Ben Alexander spent nearly every waking minute playing the video game “World of Warcraft.” As a result, he flunked out of the University of Iowa.
Alexander, 19, needed help to break an addiction he calls as destructive as alcohol or drugs. He found it in this suburb of high-tech Seattle, where what claims to be the first residential treatment center for Internet addiction in the United States just opened its doors.
The center, called ReSTART, is somewhat ironically located near Redmond, headquarters of Microsoft and a world center of the computer industry. It opened in July and for $14,000 offers a 45-day program intended to help people wean themselves from pathological computer use, which can include obsessive use of video games, texting, Facebook, eBay, Twitter and any other time-killers brought courtesy of technology.
“We’ve been doing this for years on an outpatient basis,” said Hilarie Cash, a therapist and executive director of the center. “Up until now, we had no place to send them.”
Internet addiction is not recognized as a separate disorder by the American Psychiatric Association, and treatment is not generally covered by insurance. But there are many such treatment centers in China, South Korea and Taiwan — where Internet addiction is taken very seriously — and many psychiatric experts say it is clear that Internet addiction is real and harmful
But I’m a functioning blogoholic, does that count?
Good to know there’s treatment available for those who are ruining their lives with obsessive behavior, but one wonders if all addictions are created equal? How many of you out there have considered that your time spent online is an “issue?” (I consider it a lifestyle, but then I’m probably in denial.)
We do it. But we ration the American way, which is by winners and losers. If you are rich, no problema. If you’re poor, well —
A recent article in the journal of Clinical and Investigative Medicine finds that a move to Canadian-style wait times might actually be an improvement for the United States. The study, by Kevin Gorey and colleagues, compared wait times for breast cancer treatment in the United States with those in Canada, and found that low socioeconomic status was a major factor in creating long wait times for patients in the U.S., whereas it played no role in determining wait times in Canada.
On the whole, there were not group differences in wait times between the U.S. and Canada. The authors note that high-income Americans had shorter waits than the average Canadian, but that low-income Americans had longer waits than the average Canadian. Most notably, while Canadians might face slightly longer waits than wealthy Americans, they were all able to receive the treatment that they needed. By contrast, in the United States, many of the least well-off were subject to what the authors term “the longest wait of all.” That is, they received no treatment at all.
What does this tell us? Primarily that the Canadian system is far more equitable than the highly inequitable system observed in the United States, characterized by the polarized groups of people at the extremes of an income distribution. This is evidence, first and foremost, that we already ration care in the United States, not on the basis of need, but on the basis of price. The study also demonstrates that on the whole, the increased waits that would be experienced by a few of the wealthiest Americans would be more than offset by the decreased waits experienced by those less well-off.
The question is: How selfish are we?
That’s probably not the right question. I think most people, certainly Americans, are pretty selfish.
The question is, how sure are you that you won’t get sick, lose everything you have and then be one of those losers who have to wait for health care? It happens every day to people who used to be middle class workers and who are now living in a nightmare from which they can’t awaken.
Everyone but the very wealthy in this country are just one illness away from being at the back of the line. That’s the kind of stress that people in other countries don’t have and it allows them to take risks and live happier lives.
Tim Rutten has a good piece in the Los Angeles Times about “the bizarre controversy” surrounding Obama’s planned speech to U.S. school children and the unhinged right-wing response about how the President of the United States was going to “indoctrinate” students by urging them to achieve excellence. Rutten is dead-on when he notes the inherent danger behind the ugliness. Unfortunately, Rutten lets the serious, mainstream press off the hook. (Fox News clearly doesn’t fall into that category.) The fact is you can’t really bemoan how the this ‘controversy’ has become a big deal without noting it’s the press that’s turned it into one. This loony tunes conspiracy theory has only gained traction because the corporate press won’t stop writing and talking about it. Because reporters and pundits have legitimized it. They’ve rewarded the nuts who concocted the phony story in the first place. And yes, I’m talking about corporate press outlets like the Los Angeles Times, which propped up the school nonsense as big news in its Friday edition with this headline:
Planned school speech by Obamahits resistance; The address will focus on student success, the White House says. But one critic denounces a ‘socialist ideology.
‘
I wasn’t entirely sure what he meant since I’ve seen quite a few mainstream gasbags denounce the hissy fit, but lo and behold, here’s CNN today:
The White House is set to release on Monday the text of a controversial back-to-school speech to students from President Obama that has angered some conservative parents and pundits.
The uproar over President Obama’s back-to-school speech has led the White House to release the transcript.
The uproar over President Obama’s back-to-school speech has led the White House to release the transcript.
The text of the 18-minute speech will be posted on the White House Web site so people can read it before its scheduled Internet broadcast to schoolchildren Tuesday.
Some conservatives have expressed a fear that Obama is going to use the opportunity to press a partisan political agenda.
“Thinking about my kids in school having to listen to that just really upsets me,” suburban Colorado mother Shanneen Barron told CNN Denver affiliate KMGH. “I’m an American. They are Americans, and I don’t feel that’s OK. I feel very scared to be in this country with our leadership right now.”
I know how she feels. I had the same reaction when George W. Bush was on television every five minute launching invasions of other countries for no good reason and yammering on about how oceans once protected us and now drone planes with biological weapons were coming to kill us all in our beds. It’s easy to understand why this woman would be equally freaked out by the president trying to make sure everyone can go to a doctor when they get sick. It’s scary stuff.
There’s a part of all this that’s simply a matter of the right riding the existing zeitgeist. For years liberals loudly denounced the neocons for their megalomania, warning about the ramifications of an America that has become a rogue superpower, torturing, invading and spying on its own citizens. It was a violent, frightening time with some real world consequences that are still not fully understood or absorbed.
The right, with their pretense of assuming the moral positions of their opposition, twisting their rhetoric to suit their own needs and basically use the other sides’ own methods against them, have simply jumped on the bandwagon now that their boy is gone. These people are posing as civil libertarians afraid of an authoritarian take-over,something we all have felt recently. Because they’ve absorbed all the fear and concern of the past years, even as they rejected it, they are now able to emotionally apply it to the president they hate and it has the same emotional resonance, even if it is completely ludicrous.
After all, everybody knows that the government is authoritarian in a number of different ways. The right uses this to confuse the people who feel the free floating anxiety in the culture at large and have emotionally internalized all the anti-Cheney rhetoric of the past eight years into fear of government programs that can help them. It’s quite impressive that they can do it, but when you see the help the press continues to give them it’s not altogether surprising.
These guys are blandly passing out all these paranoid fantasies without properly examining just how bizarre they really are. Obama’s speech to kids is only “controversial” because a bunch of fruitcakes and opportunists are treating the president of the United States like he’s some kind of pervert who can’t be trusted to speak to their children. I think that’s pretty awful and the media should not be validating this stuff, particularly when it makes no fucking sense!
The irony is that back when it might have actually helped to have the press validating the anti-government rhetoric, before the Iraq war, they blacked us out. I guess they won’t be repeating that journalistic mistake by blacking out people who think that presidential speeches about hard work and perseverance to schoolchildren are communist plots. It’s always interesting how they choose to apply their lessons.
In a last effort to give the Senate a bipartisan health care bill, the chairman of the Senate Finance Committee circulated a comprehensive proposal on Sunday to overhaul the health care system and proposed a new fee on insurance companies to help pay for coverage of the uninsured. The proposal is the culmination of more than a year of work by the chairman, Senator Max Baucus, Democrat of Montana. A similar fee was proposed by several liberal Democrats in July. In making it part of his proposal, Mr. Baucus may help cover the costs of the bill but also risks alienating Republicans whom he is trying to win over. Mr. Baucus is struggling to forge a bipartisan consensus among 6 of the 23 senators on his committee before President Obama puts new pressure on lawmakers in an address to a joint session of Congress on Wednesday evening. The proposal by Mr. Baucus does not include a public option, or a government-run insurance plan, to compete with private insurers, as many Democrats want. […]People familiar with Mr. Baucus’s plan said it was calculated to appeal to Senator Olympia J. Snowe, Republican of Maine. But, at first glance, they said, it appears unlikely that the proposal, in its current form, could win support from the other Republicans in the “group of six,” Senators Charles E. Grassley of Iowa and Michael B. Enzi of Wyoming. The group is scheduled to meet on Tuesday, when Congress reconvenes after its August recess. Mr. Baucus is looking for a quick response from the Republicans. Mr. Baucus’s plan, expected to cost $850 billion to $900 billion over 10 years, would tax insurance companies on their most expensive health care policies. The hope is that employers would buy cheaper, less generous coverage for employees, thereby reducing the overuse of medical services. The separate new fee on insurance companies would help raise money to pay for the plan. The fee would raise $6 billion a year starting in 2010, and it would be allocated among insurance companies according to their market shares. The fees were first proposed by Senators Charles E. Schumer of New York, John D. Rockefeller IV of West Virginia and Debbie Stabenow of Michigan. Until now, Mr. Baucus had not shown interest in the idea. Mr. Schumer said, “The health insurance industry should pay its fair share of the cost because it stands to gain over 40 million new consumers under health care reform legislation.” Mr. Rockefeller said the fees were justified because insurance companies were “rapaciously, greedily and unstoppably making money by underpaying the patient, by underpaying the provider and by overpaying themselves.” Insurers and many Republicans in Congress oppose the fees, saying they would be passed on to families and employers who buy insurance. Robert E. Zirkelbach, a spokesman for America’s Health Insurance Plans, a trade group, said the fees would “make coverage less affordable.” A recent report by Oppenheimer & Company, the investment bank, said, “It will be very difficult for the Senate Finance Committee to structure the fees in a way that they won’t be immediately passed on to customers in the form of higher premiums.” Another section of Mr. Baucus’s proposal would help pay insurance premiums, co-payments and deductibles for people with incomes less than 300 percent of the poverty level ($66,150 for a family of four). It would also provide some protection for people with incomes from 300 percent to 400 percent of the poverty level (up to $88,200 for a family of four), so they would generally not have to pay more than 13 percent of their income in premiums. Mr. Baucus’s proposal does not include a “trigger mechanism” of the type recommended by Ms. Snowe, who would offer a public insurance plan in any state where fewer than 95 percent of the people had access to affordable coverage.
Baucus has basically chosen the back door approach to lifting the employer exclusion, which was floated earlier by John Kerry. You’ll recall that CBO head Steve Elmendorf indicated in his testimony that lifting the exclusion was one financing mechanism he would probably score well. (As I wrote at the link, that seemed like a strong hint from CBO to do exactly that if the Democrats wanted a decent score.)
Since this is going to piss off the insurance companies and make the Republicans more obstinate than ever, it’s hard to see why he felt the need to eliminate the public plan, but there you have it. So we have a shitty plan that the CBO will say saves money but that Democrats will have as hard a time passing as one with a public plan. Awesome strategy.
So, no public plan, no co-ops, no trigger. No bipartisanship. No surprise.
We’re still waiting for Obama and the conference. As we always were.
Update: FYI: according to the article:
Mr. Baucus would impose limits on out-of-pocket medical costs — the co-payments, deductibles and similar charges for covered items and services. The limits would be $11,900 a year for a family and $5,950 for an individual. The comparable numbers in the House bill are $10,000 and $5,000.
I’m not defending this crap sandwich, but after reading the comments it’s clear that it needed to be pointed out that he did impose limits on how much the insurance companies charge — which is why they will be pissed if this passes. Read the whole article.
None of this makes much sense in and of itself. IMO, he’s just looking for a better CBO score to get it past the fiscal scolds and then they’ll write the real bill in the conference. After all, months ago, Obama told bloggers on a conference call what he was planning:
The House bills and the Senate bills will not be identical. We know this. The politics are different, because the makeup of the Senate and the House are different and they operate on different rules. I am not interested in making the best the enemy of the good. There will be a conference committee where the House and Senate bills will be reconciled, and that will be a tough, lengthy and serious negotiation process. I am less interested in making sure there’s a litmus test of perfection on every committee than I am in going ahead and getting a bill off the floor of the House and off the floor of the Senate. Eighty percent of those two bills will overlap. There’s going to be 20 percent that will be different in terms of how it will be funded, its approach to the public plan, its pay-or-play provisions. We shouldn’t automatically assume that if any of the bills coming out of the committees don’t meet our test, that there is a betrayal or failure. I think it’s an honest process of trying to reconcile a lot of different interests in a very big bill. Conference is where these differences will get ironed out. And that’s where my bottom lines will remain: Does this bill cover all Americans? Does it drive down costs both in the public sector and the private sector over the long-term. Does it improve quality? Does it emphasize prevention and wellness? Does it have a serious package of insurance reforms so people aren’t losing health care over a preexisting condition? Does it have a serious public option in place? Those are the kind of benchmarks I’ll be using. But I’m not assuming either the House and Senate bills will match up perfectly with where I want to end up. But I am going to be insisting we get something done.
We still have absolutely no idea what that really means, but let nobody claim the president didn’t tell everyone in advance that he planned to make the deal in the conference. The only question is why they decided to let this thing hurtle out of control in the month of August. If I had to guess, they actually thought that if they caved enough to the industry they could get Republicans on board. And if that’s so, it doesn’t bode well for the “tough, lengthy and serious negotiation process.”
There are a handfull of articles worth really delving into as your enjoy your three day week-end. The first is Paul Krugman’s discussion in today’s New York Times Magazine about the failure of the economics profession to foresee the current crisis:
[I]n the wake of the crisis, the fault lines in the economics profession have yawned wider than ever. Lucas says the Obama administration’s stimulus plans are “schlock economics,” and his Chicago colleague John Cochrane says they’re based on discredited “fairy tales.” In response, Brad DeLong of the University of California, Berkeley, writes of the “intellectual collapse” of the Chicago School, and I myself have written that comments from Chicago economists are the product of a Dark Age of macroeconomics in which hard-won knowledge has been forgotten.What happened to the economics profession? And where does it go from here?As I see it, the economics profession went astray because economists, as a group, mistook beauty, clad in impressive-looking mathematics, for truth. Until the Great Depression, most economists clung to a vision of capitalism as a perfect or nearly perfect system. That vision wasn’t sustainable in the face of mass unemployment, but as memories of the Depression faded, economists fell back in love with the old, idealized vision of an economy in which rational individuals interact in perfect markets, this time gussied up with fancy equations. The renewed romance with the idealized market was, to be sure, partly a response to shifting political winds, partly a response to financial incentives. But while sabbaticals at the Hoover Institution and job opportunities on Wall Street are nothing to sneeze at, the central cause of the profession’s failure was the desire for an all-encompassing, intellectually elegant approach that also gave economists a chance to show off their mathematical prowess.Unfortunately, this romanticized and sanitized vision of the economy led most economists to ignore all the things that can go wrong. They turned a blind eye to the limitations of human rationality that often lead to bubbles and busts; to the problems of institutions that run amok; to the imperfections of markets — especially financial markets — that can cause the economy’s operating system to undergo sudden, unpredictable crashes; and to the dangers created when regulators don’t believe in regulation.
I find it hard to picture economists as romantics, but he makes a compelling case. Maybe everybody is … In any case, it’s a fascinating look at what went wrong that contains some universal lessons for everyone. Perhaps it all boils down to the simple truth that if it seems to good to be true, it probably is.
The next article unfortunately is not online, but is worth reading if you happen to have a copy of this month’s Vanity Fair or have access to one. (No it’s not the story about Levi and Sarah, although that one’s pretty fun too.) It’s called “Good Billions After Bad:” In the last months of the Bush administration, the Treasury Department frantically pumped more than a quarter of a trillion dollars into the financial system—without bothering to track how it was spent. But Donald L. Barlett and James B. Steele dug into the records, following bailout money to banks that prey on consumers, banks that cater to the rich, and banks that never wanted it in the first place. But health care is just too expensive …
This week-end a former Obama campaign volunteer wrote a wonderful post about her growing disillusionment, that you should read in its entirety. Here’s an excerpt:
One of the great joys for me in working on the Obama campaign was being involved with people who understood this concept [of emotional truth] very, very well. Although I had no part in the messaging of the campaign myself, I watched with great appreciation how the campaign tapped into the emotions of it’s volunteers. They took a demoralized activist base beaten down by 8 years of quasi-fascist rule and lifted us up with three simple words and one simple concept – “Respect, empower, and include” and “CHANGE.”
Day after day, they used these concepts, ritualized them, repeated them, made them into a mantra. They created the emotional truth around which the campaign drew it’s power.
To this day I still tear up when I remember how, at the end of Camp Obama, our facilitator told everyone in the room to close their eyes and envision Obama and his family on January 20 – to envision Michelle and her girls as they stood to watch their father take the oath of office. And I can tell you, when I was there on the Mall and watched it happen for real, it was all I could do not to break down.
But whatever alchemy created this understanding during the campaign has all but vanished in the last few months. I know so many OFA staff and volunteers who do everything they can to keep this spirit alive, but it’s not really coming from Obama anymore. The arguments for health care, even the pledges OFA asks constituents to sign – contain not one whiff of emotional truth. Even the health care horror stories collected by OFA have been stripped of their emotion, filed away to be trotted out in mild DNC ads or handed over to congressional members. These stories need to be used, repeated, and ritualized for the entire country – they need to become our nation’s emotional truth.
That is not happening. Instead the administration is pushing policy arguments, lists of ideas, pieces of paper. And they shrivel and die next to Sarah Palin’s Baby Trig and the reptile fear of people clinging desperately to whatever they have left after a brutal recession.
So here we are. What now?
I confess that I never felt that connection, but I readily admit that I’m probably not the audience for which these emotional appeals are intended. (I’m dead inside.) But the fact that these emotional appeals were powerful is absolutely true. I know many people who were profoundly affected by them and who felt connected to politics in a way they had never felt before because of it. I think it’s bordering on indecent to kick these people in the teeth in order to appease a bunch of establishment scolds who require Democrats to “stare down their own party” in order to be acceptable leaders of Real America. (Meanwhile we have Republicans performing various metaphorical sex acts on the likes of Beck and Limbaugh on a daily basis and nobody says a word.)
She asks, what now? Well, here’s one thing people can do including this person. From the PCCC:
If Obama doesn’t stand firm on the public option, millions of people will lose hope. So today, we’re launching a petition to President Obama signed by those who volunteered, staffed, voted for, or donated to Obama’s campaign in 2008, asking him to please stand firm on the public option. If that’s you, can you sign this petition today? Click here. Then, please think hard about others you know who worked for change last year — and forward them this email. The petition says: “We worked so hard for real change. President Obama, please demand a strong public health insurance option in your speech to Congress. Letting the insurance companies win would not be change we can believe in.” We’ll make sure the White House gets our message. In addition to delivering the signatures and personal notes from the petition page, we’re planning an ad featuring the voices of those who sign. Obama’s speech “is still being debated in the West Wing.” * That means there’s still time — we have one week to persuade Obama to do the right thing. Can you sign this petition to President Obama today? Click here. Then, please forward this to others. Again, we have until Wednesday, September 9. Thanks for being a bold progressive.
They are fundraising for an ad as well:
The group has also set up an ActBlue page showing the amount donated so far, and what more money could do: “$20,000 can make a splash in a DC publication, $40,000 could buy cable news in DC, $100,000 could buy a New York Times ad.” Founder Adam Green wrote in a blog post on The Huffington Post:
We’ll make sure the White House gets our message. In addition to delivering the signatures and personal notes from the petition page, we’re planning an ad featuring the voices of those who sign. Obama’s speech “is still being debated in the West Wing,” reports Politico. That means there’s still time — we have one week to persuade Obama to do the right thing.
Maybe the White House isn’t interested in a little emotional truth from their own supporters, but they should be.
Wolcott makes an important point about the “health care debate” (and quotes tristero!):
Just take the phrase itself, “health care reform,” or, in its usual journalistic shorthand, “health reform.”
Are you telling me that with all the money pumped into consultants and pollsters, in a country whose media culture is built on advertising and catchphrases, that with all of ambitious little beavering minds who have studied the art and science of persuasion (and know Lakoff “framing” backwards and forwards, chapter and verse), that with all of that the architects and backers couldn’t come up with something more inspiring and memorable than “health care reform”? Where’s the creativity, the missionary zeal, the visionary spark? First of all, “reform” is one of the most boring fucking well-meaning meaningless words in the language. It’s a word that carries no juice, no buzz, no friction, no color, no nothing.
Why is it that Republican consultants can coin something as cunningly diabolical as “death tax” (as a substitute for inheritance taxes) and sell the hell out of it, or contrive the “Contract with America,” yet health reform is packaged in a plain brown wrapper with all the pizazz of a corporate restructuring plan. It should have been called something upbeat and flagwavey like “The American Health Freedom Act,” guaranteeing health coverage and available, affordable insurance for all.
Same deal with the “public option.” What kind of dead-dick policy term is that? “Option” is another term of pure anesthesia. Yes, Sarah Palin was fear-mongering with “death panels,” but that was a phrase that hit a nerve chord, as it was intended to. Faced with such poison spitballing, you’ve either got to up your deflection skills or find your own power chords.
read on ..
I could not agree more. The Democratic rhetoric on this has been about as lame as I’ve ever seen and that’s saying something. And it’s not just the buzzwords, it’s the slogans (or lack of them.) Why aren’t we hearing this kind of thing over and over again?
“If you think it can’t happen to you, think again.”
“We already ration medicine in this country, we just do it by ability to pay. And once you get sick and can’t work, you can’t pay.”
Those are just a handful, some good some not. But let’s just say it would have been fairly easy to come up with some meaningful, pithy rhetoric to convey what the liberal position on health care is really all about.
Why are we fighting for a public option? Well, for me, it’s mainly because I resent the hell out of being forced to give money to a bunch of greedy private interests who game the system for their own enrichment on the backs of sick people. But that’s just me. I would guess that there are other people who care about saving costs and competition and the other wonky concerns.
But whatever the reasons, it’s clear that despite my earlier optimism about the reemergence of the word “public,” the term “public option” clearly was far too obscure and therefore easily demagogued. “Guaranteed Health Security Plan” or something like that would have been better. Or do what the Republicans do and cop the other side’s rhetoric for your own gain and call it “Individual Choice.”
Obviously, it’s easier to criticize than it is to come up with good alternatives. But Wolcott is right, nonetheless. You can’t beat “death panels” with “public option.” They aren’t even in the same rhetorical realm.
On Fox News Sunday this morning, host Chris Wallace asked former House Speaker Newt Gingrich about the controversy, noting that in 1991 Gingrich defended a similar speech by then-President George H.W. Bush by saying, “Why is it political for the president of the United States to discuss education?” Gingrich replied that if it’s “a totally positive speech” that parents can see “in advance” (which they can), then “it is good to have”:
GINGRICH: My daughter Jackie Cushman just wrote a column in which she said, “if the president gives a speech as a parent to students to encourage them to learn and stay in school, it is a great thing for him to do.” It was a good thing for Ronald Reagan to do. It was a good thing for George H. W. Bush to do. And I’ve been communicating with Arne Duncan and the team at the Department of Education. I believe this is going to be posted, people are going to be able to see it in advance, it’s going to be a totally positive speech, and if that’s what it is, then it is good to have the president of the United States say to young people across America: Stay in school, study and do your homework. It’s good for you and it’s good for America.
First of all, Newt Gingrich’s daughter writes columns. Maybe she should do a pundit road show with Bill Kristol, Meghan McCain, John Podhoretz, Jonah Goldberg, Liz Cheney and Jenna Hager Bush about the dangers of affirmative action.
Second, here comes the sensible Newt Gingrich, riding in to denounce the hysteria and position himself as a serious, brave conservative who only concerns himself with real-world issues like the threat of an electromagnetic pulse attack and using lasers to wipe out North Korean missiles. Now we can make way for the parade of liberal DC columnists like Joke Line and Richard Cohen lauding the bravery of conservative heroes like Gingrich, boldly going against the attacks of his own party supporters. (Hey wait, here they are!) Maybe this will kick off his Presidential campaign in 2012, although he’ll have to get past early adopter of the “Obama’s education speech is fine” gambit, Joe Scarborough.
Being able to assert that it’s OK for the President of the United States to give a “stay in school” speech to children is about the lowest bar anyone in politics will ever have to surmount. If that’s evidence of conservative sanity, then whoever said “the soft bigotry of low expectations” was a genius. Now Gingrich and Scarborough and whoever else can get on with their attacks on Obama’s government takeover of health care and efforts to make America vulnerable to Evil Terrorists. At least they aren’t too crazy.
Just in case you were wondering if the exploitation of taxpayers by the rich and shameless has abated,well, it hasn’t:
PRECISELY one year ago, we lucky taxpayers took over Fannie Mae and Freddie Mac, the mortgage finance giants that contributed mightily to the wild and crazy home-loan-boom-turned-bust. In that rescue operation, the Treasury agreed to pony up as much as $200 billion to keep Fannie in the black, coughing up cash whenever its liabilities exceed its assets. According to the company’s most recent quarterly financial statement, the Treasury will, by Sept. 30, have handed over $45 billion to shore up the company’s net worth.
It is still unclear what the ultimate cost of this bailout will be. But thanks to inquiries by Representative Alan Grayson, a Florida Democrat, we do know of another, simply outrageous cost. As a result of the Fannie takeover, taxpayers are paying millions of dollars in legal defense bills for three top former executives, including Franklin D. Raines, who left the company in late 2004 under accusations of accounting improprieties. From Sept. 6, 2008, to July 21, these legal payments totaled $6.3 million.
Here’s the thing. There’s good reason for taxpayers to bear the burden of legal bills for average workers who are sued for doing work on behalf of the taxpayers. (And maybe you can even make an argument that these people qualify under the weird charter of Fannie and Freddie, I don’t know.) But regardless of that, they are all wealthy people who could easily afford to pay for their own legal defense and should do so regardless of whether they are entitled to have it paid for. It’s just another sign of the way the masters of the universe always milk the system to its very limits, even when it would do them a world of good in terms of reputation and public relations. It just doesn’t matter to them. If they can get away with it, they will do it.
And their example is what pushes everyone else in American society to believe that they are chumps and losers for not taking the low road themselves and getting whatever they can no matter how much it costs others. You can hardly blame people for feeling like it’s a fools game to have integrity in America.
It seems as if Alan Grayson is waging a one man war against this ethos. It certainly doesn’t look like the administration plans to join the fray:
In its final communiqué, the G-20 ministers called for “global standards on pay structure,” emphasizing long-term results in awarding pay and urging provisions to take back bonuses if bank profits tumble, known as “clawbacks.” They also suggested limits on guaranteed bonuses.
That was a setback for French and German ministers who had been pushing hard in recent weeks for a more concrete plan to address bonuses, amid rising public anger that just months after they were rescued, major financial institutions are returning to old habits and rewarding executives who take excessive risks.
In Europe, where Germany’s chancellor, Angela Merkel, is running for re-election later this month and the British prime minister, Gordon Brown, faces a general election within the next year, bonuses have been met with controversy.
While bonuses are still a contentious issue in the United States, they have been overtaken recently by the debate over health care reform. Negotiations between the American and European delegations over bonuses grew tense Friday night, according to one official who insisted on anonymity because he was not authorized to speak publicly.
He said the European negotiators felt their American counterparts were seeking to sidestep the bonus issue out of fear the White House could be accused of yielding too easily to European pressure, which might endanger progress on health care reform.
Mr. Geithner has been cool to proposals to restrict bonuses, instead emphasizing the need for higher capital requirements at banks and other broader regulatory measures to prevent a repeat of the financial crisis that began almost exactly a year ago with the collapse of Lehman Brothers.
Right. Like health care reform is going to be “compromised” more than it already is if if Tim Geithner comes out with a concrete plan to restrict obscene bonuses. Jesus, even the teabaggers hate them.
Meanwhile, everyone is very excited about the next big scheme:
After the mortgage business imploded last year, Wall Street investment banks began searching for another big idea to make money. They think they may have found one.
The bankers plan to buy “life settlements,” life insurance policies that ill and elderly people sell for cash — $400,000 for a $1 million policy, say, depending on the life expectancy of the insured person. Then they plan to “securitize” these policies, in Wall Street jargon, by packaging hundreds or thousands together into bonds. They will then resell those bonds to investors, like big pension funds, who will receive the payouts when people with the insurance die.
The earlier the policyholder dies, the bigger the return — though if people live longer than expected, investors could get poor returns or even lose money.
Either way, Wall Street would profit by pocketing sizable fees for creating the bonds, reselling them and subsequently trading them. But some who have studied life settlements warn that insurers might have to raise premiums in the short term if they end up having to pay out more death claims than they had anticipated.
The idea is still in the planning stages. But already “our phones have been ringing off the hook with inquiries,” says Kathleen Tillwitz, a senior vice president at DBRS, which gives risk ratings to investments and is reviewing nine proposals for life-insurance securitizations from private investors and financial firms, including Credit Suisse.
“We’re hoping to get a herd stampeding after the first offering,” said one investment banker not authorized to speak to the news media.
In the aftermath of the financial meltdown, exotic investments dreamed up by Wall Street got much of the blame. It was not just subprime mortgage securities but an array of products — credit-default swaps, structured investment vehicles, collateralized debt obligations — that proved far riskier than anticipated.
The debacle gave financial wizardry a bad name generally, but not on Wall Street. Even as Washington debates increased financial regulation, bankers are scurrying to concoct new products.
I don’t know why anyone is worrying about risk. These entities are all “too big to fail” so the taxpayers will bear the risk, while the players will reap gargantuan, unrestricted bonuses as long as the party continues. And if their “too big to fail” corporation gets sued after the whole thing falls apart, the taxpayers will even pay their legal fees. It’s an awesome scam.
If this is what constitutes free markets, no wonder all the rich people love them.
So Van Jones resigned and a great sigh of relief is felt all over the village. The dangerous radicalism we’ve recently been seeing in our political discourse has been eradicated with his departure and the administration can pursue its agenda without any other distractions from the kooky fringe. Thank God for that.
I would hope that these leftist extremists like Color of Change will think twice before they go after an upstanding company like FOX News because the lesson here is that somebody is going to pay a big price for doing it. In fact, it probably would pay to keep a close eye on the FOX gasbags from now on to get an idea of which groups or individuals have offended the network and get rid of them before anyone has a chance to make a public stink. It would save everyone a lot of time and trouble.
Beck repeatedly called attention to Jones’s past comments and affiliations without mentioning that he was also the co-founder of ColorOfChange, the African-American activist group leading a boycott against the Fox host. Even before the boycott, Beck mentioned Jones twice on his radio show and twice on television, but his criticism intensified considerably as dozens of companies agreed to cease running ads on his Fox show. (The boycott started after Beck called Obama “a racist” on Fox & Friends). It was a wise strategy in making the story less about Beck vs. ColorOfChange, and instead focusing the attention — with the help of fans online — to Jones (and his role in the Obama White House). Beck mentioned Jones on 14 episodes, according to the Washington Independent’s Dave Weigel, while also railing against him on “The O’Reilly Factor.”
