Stephen L. Carter writes in the Post:A specter is haunting America: the specter of profit. We have become fearful that somewhere, somehow, an evil corporation has found a way to make lots of money.(via reason)
Flash back three years. In 2006, Exxon Mobil announced the highest profit in the history of American corporate enterprise. Politicians and pundits stumbled over each other to call for an investigation and for some sort of confiscatory tax on the money the company earned. Profit, it seemed, was an evil, but large profit was even worse.
Today, the debate on the overhaul of the health-care system sparks a shiver of deja vu. The leitmotif of the conversation about the coming shape of health insurance is that the villain is the system of private insurance. "For-profit" firms come under constant attack from activists and members of Congress.
Thus, a recent news release from the AFL-CIO began with this evidently alarming fact: "Profits at 10 of the country's largest publicly traded health insurance companies rose 428 percent from 2000 to 2007." Even had the figures been correct -- they weren't -- we are seeing the same circus. Profit is the enemy. America could be made pure, if only profit could be purged.
This attitude was wrong in 2006. It is wrong now. High profits are excellent news. When corporate earnings reach record levels, we should be celebrating. The only way a firm can make money is to sell people what they want at a price they are willing to pay. If a firm makes lots of money, lots of people are getting what they want.
[..] Consider the bills in Congress that seek to limit the freedom of federally aided automakers to close dealerships or to build the cars that buyers want. Preserving local jobs and building greener cars are admirable objectives, but a firm that is forced to sacrifice profitability to attain them is unlikely to be competitive over the long haul. Indeed, one reason the "public option" health insurance program under debate may turn out to be more expensive than advocates suggest is that here, unlike in Europe, we are unlikely to put up with government restrictions on what sorts of care will be available, especially for seniors. A board of experts might decide to limit access to hip replacements, for instance, but there is little chance Congress will let them get away with it.
Private insurers, by contrast, will cut whatever they can. This puts them at constant war with regulators and patients, but beneath this tension is a certain useful discipline. We want health care to be cheaper, and the for-profit health-care industry has every incentive to make it so. Supporters of the public option tout Medicare's cost advantages over private insurance, but those are largely obtained by setting below-market reimbursement rates for medical services (meaning that private patients subsidize Medicare patients). Moreover, the costs of compliance with the hundreds of pages of Medicare regulations are also transferred to the providers, and thus, again, to private patients.
Hiatt: CBO and other economists say that, as you say, you can't solve the fiscal problem if you don't solve the health problem. But they also say that solving the health cost problem is not sufficient, that a big part of the issue is demographics and aging. And so -- and as you know, the 10-year budget shows the government raising 18 or 19 percent of [gross domestic product] in 2019, and spending 24 or 25 percent --
Obama: We have a structural gap that has to be closed.
Hiatt: So can I ask you how you think about the timing and politics of closing that structural gap?
Obama: What I think has to happen is if we can show that we have a disciplined health care reform package that is serious about cost savings and is deficit-neutral, you combine that with the pay-go rules that we have been promoting and I believe that we can get through Congress, and you are imposing some discipline on the appropriations process -- and I thought that the F-22 victory yesterday was a good example of us starting to change habits in Washington -- then I think we're in a position to be able to, either at the end of this year or early next year, start laying out a broader picture about how we are going to handle entitlements in a serious way.
It may start with Social Security because that's, frankly, the easier one. And I think that it's possible to also look at tax reform and think about are there ways that we can maybe even lower marginal rates but eliminate all the loopholes and have that a net revenue generator. I think there are going to be a bunch of things that we can take a look at, but I think health care reform combined with pay-go, combined with how we deal with appropriations bills over the next six months will help lay the foundation for us to be able to make some of these broader structural changes.
The challenge I've got, Fred, is that obviously -- our biggest problem right now in terms of short-term deficit is the recession. And nobody -- no economist I've talked to thinks that it would be wise for us to start early, start now, in reducing government outlays, when states are already cutting back drastically, and you'd have a hugely destimulative effect on the economy. But we have to begin to prepare on the midterm and the long term. And that's why I think health care reform is so important.
Hiatt: So but you'd start that in an election year and does that --
Obama: Well, probably what you end up having to do in terms of structural reforms realistically is you probably have to set up some sort of commission or mechanism that reports back with the prospect of maybe locking in a pledge for action, post election. I just think that's probably the most realistic thing that we can do.
And as I said before, the truth is you wouldn't want anything that would take effect until the economic recovery is much -- on much firmer footing anyway.
Hiatt: And you'd be willing to look at a commission -- I mean, beyond Social Security that sort of puts everything on the table?
Obama: Yes, I think everything is going to have to be on table. But here's my concern. If we are not able to get health care reform -- and, Fred, I just want to be frank with you at this point that this is why I think that if you're a deficit hawk like you, you should actually be -- you should be hard on sort of the product, but you should be encouraging on the process, because the fact of the matter is, is that if health care reform fails, there is no way that Congress is going to take up a serious effort to control health care inflation -- there's no way that we're going to pass the kinds of changes we've already talked about in Medicare, for example, in the absence of a more comprehensive reform package. And so what we're going to have is a situation in which it's just business as usual for, I think, the next four years at minimum, and maybe the next eight -- in which case, the problem is just going to keep on getting worse and worse.
So I think it is important to be jaundiced about the possibility that health care reform in the absence of these game-changers makes things worse, and I think that's entirely fair to talk about. But I think that -- Steve Pearlstein was exactly right in his article today, which is, here's what we know: If we do nothing, this thing is a nightmare, and we will not be able to, I think, just apply pain to the electorate either through mechanisms like simply cutting Medicare benefits at a time when seniors are already feeling very stressed, when we're not also providing the people some additional security.
Hiatt: I mean, that is very persuasive, of course. I guess to be jaundiced if I could a little bit, one could look at your presidency and say you have taken on early a lot of really hard things, as you say, not just health care but cap-and-trade and education and charters and Pell grants, and put the entitlement reform or fiscal whatever we're going to call it in the second tier. And so why shouldn't the deficit hawks be nervous that that says something of that -- that you're committed to it, but when it comes to your priorities, you're committed to it in the second tier?
Obama: Well -- and here would be my argument. The reason that it hasn't been at the forefront of my agenda is because I walked in when we were about to slip into the Great Depression -- or the next Great Depression. And so I had to start off, coming out of the box, with a recovery package that, whatever arguments may be made by the critics at this point, there was no economist out there who thought we didn't need to do, and a portion of that was just stabilization funds for states and tax cuts that were uncontroversial.
Folks can argue about some of the investments that were made -- most of them were roads and bridges and things -- but there might be people who said, well, why are you doing, for example, some education reform or health IT and here? Fair enough. But the overwhelming bulk of it was a much needed infusion of government demand to make up for trillions of dollars of wealth that has been lost.
Now, every economist I speak to, left and right, would also agree that it doesn't make sense for us to begin the process of deficit reduction at a time when the economy is still limping along. So I don't think it reflects -- I don't think our actions --
Hiatt: Like you said before, you could do good things for down the road --
Obama: Absolutely. But I think if you will recall, we had our -- we had a fiscal responsibility summit very early. And I put down a marker that this is going to be important to us.
I've been in office six months. I think sometimes people forget the fact that I think at this point in Ronald Reagan or Bill Clinton's presidency, their major initiative hadn't even gotten off the ground yet. I mean, in some ways we're our own worst enemy because we've gotten so many things done in these first six months, a lot of them dealing with extraordinary circumstances, that the sense is somehow that we have been putting off things that are also important to us. I just can't do everything at once.
And what I've said to Kent Conrad, what I've said to Judd Gregg, what I've said to others is, is that I am very -- I've said this to the Blue Dogs, I said it very early on -- we are serious about this. I was the one who pushed very hard to get the pay-go process moving so that we can start locking that in. We were very clear in terms of our budgeting, even though people were still concerned that we hadn't trimmed the budget as much as people would have liked. The fact is, is that we made some serious changes in how the budget is structured -- for example, making sure that our war expenses were in our budget -- to set the groundwork, to set the foundation, for us having a serious conversation about the budget.
So I think that the perception that we haven't been worried about this is partly subject to circumstances. You had -- we had to come out with a stimulus early. That was not what I would have preferred to do. I then had an omnibus because the previous administration and Congress had not been able to sort through their problems. And I will confess that there were aspects of that that I did not like, but I had to make a decision -- at a time when I wasn't clear whether or not the economy was going to get even worse and we potentially were going to have to take even more extraordinary action -- about the consequences of being embroiled in an enormous budget fight about last year's business.
We then had, by law, we had to introduce our budget, and then we had the supplemental, all at a time when government revenues are tanking.
And so I understand why a deficit hawk would be nervous. I'm nervous about this. And if you talk to my senior advisors, they'll tell you I'm on them every day about how are we going to make sure that we're positioning ourselves to take care of this long term.
But I just have to go back to the issue of health care reform. If I can't get this done, then I don't know how we're going to make the draconian choices that would then be required to close this gap in a serious way. I don't know how we can accomplish this if we've got 7, 8 percent health care inflation.
I mean, if you think about the politics of it for a moment, you would -- if you've got health care reform going up at that pace, then the only way to deal with this is to drastically cut services -- including things like Medicare that are just very hard to do politically in the absence of a broader comprehensive package or changes in delivery system -- and at the same time, increasing revenues, all in an environment in which the economy is struggling to rebound from a very serious body block.
And I just don't see Congress having the stomach to doing that unless we have a success under our belts with health care reform so that a year or two out, CBO starts looking and starts seeing some evidence that, you know what, health care reform -- health care inflation has, if not been tamed, it's gone down from 6 percent, say, to 3 percent. Now you start getting into the ballpark where you can say to people, look, if we do X, Y, Z -- if not a balanced budget then at least a deficit that is manageable comes into sight.
[..] Hiatt: Okay. Even for -- I mean, for all the things you're doing now, there are passionate constituents who want universal access, who want cap-and-trade. Hard to say -- there's many passionate people who talk about balancing the budget.
Obama: Right.
Hiatt: And so how do you deal with that in a political way?
Obama: Well, you know, I actually think that, sadly, decisions are going to be forced upon us.
Hiatt: By higher interest rates, or --
Obama: Yes, exactly. I mean, I think that if we don't show that we're serious in some fashion, then I think you're going to see a reluctance on the part of people who've been snapping up Treasurys to keep doing so.
Hiatt: And how soon do you think that could manifest itself?
Obama: Well, I don't want to speculate. That's like talking about the dollar or interest rates. But I do think that that is a prospect that we have to be wary of and concerned about. And that, in some sense, will -- certainly compels me, if I'm being responsible in my office, to push hard on this. Now, making the argument then to Congress and these constituencies and the public is going to be a challenge.
As I said, though, I think that it's a lot easier to have these conversations when unemployment is no longer at 10 percent, and people feel that we've made some progress on health care reform and they're feeling there's a little more economic security out there. It's much harder to make at a time when people are already feeling desperate.
I am a gay man. My partner lives 12 time zones away. We are in a monogamous relationship, and we do not cheat. We get to see each other only twice a year for less than three weeks. Although he is a professional in marketing, the United States will not let him immigrate because he was not picked in the lottery. The federal government would not recognize our relationship if I married him.I concur with the fury in the first and last graphs. Unfortunately, the middle one is specious. That Sanford and Ensign oppose Bill's right to marry his partner is contemptible, but this has nothing to do with their infidelity.
The government will not allow us to be together. South Carolina Gov. Mark Sanford and Sen. John Ensign (and former House speaker Newt Gingrich and senator Larry Craig) oppose same-sex marriages even as they do their best to destroy the institution of marriage in the United States.
I pay my taxes. I served in the military. I was an Eagle Scout. In short, I am a good, but second-class, citizen. It's very hard not to be infuriated by the double standards
Want to trim the federal budget and improve the military at the same time? Shut down West Point, Annapolis and the Air Force Academy, and use some of the savings to expand ROTC scholarships.Update: Yglesias thinks it's worth investigating, and I agree.
After covering the U.S. military for nearly two decades, I've concluded that graduates of the service academies don't stand out compared to other officers. Yet producing them is more than twice as expensive as taking in graduates of civilian schools ($300,000 per West Point product vs. $130,000 for ROTC student). On top of the economic advantage, I've been told by some commanders that they prefer officers who come out of ROTC programs, because they tend to be better educated and less cynical about the military.
as I observed it, at company grade (the ranks 2LT, 1LT and CPT are considered “company grade” ranks), the West Point grad and the OCS grad were usually the best officers (and with obvious exceptions, I felt most of the OCS grads were a touch better than the WP guys) while the ROTC guys were playing catch-up. Around the 5 year mark, at the rank of CPT, everyone was pretty much even.
Again, these are my observations, but as we moved into the field grade ranks (the ranks MAJ, LTC and COL are “field grade” ranks), the ROTC and West Pointers began to pull away from the OCS grads. However, at both levels, West Pointers were right there among the best because they’d been taught and taught pretty well to function at both levels.
Mexico's ambassador urges the decriminalization of marijuana as a way to weaken the cartels. Domestic production is way up. Mexico's Congress is considering decriminalization. Cultural mainstreaming, especially in the thirteen states that allow for medical use, is gaining pace. Any day now, sanity threatens to break out.A TMV columnist likes Rachel Maddow.
22,000% ROI! It's little wonder there's so much resistance to radically simplifying our ridiculous 3 million-page tax code.In a remarkable illustration of the power of lobbying in Washington, a study released last week found that a single tax break in 2004 earned companies $220 for every dollar they spent on the issue -- a 22,000 percent rate of return on their investment.
Few say, “There should be no regulation, and so I, as a libertarian, have no opinion about how it should be carried out.” Yet I hear again and again that, since the state should not be in the business of marriage, one should not, as a libertarian, have an opinion about how this business is to be carried out. Increasingly, I find this an obnoxious and shameful form of moral recusal. One cannot use an ideological image of perfect justice to excuse or ignore an obvious injustice within the actual imperfect system. That these injustices could not arise within one’s vision of the best society does not mean that they have not in fact arisen. That a debate would not occur in an ideal world does not mean that it is not occuring or that nothing morally hangs on its conclusion. To decide to sit out the debate, with an eye on utopia, is not a way to keep one’s hands clean.Christopher Buckley: Showdown at Notre Dame...
The most prominent Catholic politicians are: Vice President Joe Biden; Speaker of the House Nancy Pelosi; Sen. John Kerry; Gov. Bill Richardson; former mayor Rudy Giuliani; and fresh-from-the baptismal font Newt Gingrich.Ezra Klein responds to Ponnuru's op-ed on the misguided case for universal coverage.
What do they all—with the exception of the dripping-wet Newt—have in common: they’re all pro-abortion. Sorry, I meant “pro-choice.” For this, some bishops, who were rather silent whilst their priests were fondling the altar boys, have said they would refuse them the sacrament of communion. In a public debate, the Bishop of Rhode Island actually likened Giuliani to Pontius Pilate.
While researching this posting, I found myself wondering if the thrice-married Newt had weighed in on the controversy. Sure enough: “It is sad,” he said, “to see Notre Dame invite president Obama to give the commencement speech since his policies are so anti-Catholic.” Well, that didn’t take long.
What all this Sturm und Drang has guaranteed, is that this will be one heckuva commencement speech to watch. What do you want to bet that all three networks dispatch their anchors to South Bend on May 17, making it a four-ring circus.
Reason: Obama's Secretary of Education is fundamentally dishonest. Cato piles on.Just so I have this straight, Milton Friedman is a villain because he had a five-hour meeting with murderous dictator Pinochet, gave a lecture at a Chilean university, and because Pinochet later implemented some of Friedman’s ideas (to the great benefit of the Chilean people, I might add). Meanwhile, lefty activists and politicians can freely meet with murderous dictator Fidel Castro, publicly slobber all over him, fete him even as actual Cubans are risking their lives to flee his regime, and there’s nothing ill to be said about them. Because . . . free health care! Speaking of the U.K. you gotta’ hand it to them. When it comes to massive invasions of privacy and creepy government surveillance, they don’t mess around. Justice Scalia gives speech praising the Constitution. But only before ensuring that there would be a ban on recording his speech. He then paused the speech to excoriate a journalist for taking still photos of him. I’m sure the irony was lost on him.
MONTPELIER — Vermont has become the fourth state to legalize gay marriage — and the first to do so with a legislature’s vote.Ambers:
The Legislature voted Tuesday to override Gov. Jim Douglas’ veto of a bill allowing gays and lesbians to marry. The vote was 23-5 to override in the state Senate and 100-49 to override in the House. Under Vermont law, two-thirds of each chamber had to vote for override.
The vote came nine years after Vermont adopted its first-in-the-nation civil unions law.
It’s now the fourth state to permit same-sex marriage. Massachusetts, Connecticut and Iowa are the others. Their approval of gay marriage came from the courts.
The Vermont Senate voted earlier this morning to override Gov. Jim Douglas' veto of the same-sex marriage legislation.
The vote passed, 23-5.
A great day for the gays and the federalists: for the first time, gay marriage has been legalized in a state through the formal legislative process. Vermont's House and Senate voted overwhelmingly to override Gov. Jim Douglas's veto of a gay marriage bill. On September 1, gays will be allowed to marry in Vermont. That brings to four the numbers of states where gay marriage is legal; Iowa's Supreme Court authorized same-sex unions on Friday; SSMs are also legal in Massachusetts (thanks to a court) and in Connecticut (court-ordered, too). Opponents of gay marriage have been fearing this very day for years. They're going to have to change the way they respond to the issue because they can no longer argue (only) that courts are imposing gay marriage by fiat. In the case of Vermont (and in the case of California, twice before), duly-elected state legislatures affirmatively gave consent to expand or revise the definition of civil marriage. (California's two legislative efforts were vetoed by the governor.)The Post:
Among the celebrants in the lobby were former Rep. Robert Dostis, D-Waterbury, and his longtime partner, Chuck Kletecka. Dostis recalled efforts to expand gay rights dating to an anti-discrimination law passed in 1992.Yglesias:
"It's been a very long battle. It's been almost 20 years to get to this point," Dostis said. "I think finally, most people in Vermont understand that we're a couple like any other couple. We're as good and as bad as any other group of people. And now I think we have a chance to prove ourselves here on forward that we're good members of our community."
Dostis said he and Kletecka will celebrate their 25th year together in September.
"Is that a proposal?" Kletecka asked.
"Yeah," Dostis replied. "Twenty-five years together, I think it's time we finally got married."
The interesting thing about the Vermont legislature’s strong vote in favor of gay marriage is that I think it illustrates that far from provoking a backlash against gay rights, pro-equality legal decisions on this front tend to drive the pace of change forward. One factor is that the more people see gay equality in practice, the less frightening it looks. But another factor is the dynamics of political leaders. This isn’t really a topic that politicians want to deal with, even politicians with progressive views and progressive constituents. They would just as soon focus on something else. But a court case smokes the politicians out, and forces the better ones among the bunch to take up the cause and do the right thing.Note that the vote passed 100-49 in the house. All it would have take is a one vote switch to 99-50, and the governor's veto would not have been overridden by the 2/3 requirement, thus postponing equal marriage in Vermont for the near future.
That, in turn, can help push public opinion forward. Once people see political leaders who they respect debating the issue, it looks like a “mainstream” topic. And when that happens, for a lot of folks basic values of fairness wind up trumping the fact that they’ve lived their whole lives with the rules being a certain way and it seems “unnatural” to change them.
Defense Secretary Robert M. Gates is expected to announce on Monday the restructuring of several dozen major defense programs as part of the Obama administration's bid to shift military spending from preparations for large-scale war against traditional rivals to the counterinsurgency programs that Gates and others consider likely to dominate U.S. conflicts in coming decades.Yglesias: European aid to Afghanistan...
Gates's aides say his plan would boost spending for some programs and take large whacks at others, including some with powerful constituencies on Capitol Hill and among influential contractors, making his announcement more of an opening bid than a decisive end to weeks of sometimes acrimonious internal Pentagon debate.
Obama’s haul looks pretty modest—about 3,000 extra troops to provide election-related security plus about 2,000 troops to do embedded police trading, plus $100 million more for training and $500 million more for humanitarian aid. Still I’d say the negative tone of the press coverage suggests the perils of expectations more than anything else. The Bush administration has been trying to get more out of the Europeans for years and failing. Obama tried and he’s got something.NYT: Liberty, Equality, Envy...
[...] the real time to ask for additional European support in Afghanistan would have been 2002 and 2003 when many countries were eager to cooperate with the United States. Instead, the Bush administration leaned on America’s best friends in Europe and around the world to contribute tens of thousands of soldiers to Iraq.
The feeling in Europe, and especially in France, about Barack Obama’s presidency is as clear as day: we are envious.The Reality-Based Community:
The Post: The Radicalization of Ben Bernanke...A. A. Gill reports from London that "Mr. Obama is the only popular politician left iin the world. He could win an election in any of the G-20 countries, and his fellow world leaders will do anything to take home a touch of that reflected popularity."
If that's true, it's a substantial foreign-policy advantage.
Timothy Geithner and his predecessor Henry Paulson have been the public faces of the U.S. government's battle against the global economic crisis. But even as the secretaries of the Treasury have garnered the headlines -- as well as popular anger surrounding bank bailouts and corporate bonuses -- another official has quickly amassed great influence by committing trillions of dollars to keep markets afloat, radically redefining his institution and taking on serious risks as he seeks to rescue the American economy. Without a doubt, this crisis is now Ben Bernanke's war.And why are Asian kids so good at math? Curiouser and curiouser
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