Tag: white house

ObamaCare’s ‘Sweetheart Deal’ for PhRMA

The New Republic’s Jonathan Cohn reports that back in March, IMS Health projected slightly negative revenue growth for the pharmaceutical industry but recently changed that projection to 3.5-percent annual growth from 2008 through 2013.

“What changed?” Cohn asks. “A major factor, according to IMS, was the emerging details of health care reform … Put it all together, and you have more demand for name-brand drugs … enough to boost revenue significantly.” And:

“If this bill is implemented,” the report concludes on page 138, “an increase in prices on new drugs can be expected.”

How could this be happening?  Oh yeah:

That brings us back to the deal that the Pharmaceutical Researchers and Manufacturers of America, which represents those companies, made with the White House and Senate Finance Committee …

The industry agreed to embrace health care reform and, later on, launched a massive advertising campaign to promote the cause. In exchange, the White House and Senate Finance–which had been asking various industries to pledge concessions that would help pay for the cost of coverage expansions–promised not to seek more than $80 in reduced payments to drug makers.

To an industry as big and profitable as the drug makers, giving up $80 billion over ten years wouldn’t seem like much of a sacrifice–a point critics started making right away. But if IMS is right, the drug industry wouldn’t even be giving up $80 billion, in any meaningful sense of the term. If anything, it’d be making more money. Maybe quite a lot of it.

Which is what I predicted, both here and here.

Cohn concludes, “the drug industry has enormous leverage in Congress.” But Cohn still supports the president’s health care takeover. Or is it PhRMA’s health care takeover?

Obama’s (In)Decision on Afghanistan

According to CBS News, President Barack Obama will send most, if not all, of the 40,000 additional troops that General Stanley McChrystal requested and reportedly plans to keep those troops in Afghanistan for the long-term.

Watch CBS News Videos Online

If the CBS report turns out to be true—the White House has backed away, and other news outlets are leaving the story alone for the moment—the president’s decision is disappointing, but expected. Last month, the administration ruled out the notion of a near-term U.S. exit from Afghanistan, arguing that the Taliban and al Qaeda would perceive an early pullout as a victory over the United States. But if avoiding a perception of weakness is the rationale that the administration is operating under then we have already lost by allowing our enemies to dictate the terms of the war.

Gen. McChrystal’s ambitious strategy hopes to integrate U.S. troops into the Afghan population. These additional troops might reduce violence in the short- to medium-term. But this strategy rests on the presumption that Afghans in heavily contested areas want the protection of foreign troops. The reality might be very different; western forces might instead be perceived as a magnet for violence.

McChrystal’s strategy also presumes that an additional 40,000 troops will be enough. But proponents of an ambitious counterinsurgency strategy need to come clean on the total bill that would be required. For a country the size of Afghanistan, with roughly 31 million people, the Army and Marine Corps counterinsurgency doctrine advises between 620,000 to 775,000 counterinsurgents—whether native or foreign. Furthermore, typical counterinsurgency missions require such concentrations of forces for a decade or more. Given these realities, we could soon hear cries of “surge,” “if only,” and “not enough.”

Even if the United States and its allies committed themselves to decades of armed nation building, success against al Qaeda would hardly be guaranteed. After all, in the unlikely event that we forged a stable Afghanistan, al Qaeda would simply reposition its presence into other regions of the world.

It is well past time for the United States to adapt means to ends. The choice for President Obama is not between counterterrorism or counterinsurgency; but between counterterrorism and counterterrorism combined with counterinsurgency. Protecting the United States from terrorism does not require U.S. troops to police Afghan villages. Where terrorists do appear, we hardly need to tinker with their communal identities. We can target our enemies with allies on the ground or, if that fails, by relying on timely intelligence for use in targeted airstrikes or small-unit raids.

President Obama’s decision on Afghanistan could define his presidency. If an escalating military strategy leads only to thousands of more deaths, and at a cost of tens or hundreds of billions of dollars, then that is a bitter legacy indeed.

One Year Later

This morning, Politico’s Arena asks:

“Election 09: What’s the message?”

My response:

A note on NY 23, then to the larger message in yesterday’s returns. Already this morning we’re seeing an effort to spin the NY 23 outcome as a warning to Republicans and a hopeful sign for Democrats. Yet the striking thing about that outcome is how close a third-party candidate came in the face of opposition from the Republican establishment. And the ultimate outcome can doubtless be explained simply by absentee ballots, plus voters unaware of the last-minute developments in the race.

Thus, given those factors, the NY 23 outcome is perfectly consistent with returns in the rest of the country. (In fact, Conservative and Republican votes in that race total more than 50 percent.) And the message will not be lost on blue-dog Democrats. If the internal inconsistencies of ObamaCare did not trouble those Democrats before yesterday, they surely must now. The silence coming from the White House last night spoke volumes.

Wednesday Links

  • Cato v. Heritage on the Patriot Act, Round III: “In hindsight, did Congress and the president react too hastily in 2001 by passing the Patriot Act just weeks after the 9/11 attacks?”

The Real Story Behind the Chrysler Bankruptcy

If you worry about the abuse of executive power and declining respect among elected officials for the rule of law, you should watch this eloquent illumination of what really went down in the Chrysler bankruptcy earlier this year. The speaker is Richard Mourdock, Treasurer of the state of Indiana. The setting is a Cato Institute policy forum on October 15 about the “sordid details of the Bush/Obama auto industry intervention.”

As state treasurer, Mourdock is the person responsible for investment decisions concerning Indiana’s state employee pension funds, some of which owned a small share of Chrysler’s $6.9 billion in secured debt and some of which opposed the administration’s offer of $.29 on the dollar for that debt. Though these small secured holders were publicly castigated by President Obama as “unpatriotic” and unwilling to sacrifice for the greater good, Mourdock led the effort to stop the “sale” of Chrysler all the way to the U.S. Supreme Court.

Mourdock’s presentation gives a flavor for the tactics employed by the  Obama administration to “encourage” senior, priority creditors to back off their claims so that chosen parties could take priority—tactics that included backroom reminders that some of those creditors had received and might seek more TARP funding, threats of bringing the full weight and measure of the White House press office to bear down on dissenters, public condemnation, and other forms of arm-twisting most Americans would find unseemly for a U.S. presidential administration.

At the Cato event, Mr. Mourdock was joined by University of Pennsylvania Law School professor and corporate law expert David Skeel, who demonstrated quite clearly that the “sale” of Chrysler, as orchestrated by the Obama administration under cover of Chapter 11 bankruptcy reorganization, was indeed a sham sale. Skeel’s presentation begins at 20:15 of this video.

If you want to have a better sense of what’s going on in Washington (or to affirm your worries), I recommend you watch Mourdock here, listen to Mourdock here, read the Indiana Pensioners’ petition for Writ of Certiorari (appeal to the Supreme Court), and read the Cato Institute’s amicus brief in support of the Indiana pensioners here.

Whitehouse.gov Switches to Drupal

There was some buzz earlier this year when the White House used the free, open-source Drupal content management platform for Recovery.gov. Now the administration’s marquee Web site Whitehouse.gov will be using it.

The AP story linked just above does a good job of recounting the benefits of open source in this application: chiefly, low cost and high security.

Arnold Kling wrote recently on the Library of Economics and Liberty blog relating the work Elinor Ostrom did to win the Nobel prize in economics to how the Internet enables private provision of public goods—no regulation, little to no centralized authority at all.

Open source is nothing if not an example of that, and it’s good to see this use of open source joining many others across the big, beautiful Internet.

Obama’s Fall Offensive

In today’s Politico Arena, the editors ask:

White House Strategy: Will Obama’s effort to undermine critics undermine Obama instead? Is it overdue or overdone?

My response:

Obama is losing it. His increasing moves to marginalize his critics, richly detailed this morning at Politico, mark him as an amateur. America is not Chicago. Nor are those who oppose his agenda synonymous with the Republican Party. They’re far more numerous than that, and their numbers are growing.

Politics is one thing: “It ain’t beanbag,” Mr. Dooley noted. But scorched-earth politics is something else. It’s over the edge, like Nixon’s enemies list. It has no place in America, except in political backwaters like Chicago. (Personal note: In 1972 my wife and I served as Republican election judges in the first Mayor Daley’s Chicago. On election day, when we walked into the Hyde Park polling station at 5:30 a.m., the three Democratic judges looked at us in astonishment: “Are you real Republicans?” How else are you going to control the election?! Hamid Karzai has nothing on Chicago.)

As a practical matter, in our two-party system the Republican Party is the organizational antidote to this kind of abuse. But as the Wall Street Journal editorializes this morning, the party’s going to have to get its act together before that happens. It’s claim to be a party of principle has been seriously undermined in recent years by Republican officials at all levels of government. That leaves it to private individuals and organizations to call Congress and the administration on what they’re up to. And that’s why we too are in Obama’s cross-hairs. It won’t work – unless we let it happen. Thank you, Politico, for drawing these sad facts together in one place.