Archive | Dirty Rotten Scoundrels

Endorsement Deal

Simon Johnson at Baseline Scenario:

Being nice to the biggest banks will not save the midterm elections for the Democrats.  The banks’ campaign contributions will flow increasingly to the Republicans and against any Democrats (and there are precious few) who have fought for real reform.

The president’s only political chance is to take on the too big to fail banks directly and clearly.  He needs to explain where they came from (answer: the Reagan Revolution, gone wrong), how the problem became much worse during the last administration, and how – in credible detail – he will end their reign.

What we have now is not a free market.  It is rather one of the most complete (and awful) instances ever of savvy businessmen capturing a state and the minds of the people who run it.  Is this really what the president seeks to endorse?

Trafficking

Americans like to think we don’t have these problems – but we do. Prostitution isn’t always a “victimless crime”:

COLUMBUS, Ohio (AP) — About 1,000 American-born children are forced into the sex trade in Ohio every year and about 800 immigrants are sexually exploited and pushed into sweatshop-type jobs, a new report on human trafficking in the state said Wednesday.

Ohio’s weak laws on human trafficking, its growing demand for cheap labor and its proximity to the Canadian border are key contributors to the illegal activity, according to a report by the Trafficking in Persons Study Commission.

”Ohio is not only a destination place for foreign-born trafficking victims, but it’s also a recruitment place,” said Celia Williamson, an associate professor at the University of Toledo who led the research.

From 1990 to 2000, Ohio’s foreign-born population increased 30 percent, and the state has a growing pool of legal and illegal immigrants who draw victims or hide victims, Williamson said. These networks are highly organized, with brothels fronting as legitimate businesses.

House To Investigate Anthem BC

From McJoan at DK:

The Obama administration has already sent a sternly-worded letter to Anthem Blue Cross over the company’s excessive rate increase for individual policy holders in California. How excessive? Up to 39 percent. But that’s not all. Anthem Blue Cross and Blue Shield also informed their customers that they are changing their practice of adjusting rates annually, and as of now are reserving the right to raise premiums basically whenever they feel like it.

You got that? They want to do exactly what the credit card companies were doing.

There’s little beyond sternly-worded letters that the administration can do, other than something like maybe advocating strongly for some kind of legislative remedy, say in the form of serious competition to private insurers in the form of a robust public option for health insurance. But there’s something Congress can do, and that’s put the insurers on the hot seat and investigate. From the Speaker’s blog, The Gavel:

As Secretary Sebelius pointed out, WellPoint [parent company to Anthem Blue Cross/Blue Shield] reported a staggering $2,740,000,000 in profits for the fourth quarter of 2009 alone – eight times more than the last quarter of 2008 – and more than $4,750,000,000 for all of 2009. In fact, the company reaped these record profits even as it lost more than 1.4 million members…..

Today, Energy and Commerce Committee Chairman Henry Waxman and Subcommittee Chairman Bart Stupak announced that the Subcommittee on Oversight and Investigations will hold a hearing on February 24th regarding the premium rate increases.

The hearing, conveniently, will be held on February 24, the day before the bipartisan White House healthcare summit.

Who’s Lying On Social Security?

Glenn Greenwald points out why the use of unnamed sources is so misleading to the public:

In order to assuage concerns among progressives that the Obama administration intends to follow in the Bush administration’s footsteps by trying to cut Social Security benefits, high-level Obama officials have been telling journalists such as The American Prospect’s Ezra Klein — on the condition of anonymity — that they have no intention of touching Social Security, producing reports which then faithfully communicate that message, such as this one from Klein, two weeks ago:

What people at the White House have told me on Social Security — and what I wrote in the post she’s referencing — is that there’s no intention to touch Social Security in the foreseeable future. It’s not a priority and it’s not a political winner. . . . The problem, they say, is health care, not Social Security, and that’s where the White House is focusing.

Based on those same anonymous conversations, Klein wrote other posts telling progressives who are worried about Obama’s intention to cut Social Security that they were worrying about something that doesn’t exist.

But in The New York Times today, David Brooks recounted what he described as “conversations with four senior members of the administration.” Those unnamed Obama officials all called Brooks in order to refute his column from last week which argued “that the Obama budget is a liberal, big government document that should make moderates nervous.” Brooks — like Klein — granted anonymity to and then proceeded to quote all four “senior members of the Obama administration” (a) without explaining why he did so, (b) without describing efforts, if any, to persuade them to use their names and (c) without providing any information about who they are or what their motives might be (all flagrant violations of the supposed NYT policy governing the use of anonymity). These paragraphs were the result of the anonymity Brooks gave to the Obama White House (emphasis in original):

Besides, the long-range debt is what matters, and on this subject President Obama is hawkish.

He is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security as well as health spending.

What Klein’s anonymous White House sources told him (“there’s no intention to touch Social Security in the foreseeable future“) is directly contrary to what Brooks’ anonymous White House sources, two weeks later, told him (Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security”). But there’s no way to resolve those contradictory White House claims because Klein and Brooks allowed these officials to hide behind anonymity when making these claims. That’s what anonymity does — it allows dubious or even false government claims to be spouted with impunity and without any accountability.

What Klein’s anonymous White House sources told him (“there’s no intention to touch Social Security in the foreseeable future”) is directly contrary to what Brooks’ anonymous White House sources, two weeks later, told him (Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security”). But there’s no way to resolve those contradictory White House claims because Klein and Brooks allowed these officials to hide behind anonymity when making these claims. That’s what anonymity does — it allows dubious or even false government claims to be spouted with impunity and without any accountability.

That’s why anonymity is such a valuable weapon for government officials and such a risky and questionable practice for journalists. If the claims from Klein and Brooks’ sources are true about the intentions of the White House, then why can’t they just attach their names to those claims and why aren’t they made to do so by the journalists before having their statements amplified to the public?

First let me note that, as a contract employee -which is what the Times’ columnists are, Brooks is mostly likely not bound by the anonymity rule, although he should be.

Second, I don’t know that these are as contradictory as Glenn thinks. This is where I’ll put on my former-press-secretary hat. You never want to lie to a reporter if you can help it, but you will mislead them. My guess is, the person they misled is Ezra Klein. First of all, “not in the foreseeable future”? Classic weasel words. “When I talked to you, Ezra, it really wasn’t a priority. But circumstances have changed since then.”

And while we all know who he is, in the Beltway world, Ezra’s not a big name and doesn’t have a huge megaphone – except in the blogosphere, so the thinking would be that he’s not as big a potential threat as Brooks. But if you activated the liberal base at this time with a possible threat to cut Social Security, that would be a real distraction at a time when they’re focused on other things. Trust me: They don’t want to deal with this right now (i.e. “for the foreseeable future.”) So yeah, score one for truth.

If the Obama administration was really serious about never touching Social Security, odds are they would have made that strategic leak to someone more prominent. Real leaks (that is, accurate ones), on things that matter, are always used to float trial ballons and either reward the reporter for previous favorable coverage – or get him in line to soften future coverage.

From my own experience as the person pushing those stories to reporters, I’d say Brooks was the one who got the accurate story on this because 1) it’s the Times and you don’t want to piss them off if you don’t have to 2) they wanted to soften him up to give Obama the benefit of the doubt on budget issues in general and 3) they wanted him to pass it along the secret message to other conservatives – “I didn’t put this in the story, but Axlerod told me, strictly on the QT, that…”. In other words, this has all the signs of a classic strategic leak.

And if there’s any doubt here, you have to give the edge to appointments – namely, that Obama has surrounded himself with many, many advisers who have actively supported either the privatization or partial privatization of Social Security. Are those the people you’d hire if you wanted to save Social Security?

So while it is indeed difficult to read between the lines when “sources” spout conflicting stories, in this case? Not so much. Because I think they were both told a version of the truth. No, Obama’s not planning to touch Social Security – at this time. And yes, Obama plans to cut Social Security spending – in something. Only time will tell what those cuts include.

Social Security ‘Reform’, etc.

Well, it seems I’m not the only one who’s worried. Jane:

Ben Smith says today that the left is “silent on Social Security reform” even as the administration considers it, and quotes Blue Dog Jim Cooper who says Obama is “in a honeymoon phase, and many liberals are afraid to express concerns.”

Atrios calls it trolling. Perhaps it is, but there have been signs that serious Social Security reform is in the works, and people who have been briefed on the administration’s plans indicate that things like raising the retirement age and cutting benefits are under consideration.

Consider — in December, Cooper said a report which showed “that the governments unfunded liabilities are roughly $56 trillion” was “shocking.” He called for a commission to address it, which Hoyer endorsed but Pelosi opposed. The White House agreed to it in January:

Obama said that he has made clear to his advisers that some of the difficult choices–particularly in regards to entitlement programs like Social Security and Medicare – should be made on his watch. “We’ve kicked this can down the road and now we are at the end of the road,” he said.

So who is going to be on this panel? Kent Conrad, Judd Gregg, the Blue Dogs and “a host of outside groups with ideas on the matter.” Said Paul Rosenberg:

So, Blue Dogs in. Progressives? Not so much. Surprised? Didn’t think so. The agenda here “difficult choices–particularly in regards to entitlement programs like Social Security and Medicare” is straight out of the fiscal slasher movie on CNN last weekend, IOUSA, which Digby blogged about earlier in the week, and which was thoroughly debunked by economist Dean Baker and his associates at the Center for Economic and Policy Research (CEPR), which he co-directs, when it first came out in theatrical release last fall.

Whatever plan the task force comes up with, Cooper does not want Congress to be able to amend it.

Cooper was a health care spokesman for Obama during the campaign. Mike Lux sounded the alarm at the time, noting that Cooper had been critical to killing health care reform in 1993/94 and was a solid spokesman for the insurance industry position. Digby has more of his history.

Now as Ben rightly notes, during the campaign the only time Obama discussed revamping Social Security was raising the cap on Social Security taxes. But that’s hardly what Jim Cooper and the Blue Dogs are looking for. Nor, does it seem, that folks inside the Obama team think that this will be sufficient. The framework they are evidently looking at is outlined in a 2005 Brookings Institute paper called the Diamond-Orszag Plan, co-written by…yes, Obama’s budget director, Peter Orszag.

You can find the plan here, but this should give you a hint:

Since Painful Choices Must Be Made, a Key Question Is, Which Ones?

The Social Security deficit can be eliminated only through different combinations of politically painful choices: tax increases and benefit reductions. Unfortunately, too many analysts and politicians have ignored this reality, responding to the painful alternatives by embracing “free lunch” approaches.

[]

Our plan makes the painful choices that are necessary—selecting a combination of benefit and revenue changes to restore long-term balance. In doing so, it focuses on three areas which contribute to the actuarial imbalance: improvements in life expectancy, increases in earnings inequality, and the burden of the legacy debt from Social Security’s early history.

[]

Workers who are 55 or older will experience no change in their benefits from those scheduled under current law. For younger workers with average earnings, our proposal involves a gradual reduction in benefits from those scheduled under current law. For example, the reduction in benefits for a 45-year old average earner is less than 1 percent; for a 35-year-old, less than 5 percent; and for a 25-year-old, less than 9 percent. Reductions are smaller for lower earners, and larger for higher ones.

Obama met with the Blue Dogs Tuesday night. Before the House vote on the stimulus bill, Rahm Emanuel had promised them that they would soon see “signs of Obama’s commitment to fiscal reform,”and according to one Blue Dog, “Tuesday night was a fulfillment of the commitment Emanuel made that day.”

If Blue Dogs like Cooper have been emboldened by the idea that the left will quietly accept Social Security reforms that include reductions in benefits because of Obama’s popularity, they have sorely deluded themselves. As Atrios notes, it would create “an epic 360 degree shitstorm.” If people on the left are being quiet, it’s not because they don’t care...it’s because they don’t think Obama will ever do it.

Told Ya

I’ve been talking about this all along. The “success story” was never real:

Everyone who followed the debate about privatizing Social Security back in 2005 has vivid memories of the Chilean model. Sometimes it seemed impossible to get through any discussion of fixing Social Security without hearing a free-market paean to the way Chile had given its workers control over their own retirement investments, followed by a demand that the United States get on the same boat.

Therefore, it seems worthwhile to note that the Chileans are now bailing water.

The Chilean government recently announced that in 2007 it plans to pursue far-reaching reforms aimed at creating a larger government role in Chileans’ old-age security. The reforms are urgently needed. It has been nearly a generation since the regime of Gen. Augusto Pinochet began to supplant Chile’s government-supported retirement system with a plan for Chilean workers to save 10 percent of their salaries in private accounts. Today, roughly half of Chilee’s labor force has either not participated or has not accumulated enough to generate what the government considers a minimum payout of about $140 a month.

The overarching problem for Chile — and the real lesson for the United States — is that private savings are not a substitute for a guaranteed core tier of old-age support. The first measure of success of a retirement system is not how much certain individuals manage to sock away, but whether the system as a whole provides basic dignity for all. By that measure, Chile’s privatized system has failed and Social Security has succeeded.

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