Year: 2010

Minority Leader John Boehner talks of ‘Armageddon’ if health care reform is signed into law. Even though the legislation is scored not just as ‘revenue neutral’ but as actually reducing the deficit. (Contrast that with the trillions in war spending and tax-cuts-for-the-rich that Republicans enacted without any effort to pay for either one, and the gigantic deficits that resulted.)

Will it be Armageddon if the 45,000 people now estimated to die each year for lack of coverage don’t die?

Armageddon because we’ll be inching toward the kinds of coverage they have in all the other wealthy nations of the world?

Armageddon because we’ll be stressing preventive care?

Or because we’ll be launching a slew of pilot programs – including pilot programs for tort reform – that start the process of building a more efficient health care system?

Armageddon because illness-caused bankruptcies will plummet?

Armageddon that insurers will have to pay out 80% to 85% of their premiums (depending on the number of insureds covered) in health care reimbursements?

Armageddon because people will no longer have to worry about losing coverage if they switch jobs?

Armageddon that, as Republicans suggested we should, we’ll now be sending investigators posing as patients to help root out fraud?

Armageddon that consumers will have more carriers competing for their business?

I can totally see how thoughtful people would have written this legislation differently. There is endless legitimate discussion to be had over the best approaches, constrained though those approaches must be by political reality.

But Armageddon?

To my mind (let alone truly world-class minds like Bill Clinton’s and Barack Obama’s), the bill that passed last night is a vast improvement over the status quo.

A government take-over? (As in, Keep the government’s hands off Medicare!) Death panels? Armageddon?

It is really scary to see the crowd incited this way.*

It does not lead to good policy, good health, or good will.

The truth is, yesterday was a wonderful day for America. This enormous freight train, frozen in its tracks for so long, has begun to roll. Now, with enlightened regulation and further legislation to spur competition and innovation, we may actually get somewhere.

*When I see angry demonstrators (or even just angry Republican Congresspersons) desperate to ‘stop the bill,’ I remember their equal urgency to ‘stop the count’ of Florida ballots. Yet, would it really have been so terrible for America if we had had Gore instead of Bush? Really?

HEALTH CARE

The House is going to have a historic vote on health care. Every member will be recorded, by name, on whether to pass health care reform or scuttle it. If a majority in the House vote to pass it, it passes.

And this is tricky, or dead-of-night, or undemocratic why?

(Apparently, the Republicans have used “deem and pass” 200 times in the last 15 years, so it’s not a completely novel approach.)

With any luck, legislation will be signed into law before Easter and the health care reform behemoth will finally start to move. It is much easier to steer something – and build momentum – once it’s moving.

Additional legislation will undoubtedly follow. (Sooner or later, there should be a public option. And authority to negotiate drug prices. And wouldn’t it be nice if the capacity of V.A. hospitals were steadily expanded? Perhaps with a lottery allowing a certain number of veterans’ spouses and offspring to buy in each year? The V.A. offers cost-effective government health care that people seem to think works quite well.)

But in the meantime, consider the efforts we may see coming from bright Health & Human Services regulators committed to progress – from cracking down on fraud (who among us would not like to see that?) to rolling out pilot programs that prove themselves. The bill is chock full of promising pilot programs for more efficient care.

Once the bill does pass, many Americans are going to start seeing things they like, even before pilot programs have time to prove themselves and roll out.

Rachel Maddow provides the expected timetable: For example, shortly after passage it will become illegal to deny kids coverage for pre-existing conditions. Adults will have to wait until 2014 for that protection, but will at least get access to new high-risk insurance pools. Kids will be able to stay on their parents’ plans through age 26. Lifetime limits will disappear; likewise, insurers’ ability to cancel your policy when you get sick. Starting January 1, Medicare patients will qualify for free annual wellness visits. And insurers will be required to pay out at least 80% or 85% of premiums (depending on the number of people covered by the plan) in actual health care reimbursements. Customers of insurers who pay out less will get rebates.

TORTURE

That Employee of the Church of Christ: “If you really believe Al Qaeda is evil incarnate, why do you talk and act and vote as if Cheney et al are evil incarnate? You focus all your efforts on vilifying those who you believe may have crossed the line dealing with the perpetrators, while you spend no effort on those that you declare to be ‘evil incarnate.’ That is at least way off base, if not evil as well. The true evil (as opposed to partisan enthusiasm) in all this is that I followed your advice on FMD but not on GLDD. Sigh.”

☞ Sigh, indeed. There’s something we agree on. Sorry about that. As to the rest . . . C’mon, have you been out with signs vilifying Al-Qaeda? What would be the point? Who needs persuading of this? You’re not soft on Al-Qaeda, you just know we already all agree. Same with me. If I thought I had even a single reader who needed persuading that Al-Qaeda is the enemy, I would rail against Al-Qaeda daily.

My thrust has simply been that Cheney is wrong (I don’t think I’ve ever called him evil) . . . that the way to defeat terrorism is not to play into Al-Qaeda’s hands by invading Iraq or by humiliating prisoners in Abu Ghraib or by torturing them when many experts think traditional interrogation methods are more effective.

(Question: in your view, was the waterboarding we were doing torture?)

Mike Martin: “I had to point out one little omission in your torture story. The biggest reason we should not torture is that when enemy soldiers or terrorists are cornered, you can forget about capturing them if they know they are going to be tortured. They are likely to either fight to the finish or do some suicidal response. I have an acquaintance who was in psyops in Vietnam. It was his job to talk Viet Cong into surrendering, often from tunnels and caves where it was very dangerous to try and get to them. Because we had a reputation for treating prisoners well, they were more inclined to surrender. We were able to interrogate those who did give up and retrieve valuable information. As a former Marine, I don’t want to go into battles when I can get the enemy to give up. The people who believe in torture have no conception of military reality. Torture results in Americans dying. There is no other way to put it.”

Matt Ball: “In WW II, the Japanese homeland was under attack. Thousands were being killed every day. Yet the US determined that Japanese waterboarding was torture and executed those who did the torture. Meanwhile, this is worth a link, for those who assume anyone we abuse had it coming.”

Yesterday we wondered how the U.S. will compete with (say) South Korea, when their broadband infrastructure runs rings around ours. Today, something broader than broadband: our failing infrastructure, generally.

But first . . .

Marge Wright: “On March 17th could you repeat the clip of people singing ‘There’s No One As Irish As Barack O’Bama?’ We all have a different energy level than the giddiness of a year ago. I don’t know about you, but I’m almost holding my breath I want health care to pass so much. Of course, I’m also phoning and writing. But still, the mood is different. The relentless cruelty (and KnowNothingNess) of the right wing are astounding, and wearing on all of us. We need a good song to bring us together. So…could you repeat the song? And, this time <smile>, the good version? I love this version because it was recorded in Berkeley, led by a wonderful native Irish traditional singer, and this is the way we sing it here.”

☞ Note the old Chinese man singing in the front row. Oh, my.

And now . . .

INFRASTRUCTURE

Europe invests 5% of its GDP in infrastructure; China, 9%; the U.S., just 2.4%. I think you will find this site, and its succession of short videos, well worth a visit. Infrastructure is what we need to fund, not tax cuts.

But first . . .

HOW WILL WE COMPETE WITH SEOUL?

Yesterday‘s F.C.C. item and broadband test provoked this from James Musters:

‘The government test reports speeds in Kbps, which makes it look fast because the numbers are big. I get 3000 download and 300 upload. If it was reported in MBPS, the results would look paltry – 3 Mbps for download and 0.3 Mbps for upload. We are ‘thinking’ about moving our broadband connections to high speed Internet; meanwhile, South Korea has an average Internet connection speed of 100Mbps nationwide, a network that is currently being upgraded to 1Gbps by 2012. South Korea is implementing a system that is almost 300 times faster than what we get, ten times faster than what we plan to get.

‘Some say this blazing fast internet is only possible because they are a dense population and in America we are more spread out. But on the other side of the world, in the more rural Tasmania, the Australians are rolling out 100Mbps fiber connections to just about everyone, with the switching capacity to be opened up to 400 Mbps in the next couple of years. As NPR reported this morning, most of the modern world pays about one-fifth the price for Internet that we do, and it runs much faster. That is because we have a system where the phone and cable companies have a monopoly and no one else is allowed to sell high speed connections on their propriety networks. You get to pick the phone company or the cable company, and both, when delivering their top home internet package, are much slower than most of the rest of the modern internet nations. As NPR pointed out, we are even being outperformed by Eastern Slovakia.

‘Having not optimized the bandwidth they have now, either in terms of speed or cost, the current consolidated internet giants want the FCC to give them more radio spectrum so they can own all the possible ways of delivering Internet. (Resellers who buy blocks of time and resell at a discount rate are not really competing, they are just reselling in different packaging.) Listen to the NPR report. This ain’t news, we have been in the internet slow lane, paying far too much for service for years. Here is a random article I pulled up from 2007 from the Bush years that said the same thing.

‘Why are other nations leaping ahead by such huge strides in throughput? One answer is fiber-optics, we are still using copper connections. We are using horses and carts when they are using jet planes. How are other nations offering services at one-third to one-sixth the cost? Because they have a national fiber optic communication system on which they allow real competition by independent vendors, not just resellers who only repackage the monopoly services.

‘The FCC is owned by the big media boys, whose solution to their failings is to make a grab for more spectrum. Remember when the cell spectrum came up a few years ago and the computer makers wanted bandwidth but the phone companies got it? So now the wireless internet is not through wireless computers but through a cell sim card and you need a monthly phone company account to log on.

‘With computer companies, where there is real and diverse competition, we see prices driven down and performance up, which just does not seem to happen in the tel-com or cable business. In the US, a years worth of internet access costs more than the entire computer!’

And now . . .

BOYCOTT VIRGINIA

Barb Duel: ‘I have sent the following message to the Governor of Virginia: ‘My partner and I had planned a trip to Virginia this spring. As a result of your recent executive decisions which are gay hostile, we will not be staying in or spending any money in Virginia. We will be advising all our family and friends to do the same.’ ‘

DON’T BOYCOTT VIRGINIA

Joel Grow: Boycott Virginia? Where my wife – who works to promote tourism for our tiny rural county – canvassed door-to-door for Obama in tough, conservative areas where she was physically threatened? I know your call for boycott was mainly symbolic, but it would be better, I think, for you to call for money to be sent to Democratic candidates in Virginia than to try to damage the livelihood of many struggling, wonderful citizens in Virginia.‘

☞ Fair enough. And – thanks to many fine Virginians like Joel and his wife – the Governor has largely backed off, recognizing that the Constitution requires equal treatment under the law. Sure, he’s signaled his base that, if he had his druthers, gays and lesbians would be excluded from the state’s anti-discrimination protections. But this is progress, nonetheless.

YOUR THOUGHTS ON TORTURE

Last week, I linked to a newly released description of what exactly it is we were doing. ‘You decide’ whether it’s torture, I suggested.

An Employee of the Church of Christ: ‘I look forward to your equally graphic description of how Al Qaeda treats their prisoners during interrogations.’

Craig D.: ‘That poor little terrorist Muslim with water up his nose who might have a one in a million chance of dying from some obscure condition, but might also say something that will save countless American lives, I can live with that. Since fanatical Muslims would kill you and me in a heartbeat and have cut off countless heads in the process I can live with them gagging on water.’

☞ Listen, I like ’24’ as much as the next guy, but a couple of points:

First, we all agree Al Qaeda is evil incarnate and does engage in horrific, barbaric inexcusable behavior. There is no controversy there.

The controversy is over whether waterboarding is torture – Cheney says not – and whether we should do it – Cheney says we should.

Neither correspondent having addressed the first question, I will take that as tacit agreement that what we were doing was torture.

On the second question, of whether if it’s torture we should do it, Craig, at least, says, ‘Hell, yes.’

But a lot of red-blooded patriots like John McCain have suggested that our taking the low road, whether with waterboarding or Abu Ghraib – apart from perhaps not being what Jesus would have done – is actually not in our own self-interest. It undercuts our moral authority; it helps Al Qaeda recruit new terrorists; it legitimizes torture by our enemies, should any of us or our allies fall into enemy hands; and, according to many, it is in the main less effective and reliable than lawful, professional interrogation.

NEXT FALL

‘Next Fall,’ which opened on Broadway last week, is, according to the New York Times, ‘the funniest heartbreaker in town.’ (Full disclosure: Charles and I got ‘free’ tickets for having invested in it.)

CHANGE WE NEED

The F.C.C. is proposing a 10-year plan to make the Internet our dominant communication network – and 25 times as fast as what most of us now have. The New York Times sees ‘a shift at the F.C.C., which under the [prior] administration gained more attention for policing indecency on the television airwaves than for promoting Internet access.’

In the meantime, the F.C.C. has set up a site that lets you test your broadband speed.

MORE CHANGE WE NEED

Education is our future. So take heart, per this New Yorker profile, that the President chose an Education Secretary who is close to him (a long-time basketball buddy) . . . who is firmly in the camp of innovation and ‘market forces’ . . . and who has been armed with orders of magnitude more resources than previous Secretaries have had.

‘Stunning,’ writes the tough-minded group, Democrats for Education Reform, of the progress made to date. ‘We don’t know how else to put it.’

WE HAVE HOT WATER!

If you need a little cheering up . . . and who among us from time to time does not? . . . this account of life above the Arctic Circle just might do the trick. It comes to us via a fellow long-suffering BOREF shareholder, Nicholas Altenbernd, who writes: ‘This may help explain why it’s taking a long time for our mine to develop.’ Indeed.

Tomorrow: DON’T Boycott Virginia

Awkward entrance.

Awesome entrance.

This time, Ferris Bueller really has left the building.

Enjoy your weekend!

Yesterday, I mentioned an article I had written about Robert Redford’s height. One of you – thanks, Jim Leff – wrote to say he had found it on-line. Well, I had no idea it was there. So I clicked around and found this one, too: “How to Invest Your Last $10,000.” Oh, how the world has changed in 35 years! And not.

And now, with apologies for the abrupt shift of focus . . . the manual on waterboarding.

“IT’S NOT TORTURE”

Really?

Whatever it is, Dick and Liz Cheney are still for it.

You decide.

The estimable James Musters summarized Salon’s recent article:

Recently released internal documents reveal the controversial “enhanced interrogation” practice was far more brutal on detainees… and was administered with meticulous cruelty.

These memos show the CIA went much further than that with terror suspects, using huge and dangerous quantities of liquid over long periods of time. The CIA’s waterboarding was “different” from training for elite soldiers, according to the Justice Department document released last month. “The difference was in the manner in which the detainee’s breathing was obstructed,” the document notes. In soldier training, “The interrogator applies a small amount of water to the cloth (on a soldier’s face) in a controlled manner,” DOJ wrote. “By contrast, the agency interrogator … continuously applied large volumes of water to a cloth that covered the detainee’s mouth and nose.”

Interrogators were instructed to start pouring water right after a detainee exhaled, to ensure he inhaled water, not air, in his next breath. An interrogator was also allowed to force the water down a detainee’s mouth and nose using his hands.

One of the more interesting revelations in the documents is the use of a saline solution in waterboarding. Why? Because the CIA forced such massive quantities of water into the mouths and noses of detainees, prisoners inevitably swallowed huge amounts of liquid – enough to conceivably kill them from hyponatremia, a rare but deadly condition in which ingesting enormous quantities of water results in a dangerously low concentration of sodium in the blood. “The CIA requires that saline solution be used instead of plain water to reduce the possibility of hyponatremia.”

The agency used so much water there was also another risk: pneumonia resulting from detainees inhaling the fluid. Saline, the CIA argued, might reduce the risk of pneumonia when this occurred. “The detainee might aspirate some of the water, and the resulting water in the lungs might lead to pneumonia,” Bradbury noted in the same memo. “To mitigate this risk, a potable saline solution is used in the procedure.”

To keep detainees alive even if they inhaled their own vomit during a session – a not-uncommon side effect of waterboarding – the prisoners were kept on a liquid diet. The agency recommended Ensure Plus.

The agency used a gurney “specially designed” to tilt backwards at a perfect angle to maximize the water entering the prisoner’s nose and mouth, intensifying the sense of choking – and to be lifted upright quickly in the event that a prisoner stopped breathing. Should a prisoner stop breathing during the procedure, the documents instructed interrogators “If the detainee is not breathing freely after the cloth is removed from his face, he is immediately moved to a vertical position in order to clear the water from his mouth, nose, and nasopharynx,” Bradbury wrote. “The gurney used for administering this technique is specially designed so that this can be accomplished very quickly if necessary.”

The CIA’s waterboarding regimen was so excruciating that agency officials found themselves grappling with an unexpected development: detainees simply gave up and tried to let themselves drown. “In our limited experience, extensive sustained use of the waterboard can introduce new risks,” the CIA’s Office of Medical Services wrote in its 2003 memo. “Most seriously, for reasons of physical fatigue or psychological resignation, the subject may simply give up, allowing excessive filling of the airways and loss of consciousness.”

It seems to say that the detainees subjected to waterboarding were also guinea pigs. The language is eerily reminiscent of the very reasons the Nuremberg Code was written in the first place. That paragraph reads as follows:

“NOTE: In order to best inform future medical judgments and recommendations, it is important that every application of the waterboard be thoroughly documented: how long each application (and the entire procedure) lasted, how much water was used in the process (realizing that much splashes off), how exactly the water was applied, if a seal was achieved, if the naso- or oropharynx was filled, what sort of volume was expelled, how long was the break between applications, and how the subject looked between each treatment.”

☞ James goes on to note: “It seems to me they were drowning them, just not intending to take it all the way to death, but if they did die (stop breathing), they then brought them back to life so they could do it again. Is it just murder, or attempted murder if you torture someone to death and then bring them back to life so you can do it again? As the writer points out, ‘It should be noted, though, that six human rights groups in 2007 released a report showing that 39 people who appeared to have gone into the CIA’s secret prison network haven’t shown up since.’ ”

But I digress.

THE HANDSOME MEN’S CLUB

When I wrote for New York Magazine, way back when (ATMs had not yet been invented much less credit default swaps), I did my best to alternate serious pieces – like one on ‘bank capital adequacy’ (we called it, ‘How Solid Are the Banks?’) – with more playful ones. (‘How Tall Is Robert Redford Really?’ was my favorite. You’d be surprised how hard it was to find out.)

I thought of that as I posted yesterday’s rather serious video on financial reform. It seemed to me somehow important to follow it with this 10-minute video.

You’re welcome.

NAQ UPDATE

Last August I offered this update:

There’s good news and bad news. The good news is that, if this deal is approved, our NRDC warrants get an extra three years to run, way out until October 23, 2014. Just in time for my 100th birthday! (I really have to change the photograph on this page.) The bad news is that the strike price at which they are exercisable will rise from $7.50 to $12 (though the price at which conversion can be forced will rise from $14.25 to $18.75). If you have no idea what I’m talking about, just as well. If you’d like a refresher, here‘s a recap of the various SPACs we have dabbled in as they looked 15 months ago. But if you do own the warrants, here’s the deal: The stock closed yesterday at $10.02. The warrants will now give you the right to buy it at $12 any time until October 23, 2014. If the stock should rise to, say, 60% in that time, to $16 (and assuming this deal is approved), the right to buy a $16 stock for just $12 would be worth approximately $4 – a nice gain on today’s 27-cent warrant price. But if the stock appreciated less than 20% – let alone fell – the warrants would expire worthless. And so, here in Casablanca, we wait. And wait. And wait.

☞ So here’s a further update: The deal did get done, I still haven’t changed the photo on this page, the stock and warrant symbols have changed to ROIC and ROICW (now known as Retail Opportunity Investments Corp.), the stock remains around $10 but the warrants are up four-fold, and a very smart real estate guy I know recently paid that much to buy some, $1.02, because he thinks the folks running ROIC are also very smart – and have $400 million in cash to play with, unburdened by any troubled real estate assets – and that with some not-too-crazy financing might assemble $1 billion or so in real estate at today’s distressed prices . . . so, who knows? The stock actually could be significantly higher by the time the warrants expire four and a half years from now, which could make for a further double or quadruple in the warrants.

This has released in me all the usual self-destructive psychological juices – my remorse over not having bought even more warrants at 27 cents (and not having more volubly urged you to do likewise) . . . my fear of hanging on only to see the stock never rise above $12 (if it even gets that high) and our quadruple morph into total loss . . . my irrational inability to buy more of something after it has quadrupled . . . my embarrassment over that irrationality . . . my dread at the prospect this rant may encourage you to pay $1 – albeit with money you can truly afford to lose – only to lose it, as I lost you money on FMD and WaMoops and several others. (Google puts! What was I thinking!) Indeed, it’s a wonder readers of this column have any money left that they can truly afford to lose.

In short: my smart friend’s casual remark that he had been buying ROIC warrants at $1.02 – while initially reaffirming – has thrown me into whatever would be the very manly (not to say hypermasculine) equivalent of ‘a tizzy.’ For now, my greed and fear have reached stalemate: holding on to my warrants for a big score (oink, oink), afraid to buy more (pi-kaw! pi-kaw!).

#

Oh. Redford’s ‘about five nine.’

FINANCIAL REGULATION – LESSONS FROM ICELAND

Dean Baker:

. . . [Iceland’s experience] makes a mockery of anyone who claims to support leaving financial activities to the market. In almost all cases, actors in financial markets assume that governments will stand behind banks at the end of the day. Therefore when they say want the government to leave things to the market they are lying. They just want to be able to take risks with taxpayers money, without being fettered by regulations limiting the extent of these risks. In short, the finance boys want a free lunch, not a free market.

FINANCIAL REGULATION – PEOPLE WORTH LISTENING TO

The Roosevelt Institute last week put together a remarkable day of discussion of our financial markets. Here is your portal to that high-level thinking.

It includes this half-hour video. (Spoiler alert: George Soros strongly supports the need for a Consumer Financial Protection Agency – and agrees with Barney Frank that the “compromise” the Senate may adopt to water down the House bill is “a joke.” Jim Chanos wonders why massive criminality has gone unprosecuted. Peter Solomon says people need to get mad. Stanley Sporkin clearly is mad and says regulatory agencies are worthless without strong regulators.)

(Not on that particular stage but very much in the league of those who were: my friend Bob Pozen, who chairs a firm that looks after $150 billion for 5 million investors – perhaps you, among them – and whose book, Too Big to Save? How to Fix the U.S. Financial System, is filled with well-thought-out prescriptions.)