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Wednesday, December 30, 2009

GM rehires lobbyists -- and taxpayers foot the bill

General Motors laid off its outside lobbyists when it was under bankruptcy over the summer. Today, my column reports, although it is still under government ownership, the failed carmaker retains four K Street firms:
GM, of course, is still owned mostly by the federal government and is still losing money -- $1.2 billion in the third quarter. That means the company's expenses are the taxpayer's expenses. That means you are paying these lobbying fees. Put another way, the Obama administration, through GM, is transferring wealth from average Americans to millionaire former public officials.
The home values of 13 of GM's 18 lobbyists can be found in public records. The mean assessed value of those homes was $1.13 million. Three of GM's lobbyists have homes valued at more than $1.5 million, including one whose home is worth $2.97 million. Your taxes are paying to shine the chandeliers in these posh palaces.

Friday, December 25, 2009

My Examiner column looks at the smaller ways the Obama government boom has meant a boom for K Street:

But the real cost of Obamanomics on this score is the way in which it sucks wealth from Main Street to K Street by forcing smaller businesses and industries, non-profits, and cities and towns to invest or invest more in lobbyists.

The City of Cordova, Alaska, population 2,251, retained not one, but two lobbying firms in 2009, to lobby for stimulus money and other federal spending.

Drug lobby applauds Senate passage of health-care bill

[Originally posted at Beltway Confidential]

The Pharmaceutical Researchers and Manufacturers of America (PhRMA), is the largest single-industry lobbying group in America. It represents name-brand drug-makers. Considering this clout, and considering President Obama's claim Monday that the Senate, by passing the health-care bill, was "standing up to the special interests," it's noteworthy that PhRMA this morning celebrated the bill's passage.

Here's the PhRMA press release, with some emphasis added by me:

We applaud the Senate for taking an important and historic step toward expanding high-quality, affordable health care coverage and services to tens of millions of Americans, many of whom are struggling today financially. While considerable work remains to be done in reconciling differences between the Senate and House bills, we remain convinced that comprehensive health care reform, if done in a smart way, will benefit patients, our economy and the future of our nation.

Most importantly, the Senate bill recognizes the importance of medical progress in America. Innovative, cutting-edge medicines have dramatically increased life expectancy rates in the United States and have allowed patients with cancer, heart disease, diabetes and other devastating chronic diseases to live longer, healthier and more productive lives. We strongly believe that everyone in America should benefit from promising new advances in medical care.

By expanding coverage to more than 30 million uninsured Americans, the Senate is moving decisively in that direction. We embrace reform efforts which put an end to practices such as denying coverage because of pre-existing conditions or charging higher premiums because of gender. We also support expanding Medicaid eligibility to 133 percent of federal poverty – something we first proposed along with Families USA.

Our commitment to comprehensive health care reform is evident by our $80 billion pledge to reduce health care costs over 10 years. To that end, our companies agreed back in June to help most eligible seniors and disabled Americans who hit the so-called ‘donut hole’ in Medicare Part D cut their out-of-pocket expenses on brand-name medications in half as part of the Senate’s health care reform legislation. The remainder of our commitment will help the government expand health care coverage to millions of Americans.

In the final analysis, we believe the Senate bill provides the best blueprint for reform. It offers the kind of change that will benefit patients today without putting medical progress at risk in the future. Today, we believe the Senate voted with America’s best interests and future in mind.

Obviously, expanding Medicaid eligibility expands the pool of people who get taxpayer-funded subsidies for their drugs. For more explanation of drug-maker gifts in the bill, check my Wednesday column and my blog post from yesterday.

Thursday, December 24, 2009

Another Big Pharma payoff? Health bill favors prescriptions, dings over-the-counter drugs

[Originally posted at Beltway Confidential]

John Berlau, my former colleague at the Competitive Enterprise Institute, adds to my list of the goodies big drug companies receive in the Senate health-care reform bill. Berlau flags the bill's provision prohibiting the use of pre-tax Health Savings Account money to buy over-the-counter drugs. This tax hike thus pushes more people to buy more expensive prescription drugs, which still, of course, get favorable tax treatment.

OTC drugs are much cheaper those available for prescription, but they could now be more expensive to individual consumers given that prescription drugs would still be eligible for favored treatment in the tax plans, and that insurance companies would be mandated to cover many of them. Consequently, any time a consumer has the slightest headache, the financial incentive would often be to see a doctor and get a prescription rather than go to the store and get medicine off the shelf. This could mean that billions will be wasted on the additional costs for prescription drugs in instances when OTC medicines could be just as safe and effective at treating the illness.

Wednesday, December 23, 2009

Christmas comes early for the big drug companies

My column reports on some of the many favors the health-care "reform" bill hands to the drug companies:
President Obama on Monday credited the Senate for "standing up to the special interests -- who've prevented reform for decades, and who are furiously lobbying against it now." But the health care "reform" bill, passed late Sunday night, provides the drug companies with billions in taxpayer-funded subsidies, government-sanctioned monopolies, and mandates forcing people to buy drug insurance. At the same time, the bill doesn't touch the industry's existing special favors that Obama had pledged to eliminate in the name of consumers.

Tuesday, December 22, 2009

Health insurance stocks rally on promise of 'reform'

[Originally posted at Beltway Confidential]

If you've bought into the talk of Barack Obama, Keith Olbermann, the DNC, or Matt Yglesias, you may have lost money in the stock market this week. If you've been listening to me or Glenn Greenwald, you might have made some money.

Check out this AP article:

NEW YORK (AP) — Shares of health insurance providers leaped Monday after a key Senate vote on the country's health care overhaul put legislation on track for passage before Christmas.

Yes, it seems out that requiring us to buy more private health insurance, using taxpayer money to subsidize more private health insurance, preserving the government favors for anti-competitive employer-based health-care, and preserving most limits on interstate purchase of health insurance actually helps insurance companies, contrary to the claims of the President and his boosters.

Liberal writer Glenn Greenwald brought this stock rally to my attention.

Saturday, December 19, 2009

A corporate takeover of healthcare AND a government takeover

[Originally posted at Beltway Confidential]

Following up on my column today about the progressive rebellion against Obama's corporatism, I wanted to comment on this claim by blogger Ed Kilgore:

To put it more bluntly, on a widening range of issues, Obama's critics to the right say he's engineering a government takeover of the private sector, while his critics to the left accuse him of promoting a corporate takeover of the public sector. They can't both be right, of course....

But, my health-care writing since February has focused on how a government takeover of health care is entirely congruent with a corporate takeover of health-care. Just as a government takeover of Wall Street and a Wall Street takeover of government are consistent. Reihan Salam at National Review explains it well:

The concern from the right isn't that the Obama approach will literally nationalize for-profit health insurers. Rather, it is that for-profit health insurers will continue evolving into heavily subsidized firms that function as public utilities, and that seek advantage by gaming the political process. Profits, including profits governed by medical loss ratios, can and will then be cycled into political action, which leads to the anxiety concerning a "corporate takeover of the public sector." Again, progressives don't literally believe that such a takeover is happening. Instead, they believe, rightly, that subsidies without effective cost containment represent a massive windfall for the private insurance sector, including non-profit insurers that generate salaries for large numbers of politically active middle and upper middle class professionals.

And Ross Douthat, as usual, takes it to a far higher level:

The point is that the more intertwined industry and government become, the harder it is to discern who’s “taking over” whom — and the less it matters, because the taxpayer is taking it on the chin either way. Or to put it another way: The creatures outside looked from pig to man, and from man to pig, and from pig to man again; but already it was impossible to say which was which...

Friday, December 18, 2009 review: An Advanced Course in Big Government in the Age of Obama

John O'Hara reviews Obamanomics over at Andrew Breitbart and Mike Flynn's
Obamanomics reads like an encyclopedia of corporatism in the age of Obama....

Thoroughly researched with Carney’s typical muckraking fervor, Obamanomics shows that these behind-the-scenes alliances are often between players one would not expect to cooperate. In fact, allegiances are often the exact opposite of what politicians say and the media reports.

Insurer bailout, Bernanke pit Left against Obamanomics

My column today makes sense of the current political landscape:
President Obama is trying to rally his team behind a health care bill lambasted as "an insurance company bailout," and a Federal Reserve nominee who has engineered a slew of bailouts for Wall Street's biggest banks. While Obama's explosion of government spending and regulations has stoked conservative fury for months, the naked corporatism on display this month has finally sparked an insurrection on the Left.

Thursday, December 17, 2009

NY Times' Douthat: Lessons in Obamanomics

Ross Douthat, a conservative New York Times columnist, blogs today on Obamanomics:
The hand-in-glove relationship between a Democratic administration and certain precincts of corporate America is one of the major stories of the Obama era. And if you want to know why the Department of Energy has become a venture capital firm, or what happened to Barack Obama’s pledge to allow American consumers to buy their drugs from overseas, or why the health care bill looks, well, the way it looks, Carney’s book is a good place to start.

Carney is more stringently libertarian than I am — more anti-TARP, for instance, and more thoroughgoingly critical of the welfare state in general. But his kind of libertarian populism is a important counterweight to what’s been happening in Washington across the last twelve months. His analysis represents the cogent version of the inchoate angst that’s gripped the conservative base of late.

Howard Dean comes around to my way of thinking

[Originally posted at Beltway Confidential]
Howard Dean said today: "You will be forced to buy insurance. If you don't, you'll pay a fine. It's an insurance company bailout... It's an insurance company bailout."

Dean must be reading his Washington Examiner, because this is what I said in February, April, May, June, July (twice), August (twice, and thrice), September, (twice and thrice), October (twice and thrice), and December (I don't know why I skipped March and November).

Let's see where Democratic lawmakers go. Will they fight against industry and for their liberal principles, or will they follow their president down the path of corporatism?

Wednesday, December 16, 2009

GE employee Olbermann insists corporations are inherently conservative

[originally posted at Beltway Confidential]
Keith Olbermann went on a rant last night based on the premise that "there is no liberal media." Here's Olbermann's proof that there is no liberal media: "The media which is, after all, owned by corporations naturally leans to the right. Corporations, by definition, lean to the right, towards the status quo."

I will let someone else argue with Olbermann over his equation of "the right" and "the status quo" (maybe the Center for American Progress can do that, considering their focus on the right wing's "radical" agenda). I want to address the claim that "corporations, by definition lean to the right."

Let's start with Olbermann's employer, a corporation called General Electric. By what measure does GE "lean to the right"? Not by campaign contributions, I'll tell you that. For instance, 69% of GE's political action committee cash to House candidates so far this year have gone to Democrats, with Rep. James Clyburn, D-S.C. (95% liberal rating from Americans for Democratic Action), the top recipient. On the Senate side, Democrats have pocketed 55% of GEPAC cash, with Chris Dodd the top recipient.

But maybe GE has a conservative lobbying agenda? Hardly. The company lobbies for cap-and-trade, embryonic stem-cell research subsidies, the stimulus, alternative energy subsidies, and more.

If you actually examine the campaign contributions and lobbying agenda of corporations, you'll realize it's ridiculous to pin them with labels like "conservative." But fact-checking is not really Olbermann's thing.

Obama brings purrs from Wall Street's fat cats

Obama seems to like talking tough to corporate America, but sometimes the fat cats like cuddling up with Obama anyway. My column today explores the Wall Street-White House relationship:

But if you skip the rhetoric and focus instead on verifiable facts -- campaign contributions, administration appointees, White House visitor logs, Obama's bailouts and even his proposed regulations -- you see instead that Obama may be closer to Wall Street than any modern president.

Obama raised $14.8 million from Wall Street in the 2008 election, according to the Center for Responsive Politics -- more than any politician ever, and more than George W. Bush raised in both of his elections combined. From the fattest cat, Goldman Sachs, Obama raised $997,095, more than four times McCain's Goldman haul and more than any candidate has raised from any single company since the McCain-Feingold campaign finance regulations.

Monday, December 14, 2009

The Washington Toy Story carried an excerpt over the weekend of Obamanomics, and my section that deals with the Consumer Product Safety Improvement Act:
And small craftsmen were threatened by the testing requirement. Every manufacturer, including grandpa in his woodshed, would need to submit its products to an accredited outside testing facility. This would be costly and burdensome. But written into the law was a provision that, while common sense, seriously favored mass-producers. Look at this guidance from the CPSIA:

If your products need to be tested, and they are materially identical and made in the same fashion with no change in assembly, equipment used, etc., then a single sample may be all that is necessary for testing purposes. A change in materials or design can be enough to alter testing results. [9]

So if you’re rolling 10,000 petroleum-based Barbies off an assembly line in Shanghai, you need test only one. If you’re making ten sets of children’s rosary beads to donate to the kids in your parish receiving their first communion, you also need to test one – unless these rosaries are unique, or if you made some at home, some at your office, and some while visiting your grandchildren. In those cases you need to get each one tested – not just each rosary, but each component: the little beads, the big beads, the crucifix, and the string.

Mattel was deploying the “Overhead Smash”: crowding out smaller competitors and potential start-ups by lobbying for stricter regulation.

Friday, December 11, 2009

Discussing Obamanomics on PJTV

Here is a video of a fairly meaty discussion of Obamanomics on PJTV. We focus on Climategate, but we also discuss some of the economic foundations of my argument.

AARP Takes Fire

I produced the cover package in today's Washington Examiner, focusing on the important and complex role AARP plays in our current health-care debate.

The main story discusses AARP's role in the healthcare debate.
AARP, the powerful seniors group with 40 million members, is drawing political fire for its support of Democratic health care legislation increasing regulation of the industry and cutting Medicare benefits.
The senior-citizens group, founded in 1959, has become a sprawling billion-dollar financial and political powerhouse that does far more than simply publish a couple of newsletters and find discounts for seniors. And increasingly, its political and financial relationships have put the group's leadership at odds with its members, critics charge.
The companion piece delves into AARP's lobbying army:
In lending its lobbying muscle to current Democratic health care bills, AARP is providing a formidable ally.
According to the Center for Responsive Politics, AARP has spent $170 million on lobbying since 1998, making it the largest nonprofit lobbying group by orders of magnitude. AARP's lobbying budget regularly exceeds that of defense giants such as Lockheed Martin, the drug lobby and the insurance lobby. With more than 60 in-house lobbyists, AARP has one of the largest influence armies in town (by comparison, the National Rifle Association employs only 13 registered lobbyists).

Life insurers lobby to save the death tax

Is the estate tax debate really just about the wealthy resisting a tax hike? My column explains the real dynamic:
While senators debate health care, House Democrats have quietly moved to save the federal estate tax, scheduled to disappear next month. In this push to preserve the so-called "death tax," Democrats have an important K Street ally: The life insurance companies that peddle estate-planning products.

Thursday, December 10, 2009

On Russia Today

Here's a clip of me yesterday on Russia Today, discussing Obamanomics and bailouts.

Wednesday, December 9, 2009

Obama delivers change industry can believe in

As the health-care bill gets closer to passage, it looks more and more like corporate welfare. My column tells the tale:
With their apparent abandonment of the "public option" in favor of yet another program of government-endorsed private insurance, Democrats in the White House and Congress have revealed their health care "reform" as corporate welfare benefiting health insurers and drug makers rather than a populist assault on a greedy industry.

Tuesday, December 8, 2009

Lefty blogger: pay no attention to the industry money behind ObamaCare.

I am constantly railing against what I call "The Big Myth," the false dogma that Big Business simply wants to be left alone by government, and that Big Government serves the role of constraining Big Business. Matt Yglesias, a liberal blogger for the Center for American Progress, tried pretty hard in a blog post yesterday to salvage that myth yesterday in a blog post that has an odd "I want to believe" tone.

In a later post, I'll address Yglesias's specific points, but for now I want to address his thesis. Referring to Obama's health-care overhaul, the blogger writes:

But the simple fact of the matter is that corporate America is doing what it usually does—attacking progressive legislation, and promoting obstruction by conservative politicians.

I'll admit it's a bit hard to argue with Yglesias because of his tendency of leaning almost exclusively on loaded but undefined terms such as "progressive," "conservative," "corporate America," and -- this one Yglesias repeats so much, with so little content, it's almost his mantra -- "reform." So you have to do some mind-reading when dealing with this guy. Let's assume that by "progressive," he means "Big Government policies Obama has supported."

By this definition Yglesias's thesis falls apart. What are the biggest legislative issues of the last year or so? By my count, the top five would be the Wall Street bailout, the Detroit bailout, the stimulus, cap-and-trade, and health care. On Wall Street, Detroit, and the stimulus, Obama's Big Government side had the backing of the affected industries as well as the Chamber of Commerce. On cap-and-trade and health care, "corporate America" has been split.

Many industry giants including Duke Energy, Alcoa, Chrysler, Caterpillar, Conoco Phillips, Dow Chemical, DuPont, Ford Motor, General Electric, General Motors, Johnson & Johnson, PepsiCo, and Shell are members of the U.S. Climate Action Partnership, the lobbying group that has crafted the cap-and-trade legislation currently on Capitol Hill. Yes, the Chamber and Exxon are against cap-and-trade, but with the above big boys and Goldman Sachs on Obama's Big Government side, the situation is hardly one of "corporate America ... attacking prorgessive legislation."

Health-care is far more complex, but Yglesias's blog post unfortunately glosses over that complexity by leaning so heavily on the undefined word "reform." Still, it's startling to hear this "industry-always-battles-progressives," talk from the liberal blogger who so proudly touted his "progressive" employer's deal with Wal-Mart -- the nation's largest private employer -- to lobby for a federal mandate that all employers provide health insurance. While Yglesias tried to paint this Wal-Mart-CAP alliance as an anomaly, he did note, "the willingness of much of the business community to break with Chamber ideology on Waxman-Markey and now on health care."

Let me add these data points to poke further holes in the Big Myth Yglesias is peddling here Barney Frank scored higher on the Chamber's score card than did Ron Paul. The tobacco regulation bill Obama signed was partly written by Philip Morris, and the toy safety bill he supported was the fruit of Mattel's 2007-08 full-court lobbying press. Cash-for-Clunkers also provided an industry-Obama alliance.

At the time of the Yglesias-Wal-Mart alliance, I wrote:

The notion that Big Business has long been reflexively anti-government is a myth, and Yglesias repeats it here in order to pat his boss John Podesta (whose brother lobbies for the U.S. Chamber of Commerce, and whose sister-in-law lobbies for Boeing, Cigna, and dozens of other megacorps,) and the President (who received more money than anyone else from Wall Street, and frankly every industry but insurance) on the back for "change."

Saturday, December 5, 2009

Comcast support for Baucus bill shows NBC still in Obama-friendly hands

The same day Comcast and General Electric announced Comcast would take control of NBC Universal, Comcast CEO Brian Roberts announced his company was supporting the health-care bill currently before the Senate.

This is interesting in two ways:

First, as Newsbusters points out, this move by Roberts coincides with an announcement of a merger that will likely face anti-trust scrutiny from the same Congress and administration that is pushing the health-care bill. Washington has long used the weapon of anti-trust to extract pounds of flesh from big corporations. One commissioner said yesterday, "My skepticism about the harms imposed by so few controlling so much persists."

Also, it seems fitting that Comcast would move a step closer to Obama when taking over NBC Universal, because the current owner, GE, is perhaps the most Obama-friendly corporation in the country.

Friday, December 4, 2009

Jobs summit features rent-seeking CEOs

What does job creation look like under Obamanomics? Take a hint from the CEOs Obama invited to his job summit. My column dives into this:
Executives from Boeing, Siemens, Disney, and Dow were among those headlining the summit. These companies all depend on government aid or regulation for their profits. In this way, they were fitting icons for Obama's economic vision.

Thursday, December 3, 2009

Washington Times Review of Obamanomics

AG Gancarski reviews Obamanomics in the Washington Times:
And the biggest companies with the most lobbyists reap the benefits. This trend holds true for many sectors of the economy - big pharma, the insurance industry, king coal, big tobacco, the auto industry, agribusiness, the securities industry and so on - even as average Americans grapple with the realities of a deteriorating dollar, double-digit credit card interest rates, and houses with mortgages as underwater as a sunken ship. So it is that companies such as General Motors Corp., clinging to fiat bailout cash to survive, nonetheless kept their lobbyists employed even while pleading penury.

Wednesday, December 2, 2009

Obamanomics Excerpt: Obamanomics: General Electric wins big with White House

Today, the Examiner carries an excerpt from Chapter 10 of Obamanomics:

Days after Obama's inauguration, Jeff Immelt, CEO of General Electric, wrote to shareholders: "[W]e are going through more than a cycle. The global economy, and capitalism, will be 'reset' in several important ways.

"The interaction between government and business will change forever. In a reset economy, the government will be a regulator; and also an industry policy champion, a financier, and a key partner."

General Electric is a sprawling, complex corporation with many diverse businesses. The company makes light bulbs and refrigerators, sure, but it also has a finance arm, a transportation arm, a health-care arm, a communications arm, and more. The above letter from Immelt reveals what these arms all have in common: They all reach out for government favors.

Washington Times "Hot Button" Column on Obamanomics

Amanda Carpenter at the Washington Times writes a daily "Hot Button" column. Today, she discusses Obamanomics:
"Obama strongly believes in government directing the economy," Mr. Carney said. "It's inevitable when government directs the economy lobbyists become more important, so whether he likes it or not, he's making them more important."

Close friend of agriculture chief now a Monsanto lobbyist

My column today continues on the theme of the agrichemical industry's reach into the Obama administration:
Jerry Crawford, an Iowa lawyer and lobbyist with deep ties to Agriculture Secretary Tom Vilsack, recently registered as the Washington representative for Monsanto, a biotechnology and agrichemical giant that embodies the "special interests" President Obama planned to drive from the temple of federal government.

The Des Moines Register calls Crawford a "well-connected, high-profile Des Moines lawyer" and "Democratic power broker."

Examine his record, and you see what the paper means. Crawford was once chairman of the Iowa Democratic Party. He was the Iowa chairman for the presidential campaigns of Michael Dukakis, Bill Clinton, Al Gore and John Kerry. In 2008, he was Hillary Clinton's Midwest campaign chairman.

Of greater significance today, he is also a "longtime Vilsack friend and adviser," a "Vilsack ally," a "top Vilsack insider," and "a guru for and a big friend of Gov. Tom Vilsack," according to the Register.

Tuesday, December 1, 2009

Review: Obamanomics Ties Obama to Big Business

Human Events runs its review today of Obamanomics:
Carney isn’t calling the new president corrupt. Instead, he’s warning Obama that “corporate-government intimacy is a breeding ground for scandal.”

Time and again Carney states his opposition to Obama’s legislative agenda without the sort of rancor one might expect from a critic of the new administration. He doesn’t think Obama is a socialist or someone who wants to harm the country. The president simply believes his approach is the right one. Meanwhile, major corporations see the benefits of Obamanomics -- more regulation and less competition for their services.

So what happens next? Obamanomics details a step-by-step approach to defeat the principles set in motion over the last year, like banning future bailouts and earmarks. Carney realizes not every step is feasible. Some won’t be politically popular while others might not be enough to thwart the changes being made to our government.

But they show hope for a different kind of change still exists.

Obamanomics defined: Big Government in service of Big Business

Today, the Examiner runs an excerpt of Obamanomics, Chapter 1:

Underlying Obamanomics are some basic economic facts and political realities. These are the Four Laws of Obamanomics, paired below with some of the lobbying strategies that exploit these laws.

1) During a legislative debate, whichever business has the best lobbyists is most likely to win the most favorable small print. Similarly, once a bill has passed, the business with the best lawyers and lobbyists will best be able to craft the regulations and learn how to game them. A big business, counting on this fact while lobbying for more government spending or control, is employing The Inside Game.

2) Regulation adds to overhead, and higher overhead crowds out smaller competitors and prevents startups from entering the industry. When corporations, knowing this, lobby for more regulation of their industry, I call this the Overhead Smash.

3) Bigger companies are often saddled by inertia, meaning robust competition is a threat. Adopting regulations that stultify the economy is the equivalent of raising the basketball hoop to twenty feet at half-time: it protects the lead of whichever team is ahead. When Big Business seeks to stultify the economy to hold back smaller competitors, I call it Gumming the Works.

4) Government regulation grants an air of legitimacy to businesses, boosting consumer confidence, often beyond what is warranted. This is The Confidence Game.