Tuesday, June 23, 2009

To better understand the Iran situation (no BS version)


One of the better discussions I've heard about Iran from Karim Sadjadpour of the Carnegie Endowment for International Peace on "Fresh Air":

http://www.npr.org/templates/story/story.php?storyId=105802915

Certainly some of the recent events in Iran have been disappointing and even abominable to our sensibilities in this country, but we should remember a few things. Like Cuba, the US traditional establishment of the last 30 years has had a fetish for hating anything Iranian. Cuba was the Mob's cash cow that they let get away to the Reds, and Iran was the oil cow they lost to the Muslims. Ironically, Iran is probably the nation-state most culturally compatible with Western values and democracy in the region, yet due to internal decisions and external pressures, they have embraced (or been forced down a path of) revolutionary Islamic philosophy instead. Well maybe not the young people - who comprise over half of the population - but the gray beards clinging to power at least. It was obviously not a foregone conclusion that Iran would become a theocracy, nuclear wanna-be, and financier of terror groups, but probably more of the blame lies with Western imperialists than radical clerics.

Was there blatant fraud in this election and tyrannical government violence against protesters post-election? Surely. Their regime is populated by a bunch of thugs and barbarians, right? They subjugate women and repress civil rights. I have no love for their government (that seems to either be comprised of hard-line fossils like Khamenei or corrupt egomaniacs like Rafsanjani), but let's have a little perspective. The candidate who nets the most votes may not necessarily win an election in this country. In 2000, it is pretty clear that there were significant voting irregularities in Florida. Maybe not enough to change the result, but it was more or less swept under the rug by 5 old men in robes. Protests ensued in many US cities, and in some cases the participants were beaten down and jailed (I am not sure if there were any deaths). Hanging chads, glitches in the electronic voting machines, ineligible voters voting, and vice versa. It even happens here, in the "greatest democracy" of history. And let's not forget the influence of money in our elections. Remember the big protests over the WTO meeting in Seattle, or Bush's Republican Convention in NYC? Government thugs beat up citizens and deprived them of their rights, in our backyard. Probably people died. I wonder if other nations like Iran were condemning us then?

So let's show some humility before chastising Iran for some of the same faults we commit, albeit to a less extreme degree. But even that is debatable, since fraud and tyranny in the US has far more global impact than the same in Iran. And for the hard-liners who criticize Obama for being too "timid" on the issue: what do you expect him to do? Bomb, bomb, bomb... bomb, bomb Iran? We already have harsh sanctions on them. We have no strings to pull over there - they're not Palau. And if we "take a side", back Mousavi, and demand a re-vote, we would play right into the tyrants' hands. All of a sudden their accusations of US tampering and foreign coup seem more plausible, and they can justify a more serious crackdown. Blood will be gushing in the streets - GUSHING.

If we do support the protesters and reformers, then maybe it's best that we keep our big mouths shut and let them decide their own destiny, at least for now. Although most Iranians don't hate America, they're not exactly eager to embrace us either. They know we lust after their resources, will always side with Israel, wish to deprive them of their NPT-approved development of civilian nuclear power, and have over 150,000 troops in their front and back yards. The spectre of Bush is still present, and even Obama said that all options are still on the table (in regards to preventing their nuclear ambitions). In the past, we helped overthrow an elected leader (Mossadeq) who dared to want to nationalize their oil (ahem, I mean Shell and BP's oil), we bankrolled the dictator Shah who abused many Iranians, we mostly took Saddam's side in the brutal Iran-Iraq War where over a million died, and we shot down an Iranian passenger plane (and never apologized for it). So we're not exactly in the best position to send a message.

Friday, June 19, 2009

Case study in health care abuse: McAllen vs. El Paso


“Come on,” the general surgeon finally said. “We all know these arguments [why Medicare costs are highest per capita in McAllen than anywhere else US] are bullshit. There is overutilization here, pure and simple.” Doctors, he said, were racking up charges with extra tests, services, and procedures. The surgeon came to McAllen in the mid-nineties, and since then, he said, “the way to practice medicine has changed completely. Before, it was about how to do a good job. Now it is about ‘How much will you benefit?’ ”

Providing health care is like building a house. The task requires experts, expensive equipment and materials, and a huge amount of coördination. Imagine that, instead of paying a contractor to pull a team together and keep them on track, you paid an electrician for every outlet he recommends, a plumber for every faucet, and a carpenter for every cabinet. Would you be surprised if you got a house with a thousand outlets, faucets, and cabinets, at three times the cost you expected, and the whole thing fell apart a couple of years later? Getting the country’s best electrician on the job (he trained at Harvard, somebody tells you) isn’t going to solve this problem. Nor will changing the person who writes him the check.
- Atul Gawande

http://www.newyorker.com/reporting/2009/06/01/090601fa_fact_gawande?currentPage=all

With the health care debate in DC in full swing, controlling costs and usage are obviously key factors to any reform plan. We previously discussed comparative effectiveness analysis, and it will probably be a key ingredient to any American universal coverage program. This New Yorker piece clearly demonstrates why comp. eff. is long overdue to counter "zealously entrepreneurial" physicians and clinics. We know more care is more costly, but more care is not necessarily better for your health either. "The most expensive tool in medicine is a doctor's pen." I'd laugh if it wasn't so true. The author suggests that the abuses taking place by medical professionals in McAllen is analogous to unscrupulous mortgage brokers in the sub-prime mess. They just want to get as many patients through the door as possible and collect more commission (in some cases, illegal kickbacks). And like the financial industry, incentive systems are set up in medicine to reward these types of excesses, so it's a miracle when some communities like Grand Junction, CO or the Mayo Clinic like can actually buck the trend and offer better health outcomes for less money ("accountable care org's"). The story was written by a doctor too, so he is not just MD-bashing.

Some highlights from the article:

-McAllen... is one of the most expensive health-care markets in the country. Only Miami—which has much higher labor and living costs—spends more per person on health care. In 2006, Medicare spent fifteen thousand dollars per enrollee here, almost twice the national average. The income per capita is twelve thousand dollars. In other words, Medicare spends three thousand dollars more per person here than the average person earns.

-Yet public-health statistics show that cardiovascular-disease rates in [McAllen] are actually lower than average, probably because its smoking rates are quite low. Rates of asthma, H.I.V., infant mortality, cancer, and injury are lower, too. El Paso County, eight hundred miles up the border, has essentially the same demographics. Both counties have a population of roughly seven hundred thousand, similar public-health statistics, and similar percentages of non-English speakers, illegal immigrants, and the unemployed. Yet in 2006 Medicare expenditures (our best approximation of over-all spending patterns) in El Paso were $7,504 per enrollee—half as much as in McAllen. An unhealthy population couldn’t possibly be the reason that McAllen’s health-care costs are so high. (Or the reason that America’s are. We may be more obese than any other industrialized nation, but we have among the lowest rates of smoking and alcoholism, and we are in the middle of the range for cardiovascular disease and diabetes.)

-And yet there’s no evidence that the treatments and technologies available at McAllen are better than those found elsewhere in the country. The annual reports that hospitals file with Medicare show that those in McAllen and El Paso offer comparable technologies—neonatal intensive-care units, advanced cardiac services, PET scans, and so on. Public statistics show no difference in the supply of doctors. Hidalgo County actually has fewer specialists than the national average. Nor does the care given in McAllen stand out for its quality. Medicare ranks hospitals on twenty-five metrics of care. On all but two of these, McAllen’s five largest hospitals performed worse, on average, than El Paso’s. McAllen costs Medicare seven thousand dollars more per person each year than does the average city in America. But not, so far as one can tell, because it’s delivering better health care.

-“[The reason for McAllen's high costs is] malpractice,” a family physician who had practiced here for thirty-three years said. “McAllen is legal hell,” the cardiologist agreed. Doctors order unnecessary tests just to protect themselves, he said. Everyone thought the lawyers here were worse than elsewhere.
That explanation puzzled me. Several years ago, Texas passed a tough malpractice law that capped pain-and-suffering awards at two hundred and fifty thousand dollars. Didn’t lawsuits go down? “Practically to zero,” the cardiologist admitted.
-In a 2003 study, another Dartmouth team, led by the internist Elliott Fisher, examined the treatment received by a million elderly Americans diagnosed with colon or rectal cancer, a hip fracture, or a heart attack. They found that patients in higher-spending regions received sixty per cent more care than elsewhere. They got more frequent tests and procedures, more visits with specialists, and more frequent admission to hospitals. Yet they did no better than other patients, whether this was measured in terms of survival, their ability to function, or satisfaction with the care they received. If anything, they seemed to do worse. That’s because nothing in medicine is without risks. Complications can arise from hospital stays, medications, procedures, and tests, and when these things are of marginal value the harm can be greater than the benefits. In recent years, we doctors have markedly increased the number of operations we do, for instance. In 2006, doctors performed at least sixty million surgical procedures, one for every five Americans. No other country does anything like as many operations on its citizens. Are we better off for it? No one knows for sure, but it seems highly unlikely. After all, some hundred thousand people die each year from complications of surgery—far more than die in car crashes.

-To make matters worse, Fisher found that patients in high-cost areas were actually less likely to receive low-cost preventive services, such as flu and pneumonia vaccines, faced longer waits at doctor and emergency-room visits, and were less likely to have a primary-care physician. They got more of the stuff that cost more, but not more of what they needed.

-In an odd way, this news is reassuring. Universal coverage won’t be feasible unless we can control costs. Policymakers have worried that doing so would require rationing, which the public would never go along with. So the idea that there’s plenty of fat in the system is proving deeply attractive. “Nearly thirty per cent of Medicare’s costs could be saved without negatively affecting health outcomes if spending in high- and medium-cost areas could be reduced to the level in low-cost areas,” Peter Orszag, the President’s budget director, has stated.

-She wasn’t the only person to mention Renaissance [Hospital]. It is the newest hospital in the area. It is physician-owned. And it has a reputation (which it disclaims) for aggressively recruiting high-volume physicians to become investors and send patients there. Physicians who do so receive not only their fee for whatever service they provide but also a percentage of the hospital’s profits from the tests, surgery, or other care patients are given. (In 2007, its profits totalled thirty-four million dollars.) Romero and others argued that this gives physicians an unholy temptation to overorder.

-“In El Paso, if you took a random doctor and looked at his tax returns eighty-five per cent of his income would come from the usual practice of medicine,” he said. But in McAllen, the administrator thought, that percentage would be a lot less. He knew of doctors who owned strip malls, orange groves, apartment complexes—or imaging centers, surgery centers, or another part of the hospital they directed patients to. They had “entrepreneurial spirit,” he said. They were innovative and aggressive in finding ways to increase revenues from patient care. “There’s no lack of work ethic,” he said. But he had often seen financial considerations drive the decisions doctors made for patients—the tests they ordered, the doctors and hospitals they recommended—and it bothered him. Several doctors who were unhappy about the direction medicine had taken in McAllen told me the same thing. “It’s a machine, my friend,” one surgeon explained.

-Beyond the basics, however, many physicians are remarkably oblivious to the financial implications of their decisions. They see their patients. They make their recommendations. They send out the bills. And, as long as the numbers come out all right at the end of each month, they put the money out of their minds. Others think of the money as a means of improving what they do. They think about how to use the insurance money to maybe install electronic health records with colleagues, or provide easier phone and e-mail access, or offer expanded hours. Then there are the physicians who see their practice primarily as a revenue stream. They instruct their secretary to have patients who call with follow-up questions schedule an appointment, because insurers don’t pay for phone calls, only office visits. They consider providing Botox injections for cash. They take a Doppler ultrasound course, buy a machine, and start doing their patients’ scans themselves, so that the insurance payments go to them rather than to the hospital. They figure out ways to increase their high-margin work and decrease their low-margin work.

-In a few cases, the hospital executive told me, he’d seen the behavior cross over into what seemed like outright fraud. “I’ve had doctors here come up to me and say, ‘You want me to admit patients to your hospital, you’re going to have to pay me.’ ”
“How much?” I asked.
“The amounts—all of them were over a hundred thousand dollars per year,” he said. The doctors were specific. The most he was asked for was five hundred thousand dollars per year. He didn’t pay any of them, he said: “I mean, I gotta sleep at night.” And he emphasized that these were just a handful of doctors. But he had never been asked for a kickback before coming to McAllen.

-Powell suspects that anchor tenants play a similarly powerful community role in other areas of economics, too, and health care may be no exception. I spoke to a marketing rep for a McAllen home-health agency who told me of a process uncannily similar to what Powell found in biotech. Her job is to persuade doctors to use her agency rather than others. The competition is fierce. I opened the phone book and found seventeen pages of listings for home-health agencies—two hundred and sixty in all. A patient typically brings in between twelve hundred and fifteen hundred dollars, and double that amount for specialized care. She described how, a decade or so ago, a few early agencies began rewarding doctors who ordered home visits with more than trinkets: they provided tickets to professional sporting events, jewelry, and other gifts. That set the tone. Other agencies jumped in. Some began paying doctors a supplemental salary, as “medical directors,” for steering business in their direction. Doctors came to expect a share of the revenue stream.

-Something even more worrisome is going on as well. In the war over the culture of medicine—the war over whether our country’s anchor model will be Mayo or McAllen—the Mayo model is losing. In the sharpest economic downturn that our health system has faced in half a century, many people in medicine don’t see why they should do the hard work of organizing themselves in ways that reduce waste and improve quality if it means sacrificing revenue.

In El Paso, the for-profit health-care executive told me, a few leading physicians recently followed McAllen’s lead and opened their own centers for surgery and imaging. When I was in Tulsa a few months ago, a fellow-surgeon explained how he had made up for lost revenue by shifting his operations for well-insured patients to a specialty hospital that he partially owned while keeping his poor and uninsured patients at a nonprofit hospital in town. Even in Grand Junction, Michael Pramenko told me, “some of the doctors are beginning to complain about ‘leaving money on the table.’ ”

Sunday, May 31, 2009

Another little known casualty of the war on terror


http://www.guardian.co.uk/politics/2008/oct/22/chagos-islanders-lose
http://www.guardian.co.uk/world/2007/may/24/politics.topstories3

Diego Garcia is probably the most important US military base you've never heard of. It's located on the biggest island of the tiny Chagos Archipelago in the Indian Ocean, on land given to us by Britain after it won it from France in the 19th Century. The base has been used to stage bombing missions in the Middle East (though now most sorties originate from our base in Qatr), refueling for long range aircraft (including CIA rendition flights, which they have confirmed to be true), maritime patrol to thwart Somali pirates, a NASA observatory, and a control hub for the GPS system. There are even some allegations, from the UN among others, that it is used as a Gitmo-style prison.

It's geographic location allows critical projection of US force and influence in the Indian Subcontinent, Near East, and Africa, which is partially why India has called for the closing of the base during the Cold War (when they were more aligned with the USSR). But then 9/11 happened, the US and India got chummier, and 40% of the active US military found itself deployed to the region. And now with Russian influence persuading many former Soviet nations to cancel their lease agreements with the Pentagon, overseas airbases are all the more precious.

Now for the victims. The islands have been mostly unpopulated historically, but current "native" Chagossians are descendants of Indian and African slaves brought by Europeans to work the islands' plantations, and decided to permanently reside there. About 2,000 of them were deported during the 1960s-70s to make room for the base's construction. The Guardian reports that some were tricked to leave the islands on temporary work assignments, and then now allowed back. Others were driven out of their homes with dogs and tear gas, and most now live in poverty on the island of Mauritius 1,200 miles away. After a 10-year legal battle, in 2007 a British court ruled in favor of the Chagossians despite pleas from the Foreign Ministry. They pronounced that the eviction was illegal and exiles should be able to return to every Chagos island but Diego Garcia, so it's not like the US had to pack its bags. However, Downing Street appealed the ruling to the House of Lords, and they overturned the lower court's decision the following year by a 3-2 vote.

The US has claimed all along that any native civilian presence there could pose a security risk, and therefore the archipelago should remain unpopulated. But the "security card" argument seems quite dubious, since the US has much larger bases in Iraq, Saudi Arabia, and Afghanistan that are a stone's throw from militants (and have been repeatedly attacked by militants), and we haven't called for the mass deportations of locals around those facilities. While the chance of a terrorist attack is slim at best, Lord Hoffman in the majority decision put it this way: "Some of these scenarios might be regarded as fanciful speculations, but in the current state of uncertainty the government is entitled to take the concerns of its ally into account."

So in this case, pressure from an ally (for the purposes of waging wars on foreign peoples) trumps legitimate redress and civil rights issues of thousands of people under the jurisdiction of overseas British territorial government. While locals have protested US military presence in many nations like the Phillipines and Korea, the Chagossians aren't even hostile to the US base dominating their homeland. Putting bread on the table comes before politics, and they merely want to work in the fishing or eco-tourism industries, or even be part of the base's 3,500 strong workforce. Only about 150 Chagossian families have expressed interest to return, so it wouldn't be a resettlement nightmare, and estimates put the cost of the process at a mere 25M pounds. But instead, the US and UK governments have declared them a security risk, so that's just the way it is.

Thursday, May 28, 2009

Making a buck off swine flu panic


My wife works on FDA stuff and found that there are at least 9 companies that the FDA has identified and cautioned for hocking products that claim to "help protect you from H1N1" without any clinical evidence. Magic herbs to protect you against the virus LOL. The "pandemic" didn't last a month and already these guys are working harder than the vaccine makers! Here is an example:

http://www.fda.gov/foi/warning_letters/s7221c.pdf

So if 9 got warning letters, than means that probably 10x as many scamsters exist out there. Well, in panic people will always try to exploit fear for profit. And it's up to the consumer to have the discipline to see past it. But we don't have a very good track record (duct tape after 9/11, stocking up food/water for Y2K, buying up guns/bullets now that Obama is president).

Wednesday, April 29, 2009

Obama's first 100 days


To Newsweek,

I am writing in response to Jonathan Alter and Fareed Zakaria's articles in the May 4 issue evaluating President Obama's first one hundred days in office. I believe that your publication is continuing its habit from the 2008 campaign period of being a one-sided Obama cheerleader. The fact that your magazine has not printed a single satirical cartoon (of many available, see link below) depicting President Obama, when George W. Bush caricatures were a weekly mainstay, is telling. While I think that Obama's performance is above-average thus far (especially on the environment and science fronts, as well as incremental gains in health care, which your columnists did not recognize), how can Alter and Zakaria fill two pages with accolades while neglecting to make even a single criticism or suggestion for improvement?

http://politicalhumor.about.com/od/barackobama/ig/Barack-Obama-Cartoons/

Plenty of nonpartisan journalists and economists have voiced concerns over some of the White House's more questionable actions. Domestically, Alter and Zakaria totally overlooked:

-Problems associated with unfilled staff positions in the Obama government, because of his well-intentioned but flawed "no ties to lobbyists" policy (yet he has packed his economics team with people well connected to Wall Street).
-Corruption allegations associated with some key cabinet nominees.
-Caving to Congressional Democrats during the crafting of the generally helpful but pork-laden Reinvenstment and Recovery Act.
-Backing down on gun control campaign promises (and virtual silence on the issue), despite multiple atrocious mass shootings.
-Retaining Bush-era state secrecy policies despite pledges to be the most transparent administration ever.
http://www.salon.com/opinion/greenwald/2009/04/06/obama/index.html
-Ambiguity over CIA torture (declaring the practice outlawed and un-American, yet refusing to investigate or prosecute those responsible in the previous regime).
-More mixed signals and controversy over the AIG bonuses.
-Making generous concessions to banks/investors at the expense of taxpayers on TARP.
-Additional billions of Treasury rescue dollars so far have not impelled banks to increase lending, and did not slow the slide of the US auto industry.

While some of these events are out of a president's control, and beyond his influence in the first hundred days, they are at least worth mentioning. I would also like to point out that as of April 29, Alter is incorrect about Obama's budget being approved. Congress did pass interim spending to keep the government running through the summer, but have not passed a version of Obama's massive and contentious $3.6 trillion budget plan that was first proposed in February. According to the Minneapolis Star-Tribune, after months of stalemate Congress is preparing to pass merely a nonbinding budget outline this week.

http://www.startribune.com/ politics/43971737.html

On the international front, Obama has been quite successful and very well received by foreign leaders and cheering crowds, which we have seen before. Mending fences with Russia, making overtures to Iran, easing some restrictions with Cuba, and proposing new arms control talks was refreshing news, and several heads of state have noted that Obama simply winning the presidency has done so much to restore America's image. But so far it's been more words than deeds; Europe has not cooperated much with fiscal/monetary policy or Afghanistan, and there has been no progress towards consensus on Iran or peace in the Holy Land. While no one expects Obama to solve global problems overnight, I think his first steps have been exaggerated. After eight frustrating Bush years, I think any new American leader would be celebrated and welcomed abroad, short of Sarah Palin.

One of his first actions as president was to sign the closing of Guantanamo Bay prison. But declaring it so is different than getting it done, and very few detainees have been transferred or tried. Plus Bagram Air Base in Afghanistan may become our new Gitmo, and there have been testimonials of abuse as well. Obama's near silence over the recent Israeli siege of Gaza (that the UN and other aid groups vociferously condemned) spoke volumes to the Muslim world, regardless of his pledge that the US is a friend. And lastly, Iraq is barely on his radar, even though it was a prominent aspect of his early campaign identity. Violence has spiked recently, and he may find it difficult to adhere to his pledge to bring all combat troops home by the end of 2011.

http://www.newsweek.com/id/168022
http://www.salon.com/opinion/feature/2009/03/09/bagram/index.html?source=rss

He has performed reasonably well considering the circumstances, but I feel that your writer's unwavering praise is somewhat premature and misleading at this point.

http://www.npr.org/templates/story/story.php?storyId=103540635

Saturday, April 18, 2009

Obama and CIA torture immunity


"This is a time for reflection, not retribution." - President Barack Obama

"Justice deferred is justice denied." - Congresswoman Diane Watson, at the 50th Anniversary of Brown vs. Board of Education, a ruling that allowed blacks like Watson and Obama to get a quality education that would allow them to one day run for public office.
http://news.yahoo.com/s/ap/20090417/ap_on_re_mi_ea/ml_torture_memos_reaction
http://www.kqed.org/epArchive/R904170900 (first 10 minutes of the interview on this subject)

So Obama and Holder have decided to declassify the CIA memos that describe the torture techniques used during the interrogations of the Bush years. Some have praised that move. This shows that they are all about decency, change, and transparency, right? Well, the CIA has been fighting the release of these documents to the public for years, and ostensibly, Obama has only decided to finally do it because the ACLU lawsuit on the matter looks surely to prevail.

But even worse, he has declared immunity for the CIA personnel who participated in the tortures. He said that those people were patriots who were trying to protect America, and were given assurances by Bush's Justice Dept. that what they were doing was legal. But the same can be said of Nazi concentration camp guards. Did the Nuremberg Commission buy that excuse? They were following orders, they were assured it was ok, they did it for their country.

But the rules of war (and US military rules) state that soldiers have a DUTY to disobey unlawful orders. I don't know about CIA regulations, but many of the jailers and torturers were soldiers borrowed by the CIA for unofficial duties. If someone waves a paper in front of your face saying it's ok to execute the prisoners in your care, what will you do? Hopefully you will disobey because you know that it's wrong and others will punish you when the dust settles, even if at the moment your superiors reassure you that it's legal. But torture is different than execution, right? Is it? Detainees have died in US custody due to "harsh interrogation" that was supposed to be non-life-threatening. Sleep deprivation, stress positions, exposure to severe cold, and beatings with blunt objects don't leave visible damage, but the trauma killed several detainees with health ailments. They could even kill healthy people. At least 3 Gitmo detainees committed suicide, either out of desperation for their predicament, ideological conviction, or a coverup for murder. So when a jailer is ordered to do certain things to a detainee that he is assured are legal, and the physical reaction by the detainee is urination, screaming, vomiting, and even unconsciousness - do you continue as if everything is kosher? Not once do you feel that as a US serviceperson and conscientious citizen, you have the obligation to question whether it is right? Not once as a human do you stop and wonder why you have to cause so much pain to a defenseless stranger (who hasn't even been charged with a crime and has not seen any evidence against them), and whether such brutality is even helping national security? People who didn't stop to ponder those questions are criminals; there's no way around it Obama.

http://www.laprensa-sandiego.org/archieve/may21-04/disobey.htm
http://www.pubrecord.org/torture/677.html?task=view
http://www.truthout.org/article/three-guantanamo-detainees-die-suicides-army-says

The world still looks up to us for moral leadership and social justice (I have no idea why). What kind of message does this send? How can we protest Darfur atrocities, or journalists detained and tortured in Iran? How can we mend fences with the skeptical, angry Muslim world? And beyond that, how do we encourage them to reform politically and respect the rule of law, when we are exonerating the criminals among us? At least jail a couple of Company slackers who had poor performance records anyway, and force some spooks to resign as early retirement with a nice pension. Do something superficial at least, but don't just try to sweep it under the rug as if nothing is wrong. Obama said he would respect the opinion of his AG on the matter, but that is a cop-out. Obviously prosecuting CIA torturers is a legal nightmare. It's probably a tougher challenge than prosecuting terror suspects. Most of these crimes happened years ago overseas, and evidence is shaky at best (remember how the CIA admitted to destroying hours of interrogation and torture videos?). The chain of command is not evident. Well, I'm not expecting convictions and speedy justice, but at least do a little digging around. If the DoJ went after allegedly corrupt US legislators with so much zeal (and made plenty of stupid errors along the way), then I think we can at least try to build some cases against petty CIA torturers, if not the ex-leaders who deployed them. But politics win the day again, and Obama doesn't want to appear that he is on a "partisan witch-hunt", fearing that the GOP may circle the wagons and further impede his ambitious economic recovery efforts.

Obama on the campaign trail, April. 4, 2008:

What I would want to do is to have my Justice Department and my Attorney General immediately review the information that's already there and to find out are there inquiries that need to be pursued. I can't prejudge that because we don't have access to all the material right now. I think that you are right, if crimes have been committed, they should be investigated. You're also right that I would not want my first term consumed by what was perceived on the part of Republicans as a partisan witch hunt because I think we've got too many problems we've got to solve.

So this is an area where I would want to exercise judgment -- I would want to find out directly from my Attorney General -- having pursued, having looked at what's out there right now -- are there possibilities of genuine crimes as opposed to really bad policies. And I think it's important-- one of the things we've got to figure out in our political culture generally is distinguishing betyween really dumb policies and policies that rise to the level of criminal activity... I think a basic principle of our Constitution is nobody above the law -- and I think that's roughly how I would look at it.
http://www.philly.com/philly/blogs/attytood/Barack_on_torture.html
http://www.salon.com/news/feature/2008/08/04/obama/

I think it should be obvious to a law professor that you don't know if a crime has been committed unless you investigate first. So investigate instead of sweeping it under the rug! Both Obama and Holder have been quoted proclaiming unequivocally that waterboarding is torture. Warterboarding was a sanctioned technique in the declassified CIA memos. Torture is illegal according the US Army Field Manual, Geneva Conventions, and many other codes. "No one is above the law". "Genuine crimes as opposed to really bad policies?" Well torture is a really bad policy as well as a genuine crime, and no one is above the law, right? Even the CIA. But I am sure Obama and Co. don't want to piss off the spooks, whom they will need to help defend America, assist our allies, and win our overseas wars. Obama already nominated an outsider to head the CIA, probably insulting the senior staff who were looking for a promotion. He doesn't want to hurt morale any further, even at the cost of justice.

Friday, April 17, 2009

Goldman Sachs TARP payback


http://www.npr.org/templates/story/story.php?storyId=103122382
http://en.wikipedia.org/wiki/Goldman_Sachs
http://www.marketwatch.com/news/story/story.aspx?guid=%7B18220CBF%2D2FAB%2D4943%2D9693%2D0336B2D16A01%7D&siteid=rss

"Clearly we have created banks that are too big to fail; should we be asking if they are also too big to exist?" - Simon Johnson

There was an interesting interview on Fresh Air yesterday with Simon Johnson, the chief economist at the International Monetary Fund during 2007 and 2008. He is a professor at MIT's Sloan School of Management. He raised some interesting points about the bank bailout and the concerns over the Goldman TARP payback news. He also wrote a piece in The Atlantic describing the ways that the financial sector asserts its dominance over Washington, often at our expense.

http://www.theatlantic.com/doc/200905/imf-advice

Goldman (stock was near 200 before the crash, hit a low of 45 in Dec., and now is back to 120) claims that it took $10B in TARP money last year because the gov't twisted its arm - Treasury wanted to give aid to healthy banks as well, so that it wasn't obvious to the public which banks were the most troubled, in order to head off bank runs. Goldman claims it didn't really need a rescue, and now like Wells Fargo they are doing fine, so they want to repay their TARP loan. They want to do this to unfetter themselves from all the TARP-associated restrictions, namely compensation limits. With their competitors struggling, Goldman thinks it will be able to attract the top talent during this recession, so that they will be better poised to clean house once the economy rebounds. Basically they want to stack the deck, even if it puts the overall bank recovery and TARP program at risk. With the entire system still near the precipice, old habits die hard for greedsters like Goldman.

But TARP rules state that it is the GOVERNMENT, not the banks, that makes the final call about how and when institutions pay back their TARP loans. So this may become a showdown between the "bank oligarchy" and the Federal Government about who calls the shots during this precarious process. But in Goldman's case, it's more complex. Some think that the Feds would love to get Goldman's $10B returned, because it validates their bailout efforts and demonstrates that the financial industry may be on the mend. Also Geithner will have a fresh $10B to dole out to others. Seems good, right? Well, $10B is a drop in the bucket compared to the trillion dollars Bush/Obama have already injected into economic recovery efforts. More critically, if Goldman returns its loan to show that it is doing well, what does that say about other banks that don't? Will the public assume the worst about them? Even relatively healthy banks may not plan to repay TARP loans in the next 12 months, but now they may feel pressured to accelerate their plans, which may not be beneficial to their institution, clients, and shareholders. But to be fair, Goldman is not the first to try to repay its federal loans; 6 others banks have already done so, and others are considering it, though they're small regional banks and not household names with global influence like Goldman.

This pre-emptive strike is a big middle finger from Goldman to its competition... and to the gov't/taxpayers too. Many critics think that the Feds have already bent over backwards to help Wall Street. You'd think the least the banks could do is hold up their end of the bargain and play straight with us. Nope. Obama had to practically beg them to even accept conditional bailouts (with pay limits), and throw in huge incentives/guarantees for them to offer up their "troubled assets" to investors through the Geithner plan (many banks are still mulling it over). Trying to cover their own asses, the banks have fought us every step of the way, which has only worsened the financial crisis and delayed recovery. And now they have the hubris to think that beggars can be choosers. If the Feds let Goldman have its way now, it will show the public (and other banks) who's boss, as well as cast doubt on the gov'ts ability to better reform and regulate the financial sector in the future.

But we really shouldn't be surprised. Goldman is an investment bank, but during last fall's crash, it applied to become a bank holding company (like Citi and BofA), just so they could be eligible for Federal Reserve assistance. Morgan Stanley did the same, so now actually none of Wall Street's historic i-banks exist anymore. But Goldman is not a bank, it's a risk-taking brokerage house. Just because it bought a few struggling boondocks community banks, doesn't mean it should enjoy savings and loan status. Also, it's hard to argue that Goldman was healthy all along and just took TARP to be a team player. $13B of the initial $80B that went to help AIG meet its debt underwriting obligations went to Goldman.

We have discussed the "revolving door" between Congress and lobbyists, but what about the r-door between Wall Street executives and financial regulators? Clinton's Treasury Sec. Robert Rubin, W's Treasury Sec. Hank Paulson, Geithner's chief of staff, the current head of the CFTC, and others in government are ex-Goldman employees. There is no way they aren't getting preferential treatment from Washington. Oh, and did I forget to mention that Goldman was Obama's #2 campaign donor?

The American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. The banking-and-securities industry has become one of the top contributors to political campaigns, but at the peak of its influence, it did not have to buy favors the way, for example, the tobacco companies or military contractors might have to. Instead, it benefited from the fact that Washington insiders already believed that large financial institutions and free-flowing capital markets were crucial to America’s position in the world.

Big banks, it seems, have only gained political strength since the crisis began. And this is not surprising. With the financial system so fragile, the damage that a major bank failure could cause—Lehman was small relative to Citigroup or Bank of America—is much greater than it would be during ordinary times. The banks have been exploiting this fear as they wring favorable deals out of Washington. Bank of America obtained its second bailout package (in January) after warning the government that it might not be able to go through with the acquisition of Merrill Lynch, a prospect that Treasury did not want to consider.

-Simon Johnson

Wednesday, April 15, 2009

Bank hysteria misplaced, equal justice for all?


A couple points for thought:

1) Is the bank crisis mostly imaginary, due to people's hysteria and exploiting panic?

The comments below are from a CNBC banking analyst, made before the good news about Wells Fargo and Goldman Sachs came out.

http://seekerblog.com/archives/20090325/richard-bove-hysteria-about-banks-financial-condition/
In the last 3 months of 2008 depositors put $100 billion per month into new bank deposits - deposits which cost the banks half the interest rate of a year ago. 98% of loans are paying interest and principle. 97% of loans are also current. Home equity loans - most people think they are awful, no longer supported by real estate equity, etc. But the facts are that only 1.6% of home equity loans are non-performing. Almost all of the banks have positive cash flow - how can they go out of business given the cash flow. Exceptions are Citigroup and In Q1 - 2009 banks are going to show an operating profit. Loan losses are going to go up in credit cards and commercial real estate. But so far the loan losses are not enough to make the banks unprofitable. But note that in Q4 only .25% of CRE loans were in default (per the FDIC). That default rate is increasing.

The Financial Times and other economists don't seem to like the Obama-Geithner toxic asset plan either:
http://www.ft.com/cms/s/0/b3e99880-1991-11de-9d34-0000779fd2ac.html?nclick_check=1
http://www.nydailynews.com/opinions/2009/03/25/2009-03-25_the_new_geithner_plan_is_a_flop.html

2) Equal justice for all?
http://www.tcpjusticedenied.org/
A legal group recently conducted a very extensive analysis of indigent defense (court-appointed public defense for people who cannot afford any better) in all 50 states, in order to evaluate whether the Sixth Amendment ("In all criminal prosecutions, the accused shall have the assistance of counsel for his defense") is being carried out. Counsels do get assigned, but if they are unable to provide adequate defense (due to excessive workload, poor skills/resources, and other disadvantages vs. prosecutors), then what is the point? The actual report is attached.
"You should not have a better shot at justice, a better opportunity for an adequate defense, depending upon who arrests you in this country or where you were when you were arrested or what court system a defendant winds up in," [co-author] Tim Lewis said. "This is a basic constitutional right." [...] The report goes into detail about the wide range of ways public defender systems fail poor defendants. Sometimes people don't get lawyers at all. Other times they get a lawyer who is so overworked and underpaid that there's no way the accused can get a real defense. -NPR

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On the Geithner plan, yeah, it looks like a massive wealth transfer from my tax-paying pocket to a bunch of assholes in the finance industry. Steiglitz wrote a NYT editorial attacking it as ersatz capitalism a couple weeks ago: http://www.greenchange.org/article.php?id=4209

Krugman had a fairly interesting editorial last week as well about making banking boring: http://www.nytimes.com/2009/04/10/opinion/10krugman.html The essential argument is that too many smart people are spending too much time pushing money around, rather than actually going out and building something. There's been a huge amount of backlash from the hardcore finance propellerheads arguing Krugman's data, and I honestly don't know enough about it to evaluate the strength of his empirical claims. But I remember being at Stanford and seeing a depressingly large number of really smart people going off to push money around on the plate in finance, rather than going into an industry where they could actually build something useful (and let's not even get started on the consultants).

There's this guy who went back through historical records looking at the percentage of Harvard's graduating class of MBAs each year and correlating that number with the stock market. Essentially what he discovered is that the percentage is negatively correlated with the long-term performance of the US equity market. That is, when ~10% of HBS grads are going into finance, the stock market goes up. When ~30-40% of HBS grads are going into finance, the market's headed for a big correction. It was in the high 30's for each of 2006 and 2007, as the market headed towards the crash. Here's the historical reports: http://www.soiferconsulting.com/soifer_consulting_articles.htm And here's a somewhat tongue-in-cheek reporting about it: http://www.slate.com/id/2109982/ It makes an interesting argument for regulating finance to be a lot less interesting, forcing those big brains can go do something more useful.

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On the equal justice thing ...

First off, clearly the way indigent defense is handled in this country is shameful, and should be fixed. That said ..

I read over their recommendations for state and federal governments, and they all essentially seem to come down to "put more money into public defense." I think that's probably a reasonable thing to suggest, given the problems. But looking at their reporters and committee, the vast majority of whom seem to be deep in the legal profession, I can't help but wonder if this is really the most efficient way to solve this.

I'm not a lawyer, nor do I play one on tv, so I'm mostly full of it here. But it seems like some part of the reason that rich people get a better defense than poor people is because of the unbelievable complexity of the law. The advantage the rich have is not that they can actually bribe the court into a better settlement (I mean, ignoring the corruption cases, which are admittedly embarrassing but I think relatively unrepresentative of the overall problem). It's that they can hire a huge team of people to go through and look for loopholes: lawyers to look for weird holes in the law, investigators to look for weird holes in the evidentiary process (I heard that phrase on tv once!), etc.

Seems like the most efficient solution is to simplify the law. If these processes were easier to work through, without so many crazy holes and trapdoors and so forth, it might make it a lot easier to provide even representation to everyone. Some of that complexity is useful, but we need to start acknowledging as a nation that the complexity also has a huge adverse effect on our ability to build fairness. Admittedly, though, it would force a lot of lawyers to go find something useful to do with their big brains, so it seems unlikely we'll be seeing that recommendation from any lawyerly review panels.

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Thanks for the comments and I agree. Yes it would be good to kind of de-incentivize interest in the financial sector and creative investing. I mean, we'll always need fund managers, brokers, and such, but maybe in a more reasonable scale. What can we do though - salary limits? I think 900 people at Goldman Sachs had over $1M compensation last year. They are famous for high pay, so obviously debt-ridden Ivy League MBAers would want to go there (also it's the best place to try to take over the world). It would be better if we could attract more talent towards more tangible innovative pursuits, maybe even education. I guess it does take some creativity and intellect to play these futures markets and move debt around to make money. But yeah, it's clearly not real LABOR. I haven't had a chance to look at your links yet but the correlation is hilarious. Too bad we don't have enough data points to track how HBS US presidents affect the econ, but the first one doesn't look good.

Re: legal fairness - for some problems, throwing money at it can help a lot. Clearly we need to invest more in improving public defense. But if you're talking about re-writing the laws to make them less complex, it's a much bigger challenge than the tax code. Presidents have talked about de-mystifying the tax code for decades, but it's only gotten MORE complex. Heck the recent Obama stimulus bill created 300 changes to the tax code. So you are right that the privileged are better poised to exploit complexities and loopholes to their advantage, yet the long arm of the law comes down hard on lower-income recreational drug users or Earned Income Tax Credit abusers. But getting Congress to do anything large scale is obviously tough.

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Oh, so I guess in my excitement I missed explaining what I meant by limiting how interesting finance is and how many people get into it. I honestly don't believe that limiting pay really works ... it usually just forces people to get more creative about how they pay (like back when software firms didn't account for stock options as an expense, though clearly that was how they were paying their people). I think the fix is just more serious regulation of the finance industry: putting limits on how creative you can get with derivatives and related instruments, forcing these instruments to be standardized and over the counter, adding more restrictive capital requirements (and making the requirements counter-cyclical), forcing the markets to be more transparent, blah blah. Krugman's editorial is more detailed about it.

And yeah, I agree that you need more money in public defense. But when I see a report written by a bunch of lawyers which reaches the conclusion that the government should pay a lot more money to the legal profession, it sets off a big red siren in the back of my brain :)

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Yeah you're right about the compensation. Even with the "pay limits" imposed on bailed out bank execs, I am sure they are getting other forms of compensation. But just as people get creative about pay, they are doubly creative on derivatives and exotic investment schemes. It seems that the schemers are always one step (or many leaps) ahead of the regulators. But maybe after learning the lessons of this bubble, coupled with increased transparency & restrictions, it can only get better.

Sure lawyers griping about pay looks silly, but of course there is a wide range of pay in the legal profession. Public defenders right out of school get $45k, and 5 years exper. get $61k. Their associate DA opponents get at least $80k in most metro areas. A "general attorney" gets $99k on average in the private sector, and we know some can net much more. I suppose I should use the physician analogy - who would want to be a GP when a radiologist specialist can make 4X more money while maybe even less work? If we can't attract bright people to the dirtier, less glamorous jobs in law or medicine, then those areas will continue to underperform.

http://www.payscale.com/research/US/Job=Public_Defender/Salary
http://www.indeed.com/salary/Attorney.html

Sunday, April 12, 2009

Gun show loophole


"60 Minutes" had a great segment on the gun issue tonight, and a lot of extra info on their site:

http://www.cbsnews.com/stories/2009/04/09/60minutes/main4931769.shtml

Even as the stock market has plummeted, shares in Smith & Wesson have nearly quadrupled since November, and sales of guns are going through the roof. [...] Since November, the number of background checks nationally has jumped over 30 percent compared to last year. [...] People are stockpiling bullets. Three hours into [a gun] show, empty stock trays piled several feet high. Fear of Obama has actually created a national ammo shortage. -CBS

Based on 2002 stats, CA had 9.7 gun deaths per 100,000 residents. I wasn't sure if that was low or high, but you can imagine CA would have a lot of violence due to the gang conflicts in urban areas, as well as the drug trade on the border. Well, it turns out that ALL the Southern states have death rates that are higher. This of course correlates with their more lax gun purchasing laws.

They used VA as a case study, since it was home to the Cho-VT mass murder, and it has a bizarre gun show loophole. It is PERFECTLY LEGAL for a private citizen, who is not a registered gun dealer, to sell you or I an assault-style weapon at a gun show without a background check. 30 other states have the same loophole. Supposedly buyers are required to furnish an ID, but since these transactions go unnoticed/unregulated by the gov't, even that cannot be enforced. In an effort to expose and close this loophole, the brother of a VT victim bought an assault weapon at a VA gun show and refused to show his ID when asked. The seller said that was fine if he would throw in another $50 to the sale price. So as you would expect, people from many northern states (with stricter laws) migrate to VA gun shows to buy under these lax laws. Southern guns have been implicated in many crimes up north as well. Even with all the political momentum and public outcry after the VT slayings, the VA legislature failed to pass a law to close that loophole by 2 votes. The pro-gun side argued that Cho did not buy his weapons through this loophole, but the other side fears that the next Cho will.

Supposedly the NRA types are patriots who love America and will defend our freedoms (to bear arms). But why do they support a system where Mexican cartels or Al Qaeda terrorists can infiltrate the US and buy assault weapons no questions asked? Do they count on the diligence/racial profiling of the seller to refuse a brown-skinned buyer? And I guess we can't count on Washington to make much headway, because they are either pre-occupied with the economic crisis, or bought by the NRA. Many of the Dems who won seats from the GOP in the last 2 elections are just as pro-gun, if not more, and accepted contributions by the NRA. 60 House Dems wrote to Obama asking him to reverse his pledge to make the assault weapons ban permanent. But regardless of what Obama wants to do with this issue, it's clear that he won't have Congress' support in the forseeable future.

Tuesday, April 7, 2009

Taleban video of girl getting beaten in Pakistan


http://www.timesonline.co.uk/tol/news/world/asia/article6030741.ece
http://news.bbc.co.uk/2/hi/south_asia/7907070.stm
http://www.amnestyusa.org/document.php?id=ENGNAU200902129412&lang=e
http://www.npr.org/templates/story/story.php?storyId=102821443

Maybe you've heard the buzz surrounding a cell video of a teen Pakistani female getting flogged in public for allegedly going out in public with a male who was not her husband. She is being lightly held down by 2 men, and whipped on the buttocks with a small rope by a skinny, bearded man (maybe a cleric or tribal elder?). Dozens of onlookers are nearby as she pleads for mercy. In the end, she gets to her feet (on her own power), and is led away by a man, maybe her husband. The video was purportedly filmed in Swat Valley, a tribal region notorious for Taleban rule, some violence, and lack of central government influence. Over 1,200 people have died there since anti-government fighting intensified in 2007, at the hands of the Taleban, Pakistani Army, or US Air Force. Over 100,000 poor, uneducated civilians (people overlooked by their gov't since the founding of Pakistan) have been displaced as well. Maybe some even went to fight in Afghanistan or India, maybe not. But is it all worth it for 15,000 army troops to hunt down an estimated 3,000 militants there (out of a population of 1.5M)? Amnesty International says yes, because the Taleban have closed down over 170 schools (mostly girls' schools) and committed numerous human rights violations. But at what cost do we want to de-Talebanize Pakistan's tribal belt?

In fact, currently Pakistan has more or less agreed to a recent truce with the Swat Taleban, which hinged on whether President Zadari can authorize some amount of Shari'a as official law there. You might think that the Taleban want this in order to impose 12th Century society on the people there, and it may be partially the case. But actually their main objective is to create rapid Islamic courts in those communities to expedite their form of justice, since they are pretty much cut off from mainstream Pakistan and the legal system works at a snail's pace for them, if at all. This push for Shari'a is nothing new either, and even Benazir Bhutto's regime in the 1990s agreed to it in a lesser extent. It's just taken that damn long for the innefective government to do anything.

Getting back to the beating video... it made such waves among the secular Pakistanis that the Supreme Court (and the newly reinstated Chief Justice) may investigate. Thousands of Pakistanis took to the streets to protest the Taleban. Clearly the video content was offensive, but maybe we should get real here a second. Similar material is posted on YouTube daily by Westerners who supposedly are educated, free, peaceful, and respect human/women's rights. Nurses organize fights among handicapped patients, high school girls brawl with each other, and there have been 4 mass shootings in as many weeks. That Pakistani girl, absolutely not a criminal by our standards, did something that she knew to be forbidden and was publicly beaten/humiliated for it. I am not condoning it, but the lashing was tame and will not leave permanent damage, as far as I can tell. Women are getting killed in other Islamic nations for marital "misconduct" (our allies Turkey, Iraq, Saudi Arabia, and even at home in the US: http://www.comcast.net/articles/news-general/20090216/NEWS-US-BRIDGESTV-MURDER/). So the outrage is a bit disproportional, yet I am sure that right-wing media will relish another opportunity for Islam-bashing.

In the rural, poor, forgotten areas of our country (America's Swat), women and children are getting abused every day. If mighty, just America cannot prevent those injustices, how can dysfunctional Pakistan? Worldly, secular Pakistanis took to the streets to support that poor girl, but where was their outrage when their army's shells or US bombs were slaughtering their innocent countrymen in the mountains? Is it because those victims were ignorant Muslims, so they don't count? And Defense Sec. Gates just announced that he is recommending to Congress to change the Pentagon budget to spend more on drones and less on missile defense. Probably a more efficient use of resources, and those drones may help our fights in the Middle East - but they will surely kill innocents and promote the cowardly/uncaring image of the US military to the hearts and minds that we are supposedly attempting to win over. So how can we call them barbarians for lightly flogging a girl, when we and our Pakistani allies are displacing whole villages and killing children?

http://english.aljazeera.net/news/asia/2008/09/200898164428829256.html

Some skeptics suggest that the cell video may have even been staged, or the timing/distribution of it meant to persuade Pakistanis to reject the peace deal with the Swat Taleban. The West has already expressed much displeasure over the peace accord. We worry that if you give the Taleban an inch, they will take over that fragile nuclear nation. But history shows it's not the case. Islamists won recent elections in Palestine, Lebanon, Nigeria, and Iraq, and apart from the side-effects of war, none of those nations became disseminators of religious extremism. In fact it was the opposite for Nigeria (see Newsweek article at end). Congress is criticizing Obama's plan to support Pakistan (in order to help stabilize Afghanistan) because it doesn't go far enough to kick them in the pants so they take care of their "Islamist problem". But as we know from countless Cold War examples, it's risky to force others to fight our fights, or micromanage them to fight the way we want them to. Furthermore, it's folly to think that we can totally get rid of religious extremism, just as it's folly for Al Qaeda to think it could ever topple the West and establish a global caliphate. Ideology is usually folly, but it is a part of humanity, and it is futile for one ideology to attempt to exterminate another. Sure in a context vacuum it would be great if we could just magically crack down on extremist militants and human rights abusers with the stroke of a pen. But people who outlaw music and beat their wives for talking to another man are not our enemy like Osama is.

Unbiased religious freedom is a core American value, supposedly. As we all know, people have killed and died for religion for millennia, and will continue to do so. If an outside force tries to repress or take away a people's faith, no matter how "backwards" or "dangerous" that faith may seem to us, there will be violent repercussions. Sometimes the cost is worth it, other times it's not, especially when "victory" is so vague and maybe impossible. In that sense, the Obama White House (and our society) have not yet gotten past the intellectual ball and chain of Bush's War on Terror ideology. Look what happened to Egypt's Sadat when he tried to crack down on the Islamic Brotherhood (a peaceful political rival), maybe at the behest of the West. Dictator-general Musharraf, with carte-blanche Bush support, couldn't defeat the Pakistani extremists, so I doubt his corrupt, squabbling, civilian successors will either. It's like the Jenga game. You need to make small, delicate changes slowly, or the whole structure comes crashing down. The more you rush, the harder it gets. And the more you take, the harder it gets to take more. So we should tread with real caution. But of course US politicians work on the election cycle, and may not have the cultural sensitivity and patience for a drawn-out effort to reduce Taleban influence promoting global Jihad. They want a quick-fix, like de-Ba'athification - and we know how that turned out.

We must distinguish between violent Islam (that isn't even religious actually, but uses Islam as a pretense and motivation for bloodshed) and the fundamentalist Islam that may repulse our sensibilities, but probably won't cause much geopolitical instability. At least no more than similar Western religious extremism like Hasidic Judaism, Koresh-style cult Christianity, and Scientology. There is a cultural class struggle that underlies this religious struggle though. Most nations that have Islamist insurgency problems are failed states and/or ruled by rich, corrupt dictators. These dictators and their affiliates want to hold onto power at all costs, so of course they oppose any grassroots Islamic challenge, and will leverage petrodollars or become puppets of the West if it helps their cause. It's no coincidence that many terrorists are Western-educated and from privileged backgrounds, just like the dictators they fight against. They've seen the "free world" creeping in, and the difference is they prefer the fundamentalist Muslim alternative instead of embracing/accepting the West. I'm not judging what is wrong or right, but just stating a possible explanation. As one Pakistani said on NPR, in his view the Taleban are the "new Bolsheviks", trying to help the poor and restore some moral decency from the decadent, phony-Muslim elites. Of course morality and righteousness are very subjective. But people are not that gullible - Pashtuns support gangsters and despots in the Taleban because their own government (and the West by extension) has an even worse track record with them. Same goes with Palestinians and Hamas/Fatah. But that doesn't make them terrorists or accessories to terrorism. In fact they're pragmatists, and the Islamic extremism just tags along as negative baggage. They believe in food for their families; not 40 virgins in a martyr's paradise.

It's confusing when we condemn some fundamentalism but tolerate others. It's hypocritical when we commit human rights abuses but seek to punish Muslims who do the same - and only the Muslims in unfriendly regimes (i.e. China and Saudi get a pass but Sudan and Iran do not). Of course there are varying degrees of criminality, but it's better if we can stay above the fray. And Obama's message that America is not at war with Islam gets droned out by the furor over our air strikes and such.

http://www.newsweek.com/id/187093

Few people in the [Swat] valley would say that the current truce is their preferred outcome. In the recent election, they voted for a secular party. But if the secularists produce chaos and corruption, people settle for order.... The Pakistani government is hoping that this agreement will isolate the jihadists and win the public back to its side. This may not work, but at least it represents an effort to divide the camps of the Islamists between those who are violent and those who are merely extreme... The Predator strikes have convinced much of the local population that it's under attack from America and produced a nationalist backlash. A few Qaeda operatives die, but public support for the battle against extremism drops in the vital Pashtun areas of Pakistan. Is this a good exchange?
-F Zakaria, Newsweek

Saturday, April 4, 2009

Mass shootings, politics, and the NRA


http://www.nydailynews.com/news/2009/04/04/2009-04-04_who_is_jiverly_voong_aka_jiverly_wong_co.html

Jiverly Voong/Wong - said to be Viet but a strange name - probably a pseudonym. I don't know when we will finally tire of these attacks enough to force our leaders to stand up to the NRA and regulate arms better. Just this year (and we're only in April) more people have died from mass shootings than the year of Columbine. We don't have to be Germany, but I don't think it's a stretch to make it harder to own a gun than obtaining a driver's license.

Despite all the attacks, the Obama admin. (despite earning an "F" rating from the NRA's PAC) is too gutless/preoccupied to even challenge Congress to restore the Brady Bill (assault weapons ban). I have no idea why the NRA is so powerful, but they even have ultra-liberal Pelosi from SF (a city that tried and failed to ban handguns in a recent vote, similar to the DC law that was struck down by the High Court last year) eating out of their hand.

http://thehill.com/leading-the-news/some-obama-promises-get-punted-2009-04-02.html
http://thehill.com/leading-the-news/reid-joins-pelosi-in-opposing-weapons-ban-revival-2009-02-26.html

The administration official said the White House has tried at every turn to fulfill the five-day comment promise, but some timing issues have surfaced on select legislation. The president has not publicly broken his promise to reinstate the assault-weapons ban, which is strongly opposed by the National Rifle Association. Still, the administration has taken a hands-off approach.

When Attorney General Eric Holder discussed the reinstatement of the ban in late February, the White House deferred comment to the Justice Department. Newsweek reported recently that White House aides subsequently told Justice Department officials to drop the issue. Even if Obama were to pursue the gun ban, it doesn’t have the votes to pass Congress.

-TheHill.com
So if we can't even stop semi-automatic military weapons from sale in some states, I doubt we can do much on concealed handguns. The GOP said that in the War on Terror, sometimes civil liberties have to be curtailed in the name of public safety/national security. Same goes for gun violence then; it may be our Constitutional right to bear arms, but not at the expense of public good. And it's getting even worse when thousands of American arms are being smuggled into Mexico to fuel their drug violence that has claimed thousands. Legitimately or not, our government and its affiliates have given/sold arms to conflicts around the world too, sometimes arming both sides. The US has jostled with Russia for top arms dealer status since WWII.

NRA background:
http://www.msnbc.msn.com/id/29953973/
http://www.democracynow.org/2008/6/27/supreme_court_strikes_down_dc_handgun

Gun control activists say they are baffled by the sway the gun lobby has over Congress. They argue the NRA no longer dictates election outcomes and that the group inflates its own importance.

"They operate on the principle of fear. They're trying to hold some mythical power from the early '90s over the heads of leadership that I think is totally irrelevant to what's going on today, but still has some long legs," said Paul Helmke of the Brady Campaign to Prevent Gun Violence.

Helmke said NRA's recent efforts to demonstrate its clout are partly "a sign of desperation. They realize this is probably their last gasp in terms of trying to be the force that they used to be."
-MSNBC.com

Friday, March 27, 2009

Aid to Israel


"The military rabbinate [religious wing of the Israeli Army, like chaplains] brought many magazines and articles with a very clear message: 'We are the Jewish people, a miracle brought us to the land of Israel, God returned us to the land, and now we have to struggle so as to get rid of the gentiles who disturb us from conquering the holy land.' All the feeling throughout all this operation of many of the soldiers was of a war of religions," he said. "As a commander, I tried to explain that the war is not a war of Kiddush Hashem [the sanctification of God's name, including through martyrdom] but over the stopping of the launching of the Qassam rockets."
- Israeli soldier identified as "Rahm" on the recent Gaza war, interviewed by the Washington Post

http://www.washingtonpost.com/wp-dyn/content/article/2009/03/20/AR2009032003463.html?wprss=rss_world

I know that every war has its ingrained religious dogma and nationalist propaganda, but give me a break. Since this controversy broke, some military rabbis have been reprimanded or given leaves of absence. And that's not all; Human Rights Watch and the IDF are conducting separate investigations into the use of white phosphorous munitions (used to illuminate battle areas at night, but can also rain down on people and burn their flesh) during the Gaza conflict. Using such materials in an urban zone is a war crime, and HRW has concluded that Israel is guilty. Peace activist and former IDF soldier Yehuda Shaul interviewed 20 soldiers who participated in Operation Cast Lead. "Some soldiers from some units who led this operation in the front, basically when they received the briefing, it was - guys, we're entering in, everything that moves, everything that is a threat, everything you are afraid of, you shoot," said Shaul. Needless to say, shooting indiscriminately is also a violation of the Geneva Conventions, though unfortunately it takes place in all wars. The Israeli government has dismissed Shaul's work as unconfirmed anecdotes.
The [Israeli] army says it's investigating, even as some Israeli soldiers are coming forward with their own accounts of what they describe as needless civilian deaths and highly permissive rules of engagement. Shaul says some of the soldiers he's interviewed also say they destroyed civilian property and homes, actions that seemed to have little or no tactical purpose or necessity. Some soldiers, he says, called it gratuitous and stupid. -NPR
http://www.npr.org/templates/transcript/transcript.php?storyId=102371101

Personally, I don't want my tax dollars financing such brutality and RELIGIOUS EXTREMISM. My own country engages in enough of that - we don't need to indulge others overseas. Ironically, the War on Terror is built on the premise that radical Islam is the most significant international security threat, yet we overtly or implicitly condone Zionist extremism? Obama seeks to increase foreign aid from $20B currently to $50B by 2012, but that may run into trouble in Congress due to the economy. Already they are looking to trim $4B in aid to try to pass the 2008 budget, but not sure how that affects aid to Israel (probably negligibly).

How is it that Israel receives 1/7 of all US foreign aid ($2.5-3B annually)? Israel's population is 7M; that is 0.12% of the wold's population. In comparison, Bangladesh and its 151M people get $50M. Unlike Israel, Bangladesh is one of the poorest nations on Earth, often hit by natural disasters, and has been peaceful with its neighbors since the 1970's. The per-capita difference there is 1,286-fold in Israel's favor. Speaking of per-capita, Israel's GDP PPP is $28K (#31 worldwide according to the CIA Factbook, ahead of Czechs and Saudis) and Bangladesh's is only $1.5K. Only 20 nations are pooer. I am not so naive to think that we give our foreign aid based on need, but some disparities are too ludicrous to ignore. But then again, I am sure that pro-Israel lobbyists in Washington vastly outnumber their Bangladeshi counterparts.

As part of with an initiative by then-Prime Minister Benjamin Netanyahu, the civilian aid has been steadily decreased over the course of the past 10 years, going from USD 1.2 million to being completely cancelled this year. At the same time military aid to Israel has increased from USD 1.8 billion to USD 2.4 billion.
-Yitzhak Benhorin, ynetnews.com, 2007

Since the founding of the Jewish State, they have received over $80B in US assistance (over half of that for their military, and the proportion is growing), which is over $10K for every Israeli alive today. And our federal government spends all that effort cracking down on "welfare moms" and Earned Income Tax Credit abusers? Plus it's not like they would be out in the cold without us. Since the Luxembourg agreement of 1952 and subsequent decrees, Germany has been giving substantial aid to Israel (like unofficial reparations for Nazi crimes). As of 1995, Germany has given over $26B directly to the state and people, as well as $94M in annual low-interest loans. They have a legal and moral responsibility to do so, but what is our reason?

There are poor people in Israel and some Arabs have had their homes demolished by the government. I have no problem helping them, but I'll be damned if some of my labor contributes to the sniping and shelling of innocents in Gaza for their "holy war". The lifeblood of war is money. I wonder how international conflicts would be affected if the US universally cut military aid to Israel, as well as other big recipients like Colombia, Egypt, Turkey, Saudi. And imagine how many Americans could be put to work or how many Africans could be fed/immunized with those billions.

http://www.vaughns-1-pagers.com/politics/us-foreign-aid.htm
http://www.hotpolitics.com/tax4israel.htm
http://www.ameu.org/page.asp?iid=97&aid=134&pg=1
http://philanthropy.com/news/government/7609/congress-may-cut-some-foreign-aid-money-from-proposed-budget

All this is not anti-Semitic; it's just fact.

Wednesday, March 25, 2009

Obama considering McCain health care reform


I am not qualified to evaluate the utility of taxing employer-provided health benefits, but what I do know is that it sucks to slam your campaign opponent for advocating a certain idea, then after you've won, find yourself compelled by circumstance to consider adopting that very proposal. But I guess when Congress is unreceptive to curbing tax deductions for the rich to pay for expanded health care, you have to consider even a revenue generation plan that is "so radical, so out of touch with what you're facing, and so out of line with our basic values" (BO, speech in Virginia, 10/08).

http://www.nytimes.com/2009/03/15/us/politics/15health.html?_r=2&hp
Administration Is Open to Taxing Health Benefits
By JACKIE CALMES and ROBERT PEAR
Published: March 14, 2009

WASHINGTON — The Obama administration is signaling to Congress that the president could support taxing some employee health benefits, as several influential lawmakers and many economists favor, to help pay for overhauling the health care system.

The proposal is politically problematic for President Obama, however, since it is similar to one he denounced in the presidential campaign as “the largest middle-class tax increase in history.” Most Americans with insurance get it from their employers, and taxing workers for the benefit is opposed by union leaders and some businesses.

In television advertisements last fall, Mr. Obama criticized his Republican rival for the presidency, Senator John McCain of Arizona, for proposing to tax all employer-provided health benefits. The benefits have long been tax-free, regardless of how generous they are or how much an employee earns. The advertisements did not point out that Mr. McCain, in exchange, wanted to give all families a tax credit to subsidize the purchase of coverage.

At the time, even some Obama supporters said privately that he might come to regret his position if he won the election; in effect, they said, he was potentially giving up an important option to help finance his ambitious health care agenda to reduce medical costs and to expand coverage to the 46 million uninsured Americans. Now that Mr. Obama has begun the health debate, several advisers say that while he will not propose changing the tax-free status of employee health benefits, neither will he oppose it if Congress does so.

At a recent Congressional hearing, Senator Ron Wyden, an Oregon Democrat whose own health plan would make benefits taxable, asked Peter R. Orszag, the president’s budget director, about the issue. Mr. Orszag replied that it “most firmly should remain on the table.”

Mr. Orszag, an economist who has served as director of the Congressional Budget Office, has written favorably of taxing some employer-provided health benefits and using the revenue savings for other health-related incentives. So has another Obama adviser, Jason Furman, the deputy director of the White House National Economic Council.

They, like other proponents, cite evidence that tax-free benefits encourage what Mr. McCain called “gold-plated” policies, resulting in inefficient and costly demands for health care and pressure on employers to hold down workers’ pay as insurance expenses rise. And, they say, the policy discriminates against those — many of whom are low-income workers — who do not have employer-provided coverage.

When Senator Max Baucus, Democrat of Montana, advocated taxing benefits at a recent hearing of the Finance Committee, which he leads, Treasury Secretary Timothy F. Geithner assured him that the administration was open to all ideas from Congress. Mr. Geithner did, however, allude to the position that Mr. Obama had taken as a candidate.

The administration’s receptivity to the idea is owed partly to the advocacy of Mr. Baucus, whose committee has jurisdiction over tax policy and health programs, and to support from Republicans. There is less enthusiasm among Democrats in the House, though the health debate is at an early stage and no comprehensive plans are on the table.

Also, Mr. Obama’s own idea for raising revenues for health care — limiting the income tax deductions that the most affluent taxpayers claim — has run into opposition not only from Mr. Baucus but also from his counterpart in the House, Representative Charles B. Rangel, Democrat of New York, who is chairman of the Ways and Means Committee.

Mr. Obama’s proposed limit on deductions would raise an estimated $318 billion over 10 years, or half of his proposed “health care reserve fund.” That is a fraction of the revenues that could be raised from taxing employer-provided health benefits.

In the campaign, Mr. McCain estimated that taxing all health benefits would raise $3.6 trillion over a decade — “a multitrillion-dollar tax hike,” one Obama advertisement said.

The Congressional Budget Office says that including health benefits in taxable income could mean $246 billion in additional revenue for a single year. Stopping short of full taxation, as Mr. Baucus and others suggest, would mean less new revenue.

The latest government figures, for 2007, show that 70 percent of the 253 million people with health insurance received at least some of their coverage through employers. Employment-based insurance covers three-fifths of the population under 65.

Those who want to tax benefits in whole or in part make two main arguments. They say the tax exclusion is a generous subsidy that insulates employees from the true costs of health care, leading them to demand more of it and driving up overall costs. Critics also say the policy is unfair because it favors higher-income people. “It’s too regressive,” Mr. Baucus said. “It just skews the system.”

But in a blueprint for health legislation that he issued last November, Mr. Baucus said taking the exclusion on health benefits out of the tax code would go “too far” and “cause widespread disruption in employer-based health benefits.” Mr. Obama has also said he wants to preserve employer-provided coverage. Mr. Baucus, in his paper, cited other options, like taxing benefits above some value, taxing only wealthy employees or both.

However the proposal is devised, advocates will not have an easy time selling it.

Republicans, like Mr. McCain and former President George W. Bush before him, tend to favor taxing the benefits to finance other incentives for people to buy their own insurance. But given Mr. Obama’s use of the issue in his campaign, Republicans are unlikely to support a change unless the president himself proposes it, a senior adviser to Senate Republicans said.

Many Democrats, especially House liberals, are opposed. “It’s a dumb idea,” said Representative Pete Stark of California, chairman of the Ways and Means Subcommittee on Health. “We have to maintain as much as we can of the employer payments.”

Administration officials often say they will not repeat the mistakes of former President Bill Clinton, whose plan for universal health insurance collapsed in 1994. But Frank B. McArdle, a health policy expert at Hewitt Associates, a benefits consulting firm, said, “If President Obama agrees to cut back the tax break for employee health benefits, he will risk repeating one of Mr. Clinton’s errors by disrupting health insurance for people who have it and like it.”

Some big businesses consider nontaxable employment benefits a tool for recruiting and retaining workers. The United States Chamber of Commerce opposes eliminating the exclusion on health benefits, but James P. Gelfand, senior manager of health policy, said the group had not taken a position on limiting it.

Organized labor, a pillar of the Democratic Party base, considers the benefits among the union movement’s historic achievements for the middle class. But a split could be developing between the manufacturing unions, which have negotiated rich benefit packages, and the growing service employees unions, which include many low-wage workers without generous benefits.

Alan V. Reuther, legislative director of the United Automobile Workers, said: “These proposals would represent a tax increase on working families. They would undermine good health care coverage.”

But at the Service Employees International Union, which was an early supporter of Mr. Obama, Dennis Rivera, the coordinator of the union’s health care campaign, said that while his organization was “predisposed not to agree to the taxing of health benefits,” he would wait to pass judgment. The union, Mr. Rivera said, wants to see how any tax changes fit into the overall effort to revamp the health care system. “We need to see the total picture,” he said.

Thursday, March 19, 2009

Dodd/AIG finger pointing


This Dodd/AIG business is becoming as convoluted and unhelpful as the Alberto Gonzalez attorney firings. More and more it appears that Dodd, although the beneficiary of big bank money for decades, was actually the "good guy" who pushed from the start for strict pay limits on execs from institutions who take bailout money (both future and retroactive). But it was Obama's Clinton-carryover economics advisor Summers and controversial Treasury pick Geithner, both with deep ties to Wall Street, whose offices pressured Dodd to include AIG exceptions in the bill.


http://www.salon.com/opinion/greenwald/

Regardless of who initiated what, the Obama White House's Bush-like rationale for toning down Dodd's pay limits was that they feared (a) it would discourage banks from participating in the bailout, and (b) a legal firestorm if they were to modify pre-existing private labor contracts. But the following experts on NYT suggest that excuse b ("the sanctity of labor contracts") is rubbish. Labor agreements get modified all the time without much outcry, especially involving labor unions.

http://roomfordebate.blogs.nytimes.com/2009/03/17/when-bonus-contracts-can-be-broken/

But now that the poop has hit the fan, the White House is pinning the blame on Dodd, and Obama "didn't know anything". So either the president needs to rein in his people, or he needs to level with the country.

--------
UPDATE III: I'm receiving email regarding the remarks Dodd made today on CNN in which he stated that, at the White House's insistence and over his objections, he agreed to include the pre-February, 2009 carve-out in the stimulus bill. Some of these emailers have suggested that Dodd's comments are at odds with what I wrote. They quite plainly are not.

The narrative I wrote here (and which Hamsher wrote in her post) both included exactly that sequence:

That was the exact provision that Geithner and Summers demanded and that Dodd opposed. And even after Dodd finally gave in to Treasury's demands, he continued to support an amendment from Ron Wyden and Olympia Snowe to impose fines on bailout-receiving companies which paid executive bonuses."

I explicitly wrote that it was Dodd who, after arguing vehemently against this provision, ultimately agreed to its inclusion. And the statement from Dodd's office that I quoted above included the same series of events ("Because of negotiations with the Treasury Department and the bill Conferees, several modifications were made, including adding the exemption"). That's exactly what Dodd said today on CNN.

The point was -- and is -- that Dodd was pressured to put that carve-out in at the insistence of Treasury officials (whose opposition meant that Dodd's two choices were the limited compensation restriction favored by Geithner/Summers or no compensation limits at all), and Dodd did so only after arguing in public against it. To blame Dodd for provisions that the White House demanded is dishonest in the extreme, and what Dodd said today on CNN about the White House's advocacy of this provision confirms, not contradicts, what I wrote.

UPDATE IV: From the CNN article on the Dodd interview:

Dodd acknowledged his role in the change after a Treasury Department official told CNN the administration pushed for the language.

Both Dodd and the official, who asked not to be named, said it was because administration officials were afraid the government would face numerous lawsuits without the new language. . . .

I agreed reluctantly," Dodd said. "I was changing the amendment because others were insistent."

It was the Treasury Department -- at least according to a Treasury official granted anonymity for the extremely compelling reason that he "asked not to be named" -- that pushed for the carve-out, and did so over Dodd's objections. That was the point from the beginning. That's precisely what made it so outrageous that the administration was trying to blame Dodd for a provision which Obama's own Treasury officials advocated, pushed for and engineered.

Anyone who doubts Dodd's opposition should just go read the above-excerpted articles which reported contemporaneously about the dispute Dodd was having with the White House over the scope of the compensation limits. For obvious reasons, those real-time accounts are far more instructive about what really happened than what the parties are saying now that everyone is trying desperately to avoid blame for the politically toxic AIG bonus payments.

-- Glenn Greenwald

And some hilarious "flip flopping" from the GOP over pay limits and AIG bonuses, courtesy of Lis and Salon. But this is somewhat typical and expected of a wounded, opportunistic party out of power, and desperate for a comeback.

Sen. James Inhofe (R-OK) in Feb:
“I thought, is this still America? Do we really tell people how to run [a business], and who to pay and how much to pay?”
[Huffington Post, 2/6/09]

Sen. James Inhofe (R-OK) in Mar:
“The AIG situation is clear evidence of what happens when you shovel money out the door with no strings attached and no transparency.”
[KTUL, 3/17/09]
======================
Sen. Kit Bond (R-MO) in Feb:
“The worst thing we can do is tell businesses how to run themselves. Congress has a pretty bad track record. If you you look at our collective judgment, all 535 of us in our wisdom can’t run government very well. (We) sure can’t run business.”
[STL Today, 2/2/09]

Sen. Kit Bond (R-MO) in Mar:
“It’s unacceptable to pay bonuses after the American taxpayer was forced to bail out an institution without reforming it.”
[KRCG, 3/18/09]
=======================
Rep. Peter King (R-NY) in Feb:
“No, I will say, I agree there should have been some caps. (But) I think this (Dodd’s provision on limiting executive compensation)
went too far, and I think it can be counterproductive.”
[ABC News, 2/15/09]

Rep. Peter King (R-NY) in Mar:
Q: “Should Congress, should the White House be getting a way for these contracts to be broken?”
KING: “Congress should find a way to do it or the administration should lean on them in a way to get – to have it done.”
[MSNBC, 3/17/09]

http://www.salon.com/opinion/greenwald/