Update:
The President will make a statement soon. CNN is waxing eloquent about what important blow this is. I disagree. OBL was killed in a mansion near Islamabad. There are some spontaneous cheers from crowds in Washington for Spring Break. We haven’t seem something like that in a very long time.

Pakistan government sources have confirmed it. It claimed to be a joint US/Pakistani intelligence operation that got OBL.

Update II:
Obama recaps the war on terror. It appears it a was a special ops team that took out OBL. It looks like the breaking new killed the NY Times website. This link seems to work better.

The real story of this election, then, is that of an economic policy that failed to deliver. Why? Because it was greatly inadequate to the task.

For those who would say that progressive polices failed, I reply they weren’t really tried.

Four current and two former New Orleans police officers have been charged in connection with the killing of unarmed civilians on the Danziger Bridge in the chaotic days after Hurricane Katrina, federal law enforcement officials announced here on Tuesday.

via Police Charged in Post-Katrina Shootings and Cover-Up – NYTimes.com.

He had to wait until Dec 31st to do that? What took you so long Dave? Well, at least this once I’m quoting the Times without Paul Krugman being the source.

Serious students of health care have known for a long time that the magic of the marketplace doesn’t work in health care; the United States has the most privatized health-care system in the advanced world, and also the least efficient. The pale reflection of this reality in the current discussion is that reform with a strong public option is cheaper than reform without — which means that as we get closer to really doing something, rhetoric about socialism fades out, and that $100 billion or so in projected savings starts to look awfully attractive.

It has also been clear from international evidence that universality is cheaper than leaving a few people expensively without care. That’s reflected now in the projected savings from a strong employer mandate.

The point is that reality is pushing for a more progressive reform than the Baucus bill. Truly, the facts have a liberal bias.

via The facts have a liberal health-care bias – Paul Krugman Blog – NYTimes.com.

Paul says while it might be a “recovery” in terms of conventional definition, but job creation still lags. The question seems to be why isn’t job creation part of the definition of recovery.

Given all that, it made complete sense to distrust anything the Bush administration said. That wasn’t reflexive, it was rational.

via Reflexively anti-Bush – Paul Krugman Blog – NYTimes.com.

via White House Affirms Deal on Drug Cost – NYTimes.com.

Pressed by industry lobbyists, White House officials on Wednesday assured drug makers that the administration stood by a behind-the-scenes deal to block any Congressional effort to extract cost savings from them beyond an agreed-upon $80 billion.

Drug industry lobbyists reacted with alarm this week to a House health care overhaul measure that would allow the government to negotiate drug prices and demand additional rebates from drug manufacturers.

In response, the industry successfully demanded that the White House explicitly acknowledge for the first time that it had committed to protect drug makers from bearing further costs in the overhaul. The Obama administration had never spelled out the details of the agreement.

If I’m not mistaken drug costs have been one of the primary causes behind general inflation in the health care sector. Without effective cost controls we’re going to end up boosting instead of reducing the cost curve over time.

Op-Ed Columnist – An Incoherent Truth – NYTimes.com.

So what are the objections of the Blue Dogs?

Well, they talk a lot about fiscal responsibility, which basically boils down to worrying about the cost of those subsidies. And it’s tempting to stop right there, and cry foul. After all, where were those concerns about fiscal responsibility back in 2001, when most conservative Democrats voted enthusiastically for that year’s big Bush tax cut — a tax cut that added $1.35 trillion to the deficit?

But it’s actually much worse than that — because even as they complain about the plan’s cost, the Blue Dogs are making demands that would greatly increase that cost.

There has been a lot of publicity about Blue Dog opposition to the public option, and rightly so: a plan without a public option to hold down insurance premiums would cost taxpayers more than a plan with such an option.

But Blue Dogs have also been complaining about the employer mandate, which is even more at odds with their supposed concern about spending. The Congressional Budget Office has already weighed in on this issue: without an employer mandate, health care reform would be undermined as many companies dropped their existing insurance plans, forcing workers to seek federal aid — and causing the cost of subsidies to balloon. It makes no sense at all to complain about the cost of subsidies and at the same time oppose an employer mandate.

So what do the Blue Dogs want?

Maybe they’re just being complete hypocrites…

…Now, however, they face their moment of truth. For they can’t extract major concessions on the shape of health care reform without dooming the whole project: knock away any of the four main pillars of reform, and the whole thing will collapse — and probably take the Obama presidency down with it. Is that what the Blue Dogs really want to see happen? We’ll soon find out.

The basically want to complain about costs while opposing, you know, actual provisions that would control costs. The real question is if the President will allow them to destroy health reform.

The other option would be a closed door meeting where he explains to them that opposition will have a price:

• Expect well-funded primary challengers.
• Expect no money from the national party to help with re-election campaigns.
• Expect no help at all from the President.
• If you hate the legislation all we ask is you vote to prevent a filibuster in the Senate, then vote your conscience on the legislation when it comes to the floor if you think it will help keep you seat.

In short, the Democrats need something approximating party discipline. What’s more important here? Mollifying the Blue Dogs or the best chance at reforming health care since Roosevelt, Truman, Johnson and Clinton all failed before the corrupting influence of powerful moneyed interests? Is effective legislation more important than inclusiveness in the process? The President as done a lot to reach out to players in health care, to offer them a seat at the table. He’s tried to learn the lessons of the Clinton failure by allowing Congress to write the legislation instead of running the reform effort from the White House. He needs to take more of leadership role now and begin setting out the perimeters of reform. Congress will not craft legislation that’s good for the nation, they’ll craft something that’s good for lobbyists and large campaign contributors.

Economic Scene – Support for Health Reform Requires Facing Facts on Costs – NYTimes.com.

So what’s in health reform for the majority of voters who already have health insurance? David Leonhardt makes a try to answer: $6500 per year per household. That’s what we spend over and above the average of other industrialized countries for care that doesn’t make us any healthier. You don’t see the employer contribution to health insurance premiums on your pay stub each week.

We actually lag other countries that spend far less per person in most objective measures of health. Wages have been stagnant over the last 20 years at least in part because health insurance premiums have consistently outpaced inflation and take up a larger, albeit hidden, share of your wages.   It clearly doesn’t have to be that way. Productivity has grown, and in turn been eaten by health costs. You could have had that money in your pocket instead, if our political leadership had the willingness to take on entrenched interests that benefit from the boondoggle that is American health care.

h/t Ezra Klein Washington Post

…the Republican leadership in Congress is opposing a House bill that would save the country nearly $90 billion in the next decade by ending this program and allowing students to borrow directly from the government through colleges.

The subsidy program was created when lenders were showing little interest in the college loan program and was intended to make sure that young people could get loans when times were tough. This expensive strategy failed outright during the credit crunch when the federal government had to buy outstanding loans to keep new loans available to students. The direct lending system, which was already known to be cheaper, needed no such rescue.

via Editorial – The Student Loan Scam – NYTimes.com.

This is an interesting development and may well mirror what will happen with federal level health reform moving forward. The state has managed to hold together a coalition to support reforming payments to providers. I’m not sure such a thing is possible at the national level, but I guess we won’t know if we don’t try. This marks a departure from a fee for service payment model to global payments per captia and an assumption of responsibility for wellness by providers. The experiment in Massachusetts may well serve as an example in the national debate to control health costs.

The sector officially labeled “securities, commodity contracts and investments” has grown especially fast, from only 0.3 percent of G.D.P. in the late 1970s to 1.7 percent of G.D.P. in 2007.

Such growth would be fine if financialization really delivered on its promises — if financial firms made money by directing capital to its most productive uses, by developing innovative ways to spread and reduce risk. But can anyone, at this point, make those claims with a straight face? Financial firms, we now know, directed vast quantities of capital into the construction of unsellable houses and empty shopping malls. They increased risk rather than reducing it, and concentrated risk rather than spreading it. In effect, the industry was selling dangerous patent medicine to gullible consumers.

Goldman’s role in the financialization of America was similar to that of other players, except for one thing: Goldman didn’t believe its own hype. Other banks invested heavily in the same toxic waste they were selling to the public at large. Goldman, famously, made a lot of money selling securities backed by subprime mortgages — then made a lot more money by selling mortgage-backed securities short, just before their value crashed. All of this was perfectly legal, but the net effect was that Goldman made profits by playing the rest of us for suckers.

And Wall Streeters have every incentive to keep playing that kind of game.

The huge bonuses Goldman will soon hand out show that financial-industry highfliers are still operating under a system of heads they win, tails other people lose. If you’re a banker, and you generate big short-term profits, you get lavishly rewarded — and you don’t have to give the money back if and when those profits turn out to have been a mirage. You have every reason, then, to steer investors into taking risks they don’t understand.

via Op-Ed Columnist – The Joy of Sachs – NYTimes.com.

Feinstein thinks that oversight laws have been broken. The real question is will Lord Darth Cheney be held accountable for intentionally flouting the law? He seems very adept at avoiding accountability, ignoring Congress and being protected by GOP caucus on the Hill.

A missed opportunity on This Week – Paul Krugman Blog – NYTimes.com.

So I was all ready to talk about Rick Warren on today’s panel, only to learn that he had cancelled out at the last minute. The show replaced him with pirates, plus an extended roundtable. But I think they should have done what the British show Have I Got News For You did when a guest failed to show: they replaced him with a tub of lard, addressed throughout the show as the Rt. Hon. Tub of Lard.

via Fate of Estate Tax Imperils Obama’s Ambitions – NYTimes.com.

“In a time when our government has handed out billions upon billions to failed Wall Street banks,” she said, “it is time we provide a little relief to our businesses on Main Street.” (Flat out Lie)

But critics say her estate tax proposal represents a giveaway to the rich since very few estates built around small businesses or farms — always the poster children for repealing the estate tax — would actually be subject to the tax.

“The real beneficiaries are indeed the same kind of people getting the big bonuses on Wall Street,” said Robert Greenstein, executive director of the liberal Center on Budget and Policy Priorities.

A new analysis by the nonpartisan Tax Policy Center estimated that only 100 farms and small businesses in the entire country would be subject to the estate tax under Mr. Obama’s plan, a number that shrinks to 40 under the proposal Ms. Lincoln sponsored with Jon Kyl of Arizona, the No. 2 Republican in the Senate. A subsequent analysis by the center raised the prospect that there may be no farms or small businesses in Arkansas vulnerable to the tax. (A little bit of truth)

A few opponents of repealing the tax have suggested that Ms. Lincoln, who is up for re-election next year, is looking out for the heirs of prominent Arkansas family businesses like Wal-Mart and Tyson Foods. She dismisses the notion, saying such wealthy Arkansans have the personal resources to contend with the estate tax on their own.  (probably the real reason she cares at all)

Ms Lincoln and her aides say she is instead acting on the concerns expressed by the owners of Arkansas businesses like timber firms and floral shops who worry that what they have worked to build and expand might have to be sold to pay the tax. (Maybe she should just tell them the truth, their not subject to it)

Every time I hear someone say “death tax” I say “Paris Hilton Tax”.  It’s much more representative of who it touches.

The most powerful ordnance lobbed at the public health plan by its opponents is the dreaded “R” word, that is, the prediction that it will lead to the rationing of health care in America. In the debate on health policy, getting slapped with the R-word has always has been the kiss of death for any proposal.

Evidently, many Americans do sincerely believe that when a public health plan refuses to pay for a procedure it is “rationing,” while denial of health care to an uninsured, low-income individual who cannot afford to pay for that care is not. But as textbooks in economics explicitly teach, the role of prices in a market economy is precisely to ration scarce resources among unlimited demands.

The American health system has rationed health care by price and ability to pay all along for a sizeable segment of the United States population. In its report “ Hidden Cost, Value Lost,” for example, a distinguished panel of experts convened by the Institute of Medicine of the National Academy of Sciences estimated that some 18,000 Americans die prematurely for want of health insurance and timely medical care. That is rationing life years. (See also this and this.)

Ah yes the “magic” of the invisible hand and rationing American style. The market fixes all things, unless of course you can’t afford to participate and simply die as a result. We deserve better and most certainly can do better than this.

An Executive VP in AIG’s  Financial Products division, you know them as the wankers that destroyed the company, gets his Good-Bye Cruel World resignation letter carried in the NT Times op-ed section.

He whines and cries and complains that AIG isn’t being nice enough to them anymore. He pleads ignorance of the credit default swaps that sunk the company from inside the 377 person two office FP division he’s been part of for years.  Seems a wee bit odd that SVP would have no knowledge of a main engine of profit in very small division.

Why should anyone give a good god-damned about this guy? Struggling along on millions per year is so very, very hard to do. I ardently hope his public wailing sinks any chance for him to get anything more lucrative than, say a position as a Walmart Greeter. There’s not much of a market for cry-baby executives from the engine destruction that IS the AIG FP division.

Matt Taibbi does a better job of expressing his outrage:

DeSantis has a few major points. They include: 1) I had nothing to do with my boss Joe Cassano’s toxic credit default swaps portfolio, and only a handful of people in our unit did; 2) I didn’t even know anything about them; 3) I could have left AIG for a better job several times last year; 4) but I didn’t, staying out of a sense of duty to my poor, beleaguered firm, only to find out in the end that; 5) I would be betrayed by AIG senior management, who promised we would be rewarded for staying, but then went back on their word when they folded in highly cowardly fashion in the face of an angry and stupid populist mob.

I have a few responses to those points. They are 1) Bullshit; 2) bullshit; 3) bullshit, plus of course; 4) bullshit. Lastly, there is 5) Boo-Fucking-Hoo. You dog.

Matt tears apart each point, then closes with this:

Hey Jake, it’s not like you were curing cancer. You were a fucking commodities trader. Thanks to a completely insane, horribly skewed set of societal values that puts a premium on greed and severely undervalues selflessness, communal spirit and intellectualism — values that make millionaires out of people like you and leave teachers and nurses, the people who raise your kids and clean your parents’ bedpans, comparatively penniless — you made a lot of money.

Good for you. Consider yourself lucky. But your company went belly-up and broke, almost certainly thanks in part to you, and now you don’t get your bonus.
So be a man and deal with it. The rest of us do, when we get bad breaks, and we’ve had a lot more of them than you. And stop whining. Jesus Christ.

Yes, please STFU

I’m with Krugman, this is vile. Drug and medical device makers want to remove $1.1 billion from the stimulus bill that would be spent to compare medical treatments. I would think that if they had nothing to fear from the public knowing which treatments were best they would not be mobilizing against this provision. They don’t want you to know what treatments might work better, might cost less, might save your life, because it might cut into their profits. To say it a little differently, their profits are more important to them than your health and life.

This is why we need reform desperately. The people who profit from current dysfunctional system don’t care what happens to you as long as they can profit from your suffering. Everything else is secondary. Is that how you want your health care system managed???

Frank Rich on the financial crisis, the stimulus bill and the “patriots” in the GOP:

The crisis is at least as grave as the one that confronted us — and, for a time, united us — after 9/11. Which is why the antics among Republicans on Capitol Hill seem so surreal. These are the same politicians who only yesterday smeared the patriotism of any dissenters from Bush’s “war on terror.” Where is their own patriotism now that economic terror is inflicting far more harm on their constituents than Saddam Hussein’s nonexistent W.M.D.?

The House stimulus bill is an inevitably imperfect hodgepodge-in-progress. Obama’s next move, a new plan to prevent the collapse of America’s banks, may prove more problematic still, especially given the subpar record of the new Treasury secretary, Timothy Geithner, in warding off calamity while at the New York Fed. No one should expect the Republicans to give the new president carte blanche, fall blindly into lock step or be “post-partisan.” (Though that’s exactly what the G.O.P. demanded of Democrats with Bush: You were either with him or with the terrorists.)

Yes, we definitely remember the for us or against us stupidity. So what has the “loyal opposition” have to offer in these dire economic times?

The Republicans do have one idea, of course, but it’s hardly fresh: more and bigger tax cuts, particularly for business and the well-off. That’s the sum of their “alternative” stimulus plan. Obama has tried to accommodate this panacea, perhaps to a fault. Mainstream economists in both parties believe that tax cuts in the stimulus package will deliver far less bang for the buck than, say, infrastructure spending. The tax-cut stimulus embraced a year ago by the G.O.P. induced next-to-no consumer spending as Americans merely banked the savings or paid down debt.

Yeah how’s that last GOP led stimulus plan working for you?

We also now know conclusively that the larger Bush tax cuts, besides running up record deficits and exacerbating income inequality, were also at best a placebo on our road to ruin. In a January survey of economists, including former McCain advisers like Douglas Holtz-Eakin and Mark Zandi, The Washington Post determined that the job growth the Bush administration kept bragging about (“52 straight months!”) was a mirage inflated by the housing bubble. Job growth — about 2 percent — was in fact the most tepid of any eight-year period “since data collection began seven decades ago.” Gross domestic product grew at a slower pace than in any eight years since the Truman administration.

Not so good, huh?