Jonathan Alter in the current Newsweek:
A decade ago, I paid a call on Tom DeLay in his ornate office in the Capitol. I had heard a rumor about him that I figured could not possibly be true. The rumor was that after the GOP took control of the House that year, DeLay had begun keeping a little black book with the names of Washington lobbyists who wanted to come see him. If the lobbyists were not Republicans and contributors to his power base, they didn’t get into “the people’s House.” DeLay not only confirmed the story, he showed me the book. His time was limited, DeLay explained with a genial smile. Why should he open his door to people who were not on the team?
Thus began what historians will regard as the single most corrupt decade in the long and colorful history of the House of Representatives. Come on, you say. How about all those years when congressmen accepted cash in the House chamber and then staggered onto the floor drunk? Yes, special interests have bought off members of Congress at least since Daniel Webster took his seat while on the payroll of a bank. And yes, Congress over the years has seen dozens of sex scandals and dozens of members brought low by financial improprieties. But never before has the leadership of the House been hijacked by a small band of extremists bent on building a ruthless shakedown machine, lining the pockets of their richest constituents and rolling back popular protections for ordinary people. These folks borrow like banana republics and spend like Tip O’Neill on speed.
I have no idea if DeLay has technically broken the law. What interests me is how this moderate, evenly divided nation came to be ruled on at least one side of Capitol Hill by a zealot. This is a man who calls the Environmental Protection Agency “the Gestapo of government” and favors repealing the Clean Air Act because “it’s never been proven that air toxins are hazardous to people”; who insists repeatedly that judges on the other side of issues “need to be intimidated” and rejects the idea of a separation of church and state; who claims there are no parents trying to raise families on the minimum wage-that “fortunately, such families do not exist” (at least Newt Gingrich was intrigued by the challenges of poverty); who once said: “A woman can’t take care of the family. It takes a man to provide structure.” I could go on all day. Congress has always had its share of extremists. But the DeLay era is the first time the fringe has ever been in charge.
The only comparison to DeLay Co. might be the Radical Republicans of the 1860s. But the 19th-century Radical Republican agenda was to integrate and remake the South. The 21st-century Radical Republican agenda is to enact the wish list of the tobacco and gun lobbies, repeal health and safety regulations and spend billions on shameless pork-barrel projects to keep the GOP at the trough. Another analogy is to Republican Speaker Joe Cannon, who ran the House with an iron fist a century ago. But Cannon had to contend with Progressive Republicans who eventually stripped him of his power. DeLay’s ruling radical conservative claque remains united, at least for now.
Comparisons with fellow Texan Sam Rayburn fall short, too. Rayburn was respected on both sides of the aisle for his rock-solid integrity. He and most other House speakers carefully balanced their support for corporate interests like the oil depletion allowance with at least some sense of the public good. And they had to share much of their power with committee chairmen. Today, seniority is much less important. Chairmen are term-limited (six years) or tossed if they displease DeLay. And this crowd views “the public interest” as strictly for liberal pantywaists.
How have they succeeded? A new book, Off Center: The Republican Revolution and the Erosion of American Democracy, by Jacob S. Hacker and Paul Pierson, explains how the GOP is simply better than the Democratic Party at the basic blocking and tackling of politics, including the exploitation of cultural and religious issues. The authors argue that even if DeLay goes down, the zealotry and corporate shilling will continue as long as the GOP controls the House. Consider DeLay’s temporary replacement, Missouri Rep. Roy Blunt. The Washington Post reported last week that Blunt is respected by Republican members in part because he has “strong ties to the Washington lobbying community.” That’s a qualification for office?
The only reason the House hasn’t done even more damage is that the Senate often sands down the most noxious ideas, making the bills merely bad, not disastrous. What next for the House of Shame? If DeLay’s acquitted, he’ll be back in power. If he’s convicted, his proteges will continue his work. Reform efforts by fiscal conservatives determined to curb their borrow-and-spend colleagues are probably doomed. The only way to get rid of the termites eating away the people’s House is to stamp them out at the next election.
© 2005 Newsweek, Inc.
The stock is back up to $20.54, not much lower than where it was when first mentioned here. To my guru’s surprise, some significant state Medicaid programs are covering BiDil, despite its costing thousands a year more than the generic alternative.* In Georgia, it’s covered with just a 50-cent co-pay. In Maryland, North Carolina and South Carolina, with a $3 co-pay. It is not covered by Virginia or Pennsylvania. Florida Medicaid will only pay if you jump through lots of hoops.
This is good news for Nitromed (and bad news for our puts), but the question is whether it’s good enough news to make the company profitable one day. And if not, whether our puts will reflect that in time. (I’m selling my December puts and buying March puts to give me more time – but only, let me stress, as always, with money I can truly afford to lose.)
The latest UBS-released IMS prescription data, flaky though they may be, show the 7-day rolling average for BiDil prescriptions at 103 a day as of October 2, of which 76 were new prescriptions (as opposed to refills). The bulls on this stock hope that, as Medicaid in many states makes this drug all but ‘free,’ those numbers will continue to rise. But will they rise enough to reach the 60,000 or so full-price patients the company needs to break even?
Queried in response to this new information, and in response to a UBS-commissioned survey of doctors, my guru writes: ‘Bottom line: the UBS survey shows that there will be a significant shortfall in revenue compared to analysts assumptions even under the most optimistic assessment. More importantly, revenue should not come anywhere close to supporting profitability. Hold the course – the shorts will win.’
He’s usually right and will likely be right this time, too. But no one is right all the time. If he is right, but the stock spikes up further, it could offer another interesting opportunity to buy puts – with money you can truly afford to lose.
* I am not a doctor, obviously. Nitromed bulls say there is no generic alternative. To match the dosage in the BiDil formulation, you’d actually have to cut pills in half. Well, I cut pills in half to save a lot less than $2,500 a year. But are all patients really identical? Don’t big ones need a higher dose than small ones? Is there something magic about the precise BiDil dosage? Was it tested against every other possible combination of dosages? Is it impossible that a generic manufacturer, seeing the demand, might in a year or two come out with a dosage that requires no cutting? Is it possible that, trying desperately to cut costs, and seeing BiDil on worstpills.org, Georgia and others might at some point change their generous coverage? I truly don’t know the answers to any of these things. But to a layman, they all seem possible.
Quote of the Day
Wall Street takes your money and their experience and turns it into their money and your experience.~unknown
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