government constraints of market

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Brooksley Born called it right as the economy headed for the cliff. Brooksley Born, head of the commodities board, is a person, like Sheila Bair of FDIC, whom Obama should have picked for the positions held by Summers, Geitner and Rubin. The latter are no better than Bush's Paulson. In non-government and government roles they pushed to deregulate derivatives, increase leverage (the debt to equity ratio) and in general based their strategy on an ever-rising market. Bair and Born were sensible, thoughtful, but when they argued common sense they were rebuffed or ignored by their colleagues. It is crazy to put the same people who caused this world-wide disaster in charge of remediation, passing over the ones -- Born and Bair -- who wanted to stop and look at the recklessness of it all. Obama's "greed is our salvation" guys are just stuffing taxpayer money into the pockets of their low-life cronies. Credit has not emerged because the bankers are using their taxpayer billions to protect themselves rather than try to help the economy. Loan modifications are being denied and a provision to let judges require banks to remake loans on better terms was taken out of legislation, with, of course, no complaint from Obama inc. For Stanford Magazine article on Brooksley Born click here.

Government constraints of market, (U.S.) .....Welfare for the Rich

"The Golden Rule"? .............Them with the gold makes the rules.

Welfare for the rich constitutes a huge disease of our economy, democracy and national morale. It is the essence of corruption. Welfare for the poor is a drop in the bucket by comparison, and yet politicians mounted a huge campaign in the 90's to stop assistance to the poor, while saying nothing about dubious assistance to corporations and the rich. They might have suggested, for instance, that the super rich and corporations be denied the tax dodges devised for them by investment houses. The issue is more than money, it is control and degradation of the way we live. Listening to the radio or watching TV, taking a cab ride or driving a cab, living in public housing or near a government housing project, running a family farm, competing for a government contract, being a soldier in the military, eating flavorless produce from corporate farms, obtaining prescription drugs... These are examples of situations where citizens and small businesses get a bad result that robs them of money and degrades their lives so that corporations and fat cats can rake it in via arrangements with government. It is government of who you know, not what you know. We hope this page will help motivate young people to care about politics and take on the low-lifes that are running our country, either as sold-out politicians or as the super rich and corporate executives who control the politicians.

For this site's general comments on corrupt government operations click here, or scroll down past the media articles listed below.

For this site's page on the environment, which addresses similar issues, click here. These "similar issues" include feeding brains, blood and other animal tissue to cattle, (which are naturally vegetarian) and keeping it secret from the public until mad cow disease came along. Another example is the suppression by industry of government in speaking to the dangers of lead paint from the 1920's until the 1950's.

Articles...these are mostly dated articles, but the conditions they describe have not changed.

Lobbyists and disclosure. A member of Congress can legally receive campaign contributions from a lobbyist who has been paid by a company to promote its interests with that member of Congress. Arrangements of this sort are illegal if it is clear that the lawmaker was bribed, but there is almost never any attempt to pursue such a prosecution, allegedly because proof is hard to come by, even though the "quid quo pro" may be perfectly evident. In the wake of the Abramof scandal there is a movement to make legislators disclose their dealings with lobbyists, and to make "earmarks," clauses inserted into bills often secretly in committee to benefit narrow interests, subject to removal in a final review of the bill. For article click here.

Government contracts in return for campaign contributions: The late John Murtha, who was House defense appropriations committee chair, earmarked a lot of money for clients of PMA, a lobbying group started by an ex-Murtha staffer. PMA's clients, military contractors who send a lot of campaign contributions to Murtha, are under investigation. Click here for NYT editorial. Click here for Crew's website on corrupt congressmen, click on John Murtha (and there is a list of more of his ilk to choose from on this site). Murtha went a little too far, but the law allows these arrangements -- companies sending campaign contributions to congressmen who send them lucrative government contracts -- unless a campaign contribution for a contract deal can be proven. This is absurd. Congressmen who appropriate money for companies should not be allowed to receive campaign contributions from those companies, period. Obviously these are "pay to play" or "quid pro quo" arrangements, but there is no way to prove it without secretly taping conversations. And even if you taped conversations, requiring a subpoena, your not going to hear, "OK Joe, I'll allocate $20 million in contracts for you if you send me a $50,000 contribution." They do it without having to talk specifically about it. Congressmen who say they want to reform the lobbying situation, but are not saying stop these arrangements, are phonies. Until we stop this obvious graft our government is bought by industry. We need people to run for congress who are willing to stand up to these corrupt practices.

Tax Dodge, Blackstone creates shell company to receive assets and dodge taxes. Click Here (July 13, 07) Click here for article

Tax dodge for billionaires, the IRS does nothing about it. (One of many) A 1950's plan to help small insurers and farmers is being exploited by investors who place millions with a small insurance company they have created or acquired for the purpose of avoiding taxes. If the company takes in less than $350,000 in premiums (payments for coverage from the insured), all investment profits from assets the company holds are tax-exempt, as per the 1954 law. One individual benefiting from the change is billionaire investor Peter R. Kellogg, who has been able to avoid $110 million in taxes over four years by parking $350 million in assets with a small insurance company he owns. In some cases thriving insurance companies have downsized their insurance operations to a fraction of what they were to qualify for the loophole. The I.R.S. could take action against this abuse, but does not even audit these tax-dodge companies, and has approved new applications for the exemption increasingly in recent years, sometimes approving a dozen companies in a single week. For article click here

The chemical industry is said to leverage its campaign contributions to stifle laws that would reduce pollution from plants. Texas congressman Joe Barton, chairman of the House Energy and Commerce Committee, has outdone his colleagues by openly resisting the effort to make chemical plants safer against a terrorist attack. This May, 2005 editorial on the ways of Joe Barton is an education in how congress and industry conspire to put greed ahead of public safety.

A West Virgina a coal executive, Don Blankenship, pumps money into busting unions, pays millions to shape a state judiciary favoring business over environment, and his company was cited for five times as many toxic waste spills as any other company from 2000 to 2005. In 2004 he spent $3.5 million to defeat the reelection bid of the state's Chief Justice. For Wall Street Journal article click here. For New York Times article click here.

For a WSJ article on water subsidies for California farms click here. Farmers get a huge price cut, compared to cities, while corporations benefit from a program that was supposed to help small farmers. (As with farm subsidies generally.)

For a WSJ article on state laws prohibiting civil suits over noise from shooting ranges.... click here. When a shooting range is opened neighbors run into a legal wall in seeking compensation for the harm done to their daily life and devaluation of their property because of the noise. The National Rifle Association (the nation's most powerful gun lobby) is a prime mover of such laws, and is pushing to see them passed in the few states that don't already have them.

Article: Private prisons squeeze out as much profit as they can, with some bad results.

For a NYT's article on pharmaceutical industry stopping government from doing comparative studies on drugs to decide payment policies, click here. --- Drug companies charge more for new drugs, so they have arranged to keep the FDA from clinically testing the new drug against the old to see if the extra cost of the new drug is worth it. This prohibition was put in the recent Medicare bill pertaining to prescription drugs and Medicare.

For an article on the FDA keeping secret negative results of studies on "off-label" uses of prescription drugs, click here. "Off label" use means prescribing a drug for ailments other than that for which the drug won FDA approval.

A new California law requires hospitals to make public what they bill for various items and services. (Wall Street Journal, Dec. 27, 04) Medical billing is a funny-money realm in many ways. Hospital bills list crazy charges like $50 for a paper hospital gown, in what is called cost-shifting, and the bills are laced with fraud, such as charging for a doctor visit when a nurse gives a shot. Medicare took no measures to prosecute billing fraud until the 1990's, and the private insurers refused to investigate overcharges in the years before they took over medicine in the name of "cost containment," which turned out to be cutting services and putting the money in their pocket. The fraud, meanwhile, continues, perhaps undiminished. Medical bills are still full of rediculously high charges and charges for things that didn't happen. This Wall Street Journal article, which reviews wild price disparities in California hospital billing, is another window into the fact that nothing like a free market is operating in medicine, if it were costs at various hospitals would be more aligned. (It is worth noting that in the early '90's when first lady Hillary Clinton pretended to address cost containment in medicine, she kept quiet on the matter of fraud in billing. The media, including the New York Times, also failed to address billing fraud in their articles on medical cost containment, during a time of nation-wide review of the cost-containment issue. And still, as medical cost containment remains a major concern among Americans, has anyone seen a major media article on the fraud and in hospital bills? This site would be most grateful for a citation.)

Lobbyists...The well known Abramof-Scanlon case...... Two Washington lobbyists were paid by the Louisiana Coushatta Indian tribe to help shut down the casino of the Tigua tribe in Texas, and then were paid by the Tiguas to try get their Casino reopened. The Tiguas, in 2002 after Texas shut them down, paid $4.2 million to the same lobbyists to get a "powerful Republican congressman" to insert an amendment in an unrelated bill stipulating that the casino reopen, a tactic that had worked for other tribes according to the Tigua's attorney, but was unsuccessful in this case. New York Times Article: click here. Boston Globe Article: click here A highlight of this tale is payment to Ralph Reed, former head of the Christian Coalition, to generate support among conservative Texas Christians for the effort to shut down the Tigua Casino. Also, e-mails retrieved in a government investigation are said to show that the lobbyists planned to get paid to try to reopen the Tigua casino after getting paid by the Louisana tribe to help close it.

Minnesota has so far let communities decide whether or not to permit factory farms in their vicinity, and the communities have kept agribusiness from taking over farming. But Governor Tim Pawlenty is working on handing the state over to corporate farming. (New York Times Dec. 2, 'O4) ... There are some states which have, in ways, stymied the spread of factory farms. (We would greatly appreciate an update on this issue in Minnesota.)

Federal farm subsidies rose 40% during 2003 and 2004, to $15.7 billion dollars a year, even though farm income doubled over those two years due to the big crop yields. Large harvests lowered crop prices, in the period leading up to the publication of this article, triggering subsidies formulated to compensate for lower prices. But pre-subsidy farm incomes remained high, and the fact of higher subsidies in big-income years runs against the principle that farm subsidies are supposed to kick in when farmers are losing money. The subsidies are not, in fact, even contingent on the sale of a crop: "A farmer can sell his crop early at a high price, say, in a futures contract, and still collect a subsidy check after the harvest if prices are down over all. The money is not tied to what the farmer actually received for his crop. The farmer does not even have to sell the crop to get the check, only prove that the market has dropped below a set rate." (New York Times, Dec. 26, 2004.)

Barrack Obama on Farm Subsidies When Illinois Senator Barrack Obama, (who is African American) on his recent trip to Africa, was asked about lowering farm subsidies to U.S. farmers so that African farmers could compete, Mr. Obama did not say something politically pretty like, "We're working on that problem." He responded that many of his his constituents are soy bean farmers, explaining, "It's important to me to be sure I'm looking out for their interests, it's part of my job." U.S. agribusiness (huge corporate farms) are raking in government subsidies that were originally intended to help small farmers, and the corporations are using their subsidies to wipe out small family farms in the U.S., and undersell struggling farmers in third world countries. The reason Obama is looking out for corporate farms is not because there are a lot of agribusiness voters that he cares about, it is because there is a lot of agribusiness money he wants to keep coming his way to pay for campaign costs, so he panders like all the other sold-out politicians. If Obama is for the people, he should fight to eliminate farm subsidies for big corporations, in order to help small farmers here and abroad. For article click here (This article is not generally about farm subsidies, or similar issues, but about Obama's trip and the rock-star adulation he receives in Kenya. What is so shocking is how blithely Obama admits he puts his allegiance corporate farmers ahead of the interests of poor African farmers.)

M. J. Troy dies. Former Democratic Party boss in Queens, New York, exposed facts of corruption to the public after being imprisoned. (New York Times, Dec. 6, 2004) Note: The extent to which judges are corrupt is a great mystery in the U.S. because we do not carry out "stings," which would involve putting hidden microphones on government agents who then offer bribes to judges. The same applies to elected lawmakers, e.g. congressmen. (In Mexico stings are outlawed, making attacks on corruption impossible.) This article is an eye-opener as to how bad corruption can get on the bench.

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Stopdown...genreral discussion of government-of-the-rich issues.

Welfare for the rich and those with connections constitutes a huge disease of our economy and morale. It is the essence of corruption. Welfare for the poor is a drop in the bucket by comparison. It is more than money, it is control of the way we live. Listening to the radio or watching TV, taking a cab ride, living in public housing or near a government housing project, running a family farm, obtaining prescription drugs are examples of how consumers and small businesses get a bad result so that corporations and fat cats can rake it in via arrangements with government.

National Public Radio recently joined with the corporate media to scuttle an FCC program to create small community stations around the U.S. .....TV ads are seriously louder than programs. The FCC's dubious excuse is that "sound density" not higher decibels makes ads seem louder..... Likewise the gun lobby (NRA) has persuaded most state legislatures to shield shooting ranges from legal complaints about the noise they generate. ...Lotteries should have lots of smaller payouts: a million, a hundred thousand, ten thousand. Wouldn't that be fun? Hundreds of people could get big payoffs where now only one payout occurs. But we can't have fun with our own "education" money. Is it for higher tax revenues that they make the big payments? We seek explanation......Welfare for the rich and corporations include farm subsidies that go mainly to big "agribusiness" farms, helping them wipe out small farmers in the third world and in the U.S., even though the subsidies were supposed to help small farmers. Another welfare trough is corrupt military spending that gets us less "bang for the buck," (and could easily be busted with stings).......Housing projects built in the 60's turned poor neighborhoods into much worse nightmares of crime and violence while stuffing the pockets of developers, contractors, corrupt union bosses and consultants (yes, they've stopped building the big projects, but the same crowd is still in control, peddling the pork and taking the payoff)..... The IRS is overworked, it says. But as even major media have pointed out, the IRS spends its energy chasing down small fry -- middle class transgressors........ And then there are formatted tax dodges offered by investment corporations. The big tax dodges are transparently nothing but tax dodges, and the IRS can shut them down legally simply on that basis, but they don't. (For an example click here) "Consulting fees" for lobbyists are not for their expertise in the interface between law and business, but for their personal connections to lawmakers and administration. This is a a web of corruption that includes Indian tribes with casinos paying millions to lobbyists and party coffers to keep other Indian tribes from getting Casino's in their area..... Taxi bureaus in a given city let the taxi companies make big payouts to the permit ("medallion") holders at the expense of drivers and the riding public. This would be called racketeering except it is done by the government. We could have low fares, drivers staying busy and making much more money, beautiful cabs and prompt dispatch if taxis operated like a business rather than an extortion racket (with the permit holders extorting legally.) The monopoly, a limitation on permits, should be kept, so the drivers can make money, as was the original intent of limiting the permits. A ceiling on payments to the permit holders would stop the extortion from ruining the business....... Boards of education, housing authorities, public works (e.g. road repair) etc. are money troughs for those with the right connections. We will build a file with details and are asking for comments from readers. .....The U.S. Army subtracts the amount of disability payments to a disabled ex-soldier from the amount of his/her pension.

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Below: More commentary drawn from various sources.

Medical economics

Medicare drug benefits... Unlike Medicaid recipients, who have their prescription drugs paid for, Medicare recipients have always had to pay for their own, unless they are in the hospital. Unlike Medicaid recipients, who are receiving medical welfare, Medicare recipients have paid into the program their whole working life in what is a sort of side-car to Social Security. If they are poor in retirement they're out of luck. A new law has been passed, offering slight relief somewhere down the road, but mostly creating confusion around the various plans. "The people they sent to explain it to us don't understand it," commented one senior speaking of the drug benefits cards being offered. It is not pretty to see politicians acting as if they are doing right by seniors with these too-little and too-late measures. Clearly coverage of medication is something that belonged in Medicare from the beginning, and why it didn't happen is a story we would like to investigate.

Originally the cost of drugs was not so high, but as the cost of prescriptions rose over the decades since Medicare was started, in 1967, the pharmaceutical companies lobbied Congress not to provide coverage. One might think the drug makers would be happy to have the government pay for drugs that seniors would often not be able to pay for otherwise. The fear of pharmaceutical companies has been that price controls will be imposed in the Medicare accounts, and then price controls will spread to the larger market. So people who have paid into this program their whole working lives have to make a choice between nourishing food and medicine. And now that the same politicians (Democrats approximately as guilt as Republicans) who sold out seniors for years have offered a meager, half-baked sell-out as a remedy, who endorses it? -- the AARP! (the American Association of Retired People) Like the labor union executives whose real allegiance is to the avenues of corruption and their own salary, the AARP brass have shown us they don't care about seniors, they care about the elite power structure. If they cared about seniors they would have been fighting all along for a drug benefit that pays for drugs without the high deductibles built into the new bill.

Medicare barely pursues fraud in hospital and doctor bills. Until the 1990's they did not pursue fraud on bills at all. In this they were hand in hand with the private fee for service insurers, who never pursued fraud on bills. Even when patients complained neither Medicare nor private insurers went after fraud. Some individuals say the private insurers actually attacked them when they complained vigorously, including damaging the patient's credit. And yet the HMO's -- i.e. the insurance companies -- took over medicine in the name of cost containment, the very thing they had steadfastly refused to uphold as fee-for-service insurers.

It is important to note that when Hillary Clinton tried to rally the nation to the cause of cost containment, ('93-4) neither she nor the media addressed the issue of the fraud on our bills, which would seem like a good place to start. This fraud comes in two forms: (1) Outright fraud, that is billing for something that never happened, such as a billing for a test that was never performed or billing for a "doctor visit" when a nurse administers a shot. One older lady told us that she was told she was sleeping when a procedure was performed that she had questioned. She did manage to get that charge refunded. An office worker at a surgery clinic told us that false charges are programmed into to the computer. (2) And then there is "cost shifting," whereby a paper hospital gown may cost $50 or an aspirin $5. This must happen, we are told, so that other hospital costs like non-paying patients can be covered by the accounting process. But it clearly doesn't have to be done like this. The bills could state what the other costs are, and let the patient see the truth, rather say a tongue depressor costs $5 when the hospital pays a penny for it. This is a kind of fraud, as is the coded language describing charges that patients cannot understand, which is a deliberate obfuscation deliberately resisting reform. One may be sure the AARP, the AMA, Medicare, Health and Human Services etc. is not going to do anything about it.

And, similarly, Ms. Clinton carried on about universal coverage without mentioning that around the country hospitals and clinics that serve the poor were being shutdown -- a trend that has continued since that time. The media managed to overlook it also.

Here is an example of cost-containment as practiced by HMO's.....A doctor (from England) told us about going to an emergency room at a hospital with a good reputation in the San Francisco area. He had a rash on his leg which he thought was a type of dermatitis that can be dangerous. When the staff took his temperature they found it to be normal, prompting him to ask that they try another thermometer and run a check on that one, because his other symptoms were such that he found it hard to believe a normal temperature reading. He explained that he was a doctor. After more than half an hour went by and his rash grew in size he got someone's attention and reminded them of his situation. The staff took his temperature again with the same thermometer and told him again that he had no fever. He again pressed his claim that the thermometer was malfunctioning and again was ignored for half an hour, at which point he began to be afraid he could lose his life to this idiocy. Finally he got them to try another thermometer which showed he had a serious fever and the diagnosis (dermatitis cellulitis (?)) was made and an antibiotic given which cleared up the problem. He got the bill a few days later, $900. He protested and the hospital threatened to sue. When he recounted this incident he was in a negotiation to lower the bill.

Nothing has been done to stop the billing fraud, and the arrogance that attends it, under HMO's. What HMO's have done is cut services and put the money they save in their pockets.

There is much more to discuss about HMO's -- such as the way they have escaped liability for malpractice thanks to a benefits-related clause in the ERISA law, a federal law pertaining to retirement programs. This law should be rewritten because it provides corporate immunity where there should be no immunity. If the HMO's, to save money, refuse treatment that doctors recommend, then they should be held liable if a medical tragedy results. Likewise employers should be held liable, criminally and in civil court, for cutting costs in a way that knowingly risks worker death or injury. But here as well special laws have been cooked up by congress to limit employer liability.

Medicaid fraud is a rampant industry. A scandal involving outlets for home-care medical devices in California, and another scandal involving drop-in senior health care centers in the South, show how an actual scam industry forms up, with many operators running the same kind of scam. In California they were billing for phony cases. Medicaid was paying for homecare devices for non-existent patients.

In the South (Southeast) seniors were sent to play bingo while the centers billed the government for therapy. These operations, given the publicity, may have shut down. Or maybe the government, now that the disturbance is over, is looking the other way again. And, of course, there is all the fraud going on that is not yet exposed and never will be exposed.

HUD and Local Housing Authorities

Housing projects built in the sixties in U.S. cities created conditions much worse that any slum, in terms of violence, isolation, and horror for children. Packing the poorest of the poor into these jail-like places, where the police are afraid to go, was a very expensive indertaking. The local construction companies, unions and corrupt urban housing authority officials, and organized crime raked in the money to destroy neighborhoods in this way. Crumbs from the table of the fat cats in Washington. What would have made sense from the beginning would have been to rebuild neighborhoods, to help people with jobs and families buy houses. But corrupt money ruled and urban mayhem won out, while African American leadership failed to turn the energies of the civil rights movement against the housing project scam....Although HUD now builds little units and mixed income units now, it is the same sleazy crowd raking in the money because they still direct the "pork barrel" process, that is they are still handing out the construction jobs for kickbacks. Andrew Cuomo did nothing to stop this cesspool from being what it is. Cisneros tried to let all HUD money recipients receive a voucher that they could take where they want. But that idea, which would empower the poor and make government rental housing compete with private rental housing. was tossed out along with Cisneros. (The pork-barrel crowd dug up a minor indiscretion on Cisneros part and used it to remove him, lest he move ahead with his plan to derail corruption.)..........A question we would like to explore is, what happens now with section-8 vouchers, do people get to take them to any private landlord who will take the voucher, or are the vouchers only good at certain addresses designated by housing authorities? What % of people can get these limited vouchers. What % of people get vouchers they can take anywhere?

$650 million in U.S. dollars was found in by U.S. soldiers in residences of Saddam Hussein's inner circle after the fall of Baghdad to U.S. forces. The investigation has put the blame on few underlings, just as was done when $300 million was found to have gone to Saddam Hussein before "Desert Storm" (1990) A New York Times article describes the investigation of the laundering of the $650 million in bland terms, as if the fines levied settle the matter reasonably. Click here for article. We would greatly appreciate hearing from readers about the $300 million, which went to Saddam through an Atlanta branch of an Italian Bank, and about the $650 million -- and, in both cases, about the U.S. government's failure to pursue justice, and the media's failure to dig into these matters. With regard to the $300 million, we would like to say that William Safire in his New York Times column cried out against the media letting this matter drift quietly out of sight.

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