mykeystrokes.com

"Do or Do not. There is no try."

Eric Cantor Loves Government Spending…On The Drug Industry

Republicans would like you to believe that our deficit problem is primarily a spending problem and that responsibility for that problematic spending is primarily a Democratic responsibility. But the second claim is as misleading as the first. Republicans have also been known to promote wasteful government spending, particularly when it goes towards an industry with which they happen to be cozy. For a vivid illustration of this, look no further than a new Politico article about House Majority Leader Eric Cantor and his position on a key deficit reduction proposal.

The proposal in question would lower the cost of what the federal government currently pays to provide low-income seniors with prescription drugs. For years, the government purchased drugs for these seniors directly through Medicaid, taking advantage of the low prices drug companies must, by law, provide when selling drugs for the people in that program. But that changed in 2006, with the creation of Medicare drug benefit. At that point, the government delegated the purchasing of drugs for low-income seniors to private firms. And the firms haven’t been able to negotiate equally deep discounts, partly because of restrictions on their ability to limit drug availability.

According to the Congressional Budget Office, restoring the “Medicaid discount” for low-income seniors could save more than $100 billion over the course of a decade, depending on the structure of the proposal. And, at one point, many health care reformers had hoped to include that proposal as part of what became the Affordable Care Act. The administration and leaders of the Senate Finance Committee agreed not to include the proposal in the final legislation, as part of their infamous deal with the drug industry lobby. But that was a one-time deal, at least in theory, and congressional negotiators are looking seriously at enacting the proposal now.

The problem is lawmakers like Cantor, who oppose the idea. According to the Politico story, written by Matt Dobias, Cantor is making the same argument that the drug industry lobby does: That the proposal would amount to a form of government price controls, retarding economic growth and discouraging innovation.

The latter point is highly dubious: The reduction would bring reimbursement levels for these drugs very close to what they were a few years ago. Many experts, including the CBO, think the likely impact on research and development would be negligible. (Harvard economists Richard Frank and Joseph Newhouse addressed this issue at some length in Health Affairs a few years ago.)

As for the former suggestion, it’s true that any net reduction in government spending could reduce economic growth, at least at this particular moment. That’s why it’s not a good idea to be madly slashing government spending right now — and why, perhaps, congressional negotiators should delay implementation of this cut, like the others, so that it would take effect after the economy has more fully recovered.

But Cantor’s anxiety over the economic ramifications of spending cuts seems strangely selective. He hasn’t raised similar concerns about cuts to food stamps, Medicaid, and similar programs that would likely have a more devastating impact, both on the economy as a whole and the people who depend upon them for support.

Then again, food stamp recipients didn’t donate $168,000 to Cantor’s reelection campaign in the last cycle. The drug industry did.

By: Jonathan Cohn, The New Republic, July 15, 2011

July 17, 2011 Posted by | Big Pharma, Budget, Businesses, Class Warfare, Congress, Conservatives, Corporations, Debt Crisis, Deficits, Democrats, Economic Recovery, Economy, GOP, Government, Government Shut Down, Health Reform, Ideologues, Ideology, Lawmakers, Medicaid, Medicare, Middle Class, Pharmaceutical Companies, Politics, Republicans, Right Wing, Seniors, Wealthy | , , , , , , , , , | Leave a comment

The Limits Of Free-Market Capitalism

Until a few years ago, my spiritual devotions were  limited to the free market and the music of Patsy Cline. I’m sorry to say it’s  just me and Patsy now.

Karl Marx may have been wrong where it really mattered—communism, to paraphrase Churchill, is government “of the duds, by the duds,  and for the duds”—but he was spot on about the pitfalls of capitalism,  particularly when it came to the entrenchment of social classes, the fetish of  consumption, the frequency of recession, and the concentration of industry. Yet,  like trained seals, we continue to leap through the flaming rings of a system  that is contemptuous of the public good while rewarding those who feed off  “free” markets and the politicians who rig them. Nearly three years after the  global economy almost collapsed under the weight of a corrupt and inbred  financial order, Washington is still mired between the false choice of the  state or private enterprise as the proper steward of the general welfare.

It should be clear to anyone who has lost a cell phone  signal in our nation’s capital or been denied health coverage because of a  pre-existing ailment that capitalism’s endgame is not freedom of choice and  efficiency, but oligarchy. Many of America’s top industries—agriculture,  airlines, media, medical care, banking, defense, auto production,  telecommunications—are controlled by a handful of corporations who fix prices  like cartels. As Marx predicted, the natural inclination of players in a  market-driven economy is not to compete but to collude.

Reporting in Asia and the Middle East for many years, I  prayed to the same kitchen gods of untrammeled commerce that now bewitch the  Republican Party faithful and the neoliberals who inhabit the Obama White House. In Asia more than a decade ago, I covered the liquidation of state  assets as prescribed by the International Monetary Fund, perhaps the  largest-ever transfer of wealth from public to private hands, as if it were a  new religion that would transform economies from the Korean peninsula to the  Indian subcontinent. Laissez-faireism, I wrote, would liberate consumers and  domesticate once overweening state-owned enterprises.

In fact, privatization merely shifted economic control  from corrupt apparatchiks to their allies in business, a transaction lubricated  with kick-backs and sweetheart deals. That’s what happened in the Middle East,  and it became the spore that engendered the Arab uprising.

The corruption of capitalism in America is all the more  appalling for its legality. With the economy still struggling to recover from a  housing crisis fomented largely by Wall Street’s craving for mortgage-backed  securities, prosecution of those responsible has been confined to a single lawsuit filed by the Securities Exchange Commission against a  lone financier. The system is still lousy with loopholes, and the Republican  Party, which demographically as well as ideologically is becoming a gated  community for white, southern males, is calling for more deregulation, not  less.

Which brings us to the central failure of American  capitalism: the excoriation of the state.

So deep is the mythology of the free market that we  ignore the consequences of starving our schools, libraries, public media, and  roads and railways. We expect our teachers to assume the burdens of parenthood  and then blame them for failing education. We lament our dependence on foreign  oil and the aviation cartels, but we refuse to underwrite a passenger-rail  equivalent of the interstate highway system. We disparage the coarse  reductionism of corporate-owned news outlets while neglecting public  broadcasting, an isolated archipelago of smart, responsible journalism.

Our hostility to the public sector—fountainhead of  the Hoover Dam, Mount Rushmore, the Golden Gate Bridge, the Los Angeles  Coliseum, our national parks, and countless other public utilities and services  in addition to the federal highway system—is inversely proportional to our  reverence for private consumption. As the economist John Kenneth Galbraith wrote in his 1958 book The Affluent Society, “Vacuum cleaners to ensure clean houses are  praiseworthy and essential in our standard of living. Street cleaners to ensure  clean streets are an unfortunate expense. Partly as a result, our houses are  generally clean and our streets are generally filthy.” Galbraith also noted the  uniquely American conceit of sanctioning debt when households and private  investors hold it but condemning it when  governments do.

Should the feds nationalize banks and appropriate soy  fields? Certainly not. At its essence, there is probably no more efficient way  of establishing the price of a particular good or service than market  economics. Not all transactions are so simple, however, and there are some  services—healthcare, for example, or transportation—that often fare better  more as public goods than as private commodities. In order to save American capitalism,  we must appreciate its limits even as we struggle to harness its power.

By: Stephen Glain, U. S. News and World Report, June 2, 2011

June 3, 2011 Posted by | Businesses, Capitalism, Conservatives, Consumers, Corporations, Democracy, Democrats, Economic Recovery, Economy, Financial Institutions, GOP, Government, Health Care, Ideologues, Ideology, Politics, Republicans, Wall Street | , , , , , , , , , , , , | Leave a comment

   

%d bloggers like this: