Sean Lengell at the Washington Times gets to the heart of the issue:

The nation’s largest pharmaceutical lobbying group is preparing a multimillion-dollar public relations campaign to tout the importance of free-market health care and undercut an expected push by the Obama administration for price controls of prescription drugs.

The effort, which will include a national television commercial scheduled to begin airing next week, is the first salvo in what likely will be a huge battle over health care reform during the Obama presidency.

Other major industries are also gearing up for the fight, including big businesses and insurance companies. But the stakes are especially high for drugmakers, which stand to lose as much as $30 billion in revenue if President-elect Barack Obama’s plan to let the federal government negotiate Medicare drug prices is implemented, according to one independent report.

As with most things, this is about money. Though PhRMA’s ads will tout the benefits of a “free market” health care reform, I’m glad reporting on the issue is getting to the real reasons behind these ads.

For the record, free market health care reform is something of a myth. John McCain ran on one of the most aggressive free market health care reform plans we’ve seen in recent years, and he was soundly defeated. And there’s reason to believe the rules of the free market don’t really even apply to health care, especially health insurance. Most people don’t behave rationally when it comes to health care; they don’t plan ahead for the care they are going to need, they have to be dragged into preventative medicine, and when crisis strikes, they understandably don’t spend a lot of time shopping around for the best deal.

All PhRMA is doing here is putting their profits before the American people, and hiding it behind the old conservative canard called the free market. One might hope they’d realize that quality, affordable health care for all is a worthy goal worth supporting, even if their bottom line takes a hit, but somehow I think it’s unlikely.

As such, expect a lot more from PhRMA, our friends at AHIP (who’s been strangely silent lately), and a whole host of other industry front groups who stand to lose if health care reform passes.

(also posted at the NOW! blog)

As the presidential campaign was nearing its end, as the Republicans were getting more and more desperate amid prospects of doom, the McCain-Palin fear- and smearmongering focused not just on Obama’s “socialism” but on how horrible so-called “one-party rule” would be for the country. McCain himself put it this way: “We’re getting a glimpse of what one-party rule would look like under Obama, Pelosi, and Reid. Apparently it starts with lowering our defenses and raising our taxes.”

Two things:

1) A new CNN poll finds that “59 percent of those questioned said Democratic control of both the executive and legislative branches will be good for the country, compared with 38 percent saying such one-party control will be bad.” In other words, the American people are, contra McCain, fine with one-party rule, as long as the one party is the Democratic Party.

2) What does “one-party rule” even mean? In a parliamentary system, where the party with the most seats in the legislature is usually the one that forms the government, a party with a majority of seats can indeed rule as one. It forms the government, formally linking the executive and legislative branches, and, for the most party, can control its caucus. As members of the party require the party’s, and the party leader’s support, there are only very rarely any defections from the party line. There may be so-called “free” votes, where members are free to vote as they please, but, on major legislative items, such as the budget, or other so-called “confidence” matters (where a vote against the government means a lack of confidence in the government, generally forcing it to step down or call an election), there is strict party-line voting.

There can be no such “one-party rule” in the American presidential system. Yes, as we saw under Bush, a party that controls both ends of Pennsylvania Avenue can effectively rule as one, and there is often a good deal of arm-twisting by the whips, and defectors can be punished by the party, but, for the most part, members of Congress, both Senators and Congressmen alike, are free to vote as they please. This is why, on most votes, there is cross-over voting, with members of each party voting with the majority of the other.

On November 4th, 2008, I rode my bike to Voting Precinct 006 at St. Stephen’s Lutheran Church and School in Waterford Township, Michigan. I stood in line, I presented the proper credentials, I was issued one voting ballot, and I filled it out. I did not vote.

I had come to my polling-place intending to cast my vote for Presidential and Vice Presidential candidates that had not made it onto the Michigan ballot: Gloria La Riva for President and Eugene Puryear for Vice President. These are the candidates of The Party for Socialism and Liberation. As a small, mostly-marginalized political party, the names of these candidates were not listed among the options before me. So, when I approached the voting booth - ballot in hand - I meant to write-in these candidates’ names; whom I felt best represented my interests and desires for the nation at large.

In these politically nepotistic and insular times it seems that a majority of the populace cannot understand why anyone would vote off-ticket. These unnamed, third-party candidates have no real chance of being elected, after all. So why not choose one of the mainstream candidates who, at least, represent the better of the options we are presented with?

There are two main reasons that I decided to vote for Gloria La Riva. First, I wanted to encourage the party she represents. It is supremely important - in a Democracy - that we support those groups which rise to champion our beliefs on the national stage. If I cast my vote for some other party, Gloria La Riva and The Party for Socialism and Liberation would never know that I support them. They would never know that I am grateful for their efforts and wish them to continue doing the hard work of carrying my hopes and aspirations into the public limelight.

Second, I want it on the record! I want the state to recognize, even if only by a meaningless act of bureaucracy, that the options I have been presented with by this system do not represent me; that I, and those sharing my beliefs, have been marginalized by a system that drawls on endlessly about “democracy” and “freedom,” but falls short when presenting us with meaningful options.

For these reasons I stood in that voting booth looking at my ballot, wondering how to fill it out. The Presidential and Vice Presidential seats were presented to me as a unified ticket. In other words, if I wanted to vote Obama for President, I had no choice but to vote Biden for VP. The two distinct offices were represented by a single choice: “Obama / Biden.” The problem for my write-in candidates was that I couldn’t possibly fit both of their names into the empty write-in block provided on the ballot.

Unsure how to proceed, I finished filling out the rest of my choices and I approached the man supervising the tallying machine. I began to say, “I think I need a new ballot. I’m trying to write-in my choice for presidential candidate.” He interrupted me.

“You can’t write-in a Presidential choice. You have to pick from what’s listed.”

The growing number of reports that claim that Hillary Clinton is being seriously considered for Secretary of State in the Obama Administration make the possibility real.  But the motivations behind this choice are at first puzzling. While Hillary Clinton is easily smart ad savvy enough to take on the job, her Senate career has been more focused on domestic policy. On paper there are a number of candidates who are more qualified than her, such as the oft-mentioned Bill Richardson or John Kerry. But Hillary Clinton is well known by numerous world leaders and is probably the person with the most cache worldwide that Obama could nominate in an Administration that has made repairing the U.S.’s reputation in the world as a major foreign policy goal. Bill Clinton still has an excellent reputation in most of the world both because of his presidency and his global work with his Clinton Foundation. Much of this goodwill would most likely transfer to Hillary.

The problem is that Hillary has her own power base and, much like Colin Powell in the Bush Administration, she can’t be fired. If she goes rogue, the Obama Administration would have to grin and bear it. For her to be happy in the job, Hillary Clinton will need to be a major player in not just promoting the Obama foreign policy but also in creating it. There is an honest question about how well she would represent a policy that she may disagree with.

But the thinking behind this appointment is most likely originating from Obama’s admiration for Doris Kearns Goodwin’s book, Team of Rivals, about how President Abraham Lincoln placed competitors in his cabinet. Back in May Obama was praising the book and speculation of Hillary Clinton in his cabinet was already being mulled in the punditry after Obama’s own musings:

It came in response to a question
from a man named Mike, a “50 year” resident of Pompano Beach. “I want
to know if you’d consider everybody who is a possible help to you as a
running mate,” he said. “Even if his or her spouse is an occasional
pain in the butt.” Obama laughed. No names necessary; he seemed to get
the drift. “Ah,” he said. “I’m… well, look.” Pause. Smile. Applause.
“Look, look, look,” he said, quieting the crowd. “We’ve got more work
to do. Two more weeks to go. So I don’t want to jump the gun.” Then,
suddenly, he warmed to the idea:

I can tell you this. My goal is to have the best possible
government. And that means me winning. So, I’m very practical in my
thinking. I’m a practical guy. One of my heroes is Abraham Lincoln.
Awhile back, there was a wonderful book written by Doris Kearns Goodwin
called ‘Team of Rivals,’ in which she talked about how Lincoln
basically pulled all the people he’d been running against into his
Cabinet. Because whatever personal feelings there were, the issue was,
‘How can we get the country through this time of crisis?’ I think that
has to be the approach one takes to the vice president and the Cabinet.

It should be noted that Kearns Goodwin’s book argues that the Lincoln strategy was not only successful,  but by the end of his presidency these former rivals admired and loved the 16th President. Whether a similar result is possible in the 21st century with the 24 hour news cycle remains to be tested.

But there is another book that may also play a role in the decision to put Hillary Clinton in a prominent position in the Obama cabinet — Hardball by Chris Matthews. In this book, which first came out in the 1980s and was revised in 1999, Matthews outlines some of the rules or strategies of politics. the most relevant for this discussion is “Keep Your Enemies In Front of You.” In that chapter, Matthews explains why James Baker, the 1980 campaign manager for George Herbert Walker Bush’s first run at the presidency, was named Chief of Staff for Ronald Reagan. By placing Baker in the most prominent of roles, Reagan’s success was mandatory for Baker to be considered a success. By choosing Baker, Reagan also made certain that his Vice President had a greater stake in his success. And it was an effective strategy as Baker is considered to have been an excellent Chief of Staff.

As for Hillary Clinton, if she becomes Secretary of State, her success and Obama’s success becomes intertwined when it comes to foreign affairs. Keeping her “in the tent” rather than on the outside may remove someone whose every word in the Senate would be scrutinized for criticism of Obama. And there would also be no distracting speculation as to whether she would challenge Obama in 2012.

But would she be a good Secretary of State? Hillary Clinton certainly has the intellect for the job, and her personality can be diplomatic when the situation calls for it. While she may not have the breadth of experience of a Richardson or Kerry, she certainly has more than enough to be qualified for the job. But what we do not know is her world view in the sense of how she sees the way the world works. She spent much of the primary campaign defending her Iraq vote and she seems to understand the important role of diplomacy, and she gave an interesting speech on Foreign Policy in February, but it was more a laundry list of what she would do as President than one with overarching philosophy of international relations. But that could be a plus in that it will be Barack Obama’s world view that she represents.

Hilary and bill CLinton did do a lot of campaigning for bama over the past few months so maybe there can be real cooperation now that the process is over. Hillary Clinton is an interesting choice if Obama makes it — I just hope it is also a successful one.

Two days ago I wrote about the proposal to jack up NYC transit fares by 28% and how that was in effect a regressive tax on the sort of New Yorkers whom could least afford it—and how this was being done at the same time New York State Governor David Paterson has refused to consider what’s come to be called the “millionaires’ tax.”

Well, just to add insult to injury, here’s another winner of an idea: New York State has started collecting a $25 child support enforcement fee from those that needed government help to recover child support payments.

To be fair, this insult was originally the brainchild of the Bush Administration and its rubberstamp Republican Congress. As part of the “Deficit Reduction Act of 2005,” the federal government started charging states a $25 fee for child support recovery. However, from then, till recently, New York had covered that fee for its needy residents.

But with the looming state budget crisis, no more. Governor Paterson has decided the state can no longer afford this level of generosity.

Millionaires, however, well, have no fear, the governor is looking out for you.

The “millionaires’ tax” is pretty simple as tax proposals go. Income over $1 million would be taxed an additional 1%, and income over $5 million would be taxed .75% more. New York has one of the highest concentrations of wealth in the country—just one-half of one percent earned 28% of the taxable income back in 2005. The proposed tax surcharge could bring in about $1.5 billion in the first year—or roughly three-quarters of the expected NY budget shortfall.

The millionaires that would have to pay this tax—or at least a few loud ones, like the ubiquitous, selfish, and inevitably wrong Donald Trump—argue that if you make them pay this increase, they just might leave New York. I say, as did the NY Daily News recently, call their bluff.

As the Daily News observed, New Jersey imposed a much larger increase on all incomes over half-a-million a few years back, and they got incredible bang for their buck—about $26 coming in for every $1 fleeing the state.

And they were fleeing New Jersey!

Even New York City’s billionaire mayor, Michael Bloomberg—who had previously been heard whining about a surcharge—now says this millionaire flight threat is a lot of hooey:

I can only tell you, among my friends, I’ve never heard one person say “I’m going to move out of the city because of taxes.” Not one. Not in all the years I’ve lived here. You know, they can complain, “Oh got my tax bill, it’s heavy.” But they’ve not ever thought that. My friends all want to live here and understand the value.

He oughta know, right? That is his cohort.

As for the rest of us—that would be 99.5% of us—well, I’m guessing a lot of us have a little less mobility. And since Paterson knows he’s got a captive “audience,” I guess it’s up to this rest of us to pick up the slack, balance the budget, and so, look out for the Governor’s interests. . . whether we want to or not.

Last weekend, I posted three maps that suggested a fairly strong correlation between the states that McCain won and the states with the most poverty. From these maps, it seemed clear that poor people have once again voted against their own interests by voting Republican.

But here are two more maps that throw a big wrench into these conclusions. The first shows how the electoral map would have looked had we counted only the votes from people who make under $50,000 a year - an Obama landslide. 

The second is if we counted only people who make more than $50,000 - an Obama victory, but by the narrowest of margins.

We seem to have a contradiction here.  How is it possible that the poorest states went for McCain at the same time that the poorest voters went for Obama?  Help me out, Seminal readers.  I’m scratching my head on this one.

The CBS News Horserace blog posted a faulty analysis of the exit polls from election day. In the analysis, their polling expert, Jennifer De Pinto, wrote:

As voters left the polls on Election Day, many were asked how they would have voted if the election match-up were between Hillary Clinton and John McCain rather than Barack Obama and McCain. 52 percent said they would have backed the former Democratic candidate; 41 percent would have voted for McCain, wider than Obama’s 7-point margin over McCain.

Interestingly, 16 percent of McCain voters said they would have voted for Clinton, the Democrat, if she had been her party’s nominee.

Now if De Pinto had simply explained the problems with using the exit polls and stated that we couldn’t draw full conclusions about the final vote if Hillary had been the nominee, then it would have been an interesting analysis of those folks who voted on election day who think that they would have voted for Hillary Clinton instead of John McCain. But by implying that these numbers show that Hillary Clinton would have won the election by a wider margin, a narrative has been created that others are repeating, including by David Shuster on MSNBC Thursday afternoon.

The problems with such a conclusion?

1. This analysis has Hillary Clinton with 52% of the vote and McCain with 41%. In the actual vote count, Obama has 53% to McCain’s 46%, so the question is what has happened to the 5% difference in the McCain vote? We don’t know from the post whether these people are simply undecided or voting for a third party. The undecideds could split evenly or go more for one candidate or another, so we really don’t know the margin.
2. These numbers are based on Exit Polls from election day. Over 31 million people early voted, or about 25% of the total of total presidential votes. We know that the early vote favored Obama by wider margins than of those who voted on election day. How do we know? A CBS News poll that shows the early vote went for Obama by a wide 57-38%. These more loyal Obama voters were not part of the Exit polls and their responses could easily change the outcome.
3. We don’t know where those Hillary Clinton crossovers live. If these voters are in California and other states where Obama won by double digits, it certainly would not have affected the outcome. Would Hillary Clinton have won North Carolina or Indiana? I would be skeptical, especially because of the next point.
4. Republican turnout was lower than expected. For example, Obama actually received roughly the same number of votes in Ohio as did John Kerry, but McCain received over 300,000 fewer than George W. Bush did in 2004. It is feasible that with Hillary Clinton at the head of the Democratic ticket, Republicans would have been more motivated to vote — and vote against a Clinton.
5. Hillary Clinton, having ended her quest at the end of the primary process, did not have to endure several months of negative commercials by the Republicans and associated groups. We do not know what kind of effect this propaganda would have had.

Now I want to emphasize that had Hillary Clinton been the nominee I think she would have won as well, and I for one would have voted for her. But this is about accuracy in reporting and poll analysis, and in this instance the CBS Horserace blog fails.

I don’t always agree with the Sierra Club but on coal they have been kicking ass lately. They just had a MAJOR VICTORY essentially blocking all new coal-fired power plants. I’m hoping Hannah will have a chance to fill us in on exactly what this means at some point.

Here are a few immediate reactions, and the press release is below the fold.

Jesse Jenkins:

While the Sierra Club’s legal team and other lawyers are still determining the full implications of the decision, it appears that this decision will essentially stop all new coal plant permitting dead in it’s tracks for at least a year as EPA decides what BACT means in the context of CO2.

Adam Siegel:

In addition to opening the door for greater attention to alternative power and alternative approaches to power management/efficiency, this ruling opens the door to looking seriously at paths for eliminating coal from our electricity grid.

Does anyone else get the funny feeling that we’re going to discover very soon that the $700 billion has been spent and no one is quite sure what it got spent on? — Carrie Dann, MSNBC’s First Read

If you remember back to September when Treasury Secretary Henry Paulson was explaining to us why he needed $700 billion in taxpayer funds, he explained that:

The federal government must implement a program to remove these illiquid assets that are weighing down our financial institutions and threatening our economy.

When the bill, the Emergency Economic Stabilization Act (PL 110-343) was passed in early October, it created the Troubled Asset Relief program, or TARP. TARP had two main pieces, a troubled asset purchase program and a troubled asset insurance program. Treasury was also given the power to inject capital directly into financial institutions and to directly help homeowners to help forestall foreclosures. The asset purchase program was expected to be the biggest piece, as Treasury would buy up high risk mortgage-related assets, often at high discounts,  in order to stabilize the portfolios of financial institutions and create incentives to revise mortgages so that they don’t face default. Also, the hope was that once these assets stabilized, that Treasury could then sell them back on the market, thus making a profit for the government and thus the taxpayer.

Yesterday Paulson stated, in essence, “Never mind.”

Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets. Our assessment at this time is that this is not the most effective way to use TARP funds…

Instead Treasury is injecting capital directly into various financial entities, such as American Express, now that it has been characterized as a bank, as well as into the credit card, auto loan and student loan industries. Of course there was that purchase of another stake in AIG. One of the many concerns is that if this is direct capital injection, what assets do the taxpayers get in order to recoup losses. What we have been getting is “preferred stock.” This stuff is only a good purchase if everything works out well and the stock rises. It may be better than nothing, but it still isn’t the plan that was sold to Congress.

The key issue is still the home foreclosure problem, and it is unclear how billions of taxpayer dollars injected into these various financial entities will actually address that. Representative Barney Frank, Chairman of the House Financial Services Committee, focused on thisafter Paulson’s announcement:

House Financial Services Chairman Barney Frank (D., Mass.) said Wednesday he was disappointed Mr. Paulson was scrapping the asset-purchase plan. “I think he’s wrong not to use it that way,” Mr. Frank said…

“Using some of the TARP money to reduce foreclosures was not only contemplated in it, it was one of our major focal points,” Mr. Frank said. It’s unclear just what, if anything, the Bush administration will be able to do to help stem the tide of foreclosures.

There has been some progress on the foreclosure issue, but not as much as there could be. Citigroup has taken the leadin the private sector. The second largest U.S. bank has announced that they will stop foreclosures when borrowers have enough income to afford a reworked mortgage. Citigroup plans on contacting 500,000 borrowers over the next six months to rework their mortgages at lower interst rates that they may be able to afford. This is the attitude that other major financial institutions need to follow. Another example is IndyMac, which Paulson referred to in his own remarks.

FDIC Chairman Bair has given us a model, in the mortgage modification protocol she developed with IndyMac Bank. Through the end of October, the FDIC has completed loan modifications for 3,500 borrowers, with several thousand more modifications currently being processed. These modifications have reduced payments for participating homeowners by an average of $380 month, or about 23 percent.

That seems to be the most effective strategy overall. Reducing payments so that they become affordable means  these assets stay as assets and not liabilities.  The modified mortgages also help when it comes to getting the credit market flowing again as these loans become less likely to default, improving the health of bank’s overall portfolio.

As DemFromCT pointed out yesterday, the white paper Senator Max Baucus released yesterday leaves open the option of altering the current employer-based health care tax exclusion.

At first blush, altering or eliminating the employer-based tax exclusion sounds exactly like what Senator John McCain wanted to do, and exactly what we’ve been arguing against for months. So why is it ok when Baucus does it?

Igor Volsky over at Think Progress’ Wonk Room explains:

So what’s the difference? Why aren’t progressives jumping down Baucus’ throat and accusing him of treason? While McCain proposed replacing the employee deduction with a one-size-fits-all tax credit without reforming the health insurance market, Baucus pairs employee-tax tweaks with market reforms that would increase access to group coverage.

It’s a key difference. Let me elaborate.

The current employer-based health care exclusion says that unlike some other employee benefits - which are taxed just like cash - any money your employer spends on your health care isn’t taxed. So, for example, if your employer spends $100 every month paying for your health care plan that you get through work, that money is never taxed. If you had to buy health care yourself, you’d have to spend $100/month of your post-tax income on health insurance, which is more expensive. Not taxing the health benefits you get through work encourages employers to offer health insurance. Their money goes farther because it is not taxed and employees have to spend less. It’s a win-win.

There’s a problem, though, and it’s that the tax exclusion is a regressive tax - it benefits the rich more than it does the poor. The rich pay a higher tax rate on their income than the middle and lower classes, but they get their health insurance through their employer tax free just like everyone else. So, $100 in tax-free benefits is worth more to the rich because at their higher tax rate, that $100 turns into much less if you convert it to post-tax money.