Pharmaceutical Follies — Redux — Part II
Katy, Bar the Door, a Tsunami May Be Imminent
The Random House Dictionary of the English Language, a volume that is comprised of 2,059 pages, weighing exactly 9.5 pounds defines the word tsunami as follows: “An unusually large sea wave produced by a seaquake or undersea eruption.” Interestingly, that particular dictionary was printed in 1966, yet an excellent modern website, dictionary.com (that also includes an exceptional thesaurus) provides the exact word for word definition despite the passing of some 43 years. What has changed is the now common use of the word tsunami to describe monstrous waves caused by other than the sea.
For example, the recent financial meltdown was the tsunami that that has created an unemployment figure that numbers some 15 million Americans through August of this year. The financial collapse itself was caused by another type of tsunami, one driven by money. That was the conclusion of a recent report, Sold Out: How Wall Street and Washington Betrayed America. As revealed by Wall Street Watch, it “shows that, from 1998-2008, Wall Street investment firms, commercial banks, hedge funds, real estate companies and insurance conglomerates made $1.725 billion in political contributions and spent another $3.4 billion on lobbyists, a financial juggernaut aimed at undercutting federal regulation. Nearly 3,000 officially registered federal lobbyists worked for the industry in 2007 alone. The report documents a dozen distinct deregulatory moves that, together, led to the financial meltdown. These include prohibitions on regulating financial derivatives; the repeal of regulatory barriers between commercial banks and investment banks; a voluntary regulation scheme for big investment banks; and federal refusal to act to stop predatory sub-prime lending.”
The report continued, “‘Congress and the Executive Branch,’ says Robert Weissman of Essential Information and the lead author of the report, ‘responded to the legal bribes from the financial sector, rolling back common-sense standards, barring honest regulators from issuing rules to address emerging problems and trashing enforcement efforts. The progressive erosion of regulatory restraining walls led to a flood of bad loans, and a tsunami [aha!] of bad bets based on those bad loans. Now, there is wreckage across the financial landscape.’” “Wreckage” is perhaps an understatement considering the global economic catastrophe and seemingly endless joblessness that this misguided ideological gambit to deregulation spawned. Would this historic event have occurred if campaign financing laws had not been emasculated? What do you think?
Big Money in the Game
It has become increasingly obvious that the enormous sums expended, and the inordinate amount of influence wielded by the lobbyists, have influenced our supposedly democratic system “of the people, for the people, by the people.” This is a system that is in the process of being hijacked so that the word “people” in the above phrase could be replaced by the words, “big moneyed interests.” If you think this is a paranoiac assumption, let’s look at how campaign contributions, at least on the surface, seem to have influenced one Senator’s actions. (Incidentally, it matters not who the legislator is, what his/her party affiliations are, or what legislation is involved. For example, deregulation was promoted by Republicans but signed into law by Bill Clinton. This is a disease endemic to most politicians).
Then, There’s Max
Typical might be Senator Max Baucus (D-MT) who has been in the news, most recently as the Chairman of the Senate Finance Committee charged with leading the development of a Health Care Reform Plan. But before we examine his activities in this regard, it is informing to view his legislative record over the past five years or so and examine the possibility that lobbying money might have influenced his voting record.
In 2004, Senator Baucus was the ranking Democrat on the committee he now chairs. (Since the majority party was Republican, Senator Charles Grassley was then the Chairman of the Finance Committee). It would seem that during his 30-year career as a Senator he has demonstrated a curious (“suspicious” might be a more accurate description) relationship with health care lobbyists, more specifically with the campaign contributions with which they have plied him. This is a pattern that seems to have been played down by the media.
Over the past five or six years, three major pieces of legislation have received significant attention by various segments of the health care industry. The first, starting in 2003 was the American Job Creation Act (AJCA) detailed in last month’s article herein. The second was the Medicare Prescription Drug and Improvement and Modernization Act of 2003. The third is the Health Care Reform legislation now wending its way through Congress.
Follow the Money
Mr. Baucus, initially in his position as the ranking Democrat on the Senate Finance Committee, and currently as the Chairman of that same committee, has been extremely influential in structuring these bills. It appears that in each case, the results seem to favor and reflect industry interests.
For example, speaking to the Senate in favor of the 2004 AJCA, he said, “There is a reason why we call this bill the JOBS bill. This bill will help create and keep good, high paying manufacturing jobs right here in America. And this bill will help remove crippling European tariffs that rob American firms of business. We need to enact this bill.” Considering the abysmal, and what might be considered fraudulent results of that legislation, his advocacy would be laughable if it were not so pitiful. Was that advocacy the result of naiveté or the fact that the major beneficiary of the legislation was the pharmacy industry whose lobbyists were most generous in dealing with Mr. Baucus, as you will soon learn?
Compare his stance with John McCain, who at the same time spoke to the Senate as follows: “I have been very outspoken in my opposition to this bill, and was one of only five Senators to vote against its passage in May. I voted against it because it was loaded with wasteful spending and tax breaks for special interests and the super rich.” Imagine — 95 of 100 supposedly very smart and savvy Senate politicians voted to approve what turned out to be a job reduction, not creation bill. Who says lobbying doesn’t pay?
The second indication of a decision by Baucus that raises questions related to the influence imposed by the pharmaceutical lobbyists was his position on the Medicare Prescription Drug legislation. He was a key figure in defending the mandate in the bill that prohibited the government from negotiating drug prices thereby insuring that drug company profits would be protected. The result: In 2007 the pharmaceutical industry ranked third in terms of profits as a share of revenue — medical equipment ranked fourth. Another issue in that bill, one that forces patients into what has become known as the “doughnut hole,” was another profit booster also supported by Baucus.
The Baucus Lobbying Club
The situation becomes more and more problematic. Since 2003, more that two dozen of Baucus’ administration aides, including two of his chief’s of staff have revolved into lobbying jobs, several of them setting up their own lobbying firms. According to the Sunlight Foundation, by 2006, at least five (by now probably more) were working for a total of 27 different health care or insurance clients, “including many organizations — like PhRMA — that are sure to lobby against or severely dilute Obama’s bill.” Having worked for Baucus, this group certainly enjoys special access to Baucus.
Moreover, the Billing’s Gazette found that Baucus raised $1,500 a day from the medical industrial complex, more than any other Democratic Senator.” The Gazette also reported that “Baucus insists that the cascade of money is not unduly influencing his work.” A Baucus spokesman said, “No matter the issue, Max always puts Montana first.” Really? How is it then that The Montana Bureau of Business and Economic Research found that Montana has always ranked near the bottom in cross-state and national comparisons of health insurance coverage, lacking health insurance and access to health care?”
The Baucus Bushel of Bucks
From 2002-2008 the Baucus campaign and his political action committee raised $14.8 million, with almost one quarter of that, $3.4 million, coming from drug companies, insurance companies, hospitals, medical supply companies, health service companies and health professionals. The question that must be asked is, “to what degree is Senator Baucus’ refusal to consider a ‘single payer’ and/or a ‘public option’ system for the health reform bill, driven by his reliance on lobbyist and heath care industry campaign money?” A famous aphorism about money and government says, “An honest politician is one, when he is bought, stays bought.” The behemoths of the health care industry will soon discover whether the tsunami of funds they have expended will keep their favored politicians, including Senator Max Baucus, “honest.”
What Song Will the Supremes Be Singing?
Whether or not you personally favor single payer or public option is immaterial. The larger question was outlined in last month’s article. There is no longer any doubt that lobbying money, and money contributed directly by the big corporations and industry trade associations buy votes. I ask again, why else would this money be spent if it didn’t achieve its goal? But we now face what might be the biggest, and most dramatic challenge in the political campaign financing system in 100 years: a change that could unleash the tsunami of all tsunamis – totally unfettered corporate campaign financing – no limitations, no restrictions. At least, that’s how the more Liberal campaign reformists are interpreting a case that has just been reviewed by the Supreme Court with a decision to come in the Fall. More Conservative analysts see the case differently, although the decision could go either way. Perhaps we will cover that case in next month’s article.