Bank Bonuses Exceed Profits While Congress Throws Americans a Bone for Clunkers

Remember those huge record-breaking profits bailed out banks reported last quarter? Well... according to a recently released report by NY Attorney General Andrew Cuomo, those same banks dished out more in bonuses than they did in profits last year.

I ask you this: Are you freakin' kidding me?

From a synopsis by CBS News:

• Goldman Sachs, which earned $2.3 billion last year and received $10 billion in TARP funding, paid out $4.8 billion in bonuses in 2008 - more than double their net income.

• Morgan Stanley, which earned $1.7 billion last year and received $10 billion in bailout funds, handed out $4.475 billion in bonuses, nearly three times their net income.

• JPMorgan Chase, which earned $5.6 billion in 2008 and received $25 billion from the government, paid out $8.69 billion in bonus money.

• Citigroup and Merrill Lynch lost a combined $54 billion last year. They received a total of $55 billion in bailouts and paid out $9 billion in combined bonuses. ($5.33 billion for Citigroup; $3.6 billion for Merrill Lynch, which was subsequently acquired by Bank of America.)

While we gave $700 billion to bail out banks, Americans are still getting the shaft when it comes to asking their banks for a small bailout of their own. Here at MediaMethadone we've covered this before. A new report by the NY Times on Wednesday offers yet another account of the perverse incentives to work with homeowners to modify loans or refinance and avoid foreclosure.

On a related note, we've given more than $70 billion to bail out car companies, yet we tossed just $1 billion to boost auto sales. Americans are clambering for the Cash for Clunkers program, which offers up to $4,500 for trade-ins. In just four days, Americans went through $1 billion, with 200,000 people on a waiting list. Today the House authorized another $2 billion.

Even though the program sets low standards for fuel efficiency, it's still about the closest thing we've had to a consumer bailout. And rightly so.

Democrats Continue Cave In on Healthcare

Another day and more reports come out about Democrats caving to the healthcare industry in weakening the public health plan option. See my earlier post here.

At the rate this plan is headed for demise, we'll be more screwed than we are today. Without meaningful reform and a strong public option to give insurers real competition, we're giving the industry everything it wants. We might have less uninsured but we'll still be getting ripped off, maybe even worse, because we'll be forced to continue buying products from these leaches.

Check out the latest on negotiations with the Blue Dogs at Politico.com here.

And this one also at Politico on stalled negotiations in the Senate Finance Committee, where you can bet the argument isn't about strengthening the public option, but whether to have weaker state-based co-ops at all.

Makes you want to scream. They should listen to Sen. Lindsay Graham. Elections matter.

Blue Dogs, Gang of Six Concede to Industry; More Americans to Die

Today marks another milestone in the quest of Congressional Democrats to equivocate and concede on healthcare reform. Make no mistake about it: This is about Democrats caving to a healthcare industry that is literally killing Americans in order to profit.

Let's be clear: According to the Institute of Medicine, roughly 18,000 Americans die per year for lack of access to medical care. That's six times more than 9/11 and nearly four times as many soldiers killed in the war in Iraq, each and every year.

Two committees -- one in the House, the other in the Senate -- already passed versions of reform bills. Both have a public option, gaining support from progressives, though they favor the House bill in part because it taxes the wealthy to pay for subsidies.

But for some unexplained reason known only to the meager and weak-kneed Democrats among them, attention continues to fall on the Senate Finance Committee made up of the king equivocators and stonewalling sellouts. Chief among them is a group of six -- three centrist Democrats, three conservative Republicans -- from some of the least populated states in the country. Why on earth Democrats can't stick together and be bold after a landmark election I have no idea.

You may have seen last week how a group of centrists, the Huffington Post dubbed the Gang of Six (though different from the first) including Sen. Wyden of Oregon, sparked the whole "wait until after the recess" idea. Well today, the Post came out with another piece, this one on Blue Dog Democrats and how they've been bought and sold by big name healthcare dealers. Seven of these woof woof bow wows are holding up a bill in the House Energy and Commerce Committee, prompting MSNBC to write its a Blue Dog World. You'd think they slept through the Obama election.

To top it off, Baucus and party in Senate Finance indicated today they will release a bill absent a public option (despite a dozen polls showing 70 percent support here and here). Instead the bill calls for state-based co-ops, which industry favors. Then would you believe, after weeks of pressing for a public option, White House spokesman Jake Biggs waffled, suggesting the president didn't have a preference between a federal public option or state-based co-ops ruled by doctors. A preference? We've got a preference. It's public option NOW! Make your voices heard when Senators come home in August.

The Senate Finance version also doesn't have an employer mandate, but with an individual mandate. An employer mandate, if there's going to be a mandate to buy health insurance at all, was one of the key things protecting middle class workers worried they will lose their employer coverage. And it's another halmark of the insurance industry's demands.

Don't get me wrong, the bill still does a lot of good things -- such as ending rejections for pre-existing conditions -- but doesn't go nearly as far enough. The one shining light is a tax on health plans worth more than $25,000.

But by the way, none of the bills take on hospitals, drug companies and entrepreneurial doctors much beyond what they're own trade groups have pledged. And beyond what the health insurers have offered, they haven't gone after them much more either. (You may have noticed that during Obama's press conference last week, a sign read Health Insurance Reform, not Hospital Reform, or Drug Company Reform.)

Nate Silver at FiveThirtyEight.com has a good piece on Baucus' fuzzy math and what, if anything, Senate Finance was possibly thinking with the bill it announced yesterday. Silver makes the point that this version is about the same as the original House bill, which cost $1 trillion, but only extended coverage to 16 million people. In contrast, the new House version costs the same and covers 37 million, though more burden would get placed on businesses. Whether that's okay is a fine debate to have, but it will invariably turn into the kind of tax debates we had between McCain and Obama where the other side just refuses to listen.

My only explanation for why these otherwise meaningless Democrats are choosing to hold up healthcare reform is this: Power and influence. Who ever heard of Ron Wyden meeting with the president? Who ever heard of Kent Conrad or Mike Ross or you name any of these Blue Pansies?

Nobody.

Until next time, here's some worthwhile reading.

A good story about proposed subsidies in the NY Times.

This NY Times magazine called Why We Must Ration Health Care, which gets to the point I've been making recently that more attention needs to be spent on cost, particularly over utilization fueled by greedy doctors, hospitals, drug companies and device makers.

This piece in the Wall Street Journal, The Myth of Prevention, gained resumed attention this week as well.

Virginia Health Expo Makes Case for Reform Undeniable

For all the wonk-talk over healthcare reform, nothing makes the case for change better than stories such as the one on NPR yesterday about Remote Area Medical and one of its Expeditions in Virginia.

I had heard of the group before from this 60 minutes piece, Lifeline with Scott Pelley, embedded below. Founded to provide medical care to third world nations, the group started setting up events in the United States 10 years ago to treat the uninsured and under-insured. And what they found wasn't much different than developing countries.

In Virginia this weekend, 2,700 people lined up at the county fairgrounds, some three days early, so they could see a doctor or a dentist.

This is the story we need to share with our friends and newspapers. This is the story our representatives need to hear because they are certainly hearing from the industry, having spent more than $3 billion last year on lobbying. The New York Times has a good rundown of the details of industry/GOP ad campaigns against health reform.

Take part in the grassroots ad campaign fueled by people power and call your Senator and Congressman today and write a letter to your local newspaper.

Also, don't miss Bill Moyers conversation with Wendell Potter, who presents one of the best, well spoken and easy to understand descriptions of how corporations have taken over our healthcare system.

To see what it's done to the people of our country listen to the audio and watch the video below. This is the United States of America. We can do better.




Watch CBS Videos Online

Sen. Wyden on Healthcare Sounding More Republican Everyday

When it comes to healthcare, our esteemed senior Senator Ron Wyden is sounding more and more like a Republican every day. Is that the same Ron Wyden who voted against the Iraq war authorization and who refused to support a funding bill without a time frame for withdrawal?

On Friday, Wyden signed onto a letter along with five other "centrist" Democrats -- including "Independent-I-mean-Republican" Joe Lieberman urging the president and other Congressional leaders to "slow down" on healthcare reform. Such an important task is moving too fast, they say.

In an article today on Huffington Post, Obama chief budget guru Peter Orszag says Republicans' attempts to slow down healthcare reform is an effort to kill the plan altogether. Could this be because the healthcare industrial complex is spending $1.4 million per day on lobbying, having hired 350 former government staffers including lawmakers such as former Democratic House Speaker Richard Gephardt? See which current Senators received the most healthcare lobby contributions here. According to OpenSecrets.org, Wyden has received more than $50,000 from Blue Cross Blue Shield in this current election cycle.

Wyden insists he wants to slow down for a day or two, not months or years. But really, the impetus here is that key provisions in Wyden's own plan -- The Healthy Americans Act -- are being blocked.

For one thing, Wyden does not support a federal public health plan option, that is, unless he absolutely has to. This, despite the fact that multiple recent polls showed vast support, roughly 70 percent -- for such an idea. But of course the media latched on to the one Rasmussen poll in recent days that showed waning support for the public option, clearly an outlier. Let alone another CBS/New York Times poll reported yesterday corroborated again the more than 70 percent figure.

Instead Wyden wants to rely on private insurers with a trigger for state-based public options, viewed as a weak alternative in the eyes of most reformers. Wyden also supports taxing employer-sponsored health plans, which isn't a bad idea as long as we have a protective individual health plan market, which we currently do not. The best idea and proudest moment for Democrats so far this year is a proposal by the House to raise taxes on the rich for healthcare.

The most infuriating position Wyden has taken recently is one again that echoes the Republican playbook when he told the Washington Post a few weeks ago that "people don't want the government in the driver's seat . . . They don't want the decisions (about their treatment) made in Capitol hearing rooms with a bunch of legislators in dark suits."

Do we instead want to continue having an insurance executive making those decisions behind closed doors without any recourse? I don't think so Mr. Wyden.

In the same interview, Wyden makes the case for bipartisan support. I just don't get this either. Where were Republicans looking for bipartisan support when they passed so many infuriating policies over the past eight years?

To be sure, any plan likely to pass Congress will include landmark reforms such as an end to individual rejections based on pre-existing conditions, but whether Democrats will establish a system where health insurance charges are based on income and not health status or age is still up in the air.

So far the plan has focused entirely on how to pay for a program to expand coverage. The Congressional Budget Office report was correct in their analysis that the plans do virtually nothing to control costs. Paying for prevention, chronic disease management and electronic health records, no matter how many times Obama claims it, just isn't enough.

The same was found of Massachusetts reform plan, now operational for several years, that even though it covered virtually everyone, people were still paying an arm and a leg. As I've said all along, what good is universal coverage if we don't control costs? That said, pessimistic journalists shouldn't be so quick to pound nails in the coffin of health reform.

One way to control costs would be to take on entrepreneurial doctors by ending the loopholes in physician self referral and anti-kickback laws, which I wrote about last week at Miller-McCune.com.

At the same time, Congress should order insurers and Medicare to stop paying for individual procedures, called fee-for-service and device a plan that pays fixed costs based on enrollment.

Huge Profits for Bailed Out Banks; Are you freakin' kidding me?

That rescued banks posted multibillion dollar profits in the second quarter this year wasn't nearly as much of an insult as the notion that the average salary for a Goldman Sachs employee topped $700,000.

The evidence has been vast that the supposed "trickle-down" affects of the $700 billion TARP bailout program isn't working to do anything for average Americans, those unemployed or struggling to make their home loan payments. Because we all know in our hearts that nothing trickles down but hardship.

The number of Americans poised to lose their homes rose 15 percent up to 1.5 million this year. Meanwhile, the Obama administration's attempts to encourage banks to modify more home loans has fallen flat with just 160,000 homeowners receiving trial modifications since the program began earlier this year, a senior Treasury official told Congress last week. The program aims to modify between 3 and 4 million loans in four years.

At the same time unemployment figures have barely started to taper off, which some have interpreted as good news.

So when the rescued banks reported a combined $13.6 billion profit in the second quarter alone, we were supposed to be happy for "our" economy? Our inevitable outrage we're told by some mainstream media apologists is supposedly misguided. We should be thankful to the banks, they say, because their renewed vigor is a good sign for our struggling economy, and anyway, they're not THAT well off.

Excuse me? Bank of America posted earnings of $3.22 billion for the second quarter, down from $3.41 billion in the period last year. Citigroup reported a $4.3 billion profit, reversing a loss during the comparable period last year of $2.5 billion. Goldman Sachs posted a $3.5 billion profit. And JP Morgan Chase $2.7 billion.

In the flood of disgust that justly followed, journalists such as those at the Associated Press and Washington Post editorial sought to apologize or explain away the bank's remarkable comeback. Some reminded readers that they lost $20.8 billion not long ago. True enough, but the bailout was supposed to help Americans, not just wealthy bankers who got us into this mess to begin with.

And those pesky credit cards banks offer to anybody with the hopes that they default are, believe it or not, weighing the banks down. Oh how sad. So it's empathy we should feel.

According to the AP:

That the banks managed to turn a profit at all is remarkable. Just 10 months ago, many of them looked to be on the verge of collapse. The stock market staged a huge rally this week, driven by the signs of health in banking.

I can't tell you how happy I am for them and all their stock holders. My sincerest congratulations.

China Uighur Repression Based on War on Terror

Here's a short documentary, about 20 minutes long, that provides the background to the conflict in Xinjiang regarding the Uighurs. China has used the War on Terror to repress these Islamic separatists.

For this Journeyman Pictures film click here.

Here's an account of the latest roundups -- about 160 have died.