March 11, 2013 archive

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The Golden Age of Bipartisanship


The Drug Scandal That’s Finally Hitting The Big Time

By Charles P. Pierce, Esquire

March 11, 2013 at 1:45PM

(B)ack during the Golden Age Of Bipartisanship, wherein everybody made nicey-nice to each other, and deals were cut that sold out gay people (DOMA), poor people (welfare reform), and all the while the Republicans tried to give the boot to the president with whom they were cutting all the deals, and most of the Democrats, looking to suck up that sweet corporate cash that was sluicing into the party through the DLC floodgates, went along for the ride. (Joe Scarborough, the Machiavelli of the live bait industry, cited this period just the other day as being altogether remarkable. Republicans were working with a president they were trying to impeach! Mirabile dictu!) Now, here’s another masterpiece of bipartisan achievement. (The Supreme Court mucked around with it, too, gutting what remained of the FDA’s power to regulate the compounders in 2001.) They waited until Kessler was gone before passing the bill. In signing the bill, President Bill Clinton attached a presidential signing statement to it that strikes with a cruel irony today.

Trust them. They’ve got this.

But the principle obtained – make a deal to make a deal, and the devil take the details. Now, almost 50 people are dead because Everyone Agrees that The Market will always be more efficient at doing things like picking up deadly fungal infections than the dead hand of government regulation will. Some day, we are going to have to count up the cost of The Third Way of the 1990’s, and it is not going to be pretty.

All Krugman All The Time

Crossposted from The Stars Hollow Gazette

With a little bit of Alex Pareene just for sport.


Dwindling Deficit Disorder

By PAUL KRUGMAN, The New York Times

Published: March 10, 2013

What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

(A)fter peaking in 2009 at $1.4 trillion, the deficit began coming down. The Congressional Budget Office expects the deficit for fiscal 2013 (which began in October and is almost half over) to be $845 billion. That may still sound like a big number, but given the state of the economy it really isn’t.

Bear in mind that the budget doesn’t have to be balanced to put us on a fiscally sustainable path; all we need is a deficit small enough that debt grows more slowly than the economy. To take the classic example, America never did pay off the debt from World War II – in fact, our debt doubled in the 30 years that followed the war. But debt as a percentage of G.D.P. fell by three-quarters over the same period.

Right now, a sustainable deficit would be around $460 billion. The actual deficit is bigger than that. But according to new estimates by the budget office, half of our current deficit reflects the effects of a still-depressed economy. The “cyclically adjusted” deficit – what the deficit would be if we were near full employment – is only about $423 billion, which puts it in the sustainable range; next year the budget office expects that number to fall to just $172 billion. And that’s why budget office projections show the nation’s debt position more or less stable over the next decade.

So we do not, repeat do not, face any kind of deficit crisis either now or for years to come.

Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.


Gone Deficit Gone

Paul Krugman, The New York Times

March 9, 2013, 8:31 am

Anyone who is serious (as opposed to Serious) about matters fiscal knows that it’s highly misleading just to focus on the raw deficit numbers (ONE TRILLION DOLLARS), for two reasons.

First, fluctuations in the deficit tend to be driven by the business cycle; when the economy slumps, revenues fall and some kinds of expenditure, like unemployment benefits, rise. You want to take out these “automatic stabilizers” when assessing the underlying state of the budget.

Second, we don’t have to balance the budget to have a sustainable fiscal position; all we need is to ensure that debt grows more slowly than GDP.

So CBO is now out with its latest report on automatic stabilizers. It estimates that in fiscal 2013 these stabilizers will amount to $422 billion, accounting for just about half of a projected $845 billion deficit. So the cyclically adjusted deficit will be $423 billion.

How does this compare with the deficit consistent with fiscal sustainability? Well, there’s about $11.5 trillion in federal debt in the hands of the public. A reasonable, indeed fairly conservative guess is that nominal GDP will in future grow by 4 percent per year, half from real growth and half from inflation. This means that the sustainable deficit is 4 percent of $11.5 trillion, or $460 billion. Hey, we’re there!

And next year the adjusted deficit is projected to be much smaller.

Dwindling Deficit Disorder

By PAUL KRUGMAN, The New York Times

Published: March 10, 2013

What’s really remarkable at this point, however, is the persistence of the deficit fixation in the face of rapidly changing facts. People still talk as if the deficit were exploding, as if the United States budget were on an unsustainable path; in fact, the deficit is falling more rapidly than it has for generations, it is already down to sustainable levels, and it is too small given the state of the economy.

Now, I’m aware that the facts about our dwindling deficit are unwelcome in many quarters. Fiscal fearmongering is a major industry inside the Beltway, especially among those looking for excuses to do what they really want, namely dismantle Medicare, Medicaid and Social Security. People whose careers are heavily invested in the deficit-scold industry don’t want to let evidence undermine their scare tactics; as the deficit dwindles, we’re sure to encounter a blizzard of bogus numbers purporting to show that we’re still in some kind of fiscal crisis.

But we aren’t. The deficit is indeed dwindling, and the case for making the deficit a central policy concern, which was never very strong given low borrowing costs and high unemployment, has now completely vanished.

The undead, unnecessary, unhelpful Grand Bargain

By Alex Pareene, Salon

Monday, Mar 11, 2013 07:45 AM EDT

The Grand Bargain is revered, among the Sunday Show set, as a goal essentially for its own sake. Its Grandness is its point. The thought of the parties coming together, agreeing on a mutually unpleasant compromise involving great political “sacrifice” (symbolic sacrifice for the politicians, likely eventual actual sacrifice for the constituents), warms the cockles of the Beltway Establishmentarian’s heart. If liberals and conservatives can’t stand the deal, all the better, even if one or both sides have perfectly valid reasons for blanching. The Bargain must, by necessity, reduce the deficit by “reining in entitlements.” “Entitlements” means Social Security and Medicare, two very popular and successful programs designed to keep retired people alive. Social Security and Medicare “reforms” that make both programs less generous are among the least popular policy proposals in America today, but both parties – at least, the leaders of both parties – support them (rhetorically). Cutting these programs is probably the single highest priority of the tiny centrist elite, and it has been for years, excepting the usual run-ups to our various wars. Part of the elaborate theater of Performing Seriousness in Washington is claiming that “everyone agrees” that the cuts are urgent and necessary, while also bemoaning that no politicians are “brave” enough to support them.

Cuts to those programs have been offered, repeatedly, by the president, to Republicans. Republicans, thus far, have pretended not to notice, because their parallel news media misinforms them and because they incorrectly believe the president to be insincere in his desire to hack away at those very popular and successful programs. The recent Obama charm offensive is designed to convince Republicans that he is very sincere in his efforts to get a Serious Debt Deal, involving “entitlement” cuts and tax reform.

(I)f Barack Obama finally gets his Grand Bargain, we’re going to get “entitlement” cuts despite the fact that is a bad idea that Americans do not want.

There are two important things to remember about “entitlements”: They are hugely popular programs for a very good reason, and actual sensible “reform” would mean improving them, not sacrificing them at the altar of “fiscal responsibility.” A “grand bargain” that was done with the intention of creating the best possible outcome for the most Americans, instead of with the intention of purposefully doing unpopular things because doing unpopular things denotes “seriousness,” would lower the Medicare eligibility age and expand Social Security. That the opposite approach is effectively the bipartisan consensus approach is the special sort of Beltway madness that makes sensible people wish for either a proper parliamentary system or at the very least for an EMP to take out Georgetown and much of Washington’s surrounding suburbs.

Medicare is very expensive. It’s the “entitlement” that is actually pretty much responsible for those scary “debt will be 10 million percent of GDP by the time the rapidly rising seas have swallowed much of the Earth” graphs. Medicare is expensive because we spend a lot on healthcare. We spend a lot on healthcare basically just because we want to, and doing so has been very good to a lot of people who work in healthcare fields. The way nearly every other advanced nation controls healthcare costs is by just having the government set prices. I thought everyone knew Medicare was cheaper than private insurance because it could negotiate lower rates, but apparently lots of people didn’t understand this until Steven Brill wrote a big article about it in Time. Again, many people understand that “reining in healthcare costs” means just spend less on healthcare, but for some reason Washington is fixated on passing the existing ballooning costs onto old and working people instead of just agreeing to pay doctors less in general.

Social Security, meanwhile, is lumped in with Medicare not because it faces rapidly ballooning costs in the future – it doesn’t – but because a lot of people just really, really, really want to cut it, or make it less generous, or let the finance industry get its hands on the money. Social Security would seriously be “fixed” just by a) raising taxes and/or b) deciding to pay for it, with borrowing or with some other pot of money.

We should, in other words, be having a big national debate about how to expand Social Security, not find ways to make it less generous for future retirees. (Maybe let’s make our country seem like a nice livable place and get a bunch of immigrants here to expand our population and contribute to the economy and pay taxes and stuff?) Otherwise instead of a Social Security funding crisis we will have a “no one has enough money to retire” crisis, in a few years. Which will likely require expensive government intervention anyway. Instead, the Obama/Democratic/Centrist position is “chained CPI,” which reduces benefits. (The Republican position is “let’s wait a while and try to privatize it again later, maybe.”)

In a country with a political system that was actually responsible and responsive to public preferences, the “grand bargain” following the resounding victory of the more liberal party in national elections would be the expansion of the welfare state and the social safety net. Instead, we have two austerity parties arguing over the rate at which they’ll impoverish the future elderly.

We’ll just have to count on the wingnuts in the House GOP to blow the whole deal up again, like they usually do.


On This Day In History March 11

Cross posted from The Stars Hollow Gazette

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

March 11 is the 70th day of the year (71st in leap years) in the Gregorian calendar. There are 295 days remaining until the end of the year.

On this day in 1851, The first performance of Rigoletto by Giuseppe Verdi takes place in Venice.

Rigoletto is an opera in three acts  with the Italian libretto written by Francesco Maria Piave based on the play Le roi s’amuse by Victor Hugo. It is considered by many to be the first of the operatic masterpieces of Verdi’s middle-to-late career.

Composition history

Verdi was commissioned to write a new opera by the La Fenice opera house in Venice in 1850, at a time when he was already a well-known composer with a degree of freedom in choosing the works he would prefer to set to music. He then asked Piave (with whom he had already created Ernani, I due Foscari, Macbeth, Il Corsaro and Stiffelio) to examine the play Kean by Alexandre Dumas, père, but he felt he needed a more energetic subject to work on.

Verdi soon stumbled upon Victor Hugo’s Le roi s’amuse. He later explained that “It contains extremely powerful positions … The subject is great, immense, and has a character that is one of the most important creations of the theatre of all countries and all Ages”. It was a highly controversial subject and Hugo himself had already had trouble with censorship in France, which had banned productions of his play after its first performance nearly twenty years earlier (and would continue to ban it for another thirty years). As Austria at that time directly controlled much of Northern Italy, it came before the Austrian Board of Censors. Hugo’s play depicted a king (Francis I of France) as an immoral and cynical womanizer, something that was not accepted in Europe during the Restoration period.

From the beginning, Verdi was aware of the risks, as was Piave. In a letter which Verdi wrote to Piave: “Use four legs, run through the town and find me an influential person who can obtain the permission for making Le Roi s’amuse.” Correspondence between a prudent Piave and an already committed Verdi followed, and the two remained at risk and underestimated the power and the intentions of Austrians. Even the friendly Guglielmo Brenna, secretary of La Fenice, who had promised them that they would not have problems with the censors, was wrong.

At the beginning of the summer of 1850, rumors started to spread that Austrian censorship was going to forbid the production. They considered the Hugo work to verge on lèse majesté, and would never permit such a scandalous work to be performed in Venice. In August, Verdi and Piave prudently retired to Busseto, Verdi’s hometown, to continue the composition and prepare a defensive scheme. They wrote to the theatre, assuring them that the censor’s doubts about the morality of the work were not justified but since very little time was left, very little could be done. The work was secretly called by the composers The Malediction (or The Curse), and this unofficial title was used by Austrian censor De Gorzkowski (who evidently had known of it from spies) to enforce, if needed, the violent letter by which he definitively denied consent to its production.

In order not to waste all their work, Piave tried to revise the libretto and was even able to pull from it another opera Il Duca di Vendome, in which the sovereign was substituted with a duke and both the hunchback and the curse disappeared. Verdi was completely against this proposed solution and preferred instead to have direct negotiations with censors, arguing over each and every point of the work.

At this point Brenna, La Fenice’s secretary, showed the Austrians some letters and articles depicting the bad character but the great value of the artist, helping to mediate the dispute. In the end the parties were able to agree that the action of the opera had to be moved from the royal court of France to a duchy of France or Italy, as well as a renaming of the characters. In the Italian version the Duke reigns over Mantova and belongs to the Gonzaga family: the Gonzaga had long been extinct by the mid-19th Century, and the Dukedom of Mantova did not exist anymore, so nobody could be offended. The scene in which the sovereign retires in Gilda’s bedroom would be deleted and the visit of the Duke to the Taverna (inn) was not intentional anymore, but provoked by a trick. The hunchback (originally Triboulet) became Rigoletto (from French rigolo = funny). The name of the work too was changed.

For the première, Verdi had Felice Varesi as Rigoletto, the young tenor Raffaele Mirate as the Duke, and Teresina Brambilla as Gilda (though Verdi would have preferred Teresa De Giuli Borsi). Teresina Brambilla was a well-known soprano coming from a family of singers and musicians; one of her nieces, Teresa Brambilla, was the wife of Amilcare Ponchielli.

The opening was a complete triumph, especially the scena drammatica, and the Duke’s cynical aria, “La donna è mobile”, was sung in the streets the next morning.

Muse in the Morning

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Late Night Karaoke

Health Care Costs: The Hard To Swallow Pill

Cross posted from The Stars Hollow Gazette

Journalist Steve Brill wrote brilliant cover story for Time magazine, Bitter Pill: Why Medical Bills Are Killing Us, which lays out the reason US health care costs are out of control, just follow the money. He explains how the hospitals and their executives are scamming the system through billing to maximize profits. As an examples of the absurd charges, for a 15 cent Tylenol tablet hospitals charge as much as $1.50, $6 for a marker used to mark the body before surgery and as much as $77 for each of four boxes of gauze used. In hospital a patient can be charges as much as $450 for an electrocardiogram that in a doctor’s office would only cost $150.

This doesn’t happen in other countries where costs are controlled by government set rates for what both private and public plans can charge for various procedures. The problem here in the US isn’t that we don’t have single payer, it’s that the government doesn’t regulate the prices that health-care providers can charge. But in an article at the Washington Post by Sarah Kliff for the Wonkblog writes that we don’t need to look to other countries:

Maryland has succeeded in controlling costs for about four decades now. It is the only state that sets rates for hospitals, with the state government deciding what every Maryland hospital can charge for a given procedure..

That system started in 1976, when Maryland had hospital costs 26 percent higher than the rest of the the country. In 2008, the average cost for a hospital admission in Maryland was down to national levels. “From 1997 through 2008, Maryland hospitals experienced the lowest cumulative growth in cost per adjusted admission of any state in the nation,” the state concluded in a 2010 report (pdf).

Here is a brief summery of the article and what you should know about why health care in this country costs so much (and it isn’t malpractice lawsuits, as some would have you believe):

  • Hospitals arbitrarily set prices based on a mysterious internal list known as the “chargemaster.” These prices vary from hospital to hospital and are often ten times the actual cost of an item. Insurance companies and Medicare pay discounted prices, but don’t have enough leverage to bring fees down anywhere close to actual costs. While other countries restrain drug prices, in the United States federal law actually restricts the single biggest buyer-Medicare-from even trying to negotiate the price of drugs.
  • Tax-exempt “nonprofit” hospitals are the most profitable businesses and largest employers in their regions, often presided over by the most richly compensated executives.
  • Cancer treatment – at some of the most renowned centers such as Sloan-Kettering and M.D. Anderson – has some of the industry’s highest profit margins. Cancer drugs in particular are hugely profitable. For example, Sloan-Kettering charges $4615 for a immune-deficiency drug named Flebogamma. Medicare cuts Sloan-Kettering’s charge to $2123, still way above what the hospital paid for it, an estimated $1400.
  • Patients can hire medical billing advocates who help people read their bills and try to reduce them. “The hospitals all know the bills are fiction, or at least only a place to start the discussion, so you bargain with them,” says Katalin Goencz, a former appeals coordinator in a hospital billing department who now works as an advocate in Stamford, CT.

    Recently, Mr Brill sat down with Hardball guest host Michael Smerconish  and Neera Tanden from Center for American Progress to discuss how the rising health care costs are killing Americans:

       And it actually that bears on the conversation we’re having, because a chunk of that money is paid by Medicare. Medicare is I point out in the article is very efficient at most things. It buys health care really efficiently, which is a great irony, because it’s supposed to be the big government of bureaucracy.

       Where Medicare is not efficient is where Congress, because of lobbyists have handcuffed Medicare. Medicare can’t negotiate what it pays for any kind of drugs. It can’t negotiate what it pays for wheelchairs, diabetes testing equipment. And if Congress took those handcuffs off of Medicare, you could get about half of the spending cuts that we’re sitting around here talking about.

    Raising the eligibility age and/or applying a means test as ways to reduce the cost of Medicare will not fix the rising costs. Only government regulation of the hospitals and the ability of Medicare to negotiate pricing for procedures, equipment and supplies will cut the cost for the patient and the tax payers. Take the profit motive out of saving lives and keeping Americans healthy.