posted
Collapse is a relative term, Glass. How far and what the consequences would have been had we not done the bail outs will never be known outside of the realm of speculation.
not really.
i've posted this before, i'll post it again.
we have no investment banks left. they are all gone.
actual failures have been occurring are still accelerating, it is STILL following the same model as the '29 collapse.
this bl og image won't post so you'll have to clik on it:
Economists worldwide agreed that the bailouts were a necessity to keep a repeat of the thirties from happening.
credit availability had completely dried up (just as it did in the thirties), the bailouts were specifically done to increase credit availability.
trying to blame this collapse on subprime mortgages alone is irresponsible. the reason so many subprime loans were made was because they said it would take a perfect storm to cause this. well, we had one.
and our economic system DID collapse, because we have a new system that involves govt bailouts.
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I'm at work so I have limited internet access, Glass. Do a google search for Rep. Brad Sherman and martial law. He claims that he and other members of congress were told that if they didn't pass the stimulus bill there would be such chaos that Martial Law would need to be declared.
Oh, and Sherman is a Democrat...from Cali no less.
Posts: 1802 | From: Utah | Registered: Mar 2008
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quote:Originally posted by SeekingFreedom: I'm at work so I have limited internet access, Glass. Do a google search for Rep. Brad Sherman and martial law. He claims that he and other members of congress were told that if they didn't pass the stimulus bill there would be such chaos that Martial Law would need to be declared.
Oh, and Sherman is a Democrat...from Cali no less.
According to Wikipedia, here is an excerpt of the "clarification statement" issued by Sherman's office, bold my emphasis:
quote:I urged my colleagues not to take the extreme statements seriously and urged them to defeat the bill. It should be clear from the context of my speech that I did not believe that martial law would be declared under any circumstances and I did not think that such absurd and outlandish comments should cause members to vote for the bill. I also want to stress that I have no reason to think that any of the leaders in Congress who were involved in negotiating with the Bush Administration regarding the bailout bill ever mentioned the possibility of martial law -- again, that was just an example of extreme and deliberately hyperbolic comments being passed around by members not directly involved in the negotiations.
posted
And that's exactly inline with my point, Tex.
None of the fears that were being put forth had any basis other than possible 'worst-case' scenarios. He never backs off in his clarification that members were indeed told there would be Martial Law. Rep. Sherman states clearly that this was something floated around to scare people into voting for the bill. He didn't believe it would happen, but what about those that DID believe in it and cast their vote accordingly.
BTW, the link on Wiki to his clarification statement didn't work for me so I had to dig it up myself.
quote:Originally posted by SeekingFreedom: I'm at work so I have limited internet access, Glass. Do a google search for Rep. Brad Sherman and martial law. He claims that he and other members of congress were told that if they didn't pass the stimulus bill there would be such chaos that Martial Law would need to be declared.
Oh, and Sherman is a Democrat...from Cali no less.
and you think that argues against my assertion that the system collapsed? cuz i beleive it supports my assertion due to the fact that the people in charge were pretty darn scared.
the Bush people admitted by their acts in this that their whole economic program was a complete failure.
the Bankers in investment banking actually gave up alot of their freedom to become fully regulated under the FED RESERVE. in other words? they all ran for cover to be protected by the US Govt. are you trying to tel me that this was some scheme cooked up by the Govt to "takeover" the private industries of the US?
to what end? these people were crushed, they have taint on them now that will never go away.
they failed. they admitted it by taking govt money and being threatened with govt regualtion of their paychecks.
i'm really not understanding how people on the one hand claim it was bad to bail them out and not let them collapse (think Lehman) and then turn around and say they probably didn't even need the bailout.
the real money players that wanted the collapse were sitting on cash and waiting to buy up assets at pennies on the dollar like i already said.
martial law was probably going to be required without the bailouts.
1) people would be running on the banks, the banks do not have the money to pay out all deposits, never did- the FDIC does not have the money either, never did.
2) people would have begun stealing everything in sight. why not? they work thier whole live and some handfull of bankers makes a couple of bad decisions and they have nothing, and no job? darn right we have martial law, people would have been hijacking tractor trailers on the hi-ways.
3) the same peopl that say Obama is now to blame cuz his stimulus plan is not working? they are the ones saying we didn't need a bailout? but WITH the bailout? we are still losing too many jobs...
sorry man, i see serious duplicity in those thought processes.
PS, Brad Sherman was raising hell abut bailing out foreign (bond) investors in that speech...
the bailout ended up NOT being used to buy bonds (tocksick assets), it was used to buy preferred stock in the banks, which we own and will be bough back by the banks.
the investment banks are gone. they SUBMITTED to tougher regulations rather than fold, that's not a scam, that's desperation.
they had no cash for operation because almost all businesses as of the last Q'08 were operating day to day on borrowed money. no one would lend money to anybody and that includes grocery stores and farmers. the banks knew that they had all lied to each other, they didn't trust anybody.
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BTW? i started studying the depression era stuff a few years back when i started readin' how the average leverage in the stock market had risen to 12-1.
i was shocked that it was that high. turns out? that was a low estimate by more than half. some of the worst banks were leveraged at 50 and 60 to one in the mortgage bonds. that's why the system failed, not because of subprime.
they bought insurance (credit default swaps) and then assumed more leverage thinking that they were safe at outrageous leverage rates. they beleived the insurance could only fail in a "perfect storm"... we had one.
-------------------- Don't envy the happiness of those who live in a fool's paradise. Posts: 36378 | From: USA | Registered: Sep 2003
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quote:Originally posted by SeekingFreedom: And that's exactly inline with my point, Tex.
None of the fears that were being put forth had any basis other than possible 'worst-case' scenarios. He never backs off in his clarification that members were indeed told there would be Martial Law. Rep. Sherman states clearly that this was something floated around to scare people into voting for the bill. He didn't believe it would happen, but what about those that DID believe in it and cast their vote accordingly.
BTW, the link on Wiki to his clarification statement didn't work for me so I had to dig it up myself.
He claims that he and other members of congress were told that if they didn't pass the stimulus bill there would be such chaos that Martial Law would need to be declared.
Did you intend the connotation that someone in power sorta threatened members of Congress with concerns of martial law?
Or did you merely intend something like "rumors were flying."
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Glass, I think you misunderstand my intent. I don't argue that a crisis of unprecedented proportions existed in the financial sector. Many factors including the obscene leverage and bad mortgages and dishonest ratings in loan packaging and others set the stage for an unavoidable fall.
That's not my contention...
What I believe is that instead of being a Doctor acting to aid a dying patient, the Gov moved in like a Vulture over a thirsty desert traveler.
The powers currently in congress\white house believe that the Government should have MORE and MORE control over our lives. Crisis isn't to be avoided in this thought process, it is to be embraced and utilized. Are they new in this? Of course not. But the fact that it has been done in the past does not excuse the nefariousness of it.
Was the financial crisis orchestrated? No. Encouraged to some degree by those in positions to do so? I believe so.
Posts: 1802 | From: Utah | Registered: Mar 2008
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quote:Originally posted by SeekingFreedom: Glass, I think you misunderstand my intent. I don't argue that a crisis of unprecedented proportions existed in the financial sector. Many factors including the obscene leverage and bad mortgages and dishonest ratings in loan packaging and others set the stage for an unavoidable fall.
That's not my contention...
What I believe is that instead of being a Doctor acting to aid a dying patient, the Gov moved in like a Vulture over a thirsty desert traveler.
The powers currently in congress\white house believe that the Government should have MORE and MORE control over our lives. Crisis isn't to be avoided in this thought process, it is to be embraced and utilized. Are they new in this? Of course not. But the fact that it has been done in the past does not excuse the nefariousness of it.
Was the financial crisis orchestrated? No. Encouraged to some degree by those in positions to do so? I believe so.
OK, i did misunderstand you.
i'm not a big fan of the govt either.
here's the catch tho. we have to have some govt.
my opinion on big govt is not that the polticians are trying to gain power over our daily lives so much as they are being bought off by big business who wants to have a free pass on everything they can get. power money and lack of competition.
sure politics attracts powerhungry people, but i beleive in checks and balances.
the two parties are supposed to be part of that too...
i would prefer Obama had opened up investigations into past behaviour. in fact i'm pretty disappointed.
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The powers currently in congress\white house believe that the Government should have MORE and MORE control over our lives.
You're confusing admins...
Look, if you wanna knock Obama, the knock is his inexperience and getting scattered, trying to do too much and losing focus. This other stuff? Do you troll the Net, looking for "weird" stuff?
He clealy states that members of the House of Reps were told that without the bill's passage, Martial Law was a possibility. His tone of voice, just as clearly, shows he didn't believe that it was going to happen.
Now, if you go back to my original mention of martial law...
quote:That being said, as I recall, the threats at the time were that should the stimulus package not be passed, we would have had mass riots, runs on the banks, and martial law in the U.S. It is odd to me that if it was that serious, less than 10% of the money that was allocated seems to have stemmed the tide of global chaos...since that's all that has been spent and here we are without martial law...so far.
...I mentioned it as one of many 'worst case' scenario threats that were used to pass the TARP and subsequent Stimulus bills. I don't believe that anyone in power DIRECTLY implied that they would implement Martial Law if they didn't get their way. I DO believe that the hypothetical scenario WAS used to scare people into voting the way some wanted.
The point I tried to make was that it wasn't AS BAD as many wanted us to believe. The fact that only 10% of the money has been spent and here we are at what many are calling a rebounding point in the recession goes to show that such a large allocation of funds is NOT needed.
Posts: 1802 | From: Utah | Registered: Mar 2008
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quote:Originally posted by T e x: The powers currently in congress\white house believe that the Government should have MORE and MORE control over our lives.
You're confusing admins...
Look, if you wanna knock Obama, the knock is his inexperience and getting scattered, trying to do too much and losing focus. This other stuff? Do you troll the Net, looking for "weird" stuff?
I'm not holding Bush on any kind of pedestal, Tex. I fully agree with many on this board that the Patriot Act went FAR too far. He and Cheney used 9/11 to pass laws that allowed Big Gov. to intrude too far into innocent Americans' lives. The TARP bill? A sad attempt to pass the buck to Obama so Bush wouldn't have to try and fight a hostile congress to truly address the issue in his final months.
That said, do you honestly believe that the current admin doesn't believe that the government should have more say in our lives\choices?
Cap and Trade, anyone?
27+ Czar's not accountable to anyone but the Pres, anyone?
Posts: 1802 | From: Utah | Registered: Mar 2008
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the pressure was coming from the white house and sec-tres to pass the bill quickly.
he states that we would be sending money to the Bank of China and House Saud. that didn't happen...
he is saying that they didn't need to pass it without understanding it more, he wanted hearings. they had no hearings
The original proposal was three pages, as submitted to the United States House of Representatives. The purpose of the plan was to purchase bad assets, reduce uncertainty regarding the worth of the remaining assets, and restore confidence in the credit markets. The text of the proposed law was expanded to 110 pages and was put forward as an amendment to H.R. 3997.[4] The amendment was rejected via a vote of the House of Representatives on September 29, 2008, by a margin of 228-205.[5]
On October 1, 2008, the Senate debated and voted on an amendment to H.R. 1424, which substituted a newly revised version of the Emergency Economic Stabilization Act of 2008 for the language of H.R. 1424.[6][7] The Senate accepted the amendment and passed the entire amended bill by a vote of 74-25.[8] Additional unrelated provisions added an estimated $150 billion to the cost of the package and increased the size of the bill to 451 pages.[9][10] See Public Law 110-343 for details on the added provisions. The amended version of H.R. 1424 was sent to the House for consideration, and on October 3, the House voted 263-171 to enact the bill into law.[6][11][12] President Bush signed the bill into law within hours of its enactment, creating a $700 billion Troubled Assets Relief Program to purchase failing bank assets.[13]
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The fact that only 10% of the money has been spent and here we are at what many are calling a rebounding point in the recession goes to show that such a large allocation of funds is NOT needed.
all the TARP money went out very fast, it has all been put itno the banks for months now.
the Obama stimulus is now higher than ten percent,
and i don't beleive we are doing as well as some people are trying to say on the tube.
what they are saying is we are slowing down in our fall, not rebounding. our GDP is still not positive, and i belevie it's worse than they posted see surfers thread.
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On Friday, the Bureau of Economic Analysis released its advance estimate of real G.D.P. for the second quarter of 2009. Although some say it provides some of the first evidence of the stimulus law’s efficacy, a close inspection of the results shows that the government sector’s contribution to real G.D.P. growth so far has been trivial at best.
G.D.P. measures the total amount produced and spent in the nation during a particular time frame, like a year or a quarter of a year, indicating the country’s economic fitness.
Real G.D.P. for the first quarter of 2009 was sharply lower than it was in 2008’s last quarter, which was itself sharply lower than the quarter before that. Thus, it came as a bit of a surprise that second-quarter real G.D.P. was not also sharply lower, but rather was pretty close to what it was in the first quarter.
quote:Originally posted by glassman: The fact that only 10% of the money has been spent and here we are at what many are calling a rebounding point in the recession goes to show that such a large allocation of funds is NOT needed.
all the TARP money went out very fast, it has all been put itno the banks for months now.
the Obama stimulus is now higher than ten percent,
and i don't beleive we are doing as well as some people are trying to say on the tube.
what they are saying is we are slowing down in our fall, not rebounding. our GDP is still not positive, and i belevie it's worse than they posted see surfers thread.
basically, not every sector is in freefall.
That really is good. But it's not time to pop the cork on that special bottle...
Myself? I'm looking forward to this winter's seed catalogs.
posted
That said, do you honestly believe that the current admin doesn't believe that the government should have more say in our lives\choices?
already stated, you're confusing admins... Obama in his sort of earnest but fumbling, stumbling ways is trying to unwind what he can of previous dastardly behavior. And we see good signs, eg, today the SEC busted its first NSS case.
And we see bad signs: FOREX trading just took a nasty hit for Joe Retail.
A month or so ago, some top insurance execs reared up on their reptilian hind legs and told Congress, "NO! we're not going to stop recission of insurance policies."
But at least we're not in the headlong, toxic, death-spiral that we most definitely were in under Bush.
Obama's biggest problem has been in underestimating the amount of hate and vitriol that would come from his audacity to stop the BushNazis...
Colin Powell would be the best thing in the world for the GOP now, but they're so polarized over Rush et al that his voice seems to be lost in the hue and donnybrook.
posted
Transition to a producer society? Not saying I don't like the idea but just how in the world are we gonna do that SF? You wanna compete with China? In urban areas the average salary has risen to $1000 dollars per year. In the countryside it is still around $300 dollars per year. How do you see us successfully competing against a such a low cost basis without destroying the economy you want to save?
-------------------- No longer eligible for government service due to lack of tax issues. Posts: 5178 | From: Up North | Registered: Dec 2005
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quote:Originally posted by The Bigfoot: Transition to a producer society? Not saying I don't like the idea but just how in the world are we gonna do that SF? You wanna compete with China? In urban areas the average salary has risen to $1000 dollars per year. In the countryside it is still around $300 dollars per year. How do you see us successfully competing against a such a low cost basis without destroying the economy you want to save?
Apparrently, SF has backed off, for the time being...
quote: SEC plans more subpoena power, enforcement units
By Jonathan Stempel Jonathan Stempel – Wed Aug 5, 8:58 pm ET
NEW YORK (Reuters) – The U.S. Securities and Exchange Commission plans to issue more subpoenas and give people more incentives to cooperate with investigations as it works to tighten oversight of financial markets.
Speaking in New York, Robert Khuzami, the director of the SEC's enforcement division, said the changes will help the regulator as it focuses "on cases involving the greatest and most immediate harm and on cases that send an out-sized message of deterrence."
Khuzami, a former federal prosecutor, is presiding over a division much criticized by lawmakers for missing Bernard Madoff's $65 billion Ponzi scheme and for not doing enough to protect investors during the financial crisis.
The changes call for SEC staff to now generally have power to issue subpoenas by getting approval only from their supervisors, not the full Commission.
"If defense counsel resist the voluntary production of documents or witnesses or fail to be complete and timely in responses or engage in dilatory tactics, there will very likely be a subpoena on your desk the next morning," Khuzami said.
Other changes include plans to seek authority to submit more immunity requests to the Justice Department to encourage people to testify without fear of criminal prosecution.
The SEC also plans to create new groups to investigate cases involving asset management, foreign corrupt practices, market abuses, municipal securities and public pensions, and structured products. One group already exists to investigate subprime mortgage abuses.
Khuzami said the SEC also plans to create a new office to monitor incoming tips and complaints, and hire its first chief operating officer to boost efficiency and speed the reimbursement of funds to harmed investors.
Management will also be streamlined, and staff will need his permission for "tolling agreements" that give them more time to conduct investigations. He said these have become too common, causing delays that reduce the SEC's accountability.
DETERRENCE NOT ALWAYS "HIGH-PROFILE"
The SEC has had a number of high-profile enforcement cases in recent months, including penalties levied against Bank of America Corp and General Electric Co and insider trading charges brought against Angelo Mozilo, the former chief of mortgage lender Countrywide Financial Corp.
Speaking on the sidelines at the Association of the Bar of the City of New York, Khuzami said the emphasis on deterrence does not mean the SEC will overemphasize higher-profile cases at the expense of cases involving fewer investors or smaller amounts of money.
"Deterrent impact is not tantamount to high-profile," but could focus on novel areas of potential wrongdoing, Khuzami said. "It's not connected to big corporate cases necessarily."
He did say that the increased subpoena power may induce companies to be more aggressive in addressing wrongdoing to avoid "the necessity" of a subpoena. Some companies do not disclose SEC probes before subpoenas are actually issued.
While acknowledging a "general sense of renewed urgency" to aggressively root out wrongdoing, Khuzami downplayed the suggestion he feels pressure to do more.
"I would take issue with the premise that I am under pressure to bring enforcement actions," he said in a question-and-answer session after his speech. "No one has told me to bring more cases. What they have told me is we need to be vigorous advocates for investors."
On Wednesday, SEC Chairman Mary Schapiro told CNBC television that she would like by year end to see definitive rules governing short-selling, a practice blamed for feeding carnage in bank stocks. She also wants the regulator to work on many fraud cases with criminal authorities.
Before joining the SEC, Khuzami was a prosecutor for 11 years with the U.S. Attorney for the Southern District of New York, and was chief of that office's securities and commodities fraud task force for three years. He was subsequently general counsel for the Americas at Deutsche Bank AG.
(Reporting by Jonathan Stempel; Editing by Gary Hill)
quote:Originally posted by The Bigfoot: Transition to a producer society? Not saying I don't like the idea but just how in the world are we gonna do that SF? You wanna compete with China? In urban areas the average salary has risen to $1000 dollars per year. In the countryside it is still around $300 dollars per year. How do you see us successfully competing against a such a low cost basis without destroying the economy you want to save?
I only have a minute or two before I go to work so I'll expand on this later in the day, Big.
First, culturally we need an about face. We've been fed the 'I gotta have that too' crap for too long. As a culture, we need to change our mindset as to the differences between wants and needs. Too many of the middle and lower class are knee deep(or worse) due to misunderstanding the difference between these two priorities. Credit has been TOO EASY to obtain and I believe this is a contributing factor to our current economic situation. Too many people are in too much debt...but at least they have nice TV's\cars\homes.
Secondly, as a nation, we need to utilize the resources that nature has given us. The 'Green' folks have it right in some ways (wow! did I actually type that?). I actually DO like the idea of solar\wind\hydro power vs. importing oil. But we need to understand that they are limited in their own ways. Add nuclear to the list and we start to leave the coal\oil for power production paradigm. Speaking of...DRILL FOR OIL AND START EXPORTING IT!!!! The reserves that we know of would all but pay off the national debt in a relatively short time period once in full production. Developing nations will be using oil for a long time as they advance technologically. FEED THE NEED.
Will hit on this more later today if I have any downtime.
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Speaking of...DRILL FOR OIL AND START EXPORTING IT!!!! The reserves that we know of would all but pay off the national debt in a relatively short time period once in full production. Developing nations will be using oil for a long time as they advance technologically. FEED THE NEED.
Ok, this is a common misconception. the world is not running out of oil any time soon, and as you say, we are not out of oil either
we are running out of "cheap" oil. the days of finding oil by "shootin' at sumfood" are long over.
why do you think the OPEC members set oil prices where they do? their stated goal was ONLY 80$ not 100$ 120$ or 140$, that's because they know how much they can charge without bringing too much competition into the market.
the price of oil going so high was another major contributing factor to the collapse. as rising oil prices had their infaltionary impact on the economy? th Fed responded by raising rates. this triggered the "unimaginable" rise in ARMS monthly payment that actually began the very first wave of the foreclosure problem.
the price of oil went so high because the oil traders were getting 10 to one leverage on the face of the trade. it became painfully obvious that quite a few traders were getting much more.
the common theme in all of the collapse areas is in fact too much credit/leverage. it always is.
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Health insurance executives undermine insurance lobbyist’s pledge to reform insurance market. Yesterday, during an interview with Bloomberg Radio, Karen Ignagni — the President and CEO of America’s Health Insurance Plans (AHIP) — reiterated insurers’ commitment to reforming the health insurance marketplace:
That’s what people want. They want to be in. They don’t want to be rejected because of preexisting conditions, and they want to make sure they have continuity of care. We’ve committed to that. That’s what our industry is doing. We are one of the first to step up and offer real change that affected our industry. And we’re still committed to that.
While the insurance industry has publicly supported regulations that would guarantee everyone coverage and outlaw pre-exising condition exclusions, Ignagni may be overstating the industry’s commitment to so-called “market reform.” On June 16, despite Ignagni pledges of commitment, insurance executives from UnitedHealth Group, Assurant, and WellPoint specifically refused to “commit” to ending the controversial practice of rescinding coverage after an applicant files a medical claim. Watch a compilation of Ignagni’s claim and insurers’ refusal to end rescission: As former health insurance executive Wendell Potter argues, insurers seek to “drive down” costs by refusing to insure “unhealthy people,” a tactic borne out by the fact that 47 million Americans currently lack health insurance. The “insurance industry has been one of the most successful, in beating back any kinds of legislation that would hinder or affect the profitability of the companies,” said Potter. The Wonk Room has more.
-------------------- Wise men learn more from fools than fools from the wise. Posts: 3827 | From: beautiful California | Registered: Sep 2008
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quote:Originally posted by glassman: Speaking of...DRILL FOR OIL AND START EXPORTING IT!!!! The reserves that we know of would all but pay off the national debt in a relatively short time period once in full production. Developing nations will be using oil for a long time as they advance technologically. FEED THE NEED.
Ok, this is a common misconception. the world is not running out of oil any time soon, and as you say, we are not out of oil either
we are running out of "cheap" oil. the days of finding oil by "shootin' at sumfood" are long over.
why do you think the OPEC members set oil prices where they do? their stated goal was ONLY 80$ not 100$ 120$ or 140$, that's because they know how much they can charge without bringing too much competition into the market.
the price of oil going so high was another major contributing factor to the collapse. as rising oil prices had their infaltionary impact on the economy? th Fed responded by raising rates. this triggered the "unimaginable" rise in ARMS monthly payment that actually began the very first wave of the foreclosure problem.
the price of oil went so high because the oil traders were getting 10 to one leverage on the face of the trade. it became painfully obvious that quite a few traders were getting much more.
the common theme in all of the collapse areas is in fact too much credit/leverage. it always is.
If we could keep oil at a set price of $75 per barrel that would be perfect.
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Let's face it what ever this Health Care legislation becomes, it's just the first step towards a single payer government controlled Health Care System.
Once the ball starts rolling down hill they'll never stop it. Let's hope we get the best program possible because we're gonna be paying dearly for it. And let's make sure that what ever congress votes to saddle us with, they too must be committed to the same program for themselves and their families.
-------------------- Let's Go METS!!! Posts: 3317 | From: CT | Registered: Dec 2006
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quote:Originally posted by glassman: i think Congress SHOULD get the VA
if it's good enough for the troops?
That's a sure fire way to improve the care our Vet's get. I'm with you.
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Drug Industry Helping Obama Overhaul Health Care
WASHINGTON (AP) -- The nation's drugmakers stand ready to spend $150 million to help President Barack Obama overhaul health care this fall, according to numerous officials, a staggering sum that could dwarf attempts to derail Obama's top domestic priority.
The White House and allies in Congress are well aware of the effort by Pharmaceutical Research and Manufacturers of America, a somewhat surprising political alliance, given the drug industry's recent history of siding with Republicans and the Democrats' disdain for special interests.
The campaign, now in its early stages, includes television advertising under PhRMA's own name and commercials aired in conjunction with the liberal group, Families USA.
Numerous people with knowledge of PhRMA's plans said they had been told it would likely reach $150 million and perhaps $200 million. They spoke on condition of anonymity, saying they were not authorized to divulge details.
Additionally, the industry is the major contributor to Healthy Economy Now, which recently completed a $12 million round of advertising nationally and in several states. The ads were made by firms with close ties to Democrats and the White House and generally reflected the administration's changing rhetoric on health care.
In an interview, Ken Johnson, senior vice president of PhRMA, said, "We will have a significant presence over the August recess, both on television and newspapers and on radio, but we have not finalized details for our fall campaign."
Ron Pollack, executive director of Families USA, said the partnership with the deep-pocketed drug industry is one of mutual self-interest, even though the two groups disagree on numerous issues. "We want to achieve coverage for everyone. For PhRMA, this would improve volume for prescription sales because everyone" would have better access to medicine, he said.
Any health care bill that makes it to Obama's desk is expected to extend health insurance to the nearly 50 million who now lack it. That would mean a huge new pool of potential customers for drug companies and other health care providers. That, in turn, has created an incentive to offer concessions to the White House and lawmakers in hopes of shaping the bill, rather than simply opposing it.
Drugmakers were the first group to reach agreement with the White House and Senate Finance Committee Chairman Max Baucus, D-Mont., announcing several weeks ago that they would absorb $80 billion in costs over a decade.
Even before the announcement, according to several individuals, the White House sought help from PhRMA in passing legislation.
Now, with the legislation under attack, the industry is providing key support during August as Republicans work to inflict a high-profile defeat on the president.
A significantly more ambitious advertising effort by PhRMA is expected to begin around Labor Day. Jim Messina, a deputy White House chief of staff who is deeply involved in the administration's health care effort, brought Democratic senators up to date recently on the help PhRMA, labor unions and other outside groups are providing.
At the same time, the drugmakers are counting on the White House to block efforts by House Democrats to extract more than $80 billion from their industry in the legislation.
The partnership is complicated because many Democrats in both the House and Senate oppose key goals of the drug industry. Liberals, in particular, favor the importation of prescription medicine from Canada and other countries. They also want the government to have authority to negotiate directly with companies for lower drug prices under Medicare.
House Speaker Nancy Pelosi, D-Calif., has been critical of drug manufacturers, and Rep. Henry Waxman, D-Calif., chairman of the Energy and Commerce Committee, said several weeks ago the House was not bound by PhRMA and Baucus' agreement.
By the White House tally, overall advertising so far by PhRMA and other supporters of the bill has swamped efforts by opponents. Republican strategists concede it would be extremely difficult to match an effort of the size PhRMA is planning.
For comparative purposes, 2008 Republican presidential candidate John McCain was limited to spending $84 million a year ago when he accepted government funding for his fall campaign.
Independent calculations show Healthy Economy Now has spent about $12 million on three ads that ran nationally and in 17 states and the District of Columbia.
The messages meshed with the White House's changing rhetoric. An ad that began in mid-June said patients would be able to choose their own doctors. Another, launched in mid-July, focused on consumer protections, including a ban on insurance companies denying coverage due to pre-existing medical conditions.
To make the ads, the group hired GMMB, a political consulting and advocacy advertising firm with close ties to the White House and Senate Democrats, as well as AKPD, top White House strategist David Axelrod's former firm.
Jeremy Van Ess, a spokesman for Health Economy Now, said the decisions were made by the organization, and not at the White House's request.
"Absolutely not. ... It's no secret in Washington that these two firms we had are the best out there," he said.
PhRMA/Families USA spent about $5.7 million in nationwide advertising for the two months ending Aug. 9, according to information compiled by a different organization.
Two weeks ago, the drug industry added another weapon to its arsenal, launching a series of ads under its own name in a few key states at a cost of about $1 million so far.
Among them is Nevada, where the industry has purchased time through Labor Day to air commercials thanking Senate Majority Leader Harry Reid for his efforts to pass health care reform.
Reid's public approval is weak in the state, although he does not yet have a Republican opponent for 2010.
While the White House and Democrats benefit from PhRMA's help, they seem reluctant to discuss it openly.
When PhRMA became the first big health care provider to agree to accept reductions as part of legislation, Obama made the announcement at the White House with the head of AARP in attendance. Billy Tauzin, the former Republican congressman who is head of PhRMA, was not invited.
More recently, Reid omitted the drugmakers from a list of outside interests trying to help pass legislation.
The drug industry's campaign is the culmination of a broader shift it has undertaken. A few years ago, the industry hired Steve McMahon, a longtime Democratic strategist, to oversee its political advertising.
Drugmakers have also funneled more money to Democrats in recent years, a trend that began soon after they gained control of Congress.
-------------------- It isn't so much that liberals are ignorant. It's just that they know so many things that aren't so. Posts: 6949 | Registered: Apr 2004
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quote: CBO Admits (Very Quietly) That HR 3200 Will Reduce Costs
by Tim Foley
category: Obama and Congress
Published July 26, 2009 * 11:16PM PT
Since I’m sure we’ll be greeted Monday morning with a chorus of opponents of reform citing the latest Congressional Budget Office pronouncement as proof that we should give up on health care reform, I thought I should call attention to the last two paragraphs of the document. Last week, many took CBO Director Doug Elmendorf’s verbal testimony as proof that the current reform proposals in the House, the Senate and the White House would not appreciably reduce health care costs. What, I wonder, will they make of CBO’s new pronouncement that HR 3200 would “achieve tens of billions of dollars in Medicare savings each year”?
The context: Rep. Steny Hoyer asked the Congressional Budget Office to “score” the proposal to create an independent body modeled on the existing Medicare Payment Advisory Commission. Since this new commission – IMAC – would be staffed with providers and experts, not politicians, they’d be empowered to make policy decisions to reduce Medicare spending unencumbered by political calculation. The President would decide whether to implement their proposals each year as a package deal (no amendment or picking and choosing), and they would become law unless Congress passed a law to put them on ice within 30 days. White House Office of Management and Budget Director Peter Orszag has championed this idea as a way to overcome political inertia and generate long-term savings.
CBO determined there may well be substantial long-term savings, but marginal short-term savings. However, given the furor of last week, it’s striking that part of the reason why Elmendorf and his staff don’t believe IMAC will yield much short-term savings is because their recommendations will likely overlap with provisions in HR3200 that will already be reducing costs. Full quote, with no elisions:
Several percent of annual Medicare spending would amount to tens of billions of dollars per year after 2019. By that point, H.R. 3200, as introduced, would already be on track to achieve tens of billions of dollars in Medicare savings each year, primarily as a result of provisions that would reduce payments to Medicare providers relative to those projected in the current-law baseline. (Total federal resources devoted to health care programs would increase under the introduced version of that bill, however, because of the provisions aimed at making health insurance available to more people.) Substantial additional savings from an IMAC-type proposal would probably require significant changes in coverage, benefit design, and payment and delivery systems aimed at reducing the quantity and intensity of services provided. Some of the savings that could be expected from such changes are probably already captured in CBO’s assessment of the long-term savings that would result from provisions of H.R. 3200, but it is difficult to assess the extent of that overlap.
Something to keep in mind as you hear pundits thundering that the CBO says health care reform won’t reduce costs.
posted
pretty good article Tex, i have to agree with this part in particular:
When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years into the future.
i get annoyed every time i see drug commercials on tv cuz we pay fro them too...
apparently the Obama people have launched a website to attempt to dispute the rumors floating around:
UBBFriend: Email this page to someone!
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