliberation are public, collaborative and exhaustive. No less important is the broad support afforded the commission by stakeholders in the system: providers, payers, patients and politicians (who still recall the oceans of red ink generated by Maryland’s charity hospitals). Health-care providers appreciate the predictability, transparency and fairness of the process, and the nationally comparable profit margins. The enhanced compensation by public payers (enabled by a federal waiver) and the absence of protracted rate negotiations with each payer are fringe benefits. Payers cherish the regulated payment parity and the predictability of revenue streams. They are also happy to be largely free of hospital cost markups and cost-shifting. Patients appreciate the access to care. Moreover, employer-sponsored premiums as a percentage of median household income are the lowest in the nation, the New America Foundation’s “State of State Health” reports.

Just changing health insurance regulations – and most importantly eliminating health insurance companies from their current anti-trust exemption – is not enough to really bend the curve of health care costs. Limiting payments to doctors and medical providers won’t do much either, except to drive more out of the market or cause them to find other ways to increase their income. What must be done is changing the system as a whole. Maryland’s example may provide an example of how that can be done.