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Month: October 2009

Original Sin

by dday

The staff of The New Republic has begun to flagellate themselves with birch twigs over the reappearance of professional liar Betsy McCaughey as a nemesis to health care reform. Michelle Cottle wrote a long vivisection of McCaughey under the familiar title “No Exit,” the same as McCaughey’s 1994 article in TNR that managed to set conventional wisdom in the Beltway against the Clinton health care plan. You cannot read the reams of charges without concluding that McCaughey is a horrible woman, which I’m sure was Cottle’s directive (though in McCaughey’s case, it’s not hard). Franklin Foer, the current editor, also threw himself upon the mercy of the court of public opinion:

As Betsy McCaughey returns to the scene for another fight against health care reform, New Republic editor Frank Foer is still thinking about the piece she wrote for the magazine 15 years ago.

“To me, it’s an original sin that I hope we can expunge,” Foer told POLITICO […]

Indeed, the McCaughey piece has been a sticking point for TNR staffers for some time. And when Foer took over as editor in March 2006, the magazine recanted McCaughey’s article and formally apologized for it. But still, Foer said he “wanted to make it our mission to be on the right side this time” and pointed out that he’s “made health care reform a pretty important issue for the magazine.”

Of course, Marty Peretz still likes her:

“I do not think Betsy is an intellectual fraud. Not at all,” Peretz wrote in an email.

“I have not read the Cottle piece and I do look forward to doing that,” he continued. “But the issue that McCaughey went after was one of the most intricate and economically challenging ones that America has faced, as we can see from the present debate.”

Aside from Peretz acknowledging he doesn’t read his own magazine, there’s a bias he displays here toward giving wide latitude to anyone who offers the conservative counter in favor of the status quo against something new and different. Peretz has studiously ignored 15 years’ worth of discrediting McCaughey, including the recent charge that she coordinated her piece in TNR with the tobacco industry, who wanted to stop the Clinton plan because cigarette taxes partially financed it. The problem is that other media outlets have done the same. They have not only failed to rebut McCaughey, they have bothered to amplify her claims in the first place, as Jamison Foser points out.

There are plenty of liars in the world who nobody gets worked up about — because their lies don’t drive major media coverage about an important issue. That’s what’s infuriating about Betsy McCaughey: major news organizations give her a platform. They run her op-eds, they host her on television, they quote her, they allow her falsehoods to shape the public debate about health care. They do this despite knowing that she’s a liar.

That’s what’s infuriating: that someone whose defining quality for the past 15 years has been her dishonesty about health care reform should be granted a role shaping the debate over health care reform by major media outlets. And, unfortunately, Cottle doesn’t address that issue at all. How did TNR come to publish McCaughey in the first place? Don’t they employ fact-checkers? Shouldn’t they? How do her false claims continue to make it into print? Why do television news shows book her? What does it say about the news media that they grant McCaughey a platform? That’s the important part. If McCaughey was just another crackpot spouting off lies and conspiracy theories while nursing a cup of coffee at the local diner, nobody would care.

Cottle isn’t responsible for McCaughey’s 1994 TNR piece – people should direct those inquiries to Peretz and Andrew Sullivan, who as of a couple years ago was still mighty touchy about it. But there’s enough in the public domain – Cottle has now pulled all the strands together into one package – for news producers to never put her on the air again, given the history of dishonesty.

I’m not going to hold my breath waiting for that to happen. Just yesterday, in fact, McCaughey printed an op-ed where she favorably quoted David McKalip, the neurosurgeon who earlier this year sent out a picture of Barack Obama dressed as a witch doctor with the word “Obamacare” below him. She must be building a new generation of liars.

…and as if on cue, she shows up on MSNBC today…

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Blog Crew

by digby

I knew Jonathan Schwarz of A Tiny Revolution had an affiliation with Michael Moore, but I didn’t realize had anything to do with Capitalism: A Love Story. And I certainly didn’t know that these guys had anything to do with it.

Congratulations to all of you.

Update:

Speaking of liberals — just read this. And pray for me.

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Murder In Texas: Update

by dday

Glenn Smith writes that a Texas state Senator is trying to investigate the astonishing “Saturday Night Massacre”-style dismissal by Gov. Rick Perry of three members of a commission which was about to look into his negligence which led to the state-sanctioned murder of an innocent man. He wants the newly installed member of the Texas Forensic Science Commission to schedule a hearing on the execution of Cameron Todd Willingham, and fast.

Last week, Perry scuttled the Texas Forensic Science Commission hearing into the evidence that convicted Cameron Todd Willingham, scheduled for last Friday. The governor, without warning, replaced three of his four appointees to the nine-member commission. The commission had been scheduled to hear from nationally recognized arson expert Craig Beyler, who had issued a report in August questioning the evidence in the Willingham case. Beyler wrote:

The investigators [in Willingham’s case] had poor understandings of fire science and failed to acknowledge or apply the contemporaneous understanding of the limitations of fire indicators. Their methodologies did not comport with the scientific method or the process of elimination.

Sen. (John) Whitmire said he would bring Williamson County prosecutor John Bradley, Perry’s newly appointed Forensic Science Commission chairman, before his Senate committee. Craig Beyler should also testify, saying publicly what Perry stopped him from saying last week. A legislative committee shouldn’t pre-empt an executive branch function — even if it’s been obstructed by the governor. But Beyler has already publicly issued his report. Legislators have a right to hear it from the horse’s mouth.

Also somewhat lost in the outrage over Perry’s Nixonian action were statements from two of those let go from the Forensic Science Commission, Fort Worth prosecutor Alan Levy and Commission Chairman, Sam Bassett, an Austin lawyer. Neither man had prior knowledge that the axe was falling on their heads, and that raises further questions about Perry’s motives. Perry said his action was just “business as usual,” noting that the terms of the agency officials had expired. Operating under business as usual, their dismissals would not have been kept secret from them.

Smith has a lot more at the link. I don’t know if this case will start a national debate on the death penalty based on how the system sent an innocent man to his death, but clearly Rick Perry doesn’t want to have that debate. Seeing that he’s in a primary fight for his job, and the cover-up is so brazen and obvious, we could actually see this get some wider attention.

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Talking The Talk

by digby

This article delves into one of the interminable debates among liberal activists for the past few years:

THINK BACK to these phrases: “The flip flopper,’’ “Compassionate conservative,’’ “Death tax,’’ or even the “Domino theory.’’ They were magic words and they changed history. The Domino theory was an entire foreign policy reduced to just two words that gave the nation permission to go to war in Southeast Asia.

They’re called micro-scripts, and they are the lethal weapons in any war of words or ideas. They work because people love to repeat them as much as hear them. They instantly enable any Joe at the coffee shop to conduct a pointed political argument because they give him the lines. He can say to his friends, “I’m not voting for a flip flopper.’’ They’re more than sound bites – they are idea bites.

And they are a big problem for President Obama and the Democrats, especially on the health care debate. Democrats are going into this battle without these powerful rhetorical weapons – while Republican micro-script masters are gleefully mowing them down, armed to the teeth.

Consider some of the phrases the right is using to derail health care legislation: “Death panels,’’ “pull the plug on grandma,’’ “the efficiency of the post office with the compassion of the IRS,’’ “rationed care,’’ “socialized medicine,’’ “government care,’’ “it’s the French plan,’’ “Obamacare,’’ and on and on.

And what is the left saying? Stuff like: “What they say isn’t true. If you have health coverage today, your plan will not be worse.’’ That isn’t going to beat death panels.

Maybe “The Republican health plan is to die quickly” will.

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Failed State

by digby

This is one of the most sobering article I’ve read about California yet, and I’ve read a lot of sobering articles about California recently:

[T]he state that was once held up as the epitome of the boundless opportunities of America has collapsed. From its politics to its economy to its environment and way of life, California is like a patient on life support. At the start of summer the state government was so deeply in debt that it began to issue IOUs instead of wages. Its unemployment rate has soared to more than 12%, the highest figure in 70 years. Desperate to pay off a crippling budget deficit, California is slashing spending in education and healthcare, laying off vast numbers of workers and forcing others to take unpaid leave. In a state made up of sprawling suburbs the collapse of the housing bubble has impoverished millions and kicked tens of thousands of families out of their homes. Its political system is locked in paralysis and the two-term rule of former movie star Arnold Schwarzenegger is seen as a disaster – his approval ratings having sunk to levels that would make George W Bush blush. The crisis is so deep that Professor Kenneth Starr, who has written an acclaimed history of the state, recently declared: “California is on the verge of becoming the first failed state in America.”

[…]

Nowhere is the economic cost of California’s crisis writ larger than in the Central Valley town of Mendota, smack in the heart of a dusty landscape of flat, endless fields of fruit and vegetables. The town, which boldly terms itself “the cantaloup capital of the world”, now has an unemployment rate of 38%. That is expected to rise above 50% as the harvest ends and labourers are laid off. City officials hold food giveaways every two weeks. More than 40% of the town’s people live below the poverty level. Shops have shut, restaurants have closed, drugs and alcohol abuse have become a problem.

Standing behind the counter of his DVD and grocery store, former Mendota mayor Joseph Riofrio tells me it breaks his heart to watch the town sink into the mire. His father had built the store in the 1950s and constructed a solid middle-class life around it, to raise his family. Now Riofrio has stopped selling booze in a one-man bid to curb the social problems breaking out all around him.

“It is so bad, but it has now got to the point where we are getting used to it being like this,” he says. Riofrio knows his father’s achievements could not be replicated today. The state that once promised opportunities for working men and their families now promises only desperation. “He could not do what he did again. That chance does not exist now,” Riofrio says.

Outside, in a shop that Riofrio’s grandfather built, groups of unemployed men play pool for 25 cents a game. Near every one of the town’s liquor stores others lie slumped on the pavements, drinking their sorrows away. Mendota is fighting for survival against heavy odds. The town of 7,000 souls has seen 2,000 people leave in the past two years.

It goes on to say that the way out is being led by environmental forward thinkers like Van Jones and Alice Waters who are hoping to recreate the California Dream with sustainability and green jobs. I certainly hope that’s the case. But right now, this state is in a world of hurt — and it’s truly a world. The article points out that if it were a country California would be a member of the G8 — that’s right the G8, not the G20.

If anyone seriously believes that California can go through the kind of trauma it’s going though and it won’t affect the rest of the country they really are dreaming.

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“I Cant Stand Those People!”

by digby

Peter Drier and Todd Gitlin have written an important story in Columbia Journalism Review that will set any media critic’s teeth on edge. It’s so infuriating to find out what utter creeps the people who decide what you need to know are.

No one packed heat, no one screamed at a member of Congress, no one called anybody a Nazi, no fistfights broke out. So—no story.

All that happened was that on Thursday, Oct. 1, a moving van pulled up in front of the largest house in a Main Line neighborhood just outside Philadelphia—the home of H. Edward Hanway, CEO of CIGNA, one of the nation’s largest health insurance companies—and eight demonstrators from Health Care for America Now (HCAN) got out. One was Stacie Ritter, a former CIGNA customer whose twin girls were afflicted with cancer at the age of four. Their treatment left permanent damage. CIGNA refused to pay for the human growth hormones that her doctor prescribed to help her daughters grow properly. When her husband was briefly unemployed, they were bankrupted.

No one was home at Hanway’s mansion. Ritter left a note to explain that the van symbolized a request: “Can I stay in your carriage house until we get back on our feet financially?”

The same day, in Indianapolis, HCAN organized a house call on Angela Braly, CEO of WellPoint, the nation’s largest health insurance company. And in Wayzata, Minn., fifty protesters, holding umbrellas and candles, stood outside the lakeside mansion of UnitedHealth CEO Stephen Hemsley, in the rain, and screened a video that was unkind to the company. (HCAN has tried to buy time to broadcast the video on CNN, but the network refuses to air it.)

Total number of print and broadcast reporters who showed up at any of the three events: Zero.

For several months, HCAN—a national coalition of religious groups, community organizations, unions, senior citizen groups, health care professionals, and consumer advocates—has been organizing polite demonstrations, rallies, and public forums, trying to put faces on an industry that has spent multiple millions of dollars lobbying against reform, while angry protests at town meetings swelled August’s big national story. On Sept. 22, HCAN sponsored about 150 demonstrations at various insurance company headquarters around the country. The Los Angeles Times did not bother to report about the several hundred demonstrators at WellPoint’s California subsidiary office, located a few blocks from the newspaper’s office. Nor did The Philadelphia Inquirer note those who descended that day on CIGNA, nor The New York Times those outside UnitedHealth in midtown Manhattan.

They couldn’t even buy coverage?

Meanwhile:

“At a certain point,” Indianapolis Star senior editor Jenny Green told us, the demonstrators are “not adding to the debate. They’re just one side saying exactly what you’d expect them to say.”

Her colleague, Greg Weaver, the Star’s deputy public service editor for business, maintained that the raucous town meetings of August, dominated by conservative activists shouting down Democratic Congressmembers, were newsworthy because they “are more of a public forum where you have many sides of the debate, whereas at the [HCAN] protest [at WellPoint CEO Bray’s house] you have only one side of the debate.”

“I did not think the protest at [Cigna CEO] Hanway’s house was news,” Philadelphia Inquirer business reporter Jane Von Bergen told us. “It was a staged event. It wasn’t real news. I avoid them. I can’t stand them. They don’t add anything. They don’t teach anything. If they go to his house, we don’t learn anything more about the health care debate.” The protest was “too manufactured,” said Von Bergen. “Just a bunch of people going blah-blah-blah.”

By contrast, said Von Bergen, who covered the rowdy town meeting in August where right-wing activists confronted Sen. Arlen Specter, the news value of that event was “readily apparent.” “It involved public figures”—members of Congress. So political reporters picked up the story.

Isn’t Hanway a public figure? we asked. He’s well known in the business community, she said, but not among the general public—a condition that HCAN is trying to change, but can’t do if the media won’t cover their events.

[…]

The town-meeting shouters of August, by contrast, were contentious. Some screamed and hectored, some got embroiled in fist fights, some carried guns. Some carried signs calling Obama a “Nazi” and his plan “socialism”; some warned that “Obamacare” would “pull the plug on grandma.” They understood that the standard template for protest stories is the crime story. They cracked the reportorial code: By behaving extravagantly and precipitating clashes, they made news.

It’s an old story, immortalized in the slogan, “If it bleeds, it leads.” This idea of newsworthiness has the unintended effect of coaxing protest movements toward raising the action ante.

The problem, of course, is that if liberals even slightly raised their voices they’d be tased to within an inch of their lives, if not worse. And if they didn’t happen to be middle aged white people, they’d be in real trouble. You know how this works.

I’m not saying that HCAN’s methods are necessarily good ones. But the difference between how the newspeople view the two contrived political events is not just a matter of “if it bleeds it leads.” The teabaggers are deemed legitimate and the HCAN protesters aren’t even though everyone has known from the beginning that the teabaggers were organized via astroturf outfits.

The default is always to Real Americans, no matter how unreal they really are.

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Socialized Profits

by dday

A wild story out of Maine.

Anthem Health Plans of Maine, a subsidiary of WellPoint, is suing the state because they want to increase premium rates by 18.5% on their 12,000 individual insurance policy holders, so they can guarantee themselves a 3% profit margin. This story shows how silly it would be to solely rely on regulation to rein in insurance industry practices.

Like many other states, Anthem Health Plans hold a monopoly on the individual insurance market in Maine, controlling 79% of all the plans. Also like many other states, they are licensed to sell insurance through the Department of Insurance, who must clear all rate increases prior to implementation. Originally, Anthem Health Plans were a nonprofit Blue Cross and Blue Shield corporation licensed to practice in Maine since 1939. In 1999, Anthem bought the business and began to operate it as a for-profit company. Since that point, Anthem has raised premium rates 10 times, and 8 of those times have been double-digit rate increases.

Jan-99: 20.4%
Nov-99: 15.7%
Jan-01: 23.5%
Feb-02: 12.7%
Jan-03: 3.4%
Mar-05: 14.5%
Mar-06: 16.3%
Jan-07: 16.7%
Jul-07: 1.3%
Jan-08: 12.5%

The average individual Maine rate-payer is paying four times as much for insurance than they did ten years ago.

But this isn’t good enough for Anthem Health Plans. They first proposed a 14.5% rate increase for its individual insurance products, then they revised it up to 18.1% and finally 18.5%. This is an average increase. Some plans would see increase of 24.5%, some 38.4%, and for its Preventive Care and Supplemental Care Accident rider, which is part of 1/3 of all their policies, Anthem proposed a rate increase of 58.2%. This amounts to Maine consumers paying $12 million more in annual premium dollars for the exact same level of benefits.

Anthem isn’t hurting for profit. Their Maine operations have generated an average annual return of $70 million dollars over the last five years. Anthem paid dividends to their parent company, WellPoint, of $75 million dollars last year alone, and $152 million since 2006. Their nine highest-paid employees totaled over $4.3 million in compensation. The individual market, while a smaller portion of their overall business, still generated $5.4 million in profit over the last two years.

The reason Anthem desires these rate raises is because their actuarial charts show they can guarantee a 3% profit through this increase. That’s an estimate, however, and in 8 of the last 10 years the profit margin achieved has actually been higher. The Maine Superintendent of Insurance ruled in May 2009 that the 3% profit and risk margin sought was “excessive and unfairly discriminatory,” as per the laws of the state, and instead approved a rate increase of 10.9% for Anthem. Given the recession, the financial health of the company, and the years of large rate increases, there was no way she could approve anything higher.

So Anthem sued the state. But not after filing revised rates at a 10.9% increase so they could get that going while they litigated for an even higher rate.

The Superintendent of Insurance explained in a court filing that there is no statute mandating that Maine must provide Anthem or any other insurer with a guaranteed profit. Given Anthem’s ability as a large operation to cut costs, just as any family must do during a recession, the Superintendent argued there is nothing preventing them from making a profit with a 10.9% rate of premium increase. But Maine is under no obligation to guarantee one. That would be a “socialized profit,” which Anthem is asserting the right to without any legal basis in fact. Furthermore, policyholders have contributed $17.4 million in profit to Anthem’s bottom line over the past decade, which should be more than enough to cover potential losses from just the individual insurance line this year.

Anthem argued that they were discriminated against relative to other companies in Maine because one other individual insurer was provided a 3% profit and risk margin (that company, MEGA, asked for 2.2% rate increase back in 2007, a far different scenario). This, the corporation said, violated their equal protection rights under the federal and state Constitutions. This is a laughable claim, that the state must guarantee a profit for every insurance company licensed to provide a product. It’s nowhere to be found in the Maine Insurance Code, and the Superintendent of Insurance is allowed under Maine law to consider each company’s situation individually. In this case, she ruled that a 18.5% increase in premiums would be unfair and excessive.

This is a very revealing case. Those arguing against a public option claim that insurance regulations alone will be sufficient to provide an affordable product for everyone. Here’s a case where Maine is attempting to regulate the industry, and the industry sues the state in an effort to grab more profit. While claiming to be on the side of reform, they will fight tooth and nail, and can be expected to do so for every regulation in the national health care bill, right down the line.

Brave New Films has put together a video exposing the practices of Anthem and its parent company WellPoint. You can send your friends in Maine the news about this lawsuit, to highlight this practice.

Rate this story up on Digg and Reddit, if you can.

Arthur Delaney now has this story up at The Huffington Post. He notes that Anthem lied about their individual market performance:

In its filing, Anthem said it had lost $3.7 million on its individual insurance products over the past five years. The AG says Anthem has made $5.4 million from individual consumers over the past two years, and points out that Anthem paid $75.7 million in dividends to WellPoint in 2008, $40.4 million in 2007, and $35.6 million in 2006. And its executives paid themselves pretty well, too.

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Lessons Learned

by digby

Susan Dunn has written an interesting and provocative op-ed piece in today’s NY Times about Roosevelt’s failed effort to interfere in primaries in the 1938 election and the lessons Obama and Co. should take with respect to similar interference in state and local races around the country.

FDR too was plagued with reactionary wingnuts in his own party who tried to obstruct his agenda, so he intervened in the primaries by supporting liberal challengers in the ’38 midterms. (She quotes him saying about a Conservadem of the day, “Take Tyding’s hide off and rub salt in it” which would garner a GOP hissy fit of epic proportions if it were uttered today. “He’s endorsing torture!” the hypocritical Republicans would cry.)

According to Dunn it didn’t work because he underestimated the strength of the political machines, local papers and the attachment constituents have to their incumbents. Roosevelt had to do a lot of fence mending with these people when they were returned to office and her advice is for Obama to take a lesson from Roosevelt’s experience.

She claims that Roosevelt (like Obama?) relied too much on his own charisma and popularity instead of setting in motion long term political programs to build the party from the grassroots up. And while she recognizes that Obama is interfering in elections not because he wants to get rid of the barriers to his reform agenda from within his own party but rather out of “pragmatic” necessity to simply keep the seat at whatever cost, she seems to think that he’s in danger of doing exactly what Roosevelt did. To that, I can only say “I wish.” Roosevelt wanted to pass a progressive agenda and was being hamstrung by a bunch of right wing jackasses who didn’t have the nerve to actually run against his program (he was immensely popular) so he put his own popularity and political capital on the line to replace them with people who would. It didn’t work, but God bless him for trying.

Obama, on the other hand, seems to be leaning in the direction of working to preserve impediments to his own agenda, for reasons that can only be seen as self-destructive. (Of course, that’s assuming he wants his agenda to pass, which is still not entirely clear.) The Obama team has learned a lesson from Roosevelt’s experience alright, but not the one that Dunn thinks they should have learned. They seem to have learned that you should protect the conservatives in the party and never use even the slightest bit of political capital to persuade voters that they should elect more liberal representatives.

I’m not saying that Roosevelt did the smart political thing. I don’t know enough about the history of this move to judge whether there was any long term gain from what he did or whether it actually hurt him in the short run. But as a general rule, I don’t have a problem with a president putting his own credibility on the line to pass his agenda. The problem is when he uses his institutional clout to subvert the democratic processes that are in place for people to make their own decisions.

If Obama wants to go out and campaign for Arlen Specter it’s his privilege (although I can’t imagine why he would think that Specter would be a loyal ally.) But what he shouldn’t do is make promises that there will be no primary opponents or tell people that they can’t run for office simply because he wants to protect the seat. And it would be far more helpful to his own ability to govern if he used his popularity to help elect people who would actually vote to pass his agenda.

I’m all for ideological election battles. If people want to try to convince voters that their platform is the right one, and they have the stomach for political battle, then they should throw their hats into the ring and run. If the president wants to support challengers or incumbents who will help him be successful, then that’s perfectly fine. What isn’t fine is rigging the game.

To be clear, Dunn isn’t defending that idea in the least and she obviously believes that Obama should be putting his efforts into party building from the ground up rather than building his power on his own personal charisma, which is, after all only a temporary advantage for the Democrats. But, as I said, I think the administration has learned a lesson from this, but it came to the wrong conclusions. They seem, so far, to be obsessed with maintaining seats, no matter how reactionary they may be, and we are seeing how that translates into obstructionism by recalcitrant “centrists” who understand that they have the power to run the country based on nothing more than their own egos. It’s not a healthy way to run a democracy. I admire Roosevelt for going at that head-on in a time of crisis.

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The Beat(ing) Goes On

by digby

No matter who loses, Goldman wins:

Goldman Sachs stands to receive a payment of $1bn – while US taxpayers would lose $2.3bn – if embattled commercial lender CIT files for Chapter 11 bankruptcy protection, people familiar with the matter said.

The payment stems from the structure of a $3bn rescue finance package that Goldman extended to CIT on June 6 2008, about five months before the Treasury bought $2.3bn in CIT preferred shares to prop it up at the height of the crisis. The potential loss for taxpayers would be the biggest to crystalise so far from the government’s capital injection plan for banks.

The agreement with Goldman states that if CIT defaults or goes bankrupt, it “would be required to pay a make-whole amount” that totals $1bn, the people familiar with the matter said.

While Goldman is entitled to demand the full amount, it is likely to agree to postpone payment on a part of that sum, these people added. A CIT filing last week said that it was in negotiations with Goldman “concerning an amendment to this facility”.

Goldman said: “This would not be a windfall payment. The make-whole payment is simply the present value of the spread to be earned over the life of the facility.”

CIT declined to comment. In an effort to prevent bankruptcy, it is working on a debt exchange offer that would virtually wipe out equity holders. In the event of bankruptcy, Goldman would reap more than $1bn because it also holds credit insurance that would be paid off.

Goldman said: “The credit default swaps Goldman Sachs purchased to prudently manage the risk associated with the CIT financing are not a directional ‘bet’ on CIT, but were bought to protect against the possibility of a precipitous decline in the value of the collateral.”

It’s not a windfall payment it’s business, strictly business.

Oh, and be sure to read this beat sweetener by Ryan Lizza about Larry Summers. I think Lizza’s beat has been so sweetened by now that he’s in severe danger of becoming diabetic.

Update: Dean Baker on the Summers article.

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