Browsing the blog archives for May, 2009.


One-Way Bridge

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abortion, Obama Administration

This article from Wall Street Journal illustrates by alarm bells should go off whenever anyone speaks of “common ground” on abortion. Laura Meckler writes that President Obama is inviting advocates from across the political spectrum to try to find common ground on abortion. And that’s grand. But notice where the “common ground” is:

Ms. Barnes told participants that the White House is interested in hearing ideas in several areas, among them: sex education; responsible use of contraception; maternal and child health; pregnancy discrimination in the workplace and elsewhere; and adoption.

Those are all ideas any good feminist/liberal/progressive/pro-choicer can accept easily. That’s including adoption, as long as the decision to give up maternal rights is made without coercion of any sort.

The White House position is to reduce the number of abortions in America by reducing the number of unwanted pregnancies in America. Again, that’s a position any feminist/liberal/progressive/pro-choicer is comfortable with. We’ve been making the same argument for years.

Now, who is not in favor of better sex education and greater access to contraceptives? The so-called “right to life” movement is not in favor of those things. Anti-choice organizations run the gamut of taking no position on contraceptive use to being actively opposed to contraceptives. They’re all opposed to sex education, preferring the sham substitute, “abstinence only.”

I talked about the alarm bells — there are some allegedly “progressive” religious leaders making noises about common ground on abortion, and they talk about reducing abortion rate. But when you hear the term “abortion reduction,” look under the hood to see what’s running the engine. Sometimes “abortion reduction” is a code word for reducing the number of abortions by chipping away at abortion access through creative legal restrictions.

So, I prefer to talk about reducing unwanted pregnancy, not reducing abortion, although fewer abortions certainly is one of the outcomes of reducing unwanted pregnancy. And providing material support for women who don’t want to abort but are in a place in their lives where pregnancy and child care are untenable is fine with me, too, as long as reducing unwanted pregnancy is the first priority.

I’ve long argued that the way the abortion controversy is presented in media is a false dichotomy. The conventional wisdom is that the pro- and anti-choice sides are equally extreme and must meet in the middle. Although you can find people with all manner of extremist positions, if you look at the major pro- and anti-choice organizations, you are not looking at two equally extremist sides. One side –

  • Supports avoiding unwanted pregnancy as much as possible through contraceptive use and informed sexual behavior. This in turn will reduce the rate of abortion.
  • Supports Roe v. Wade, which includes the provision that states may prohibit elective third-term abortion as long as exceptions can be made for life and health of the mother.
  • Supports the decisions of women who choose to carry pregnancies to term.

The other side –

  • Either refuses to support contraceptive use or is actively opposed to it.
  • Wants to criminalize all abortions, even very early ones, including non-elective abortions in cases of medically compromised pregnancies.
  • Wants to take the ability to make reproductive decisions away from women.

This is just not two equally extreme sides.

As Lynn Harris writes at Salon, media lazily equate positions such as those advocated by the White House as a “compromise” with anti-choice positions.

… it’s not necessarily accurate to portray such framing — no matter who does it and what issues one may have with the particulars — as a “compromise.” Especially given the increasingly vocal opposition to contraception, since when is supporting it a compromise? When it comes to abortion, lots of us have been talking about prevention, and about how “it’s not just about Roe” — or, for that matter, “choice” — for a good while. I’d call this expanding the debate, not ceding ground. And now that legislators and journalists have picked up on it, the longer the focus on prevention and healthcare gets misrepresented as “compromise,” I say the longer we’ll be fighting.

Update: Obama budget eliminates funding for “abstinence only” education. Time for the dancing banana –

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The Monster They Created

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Obama Administration

Eric Boehlert writes that Clear Channel Communications is drowning in debt and struggling to stay in business (yes, we weep and we mourn). Already this year it has shed 12 percent of its workforce. The workers remaining are losing company matching contributions to their 401K plans.

Yet last year Clear Channel gave Rush Limbaugh a 40 percent pay raise. And Boehlert marvels at this, because it’s not as if any other radio entity could have offered him more money than what he was making before. Boehlert writes,

The astronomical worth of Limbaugh’s eight-year pact: $400 million. The amount of money Clear Channel execs have been trying to scrimp and save this year as they lay off thousands from the struggling company: $400 million. Ironic, don’t you think? …

…Last summer there was nobody else in a position to steal Limbaugh away. Clear Channel was basically bidding against itself and decided, in the end, to give Limbaugh a 40 percent raise, which included writing a $100 million signing bonus check to celebrate his contract extension. That right: A nine-figure signing bonus. At the time, it was a puzzler. Looking back at it today, the $100 million goodwill gesture, viewed against the backdrop of Clear Channel’s doomsday woes, makes no business sense whatsoever. (That $100 million bonus could have saved maybe 1,000 Clear Channel jobs this year alone.)

Some of the fired employees were popular local radio personalities and reporters. Apparently Clear Channel is going to be the Rush Limbaugh Channel.

Lee Fang writes that at a recent Heritage Foundation dinner, Limbaugh mocked the poor and laughed at the very idea there might be a recession. One of his better lines was “So I always believed that if we’re going to have a recession, just don’t participate.”

Kind of fascinating, in an OMG that’s week-old roadkill way.

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Zombie Bank

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Financial Crisis
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What Is the Purpose of a Health Care System?

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Health Care

This is something of a follow up to “Why Is There an Economy?” The Center for American Progress has an alarming report on the number of Americans losing their health insurance every day. The rate of uninsured Americans is growing in every state, and most of the uninsured have jobs.

Matt Yglesias comments,

Right now, a person who develops a serious medical problem can continue to enjoy health insurance coverage if and only if he or she is able to maintain health insurance continuously. But if you lose your insurance because you get laid off, and then can’t find a new job for a while because of generally bad labor market conditions, then even though you’ll be able to get a new job when the economy revives, you’ll now find that your illness means you can’t get coverage for your medical problem. That’s totally rational business practice, but it completely defeats the purpose of a health care system which is precisely to ensure that sick people can get health care.

If you pay close attention to right-wing arguments against national health care, you notice the underlying assumption: The purpose of a health care system is to support a profitable health care industry. For example, regulations that mandate insurance companies insure people with pre-existing conditions are bad, because they are bad for business.

On the other hand, if your underlying assumption is that the purpose of a health care system is to provide health care to people who need it, you must be a liberal.

I did a news google looking for a right-wing argument against national health care, and this is the first one that came up. It’s not as strident as many. It does begin with the straw-man assumption that people who want a national health care system expect it to be free. I have never met anyone who thought that.

The author also falls back on the assumption that “government bureaucracies” always are more expensive and inefficient than private enterprise. But the American health care “system” already is the most inefficient on the planet. We spend much more on health care per capita than any other nation and get poorer results.

In any event, the argument that government bureaucracies always are more inefficient than private enterprise simply is not supported by facts. Any large organization, whether a business or a government, can be run well or poorly. It’s true that consumer products companies work at being cost effective in order to survive. But notice a lot of them aren’t exactly surviving these days.

And as I’ve pointed out elsewhere, the laws of supply and demand do not apply to health care in the same way that they apply to mp3 players. People don’t shop for health care in the same way they shop for toasters. If you want to buy a toaster, you go to a retail store and pick out the nicest one you can afford. This provides an incentive to toaster manufacturers to make better toasters that cost less. However, with health care, it’s more like you buy a membership in the retail store — your health insurer — and the store decides what toaster you can have, and even whether you will get a toaster at all.

The author of the anti-national health care article writes,

Advocates of national health insurance argue that preventive care is cheaper than trying to care for patients who have become seriously ill. This is true, but preventive care is more expensive than no care – which is what uninsured people usually choose. If we adopt universal health insurance, people who normally do not go to the doctor will go, and some one will have to pay for that care.

Kind of stunning, yes?

Social security insurance and Medicare have worked to provide more money and better health care for the elderly. But as a consequence old people live longer, collect more social security, and need more Medicare. Both programs have become vastly more expensive than was originally projected.

See, if we could just let more people die younger, it wouldn’t be such a strain on the system.

The author then brings up the awful specter of rationing health care, without noticing we are already rationing health care — if you don’t have insurance, you don’t get health care.

The author is correct that one reason health care is more expensive than it was many years ago is that medical science has developed new technologies and therapies that are excellent, but expensive. A century ago, if you broke your leg, the doctor would diagnose this by feeling your leg. Then we went to X-rays. Now there are MRIs. Very expensive stuff. But for that very reason, the old system of letting people pay the doctor however they could doesn’t work any more. And the more recent system of providing health insurance through employment is breaking down, also.

The author doesn’t bring up right-wing arguments against so incremental a step as a public insurance program that might compete with private insurance. Such a public program might be able to provide lower cost insurance by widely pooling risk and through subsidies. And that’s not fair to private insurance companies. See, it’s better to let millions of Americans go without decent health care than to not be fair to private insurance companies. As I said, to the Right, the purpose of a health care system is to support a profitable health care industry.

There’s nothing wrong with profits, and those nations that have the best health care systems as measured by cost per capita and results tend to have mixed public and private systems. It’s not just the government pulling the whole load; there is still a place for private enterprise. But those nations with the most cost-effective health care systems have the crazy idea that the purpose of a health care system is to provide health care. Radical.

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Update on the Noble Hedge Fund Managers

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economy

They’re standing up for the rule of law and the Constitution. I’m touched. Or somebody’s touched.

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Juxtapositions; or Kindle to the Rescue

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Bush Administration, economy, Obama Administration

The latest word on the possible Boston Globe closedown is that the Union blinked. The Globe will stay in business, for now.

Full disclosure: The Boston Globe is owned by the New York Times Company, as is the other site I write for, About.com. A couple of months ago the company announced it was cutting the stipend for those of us who write for About.com on contract. Of course, we don’t have a union, so there wasn’t much we could say about it.

But also in today’s New York Times — will Kindle come to the rescue? I’ve never used one (although if you buy one from Amazon, please click through using the kindle widget on the sidebar so I get a cut, thanks). However, I can foresee a time when most of us will have broadband kindle-type devices with us all the time so we can download and read current news wherever we are. I would like that. No paper, no ink, no printing, big cost savings for newspapers. Not so good for printers, of course.

Paul Krugman discusses falling wage syndrome. Lots of people are taking wage cuts, and falling wages create more economic stagnation. Bill Anderson at LewRockwell sniffs,

You see, Krugman believes that there should be no consequences to an unsustainable boom, and that once a bubble bursts, then the spending that occurred during the boom must be continued at all costs. That is not economics, folks. That is nonsense.

Krugman wrote that an economy needs spending, or else it is stagnate. And if an economy is heading for stagnation, it needs more spending. I don’t see how anyone could argue with that. One thing defines the other; like if it doesn’t rain for a long time, it’s a drought. In other words, it’s not about what should happen, or what Krugman wants to happen, but what will happen. Hardly nonsense. But you know libertarians; Ann Coulter will win the Nobel Peace Prize before libertarians will admit Krugman might be right about something. He could say water flows downhill, and they’d argue with him.

The righties must have worn themselves out over the weekend defending the honor of hedge funds, because so far they’ve been quiet about the President’s plan to crack down on multinational corporations that use tax loopholes to avoid paying U.S. taxes. But Andrew Leonard writes,

But the president’s announcement Monday morning of a push to crack down on tax loopholes that allow multinational corporations to avoid paying what they owe to the U.S. government is already spawning half-hearted chatter on the cable news shows: It’s more proof of Obama’s antipathy to business.

The criticism is muted, however, because it’s just not a winning political proposition to defend multinational businesses that offshore jobs at a time when populist fervor rages so high.

Well, yeah. And if you missed it, be sure to catch the story about the Bush Administration’s American Jobs Creation Act of 2004 and how well that worked. It was great for business but bad for the economy, a circumstance that ought to cause heads to explode at LewRockwell.

Never fear for the rich, folks. Steve M tells us that in the past 100 days they’ve dropped $100 million on the George W. Bush Presidential Library. If they’ve got that much money to waste, I can’t feel too sorry for ‘em.

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Profitable Lobbying

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blogging, Bush Administration

Be sure to see “A Jobs Act That Created No Jobs” at Scholars & Rogues.

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4 Comments

Pity the Poor Hedge Fund!

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economy, Obama Administration

This follows up the last post, on “Why Is There an Economy?” A blogger named Corky Boyd is outraged that the Obama White House is strong-arming business.

Yesterday (May 1) on Detroit’s Frank Beckman’s morning talk show (WJR), bankruptcy attorney Tom Lauria made the incendiary accusation that the members of the White House had threatened to use the “the full force of the White House Press Corps to destroy” his client’s reputation if it didn’t acquiesce to highly unfavorable terms of the government’s proposed Chrysler restructuring plan. Because of the strongarm tactics, Lauria’s client dropped its opposition. …

…There is a pattern here. Financial institutions holding billions of Chrysler’s secured debt are being held hostage by the TARP loans they are not permitted to pay back. They are being forced to accept just pennies on the dollar for loans they made in good faith less than two years ago. Just like mob loan sharks, the administration wants them under its thumb so they can extort more and more concessions.

This is an abuse of power that goes beyond Nixon.

Oh Noes! Why is the White House being so mean to the nice businessman?

Here’s the reason: The client who is being strong-armed is hedge-fund manager Perella Weinberg Partners LLP. Perella and a couple of other hedge funds that owned a part of Chrysler’s debt have been obstructing Chrysler’s attempts to restructure itself and avoid bankruptcy. The hedge funders wanted Chrysler liquidated so they could take their money, and too bad if the loss of Chrysler sets off a chain reaction of failed suppliers and other businesses that send the entire American economy into a tailspin. Not to mention what would happen to the retirees, who would lose their pensions, etc.

Lisa Lerer at The Politico explains what happened.

“Bankruptcy is only required today because of the greed of a few hedge funds that held a fraction of Chrysler’s debt,” said Rep. Candice Miller, (R-Mich.) “President Obama today stated that he did not stand with these hedge funds and neither do I.”…

…“The administration put a great deal of pressure on those entities to go forward,” said Rep. Gary Peters, (D-Mich.) “They gave these hedge funds every single possible opportunity to accept the deal.”

Last night, the Treasury department sweetened their $2 billion cash offer to holders of Chrysler’s secured debt by $250 million. The secured debt holders would have gotten the cash in exchange for retiring roughly $6.9 billion in debt. The administration also extended an original 6pm deadline to continue negotiating through the night.

Sen. Debbie Stabenow, (D-Mich.) blamed the breakdown in negotiations on three large hedge funds – Oppenheimer Funds, Perella Weinberg Partners and Stairway Capital.

“We’ve been working with them every day, last night, and up until this morning,” said Stabenow. “They pushed as hard as they could.”

The White House strong-armed Perella Weinberg Partners into signing on to the $2 billion deal in order to leave something left of Chrysler to restructure. This in turn will, it is hoped, save thousands of jobs (you’re saving not just Chrysler, remember, but also suppliers) and at least some portion of employee health and retiree benefits. And this is good not just for the employees and retirees, but for the state and local economies in which these businesses are located.

In other words, three hedge funds tried to hold a chunk of our nation’s economy hostage, and the White House didn’t let them get away with it. And this meathead blogger says the White House is abusing power. Jeez louise, people are stupid.

Update: A mouthpiece for Plutocracy called “Founding Bloggers” links here, saying,

Right on cue, here is a liberal blogger that makes the case against the evil capital investors who would dare exercise their rights under contract.

What the pea-brains aren’t noticing is that there are vast numbers of contracts that are being shredded or amended because of the plight of the automakers. These include contracts with suppliers and, probably, dealers as well as workers. Everybody else is taking a hit. The White House is trying to spread the pain around so that there’s something to salvage and the overall U.S. economy doesn’t take a bigger hit than it’s already taking.

In a perfect world the automakers would be making a profit and the capital investors would be making a nice return on their investment. But when the Titanic is going down it’s not the time to complain that you paid for a cabin with a better view and want a refund.

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Why Is There an Economy?

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Obama Administration

At the Washington Post, Eva Rodriguez shrieks that Barack Obama is taking over the auto industry.

Yes, she begins by acknowledging that he said he doesn’t want to run auto companies. This suggests, Rodriguez says, that the President understands “business professionals are better equipped than government bureaucrats to decide what cars to make, what prices to set and how many people to employ.” However,

Seconds after that promising, if relatively vague opening, though, Obama took much of it back. He couldn’t help himself. “But I know that, if the Japanese can design an affordable, well-designed hybrid, then, doggone it, the American people should be able to do the same,” he said. “So my job is to ask the auto industry: Why is it you guys can’t do this?”

So much for hands-off.

Let’s stop right there. We see the dichotomy Rodriguez sets up — “government bureaucrats” versus “business professionals.” Government bad, private industry good. And then we see that the President’s challenge to the auto industry to catch up to the times is conflated with micromanaging.

In other words, we’re supposed to give absolute trust to the “business professionals” who failed miserably at running their companies, because they are, you know, “business professionals” and President Obama is just a “bureaucrat.” No other explanation is required.

Rodriguez wants the President to give Detroit “incentives” rather than challenges to update its product line. What if more fuel-efficient cars don’t sell, she asks. Like the gas-guzzlers have been flying off the lots lately. But fuel efficiency is not just a nice idea; it’s an imperative. We as a nation, as a species, simply cannot continue to burn fossil fuels at the rate we are burning them. The dinosaurs running the auto industry refuse to look any further ahead than the next quarterly report, and that’s one of the reasons they’re in trouble.

And a few minutes of googling revealed that sales of hybrids are an accelerating share of auto sales.

But then we get to what’s really eating at Rodriguez:

Which brings us to another disturbing aspect of the government’s dealings: its unabashed and unwise attempts to tilt the scales in the unions’ favor. The government proposed giving the United Auto Workers’ retiree health fund a 55 percent equity stake in Chrysler — more than the combined stakes of Chrysler’s merger partner, Fiat, or the other creditors that are owed roughly $7 billion. At GM, the plan is for the union to take a 39 percent slice — a rich reward for years of work rules, health care and pension deals that contributed mightily to the company’s financial woes.

I challenge Rodriguez to write an essay on the subject of “Why Is There an Economy?” Not “What Is an Economy?” or “My Ideal Economy,” but to get down to the most basic question of all, which is to examine the place of economies in human civilization. And for that matter, why is there civilization?

Ultimately the purpose of civilization is to support the lives of humans, so that we aren’t living in caves by ourselves, living on what food we can hunt and gather ourselves and guarding our stuff from other humans.

Civilization is good for us. Unless one is extremely isolated, an enterprise as simple as growing a vegetable garden requires some cooperation from other humans, if only that they agree not to pick and eat your tomatoes without paying you something for them.

There are two pillars of civilization, which are governments and economies. (There may be other pillars, but right now I’m just dealing with these two.) Governments are the administrative function of civilization, and although nothing lasts forever, governments that do a good job at managing civilization in a way that is generally beneficial to most people tend to be more stable and successful than those that don’t.

Economies are the means by which goods and services are created and distributed in a civilization. If most people in a civilization can count on getting enough food, clothing and shelter to be reasonably comfortable, the civilization will be more stable and successful than one in which people aren’t sure where their next meal is coming from.

As civilizations became more and more complex they developed in ways that betrayed their original purpose. So, there have been civilizations — most of ‘em, actually — that allow a powerful few to keep the many in poverty and bondage. Such civilizations tend to be unstable and eventually are busted up, from within or without. The whole point of democracy is to empower the many to prevent exploitation by the few, but it’s clear we’re still working on that.

The bottom line is that civilizations, and their governments and economies, exist to support the lives of humans, and civilizations forget that at their own peril.

The thing that bugs me most about “free market” conservatives is that they assume people exist to serve the economy, not the other way around. Yes, profits are necessary to an economy, but profits alone aren’t the only thing that’s necessary. If an economy is not holding up its part of civilization by supporting the lives of people, it is not a healthy economy.

“My goal as a taxpayer is to see that these companies earn enough so that they return my tax dollars as soon as possible,” Rodriguez writes. And we all want that. But the larger goal is to manage an economy that supports the lives of citizens. Cutting people off from pensions and health care in order to maximize profits may be good, in the short term, for the auto industry. But it’s a losing strategy for a civilization.

Now, we all understand that requiring auto makers to provide health benefits and pensions, not to mention a living wage, to its workers makes it harder for Detroit to compete in the global marketplace. As I see it, there are two basic solutions to this problem. One solution is to do what the other first-world industrialized democracies are doing and give government a much larger role in paying for health care and retirement, relieving the corporations of this burden. This is the “progressive” solution.

The other solution is to demand Americans sacrifice the standard of living and economic stability they used to take for granted. This is the “free market” solution.

Human civilization is struggling to accommodate rapidly changing conditions brought about by a global marketplace and workforce. We’re all on a learning curve here. Business models and strategies that worked just fine in the past are no longer tenable. What is tenable? I don’t think any one school of economic theory has all the answers. We need a broad spectrum of ideas on the table right now.

Going forward, there are two principles to keep in mind. And the first principle is that an economy exists to support the lives of people, not the other way around. A healthy economy is one that enables people to exchange goods and services in a stable and consistent manner. It allows us to work for and provide for ourselves and each other.

Creating wealth is good, but an economy that exists to create wealth merely for the sake of creating wealth, without regard for who benefits from the wealth, is not filling the most essential role of an economy as a function of human civilization.

The other principle is that an economy needs to be flexible in order to respond to changing conditions. Flexibility requires that we don’t cling to narrow, rigid economic ideologies, but are able to keep our minds open to new ways of thinking. It also requires not allowing any one sector to profit at the expense of other sectors, or allowing any one industry to become “too big to fail.”

Put another way, as we talk about what’s good for the economy, we need to remember what an economy is good for. If we forget, our solutions will be no good.

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Derby Day

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entertainment and popular culture

Another Kentucky Derby day. The race below probably is more fun to watch than the one they’ll run today.

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