Change We Can Believe In - Or Compromise We Can't?

Mr. President:

We've now had seven months to BELIEVE in "Change We Can Believe In".

Where is it?

Today, we learned that the "Public Option" - the centerpiece of your Health Care Reform - has been officially taken off the table. This follows the revelation
two weeks ago, confirmed by the White House, that you agreed NOT to have the
government negotiate with the pharmaceutical industry for "the lowest possible prices".

We have also learned that the non-profit "health care co-operatives"-
the fallback position in case there was no "public option", now
will not happen either. Neither will Medicare reform.

And Tort Reform - the one thing that might take an immediate 15%
right off the top of the national health care bill - wasn't even up for discussion.

How is this "Change We Can Believe In" ?

It looks to me like more of the same.

But now we've got questions - what else has been agreed to behind closed doors
that we won't find out about until later?

Are the Health Insurance Companies still going to be allowed to profit from
denying coverage for pre-existing conditions or dropping coverage of those
who file a claim? Is Big Pharma still going to be able to exert monopoly
pricing over drugs with a blanket veto over any negotiations for lower prices?

Judging by the reactions of the stock market, that seems likely.

In the past six weeks, CIGNA is up 40%. Wellpoint - up 23%. Aetna - up 21%.
Big Pharma? Pfizer - up 20%. Bristol-Myers/Squibb - up 15%. You get the idea.

The Market seems to believe the Fix is in - do you?

This isn't Change We Can Believe In - this is Compromise We Can't Believe Happened.

Now, if the GOP had a majority in the House and Senate, and you
had won a squeaker of an election, we could understand. You would be starting
from a position of weakness. Realistically, you could expect only those small,
incremental changes you could negotiate. And you would be asking, like
many other Presidents before you, for a Congress you could "work with".

But that's not what happened. We gave you a convincing popular and electoral
victory. You have solid majorities in both houses of Congress.
Health Care should have been a done deal. We could understand some
compromise. No Congress, regardless of party, will give a President
everything he wants.

But this isn't compromise. It's a total cave-in to the other side, which has
a vested interest in keeping our health care a sorry mess. And it didn't
have to happen.

There's lots you could have done.You could have made this a matter of party
discipline. You could have pointedly refused to work with the GOP or
conservatives and used the media to tie them to their corporate masters.
This would have covered your moderates and isolated the Blue Dogs.
Remember, most of those Mutts owe you more than you owe them.

And it would have paid off in other ways too. Big Health Insurance and
Big Pharma are poster children for corporate Bad Citizenship that
everyone recognizes. Almost everyone either has had a claim denied,
coverage denied, been put in a financial bind by illness,or
knows someone who has. That makes them unpopular, easy targets.

Get Health Care through, and you do more than just reform Health Care.
You send a Big Message to the other bad citizens - especially Wall Street -
that it's time to play ball and get with the program. Your program.

But fail on Health Care, and you're done. They'll know you can be had.
You'll be compromised and bi-partisaned to death on absolutely everything
else - banking reform, the environment, everything.

Remember, Mr. President; Compromise is a tactic - not a strategy.
Don't forget that. We voted for Change We Could Believe In ; not
compromise we can't understand.

And your beloved Progressives won't forget that - neither will the people.
If joblessness and foreclosures persist into 2010, a lot of good, loyal
Congressional Democrats are going to lose their seats. That won't help you.
And if things don't improve by 2012, you're going to be replaced -
maybe even by a woman.

And I'm not talking Hillary - I'm talking Sarah.

Barack Earl Hoover, Jr. (Part 2 of 2)

(Continued From Part 1)

For both Herbert Hoover and Barack Obama, the problems began early in their presidencies.

Seven months into office, Herbert Hoover witnessed the great Wall Street
Crash of October 1929. In September 2008, two months prior to Obama's
election, Wall Street repeated its 1929 performance, sending stocks to
ten -year lows while wiping out both major investment banks and
millions of hapless investors.

In both cases, the market collapse resulted in mounting bankruptcies,
foreclosures, and quickly skyrocketing unemployment. By June of 1930,
unemployment had doubled to 9.6 per cent. By May of 2009, using a
more expansive measure, unemployment was also 9.6 per cent - and rising.

At first, both Obama and Hoover were reluctant to directly intervene. In Hoover's time, market panics and crashes happened every seven to ten years, and usually corrected themselves in months after the excesses of speculation had been liquidated away. Obama had been forced to divert valuable
campaign time and resources into negotiations with the outgoing Bush
Administration over relief measures, as it became apparent that he would be the
likely winner of the 2008 election and would require some continuity in order to fully address the problems.. Thus, both men chose to start by using the "bully
pulpit" of their office - to try to stem the tide of events by moral suasion.

Hoover began by calling a series of meetings with the "key men" of his time -
bankers, industrialists, and academics - to explain his view of the problems and
what he needed them to do to help correct them. He wanted the banks to
resume lending, the industrialists to hold the line on layoffs, and the academics
to lend theoretical support to his efforts. To get things started, in 1930 Hoover
and the Congress created the Reconstruction Finance Corporation (the RFC);
an unprecedented combination stimulus and banker's relief measure.

(It would later be greatly expanded by the Roosevelt Administration under the New Deal.)

Obama also called in his "key men" from Congress and the business, financial and academic communities to get their support behind relief efforts. Using the Troubled Asset Relief Program (TARP), passed in the waning days of the Bush Administration as a start, Obama, like Hoover, persuaded a frightened Congress to pass an unprecedented RFC-like stimulus program of tax cuts and spending bills, in an effort to "re-light" the flamed-out economy.

In both cases, the "Key Men" listened politely - and went on as before.
The banks hoarded the cash proffered them under both the RFC and TARP
and quickly ceased lending. The financial community - the investment banks
and brokerage houses - used the funds to resume paying their executives and
traders huge bonuses, while the sector as a whole continued to show losses.

A few investment banks even used the relief funds and government
guarantees to speculate against their own customers - using inside information
and proprietary trading.

The response of the business, government, and academic sectors to the
efforts of both men was equally disappointing. Under both Hoover and
Obama, the business community took the assistance and continued to
slash output and employment. The Congress took Obama's stimulus package
and used it to fund thousands of pet "pork barrel" projects in their districts.
Consumers and the wealthy used tax cuts to increase saving and pay down debt
instead of spending. The States used their portion of the funds to
shore up sagging state budgets and preserve the jobs of existing state
employees instead of embarking on new programs. And the academic
community under both Hoover and Obama began sounding the alarm about
"Deficits"and the need to balance the budget.

Conservative economists began to call for slashed spending and increased
"liquidation"of troubled sectors of the economy. Liberal economists began
calling for immediate tax increases on "the wealthy" and for new sources of
government revenue, such as a Value-Added Tax and new carbon-fuels and
energy-consumption taxes.

The end result? Both men, despite their best efforts, managed to do little
more than slow the rate of an inevitable decline. In Hoover's case, matters
continued to drift gradually downward until he was replaced by Roosevelt in 1933.

Obama, seeing the economy shrink to new lows despite the vast amounts
appropriated and spent, began new initiatives on "the green shoots of the Green
Economy" (a sop to the environmental activists of his party), and a quixotic
attempt to reform Health Care.

In both instances, both of these bright, technocratic men fell into The
Technocrat's Trap: that doing what should be done would result in
what must be done. Hoover, ever the cautious and calculating engineer,
believed that his sheer logic and scientific precision would both win over
doubters and persuade opponents.

Of course, that did not happen - and the same high-minded, logical approach
was to lead another engineer President ,James Earl Carter Jr. - to disaster
fifty years later.

Obama. a lawyer and community activist by training, did not have the same
mathematically logical mindset as Hoover. But his years of experience as
a community organizer, attorney and politician led him to believe in the
value of consensus - that what must be done was to first, achieve consensus;
and then the result could be carried through to do what should be done.

Having carefully studied both the problems and the failures of past Presidents
to achieve consensus, Obama also brought a legislative majority and a solid
electoral victory to the table. Combining a desire to seek consensus and
an extraordinary grasp of detail with an even-handed, mature temperament,
he had every reason to believe he would succeed.

But, as they say, the devil is in the details. And in the rough-and-tumble
struggle between reality and idealism, reality usually wins.

Reality saw Obama's Stimulus package bear only the slightest resemblance to
what he had originally proposed. The final product featured non-stimulative tax
cuts, an unprecedented porkfest for politicians, and precious little in the way
of immediate, employment-creating projects and programs. Even worse,
Obama's natural caution has led to a glacial slowness in implementation.

Result? Hooverization.

But it is on Health Care that Obama's efforts most resemble the struggles
of the 39th President. In what can only be described as a Carteresque
mix of idealism, inexperience, and naivete, Obama handed off the responsibility
for this key Administration initiative to the Democratic leadership of the Congress.

Now you don't have to be a hardened cynic to understand that these Solons
are hardly "tribunes of the people". Rather, they are the bought and paid for
creatures of every special interest with business to transact or bring before the
federal government. And one of the wealthiest and most powerful of
those Special Interests is the Health Care industry.

And on this one they are taking no chances. Backed by a 300 million dollar war
chest, they have deployed a brigade of 3300 lobbyists to Capitol Hill. That's
roughly six cash-carrying lobbyists per Member of Congress.

And they aren't stopping there. The demonstrations against "Government
Health Care" have been largely paid for and orchestrated by those same
interests - often by slick, well-paid young organizers in khakis and polo shirts
with the logos of Blue Cross, Pfizer,Cigna, Wellpoint, and United Health,
to name a few. And coverage of these incidents - especially on conservative
or business-oriented networks - has been paid for by these same folks.

Against this, Obama, until very recently, has declined to use the influence
of his office or the Executive Powers of the Presidency to shape the debate.
As a result, the opinion polls are now running 4 to 1 against Health Care Reform.

Mr. President, you've Carterized yourself.

Barack Hussein Obama, meet Barack Earl Hoover Jr.

Obama , Health Care, and Reality

Today, we learned that the House and Senate will not complete their work on the
Administration's Health Care proposals before the summer recess.

Commentators and other are suggesting that perhaps now is the time to pull back and "regroup" and rethink what to do next.

Mr. President, that's good advice. You need to remember that this is only the end of the first round, not the end of the fight.

But in the drive for "universal coverage" , let's understand why we're doing this - to REDUCE COSTS.

Mr. President, I think we can all agree that the current system is totally out of control. Health Care now constitutes one-sixth of the economy - up from one eighth of the economy just ten years ago.

To put this in perspective, this is a bigger share of the economy than either the auto companies or the banks you've just bailed out. And, if things are left unattended, we can see both the Health Insurers and Big Pharma lining up for a bailout as well.

What's worse is the fact that the BIGGEST driver of these increased costs is the complete breakdown of the cost controls on Medicare. While health care costs overall have increased six times faster than wages and eight times faster than the Consumer Price Index, Medicare costs have increased even faster. This isn't just out of control - it's the Mother of all Train Wrecks waiting to happen.

You are right - something has to be done. But what must not be done is more "business as usual".

The cosmetic tinkering at the margins that is likely to emerge from Congress is not going to get the job done.

Here, at a minimum, is what you have to do:

1) Get everyone into the pool. Everyone is familiar with the plight of the uninsured. But the uninsured aren't just low-wage workers or the unemployed - most are, in fact, young, healthy, employed workers
who "opt out" of employer-provided health plans to raise their take-home pay.

This has to stop. What you can do right away is make enrollment in employer-provided plans mandatory, or pay a Health Care Tax equal to the employee contribution. This will help get everyone in - and paying.

When folks literally have "skin in the game ", they are more likely to pay attention to the issue.

2) A Public Option. Your "Health Insurance Exchange" is a good idea -
but without a publicly-provided health care option, there will be no rational basis for comparison.

To abandon the field to the for-profit Health Insurers is to let the rent-seekers have complete control of the market.

In some states - Nevada, for example - only one or two of these rent-seekers have virtual total control of the health insurance market. A choice between two collusive for-profit providers is no choice at all.

A "public option" on the table keeps these folks honest. And why do I call the Health Insurers rent-seekers? Because that's what they are.

When you are under pressure from Wall Street for ever-increasing earnings, there's only one way to do this if you are a Health Insurer. And that is to raise prices and deny coverage at the same time.

That's what the economists call "rent-seeking". That means abandoning your role as a payer of benefits and becoming a path-blocking middleman focused on keeping as much of the premium dollar as you can legally get away with. And that's exactly what has happened.

Don't believe me? Just ask anyone you know who has suffered a catastrophic
illness or injury how THEIR experience with their insurance company was.
End of story.

3) Reform Medicare. Medicare now resembles nothing so much as an attempt to provide Cadillac care at Chevrolet prices. And as we now know, that can't be sustained for very long - if ever.

Medicare right now is based on an old-fashioned "fee-for-service" model.

And because the reimbursement rates are so low, there's every incentive for
providers to load up the tab with every possible test and procedure.
Even Part A and Part B supplements (hospitalization and drugs) paid for by the
enrollee don't help much.

Three things need to happen with Medicare to control costs - Capitation, Controlled Access, and Compensation for Outcome . What this means over time is transitioning to an HMO model.

Politically, it's going to be a tough sell. Seniors are organized. They vote.
And Grandma is used to seeing the same doctor she's seen for the last thirty years.

But then, we didn't elect you to do the easy things.
We elected you to do the tough things we couldn't do for ourselves.
And admittedly, this is one of the toughest.

But the good news is, there's a way to do it. You counterbalance the influence
of the retired elderly by adding some additional players to the pool.
You should immediately drop the eligibility age for Medicare from 62 to 55,
and then each year over the next five drop the age limit one year until
eligibility is age 50.

This will add a cohort of working middle-age people to the Medicare pool
who are, for the most part, used to HMO/PPO plans and are relatively healthy.
You can no doubt come up with financial and tax incentives to get them to
switch. It won't work for everyone - but for working empty-nesters, it
might be just the thing.

With a large enough pool of people in the system, you would finally have
a constituency for real change.

Finally you've got to grasp two big thorn bushes - not mere nettles - to
really make change happen. You've got to take on Big Pharma and
Big Tort Law.

One of the first things Congress did in reworking your proposal was to
deny Medicare the right to bargain directly with Big Pharma for the
lowest possible prices for name-brand drugs. This was nothing more
than a corrupt bargain between dollar-laden lobbyists and cash-hungry
Congressmen.

Big Pharma knows what happened when Canada and all the other
industrialized nations negotiated for "lowest possible prices".
Their profit margins went down in those markets from the exorbitant
to the merely reasonable.

That's why gouging the American market is a matter of
financial necessity - Wall Street will not keep the investor dollars
rolling in and the stock prices up otherwise.

Eighty billion dollars in "soft-dollar" concessions over the next ten
years is not enough,. And you have the whip hand on this.

If you were Franklin Delano Obama, you'd get price concessions
right now - or you'd immediately revoke their patents and hand them
over to others willing to manufacture on government contract.
After all, it's what the Canadians did - and if you look at their prices and
formularies, they're much like ours - only cheaper.

Big Pharma - like any "Big" entity, listens to persuasion - but responds to threats.

And remember, what a government gives (patents, etc.), it can also take away.

Last, you've got to take on the Malpractice Lawyers. They are among the
biggest financial contributors to Democratic members of Congress.

And, you're a lawyer yourself. You know that the whole Tort and Malpractice
area needs drastic and immediate reform.

The way to do this is to take Medical Malpractice out of the court system and make it like Workmen's Compensation. Workmen's comp made it possible for employers not to be sued for workplace injuries. A Federal Malpractice Compensation Board might do the same for doctors, who, through no fault of their own, are obliged to either practice costly defensive medicine, get out of certain specialties, or avoid serving certain geographical areas.

Get where we're going with all this? To achieve reform, everyone's going to
have to give up something. Certain people's taxes may have to go up -
some types of care may have to be rationed - and the fattest for-profit
players may have to be brought into line.

But advanced societies are starting to regard health care as a public good -
like schools, roads, police and fire protection.

And public goods are things that a for-profit Capitalist system isn't
necessarily very good at delivering.

If matters are left unchecked, what we're heading towards is a society where
the Rich, the Connected, and subsidized Elderly have care - and the rest of
us are sick, uninsured, uncared for and nonetheless getting stuck with the bill.

That's not a recipe for National unity and cohesion.

- The Thinking Nationalist

Obama, Health Care, Congress and Bill Clinton

Today we heard from President Obama that his health care plan "needs work" and may not quite be ready for prime time. Upon hearing this, reporters breathed a sigh of relief, the Republican opposition took a break, and the "Blue Dog" Democrats (upon whom passage of this bill will ultimately depend), began negotiating with themselves as to how best they can distance themselves from this issue by giving it the "death of a thousand cuts".

Mr. President, The Thinking Nationalist is going to make two predictions: First, ObamaCare will never happen. Congress will never allow it. And second, even if a health care bill does make it out of that great legislative Sausage Factory by your self-imposed deadline, it will be distinguished by the following:


- It will bear only a faint resemblance to anything you've proposed;
- It will vastly swell the deficit ($238 billion is only the conservative CBO estimate);
- It will not reduce the number of uninsured to any measurable degree;
- It will reduce the options available to the insured in the name of "reducing costs";
- It will not feature a "public option";
- It will "shift costs" from insurers and employers to doctors and patients ;
- It will be a huge, federally-financed bonanza for the rent-seekers of the
for-profit Health Insurance and Pharmaceutical Industries.

And you, Mr. President, will stay the veto pen and sign it.

How did it come to this? Mr. President, here's how:

It begins with Leadership.

First of all, when you stake out the high ground as you have done, when you make this the defining issue of your Presidency, it's too important to "manage from the rear" - it has to be led from the front.

This is exactly NOT the sort of issue you can just hand off to Nancy Pelosi and Harry Reid and just wait to bless the result. If you have a clear idea of what you want ,you should have known better than to hand off the project to these two. And bi -partisanship? Forget it. The Republicans have shrunk to a white,Southern, rural, permanent minority. They are not the opposition - they are irrelevant. You should know this.

However, you are in danger of being undone on the whole Health Care issue by your erstwhile friends on the Hill. And with friends like Max Baucus, Byron Dorgan and Ben Nelson, you don't need enemies.

Mr. President, the House and Senate are busy transforming your proposals from Pork Loin into Pork Sausage - laden with fat, and filled out with those bits and scraps thrown into the mix by their lobbyist buddies.

Mr. President, it's time to go back to campaign mode - full time. And to win this ball game, I think Manager #44 needs to make the call to the bullpen for Relief Pitcher # 42.

As you know, Bill Clinton was the last President to make a huge push for national Health Care reform.

But his proposal, developed entirely in the White House by Hillary, made the mistake of seeking absolutely no input from anyone outside 1600 Pennsylvania Avenue. Hillary insisted on that to prevent the same kind of Congressional sausage-making we are now witnessing.

It was a complete package - down to the last detail - and presented to Congress and the people as a "take it or leave it" proposal. And, predictably, it got left.

You've learned from the Clinton's mistakes. HillaryCare was far more radical and extreme than anything you've proposed. But you've gone too far in the other direction. You've made the seeking of "consensus" and "input" an end in itself. What that means is that what you'll wind up with will have no resemblance to what you've proposed. Why? Because you've handed the initiative over to the opposition - which is now concentrated in the leadership of YOUR party.

Mr. President, how do we reset matters and get things off the dime?

First of all, bringing back #42, Bill Clinton, to spearhead the effort as your new
Health Care Czar isn't an admission of weakness on your part.

It's bringing in a game-changing player when the game needs changing;

Second, nothing else you could do will so demonstrate your seriousness on the issue as this will. Bringing back a well-liked Former President as a Player on your team just might push this over the top.

Third, when it comes to "Going Campaign Mode"on an issue, there's no one like Bill. When you consider that the opposition is concentrated in the "Blue Dog" states and districts, he's just the guy for the job.

Remember, he's one of them - a down-home good ol' boy. When you also consider that he's a more experienced and knowledgeable "policy wonk" than many of your current players, you've got the best of both worlds;

If you bring him on, don't be surprised to see his whole kennel of attack dogs - the John Podestas, Paul Begalas and Jim Carvilles - helping out with the media and the talk shows. Right now, they're either on the sidelines or working for the opposition;

Finally, Bill's looking for a role right now. His activities are limited because of Hillary. He can't speak out on foreign policy issues.

But he'd jump at this chance to return to the action and add to his legacy. You should take
advantage of this.

Besides, as a true CEO - you should care less about credit than results. And one of the key qualities of the Great Leaders in any field is the ability to recruit Marquee-Level talent to the team.

This could be the greatest Political Coup of all time. And if Bill helps you get Health Care passed, you'll get all the credit.

In my next post, I'll give you fellows a few ideas to help you get started.

- The Thinking Nationalist