Held Hostage by the Health System

by Dr. Marcia Angell

The Boston Globe
Saturday, May 23, 2009

The Senate Finance Committee's hearings on health reform earlier this month did not include testimony from any advocate for single-payer insurance. Physicians for a National Health Program, which represents 16,000 doctors, asked the committee to invite me to testify, but it chose not to. If I had been invited, this is what I would have said:

The reason our health system is in such trouble is that it is set up to generate profits, not to provide care. We rely on hundreds of investor-owned insurance companies that profit by refusing coverage to high-risk patients and limiting services to others. They also cream off about 20 percent of the premiums for profits and overhead.

In addition, we provide much of our medical care in investor-owned health facilities that profit by providing too many services for the well-insured and too few for those who cannot pay. Most physicians are paid fee-for-service, which gives them a similar incentive, particularly specialists who receive very high fees for performing expensive tests and procedures. Nonprofits behave much like for-profits, because they must compete with them. In sum, healthcare is directed toward maximizing income, not maximizing health. In economic terms, it's a highly successful industry, but it's a massive drain on the rest of the economy.

The reform proposals advocated by President Obama are meant to increase coverage for the uninsured. That is certainly a worthwhile goal, but the problem is that they leave the present profit-driven and highly inflationary system essentially unchanged, and simply pour more money into it - an unsustainable situation. That is what is happening in Massachusetts, where we have nearly universal health insurance, but costs are growing so rapidly that its long-term prospects are poor without cutting benefits and greatly increasing co-payments. Initiatives such as electronic records, case management, preventive care, and comparative effectiveness studies may improve care, but the Congressional Budget Office and most health economists agree that they are unlikely to save much money. Promises by for-profit insurers and providers to mend their ways voluntarily are not credible.

Nearly every other advanced country has a largely nonprofit national health system that provides universal and comprehensive care. Expenditures are on average about half as much per person, and health outcomes are generally much better. Moreover, these countries offer more basic services, not fewer. They have on average more doctors and nurses, more hospital beds, longer hospital stays, and there are more doctor visits. But they don't do nearly as many tests and procedures, because there is little financial incentive to do so.

It is often argued that the first order of business should be to expand coverage, and then worry about costs later. But it is essential to deal with both together to stop the drain on the rest of the economy and the further fraying of healthcare. The only way to provide universal and comprehensive coverage and control costs is to adopt a nonprofit single-payer system. Medicare is a single-payer system, with low overhead costs, but it uses the same profit-oriented providers as the private system and also preferentially rewards specialists for tests and procedures. Consequently, its costs are rising almost as rapidly as those in the private sector. Representative John Conyers introduced an excellent bill that calls for extending Medicare to everyone in a nonprofit delivery system. That could be done gradually, by lowering the Medicare age a decade at a time.

A single-payer system is ignored by lawmakers because of the influence of the health industry lobbies. They raise the specter of rationing and long waits for care. There are indeed waits for some elective procedures in some countries with national health systems, such as the United Kingdom. But that's because they spend far less on healthcare than we do. For them, the problem is not the system; it's inadequate funding. For us, it's not the funding; it's the system. We spend more than enough.

I urge you to consider a nonprofit single-payer system. The economic interests of the health industry should not be permitted to hold the rest of the economy hostage and threaten the health and well-being of the public.

Dr. Marcia Angell is a senior lecturer in social medicine at Harvard Medical School and former editor-in-chief of the New England Journal of Medicine.

Paul Begala health memo rebuts Frank Luntz

By: Carrie Budoff Brown
May 21, 2009 11:44 PM EST
Politico

Democratic strategist Paul Begala is circulating a point-by-point rebuttal of GOP consultant Frank Luntz’s widely read strategy memo on health care – with Begala urging congressional Democrats to push back hard against “Republican Orwellian rhetoric.”

“Because they know they cannot win the argument honestly, Republicans are resorting to mendacity,” Begala wrote in the memo obtained by POLITICO. “Democrats must not let them get away with it.”

Begala argues that the Luntz strategy aims to confuse voters about which party wants reform. He warns Democrats that they risk seeing their message co-opted and a health overhaul die this year unless they aggressively confront Luntz’s tactics.

“Your job is to smoke them out,” wrote Begala, a former adviser to President Bill Clinton and CNN commentator. He is scheduled to brief Hill staff on the memo Friday.

Begala’s advice comes ahead of the Memorial Day recess when members of Congress will likely canvass voters on health care reform while back in their districts. The issue is expected to dominate the legislative agenda through the summer with House and Senate looking to pass a bill by August.

Luntz, a top practitioner of political framing, wrote a 28-page memo earlier this month arguing that Americans wanted reform and that Republicans needed to empathize with their fears over rising insurance costs. They could not just resort to a knee-jerk rejection of the ideas being pushed by President Barack Obama, Luntz wrote.

He urged his party to direct their attacks on Democrats in Congress and Washington bureaucrats.

But even as Luntz encouraged Republicans to embrace reform, he outlined a detailed strategy for defeating the sweeping overhaul Democrats have proposed. He wrote, “Republicans must be for the right kind of reform that protects the quality of health care for all Americans.”

Four House and Senate Republicans introduced the first major health care reform bill Wednesday, helping to blunt criticism that the GOP wasn't putting forward its own solutions. Even on this point, Begala suggests Democrats highlight that Republicans never made a serious effort to overhaul health care when they controlled Congress and the White House.

The Luntz paper, which received wide notice in political circles, reminded health care experts of memos written by William Kristol, a Republican columnist who helped torpedo the Clinton health care plan in 1994.

When the memo from Luntz leaked out, Senate Democrats expressed concern with the White House that the party wasn’t ready for the fight. President Barack Obama’s top strategist, David Axelrod, was dispatched to the Hill, where he met privately with House and Senate Democrats on how to talk about health care reform.

Obama introduced eight principles for health care reform in his budget released in February. But now, he’s emphasizing three: reducing costs, preserving choice and ensuring affordability.

Obama introduced the simplified approach last week at a White House event, and his communications and political operations have since run with the framework, pushing it in fundraising appeals and private meetings with lawmakers.

Calling the Luntz strategy “misleading,” Begala offers nine pages of arguments and mock scripts designed to counter it.

Democrats should “banish from your lexicon the oft-cited statistic that 48 million Americans lack health insurance,” Begala wrote. “While it is true, it has two flaws: first, it lacks emotion; second it lacks resonance. Every single working American is suffering with the high cost of health care today.”

Washington bureaucrats play the bad guy in Luntz’s memo, but insurers pick up that role in the Begala paper.

If Republicans say Democrats want the government to control health care, Democrats should say insurers play that role now, and a reform bill would require them “to charge reasonable prices and deliver quality service,” Begala wrote.

Luntz told Republicans that they must acknowledge a health crisis exists, but they should also emphasize that it would also be more of a crisis if Democrats implement a health care system that ends up delaying medical treatments.

“Having to sit in the waiting room is a nuisance,” Begala wrote. “Not being able to afford to go to the doctor’s office at all is a crisis.”

And if Republicans heed Luntz’s advice to attack the Democratic plan as “a bailout for [the] insurance industry,” Democrats should remind listeners that they want to stop insurance companies from denying or dropping coverage based on preexisting conditions.

“As we say in Texas," Begala wrote, "what chutzpah."

Just When You Thought the Corporate Rip-Off Schemes Couldn't Get Any Worse...

by David Sirota
OpEd News
5/23/09

This month, the Obama administration unveiled a plan to reform the taxes that apply to life insurance. Not surprisingly, the insurance industry freaked out, paushing out its spokesman to say "This is absolutely the wrong time to make it more expensive for families, as well as U.S. businesses, to obtain the security and peace of mind our products provide."

That sounds reasonable, until you read this incredible new report from the Wall Street Journal about how insurance companies use current tax rules not to help "families obtain security and peace of mind" but to help fat-cat executives pad their salaries:

Banks are using a little-known tactic to help pay bonuses, deferred pay and pensions they owe executives: They're holding life-insurance policies on hundreds of thousands of their workers, with themselves as the beneficiaries.

The insurance policies essentially are informal pension funds for executives: Companies deposit money into the contracts, which are like big, nondeductible IRAs, and allocate the cash among investments that grow tax-free. Over time, employers receive tax-free death benefits when employees, former employees and retirees die.

Though not improper, the practice is similar to what is known as "janitors insurance," an insurance-on-employees technique that has long been controversial. Critics say the banks' insurance contracts are a way for companies to create tax breaks for funding executive pensions. And some families have complained that employers shouldn't profit from the deaths of their loved ones.

This is the kind of story that you read and think wow, just when you thought corporate rip-off schemes couldn't get any more shameless ...I mean, using employees' life insurance policies as a back-door way to pad the boss's salary ... wow.

I've (obviously) been critical of the Obama administration in its handling of the financial bailouts, but I think on tax issues, the administration is basically trying to do the right thing. When you look across the news, you see a bunch of big and small efforts to shut down the worst tax loopholes, from the corporate tax haven loopholes to this life insurance loophole. That effort is going to have its predictable critics, but when you read a story like the Wall Street Journal's scoop this week, you see how important it is to ignore those critics.

Al Gore Dials for Votes on Warming Bill

By LISA LERER | 5/21/09 4:26 AM EDT
Politico


House Democrats backing controversial climate change legislation have been getting a hidden helping hand this week from Al Gore.

Over the past few days, the former vice president and environmental activist has mobilized his green grass roots, marshaled his well-endowed lobbying organization and even personally called Democratic committee members in an effort to push the bill through the House Energy and Commerce Committee and through Congress.

“I have enormous respect for Al Gore. When it comes to climate change, he’s the guru,” said Rep. Eliot Engel (D-N.Y.).

Engel said Gore called him on Saturday to try to persuade him to vote for the legislation. The two, who had never spoken privately before, had a “nice, lengthy conversation,” said the congressman.

Gore said he supported the legislation “despite the compromises that had to be made” because it was moving the country toward reducing greenhouse gas emissions.

Some environmental groups have criticized the bill as overly generous to polluting industries at the expense of tougher caps on emissions — a view shared by a handful of progressive House members. But with both a Nobel Peace Prize and an Oscar to show for his work on climate change, Gore holds particular sway with those members, and his calls could persuade some wavering progressives to back the bill.

Engel told Gore that he planned to oppose the bill because he felt “uncomfortable” with some of the concessions energy committee Chairman Henry Waxman made to utilities, coal plants and manufacturing companies. He’d also like the legislation to include more funding for flex-fuel vehicles, which he’s pushed for several years.

“Gore said he wasn’t all that familiar with the nuances of flex-fuel cars but he hoped I could work it out so I could support the bill,” the congressman said. “It’s helpful to hear him, because he’s been such a leader in this regard, so I appreciate the call.”

But, he noted, “I’m not a yes on this bill.” For the rest of the story click here.

Gore’s spokeswoman, Kalee Kreider, said she would not comment on his private communications.

The former vice president may have his work cut out for him: House Ways and Means Committee Chairman Charles Rangel said he intends to mark up the climate change bill after it passes out of Waxman’s committee. That means there will be a need to persuade another group of skeptical — and possibly politically vulnerable — Democrats to back the legislation.

“I don’t want to personalize any bills. I just want to deal with what the committee deals with,” Rangel said Wednesday. “We will deal with anything we have jurisdiction over.”

Asked about Rangel’s comments, Waxman said he’ll meet with the Ways and Means chairman, and any other chairmen with jurisdiction, after the Memorial Day recess to figure out how to proceed.



“I’m not worried about it,” Waxman said.

Gore is no stranger to Hill politics.

As a congressman in the 1980s, he used his seat on the committee to debate ways to curb pollution using the Clean Air Act. He still has good relationships with several of the committee’s most senior members, including former Chairman John Dingell and Waxman, the current chairman.

Gore has spoken with Waxman and progressive Washington Democratic Rep. Jay Inslee, a supporter of the bill, and he testified last month before the committee.

Off the Hill, Gore’s network of environmental organizations is running large-scale grass-roots campaigns advocating for the legislation, complete with ads, e-mail solicitations and training sessions for “citizen activists.” The effort is largely targeted at Midwestern and Southern lawmakers who worry that the new regulations will raise costs for strapped consumers and fossil-fuel-intensive industries, including steel, auto and coal.

Read more: http://www.politico.com/news/stories/0509/22796.html#ixzz0GM4uruWO&BAnd here is the rest of it.

Bill Moyers Journal Puts Single-Payer on the Table

Don't miss Fact-Packed May 22 Bill Moyer's Journal! Moyers Exposes Who's Behind the Lobbying Campaign to Kill Healthcare Reform.

Watch Online.

By Sandra Spangler

Bill Moyers put the discussion of single-payer on the table as national advocates laid out reasoned arguments backed by surveys and statistics about why single-payer is the only financially and politically feasible option that makes sense to control costs that have nothing to do with delivering quality health care.

Single-payer is the only option that removes the insurance companies as middlemen and returns health care decisions to doctors and patients. Retaining private insurance companies, even in competition with a public plan, would fail to rein in costs of maintaining a huge profit-driven bureaucracy that still complicates health care delivery and burdens doctors.

Moyers said the mainstream media has not covered the single-payer option. To illustrate that Congress has already decided to please the powerful insurance lobby, Moyers aired a film clip of Sen. Max Baucus, Chairman of the Senate Finance Committee telling a questioner that single-payer is off the table because it can't pass.

Donna Smith, who herself experienced a medical bankruptcy and who appeared in Michael Moore's film SICKO told Moyers that single payer takes a great idea from the left, public financing, and combines it with a great idea from the right, private delivery. Smith, now works as an organizer for the California Nurses Association. She vows that fighting for single-payer is difficult and will require more doctors in white coats and nurses taking to the streets to get a message out that will overcome the financial power of the insurance lobby. But she predicts that advocates of single-payer will win in the end because the system is broken.

Sidney Wolfe, MD, acting President of Public Citizen and director of it's Health Research Group, told Moyers that single payer would easily pass Congress with muscular leadership from House and Senate Democratic leaders in partnership with the President.

Wolfe and Dr.David Himmelstein, Associate professor of Medicine at Harvard, who founded the Physicians for National Health Care, say the health care system in the United States only serves the interest of a bloated health insurance industry. Health insurers drain 400 billion dollars a year from taxpayers and policy holders to fund company profit and executive "perks" and maintain a wasteful bureaucracy. Himmelstein said that the $400 billion the insurance companies waste would fund all the uninsured and underinsured in this country. Both doctors agree that 20,000 people a year in the U.S. die needlessly because they don't have adequate insurance or are uninsured.

Dr. Himmelstein also described insurance company schemes designed to make money by cherry picking healthier people and denying coverage to sicker people.

One of Himmelstein's fears is that if Congress adopts a public option without reining in insurance companies, the sickest patients will wind up in the public plan and the healthy will remain in private plans that will unhesitatingly drop or deny coverage the minute a patient gets sick. He arrived at this opinion from observing what has happened with Medicare HMO's that have cherry-picked healthier people and left the rest in the public plan. The government pays 15% more to insure enrollees in Medicare HMO's and subsidize insurance companies. Himmelstein said that half of the people forced into medical bankruptcy had insurance initially but could not afford to pay high co-pays and coinsurance. He also added that there are more doctors in Canada in private practice than there are in the U.S. More and more U.S. doctors are salaried employees of corporate health care organizations.

Himmelstein and Wolfe complain that doctors spend hours every day arguing on the phone with insurance gatekeepers trying to get them to cover medically necessary treatments. Himmelstein said that most doctors support a national single-payer healthcare system so they can get back to practicing medicine.

According to Wolfe, insurance administrators outnumber doctors 30 to one.

Click on the picture to view Moyers interview with Donna Smith, who represents the 85,000 strong California Nurses Association.







Click on this picture
to view Moyers interview with Drs. Himmelstein and Wolfe.

Feingold: Prolonged detention would ’set the stage for future Guantanamos’

BY MURIEL KANE

Published: May 22, 2009
Updated 5 hours ago
Rawstory


Senator Russ Feingold (D-WI) has sent a letter (pdf) to President Barack Obama which praises many aspects of his Thursday speech but also expresses concerns about his intention to create a system of “prolonged detention” without trial for certain terrorists.

Feingold announces in the letter that he plans to hold a hearing on the matter next month and asks for top Justice Department officials to testify.

“While I appreciate your good faith desire to at least enact a statutory basis for such a regime,” Feingold writes, “any system that permits the government to indefinitely detain individuals without charge or without a meaningful opportunity to have accusations against them adjudicated by an impartial arbiter violates basic American values and is likely unconstitutional.”

Feingold goes on to note that “such detention is a hallmark of abusive systems that we have historically criticized around the world. It is hard to imagine that our country would regard as acceptable a system in another country where an individual other than a prisoner of war is held indefinitely without charge or trial.”

“Once a system of indefinite detention without trial is established, the temptation to use it in the future would be powerful,” Feingold continues. “And, while your administration may resist such a temptation, future administrations may not.”

“There is a real risk, then, of establishing policies and legal precedents that rather than ridding our country of the burden of the detention facility at Guantanamo Bay, merely set the stage for future Guantanamos, whether on our shores or elsewhere, with disastrous consequences for our national security. ”

Feingold, who chairs the Constitution Subcommittee of the Senate Judiciary Committee, concludes by saying that he will be holding a hearing on the matter in June and requesting testimony from one or more top Justice Department officials.

Feingold has an extensive history of opposition to indefinite detention. When he voted against the Patriot Act in October 2001, he explained that “my focus on this bill, as Chair of the Constitution Subcommittee of the Judiciary Committee in the Senate, was on those provisions that implicate our constitutional freedoms. … The Administration’s original proposal would have granted the Attorney General extraordinary powers to detain immigrants indefinitely, including legal permanent residents. … [Even after revisions] the bill continues to allow the Attorney General to detain persons based on mere suspicion.”

When Feingold later announced his support for the Habeas Corpus Restoration Act of 2007, he did so largely on the grounds that it would “restore the Great Writ of habeas corpus, ensuring that no person will be subject to indefinite detention without charge based on the President’s sole discretion.”

Feingold, as much as any senator, appears to have both the desire and the position in the Senate to make an issue of the Obama administration’s support for “prolonged detention” in a highly visible public forum.

Feingold’s complete letter can be read in pdf form here.

'Policy Differences' or 'High Crimes?'

REAL NEWS VIDEO

This Real News segment presents two sides of the controversy embroiling the President who as a candidate invited his liberal grassroots base to hold his decisions to account. President Obama told the grassroots that he needs popular support to make change. David Swanson, former Dennis Kucinich aide is taking his duty to disagree with the President seriously on this controversial topic.

Swanson debates Real News moderator Paul Jay on President Obama's Closed-Door Decision Not to Investigate the Bush-Cheney Administration. President Obama has consistently said that dealing punitively with the Bush deceitful policies that began the Iraq war only prevents progress in the future and would be a distraction that would tie up his agenda to bring real change for the American people.

Many Americans agree. However Swanson argues that Attorney General Eric Holder should appoint a special prosecutor to conduct an inquiry into whether Bush administration violations of the rule of law were high crimes. He also says that Obama's decision allows Dick Cheney to go on the offense and that ruling out any prosecutions for misdeeds seems to legitimize them. It is Swanson's intent to lobby the President to reconsider. Editorial comment by 26Dems



David Swanson is the creator of ImpeachCheney.org, co-founder of AfterDowningStreet.org and Washington Director of Democrats.com A writer and organizer, Swanson has worked for ACORN, the International Labor Communications Association, Dennis Kucinich's 2004 presidential campaign and many others

Siegelman's First Trial Judge Blasts U.S. Prosecutors, Seeks Probe of 'Unfounded' Charges

Andrew Kreig, DC journalist and attorney
Posted: May 21, 2009 06:17 PM
Huffington Post

One of the most experienced federal judges in recent Alabama history is denouncing the U.S. Justice Department prosecution of former Alabama Gov. Don Siegelman.

Retired Chief U.S. District Judge U.W. Clemon of Birmingham calls for a probe of misconduct by federal prosecutors ─ including their alleged "judge-shopping," jury-pool "poisoning" and "unfounded" criminal charges in an effort to imprison Siegelman.

The Siegelman prosecution by the Bush Administration Justice Department is one of the most controversial U.S. criminal cases of the decade because of claims that Republican political appointees ─ sometimes using career prosecutors as public surrogates ─ unfairly targeted the Democratic defendant to prevent his re-election in 2006 as governor.

"The 2004 prosecution of Mr. Siegelman in the Northern District of Alabama was the most unfounded criminal case over which I presided in my entire judicial career," Clemon wrote U.S. Attorney General Eric H. Holder last week. "In my judgment, his prosecution was completely without legal merit; and it could not have been accomplished without the approval of the Department of Justice."

The remarkable letter by Clemon requests that that Holder investigate misconduct by federal prosecutors arising from Siegelman's 2004 trial on bribery-related charges. Clemon oversaw that trial until prosecutors dropped the case. Prosecutors then shifted their effort against Siegelman to a different Alabama federal district. Prosecutors obtained Chief U.S. District Judge Mark E. Fuller of Montgomery to preside over the former governor's trial. Fuller hated Siegelman because of his role in appointing an investigator for scandals arising from the judge's controlling interest in the military contractor Doss Aviation, according to on-the-record sources cited in my Huffington Post article published May 15. Click here for the full Huffington Post story.

The Crimes of Wall Street: The Scam and Sleaze at the Top/White Collar Criminal "Laughs" at Govt. Oversight

by Danny Schechter

Global Research, May 20, 2009

So many of us know in detail about all the false warnings and exaggerated claims that were used to justify the war in Iraq. By now, six years later, and after many books, reports, news stories and films (hopefully including my two books and film, Weapons of Mass Deception), we see the pattern of lies and deception. We realize what a fraud was committed against the American people and what its consequences have been for the people of this country, Iraq and Afghanistan.

For many of the righteous among us who thunder against these lies, there seems to be a lack of curiosity about the costly frauds that flushed our own economy down the toilet. Here too, there is a tendency to focus blame on politrick(ians), and not look at the larger fraud behind the fraud, in part , because most economists and media outlets minimize its role.

First, its clear that, like on the war, government officials did mislead us, from original deregulators in the Carter-Reagan years to the financial “modernizers of the Clinton-Bush 2 era with their refusal to accept responsibility for the consequences of their free market fantasies, the gutting of rules and regulations and embrace of a phony “ownership society.”

It is also now easy to blame the now self admitted “naivete” of Fedhead Alan Greenspan or the continued arrogance and bluster of Democrat turned Republican Phil Gramm who killed Glass Steagall and called fighters against predatory lenders “terrorists.” It equally easy to scorn those who claim that our government is a “tyranny” and call Obama a flaming Socialist

Flash back with me now to March 2007, just a few months before the markets melted down. Slate reported then on testimony by the two top economy watchers in America. They insisted that problems that were unleashed like a tsunami had been “contained.”

“Testifying on March 28, Ben Bernanke said, "At this juncture…the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained." The same day, Treasury Sec Henry Paulson told the House of Representatives that "from the standpoint of the overall economy, my bottom line is we're watching it closely but it appears to be contained."

In May, Bernanke returned to the containment theme, saying, "we do not expect significant spillovers from the subprime market to the rest of the economy or to the financial system." A few weeks later, he reiterated that "the troubles in the subprime sector seem unlikely to seriously spill over to the broader economy or the financial system." On July 26, Paulson told Bloomberg, "I don't think it [the subprime mess] poses any threat to the overall economy." In China a week later, he revised and extended his remarks: "I also said I thought in an economy as diverse and healthy as this that losses may occur in a number of institutions, but that overall this is contained and we have a healthy economy."

Duh? Wrong, wrong, wrong.

But, before you dismiss these two geniuses as dunderheads, let’s consider what they knew or should have known. Or perhaps, like their counterparts in the Pentagon, they were blinded by their own assumptions and false “intelligence.” As people with a strong memories of our volatile history of financial crises, they know it’s not the just the government that should be indicted—it’s the irrational system it upholds.

At that time, and for years leading up to the popping of an artificially created bubble, there was a white collar crime wave underway with large scale corporate fraud that was duly reported and duly ignored. In 2004, The FBI first reported publicly on an “epidemic” of mortgage fraud that had been going on for years charging 80% of the losses were the result of deceptive practices by lenders backed by our biggest financial institutions.

Criminologist William K Black, a former bank regulator and expert on crimes committed by the men at the top—so-called “control frauds” referencing the practices of CEOS in control at big corporations---studied these reports pointing out that by 2008, there were only 62,000 “criminal referrals” in this industry with only agencies reporting crimes “mandated” by law to do so. Only 1/3 of these illegal practices were even reported and, then, hardly any, in unregulated sectors which, in turn, dispensed 80% of them. These were the mortgages Wall Street bought, securitized, sliced and diced, borrowed against, and resold under false pretenses. Did they know? You bet they did.

He estimates there have been ½ million Fraudulent mortgage cases annually that should have been prosecuted but the FBI only has the capacity to handle 500 per annum because most of its white collar crime fighters were reassigned to the war on terror.

This is common says Sam Antar, a former, or maybe not so former admitted white collar criminal who laughs at government attempts to control the crimes:

“ Because the government doesn't have the resources to do it, and the white-collared criminals know it. The government basically ceded complicated crimes right after Enron. They ceded prosecuting complicated crimes. You see today, like the AIG thing, uh, Andrew Cuomo gets up there in front of the microphone and says, "We're gonna get those bonuses back!!" Any schmuck prosecutor could've gotten those bonuses back. Where are the complicated crimes that are being investigated? All we're getting today is small dinky guys getting prosecuted here and there for relatively easy crimes to investigate.”

The goal of control frauds are to defeat all attempts at controlling fraud, and artificially through accounting tricks to inflate the value of shares, promote a bubble or in short “Optimize the firm for fraud.” He says the control fraudsters are the real super-predators producing greater losses than all property crimes put together.

He charges this is as part of creating a “crimogenic” environment dressed up in legitimacy.

This is just one fraud. Black cites others including insider trading and “tunneling”---using bank holding companies as conduits for monies transferred from banks to executives and their underlings.

Two economists, one a Nobel Prize winner, George A. Akerlof, who along with Paul M Romer published a fascinating paper on deliberate looting using bankruptcies. Their thesis; ‘Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.”

Sound familiar?

In a lecture he gave recently in Iceland, a country’s whose government collapsed because of other frauds and speculation, William Black noted that ratings agencies involved in setting the price of assets never even looked at the loan files when certifying many of these deals as ‘triple A” thus inflating their value, aided and abetted by phony appraisals. This is what was behind the rash of no-doc or “liars” loans that deliberately misled borrowers.

After securities based on this allegedly asset-backed mortgage paper (with no assets behind it) began to fail in large numbers, one agency, FITCH, went back and reviewed the underlying information only to conclude in a low key way that “the results were disconcerting because of the appearance of fraud in every file we review.”

“Disconcerting?” How about infuriating, because more that $2 TRILLION dollars worth of these “toxic” assets were sold and bought contaminating the global economy. These crimes need to be fully investigated. A commission that investigated the S&L crisis concluded that in the big losses they studied “fraud was invariably present.”

Three questions: why didn’t anyone read that report? Secondly, what do you think an investigation of this crisis will reveal? And finally, why isn’t William Black speaking more in America?

Mediachannel News Dissector Danny Schechter is making a film based on his book PLUNDER: Investigating Our Economic Calamity (newsdissector.com/plunder) Comments to Danny@mediachannel.org

The Lie Cheney told about A.Q. Khan

by Larisa Alexandrovna
Rawstory
Friday, May 22nd, 2009 at 12:43 pm

Somewhere among the strategically placed references to September 11, 2001 and his unapologetic defense of torture, Dick Cheney managed to lie about a series of topics and events that are well documented. It is, after all, the electronic age and facts are not difficult to come by.

One must consider too what motivated the networks to carry a speech by a former Vice President in defense of torture. Perhaps former Chilean torturer Augusto Pinochet would have received a similarly warm reception from our broadcasters if he had chosen to deliver a speech on the benefits of torture.

The ethics vacuum is mind-boggling.

We have come to a point where a former Vice President told the world that America tortures – but calls it something else - and the networks cover this as though it were a random stump speech, not the actual embarrassment and horror that it is. The facts too are missing, although only a few news outlets seem interested in the truth.

No One Could Have Imagined

Cheney says that the attacks of September 11, 2001 “caused everyone to take a serious second look at threats that had been gathering for a while and enemies whose plans were getting bolder and more sophisticated.”

On the contrary, the plans were not new and bold and were well documented by the Central Intelligence Agency. In fact, a month prior to the attacks, President Bush and Dick Cheney both received a briefing on the matter. The August 6, 2001 Presidential Daily Briefing entitled “Bin Laden Determined to Strike in the US,” is fairly clear. The PDB mentions the following:

"A clandestine source said in 1998 that a Bin Laden cell in New York was recruiting Muslim-American youth for attacks.

We have not been able to corroborate some of the more sensational threat reporting, such as that from a [deleted text] service in 1998 saying that Bin Laden wanted to hijack a U.S. aircraft to gain the release of "Blind Shaykh" 'Umar' Abd aI-Rahman and other U.S.-held extremists.

Nevertheless, FBI information since that time indicates patterns of suspicious activity in this country consistent with preparations for hijackings or other types of attacks, including recent surveillance of federal buildings in New York.

The FBI is conducting approximately 70 investigations throughout the U.S. that it considers Bin Laden-related. CIA and the FBI are investigating a call to our embassy in the UAE in May saying that a group or Bin Laden supporters was in the U.S. planning attacks with explosives.

What did Bush do after receiving this briefing? He promptly went on vacation. It is unclear what Cheney did, but whatever it was, it had nothing to do with national security. In addition, torture was unneeded in obtaining this information. What was needed, however, was a White House interested in protecting our nation. It is therefore remarkable that Cheney continues to use 9/11 as a reason for his abuses of power, rather than be shamed by his indifference and negligence.
For the rest of the story click here.

The Myth of Return to the Battlefield from Guantanamo

Shayana Kadida
Senior managing attorney at the Center for Constitutional Rights
Posted: May 21, 2009 11:10 PM


The New York Times last night joined the parade of news organizations credulously reporting the utterly undocumented claims of Bush Defense Department holdover officials that large numbers of released former Guantanamo detainees had "returned to terrorism or militant activity."

The story indicates that the Times has seen a copy of the report. But had Times Pentagon correspondent (Condee Rice biographer) Elizabeth Bumiller seen any names? Apparently, 74 detainees are claimed to have returned to "the fight" (up from the 5, 7, 10, 12, 31, 61, and other unsupported totals the military has issued over the years). But 45 names they won't release. (Which it to say, those claims are nonsense -- compare the "43 suspected of returning to the fight" from DOD's Jan. 14 press conference.) As to the others, "29 have been identified by name by the Pentagon, including 16 named for the first time in the report." If so, that means 13 were previously named. Luckily we have a report from the Pentagon from July, 2007 which names names, and includes the "anti‐coalition militant activities" the detainees are supposed to have participated in.

Included: three English detainees whose "militant" activity was participating in the making of Michael Winterbottom's movie The Road to Guantanamo and seeking damages for their torture in U.S. courts, and five Uighurs, shipped off to Albania to forestall a court hearing on their release in 2006 and living in a run-down refugee camp there, whose crime was to complain to Tim Golden of the same New York Times about their miserable condition.

In fairness, the July 2007 report's preamble claims that "anti‐coalition militant activities" can include "participat[ion] in anti‐US propaganda or other activities"--but the report never bothers to sort out the total number of those who have "returned to the battlefield" through the militant activity of ... typing. Or talking to a reporter. The gaudy numbers reported previously (generally without names) have undoubtedly included all those few released detainees who dared complain about what they had experienced.

Bumiller didn't bother to check Google for the Seton Hall Law School report tearing apart the military's earlier claims. Nor did she check the names herself. But, lest you think no reporting at all was involved in her Times story, she did bother to do the math -- dividing 74 into the total number of released detainees (534) to come up with a "recidivism rate" -- which she then compares to the rate in US prisons! (Wow -- that part counts as *actual research*!)

Since the Times prides itself on its use of the English language (if not content), let's stop to explain a fine point to the editors here. "Recidivism" implies a prior crime, just like "return to the battlefield" implies the detainees were there once before. That's simply not true for 96% of the detainees, who the military's own records show were not captured on anything resembling a traditional battlefield.

UPDATE: Bumiller Backtracks slightly in Video interview with Andrea Mitchell:




What about actual names? Here, as best as I can tell, are the stories that are specific enough to be worth further analysis:

* Mullah Shazada: an Afghan killed on the battlefield on May 7, 2004, supposedly bragged to his people that he had been at Guantanamo under a completely assumed identity, and managed to get released. Conveniently, there's no way to verify a story like this, which could easily be the sort of thing a fighter makes up to increase his street cred.

* Abdullah Al Ajmi: A Kuwaiti who was released, lived a relatively normal life for three years, then vanished and allegedly blew himself up in Mosul, taking several Iraqi soldiers with him. According to his lawyer, when he first met Ajmi he was a polite young man, who left Guantanamo so damaged that his lawyer tried to warn the authorities that he needed help -- to no avail. The fact that the stigma of Guantanamo made him unmarriageable was apparently a major factor in his decline.

* Two Saudi guys who appeared in a video wearing tight camouflage t-shirts and claiming to be the new leaders of Al Qaeda in Yemen: Abu Hareth Muhammad al-Oufi and Sa'eed Ali al-Shihri. However, al-Oufi turned himself in to Saudi authorities after the Saudis made an appeal to their families and the families apparently called out for their kids to return, raising the question: how dangerous can a momma's boy really be?

Note that all of these men were released not by a court order, but by the Bush administration's own haphazard internal process. Perhaps if that administration had shown a commitment to charging and trying detainees, some of these men might be serving sentences for conduct prior to their detention. But instead, the Bush admin showed a mindless commitment to expanding executive power -- deciding to hold men as long as they could to prove a point about presidential power, not to make us safer.

Of course, there are limits to how long any country can hold foreign nationals in preventive detention: eventually the diplomatic costs will always get so high that the executive will have no choice to release them. And, of course, that's not a bad thing when there's no evidence justifying someone's detention. As the President has said repeatedly, the costs - both in terms of diplomatic and popular cooperation and goodwill overseas - far outweigh the risk of releasing individuals about whom we may have incomplete information. President Obama would do well to consider his own words when deciding whether to go forward with the preventive detention scheme he proposed today in his speech to the nation.

The president I still am hopeful about. The Times, not so sure. Will they print a front-page retraction to match the print headline "1 in 7 Rejoins Jihad, Pentagon Finds"?


UPDATE: See Spencer Ackerman's slow dissection of Bumiller's claims here and here.

UPDATE II: Bumiller backtracks (sort of, and ever so slightly) here.

Blue Double Cross

New York Times
OP-ED COLUMNIST

Blue Double Cross

By PAUL KRUGMAN
Published: May 21, 2009

That didn’t take long. Less than two weeks have passed since much of the medical-industrial complex made a big show of working with President Obama on health care reform — and the double-crossing is already well under way. Indeed, it’s now clear that even as they met with the president, pretending to be cooperative, insurers were gearing up to play the same destructive role they did the last time health reform was on the agenda.

So here’s the question: Will Mr. Obama gloss over the reality of what’s happening, and try to preserve the appearance of cooperation? Or will he honor his own pledge, made back during the campaign, to go on the offensive against special interests if they stand in the way of reform?

The story so far: on May 11 the White House called a news conference to announce that major players in health care, including the American Hospital Association and the lobbying group America’s Health Insurance Plans, had come together to support a national effort to control health care costs.

The fact sheet on the meeting, one has to say, was classic Obama in its message of post-partisanship and, um, hope. “For too long, politics and point-scoring have prevented our country from tackling this growing crisis,” it said, adding, “The American people are eager to put the old Washington ways behind them.”

But just three days later the hospital association insisted that it had not, in fact, promised what the president said it had promised — that it had made no commitment to the administration’s goal of reducing the rate at which health care costs are rising by 1.5 percentage points a year. And the head of the insurance lobby said that the idea was merely to “ramp up” savings, whatever that means.

Meanwhile, the insurance industry is busily lobbying Congress to block one crucial element of health care reform, the public option — that is, offering Americans the right to buy insurance directly from the government as well as from private insurance companies. And at least some insurers are gearing up for a major smear campaign.

On Monday, just a week after the White House photo-op, The Washington Post reported that Blue Cross Blue Shield of North Carolina was preparing to run a series of ads attacking the public option. The planning for this ad campaign must have begun quite some time ago.

The Post has the storyboards for the ads, and they read just like the infamous Harry and Louise ads that helped kill health care reform in 1993. Troubled Americans are shown being denied their choice of doctor, or forced to wait months for appointments, by faceless government bureaucrats. It’s a scary image that might make some sense if private health insurance — which these days comes primarily via HMOs — offered all of us free choice of doctors, with no wait for medical procedures. But my health plan isn’t like that. Is yours?

“We can do a lot better than a government-run health care system,” says a voice-over in one of the ads. To which the obvious response is, if that’s true, why don’t you? Why deny Americans the chance to reject government insurance if it’s really that bad?

For none of the reform proposals currently on the table would force people into a government-run insurance plan. At most they would offer Americans the choice of buying into such a plan.

And the goal of the insurers is to deny Americans that choice. They fear that many people would prefer a government plan to dealing with private insurance companies that, in the real world as opposed to the world of their ads, are more bureaucratic than any government agency, routinely deny clients their choice of doctor, and often refuse to pay for care. For the rest of the story click here.