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How the White House's Deal With Big Pharma Undermines Democracy


I'm a strong supporter of universal health insurance, and a fan of the Obama administration. But I'm appalled by the deal the White House has made with the pharmaceutical industry's lobbying arm to buy their support.

Last week, after being reported in the Los Angeles Times, the White House confirmed it has promised Big Pharma that any healthcare legislation will bar the government from using its huge purchasing power to negotiate lower drug prices. That's basically the same deal George W. Bush struck in getting the Medicare drug benefit, and it's proven a bonanza for the drug industry. A continuation will be an even larger bonanza, given all the Boomers who will be enrolling in Medicare over the next decade. And it will be a gold mine if the deal extends to Medicaid, which will be expanded under most versions of the healthcare bills now emerging from Congress, and to any public option that might be included. (We don't know how far the deal extends beyond Medicare because its details haven't been made public.) Let me remind you: Any bonanza for the drug industry means higher health-care costs for the rest of us, which is one reason why critics of the emerging healthcare plans, including the Congressional Budget Office, are so worried about their failure to adequately stem future healthcare costs. To be sure, as part of its deal with the White House, Big Pharma apparently has promised to cut future drug costs by $80 billion. But neither the industry nor the White House nor any congressional committee has announced exactly where the $80 billion in savings will show up nor how this portion of the deal will be enforced. In any event, you can bet that the bonanza Big Pharma will reap far exceeds $80 billion. Otherwise, why would it have agreed?

In return, Big Pharma isn't just supporting universal health care. It's also spending a lots of money on TV and radio advertising in support. Sunday's New York Times reports that Big Pharma has budgeted $150 million for TV ads promoting universal health insurance, starting this August (that's more money than John McCain spent on TV advertising in last year's presidential campaign), after having already spent a bundle through advocacy groups like Healthy Economies Now and Families USA.

I want universal health insurance. And having had a front-row seat in 1994 when Big Pharma and the rest of the health-industry complex went to battle against it, I can tell you first hand how big and effective the onslaught can be. So I appreciate Big Pharma's support this time around, and I like it that the industry is doing the reverse of what it did last time, and airing ads to persuade the public of the rightness of the White House's effort.

But I also care about democracy, and the deal between Big Pharma and the White House frankly worries me. It's bad enough when industry lobbyists extract concessions from members of Congress, which happens all the time. But when an industry gets secret concessions out of the White House in return for a promise to lend the industry's support to a key piece of legislation, we're in big trouble. That's called extortion: An industry is using its capacity to threaten or prevent legislation as a means of altering that legislation for its own benefit. And it's doing so at the highest reaches of our government, in the office of the President.

When the industry support comes with an industry-sponsored ad campaign in favor of that legislation, the threat to democracy is even greater. Citizens end up paying for advertisements designed to persuade them that the legislation is in their interest. In this case, those payments come in the form of drug prices that will be higher than otherwise, stretching years into the future.

I don't want to be puritanical about all this. Politics is a rough game in which means and ends often get mixed and melded. Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that's the case, our democracy is in terrible shape. How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation? When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public's interest? (Any Democrats and progressives who might be reading this should ask themselves how they'll feel when a Republican White House cuts such deals to advance its own legislative priorities.)

We're on a precarious road -- and wherever it leads, it's not toward democracy.

108 Comments

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There is not doubt in my mind that it's entirely BigPharma's fault. All of it.

The fact that the man who promised hope, change we can believe in, blah blah blah, has signed off on this means nothing at all.

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Thank you, Mr. Big Pharma Apologist!

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Lalo,

a pox on both of them.

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So nothing makes you happy. No matter how this debate went - as long as there is some way to bash the Democrat...then you do it.
Your intellectual dishonesty is repugnant.

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I'm not sure how many times I have to say this: "A broken system can't fix itself."

(I worked as a systems analyst and designer for 18 years, until I was H1B'd out of the field in 2005).

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You have the easiest job in the universe. Whatever happens you just say you're against it, and that you always knew more than anyone to start with and still do. But like many of the easiest jobs, yours is worthless, and adds absolutely nothing positive.

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It is clear that there are power structures including the pseudo-christian mafia running things in this country. They clearly have for some time. I don't know how we managed to get President Obama elected but it's clear that our democratic majority is fairly meaningless. Representatives are not representing the people from what I can see.

We have only the semblance of democracy here. The elite have plundered and robbed us blind stealing our democracy out from underneath us.

And the reality is that without some real leadership, some plan to save or restore our democracy... it is already gone. The insurance companies and big pharma will buy the republicans back into power. All of the money that has already been stolen from us and the weakened economy working against us... what have we left to fight back with. It is a sick story of power hungry, demented, religious thieves doing their utmost to ruin a country.

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Psuedo-religious thieves.

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It going to take more than just leadership. Its going to take more than just voting on election day.

It going to take popular involvement in a big way to break free big money's grip on our pockets and our government.

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Well, I could be mistaken, as a casual obvserver, but it appears to me that Pharma and Health Insurance were a giant block resisting change.

I'm guessing that Obama decided to split the opposition in half. He broke big Pharma off from the opposition. It cost a mint. We'll see what happens.

We are trying to get to universal single payer. To do that, he figured, we could only take a half step to public option.

Now it turns out, to get to public option, he had to take a half step, and agree to not make pharmaceuticals part of the reform.

Presumably, this gets him to public option. Public option, eventually, gets us to universal health care. Universal health care alters the distribution of wealth and power in the country.

In the mean time, the most important thing is to pass card check.

And I'm sure that most politicians opposing card check feel strengthened by how Health Reform has gone.

We are, in deed, a long long way from a Democracy.

FDR gave us paradise, short of universal health care. And we pissed it away.

Another point: we should have never completely defanged the mob and decoupled them from organized labor. Poverty is a form of violence. None of this would be going on if the plutocrats were worried about some of the voilence they are inflicting on the American people might be thrown back at them. Last week we came full circle, and some women in Oregon called up and threatened a Union with violence.

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Thank you for this comment.
word(s)
-justperceptions

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One reason the town meeting hooha stuff works is that Americans have the common sense not to trust their government.

Let the bill fail and come back and do it right. Make it simple. Sell an expansion of Medicare People understand it. You can phase it in or let people buy in or tweak it how you like. You may have to sell a tax increase. It may not pass the first time through. But if you'd keep selling a simple concept eventually you might actually convince real Americans.

But who can believe any of this reform b.s. You don't even know how many other deals have been cut. You can only figure that none of the deals are going to benefit you.

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Medicare for all!

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But they are instead trusting their corporate insurance companies; that makes even less sense than being able to opt for a public plan, for instance.

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Well, who treats you with more respect your insurance agent or your congressman? At least your agent might give you a key chain or new pen.

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Hear! Hear!

Single Payer!

Single Payer!

Single Payer!

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Looks like Obama is enlisting Big Pharma to help screw Big Insurance. If he succeeds, he can always screw Big Pharma later. Fine. When in the last century or two hasn't a president cut such deals for PR purposes?

Unfortunately, an actual solution depends on the horde of pigs and clowns who represent us in Congress. They are not engaged in, and never have been engaged in, democracy. They, and not Obama (or, in 1993, Hillary), are supposed to forge complex social legislation. They're supposed to do so without regard to what Billy Tauzin wants. And they, not the White House, are the reason we are all screwed.

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If Obama is enlisting Big Pharma to help screw Big Insurance, it might be because he got fed up with those Rick Scott ads and feels it's time for some "Payback"!!

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I am curious why you have no objection to anti-democratic corruption of the constitutionally defined democratic institution (congress), but consider it a threat to democracy when those seeking self-interest influence the never-very-democratic-in-the-first place executive branch?

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Yeah, that's what I meant to say.

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He sold us out? Oh I see the bill has been passed by both houses of congress and he's ready to sign it into law. That was quicker than I expected.

Seeing as the CBO says under the House bill 96% of all Americans will be covered by private insurance and 4% by the public plan you can look for private insurance companies, forced to compete like they ought to, drive those drug prices down through negotiation, the same way the UAW gets the same deals from Ford, Chrysler and GM. WellPoint: "Why should I pay you that kind of price for Lipitor when BCBS is only paying X?"

They're going to have to because under the new bill they won't be able to just deny drugs to their policy holders or dump the really sick ones onto the public plan. Now if you don't think that'll work then why the fuck did you vote for the clowns who passed the same kind of legislation in the Medicare Part D drug bill?

You're criticizing Obama for playing winning politics by pitting stakeholders like insurance and drug companies, as they try to preserve their own personal fiefdoms against each other, for the benefit of the rest of the country.

And frankly I'm not worried about any of these negotiations. The sausage isn't seasoned yet let alone in the tube. House leaders aren't going to let the likes of Baucus and Enzi decide the fate of this bill.


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And let me modify my post for a non wingnut audience. I posted it on one of their websites and copied it here. I doubt anyone here supported the Medicare Part D drug plan.

The sausage isn't seasoned or in the tube yet, let alone hot off the grill and ready to be signed. If Obama has conned the drug companies into ponying up $150 million to Families USA and healthyeconomynow.org to counter the insurance companies' $200 million for the privilege of having Baucaus's ear that's fine with me. Those non profits do really good work. Check 'em out. Most of Baucus's garbage isn't going to wind up in the bill anyway.

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When do the American people get to be stakeholders?

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When Pelosi and Waxman push back, Baucus steps up and tells Grassley and Enzi regretfully they're not going to get their way, everybody keeps the campaign contributions, Republican and Democrats alike, and Billy Tauzin gets fired for getting played by Barack Obama when after the bill pases actual competition lowers the price of not only drugs but all health care expenditures. That's when.


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It would be really nice if you are right, but the chance of that happening is so slim it is really beyond the point of being able to believe such machinations will come out in favor of the people.

I think the whole effort was flawed from day one with Obama trying to broker a deal when the truth is there has to be some pretty big losers and those losers need to be the insurance and drug parasites and the allied insustries that have been feeding off the public for many years. The only way to really "win" this thing for the American people is to be honest and courageous and start fighting for the the reform that is clearly most efficient, easiest and most rational to implement, most cost effective and easiest for everyone to understand: some form of single payer.

This convoluted mish mash of a bill taking form in Congress is going to be outrageous ly expensive without meeting the needs of the people. It is packed with all kinds of special interest goodies. It is, in short, a dog of a bill.

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Well Oleeb I call utter bullshit on that. I've read the bill and it's full of good legislation that will rein in the insurance cos, drug cos, hospitals and bad doctors. It also promotes actual competition that will force these thieves to lower prices and actually operate like they should instead of government protected monopolies.

Obama invited those "stakeholders" in and they showed up because they know the jig is up and their ox is going to get gored. They all went because they know they can't be seen as standing in the way of reform and in hopes they'd get a sympathetic hearing. Now they can't say they haven't been to the table, or were shut out of the process.

You may think killing this bill will get us single payer. All killing the bill would get us is a seriously damaged president and more Republicans in the house and senate next year.

The House bill is a good legislation. We will wind up with a system much like the Germans and Dutch have.

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Well, as I said, it would be nice if you're right. I do think, however, that you are being extraordinarily naive about what the bill might, perhaps, maybe, if it all works right accomplish. Even if killing a bad bill doesn't lead to single payer, I would rather have that than to put in place a bad bill that delays real reform. I don't see insurance subsidies or guarantees of even greater windfall profits for big pharma as anything even remotely resembling healthcare reform. The purchase price for the half measures the administration seeks is far too high. That's not bullshit, that's just having a different point of view. It isn't as though there aren't plenty of informed people out there looking at the bill and finding it so packed with special interest goodies that they find the intention of reforming the healthcare system completely undermined.

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And the bill gets passed by reconciliation without the republicans and 40 years from now, if there are any republicans left, they'll claim credit for the whole idea.

I just realized I didn't capitalize republican. I kind of like it that way.

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Nancy Pelosi, Jim Baucus, and Henry Waxman say the House is not bound by the deal, and that they want negotiating power with PhRMA, and the right to import drugs from Canada. Are they likely to prevail, or does it matter, if everyone guesses that those conditions would be killed by Senators in conference anyway?
The way the deal was framed by the New York Times, PhRMA gives $150 in conjunction with Families USA for advertising to sell the bill, though which bill must still be up in the air.

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And the right to import drugs from Canada? These drugs aren't made in Canada. They're made here. Canada negotiates a price for their 30 million people. They can't afford to sell all their drugs to us unless we let the Canadian government negotiate on behalf of 330 million Americans too. Does any of that that make sense at all? How about we negotiate through our government drug prices on behalf of our 330 million people?


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“Politicians are a set of men who have interests aside from the interests of the people and who, to say the most of them, are, taken as a mass, at least one long step removed from honest men”

Abraham Lincoln

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Interesting article. The last paragraph is worth reading and re-reading.

I agree with this part most strongly.

Perhaps the White House deal with Big Pharma is a necessary step to get anything resembling universal health insurance. But if that's the case, our democracy is in terrible shape.

It's probably necessary. It also means democracy is in bad shape. But the people to blame for that are less the administration than ourselves. It's not like the grassroots left has been marching in the streets on this issue. This issue is hard to understand, and vested interests focus on it a lot more closely than ordinary citizens. On this issue, I really see no alternative to the divide-and-conquer strategy.

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The so-called grass roots left is for the most part dead or getting near to. The new generations are frightfully apolitical and nihilistic.

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Alex and Andrew,

I'm not part of the old guard left, but I've fought harder than most of them this year for "their" (our shared) causes.

I see a lot of younger folk out there.

The problem is that there wasn't much of a pass-off.

The old guard left was pretty small, and it came from a giant generation. It also used a lot of strategies that were self-defeating. I love Bill Kunstler, but let's face it, by the 1980's he was more showman than legal mastermind. I could name many other people who raised more questions about the left than inspired new members.

Don't forget, Hill and Bill were part of the generation that gave us the old-guard left (the OGL?), as you put it, or at least a giant wave of the OGL, and they ended their administration (two for the price of one!) by having Bill sign the repeal of Glass-Steagall and the Commodities Futures Modernization Act.

You can't just blame the kiddies.

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Sorry, I should probably note that Kunstler was old enough to have been the father of some of the Chicago Seven/Eight he represented.

So to lump all the "old guard left" into the boomer generation is not quite fair. Nor does it seem that the old guard left was only right, in the same way that the old guard right was only ever wrong. There were some significant strategic errors. I was recently reading Mailer's "In The Armes of the Night" and he predicts this giant left-right divide as being sown by student activists not "getting" conservatives.

My point (not well stated - it's late!) was that stereotyping overlooks some significant differences within those groups. Twenty-somethings today are hardly apathetic. They tend, however, to be less involved in big picture politics, and more involved in their communities. (They may be thinking globally, but most are acting locally, and the venues through which they act aren't as secular.)

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Sure maybe you fight harder than most of us did in the 60's--mid70's. But scattered individuals do not a movement make. I stand by what I said the current generations are FRIGHTFULLY apolitical, and I might add amoral. The amorality is a legacy of the libertine strain that emerged from the 60's--70's. Free love, free sex, irresponsible behavior and an unrealistic vision as to what they wanted America to become. There was a frightful lack of realism in those people, but they had the fire in the belly and that's what was the essence of the Movement. Today's generation has turned away from the unrealistic idealism and wondered off into a so-called realism that borders on the cynical and as I said before, the nihilistic. What the younger generation did pick up on was the worst strains. The "hand off" as you put it was a hand off of irresponsible drug use moral decay. Believe it or not but many of those overweight "birtheres" were once flower children. The Libertines won out and turned their backs on the idealism of the 60's. So now we see them as having adopted the worse of both worlds: a defeatist cynicism, and libertine irresponsibility. The result is nihilism.
You are right; we boomers did not manage the transition to the future in a responsible way. The Viet Nam war was over, middle class kids (with the draft gone) were not facing jungle warfare (the meat grinder) after one month of "basic training" (which was joke). So they did what they themselves warned against "co-opted".

I'm glad to see that some young people like yourself are creating a germ for future developments that do not lead entirely into mindless materialism and immorality.

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"How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation?"

We are already there, silly

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"How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation?"

I want to add that Bill Clinton and the DLC's pitch to big business that they were just as corporate-friendly as the Republicans didn't help.

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It seems like a day doesn't go by that Obama doesn't disappoint me. If he's not signing on to much of the Bush/Cheney gang's war on terror tactics then he's aligning himself with the corporate boys.

I don't know if he's being manipulated by the political/corporate system, or if he's sympathetic to their desires, or maybe he is simply a failure as a leader.

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So, I guess Frank Rich had it right this morning. It turns out we HAVE been punked by the Obama administration. Thanks Obama administration! Thanks setting my hope on fire and then pissing on it! Thanks!

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Oh, I forgot. And this:

"How soon until big industries and their Washington lobbyists have become so politically powerful that secret White House-industry deals like this are prerequisites to any important legislation?"

How soon?

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Really! Where's Reich BEEN for the past how old RU Professor?


Dang, one or two around here (CT Voter???) have promised to withhold contributions unless a public option is passed.

Not to be "puritanical", but surely naive

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Amen and amen.

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Considering that type 2 diabetics currently make up over 20% of Medicare costs, I find it interesting that pharmaceuticals companies are the bad guys in this equation.

A country that generally doesn't exercise, is 63% overweight, and over 30% obese is blaming their problems on the cost of the drugs they rely on to lower their cholesterol, fix their bloodsugar, and bring down their blood pressure. Problems which can be resolved for free with a 40 minute walk and 2,000 calorie diet.

How about the next time we decide to villify a nameless corporate executive that we don't have to see face to face we instead confront a 300 lb man biggy sizing his value meal? Or the 225 pound woman riding her golf cart to get her mail?

Or is that McDonald's fault for tasting better than Subway?

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Thank god for ADAP...my annual medication bill = 25,000

Arnold almost cut me off this year. Talk about Terminator

I did discover something though..a real kick...Aids Drug Assistance has 3 components - state money, matching Federal money and guess where most comes from???


BigPharma gives the state of CA discounts = about 3 times the state contribution

It's a racket folks...no doubt about that...

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Thank you very much for saying this and for saying it so well.

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Guess I'm not a puritan

I take the 150 million in adversting - actually 300 million because they'd run the ads against you - and run

Deal with the problem in separate legislation...Lotsa time to fine tune

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What dream world have you been in? Democracy?
Democracy is and has always been an illusion in order to make the common people believe it had control.
We live in a Republic, where the rich property owner, where the wealthy elite are the kingmakers.

In the event the peasants should somehow bring up, from its grass roots someone unlettered, the elites will always have the final say with the Electoral College procedure.

The American Revolution was going to happen, in response to Englands atrocities.
Who would eventually control in the aftermath, was essential. Lo and behold monied interests eventually got a hold of the reigns; again.

1905 Fellow workers, this is the continental congress of the working class. We are here to confederate the workers of this country into a working-class movement that shall have for its purpose the emancipation of the working class from the slave bondage of capitalism. “Big Bill” Hayward, at the founding meeting of the Industrial Workers of the World (IWW).

1908 Competition was natural enough at one time, but do you think you are competing today?.... Against whom? Against Rockefeller? About as I would if I had a wheelbarrow and competed with the Santa Fe (Railroad) from here to Kansas City. Eugene V. Debs, Socialist Party candidate for president in 1908.

Big pharma or big insurance

1906 The greatest single hold of “the interest” is the fact that they are the “campaign contributors.”... Who pays the big election expenses of your congressman, of the men you send to the legislature to elect senators? Do you imagine those who foot those huge bills are fools? Don’t you know that they will make sure of getting their money back, with interest? David Graham Phillips, in his article, “The Treason of the Senate”

Politics or sausage making?
1906 There was never the least attention paid to what was cut up for sausage.... There would be meat that had tumbled out on the floor, in the dirt and sawdust.... There would be meat stored in great piles in rooms; and the water from leaky roofs would drip over it, and thousands of rats would race about on it.... These rats were nuisances, and the packers would put out poisoned bread for them, they would die, and then rats, bread, and meat would go into the hoppers together. Upton Sinclair, description of sausage-making in his muckraking novel, The Jungle.



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Running a big drug company is a combination of wall street and roulette as it is. You can spend billions on several misses, and not recognize a win for years because you were developing a cure for cancer and instead made something that provokes the growth of healthy adult replacement teeth.

Pharma's support of the new health care initiative is contingent on their being able to continue to conduct business. This somehow does not surprise me.

Pharma companies are for profit businesses. They develop and produce a lot of medicine. They obviously do not want government to have enough leverage to prevent them from charging enough for the medicines to be able to recoup their investment and make a ton of bucks like any other business.

The thing that really sucks today is that many drugs are not being developed with sufficient emphasis today because Pharma can't figure out how to make money selling such a drug if they are able to invent one; the audience is too small in some cases, and doses would have to cost $100,000.00 each. This is the biggest issue in medicine today.

Government is the fount of regulation, but they're not particularly savvy when it comes to running large drug companies. So having any government agency tell a pharma what to do and how to do it is in fact asking for trouble.

I think paperwork companies have barely scratched the surface of competitive bidding. We may not need big government leverage, we may only need some serious foresight by the insurance shops. One hopes they (further) learn how to earn their keep.

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It has been many years since "Pharma" spent significant money developing new drugs. Their efforts all go into developing "me too" drugs that they can hype with TV ads to make millions off the original drug developer's product. New drugs are developed largely by the NIH and the research labs funded by the NIH. "Pharma" spends more money advertising their "me too" drugs on TV than they spend on all research. What we really need to do is increase the NIH funding by a factor of 10 so they can develop the drugs needed to fight the diseases that still haunt us. Then force "Pharma" to eliminate TV ads, obscene executive perks, and excessive profits.

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So who pays for the clinical trials? How much do you think it costs to run large scale trials on human subjects?

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"Pharma" pays the cost for clinical trials of their "me too" drugs, and they factor that cost into the price for the drugs, then they spend twice as much on TV ads promoting them. "Me too" drugs, often for near imaginary ailments, have very little value for society.

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There are some great books that shed light on Big Pharma (an older one-Bitter Pills, by Stephen Fried, and Overdose, by Jay Cohen MD). Pharma now controls the FDA, all drug testing, and controls the information regarding side effects given to the public). The government has handed over it's watch dog/regulator role to Big Pharma and many of the FDA people are double dipping on the payroll of Pharma as well. FDA has lost control of drug safety and what drugs should be developed for what conditions. It is all MONEY and PROFITS. Caving on price negotiations is just another nail in the coffin of U.S. healthcare. If you're older like me, it's not too bad, but my kids are sunk and if they stay in the U.S., healthcare costs will soon surpass mortgage costs for the average family.

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You should read what Dr. Marcia Angell, who teaches at Harvard and was the first woman editor of The New England Journal of Medicine, has to say about the pharmaceutical industry.

She's brilliant, and has been on their case for years. And she can't make a dent.

On the other hand, earlier in this thread, someone else made a point about the idiocy of Americans blaming pharmaceutical companies when 20% of medicare is consumed with T2 Diabetes medication.

He's right in the sense that the biggest budget killers are T2 Diabetes and heart disease, and they're almost entirely preventable through lifestyle modification, which is... FREE. And healthy food is better tasting. And working out is fun - provided you educate people and provide them access to healthy food and safe walkways on which to run and workout.

So both the left and the right have some valid points here.

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Robert, You are both too cynical and not nearly cynical enough.

That our democracy is in serious trouble should be a given. The table, chairs and meeting room are owned by the insurers and pharma. You of all people know this.

Given that, it seems to me that Obama needed to divide the opposition, and between big insurance and big drugs, he surely made a better choice in allying with pharma.

The Presidency and Congress have little power against the industries of America, including in healthcare. Can they really do more than back one of them against the other? Just where do you think Congress, and Democrats in particular, will get the money they need for re-election. If you look at patterns of donation I think it is safe to say that big insurance is the Republican/Blue Dog industry, and the core Democrats are more big pharma types anyway. So Big Pharma is a logical ally.

Now this means that Obama has decided to go for coverage first, and cost control ... later, or someday. Given the state of our economy that's not a bad stimulus policy. Once we do get near universal coverage, both in practice and established institutionally as a principle and political expectation, that will be time to start squeezing. The deal with Pharma isn't forever.

Now I'm surprised to find myself justifying Obama's choice here... I consider myself a hard core leftist, favoring single payer. But I'm also a hard core realist, and I've learned how pathetic the political establishment is in relationship to the power of the medical industrial complex. It literally lacks any serious domestic political power without some kind of industry support.

So this is the sellout, and it seems like it is almost how it would have to be. I'm way beyond disappointment in Obama, or disappointment in the failure of any kind of progressive single payer plan. I'm trying to figure out if there is any way that Obama could possibly salvage anything good for my family, which can barely afford our insurance.

I can easily see how selling out to Pharma is the only way the Obama administration would stand a chance against the Insurance industry.

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I, too, am appalled by this deal, but the more I think about it, the more I start to believe that - in a flawed democracy where corporations rule - this may be, for now, the best we can get. If Obama, a genuine pragmatist and a genuine Democrat, sees he will loose if he goes up against both Big Insurance and Big Pharma, it may be a smart gamble to give Big Pharma what they want so he can defeat Big Insurance. Politics ain't pretty.

Many thanks to Robert Reich for the expertise he brings to TPM and his remarkable ability to make complex ideas seem simple. He is helpful even when we disagree with him.

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I think more likely Obama is selling us out to Big Pharma and Congress is selliing us out to Big Insurance.

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flawed democracy where corporations rule

This seems more a case of the corporations coughing up the dough as a result of a shakedown. Follow the money. Obama got $150 million in support for his plan. If you think that was by asking nicely, think again. This is a classic shakedown.

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When will it become standard practice that such deals come with hundreds of millions of dollars of industry-sponsored TV advertising designed to persuade the public that the legislation is in the public's interest?


It's a close call I have to admit

1) levitra ads
2) health care ads
3) Avodart

At my age, I vote for #3

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I recall trying to raise money with the Finance Committee of the local Homelessness Planning Council


BigPharma came through....they had an interest in an injectible anti-psychotic - Zyprexa

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Point being you can't NOT run into BigPharma

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Anyone who thought Obama wouldn't be making these kinds of deals is either illusional or delusional. This *is* American capitalism, after all, and he is its political leader. In the absence of a major labor uprising that raises the issue, the chance of getting universal health care in or about the current context is about the same as Reich becoming Pope.

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just a perspective from the concept of 10-moves-ahead chess, it would be sickening if this is the way that conservatives/big-business engineered a way for liberals to turn against the bill.

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Most of the problems people have with Obama's actions is based on a misreading of Obama. If you studied his position papers leading up to his election nothing that has happened would be a surprise to you. Obama is a middle of the road, compromising, politician, who favors incremental improvements, and making the smallest changes possible to show some progress. He is not anti-war, is not against the bloated munitions industry, does not oppose pork barrel politics, is friends with lobbyists, etc. He did not promise to reduce the size of the military establishment, but to increase it! He didn't promise to shut down the Afghanistan conflict, but to escalate it. He didn't promise universal health care, and especially not single payer health care, but a group of small changes, the biggest of which is mandatory purchase of commercial insurance by everyone.

Perhaps more people should have read his position papers. Then again, when you have a President like Bush, and a Repub candidate like the old timer, with a choice between centrist Clinton and centrist Obama, it isn't like we could try to elect a real liberal. We probably got the best deal that was available when we elected Obama, just as we will get the best deal available when we are all forced to buy private health insurance in return for everyone being covered.

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We'll be forced to buy insurance. Whether we are covered is another question. I expect it will be discovered (surprise! surprise!) that covering your condition is not affordable and incompatible with the cost cutting necessary for revenue neutral healthcare reform. The Republicans aren't lying about the rationing. They're only lying about the fact that rationing is inevitable since the bill is going to be incredibly underfunded. You may of course exempt yourself and your family from this rationing by purchasing the gold plated policy at a 1000% premium adjustment. It is your choice after all.

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But Hoppy, if you recall, during the campaign his people and many, many of his supporters in the blogosphere and in the corporate media were saying that he really was just positioning himself with those papers to appear moderate but that the thing to focus on was his message of "change". And that is, in fact, what most people focused on. He was flim flamming the voters from day one, but I think he's learning that his middle of the road BS just doesn't work, particularly when the economy has been wrecked and all the consequences of the terrible decisions of the Bush years are coming to fruition. He's going to have to get off this centrist crap or he's a one termer.

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I can live without the insurers. Can't say the same about pharma. Barack's got my proxy to do whatever works.

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Secy Reich - I am not happy about this deal but as a then staff member to a junior Democratic member of Congress I also had a front row seat to the Clinton Health Reform effort as both a member of the Health care Task Force and the chief health aide to my boss who was on a House committee with jurisdiction and reported a bill.

In 1994, both Big Pharma and Big Insurance worked to defeat health reform. They were basically the trojan horse that the rest of the health care industry used to defeat those efforts.

Changing health care is tough not just because of the campaign contributions but also because of the jobs involved (tens of millions nationwide). For example, you may hate pharma companies but if you represent NJ you have to listen to them b/c they employ close to a hundred thousand people. The biggest employer in our district was a hospital system with 11,000 employees. Imagine how powerful it was when they came in and told us that if health reform in this form it will result in a 10% jobs loss. We listened and agreed to help change parts of the bill to help them but not to oppose them.

I am disgusted by details of the deal but it is smart politics. Obama has succeeded in basically isolating Big Insurance which is quite a feat politically and why he is likely to succeed where Harry Truman, Richard Nixon and Bill Clinton all failed.

The opportunity to provide universal coverage comes along every 15-20 years and each time we let it pass without action the number of uninsured rises dramatically (it was 37 million in 1994 when Clinton Health Reform failed).

My number 1 goal is to provide coverage for the 50 million people who do have health insurance today and to provide a regulatory framework that protects people in private insurance. I'd love a single payer system or a public option but I am not willing to scuttle an imperfect bill in favor of a perfect one that will probably take another 15 years to come about.

I highly recommend today's NY Times editorial (link below) that shows that Massachusetts tackled the uninsured first and is now going to start addressing cost. I think they got it right.

http://www.nytimes.com/2009/08/09/opinion/09sun1.html?_r=1&ref=opinion

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Oops. I meant to say the 50 million people who do NOT have health insurance today.

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Well said.

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I second the "well said." I still hope we get a version of a public option in the final bill -- and I think we will.

But it can't be overstated how difficult this is. The vested interests are huge, and it's easy to manipulate the public on issues like this that are hard to grasp without statistics.

While agreeing with you, I have to say I also agree with Reich that the power of industry remains deeply disturbing.

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Completely agree that the power of the health industry is incredibly scary. I saw it up close 15-16 years ago and it has clearly gotten worse.

I just don't believe we can go another 15 yrs without addressing the issue of the uninsured. My wife no longer works and cares for our daughter so we are literally a pink slip away from being uninsured (fortunately my job is pretty secure). This is just not sustainable.

I also know that once we have actually passed universal coverage it will be easier to modify b/c the hysteria around it will be gone. No one even thinks about undoing Medicare today and the same will be true with whatever Obama passes (the Mass Plan for all its faults is incredibly popular). This is why the Rs are so determined to defeat it.

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Yep. I have family members who have incurred huge bills while uninsured, so I appreciate the gravity of that part of the problem.

And I also think you're right that it will be much easier to expand this sort of program once people have begun to benefit from it.

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DeMint might be right. Healthcare may be Obama's Waterloo, not because healthcare isn't passed, but because it is passed. If he gives big pharma carte blanche to charge whatever they want and then gives the insurance industry 50 million new customers with no competition from a public plan, corporate America wins and the people are more shafted then before reform began. Frankly, beyond disgust does not even begin to describe my emotions. I am telling my kids to look to careers outside the U.S. as the quality of life, education and healthcare all surpass this country. I worked for Obama and have supported the Democrats, but only an idiot would continue to support a Party than continually caves.

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But what if he achieves it?

What happens to the GOP then after they went for the kill and failed?

It's not like they didn't put a full effort to kill it either. They went batshit crazy, with thugs and teabaggers and "death panels".

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"our democracy is in terrible shape".

Sad but true.

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I think Jimmyc and others with similar views are right. Although nothing is an absolute certainty, the prospects are now excellent for passage of a healthcare reform bill that provides near universal insurance coverage that can never be denied anyone by any insurer, at a reasonable cost, and with at least some subsidization of low income families. The bill will also contain a public component of some type, more likely a government-supervised non-profit cooperative arrangement than a government run program. It will one of the great societal achievements of recent decades, and the support of the pharmaceutical industry will be instrumental in its passage.

Did Obama give up much in return? He probably sacrificed very little. The CBO had already looked at the savings achievable by negotiation of Medicare drug prices, and concluded they would be quite small. The reason is that those prices had already been negotiated downward by the various plans providing the drug benefits -
http://www.cbo.gov/ftpdocs/79xx/doc7992/DrugPriceNegotiation.pdf

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jmnyc, not jimmyc (the fine print misled me)

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Don't know what to say. Lots of informative comments but I'm tending to agree with xargaw's comments about "Healthcare may be Obama's Waterloo". Reminds me when Clinton was stealing the Repubs thunder on welfare reform and Prof Reich, during a speech, used the term "corporate welfare" in an effort to spotlight what corporate America gets away with versus the chump-change welfare of the less fortunate. Reich disappeared after that comment. Rarely, if at all, did he mention it again while working for Clinton. Started to realize then how powerful and important business interests were to those that "represent" our interests.

And here we are again; if Obama can't find a way to get a "robust" public option plan into law it will be a devastating defeat for all Dems and of course, to all Americans, even if they don't realize it.

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Healthcare will not be Obama's 'Waterloo.' Obama, himself will be his waterloo. He is selling himself short and spreading himself thin.

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I'm skeptical. I'd like to see a strategy to achieve HCR that doesn't co-opt some of the players -- doctors or drug makers, etc. Even with the AMA and now pharma on board, the insurers are doing a good job of savaging this thing. I guess what I'm saying to the anti-engagement purists is, what's your plan for actually getting it done, if you just pick fights with all of the players?

p.s. Making this about "democracy" seems melodramatic.

p.p.s http://www.thedailybeast.com/blogs-and-stories/2009-08-06/take-a-chill-pill?cid=hp:mainpromo2

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Obama should fire whoever sold him on this awful deal. Americans subsidize drug prices for the rest of the world. Pharmaceutical Companies got insurance against having to sell drugs at negotiated prices, just like Citigroup and AIG were rescued with government bailouts they won't have to pay back.
The Obama administration has only given us "reform" which corporate America signs off on. The banks got bailouts but avoided cram-downs, real regulation, and can still gouge credit card holders. The Democratic Party retreated without a fight for eight years, Obama hasn't shown us when he will stand up to corporate America.

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Who have we here?

Robert Reich, another mobster.


ex animo


davidfarrar

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We now regularly encounter this submissive behavior on the part of U.S. administrations. Is it possible that a group of large corporations, such as the pharmaceutical industry acting in concert, is actually more powerful, in certain respects, than the government of the United States?

It seems hard to believe that the pharmaceutical industry has quite that much power. Yet why else would the Obama administration give in to such an outlandish demand as "no price negotiation"?

Maybe Obama believes that such a commitment (not to negotiate prices) could not be enforced or even precisely defined. The government plan will inevitably maintain a list of drugs eligible for reimbursement, or at least a list of recommended drugs. In most situations, there are two or more choices between alternative drugs for a given medical problem. Take a drug off the recommended list, and the pharma company won't sell as much of the the stuff. So the government might be able to bargain about prices without actually saying or doing anything.

Just the implicit possibility of taking a drug off the recommended list might give a pharma company incentive to offer a lower price.

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I mentioned above that Obama appeared to have gotten a very good deal - strong support by the drug companies for healthcare reform, plus an $80 billion promise to reduce costs, for which he gave up very little in return.

To document the last point, I provided a link. I'm disappointed that some commenters since then appear to have not bothered to visit the linked site to confirm that Obama sacrificed little for his part of the bargain. I urge anyone interested in the facts to do so.

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Thanks Fred, for your worthwhile analysis.

Many here seem to think Obama's job is easy, he can just click his heels and good things happen. The forces against him are well funded, and much of the electorate is ignorant or bigoted, and too many live in an a Fox/Rovian fantasy world.

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The single most important thing that can be done to clarify this subject is to change one word in how it is generally referred to.

Banish "health" and substitute "sickness."

The debate is about Sickness-care, not Health-care.

Without sickness this industry would not even exist.

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Fred - yr right, it's all in the details. But while yr on pg 810 taking notes from the HCR bill the big picture is right in front of you; we lose everything with, as u say .."a public component of some type,..". Some type? Between Pharma and Big Ins what effective chance would "some type" of a public option plan ever have in protecting us at all. Nothing else matters because over time corporate Americas lobbyists will rewrite this legislation. Guaranteed. The Bush WH team rewrote laws, that had been put in place under Clinton, against the coal industry and made them retroactive to the existing laws so as to nullify any fines that the coal industry was still contesting (based on existing laws). Rewrite the laws and the crime never happened. Yes they did this.

A robust public option, once part of the American experience/culture, once in place and "working", could not be rewritten or "legislated-out" 10 years from now. It's the only leverage we have.

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I appreciate the realistic comments here. I get the feeling that some people think Obama should accomplish everything in this one bill, and if he doesn't get it all then he's a failure. They don't want a president, they want a miracle worker.

I voted for Obama because he's a pragmatic strategist not an ideological egotist. He will get us competitive health insurance options, and that's what our family urgently needs to hold onto our insurance. And if that means he had to dance with one of the devils for a short time, than I am grateful he held his nose and did it.

Obama has managed to get almost every powerful interest group behind him on this huge, social-altering issue.

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You are really in for a rude awakening. Take off the rose colored glasses.Pharmaceuticals and Insurance companies don't dance with anyone who is not paying the piper or the pimp so to speak

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I have said this before....We are just adjusting the chairs on the deck of the Titanic and the Insurance companies and the pharmaceutical companies have already taken all the life boats and Obama was in the first boat off the ship. His inexperience in dealing with these DC lobbyist/GOP hustlers is becoming very evident and the fact that he has allowed the right winged nutters to get ahead of the curve with their propaganda (...i.e. we are going to euthanize your grand parents etc...i.e Obamas death panel spewing from the mouth of the alaskan quitter), is also evidence of his naievete when it comes to understanding the depths to which these people will go to ruin the possibility of a true health care reform in this country. THe opportunity was lost the minute you/Obama allowed the Insurance,PHarmaceutical companies in the door. We have lost the opportunity for another generation. Once again we will be paying stock holders dividends to allow us and our families to continue living! Obama runs a great campaign but he sucks at running the country!

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I disagree with Reich's comment that democracy is dead. I don't like the blue dogs, but the main reason they haven't folded to the president on this huge bill is because they represent red states, and they're accountable to their constituents. For them to give Obama everything he wants because he's the president isn't exactly the definition of democracy. Obama is having to compromise to get the blue dogs and moderate republicans' support BECAUSE of democracy. Otherwise we would have a tyranny--much like we did with Bush when the Republicans were in power.

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There is only one way to ensure Universal Health care for all.

Public financing of elections.

It is the only way to keep elected officials beholden to the people.
Otherwise, why would they listen to us ?

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Hear, hear!!

I've been saying that for a while. I've posted it on other threads on TPM. The solution to the health care problem is...

Public financing of elections.

I'm late to this thread, but so happy to see someone else has posted this idea here. Thanks, Hoggy!

-- ARG

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Drug makers are akin to doctors and hospitals -- people who make too much money in health care.


But they are different than insurers, who basically make money by bilking people with premiums and then denying coverage as much as legally possible. Insurers are killing people.

I still think Obama needs deals with key players, otherwise this will never pass. Reich has no plan for getting this passed either. So what are we left with? Do nothing and let's wait a few more decades??

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It’s easy to say “don’t do deals” with any key players. (Reminds me of the "don't deal with dictators" school of foreign policy, because sanctions and war have proven *so* much more effective than engagement....)

But then, all you have is a half a dozen enemies who will kill the plan anyway.

So what’s your solution, Reich, to actually passing a bill if you don’t bring anyone on board?

All the people preaching about how Obama's plan doesn't go far enough -- have you noticed, that even this moderate reform package is being savaged?

I'd like to see anyone tell me *how* you plan to pass a stronger bill, if the Senate is balking at a weaker one.

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p.s. Nice to see that liberals are using August to attack Obama, instead of supporting him, or attacking the health insurers who want to kill any reform.

So while GOP is talkign about "death panels", our liberal friends are talking about "undermining democracy"

With friends like this .....

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Tell me why liberals should continue to give support, to the sell out Obama?

War continuation in Afghanistan, Obama surrounding himself with counselors of Wall street crooks, allowing the banker class a prominent seat at the table, to design a bailout that protects the bankers and not the Liberal homeowners who voted for Obama.
Obama bail’s out white-collar speculators and bad mouths homeowners who tried to play by the rules.
What kind of excuse will Obama use the next time when he puts his trust in the people who brought the country to ruin financially and appoints them because they know how to make it work.
WTH Obama , of course they know how to make the financial system work; Work for them, not US.
Not US liberals that brought you to power.

How soon before the next election, then maybe the working class will really get a champion in the Whitehouse; someone who will really change things in Washington.

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"How soon before the next election, then maybe the working class will really get a champion in the Whitehouse; someone who will really change things in Washington."

You must have been living on Mars the last thirty years. It's malcontent like yourself that followed the Pied Piper Ralph Niader and put Geroge bush in the driver's seat to drive us stright off the cliff.

You're a bunch of spoiled, whiny children. Get a fucking grip on reality.


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Why blame Nader?. Why not blame the American working CLASS, to stupid to realize that Obama like his predecessor Capitalist shills, has sold the working class into slavery. Wage slaves necessary to shore up the failures of Capitalist bankers.

While the working class struggles to compete against cheap foreign imports, fights to maintain a good standard of living. Obama thinks it best to socialize the banker’s risks and kicks the working class to the curb, out of their foreclosed homes.
Giving lip service to the downtrodden, ”be well fed, be well clothed”

YOU! need to get a grip on reality; every time Obama’s team bailed out the bankers, the working class got the bill.
“Get to work you slaves!”

“What the workingmen of the country are profoundly interested in is the private ownership of the means of production and distribution, the enslaving and degrading wage-system in which they toil for a pittance at the pleasure of their masters and are bludgeoned, jailed or shot when they protest” Eugene Debbs

Not to fear Obama is here, help the banker, help Big Pharma, help Afghanistan, Iraq, Israel, help everyone, Except; lets make work so the American worker can pay the tax, while the Banks and the Goldman sacs’ make record profits.
Is picking cotton, work? Start picking SLAVE.

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I agree with you almost completely. Our government is run by large economic interests, not the desires and needs of the rank and file electorate.

Where you and I differ is that I believe, if we really want progressive change, it's going to a long, hard, incremental process, and throwing away our votes on vanity candidates, and clearing a path to the White House for monsters like George W. Bush does more harm to the progressive cause than whatever good feelings we get from voting for a nonviable candidate out of frustration or spite.

And if you honestly think that we would be where we are today if Al Gore had been elected in 2000, than I have to assume you're living in an alternative universe.

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Good post.

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"I've been dealing with the drug companies for many years. They have never lost. They're the Rocky Marciano of lobbyists. They never lose, never, zero. That is why they can double the price of your prescription drugs tomorrow. That is why they manage to get the Medicare Part D bill through that they wrote. That is why they pay their CEOs tens and tens of millions of dollars. That is why we don't negotiate prices with drug companies. They never lose. The insurance companies may occasionally lose, but they're also very, very powerful." - Senator Bernie Sanders

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Isn't this industry collusion? Aren't there anti-monopoly laws that govern this type of thing?

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Thank you, Mr Reich, for speaking truth to power.

We just saw something similar with Credit Card 'legislation', and with the financial players' bonus packages.
We need to get lobbyists out of the electoral process.
Someone please tell me how we can disallow tv advertising for candidates, and revert to a publicly-financed electoral system?

Otherwise, we'll just keep slipping down this slope.

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Why not control the budget
Example
20% for defense
20% for health care
20% for Social security
20% ?
20% ?

If defense wants more, then proportionately the others get more money. You might like defense spending and I might think it to much, we'll compromise.

The budget becomes a matter of what gets funded in each category.
No more robbing Paul to pay Peter
100 billion for defense, then 100 billion for healthcare.
No more 200 billion for defense and 0 for healthcare.
Three equal branches of Government yet they starve the judiciary? 33.33% to each branch.
Prioritize in each category.
Then follow the money.

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A genius alliance, politically speaking.

So this is what it feels like to sell my soul. Can't say it's a good feeling. Maybe someone could prescribe a pill to make me feel better.

Sadly, I probably couldn't afford it.

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I have never been so angry and disappointed in my life. Our President and most of Congress are incompetent, clueless and so out of touch with the working, taxpaying citizens in this country. There is an old saying "let's not cloud the issues with facts" Well that is exactly what they are all doing. First, by trying to sell us ObamaCare they are surly to finally bankrupt this country, like we don't have enough debt already. Maybe they should all go back and take economics 101 again, because obviously they were not paying attention in class the first time they took it. There are three entity's that are responsible for health care, the insurance company's, the pharmaceutical company's and the doctors/hospitals. Obama said, quote from his campaign for President, "It won't be business as usual in Washington if I am elected President" No? Months ago, Doctors/Hospitals said Malpractice insurance was putting them out of business. But Obama appeased the trial lawyers and won't seek any kind limits on awards. Then Obama cuts a deal with Big Pharma, in exchange for them spending 150M on promoting his ObamaCare, he won't let the Government plan negotiate for lower drug prices. Didn't everyone rag on George Bush when he did the same thing with the Medicare drug plan(Don't forget, congress passed that too) This pretty much sounds like business as usual to me, who does he think he's kidding? So now you have eliminated 2 of the 3 principal players who have the ability to lower costs. We are being fed bullshit as usual. And for all the democrats who are trying to make everyone believe that the outrage you are seeing at these town hall meetings is some kind of organized plan by republican's, think again, we are mostly non-political taxpayers who are tired of having our pockets picked yet again. And a little note to Obama and Congress before you put this country another 3trillion in debt, do you guys remember SOCIAL SECURITY?
Sighned, pissed off All American taxpayer.

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Robert Reich

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