The Affordable Care Act (ACA) is the landmark piece of policy for Obama's first term. Save perhaps his response to the Great Recession, the ACA is likely to be the primary measure by which his presidency will be judged in the history books. As long as it is fully implemented, it should help millions of uninsured Americans by shifting more people onto Medicaid, providing subsidies for low-income workers, and forbidding insurance companies from excluding customers based on past illness.
The Obama campaign released an interactive flow chart yesterday. One inputs their demographic data?age, sex, and income, for example?and the program spits out various ways the ACA has improved your health-care coverage. As someone who has private insurance, it showed me a list of services my insurance will now be required to cover at no extra charge and highlighted the fact that 80 percent of my monthly payments must be used on funding health service. It also informed me that, thanks to my salary level, I will qualify for tax credits to help me pay for insurance, but not until 2014.
The chart is part of a wider media blitz from the president's re-election campaign on the eve of the two-year anniversary of the ACA's passage. It also comes shortly before the Supreme Court is scheduled to hear oral arguments on its constitutionality later this month. For all the attention heaped on the ACA as it snaked its way through Congress in 2009 and early 2010, it has largely receded to the backdrop. That's because many of the main benefits won't be implemented until 2014, a budgetary move made to satisfy Blue Dog senators, who wanted to keep the price tag for legislation low during first ten years for imaging purposes. Its main innovations?a ban on pre-existing conditions, subsidies, and the health exchanges?won't go into effect until long after the next presidential election, putting Obama in the awkward position of touting benefits that will eventually improve their health care.
Stop menacing us with your
"I was raped by a priest" complaints!File this under oh my god:
[T]here?s a growing consensus on the part of the bishops that they had better toughen up and go out and buy some good lawyers to get tough. We don?t need altar boys.That's William Donohue, head of the Catholic League for Religious and Civil Rights, explaining the Catholic Church's new "get tough" strategy to silence and shut down those meanie rape and abuse victims and their advocates, by trying to bury SNAP in a barrage of costly and irrelevant legal proceedings.
SNAP is the Survivors Network of those Abused by Priests. According to the New York Times, it has three paid staff members, and its revenue in 2010 was a whopping $352,903. In other words, compared to the mighty Catholic Church, it's a pretty small, not-very-well-funded organization that exists solely to support those who've been victimized by the Church. Which means, according to Donohue, that SNAP is "a menace to the Catholic Church."
There's more to this new "get tough" strategy:
He said bishops were also rethinking their approach of paying large settlements to groups of victims. ?The church has been too quick to write a check, and I think they?ve realized it would be a lot less expensive in the long run if we fought them one by one,? Mr. Donohue said.Yes, that's the whole problem with how the Church covered up its priests who raped and molested children. It was too quick to write checks to the victims. So much more cost-efficient for the Church to instead spend the money trying to shut down the victims' support groups.
But it's not like it's a national strategy or anything. Sister Mary Ann Walsh, spokeswoman for the United States Conference of Catholic Bishops, said so. And besides, the Church would never be less than truthful about its coordinated attempt to silence its victims.
All of this new "get tough on rape and molestation victims" strategy is happening, of course, in the context of the Catholic bishops, and even the pope himself, whining that Americans are not showing proper deference to the Church's moral teachings and beliefs. Last week, Cardinal Timothy M. Dolan, archbishop of New York, penned a letter to his "brother bishops," in which he complained that "religious freedom is under attack" and insisted, "We did not ask for this fight, but we will not run from it." He even suggested that bishops might have to "engage in civil disobedience and risk steep fines" in order to protect their "religious freedom."
This is fight is the fight to prevent women from using contraception and to try to regain some influence over American Catholics, who increasingly ignore the edicts of their Church. The more the bishops insist that their definition of morality is the definition to which our laws must adhere, the fewer people listen and the more desperate the bishops become.
Because women's health care is an affront to the bishops and their beliefs and requires all of their resources. You know, except the ones not devoted to silencing those meanie victims of rape and abuse and their supporters who are a menace to the Church.
"I didn't back Romneycare, which is a government takeover of one-sixth of the economy," Santorum told conservative radio host Mark Levin on Monday night, pointing to his own work with Ohio Gov. John Kasich (R) on health savings accounts during the Clinton administration.But if Rick Santorum is a liberal (to Mitt Romney), and Mitt Romney is a socialist (to Rick Santorum), then I guess the question is: What does that make Barack Obama?
"When Mitt Romney's solution to a healthcare problem is to take over one-sixth of the economy, you can't call yourself a conservative," Santorum said. "You can call yourself a socialist, but you can't call yourself a conservative."
Simple answer: He's the guy who most Americans would vote for in a heartbeat than either of these two clowns.
FiveThirtyEight's look at the Republican electorate in Alabama.
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The Catholic church has flexed it's considerable muscle and gone on the offensive against the Survivors Network of those Abused by Priests (SNAP), asking the courts to force the organization to turn over two decades of emails. The request is part of two Missouri cases involving the sexual abuse of children by priests, and the church has filed at least five subpoenas in recent months and the national director was grilled by church lawyers for six hours earlier this year. Yesterday a judge in Kansas City rules that the network has to comply, because it "almost certainly" has information relevant to the case.
Did I mention that SNAP is not even a plaintiff in either of the cases preceeding now?
That makes it prett easy to lay bare what this really is...an orchestrated legal campaign by the church to crush an organization that it considers a thorn in it's side. The bishops would like nothing more than to set Torquemada loose on the troublemakers and rabble-rousers at SNAP, but since the days of the Inquisition (didn't expect that!) they are using legal pressure in an effort to silence their fiercest critic. If you want proof that SNAP is on the side of the angels -- Bill Donohue, the wingnut leader of the Catholic League, called SNAP "a menace to the Catholic church."
Mr. Donohue said leading bishops he knew had resolved to fight back more aggressively against the group: "The bishops have come together collectively. I can't give you the names, but there's a growing consensus on the part of the bishops that they had better toughen up and go out and buy some good lawyers to get tough. We don't need altar boys."
He said bishops were also rethinking their approach of paying large settlements to groups of victims. "The church has been too quick to write a check, and I think they've realized it would be a lot less expensive in the long run if we fought them one by one," Mr. Donohue said.
However, a spokeswoman for the United States Conference of Catholic Bishops, Sister Mary Ann Walsh, said Mr. Donohue was incorrect.
"There is no national strategy," she said, and there was no meeting where legal counsel for the bishops decided to get more aggressive.
I have no doubt that Donohue is the one telling the truth here, because he is gloating. He can't help himself from sporting wood at the mere thought that the church might smite an enemy.
SNAP going up against the church is truly a David v Goliath story...
The church has billions of dollars in assets. SNAP, which has only three paid staffers, operates on a shoestring. It's total revenue for 2010 was just an eyelash over $350,000 a significant portion of which came from trial attorneys who had won settlements from the church. The fifty grand they have spent trying to comply with the subpoenas represents a significant chunk of their operating capital. They are lining up attorneys who will work pro bono.
When the scandal over clergy sexual abuse reached a peak in Boston in 2002, American bishops met at their conference in Dallas with network members who gave emotional testimony about the toll of the abuse. But relations have deteriorated since then, and SNAP members say bishops now refuse to meet with them.
The first indication that the network would be caught up in legal proceedings came from Kansas City, where Bishop Robert W. Finn last year became the first American bishop ever to be criminally indicted for failure to report suspected child abuse.
Mr. Clohessy received a subpoena in October at his St. Louis home, where he works, regarding the case John Doe B.P. v. the Rev. Michael Tierney and the Diocese of Kansas City-St. Joseph.
Four plaintiffs are accusing Father Tierney of sexually abusing them years ago. The cases would be outside the statute of limitations in Missouri, but the plaintiffs contend they recovered their memories of abuse only recently.
The subpoena asked that Mr. Clohessy turn over all documents in the last 23 years that mention repressed memory, any current or former priest in Kansas City, the diocese, Father Tierney, John Doe or Rebecca Randles, the attorney for the plaintiffs.
The church's lawyers say they need to see SNAP's records to investigate whether Ms. Randles violated a gag order by giving the group information about one of the Tierney cases before it was filed, which the group then included in a news release.
Ms. Randles said in an interview: "I certainly didn't violate the gag order that is based on the ethics rules. And I did get an informal opinion from the Missouri bar ethics council indicating that it was acceptable to give an advance copy of the petition as long as my client had given me permission to do so."
Ten victims' advocacy groups filed a supporting brief arguing that the subpoena was unconstitutional. The Missouri Press Association also filed a supporting brief.
However, Judge Ann Mesle of Missouri Circuit Court in Jackson County ruled that Mr. Clohessy must release the files and be deposed because he "almost certainly has knowledge concerning issues relevant to this litigation"
Mr. Clohessy was deposed in January by lawyers for five accused priests and the diocese. In the 215-page transcript, made public on March 2, most of the questions were not about the case but about the network - its budget, board of directors, staff members, donors and operating procedures.
Mr. Clohessy testified that he had never had contact with John Doe.
"It was not a fishing expedition," Mr. Clohessy said. "It was a fishing, crabbing, shrimping, trash-collecting, draining the pond expedition. The real motive is to harass and discredit and bankrupt SNAP, while discouraging victims, witnesses, whistle-blowers, police, prosecutors and journalists from seeking our help."
The line of questioning pursued in the deposition was deliberately designed to undermine the assertion that the group is a rape crisis center. If that assertion was upheld, Missouri law would shield the records.
What is afoot is a coordinated effort by the rich and powerful -- the Catholic church -- to intimidate and silence the voices of those who have been victimized and damaged by child-raping priests. And Judge Ann Mesle seems willing to hand them her gavel to beat them with.
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Today’s Outside the Box comes to us from Grant Williams, who covers the world from his perch in Singapore, in his always instructive and always entertaining Things That Make You Go Hmmm… I felt for him right at the outset today, because (like yours truly) he was trying really hard … not to talk about Greece.And so, he announced, he was going to talk about Spain and about oil; but then, before he even made it through his opening paragraph, there was this:
"… ahhhh NUTS! They did it AGAIN…. ok… the Greek restructuring. It’s not as though I could ignore it, now, is it? … Oil can wait until next time…. no doubt it’ll be an issue then . . . → Read More: European Countries That Make You Go Hmmm?
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It takes quite a ?trade? agreement to undermine financial regulation, increase drug prices, flood us with unsafe imported food and products, ban Buy America policies aimed at recovery and redevelopment, and empower corporations to attack our environmental and health safeguards before tribunals of corporate lawyers. Trade, in fact, is the least of the Trans-Pacific Partnership (TPP).
Backdoor deregulation and imposition of new corporate investor and patent rights via trade negotiation began in the 1990s with the World Trade Organization (WTO) and North American Free Trade Agreement (NAFTA). But the TPP now threatens a slow-motion stealth attack against a century of progressive domestic policy. At stake is nothing less than a democratic society?s ability to regulate a market economy in the broad public interest.
Under the framework now being negotiated, U.S. states and the federal government would be obliged to bring our existing and future policies into compliance with expansive norms set forth in 26 proposed TPP chapters. These include domestic policy on financial, health-care, energy, telecommunications, and other service-sector regulation; patents and copyrights; food and product standards; land use and natural resources; professional licensing and immigration; and government procurement.
The obligation that signatory countries ?ensure conformity of their laws, regulations and administrative procedures? to these terms would be strongly enforced, including by our own government. Failure to do so would subject the U.S. to lawsuits before dispute-resolution tribunals empowered to authorize trade sanctions against the U.S. until our policies are changed. Attacks against our non-trade laws could also be launched by any ?investor? that happens to be incorporated in one of these countries. The TPP is being designed so that other nations?China, Japan, you name it?could join in the future.
We know this much only thanks to a combination of text leaks and grilling of negotiators. As trade lawyer Gary Horlick, a former U.S. trade official with four decades in the game, recently noted at a conference on global business: ?This is the least transparent trade negotiation I have ever seen.? In fact, a recent text leak revealed that the parties were required to sign a memorandum of understanding that forbids the release of negotiating documents for four years after a deal is done or abandoned.
Such an extreme proposal could only get this far under cover of unprecedented secrecy. Executive-branch trade officials and corporate allies are making important policy decisions that could affect us all in myriad ways, without public access to any documents or details or input from members of Congress serving on key committees whose jurisdiction is directly implicated. The involved governments have ignored a global ?release the texts? campaign led by unions and civil-society groups. This is especially appalling for the Obama administration, given its stated priority of enhancing government transparency. The opaque process has contributed to a near-total absence of press coverage.
Meanwhile, more than 600 business representatives serving as official U.S. trade advisers have full access to an array of draft texts and an inside role in the process. The strategy is to squelch informed debate until a deal is signed and any alterations become difficult.
The implications for the principle and practice of democratic governance are dire. Not only would a vast array of decisions affecting our daily lives be made in venues where we have no role, but even if the U.S. wanted to make changes to the adopted pact it would require consent by all signatory countries. Thus, accompanying the imposition of specific retrograde policies would be an unprecedented shift of power toward locking in corporate rule insulated against the normal means of democratic accountability such as elections, advocacy, and public protest.
If this description of the proposed TPP sounds far-fetched, consider the consequences of trade pacts sold under the appealing brands of ?trade expansion? and ?free trade.? Canada is threatening key aspects of the Dodd-Frank financial?reregulation package as violating NAFTA. The European Commission staff contends that the proposed financial-transaction tax conflicts with European WTO commitments. Billions in U.S. stimulus money leaked offshore because of limits on Buy America procurement preferences already established in past trade pacts. Last year alone, the WTO struck down U.S. dolphin-safe tuna and country-of-origin meat labeling as well as the ban on candy-flavored cigarettes, which is aimed at curbing youth smoking, as violating U.S. trade obligations.
Now, the TPP threatens to combine the most damaging elements of past pacts and expand on them. With the later addition of Japan, China, Russia, Indonesia, and other Pacific Rim nations, it could encompass many of the world?s largest nations. This is precisely the vision that TPP former U.S. trade officials and corporate lobbyists presented to the Obama transition team in their ultimately successful push to get the new administration engaged in these talks.
Not surprisingly, the idea for a Pacific region NAFTA-on-steroids originated in the alliance between the George W. Bush administration and U.S.?based multinationals eager to increase offshoring while rolling back domestic consumer?safety, financial, environmental, and other safeguards. After a pause (ostensibly premised on Obama?s establishing his own trade policy), the new administration renewed negotiations. The operating text, though, is the one drafted by Bush officials, which shouldn?t come as a surprise since so many of the career trade officials were involved with NAFTA and the original TPP negotiations.
The fact that the TPP is not mainly about trade or the countries now at the negotiating table is also demonstrated by the fact that the U.S. already has bilateral free-trade agreements with four of the nations engaged in the process (Australia, Singapore, Chile, and Peru) making up about 80 percent of all TPP nations? combined gross domestic product. These existing deals eliminate most traditional trade barriers, like tariffs. Given the limited opportunity for expanded U.S. exports, it is worth examining more closely who stands to benefit from the TPP.
Past U.S.?sponsored agreements have included a set of extreme foreign-investor rights, and U.S. negotiators are looking to use TPP to expand these terms. This package includes many special protections that incentivize offshoring of U.S. jobs, by eliminating risks typically associated with relocating to developing countries with rock-bottom wages.
Under the U.S. investment model for free-trade agreements, relocating firms are guaranteed a ?minimum standard of treatment? that extends beyond being treated the same as local firms. They also are granted new rights to obtain compensation from host governments for loss of ?expected future profits? due to health, environmental, zoning, labor, or other policies. Compensation can be obtained for indirect or ?regulatory? takings, a concept championed by conservatives but generally not recognized under the robust property rights provided by U.S. law.
The U.S. proposes that this chapter also forbid host countries from limiting capital transfers. This removes a prospective complication for U.S. firms considering relocation and poses a risk to global financial stability. In an era when even the International Monetary Fund has reversed its traditional opposition to capital controls, imposing such limits via a trade pact is both disingenuous and reckless policy.
The chapter also would establish new rights for foreign investors to acquire land, natural resources, factories, and more. All performance requirements, including domestic content rules, would be forbidden. This ban on signatory countries using this key industrial policy tool would be absolute, not just applied to investors from those nations.
These extraordinary rights would also be provided to foreign firms investing in the U.S., including subsidiaries of, say, Chinese firms incorporated in Vietnam. This raises concerns about our ability to determine what sorts of investment from what sorts of countries are best for the U.S., and to regulate foreign firms operating here so that they conduct business on equal terms with domestic firms.
Most stunningly, these new rights in a public treaty could be privately enforceable. The U.S. is pushing for inclusion of ?investor state? enforcement. This little-known mechanism allows foreign firms to bypass domestic court systems and directly sue governments for cash damages (our tax dollars) over alleged violations of their new rights before U.N. and World Bank tribunals. These bodies would be staffed by private-sector attorneys who rotate between serving as ?judges? and bringing cases for corporations.
Conservative critics of the International Criminal Court?s jurisdiction in human-rights cases have been curiously silent about this more substantial assault on our sovereignty and judicial system. The scope of domestic policies that would be exposed to such attacks is vast, including government procurement decisions, regulatory permits, intellectual-property rights, and regulation of financial instruments such as derivatives.
Avoiding domestic courts not only eliminates major risks for firms seeking to relocate but inclusion of this regime in past pacts is establishing an alarming two-track system of justice. Chevron is now asking one of these corporate tribunals to invalidate 18 years of U.S. and Ecuadorian court judgments that resulted in the company being ordered to pay for the cleanup of horrific Amazonian toxic contamination. In other trade courts, Philip Morris International is attacking Australian and Uruguayan cigarette plain-packaging policy.
Under similar NAFTA provisions, more than $350 million has been paid to investors by governments in disputes over such issues as toxic-waste-dump permits, logging rules, and bans on toxic substances. Currently, there are more than $12 billion in pending corporate attacks on environmental, transportation, and public-health policy under existing U.S. free-trade agreements?and the proposed TPP would create vast new opportunities for litigation. Even when governments win, they waste scarce budgetary resources defending national policies against these corporate attacks.
The pact?s procurement chapter would require that all firms operating in any signatory country be provided equal access to U.S. government procurement contracts over a certain dollar threshold. These rules constrain how our national and state governments may use our tax dollars in local construction projects and purchase of goods. They also limit what specifications governments can require for goods and services and the qualifications for bidding companies. Requiring that electricity come from renewable sources or that uniforms meet sweat-free standards could be forbidden. Rules excluding firms that refuse to meet prevailing wage requirements or that are based in countries with terrible human- or labor-rights records could be challenged.
Effectively, these rules eliminate important policy tools for job creation, development of green-economy capacity, and the building of demand for preferred business practices. Even in strictly commercial terms, this is lunacy. The U.S. procurement market in 2010 was more than seven times that of all the TPP countries combined. Thus, in exchange for opportunities for some large U.S. firms to bid on a smaller pool of foreign contracts, we would be trading away the ability to ensure that billions in U.S. government expenditures are channeled back into our economy to create jobs and foster our own cutting-edge industries.
U.S. trade officials engaged in the TPP are seeking to extend older trade deals? ban on capital controls, even as Massachusetts Representative Barney Frank, the ranking Democrat on the Financial Services Committee, has demanded a review of whether the past pacts require changes. U.S. negotiators are also pushing for additional limits on domestic financial regulation. These constraints would undermine policies being implemented by many countries to get banks, insurance, and securities firms under control.
This includes a prohibition on bans of risky services and financial products. The provision would enable litigants to challenge purely domestic policies that set limits on financial firms? size, the types of services a firm may offer, and the legal entity through which a service or product may be provided. This would, for instance, foreclose many policy tools aimed at dealing with ?too big to fail? banks and shadow banks, limiting risk via firewalls or requiring derivatives only be sold on exchanges. These would be absolute bans on certain forms of regulation that countries would be forbidden to ?adopt or maintain,? not requirements to treat domestic and foreign firms the same.
The notion that any free-trade agreement would expand monopoly rights for ?rent seeking? (excess profits) would induce Adam Smith and David Ricardo to rotate in their graves.
But that?s exactly what our current trade policy does, and the TPP is poised to go further. According to a study conducted by the University of Minnesota, U.S. drug prices increased $6 billion when WTO patent rules required the U.S. to change its patent term from 17 to 20 years. The TPP would be even more of a gift to drug companies at the expense of consumers and taxpayers.
Leaked negotiating texts show that the TPP would extend monopoly controls over drug-safety testing data, which could cut off millions of people from access to life-saving drugs. (Even when a patent monopoly ends, lower-cost generics cannot be marketed because the safety data is withheld.) A majority of target TPP countries are developing nations with significant HIV/AIDS rates, so this is a particularly depraved proposal. Thanks to a leak, we know that U.S. negotiators are proposing to roll back even the modest trade-pact access to medicine reforms obtained during the George W. Bush administration.
The U.S. proposal could also undermine the drug formularies of Australia, New Zealand, and other countries that have successfully controlled drug costs. This could also boomerang home. State officials participating in the development of formulary rules for Medicare and Medicaid have reacted with alarm about how this proposal could undermine hard-won gains in the epic health-care reform battle.
Even given the lack of access to actual negotiating texts, we know that the scope of domestic-policy space that could be foreclosed by this deal is immense.
The pact?s coverage of the service sector would include basically anything you can?t drop on your foot, from an education to health care. The rules would not be limited to trade in services but would limit how we can regulate foreign-owned service firms operating here, including critical sectors like health, energy, education, water, and transportation. Even local land use and zoning policy is implicated.
These rules would even cover the movement of natural persons across borders to deliver a service, otherwise known as immigration and visa policy. Some past U.S. trade deals have guaranteed specific numbers of U.S. work visas. Other countries are demanding the same in the TPP. Whatever your views of these issues, it?s a bad idea to make immigration policy behind closed doors as the byproduct of a trade pact whose terms cannot be altered without consent of all parties.
Several chapters impose limits on product environmental, health, and safety standards. The U.S. has proposed a new ?regulatory coherence? chapter that would require each signatory country to establish an agency to do cost-benefit analysis of regulation. Constraints on food and product safety and inspection are also being negotiated, including a requirement that the U.S. accept imported food that does not meet our safety laws.
Consider seafood, much of which is imported from TPP target countries. Before WTO and NAFTA, half of the seafood consumed here was imported. Today that figure is 84 percent, while the Food and Drug Administration tests only 0.1 percent of it. Democratic Representative Rosa DeLauro of Connecticut uncovered that, even with lax inspection, last year the FDA issued numerous import alerts for Vietnamese seafood detained for misbranding, E. coli, antibiotic residues, microbial contamination, and other serious safety problems. The TPP could undercut even our current safety rules.
The same provisions deemed to be a threat to Internet freedom and innovation found in the discredited Stop Online Piracy Act are lurking in the TPP. This includes a requirement that each country establish large mandatory fines for unintentional, noncommercial, small-scale copying of Internet content protected by copyright. Also forbidden would be circumvention of digital locks, even for lawful uses such as playing a DVD that you purchased and run using Linux. As well as exposing us all to personal liability, these measures could stifle competition, given the threat of multimillion-dollar lawsuits.
All this invites the obvious question: Why are Obama trade negotiators pushing this deal now? Certainly the White House policy team does not want international preemption of the domestic agenda it is fighting to enact. Nor must the Chicago re-election campaign team be celebrating a deal that will infuriate its base while benefitting only Obama?s most implacable corporate opponents.
The hopeful explanation is ignorance made possible by the elite fealty to a failed conception of free trade and the extraordinary secrecy that has forestalled the external alarms that might otherwise sound. Those in the U.S. government positioned to know the expansive non-trade policy implications are also those who support this approach, including many Clinton-era retreads connected to the passage of NAFTA.
Yet if these talks result in the adoption of a final agreement based on the framework now under negotiation, it could commit our country to a devastating future path.
The only good news is that past attempts to use the Trojan Horse of trade negotiation to impose and lock in massive deregulation have been foiled. Citizen activism and publicity derailed the proposed Free Trade Area of the Americas in 2005, the aborted Multilateral Agreement on Investment in 1998, and the original attempt to negotiate a free-trade area for Asia-Pacific Economic Cooperation nations, many of which are parties to the TPP. Now, as then, the public, policy-makers, and the press can help derail these deceptive attempts to undermine democracy by awakening to the threat before it is too late.
Mitt Romney dreams of an America without Medicare (Rick Wilking/Reuters)
Mitt Romney hasn't explained his announcement yesterday that he won't be enrolling in Medicare despite turning 65, but as Jonathan Cohn points out, Romney is at least practicing what he preaches. Romney supports Paul Ryan's plan to turn Medicare into a voucher program, a plan that would effectively end Medicare as we know it, and Romney is putting his money where his mouth is by deciding against enrolling.
Romney's decision is a window into the future that he promises to deliver. Instead of a Medicare program that directly provides coverage, Romney wants seniors to obtain coverage from private insurers. Depending on their income and personal wealth, a portion of that coverage will be subsidized, but the guaranteed coverage of Medicare would be eliminated.
The fact that Romney was able forego the Medicare system without penalty or punishment puts the lie to the notion that government health care programs are tyrannical. That's an important fact to point out, because even though any senior who doesn't want Medicare coverage could walk away from the system, just like Mitt Romney did, the overwhelming majority of them don't?and that's a testament to the effectiveness of Medicare.
But even though Medicare works, Mitt Romney wants to end the program as we know it. He wants Medicare to be transformed into a voucher provider, subsidizing private insurance plans instead of directly covering medical care. For 99 percent of Americans, it would be a radical overhaul, raising costs and making it difficult if not impossible to find insurance. Given his means, Romney would do fine in such a system. That's basically the system he's living in now, but it doesn't take a rocket scientist to realize most people can't afford what he can afford. And if Medicare were privatized as he proposes, that's exactly what he would force every American senior to do.
If you're only concerned about personal benefit, Medicare might not turn out to be the best deal in the world for someone like Mitt Romney, who is fabulously wealthy and doesn't need the coverage. But even the Mitt Romneys of the world are better off living in a society where senior citizens have the security of health care coverage that Medicare provides. If we were to adopt Mitt Romney's proposal to turn it into a voucher system, Medicare would no longer provide it's greatest benefit of all: the peace of mind that comes with knowing that every single senior citizen has the health care coverage they need.
Part II in this series discusses credits the banks get towards meeting their multi-billion dollar settlement obligations. The federal government and state AGs want you to assume that means a set amount of principal reductions that the banks will grant.[...]
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On November 12, 2011, I listened as President Barack Obama told business leaders attending the Summit of the Asia-Pacific Economic Cooperation forum in Honolulu that ?we?ve turned our attention back to the Asia Pacific region? and announced two vehicles for that return. These were the Trans-Pacific Partnership (TPP) Free Trade Agreement, now under negotiation and to be concluded by the end of this year, and the Pivot to Asia, meaning a redeployment of American priorities and military forces away from Europe and the Middle East to Asia.
The president said that Asia will be central to America?s future prosperity and that it was imperative to correct unsustainable trade and financial imbalances while continuing to expand economic ties. This would require that all countries play by the same rules appropriate to the current global economy. The TPP, he said, would be a template for a ?21st-century agreement? that would eventually be open to all the countries of the region. He emphasized that this kind of agreement can thrive only in an environment of security and stability, and he underscored that the Pivot to Asia ?will allow America to keep its commitments to its allies? in a region characterized by competing territorial claims, uncertain energy supplies, and North Korea?s nuclear threats.
In closing, however, he stressed that neither the Pivot nor the TPP is aimed at any particular country?which, of course, meant that it is. The country is China. But these initiatives are also about responding to the pleas of Asian friends, the importuning of U.S. global corporations, papering over inconsistent goals, denying American commercial decline, and clinging to the quasi--American empire.
Obama accurately posed the challenges. But do these twin policies accurately define American interests? Are they plausible strategies for achieving them? These key questions have received surprisingly little attention.
As it has evolved so far at least, the TPP is anchored in the same orthodox free-trade philosophy that has inspired every U.S. trade negotiation and agreement since the end of World War II. It is also following the same negotiation process as all the old deals. Indeed, the agenda and initial text were largely lifted from the failed Asia-Pacific Economic Cooperation trade agreement of the 1990s and the more recent U.S.?Korea Free Trade Agreement. These texts have been broadened a bit to try to cover some new topics like state-owned enterprises, but essentially they are no different from what has gone before both in substance and procedure. We can?t know the result yet, but in the past, the U.S. trade imbalance has widened after each new agreement.
The foreign minister of a Southeast Asian country once told me that China is like a new sun entering the American solar system. All the planets, he said, are now shifting their orbital patterns, and the Asian planets especially are entering into orbit around the Chinese sun.
He was correct, and this fact has important implications for both the planets and the suns. This same foreign minister made the point that China?s is a hierarchical worldview in which each country and person has an assigned position that is either up or down. In this hierarchy, he said, my country?s position is definitely down, and we therefore prefer not to be controlled by China. On the other hand, he added, there are nice economic benefits in China?s orbit. So, we?d like to be in that orbit but with U.S. gravity keeping it wide and loose.
Just so. The rest of Asia is growing, thanks to its Chinese connections, but also fears being overwhelmed. This concern of smaller Asian nations has been exacerbated by the recent rapid displacement of U.S.?made products and technologies in world markets. Despite keeping several of its 11 aircraft carriers and more than 100,000 troops in the region and being the biggest buyer of Asia?s exports, America is said somehow to be ignoring Asia. Thus some governments, such as Singapore, Malaysia, and Vietnam, call for the U.S. to demonstrate renewed commitment by entering into more free-trade agreements and security arrangements. This is partly sincere but is also partly special pleading aimed at allowing them to continue their free ride on America?s unilateral security commitments and open markets.
These countries, observing America?s mounting trade deficits with Asia, also fear a possible American shift toward protectionism. They hope to use free-trade agreements to lock in their access to the U.S. market. As for the United States, it has long treated the Pacific Ocean as an American lake and taken on unilateral responsibility for defending its Asian allies while patrolling the Chinese coast and keeping China confined within its own shores.
Anxious to keep the planets in proper orbit around the American sun, the U.S. foreign-policy establishment insists that there can be only one solar system and argues that China must become a ?responsible stakeholder? in this American system, implying that China is somehow not yet fully civilized and that America must be both mentor and disciplinarian as it brings the Chinese celestial body into orbit around itself.
Thus the logic of the new Pacific initiative: a free-trade agreement that includes many of the Asia-Pacific nations along with the United States, but one that is too demanding for a developing and mercantilist nation like China to enter yet. The military Pivot, meanwhile, has America taking on responsibility for defending Asian claims disputed by China; our enhanced role keeps pace with the modernization of China?s forces and maintains U.S. hegemony until such time as China can be declared fully civilized, if ever. Unfortunately, the logic falls apart when the details of the TPP are measured against actual Asian economic practices and geopolitical threats.
The call for a 21st-century trade agreement also grows out of long--standing U.S. frustration with most of its late-20th-century trade relationships in Asia. This goes back to the U.S. postwar occupation of Japan. Then, U.S. leaders advised Japan to produce labor-intensive goods like clothing, because Japan?s plentiful supply of inexpensive labor would give it a cost advantage in those kinds of items. American free-trade doctrine held that countries should not protect or subsidize favorite industries but should rather specialize in producing what they could do best and cheapest while trading for the rest.
The Japanese rejected this advice. As former Ministry of International Trade and Industry Vice Minister Naohiro Amaya once told me, ?We Japanese did the opposite of what [the American authorities] told us.? Thus, Japan rejected direct foreign investment, imposed high tariffs and other protective barriers, compelled a high rate of savings, and channeled the savings through the state-controlled banking system into capital-intensive industries with large economies of scale and rising technology input such as steel, shipbuilding, autos, and later semiconductors and consumer electronics, to name a few. Japan further intervened regularly in currency markets to keep the yen cheap versus the dollar as both a subsidy to Japanese exports and an extra tariff on imports. It also provided a wide range of special loan and investment facilities along with outright subsidies to promote investment in and exports by the targeted industries.
This was an export-led mercantilist growth model. Unlike the Anglo/American model in which market outcomes are ends in themselves, this model saw the market as a means to an end, as a tool that could be sharpened if it was not producing the desired result. It was also a tool that aimed to produce chronic trade surpluses and accumulation of dollar reserves.
Japan soon became a model for Asia. Singapore?s first prime minister, Lee Kuan Yew, advised his people to learn from Japan. They did, and so did the people of Korea, Taiwan, Malaysia, Hong Kong, and Thailand, which became known as the Asian Tigers as they duplicated Japan?s success. Then in 1992, China?s Deng Xiaoping declared that ?to get rich is glorious,? and China became the last Tiger or perhaps the first Dragon.
What cannot be overemphasized about this progression is the fact that these countries all adopted an economic-development philosophy that is the opposite of America?s and of the free-trade doctrine on which the World Trade Organization (WTO) and its conception of globalization are based. While operating within a structure that presumes free trade is always a win-win proposition, most East Asian nations have embraced neo-mercantilism, which understands globalization frequently to be a zero-sum proposition (win-lose).
While producing miracles in Asia, this circumstance resulted in an unbalanced form of globalization in which the U.S. market was mainly open while Asian markets were relatively protected, and often-subsidized Asian products flooded U.S. markets. After more than 100 years of trade surpluses, the United States went into constant deficit in 1976. By 1981, when I became one of the main U.S. trade negotiators, the deficit was $16 billion ($11 billion with Japan). I was told that the deficit was unsustainable and that it was my job to fix it. By 1987, the U.S. textile, steel, auto, semiconductor, machine tool, and consumer electronics industries, among others, had all been savaged and laid off millions of workers as the U.S. trade deficit grew to $161 billion ($60 billion with Japan). After a dip following Japan?s U.S.?forced yen revaluation in 1986?1987, the U.S. trade deficit hit $230 billion in 1998. By the end of last year, it was $558 billion, of which $295 billion was with China and more than $400 billion was with all of Asia.
Behind these statistics is the loss of entire U.S. production industries such as consumer electronics and the loss of millions of jobs and billions in investment (the $558 billion deficit of 2011 represents a loss of six million to nine million jobs). These alarming trends led to virtually constant negotiations to open Asian markets and stop ?unfair? trade. Trade talks were also initiated as a way to reward allies and entice doubters and adversaries toward our model. What these talks did not do was reverse Asian neo-mercantilism.
Between 1960 and today, there have been four full-fledged rounds of global negotiations under the aegis first of the General Agreement on Tariffs and Trade (GATT) and then of the WTO that engaged the United States and the Asia-Pacific countries. In addition, there was a continuing series of talks with Japan under rubrics such as the Market Oriented Sector Specific Initiative (MOSS, ridiculed as More of the Same Stuff), the Semiconductor Negotiations, the Nippon Telegraph and Telephone talks, and more. There was the creation of the Asia-Pacific Economic Cooperation association, founded in the early 1990s to spread liberal democratic ideals within the Pacific Rim through trade and investment. There were the negotiations both to bring China into the WTO and for America to grant it permanent ?most favored nation? treatment. The North American Free Trade Agreement and bilateral free-trade agreements with Peru, Chile, Singapore, Australia, and Korea are also part of this saga of trade deals that only widened trade imbalances.
Each of these projects had its causes, purposes, and dynamics, but certain critical patterns repeated. The premise was that all participants embraced the same free-trade philosophy and rules and that if the rules were set properly, the results would automatically be satisfactory for all. The fundamental difference in philosophy between laissez-faire, free-trade America and export-driven Asia was never directly confronted. One reason for this was that free trade was a kind of religion of U.S. policymakers, for whom any management of results was original sin. Another was that America was long considered economically invulnerable. Yet another was that the purpose of the deals was usually more to cultivate geopolitical allies, to stimulate development of struggling neighbors, or to facilitate U.S. investment abroad. But the agreements were always sold to the U.S. Congress and public as arrangements that would increase U.S. exports, reduce trade deficits, and create jobs.
They never did. Rather, the trade deficit relentlessly rose, offshoring of U.S.?based production and jobs accelerated, and trade became a drag on growth of U.S. gross domestic product as well as a cause of rising income inequality. As economic strategy, the trade deals and their logic were unsuccessful, or irrelevant, or both.
Nothing illustrates this folly better than the case of China. By the turn of the century, negotiations to bring China into the WTO had been going on for more than a decade and were now coming to conclusion. The big question was whether the United States would accord China the same permanent most-favored-nation (rebranded as PNTR, or permanent normal trade relations) treatment it accorded other members of the WTO. Some analysts warned that the then?$68 billion trade deficit with China would grow dramatically. But their testimony was drowned out by that of laissez-faire economists, CEOs, trade negotiators, think-tank heads, and political leaders, all of whom emphasized that China was no Japan; the Chinese actually welcomed foreign participation in their economy. The China lobby further argued that America?s exports to China were bound to increase more rapidly than China?s to America because China would be dramatically reducing its tariffs and trade barriers, while America would be making no cuts at all.
That, of course, turned out to be utter nonsense. By the time China joined the WTO in 2001, its trade surplus with the United States had jumped to $83 billion. As noted above, by the end of 2011, it had climbed to $295 billion despite an endless series of ?strategic and economic dialogues? and cabinet-level trade and development discussions reminiscent of the Japan experience. The reality is that U.S.?Asia trade imbalances tend to grow and accelerate regardless of negotiations and deals?or more likely because of them.
But since the charade of shared principles means that failure to fulfill the rosy forecasts cannot be attributed to systemic differences, it has to be blamed on flawed agreements, which then requires negotiation of new agreements covering more items such as protection of intellectual property, banking regulations, or other elements that might possibly serve as market barriers. Thus have talks and deals proliferated, providing few jobs for America aside from lifetime employment for its trade negotiators.
There are, however, two clear purposes that all the deals have served. The first is the geopolitical grand strategy objectives of the United States. By making the United States the market of last resort, the trade agreements have helped persuade allies to accept U.S. hegemony. The second purpose served is that of U.S. businesses that profit immensely from outsourcing and offshoring to Asia but that need the security provided by Uncle Sam to do so. These realities reveal the flaws in U.S. trade efforts?misplaced priorities, a false doctrine, and false assumptions.
Most misplaced has been the geopolitical priority with its subordination of long-term economic interests to short-term political/military objectives. Washington continually makes concessions, refrains from insisting on application of the GATT/WTO rules, or backs away from taking actions to counter mercantilism on national--security grounds. In the 1980s, the Reagan administration declined to invoke GATT rules against European subsidization of the Airbus, because Secretary of State George Shultz said doing so would shatter the North Atlantic Treaty Organization. Today, Washington declines to respond to China?s blatant currency manipulation. Why? It thinks it needs the Chinese to help with problems like Iran and North Korea. It doesn?t understand that erosion of U.S. wealth-producing capacity is the most important national--security threat.
A corollary is the false premise that mercantilists who intervene to distort markets should not face retaliation because they are only hurting themselves and will eventually see that and abandon their policies. Studies have shown that the Airbus subsidies helped rather than hurt the European Union economy. The Airbus killed off all the U.S. commercial aircraft makers except Boeing and cost the U.S. economy many thousands of jobs that won?t be recovered even if Europe stops the subsidies. All the evidence of the past 200 years suggests that mercantilism works and that mercantilists win.
The trade deals that the U.S. has been negotiating do not reach the most important elements of Asian mercantilism. For starters, because of foreign-currency intervention policies, the dollar tends to be chronically overvalued versus the currencies of most Asian countries. Although the WTO vaguely calls for not using currency policy to offset tariff reductions, the truth is that currency policy is not seriously covered by any international trade agreement. Thus currency manipulation can be and is used to keep markets protected in the face of apparent market-opening agreements.
A second major element is a set of investment packages aimed at inducing the offshoring of production and research-and-development facilities. China, Singapore, Malaysia, and many others offer big tax holidays, free land, cut-rate utilities, free worker training, sweetheart loans, and big capital grants to companies as enticements to invest. Nor are the Asian countries alone. Others such as France, Ireland, and Israel play the same game. In the United States, some of the individual states do this, but their resources and authority (they can?t grant holidays on federal taxes) are limited, and Washington doesn?t play. So it often happens that businesses whose U.S. operating costs are internationally competitive will nevertheless offshore production in order to get the incentives. These packages are not covered in any of the free-trade agreements.
A third element is antitrust or competition policy. The biggest barrier to getting into many markets is control of distribution chains by powerful cartels that often have cozy ties to governments. Take autos. In America, foreign automakers can sign up any Detroit auto company dealer to sell its cars as well. Not so in Japan or Korea. Again, antitrust is not covered by any of the free-trade deals.
Fourth are ?buy national? and indigenous technology-development policies aimed at giving advantages to domestically based production and making market access conditional on developing designated technologies in the market. WTO rules on this apply unevenly, and many countries in Asia exert pressures that favor those producing and developing locally. General Electric, for instance, recently transferred its avionics business into a Chinese joint venture to ensure access to China?s state-controlled aircraft market. Even when banned by agreements, these policies operate in practice because countries with strong bureaucracies wielding broad discretionary authority can easily intimidate companies.
Value-added taxes, which tax transactions at each stage of production and distribution, are common in most countries and are rebated for exports while being added to imports. They thus constitute a kind of subsidy for exports and an additional tariff on imports. Because it has no value-added tax, the United States is particularly disadvantaged in international trade.
There is also the implicit economic nationalism of public exhortation that plays to cultural pride. The leaders of Asian countries constantly preach the importance of making things domestically, attracting investment, developing indigenous technology, buying locally, and contributing to the national welfare. This is somewhat intangible and yet very powerful. It is, of course, not covered in agreements and probably can?t be. But it is a game that the United States simply doesn?t play and should.
America needs to try something new. The Obama administration is right to be seeking a comprehensive 21st-century U.S. trade and globalization policy. Such an effort should begin with a reassessment of national security and geopolitical priorities. It should recognize that the decline of U.S. influence in Asia is not due to lack of military power and presence but rather to eroding competitiveness. Regaining economic strength has become a matter of the highest geopolitical priority. We can no longer subordinate trade to national-security considerations, because trade is national security.
A 21st-century treaty would include provisions to prevent or counter currency manipulation. Measures could range from emergency tariffs to surcharges on foreign buying of U.S. Treasury securities to application or development of alternative international currencies. The point is to do something beyond whining.
Similarly, a 21st-century deal would include some disciplines on investment incentive packages that countries use to encourage offshoring. These are nothing more than indirect export subsidies and a way to circumvent the WTO prohibition of direct export subsidies.
In the same manner, any new deal should include strong anti-cartel provisions that would be adjudicated and enforced by impartial institutions and would measure actual market access to previously closed systems.
A 21st-century agreement would include strong penalties for violations of market-access commitments. Even the existence of five-year industry-planning schemes, for example, should trigger investigation of market-access impact.
Finally, the primary goal of any 21st-century deal must be to reduce the U.S. trade deficit, to increase production in and exports from America in a measurable way, to increase the flow of technology and investment to America, and to increase U.S. competitiveness. It needs to be results--oriented, not just based on nominal compliance with processes.
How does the TPP measure up? Poorly is the answer. For starters, it is more of a geopolitical effort than a trade/globalization effort. At a White House meeting last year, I asked why we were doing a TPP in view of the fact that we already have free-trade agreements with four (Peru, Chile, Australia, Singapore) of the eight other countries included in the current talks and that those four plus the United States account for more than 85 percent of the trade at stake in the TPP. The reply was that we needed to demonstrate our commitment and engagement in Asia. There was no mention of creating jobs or contesting mercantilist policies that disadvantage our economy.
The countries currently participating are an unlikely group, with mostly small economies excepting the United States. They are playing a charade in talking free trade but not practicing it in the sense that American leaders mean the term. Australia, New Zealand, America, Peru, and Chile largely share a free-trade philosophy, but the likes of Singapore and Malaysia embrace strategic industrial policy and export-led growth, and Vietnam is dominated by state-owned enterprises.
The negotiating agenda is a list of familiar tunes: better intellectual-property protection, further tariff reduction, government procurement, rules of origin, etc., ad nauseam. Nothing on currencies, investment incentives, antitrust, pressure tactics, or anything else that might impede the continued practice of mercantilism under the facade of a free-trade agreement. The chapter on labor practices is likely to be minimal, while the capital rights will help dismantle important regulatory protections. There is no way that this deal could serve as a meaningful template and docking agreement for creating a truly integrated 21st-century free-trade area around the Pacific Rim. Nor is there any apparent economic benefit to the United States. There may be benefits for the U.S. companies seeking to invest and produce in Asia, but is that in the American national interest?
The TPP also fails as geopolitics. What exactly is the threat the Pivot is meant to counter? Is China going to invade America? Is it going to patrol our coastlines as we patrol its shores? Is it going to invade Japan and Korea? No, no, and no. What about North Korea: Is it going to invade us? Can its bombs reach us? No, and no. Might it invade South Korea or shoot a bomb at Japan? Barely possible, but we already have troops and weapons in place to deal with that. Moreover, North Korea is surrounded by powerhouses like Russia, China, South Korea, and Japan. So why the need for a flexing of U.S. muscles?
One answer is that China is modernizing its forces and that while they may not threaten America directly, they have threatened certain claims of countries friendly to us, like the Philippines. We therefore need to support our friends. Maybe, but the rights and wrongs of claims over reefs in the Pacific are unclear. We need to be careful, and, anyhow, nothing is preventing our friends from allying to resist Chinese pressure?except, of course, one thing. They all are doing business like crazy in China and don?t want to risk antagonizing it. So they find it convenient to urge Uncle Sam to increase its security presence while they concentrate on getting rich. Out of habit, pride, and the priority given to geopolitics, America?s knee-jerk reaction is to saddle up.
It?s a bad response. For starters, it puts us in a no-win position. China is growing and has a rising stream of wealth and capabilities. It will easily be able to increase and modernize its forces. Conversely, we must reduce military spending. Why give China reason to think we are challenging it to an arms race while our position weakens and theirs strengthens? We could well wind up doing a pirouette rather than a pivot, simulating a get-tough policy with little to back it up. But more important, America?s main job now must be to invest and make more in America. The Pivot not only distracts from that, it is like writing a military insurance policy against the risks of offshoring for all the companies moving production and jobs to Asia. Why do that when we want them to produce and hire in America? By taking full responsibility for Asian security, we are subsidizing the very mercantilists whose competitive inroads we?re trying to reverse.
It?s clear that America does need a new 21st-century set of rules for trade and globalization as well as new national-security policies and priorities. It?s also clear that the combination of the TPP and the Pivot are not that. Sadly, they look suspiciously like more of the same old stuff.