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Wednesday News

Good Morning Conflucians!!

Barack Obama had an op-ed piece in yesterday’s WSJ. In it he says we need to balance regulation with businesses need to create jobs and, well, make lots of money. For example:

Sometimes, those rules have gotten out of balance, placing unreasonable burdens on business—burdens that have stifled innovation and have had a chilling effect on growth and jobs. At other times, we have failed to meet our basic responsibility to protect the public interest, leading to disastrous consequences. Such was the case in the run-up to the financial crisis from which we are still recovering. There, a lack of proper oversight and transparency nearly led to the collapse of the financial markets and a full-scale Depression.

Over the past two years, the goal of my administration has been to strike the right balance. And today, I am signing an executive order that makes clear that this is the operating principle of our government.

This order requires that federal agencies ensure that regulations protect our safety, health and environment while promoting economic growth. And it orders a government-wide review of the rules already on the books to remove outdated regulations that stifle job creation and make our economy less competitive. It’s a review that will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.

Note that this move is right as Republican’s take over the House and have increased numbers in the Senate, with momentum at their back. So as we see and have seen before, Obama is moving to compromise and move to the right even before debate begins on the topic. That is of course not surprising to us as we’ve noticed his right leanings from before the primaries. This problem is also noticed at Salon:

But on the day before House Republicans are expected to vote to repeal the Affordable Care Act, primarily on the specious grounds that it is a “job-killing” regulatory Frankenstein, the White House’s decision to suddenly be concerned about the right balance between public safety and commerce is strange and discomfiting. The big battles of the next two years are going to be all about defending the regulatory achievements of the Obama administration — healthcare reform and bank reform — in addition to ensuring that the Environmental Protection Agency isn’t hamstrung by Republican opposition as it carries out its Supreme Court mandate to treat greenhouse gases as pollutants under the Clean Air Act.

The Salon article goes on to make the case that this is a terrible fumble by Obama:

The strategy is unfathomable, and the notion that we must now seek to strike the “proper” balance — as if the proponents of greater regulation had been carrying the day in recent years — is just plain nutty.

Here we go again. Why do they keep being deluded with example after example, with signal after signal, with appointment after appointment? Deluded that Obama is left leaning? That he’s even liberal? Other than a few speeches, just words, what in his past would lead them to think this? Haven’t they noticed who funded him, who basically created him? Why do we keep having these perfect examples, perfect demonstrations of who Obama really is only to have places like Salon or HuffPo or others gasp, act surprised, and shake their heads thinking he’s made a mistake or is getting bad advice.

No, it’s not a mistake. It’s not nutty. It’s not a fumble. This is who Obama is. It’s who he has always been. How many more examples do you people need? Have you bothered to read the health care bill or noticed who wrote it? Did you not notice the tax cut for the very wealthy. Did you not notice the lack of regulations or strings attached with the financial bailouts. This stuff has been from day 1 people.


In related news, we’re going to see a new tone as the Republicans make noises like they want to repeal the health insurance lobbies hard fought victory represented by the Obamacare bill:

Obama issued a statement late Tuesday said he is “willing and eager to work with both Democrats and Republicans to improve the Affordable Care Act. But we can’t go backward.”

Republicans largely ignored an attempt by Democrats to rename the “Repealing the Job-Killing Health Care Law Act” to temper the language following the Arizona shooting this month that killed six and injured 13, including Rep. Gabrielle Giffords (D-Ariz.).

But Republicans now mainly refer to the “job-destroying” health care law.

“Obviously there are strong feelings on both sides of the bill and we expect the debate to ensue along policy lines,” said Rep. Eric Cantor (R-Va.), the majority leader. “We are going to be about decency here and engage and promote an active debate on policy.”

Of course what they want to do is repeal any good parts of the bill. And there may even be a few good parts stuck in there against the wishes of the lobbyists who wrote most of the bill. Republicans don’t really have the numbers to do anything in this round of kabuki theater. So this show is about setting the stage for later “compromises” and possible defunding efforts. Which sadly Obama will likely to all to wiling to go along with.


Another front in the battle Republicans are waging against the working class should be of no surprise. Obama set up Elizabeth Warren in a pseudo position just for the purpose of giving the Republicans something to knock down. And that process looks to be starting soon:

The chairman of a financial services oversight panel sent a letter to Elizabeth Warren, head of the Consumer Financial Protection Bureau, saying he is skeptical of the new bureau’s very existence and demanded details about how it will operate.

Rep. Randy Neugebauer (R-Texas), who chairs an oversight panel of the Financial Services Committee, said in the letter sent Tuesday that he thinks Warren is “tasked with executing a fatally flawed plan.”

He then asked Warren to answer three pages worth of questions about the new bureau. Some of the queries are operational, including how Warren will staff and organize the agency. Others are more broad, inviting her to explain how Congress should best perform its oversight role, given the body is not funded through the traditional appropriations process.

Neugenbauer also wants details on meetings Warren has held with the Securities and Exchange Commission, the Federal Reserve, and other financial regulatory agencies.

“What policies are in place to avoid potential duplicative, conflicting or overlapping rulemaking that are currently underway, but will ultimately be under the regulatory authority of the CFPB?” he asked.

He concludes asking Warren to explain how she plans to “avoid the kind of over-regulation that might stifle innovation.”

And so it begins. The only hope we have of some sanity in consumer protection and financial regulations is about to be taken out. And it appears to have been planned this way from the beginning.


As mentioned last night, Joe Lieberman has announced he won’t run for a fifth term. Which means he’ll server two more years. Does that mean he’s planning on running for President? Does that mean he’ll join whoever the Republican party bosses select for their presidential candidate on the ticket as VP? Or maybe he’ll just head over to K-street and collect is rewards.

Also mentioned last night, Sargent Shriver died at age 95. And Don Kirshner died at age 77.


In strange political news, “Baby Doc” Duvalier decided to return to Haiti – never a good idea if you stole nearly 1B. And now he has been arrested and charged with corruption:

Jean-Claude “Baby Doc” Duvalier was charged with corruption and the theft of his country’s meagre funds last night after the former Haitian dictator was hauled before a judge in Port-au-Prince

Two days after his return to the country he left following a brutal 15-year rule, a noisy crowd of his supporters protested outside the state prosecutor’s office while he was questioned over accusations that he stole public funds and committed human rights abuses after taking over as president from his father in 1971.

“His fate is now in the hands of the investigating judge. We have brought charges against him,” said Port-au-Prince’s chief prosecutor, Aristidas Auguste.

He said his office had filed charges against Duvalier, 59, of corruption, theft, misappropriation of funds and other alleged crimes committed during his period in power.

What was he thinking?


After Goldman Sachs invested gobs of money in Facebook with the intent to offer investment opportunities here and abroad, they’ve decided not here. Mostly to skirt around some SEC requirements. You know, being the upstanding corporate citizens that they are:

There was another question about the planned Facebook stock offering that went beyond whether the social media leader is a good investment now or if it’s overpriced. A more serious issue was how investment banker Goldman Sachs was structuring a “private placement” deal to skirt U.S. securities law.

Now it seems Goldman Sachs has decided that “intense media attention” no longer made it worthwhile to go forward with offering a piece of Facebook in the U.S.

Does that mean the deal is over? Does it mean that Facebook will do a deal in the U.S. with proper financial disclosure?

Unfortunately, neither. Instead, the Wall Street Journal is reporting today that Facebook will go ahead with its private stock sale but exclude U.S. investors from the deal.

“In a statement provided to The Wall Street Journal, Goldman said the move came after officials at the New York securities firm ‘concluded the level of media attention might not be consistent with the proper completion of a U.S. private placement under U.S. law,’ ” Aaron Lucchetti reports for the Wall Street Journal.

Under the planned offering, only wealthy clients of the investment firm would have been allowed to purchase a piece of Facebook. The arrangement sounded fairly complex; but basically, the idea was to put all the Goldman investors into a single fund and then count that fund as “one” investor. Why? By doing so, they would get around required public financial disclosures for any company with 500 or more investors. (There was more money coming in from another investment firm in Russia.)

Money for nothing and the clicks are free. Yea, I just made that up. TM by DT. So we the taxpayers make all this possible because they have our money backing them up allowing them to make riskier deals, and the deals they make are not just risky, but they’re fashioned only around the wealthiest clients. And the funny part here, it looks like it’s going to make suckers and losers out of these wealthy clients because they may be making yet another bubble with what they’re doing, that will just pop down the road. Time will tell.

And speaking of Facebook, they were planning on opening up users phone numbers and addresses to third parties, but have backed down, for now, after some complaints:

Just before the weekend, Facebook announced that it had expanded the information users are able to share with external websites and applications, to include home addresses and mobile phone numbers.

This enables developers of e.g. an ecommerce site to more easily fetch the address and phone number of a potential customer to streamline the checkout process.

For the record: users needed to explicitly opt to share this data before any application or website could access it, and they were evidently not able to share their friends’ addresses or mobile phone numbers with applications.

Sure enough, the dialog box (see below) wasn’t super clear about that, so Facebook was unequivocally opening itself up for a new sh*tshorm to hit the deck.

This morning, Facebook announced that it has temporarily disabled the sharing feature, looking to relaunch it in the next few weeks after making some changes.

Facebook dubs these future changes ‘improvements’ repeatedly, but of course the company is responding to the wave of criticism it has received for quietly releasing the new sharing feature, on a Friday evening no less.

I suspect they’ll enable it. But perhaps just add a bit more complexity to the privacy settings systems so there is an additional way to opt out. If you can figure it out of course.

That’s a bit of what’s in the news this morning. Chime in with what you’re reading.

What kind of jobs are we talking about, anyway?


So I see this headline at Memeorandum:

Harvard Economist Estimates Health Repeal Would Destroy Up To 400,000 Jobs Per Year Over Decade

Just as House Republicans gear up to repeal the “job killing” Affordable Care Act, the Department of Labor is reporting that the U.S. economy added 103,000 jobs last month, pushing the jobless rate down to a 19-month low of 9.4 percent.

In fact, since President Obama signed health reform into law on March 23, 2010, the economy has created approximately a total of 1.1 million new jobs in the private sector. One-fifth of the new jobs — over 200,000 — have been in the health care industry.

Here is the report of Harvard economist David M. Cutler

Any proposal that adds $200 billion to our medical spending after a decade will have enormous economic implications. The employment impacts of health care repeal will be particularly severe because many of these costs will fall on businesses. As we’ve already seen, employers facing higher health costs will hire fewer people, lay workers off, and pay lower wages.

To estimate these employment impacts, I followed the methodology of myself and Neeraj Sood.13 That paper took estimates of the medical spending change associated with health reform and combined that with the econometric model of Sood, Arkadipta Ghosh, and José Escarce that estimated the employment impacts of changes in medical costs. I use the model to estimate the employment impact of repealing reform.

Figure 3 shows the net impact of repealing health reform on total employment. The baseline estimates show that 250,000 jobs will be lost annually if health reform is repealed. Annual job losses would average 400,000 using the greater estimate of 1.5 percentage point cost increases annually resulting from repeal. Figure 4 shows the estimated employment change by industry in 2016 (omitting health care, which will have more employment). More than 200,000 jobs will be lost in manufacturing and nearly 900,000 jobs will be lost in nonhealth care services.

I’m no bean counter but I got a few problems with this story. First of all, what kind of jobs are these 200,000 new jobs in the health care industry? Are they doctors and nurses? Or are they paper-pushers who process health insurance claims? Seems to me we’ve had a chronic shortage of nurses for decades and I haven’t heard of any problem with unemployed doctors.

The second problem I have is the assumption that higher health care costs will cause employers to hire fewer people. It seems to me that a more likely response would be for employers to stop providing health insurance. I’m not saying that would be a good thing, I’m just questioning the assumption upon which Cutler’s numbers are based.

I believe that Obamacare is a bad program. Not only that but it’s politically unpopular now and that will only get worse. Worst of all, it’s a Republican plan that the Democrats will be blamed for enacting.

We’re seeing a lot of conflicting claims right now about what effect repealing Obamacare would have on the federal budget. Democrats are claiming that Obamacare will reduce the deficit by $230 billion while Republicans are claiming that repealing it would reduce government spending by $540 billion.

Both are telling the truth, sort of:

CBO and the staff of the Joint Committee on Taxation (JCT) have not yet developed a detailed estimate of the budgetary impact of H.R. 2, the Repealing the Job-Killing Health Care Law Act, which would repeal the major health care legislation enacted in March 2010. Yesterday, we released a preliminary analysis of that legislation indicating that, over the 2012-2021 period, the effect of enacting H.R. 2 on the federal budget as a result of changes in direct spending and revenues is likely to be an increase in deficits in the vicinity of $230 billion, plus or minus the effects of forthcoming technical and economic changes to CBO’s and JCT’s projections for that period.

We have been asked to provide the revenue and direct spending components of that total. Extrapolating the estimated budgetary effects of the original health care legislation and accounting for the effects of subsequent legislation, CBO anticipates that enacting H.R. 2 would probably yield, for the 2012-2021 period, a reduction in revenues in the neighborhood of $770 billion and a reduction in outlays in the vicinity of $540 billion, plus or minus the effects of forthcoming technical and economic changes to CBO’s and JCT’s projections.

A recent Gallup poll shows that 46 percent of the country wants to repeal Obamacare and 40 percent say they want to keep it. Calling the general public stupid is a really popular pastime in the blogosphere but how are voters supposed to make informed choices if neither side will be completely honest?

Here at The Confluence we take pride in being Independent Liberals. We don’t feel any need to defend or support any party. We deal with the truth, even when it’s inconvenient. We’re not always right but we don’t fudge numbers or spin facts.


About those “death panels”


I was reading an article at Conservatives4Palin that points out (correctly) that when the former Alaskan governor made her infamous “death panels” post on Facebook she wasn’t referring to end of life counseling.

This is what Sarah Palin said:

The Democrats promise that a government health care system will reduce the cost of health care, but as the economist Thomas Sowell has pointed out, government health care will not reduce the cost; it will simply refuse to pay the cost. And who will suffer the most when they ration care? The sick, the elderly, and the disabled, of course. The America I know and love is not one in which my parents or my baby with Down Syndrome will have to stand in front of Obama’s “death panel” so his bureaucrats can decide, based on a subjective judgment of their “level of productivity in society,” whether they are worthy of health care. Such a system is downright evil.

Health care by definition involves life and death decisions. Human rights and human dignity must be at the center of any health care discussion.

I know this will surprise those people who are convinced (or pretend to be convinced) that because I refuse to demonize Ms. Palin that I am infatuated with her but I disagree with the former Vice Presidential candidate.

Before I explain my disagreement I want to clarify what Sarah Palin actually said. Contrary to the assertions of Ezra Klein and others, Palin never claimed that Obamacare would euthanize anyone. She claimed that Obamacare would result in rationed health care and that bureaucrats would decide whether or not to pay for treatment based on subjective criteria like the patient’s “level of productivity in society.”

While there is a nugget or two of truth in what Palin said we’re hardly talking about exterminating “useless mouths.” What we’re talking about is the kind of cost-benefit analysis that people already have to make every day.

Despite what some people think none of us has a “right to life.” On a long enough timeline the mortality rate is 100%. As Clint Eastwood said, “We all got it coming.”

As we saw during the Terri Schiavo case, the general consensus in this country is that at some point it is acceptable to terminate life-support. The real question in cases like that is who (other than the patient) can make those decisions and when they should be made.

But “death panels” cases aren’t about whether or not to pull the plug on someone, they are about the limits, if any, on the payment for health care services.

Forget the specifics of Obamacare for the moment and assume we adopted some version of single-payer like all the other industrialized nations have done. Call it Medicare For All. As the cost goes up and the prognosis grows more grim, is there some point at which we should say “enough is enough?”

Let’s say we have a patient in his eighties who is diagnosed with cancer. Treatment will cost approximately $1 million, the chances of success are less than 10% and he has already exceeded his life expectancy so even if the cancer doesn’t kill him he isn’t gonna celebrate many more birthdays anyway.

Should we pay for his treatment? What if he had diabetes and tuberculosis too? What if he’s already in a persistent vegetative state? Is there any point at which we should draw the line?

The fact is those decisions are already being made, but the decision-makers are health insurance company bean-counters and profit-minded executives.

I think that if we are going to control health care costs one thing we need to do is set limits on how much health care we will pay for. The factors considered in setting those limits should include cost but also a number of other factors, including prognosis and quality of life.

But those limits need to be determined in an open manner by people answerable to the public. There needs to be an open process and a way to appeal the decisions that are made.

What do you think?



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