Month: December 2009

This Isn’t Good

by digby

From Meteor Blades:

Third-quarter growth was significantly weaker than previously reported, the government announced Tuesday. As measured by gross domestic product, which is seen by many as an increasingly flawed gauge that overstates the health of the economy, the revision showed that growth was still well into positive territory compared with four previous quarters of negative growth.

The initial estimate in October for annualized third-quarter GDP growth was an encouraging 3.5%. Last month, that figure was revised downward to 2.8%. Today, the figure was again revised downward by the Commerce Department’s Bureau of Economic Analysis, this time to 2.2%. This was well below the experts’ consensus of 2.7%, and below the level that even the most pessimistic expert had predicted.

Of that 2.2% increase in GDP, 1.45% came from the administration’s Cash-for-Clunkers program, which provided $3 billion in consumer subsidies for buying new, more fuel-efficient cars. Adjusted for inflation, GDP this year is down 2.8% over 2008.

Goldman Sachs’ Edward F. McKelvey wrote:

This was a much larger than normal revision for the third pass on a given quarter, knocking what once was a fairly robust 3.5% bounce down to a mediocre 2.2% (from 2.8% prior to this revision). All sectors except the trade balance — a focal point of last month’s downgrade — saw some downward revision. Revisions were particularly deep in business investment — to 5.9% from 4.1%, worth two tenths of the revision — and in inventories (also worth nearly two tenths).

The latest revision, which is based on more complete data than the previous estimates, was mostly a result of downward calculations of nonresidential fixed investment, private inventory investment, and personal consumption expenditures. Building of new office and retail commercial space dropped more than previously estimated and state and local government spending was worse, falling by 0.6 percent.

Not good.

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President Goldilocks

by digby

Depends on what the meaning of the word “campaign” is:

Obama said the public option “has become a source of ideological contention between the left and right.” But, he added, “I didn’t campaign on the public option.

Perhaps he didn’t have it at the center of his campaign, but his campaign documents certainly included it (PDF):

The Obama plan both builds upon and improves our current insurance system, upon which most Americans continue to rely, and leaves Medicare intact for older and disabled Americans. The Obama plan also addresses the large gaps in coverage that leave 45 million Americans uninsured. Specifically, the Obama plan will: (1) establish a new public insurance program available to Americans who neither qualify for Medicaid or SCHIP nor have access to insurance through their employers, as well as to small businesses that want to offer insurance to their employees; (2) make available the National Health Insurance Exchange to help Americans and businesses that want to purchase private health insurance directly; (3) require all employers to contribute towards health coverage for their employees; (4) mandate all children have health care coverage; (5) expand Medicaid and SCHIP to cover more of the least well-off among us; and (6) allow state flexibility for state health reform plans.

I don’t think it’s actually necessary or possible for Presidents to stick to the letter of their campaign promises. Things change, art of the possible etc.

And since he never pushed very hard for it it’s been clear for some time that he and the rest of the leadership decided that it would be something they could safely bargain away because the liberals who wanted it would hold their noses and vote for the plan anyway. But that doesn’t mean that the liberals were wrong to assume he supported it. It definitely was in his campaign health care plan.

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The Hippies Are Tripping

by digby

“…but I gotta say, Contessa, just because so much of the commentary I’ve heard has been really idiotic. Liberals who want universal health care ought to be thanking Harry Reid for getting this thing done rather than talking about what’s inadequate in the bill. I’m not saying the bill’s a good bill, but if you’re a liberal, and you want universal coverage in this country, and think that you could do better than Harry Reid, can do better than what he’s done, or the White House can do better, they ought to lay off the hallucinogenic drugs because we have had a vivid demonstration of the limits of political possibilities on this issue.”

Meanwhile, in a world in which two houses of congress still exist:

Democrats Face Challenge in Merging Health Bills

Even as the Senate took a significant step toward passing its version of a sweeping overhaul of the health insurance system before Christmas, Democrats were grappling Monday with deep internal divisions over abortion, the issue that most complicates their drive to merge the Senate and House bills and send final legislation to President Obama.

In the House, advocates and opponents of abortion rights and conservative Democrats have made clear that they object, for different reasons, to the Senate’s compromise language on abortion. Interest groups on both sides of the spectrum — Planned Parenthood on the abortion rights side, Catholic bishops for the anti-abortion rights camp — also oppose the abortion provision in the Senate bill, leaving Speaker Nancy Pelosi with a challenge in rounding up the votes she needs in the House.

Ms. Pelosi’s room for maneuvering is limited because any changes to the language in the Senate bill could unravel the deal that provided Democrats with the 60 votes they need to get the legislation through the Senate.

Maybe the liberal members of congress are on drugs, I don’t know. But I do know that the House of Representatives is a constitutional body with an equal say in legislation. And they passed a bill that is substantially different from the Senate. But unlike Joe Lieberman and Ben Nelson, they are being told that their concerns are irrelevant and that they have to suck it up and pass the bill that Joe Lieberman and Ben Nelson say they are allowed to have.

Now, the fact is that they want desperately to pass health care reform and Joe Lieberman and Ben Nelson would like nothing more than to walk away, so they are at the same disadvantage they’ve always been. But that’s not a guarantee. Pelosi has Stupak and the unions both threatening, while her liberals, especially women, are getting tired of being used as a bargaining chip in this effort. It’s not like she can just wave a magic mushroom and get everyone to hold hands and sing “I Am The Walrus.”

It may be true that Ben Nelson and Joe Lieberman have veto power over any bill. But until this process completely plays out, there is no way of knowing for sure that somebody else isn’t going to exercise theirs. It can happen and it has. So a word to the wise to all the people who are telling liberals to STFU — STFU. If you like this Senate bill you might want to be a little bit more respectful to all the people who still have its fate in their hands.

There seems to be an unfortunate requirement in American politics that when pundits and numbers crunchers read the tea leaves and determine to their satisfaction that the contest is over, those they’ve decided are going to lose are required to immediately capitulate, admit they were wrong and join in the celebration of the winner — even if the votes haven’t been cast or the cases haven’t been decided. I can think of three recent electoral situations like that — the 2000 election, the 2004 Democratic primary and the 2008 Democratic primary. There is an unwillingness to let democracy play itself out all the way out to the official finish.

Yes, it may be true that the Senate bill is the final bill and that liberals will have to live with that. But exhorting them to get with the program before the conference committee even reports out a bill doesn’t account for the fact that sometimes it really ain’t over til it’s over. Case in point: Howard Dean 2004. Sometimes things don’t turn out the way you think they will.

Of course, sometimes they do. But even if the Senate bill is the best bill we’re going to get, it’s unwise not to allow people some space to argue for improvement. They will be far less likely to feel they were railroaded — after all, when somebody’s pressuring you to “give in to the inevitable” you can be forgiven for wondering why they’re trying so hard to force you to sign on if they’re so sure of the outcome. The final bill will have more legitimacy if everyone on the team feels that they tried their best, they were heard and they can come back to fight another day.

I would guess that when the final health care bill is passed, the vast majority of disappointed activists will regroup and figure out what to do going forward to improve it. But the punditocracy (and some in the administration) aren’t making that any easier by telling people who care deeply about the issue that they need to “get over it” before it’s even over.

Update: To be clear, I’m not saying that people shouldn’t criticize tactics or dishonest arguments where they see them. I’m simply saying that telling people that they have to clap louder isn’t a good idea. I believe that fighting this stuff out is good for democracy and that there is far too much fear of “discord” especially in Democratic Party politics. It’s not the end of the world to have disagreements.

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Everybody’s Happy

by digby

I had a friend snidely question not long ago asking if I was right about the medical insurance industry benefiting from the reforms, why weren’t investors flocking to them?

Well:

Healthcare shares rose on Monday as a bill to reform healthcare passed the first critical test in the Senate, without many of the provisions, such as a government-run health insurance option, that investors most feared would hurt profits.

Hot Stocks

The S&P Healthcare Index rose 1.4 percent, while the Morgan Stanley Healthcare Payor stock index rose 3.6 percent. The S&P Managed Health Care index rose 4.6 percent.

“All in all, relative to the last version of health reform issued by the Senate, things have turned out pretty well for the health insurance industry,” said Carl McDonald, an analyst at Oppenheimer. “In particular, all versions of a government-run health plan have largely been eliminated.”

The original Senate bill taxed the health insurance industry a fixed $6.7 billion a year. Under the new proposal, the industry would face a $2 billion tax in 2011, with increases over time to $10 billion in 2017.

Analysts said the new proposal would allow insurers time to factor the tax into pricing.

The bill would require most Americans to have insurance, expanding the membership rolls for health insurers. At the same time, it replaces a proposed government-run public insurance option with less onerous exchanges to cover those who are not covered through their employment.

Matthew Borsch, an analyst at Goldman Sachs & Co., said Cigna Corp remains his favorite among health insurers.

“Aside from reform, the important backdrop to our sector view is fundamentals, which are decidedly mixed but with the key being that downside risk to commercial margins is mitigated by firming of industry pricing,” he said in a research note.

Shares of Cigna rose 5.3 percent to $37.69. Shares of Aetna Inc rose 5.84 percent to $34.41. Humana Inc rose 3.79 percent to $45.17 and United Health Group Inc rose 5 percent to $33.14. Shares of Wellpoint Inc rose 3.8 percent to $60.51.

As predicted, it would appear that the insurance industry feels confident that it can jack premiums through the roof for a while yet.

Let’s hope the congress has what it takes to fix that fairly quickly. Of course, it will take a lot of horror stories of misery and despair to make that happen, but that’s how it’s done these days. It’s not like they could have known …

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Catching Up

by digby

What with all the health care talk these last few days, I hadn’t heard about this:

The New Goldman Sachs World Headquarters — a 43-story office tower next to the World Trade Center site — is being built with the help of millions of dollars from taxpayers, Bloomberg news service reports.

The company that has been the focus of populist anger since the TARP bailout last year took advantage of programs the government set up to revitalize lower Manhattan after the 9/11 attacks. Setting up shop next to the WTC qualified Goldman Sachs for $49 in “job-grant funds, tax exemptions and energy discounts,” Bloomberg’s Christine Harper reported.

Additionally, because then-Goldman Sachs CEO Hank Paulson raised concerns about security at the site, the city and state threw gave the construction project an additional $66 million in benefits. And the investment bank was also allowed to sell tax-free some $1.6 billion of Liberty Bonds — bonds created to fund the effort to rebuild lower Manhattan. That allowed Goldman Sachs to avoid taking out a commercial loan for that amount of money, saving it an additional $175 million over 30 years, according to the Bloomberg report.

The New York Daily News reported earlier this month that the city of New York forgave Goldman Sachs about $161 million in lease payments the company would have had to make on the land where the new 43-story office tower sits. Under the agreement between the city and the company, Goldman doesn’t have to pay the lease if Ground Zero remains empty.

Orthis:

Alan Greenspan, former Federal Reserve chief, warned today on the risks US social programmes – Medicare, Medicaid and Social Security – pose to the US’s ability to finance its deficits in testimony prepared for the Senate Committee on Homeland Security.

Or this:

The US Department of Labor reported that weekly jobless claims for the week ending Dec. 12, 2009, rose unexpectedly by 7,000 claims to 480,000 from the prior week’s revised 473,000.

Job pundits were expecting to see initial unemployment claims fall to 465,000. Instead, the jobs market showed a knee-jerk movement higher-than-expected, which indicates that the US labor market is far from recovering…

Since this summer, unemployment claims have been drifting lower. Yet for the week ending Dec 5, the number of workers continuing to collect unemployment benefits rose 5000 to 5.19 million. But there are millions more who have used up their unemployment benefits.

So unemployment remains high and the deficit is growing. But Alan Greenspan says we need to cut social insurance programs. And Goldman is getting tax breaks (undoubtedly based on the promise that they will create jobs.)

I think I need to get out my copy of “The Shock Doctrine” again.

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Making Them Squirm

by digby

Here’s some good news on a different topic. The President signed the appropriations bill today and:

Within the Appropriations Act is Sen. Al Franken’s (D-MN) amendment prohibiting defense contractors from restricting their employees’ abilities to take workplace discrimination, battery, and sexual assault cases to court. The measure was inspired by Jamie Leigh Jones, who was gang-raped by her co-workers while working for Halliburton/KBR in Baghdad. Many Republicans opposed the legislation — saying it was an unnecessary attack on their allies in the defense contracting business — and faced intense political blowback over their positions.

The reason I think it’s good news isn’t just on the substance (which it certainly is) but on the politics. Franken’s amendment is driving the Republicans crazy because they basically voted to protect rapists and are paying a political price for that. And now they are whining that Franken was somehow “uncollegial” because the amendment put them in an embarrassing position (which makes me wonder how many other things issues are swept under the rug because it would make members of the opposition uncomfortable.)

That’s the kind of thing the Democrats should do more of. Expose the Republicans’ hypocrisy and cruelty by forcing these issues on to the agenda. Aside from the fact that Republicans (and some Democrats) are all basically employees of the military industrial complex, they have also developed a political requirement to reflexively defend anything that even has the word “military” in it. This rape exemption was a particularly obvious case of whorish subservience, but there are many more issues like this than can be used to embarrass the Republicans and they ought to be used.

The Senate is an undemocratic elite club filled with far too many egomaniacs and aristocrats. They don’t like having a sharp comedian in their midst (although having an addled movie star for president was just ducky.)His very presence offends them. Good. If that’s the case, I think Senator Franken would be just the guy to lead the charge against the filibuster. What has he got to lose?

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Happy Liberals

by digby

It looks like Rahm may have been right, at least for now. Greg Sargent reports:

[T]he internals of the new CNN poll contain a striking finding: Support for the Senate bill is up among Democratic voters. What’s more, Obama’s support has increased among liberals.

The poll finds that support overall for the Senate health care bill has jumped six points, to 42%, since early December. That’s a sizable jump, though overall 56% oppose it.

But here’s the interesting part: The poll also found that approval of the Senate bill has jumped 10 points among Dems in the same time period — a time period during which the Medicare buy-in was dropped. That’s a faster rise than overall. What’s more, it has jumped by the same number among young voters — who are presumably more liberal.

On top of that, the poll also says that Obama’s overall approval among liberals has gone up, to 81%.

Other polls, like this one, show a very different result, so it’s hard to know if that means anythying.

But nonetheless, I would guess that this CNN poll will be cited everywhere as validation of the village conventional wisdom that you can’t go wrong by punching a hippie. And the acceptance of the defeat of the public option and new abortion restrictions will likewise be interpreted as a sign that the progressive activists represent nobody but themselves.

I’m not surprised that liberals would “support the bill” in any case. Like the progressives in the congress they want health care reform, especially if it includes a huge expansion for the poor. The closer that comes to fruition, the more they come to terms with the bill as an imperfect improvement.

How that translates into enthusiasm and turn-out next November remains to be seen.

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Which Reality?

by digby

Senator Whitehouse made a stirring speech on the floor yesterday:

When it turns out there are no death panels, when there is no bureaucrat between you and your doctor, when the ways your health care changes seem like a good deal to you, and a pretty smart idea, when the American public sees the discrepancy between what really is, and what they were told by the Republicans, there will be a reckoning. There will come a day of judgment about who was telling the truth.

So, as much as I admire Whitehouse’s passion, I’m not entirely sure he’s right about this. I would have once believed that reason would always prevail, but recent years have shown me that it’s not necessarily the way things work. We live in a strange PoMo world of swirling competing narratives and propaganda, some of which become a mythic truth regardless of their factual basis. (Al Gore wrote a whole book about this problem.)

I hope that in the long run all this will be seen as the historic progressive advance the Democrats are touting it to be. In the meantime, I suspect this fight will be ongoing for the foreseeable future and I have no doubt that the right will win at least some of the battles. I hope the Democrats are not relying on the notion that “everyone will see” how great the benefits are and hold Republican obstruction against them as they go about defending this program to the people. That’s just not enough.

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Congratulations!

by digby

… to my pal Mike Lux, who won the Air American Cruise contest:

Air America announced this morning that I won their blogger contest, so I am going on the cruise. Thanks to all of you who helped, it honors me that so many folks voted for me. While I intend to have fun, I will spend most of the trip strategizing my ass off with Rachel, Howard, and the gang, so hopefully I will do you proud.

And many, many thanks to my other pals at the PCCC who worked to put me in the top five. I was thrilled to be considered and will love the swag I won as a runner-up.

Congrats to Mike. He will represent us well.

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Ouch

by digby

Not long ago, Dr Drew Westen was the “it boy” of the Democratic Party, with his book
“The Political Brain.” I doubt if anyone in the White House likes him much today.

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