Month: December 2009

Getting While The Getting’s Good

by digby

If you thought your credit card issuers were screwing their customers in advance of new regulations, get a load of what you can expect from your health insurance providers:

Health insurance giant Aetna is planning to force up to 650,000 clients to drop their coverage next year as it seeks to raise additional revenue to meet profit expectations.

In a third-quarter earnings conference call in late October, officials at Aetna announced that in an effort to improve on a less-than-anticipated profit margin in 2009, they would be raising prices on their consumers in 2010. The insurance giant predicted that the company would subsequently lose between 300,000 and 350,000 members next year from its national account as well as another 300,000 from smaller group accounts.

“The pricing we put in place for 2009 turned out to not really be what we needed to achieve the results and margins that we had historically been delivering,” said chairman and CEO Ron Williams. “We view 2010 as a repositioning year, a year that does not fully reflect the earnings potential of our business. Our pricing actions should have a noticeable effect beginning in the first quarter of 2010, with additional financial impact realized during the remaining three quarters of the year.”

I don’t know what the health care plans might have in them to anticipate this kind of thing once HCR is passed, but if the latest talking points from the White House on denial and rescission are any indication of how they are thinking about these possibilities, it’s nada.

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Shoot Me Now

by digby

I cannot bear it:

Contentious exchanges between White House press secretaries and members of the media have been fairly commonplace during the past few presidential administrations.

However, the one that took place Wednesday between White House press secretary Robert Gibbs and April Ryan of American Urban Radio, in which Gibbs essentially compared Ryan to a petulant child, is among the most heated (and entertaining) in recent memory.

The testy exchange was sparked by Ryan’s insistent questioning of White House social secretary Desiree Rogers’ role at the recent state dinner, which has been in the headlines because of the fallout from Tareq and Michaele Salahi’s “party crashing.”

Ryan claimed that there have been whispers around Washington insinuating that Rogers had overstepped the traditional role of her title at the event to become the “belle of the ball,” thus “overshadowing the first lady.” Frustrated by Ryan’s tabloid-y line of questioning, Gibbs instructed her to “calm down” and to take a deep breath,” adding “I do this with my son and that’s what happens.”

The fatuous gasbags were all atwitter yesterday that the White House is “stonewalling” to protect their “old Chicago pal” Desiree Rogers, the white house social secretary. As I said the other day, this is rapidly turning into a “travelgate” type Village scandal and someone is going to have to go down, preferably one who falls under the auspices of Michelle Obama, who has clearly made some kind of social error.

Just as Travelgate was about Hillary Clinton failing to respect the social pecking order by installing old Arkansas friends in a job in which the press had a personal stake, (Ryan’s comments about “overshadowing” notwithstanding) I’m pretty sure this is about Michele and “her pal” somehow not respecting the pecking order and failing to understand just how sacrosanct are the invitation lists to the White House. (You’ll recall that Michelle had a press avail the day of the state dinner and mentioned that she regretted not being able to invite everyone, which I thought was rather odd at the time.)

The lesson has long been clear. You do not mess with the Village tabbies. They have far more power than you might think.

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Martyrs To The Deficit

by digby

Obama on the deficit yesterday:

ROBERT KUTTNER: You know, most of the things that have been proposed today cost money, and there is this concern about the federal deficit.I hope that your administration will recognize, as I know you will, that it’s possible, first of all, to reduce the deficit over time and sometimes in the short run realize that you need to increase the deficit. And I hope the concern about the deficit in the long run doesn’t crowd out the need for additional spending in the short run. And I also think that some of these programs that increase jobs and increase GDP are probably the fastest way to get the economy back on a track that will reduce the deficit over time. It’s certainly a better way to reduce the deficit than putting ourselves into a — into a debtor’s prison and assume we can deflate our way to recovery.

OBAMA: Well, I think this is an important point. You know, we’ve been talking a lot about specific initiatives. There is a macroeconomic element to this whole thing. And so let me just amplify what was just said. We have a structural deficit that is real and growing, apart from the financial crisis.

We inherited it. We’re spending about 23 percent of GDP and we take in 18 percent of GDP and that gap is growing because health care costs, Medicare and Medicaid in particular, are growing. And we’ve got to do something about that.

You then layer on top of that the huge loss of tax revenue as a consequence of the financial crisis and the greater demands for unemployment insurance and so forth. That’s another layer. Probably the smallest layer is actually what we did in terms of the Recovery Act. I mean, I think there’s a misperception out there that somehow the Recovery Act caused these deficits.

No, I mean, we had — we’ve got a 9-point-something trillion- dollar deficit, maybe a trillion dollars of it can be attributed to both the Recovery Act as well as the cleanup work that we had to do in terms of the banks. In turns out actually TARP, as wildly unpopular as it has been, has been much cheaper than any of us anticipated.
So that’s not what’s contributing to the deficit. We’ve got a long- term structural deficit that is primarily being driven by health care costs, and our long-term entitlement programs. All right? So that’s the baseline.

Now, if we can’t grow our economy, then it is going to be that much harder for us to reduce the deficit. The single most important thing we could do right now for deficit reduction is to spark strong economic growth, which means that people who’ve got jobs are paying taxes and businesses that are making profits have taxes — are paying taxes. That’s the most important thing we can do. We understand that in this administration. That’s not always the dialogue that’s going on out there in public and we’re going to have to do a better job of educating the public on that.

The last thing we would want to do in the midst of what is a weak recovery is us to essentially take more money out of the system either by raising taxes or by drastically slashing spending. And frankly, because state and local governments generally don’t have the capacity to engage in deficit spending, some of that obligation falls on the federal government.

Having said that, what is also true is that unless businesses and global capital markets have some sense that we’ve got a plan, medium and long term, to get the deficit down, it’s hard for us to be credible, and that also could be counterproductive. So we’ve got about as difficult a economic play as is possible, which is to press the accelerator in terms of job growth, but then know when to apply the brakes in the out-years and do that credibly. And you know, we are trying to strike that balance, but we’re going to need help from all of you who oftentimes are more credible than politicians in delivering that message.

Because we want to leverage whatever public dollars are spent, and we are under no illusion that somehow the federal government can spend its way out of this recession. But it is absolutely true that any of the ideas that have been — been mentioned here are still going to require some public dollars, and those are actually good investments to make right now.

That makes sense to people who understand these things like those at that jobs summit. But unfortunately, most people don’t and the president needs to start talking in terms that are comprehensible to the layman on this subject because they are not getting it.

Two things are happening. The economy feels terrible and whatever green shoots are growing have not yet penetrated the general consciousness and aren’t likely to for quite a while. And in the meantime you have the deficit fetishists taking the opportunity to pimp debt as the cause of the economic crisis and shock doctrine their way into the destruction of entitlements. They are doing that by conflating the short term need for stimulus etc with the Wall Street bailouts and the deficit. And now they think that those are the things that caused the recession. Now, whether the Democratic congress will allow the deficit scolds to push through a cat food commission is unknown, although there’s plenty of reason to believe that the political establishment sees this as a “go to China” moment that needs to be done under a Democratic president.

The problem with that is that the right wing isn’t going to play along and be good soldiers. They’ve shown with their rank mediscare hypocrisy that they are going to use these issues to build a new coalition with seniors as their backbone. “Change” is the last thing those folks want. They are scared to death that this fast paced, new century with all its challenges is going to leave them vulnerable at the end of their lives when they are no longer able to compete in the workforce. They are a powerful and easily mobilized constituency and since the Republicans have little hope of gaining with other growing constituencies, it’s a pretty smart play. It’s a huge demographic and it’s actually going to grow substantially in the next few years as the baby boomers hit retirement.

The president’s Wall Street advisors are telling him that US “credibility” and all that flows from that is at stake. And maybe he actually believes that he should sacrifice his presidency and the Democratic Party’s future for the greater good on this one. Or maybe he’s just playing Russian Roulette.

Either way, this discussion of deficits is not being waged on the up and up and it’s going to be extremely destructive politically. Republicans have proven time and again that “deficits don’t matter” to them. Cheney said it outright. It was proven when they spent the surplus Clinton so assiduously gathered to save social security the last time. So all that will happen is that Democrats will be good little soldiers by doing something drastic about “entitlements” — after which the Republicans will take power and spend us into deficits all over again. The only difference will be that the safety net will have been shredded. And the Democrats will be blamed.

It’s a very bad political play in both the short and the long term. If the Republicans want to lower the deficit, let them put some skin in the game.

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Fouling Their Trousers Again

by digby

In my email box this morning:

TEA PARTY FOUNDER ASKS “IS IT TIME FOR PRAYER AND AMMO?”

Washington, DC – “Conservatives are coming back to life after a long
coma. I am calling on all, Tea Parties and Patriots groups to bring
America back to the fundamentals which made us great!” Dale Robertson
– Founder Tea Party/Tea Party.org

The latest DailyKos/Research 2000 poll finds more evidence of a
growing enthusiasm gap between the two major political parties: 81%
of Republicans said they would definitely or probably vote in next
year’s elections as compared to just 65% of independents and 56% of
Democrats.

“Unless something is done and right away, America is scheduled for a
rude awaking when our dollar goes to zero, buckle your set belts.”

The dollar, the debt, and the doom, not that it seems to matter to
many Americans who lull themselves into a state of denial with sweet
sugar plums dancing in their heads, doom looms heavily on the horizon
involving the dollar and the debt.

The value of the dollar has plummeted to its lowest level in over a
generation. This means that creditor nations are quickly switching to
other currencies. There is also widespread talk of the value of the
dollar going to ZERO, at which point a world currency would be
implemented under a ‘new world order,’ according to one leading
economist who appeared on CNBC and Fox News. Of course the one major
driving force behind our present dire economic woes is the
mind-boggling national debt, which, according to conservative
estimates, now stands at roughly 12 trillion dollars.

But as the National Debt Clock shows, the actual debt is more like a
terrifying 105 TRILLION when we count unfunded liabilities. That
amounts to a debt load to U.S. citizens of a nauseating $345,000
bucks PER PERSON.

As the official policy of the Obama Administration, the Federal
Reserve under Ben Bernacke supports the continuing decline of the
value of the dollar. The powers that be also contend that there is no
need to worry about debts and budget deficits.

The explanation of this puzzling stance on the dollar and the debt
could well be that Obama and company are actually pushing for the
demise of the dollar and the implementation of a world currency under
a new world order. This is because they know that if we continue with
the present course of spending ourselves into oblivion, there is no
way the dollar can survive, which means that there is no hope for our
current financial system.

And, with this Administration’s mantra of things ‘being too big to
fail,’ Obama and his minions will try to sell the public on the
notion that since America is too big to fail, the only salvation is
to give up our financial system and its currency and move to a new
world order under a global government with a global currency.

At that point, we can permanently kiss our liberties good-bye.

You think it can’t happen? Well, did you ever think that this nation
could run up an extra 2 trillion dollars in debt in one year? Since
January of this year, Obama’s policies have resulted in an extra 1.8
trillion dollars of debt.

What can we do as citizens to stop this headlong acceleration into
national destruction?

· First, deal in cash as much as possible, although it is probably
not a good idea to hoard it. If the dollar’s value goes to zero, it
won’t be worth anything, anyway.

· Second, invest in silver, gold, platinum, and other precious
medals. But here again, don’t put all of your eggs in one basket. For
those who can’t afford gold, which is at an all-time high, silver is
a good alternative.

· Third, do not help big banks and large mortgage and financial
institutions. Get out of them. Choose local institutions with a
conservative track record and with no ties to large outside entities.
Do your homework and investigate your bank thoroughly before putting
any money with them. And even then, don’t put in too much. The FDIC
is flat broke. That means if your bank goes under, there is no real
money there to cover your lost savings or your dissolved checking
account.

· Fourth, become a political activist. Demand that Washington change
course. Throw the bums out in 2010 and 2012. And let your voices be
loud and relentless. Demand that sound economic policies be
implemented based on restrictions on government spending, balanced
budgets, and reducing the debt.

· Fifth, abolish the Federal Reserve. Simply end it. Caput. End of story.

· Sixth, since I am not a financial adviser or planner, my words
above are not meant to convey professional financial advice. I can
only speak about what I will do and what I hear others who have their
eyes wide open recommend. I repeat, do not take my words here as
financial advice.

· Seventh, go back and re-read the sixth above. Eighth, stock up on
guns and ammo. You may well need them before this is over. Economic
collapse usually results in violence. Be ready to defend yourself.

“Tomorrow may be the day after America is gone!”

Dale Robertson is calling for a day of prayer for all Tea Party
members and fellow Patriots. (So far, prayer has escaped taxation.)

Dale Robertson is the Founder of the modern day Tea Party movement
and the President of TeaParty.org. Dale is a family man living in
Texas with his wife and five children. He is a retired military
officer. He holds a Bachelor of Science Degree from the University of
Washington in Political Science, as well as an Associate’s Degree
from Southwest College in Engineering. Dale Robertson is volunteering
full time for the establishment of the Tea Party. His website can be
found at www.TeaParty.org.

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What about the terrorists who are coming to kill us all in our beds? It’s hard to keep up…

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Comedy Gold

by digby

I knew Al Franken was a comedic genius but I had no idea he would be able to make his colleagues into comedians as well:

The Politico reports that Senate Republicans are outraged at Sen. Al Franken (D-MN) due to their votes against an amendment he introduced, to crack down on the rape of employees of military contractors, now being used against them:

The Republicans are steamed at Franken because partisans on the left are using a measure he sponsored to paint them as rapist sympathizers — and because Franken isn’t doing much to stop them.

“Trying to tap into the natural sympathy that we have for this victim of this rape –and use that as a justification to frankly misrepresent and embarrass his colleagues, I don’t think it’s a very constructive thing,” Sen. John Cornyn (R-Texas) said in an interview.

…

“I don’t know what his motivation was for taking us on, but I would hope that we won’t see a lot of Daily Kos-inspired amendments in the future coming from him,” said South Dakota Sen. John Thune, No. 4 in the Senate Republican leadership. “I think hopefully he’ll settle down and do kind of the serious work of legislating that’s important to Minnesota.”

Evidently, these Senators simply can’t believe that a fellow Senator would allow them them to pay the price for an exceptionally embarrassing vote. Apparently that just isn’t done in the millionaire’s club and the gauche comedian isn’t playing by the rules.

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The Real Deal

by digby

I can hardly stand to write about the gay marriage debate anymore because every defeat just hurts too much. But sometimes someone says something that’s so right that it makes me feel hopeful again:

h/t to Chris Hayes

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Meanwhile In Bizarroworld

by digby

Here’s Mitt Romney’s “economic plan” (also known as John Galt’s wet dream):

•Repair the stimulus. Freeze the funds that haven’t yet been spent and redirect them to immediate, private sector job-creation priorities.[More money for me and my friends!]

•Create tax incentives that promote business expansion and hiring. For example, install a robust investment tax credit, permit businesses to expense capital purchases made in 2010, and reduce payroll taxes. These will reignite construction, technology and a wide array of capital goods industries, and lead to expanded employment.[More money for me and my friends!]

•Prove to the global investors that finance America’s debt that we are serious about reining in spending and becoming fiscally prudent by adopting limits on non-military discretionary spending and reforming our unsustainable, unfunded entitlements. These are key to strengthening the dollar, reducing the threat of rampant inflation and holding down interest rates.[Less money for sick and old people. And that means more money for me and my friends!]

•Close down any talk of carbon cap-and-trade. It will burden consumers and employers with billions in new costs. Instead, greatly expand our commitment to natural gas and nuclear, boosting jobs now and reducing the export of energy jobs and dollars later.[More pollution and global warming for everybody!]

•Tell the unions that job-stifling “card check” legislation is off the table. Laying new burdens on small business will kill entrepreneurship and job creation.[Less money for working people and more money for me and my friends!]

•Don’t allow a massive tax increase to go into effect in 2011 with the expiration of the 2001 and 2003 tax cuts. The specter of more tax-fueled government spending and the reduction of capital available for small business will hinder investment and business expansion.[Much, much more money for me and my friends!]

•New spending should be strictly limited to items that are critically needed and that we would have acquired in the future, such as new military equipment to support our troops abroad and essential infrastructure at home.[Unlimited money for my friends in the defense industry!]

•Install dynamic regulations for the financial sector – rules that are up to date, efficient and not excessively burdensome. But do not so tie up the financial sector with red tape that we lose a vital component of our economic system.[Tons more money for me and my friends!]

•Open the doors to trade. Give important friends like Colombia favored trade status rather than bow to protectionist demands. Now is the time for aggressive pursuit of opportunities for new markets for American goods, not insular retrenchment.[OMG. So much money for me and my friends!]

•Stop frightening the private sector by continuing to hold GM stock, by imposing tighter and tighter controls on compensation, and by pursuing a public insurance plan to compete with private insurers. Government encroachment on free enterprise is depressing investment and job creation.[Oh Jesus…]

If you think the US will be improved by quickly completing its transition into a banana republic, this would be the plan you’d like.

And, by the way, this is the guy who virtually everyone thinks is the only one who the Republicans could choose for 2012 who has a chance to win.

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Goldilocks Politics

by digby

NBC News Washington Bureau Chief Mark Whittaker on MSNBC with the Village CW:

I think that part of the strategy here was to limit the damages on all sides. The potential military risk in terms of the Taliban toppling the government in Kabul, the possibility of this infecting Pakistan, but also the political risks of being attacked from both sides.

So, I think the administration realized that they were going to take their lumps from the right, from the left, but ultimately this sort of middle ground strategy that they came up with was going to limit the political damage in terms of the hits that they were going to take.

David Broder must have felt a major thrill up his leg when he heard that. Nobody in the country or rest of the world thinks that making such important decisions based on “this one’s too hot and this one’s too cold” makes any sense at all. But the Villagers think it’s juuuuust right.

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Stock Tip: Buy Fancy Feast

by digby

If you thought the Republicans went nuts on Medicare cuts, wait until they get a hold of this. (And no, being total hypocrites on the matter will not stop them. Hypocrisy is no longer operative.)

Ben Bernanke has overseen the greatest expansion of the Federal Reserve’s balance sheet in its history, pouring trillions of dollars into Wall Street firms at roughly zero interest rates.

His generosity, however, has a limit.

In testimony before the Senate Banking Committee today, where he’s seeking re-appointment as the Fed’s chairman, Bernanke called for cutbacks in Medicare and Social Security even as unemployment rises and the middle class is endangered.

Citing legendary bank robber Willie Sutton, Bernanke said of the retirement and health care funds that are the legacy of the New Deal: “That’s where the money is.”

Sen. Bob Bennett (R-Utah) sympathized with Bernanke, saying that, because of entitlement spending, “you’re going to be looking at a situation where the Congress will be unable to provide any kind of fiscal discipline because of the mandatory spending. That puts an enormous burden on your plate.”

“Well, Senator, I was about to address entitlements,” Bernanke replied. “I think you can’t tackle the problem in the medium term without doing something about getting entitlements under control and reducing the costs, particularly of health care.”

Bernanke reminded Congress that it has the power to repeal Social Security and Medicare.

“It’s only mandatory until Congress says it’s not mandatory. And we have no option but to address those costs at some point or else we will have an unsustainable situation,” said Bernanke.

Well we’ll solve that with an blue ribbon commission that will tell them to take it or leave it, won’t we?

I don’t know how closely you are all following the current right wing assault on the medicare cost cutting in the health care reform bill, but it is beyond belief. This will piggyback right on top of it.

You see, they have a new constituency nowadays: older people who don’t much like our young black president. (And there aren’t many new constituencies for them out there.) They will obviously do anything to get their votes, particularly in the midterms, where the elderly traditionally turn out in greater numbers than others. Scaring the bejeezuz out of them with threats to their social security and medicare is just what the doctor ordered.

Bernanke may not technically be a member of the administration but that distinction will be lost on most elderly people. And don’t think that these same elderly folks will find any inconsistency in this and their equally fervent insistence that the deficit is out of control. They believe it’s out of control because the liberal president is giving away their well-deserved benefits to lesser people who don’t deserve them. They want their benefits AND they want the government to stop spending what they consider their money on things like the stimulus or health care or anything else. They worked their whole lives but the rest of us are lazy and lacking in fortitude. This is how they think, believe me. (Maybe I will too when I get old, I don’t know …)

This deficit fetish is a political trap that Obama and his Whiz Kids are going to rue ever falling into. They may think they can finesse it in some way, but this is not finessable during a recession. Even FDR couldn’t do it and he was a hell of a lot more experienced and battle hardened at the time he tried.

The administration and Bernanke are absolutely nuts to be talking about making Americans feel more insecure right now. I realize they believe they have to coddle the towering talents that run Wall Street and the banks or the sky will fall, but damn, they don’t have to go this far. Can’t they just have Larry, Tim and Ben call up all their bffs and tell them personally that they understand their concerns but that they simply can’t go out and tell the people of this country to suck it up right now? isn’t there any advantage at all to having Wall Street inside the white house and the Fed?

As for the substance of the argument: feh. There are far more pressing economic problems at the moment than social security’s solvency in 2038.

Update: Atrios wrote:

As I see politicians continuing to fret over that evil deficit, I wish someone would inform them that a big cause of declining tax revenues/increasing deficit is… unemployment!

And that isn’t just a short term thing. Longer term the unemployed find their job skills degrading, more are likely to move into gray market employment where income isn’t necessarily taxed, labor force participation might decline, etc. There aren’t these two separate things – unemployment and deficit – they’re rather intertwined.

He’s right of course. And I would guess that Pete Peterson and the boys know that very well. But the deficit fetish isn’t really about deficits, particularly right now. They actually encouraged Bush to hand the surplus to the wealthy just a few short years ago. It’s a shock doctrine move to eliminate the evil “entitlements.”

They don’t care about the real reasons — they want to use this economic crisis as an excuse to eliminate the safety net once and for all. If unemployment has to stay high and the economy needs to remain sluggish in order for them to shove through their shock therapy, that’s fine with them.

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Logic

by digby

Dan at Pruning Shears writes in with this:

Why is it that those who want to kill the public option use logic – the argument that it’s a small piece of the whole package so why make a big deal about getting rid of it – that more persuasively argues for their dropping the issue and letting the silly old liberals have their way?

That’s exactly the point Matt Yglesias has been making for weeks.

I continue to believe that it’s because they just can’t let the silly old liberals have their way on such a high profile issue. That particular “win” (such as it is) would indicate that liberals have the power to affect legislation and be serious players in the governance of our country. After all, on the substance, this public option really doesn’t mean all that much. They tell us that themselves over and over again. So it’s not about policy at all.

For some it’s about ideology to be sure. They don’t like liberalism and don’t want anyone thinking that liberals have any kind of constituency for it.
But I would guess that there are just as many in the Democratic Party who believe that allowing liberals to “win” something that has become so symbolically attached to the left will upset this allegedly center-right country and the Democrats will lose political power because of it. (They are already petrified that having a centrist African American president is a bridge too far for the Real Americans.)The Village CW would certainly indicate that’s the common cocktail party assumption.

As I have written many times before, the “public option” is a rather odd and complicated tool with which to show progressive muscle and it may end up forcing liberals to make a painful Solomonic choice that they wouldn’t have had to make if they had made their bottom line something that had a better grounding in principle. But that’s water under the bridge. The Public Option is what liberals decided was their requirement and lo and behold, the public liked the sound of it too. And now the forces for the status quo believe they must deny it to them lest they actually build up and then use this newfound muscle to do something really liberal.

I still have hope. The Public Option has been declared dead so many times already that I will not believe it has actually passed on until the conference reports out the final bill. But I see it primarily as a political matter at this point and one which I dearly hope the liberals can win. It will be hard work to build that muscle up again. (But that’s not saying it can’t be done…)

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