Private Equity in Action

The New York Times has an interesting article that illustrates how private equity firms are driving up costs in the United States health care system. Private equity firms, like Mitt Romney's Bain Capital, often enter business sectors where they see an opportunity to milk huge profits in a short time, regardless of the consequences for the country overall. At issue is "physician dispensing" of drugs.

Supposedly a tremendous convenience to patients, this involves doctors selling drugs to patients in their offices, instead of sending patients to a pharmacy. The problem is that the docs charge up to ten times what drug stores do. Since this is often billed to workers comp insurance, patients never even realize it's happening. From the article:

Most common among physicians who treat injured workers, it is a twist on a typical doctor’s visit. Instead of sending patients to drugstores to get prescriptions filled, doctors sell the drugs in their offices to patients who walk out the door with them. Doctors can make tens of thousands of dollars a year operating their own in-office pharmacies. The practice has become so profitable that private equity firms are buying stakes in the businesses (emphasis added) and political lobbying over the issue is fierce. 

Doctor dispensing can be convenient for patients. But rules in many states governing workers’ compensation insurance contain loopholes that allow doctors to sell the drugs at huge markups. Profits from the sales are shared by doctors, middlemen who help physicians start in-office pharmacies and drug distributors who repackage medications for office sale. 

Alarmed by the costs, some states, including California and Oklahoma, have clamped down on the practice. But legislative and regulatory battles over it are playing out in other states like Florida, Hawaii and Maryland. 

In Florida, a company called Automated HealthCare Solutions, a leader in physician dispensing, has defeated repeated efforts to change what doctors can charge. The company, which is partly owned by Abry Partners, a private equity fund, has given more than $3.3 million in political contributions either directly or through entities its principals control, public records show.

This trend is extremely troubling. Such physicians have a direct economic interest in prescribing medications. There have been accusations that practices with in-house imaging and diagnostic equipment are doing unnecessary tests to pad their bottom lines, driving up the cost of health care. Now practices that dispense drugs will have an incentive to overprescribe them.

Considering that many workers comp injuries involve painful back injuries that sometimes require narcotic painkillers, you have to wonder whether private equity firms hounding physicians to increase profits might turn the docs into drug pushers.

Physician dispensing isn't necessarily bad, but wildly varying costs between states indicate there's a problem. In Maryland a physician charged $7304 for 360 lidocaine patches, while the same number only cost $4068 in California (one provider of the patches charges physicians $2863). The difference is that California enacted regulations to prevent such rip-offs.


In Florida a bill was introduced to prevent this kind of abuse, but was prevented from coming to a vote by the Senate president, who was heavily lobbied by the company that supplies physicians with the system for selling drugs. This, despite the state insurance commissioner's estimate that the law would have saved $62 million.

Private equity firms like Abry Partners are exploiting injured workers and ripping off the small businesses that pay the majority of workers comp taxes. This is exactly the kind of crony capitalism that Mitt Romney's money-money-money ethos engenders, and is another example of how money is being redistributed from average Americans to the very wealthiest.

Yes. Yes I Am

Rooting for America to fail since 2008.

No President Since...

The drone from the "liberal" media of late regarding the re-election chances of President Obama usually revolves around the same line: No president since FDR has been re-elected with an unemployment rate over 8 percent. In looking at this fact alone, liberals should be nervous, right? 

Not really.

First, we need to look at who has lost re-election since FDR. We have Gerald Ford, Jimmy Carter, and George HW Bush. I think we can all agree that all three of these men had problems beyond jobs. 

Second, people like President Obama personally even if they plan on not voting for him. Right now he's running a few points ahead of Mitt Romney (48-46 or something around there). Yet some of those 46 percent approve of him personally as he consistently polls in the mid 50s in polls on him as a person.  Some polls have even had him as high as 75 percent!  Doggone it, people like him:) And that's despite the right's continued pummeling of him as a person which, honestly, gives me a great deal of hope about America. 

More important than both of these (and VASTLY under reported by the media) is the rate of unemployment in the swing states. You see, folks, it really doesn't matter that unemployment is at 11 percent in Rhode Island or nearly 11 percent in California. Those states are going to go for the president. Heck, they may not even approve of the job he is doing but they are still going to vote for him over Mitt Romney because they know that the latter is going to make things worse. To put it simply, the Democrats have done their job in those states. 

Take a look at the unemployment rates by state.  And now look at the swing states. Iowa has a 5.1 percent unemployment rate. That's well below the national average and jobs may not be on the minds of folks in that state. I know this because most of my in-laws are from there. Any president would kill for this rate in joblessness so look for the president to focus on other issues here. New Hampshire is right around here as well (5 percent) as is Virginia at 5.6 percent. Wisconsin and New Mexico are at 6.7 and 6.8 percent respectively. Again, well below the national average. Even Ohio and Pennsylvania are at 7.3 and 7.4 percent Most political wonks agree that if unemployment dips to around 7.5 percent, the election is over. Colorado is the final state that is below the national average at 8.1 percent. 

So, if you add all these states to the president's base of a solid 196, you get 281 electoral votes and enough to win. That's assuming, of course, that because the unemployment rate is so low, that these states will think the president is doing a good job on the economy. If you look at Andy's map over at Electoral-Vote.com, this jibes with what I am saying here with the exception of Iowa. The conservative, evangelical base has grown very strong there over the years so I wouldn't be surprised if Romney won that state. But that only takes away 6 votes which leaves the president with 275.

We are left with Nevada, Florida, North Carolina and Michigan. North Carolina is barely Republican and will probably go to Romney after the whole gay marriage flap.Andy's map shows us that the rest of those will go to the president's column with Nevada being likely Democratic with Florida and Michigan at barely Democratic. Nevada and Florida have such heavy Latino populations that Romney is going to have real problems in both of these states. Michigan is likely a go for the president for obvious reasons which brings us to 326-212. 

At this point, this is my prediction for the election. Obviously, a lot could change between now and then but I honestly don't think that the unemployment rate is going to matter because the battle is really down to 12 states or less. South Carolina could have an employment rate of 0 percent and they would never vote for the president. 

Conservatives keep pushing the economy as the main issue but are they paying attention to the unemployment rate in the swing states? Certainly, the media is not. 

Every Single Word Of This Is True

The Common Person Doesn't Get It

At Mitt Romney's fund raiser in the Hamptons last weekend one person said:

I don't think the common person is getting it. ... We've got the message. But my college kid, the baby sitters, the nails ladies -- everybody who's got the right to vote -- they don't understand what's going on. I just think if you're lower income -- one, you're not as educated, two, they don't understand how it works, they don't understand how the systems work, they don't understand the impact.

The thing is, I agree with this person: average Tea Party and uneducated low-income Republicans   just aren't getting it. They don't know how truly egregious and outrageous the advantages that wealthy people like the Koch brothers derive from their wealth, how they pay almost nothing for oil leases on federal land that net them billions, how wealthy investors get access to special stock deals and inside information from their brokers, and how people Mitt Romney's position pay a paltry 13% tax rate while the commoners pay double that or more.

Recent stories about Mitt Romney's real wealth have exposed some of these tricks: from Cayman Island tax havens, to secret Swiss bank accounts, to IRAs that magically grow to $100 million, to executive perks like free clothes, apartments, 50-yard-line luxury boxes at football games and multi-million-dollar golden parachutes for execs no matter how badly they screw up. Yeah, those poor uneducated Republicans don't have a clue how truly tilted the system is in favor of the wealthy and how the rest of us are paying for their goodies.

I would grant that those who really did create new jobs and wealth, like Henry Ford, Steve Jobs and Bill Gates, deserve huge financial rewards. But most wealthy people never had to work for their money, Heirs to fortunes like the Koch brothers, hedge-fund managers and hired-gun CEOs never created anything new in their lives.

My dad is one of those uneducated Republicans. Back in the Sixties he ran a small business and often paid employees cash under the table to evade payroll taxes (he had to pay back taxes for years). Today he lives on Social Security and a pension from a unionized municipal bus company. He's alive today due to a pacemaker paid for by Medicare and his pension's health care plan. Yet all he can do is complain about socialism, keeping the government's hands off his Medicare, how Obama wasn't born in this country and how those damned dirty Mexicans bringing disease into this country.

If the Republicans carry through with their plans, my dad will lose his "Cadillac" government-funded retiree pension plan, and Social Security and Medicare will be privatized. But exactly who will be paying for retirees currently enrolled in those programs? What will happen to the decades of contributions I made to those programs? I will still be a year too young to qualify for them if Romney and Ryan carry out their threats. They can't give the money back to me, because current retirees are living on that money.


The only people who will come out ahead in the privatization of Medicare and Social Security will be the big banks and investment firms. Just as with 401(k)s and IRAs, all of our money will be put in their hands. Every year "management" fees will nibble away at the money we're supposed to be saving in our retirement accounts, and in the end Wall Street will have even more of our money than they do now. This is why Wall Street is backing Mitt Romney: they want to get their claws in that huge pot of money that's currently paying for my dad's Social Security and Medicare.


There's no doubt that Wall Street will screw up again, like they did just a few years ago. JP Morgan did it a couple of months ago. But even when they bankrupt the rest of us, they'll still attend fund raisers in the Hamptons, get their big fat golden parachutes, and live on the money they squirreled away in Cayman Island and Swiss bank accounts.


Yes, the common person doesn't get it. Because the wealthy are getting everything.

The Charlie Brown of the Supreme Court

In a piece on Slate Dahlia Lithwick wonders why conservatives are so bent out of shape because Chief Justice John Roberts voted for the ACA act, but when "liberal" justices like Elena Kagan vote with the conservatives, liberals don't bring out the pitchforks, tar and feathers.

The problem is that the justices face exactly the same situation that Charlie Brown does when Lucy tees up the football for him to kick.

When Roberts assumed office in 2005, the mandate was a basic tenet of conservative thought. Mitt Romney and the Heritage foundation said it the only responsible funding mechanism for universal health care, to avoid the infamous free riders.

After teeing up the health care mandate football in conservative health care position papers for decades, and after Romney implemented said mandate in Massachusetts, conservatives yanked the ball away just as Roberts about to kick it, the way Lucy always does to Charlie Brown.

In the last 20 years the Republican Party has been hijacked by a cabal of extremely wealthy individuals with a very specific agenda. The answers nominees to the court gave that Republicans loudly applauded in confirmation hearings seven to ten years ago would be roundly booed and proclaimed treasonous by conservatives today.

This is the real difference between the liberal and conservative viewpoints on the court.

Conservatives appear to believe the court is nothing but an extension of the political process, and appointees should be required to carry out the wishes of the political party that appointed and confirmed them, even years after that party has changed its platform about an issue. For conservatives the court is nothing but another mechanism to enforce their hyperpartisan view of the way the country should be run.


Conservatives used to believe that judicial appointments were the dead hand of long defunct administrations, allowing Ronald Reagan to shape policy from beyond the grave. But this view has morphed completely. Now, with big new campaign contributors entering the fray, they believe that the court should make the decision they want at this moment, because they've given so much cash to candidates and bought all that TV time. And these businessmen demand results for their money.

Liberals believe that court decisions should set precedents that last for decades, if not centuries. They believe justice in the courts should be durable and dependable, and that justices must be able to make decisions independent of the whims of legislators who are looking to feather their own nests and improve their own reelection chances, and campaign donors looking to remold America in the feudal model.

The Supreme Court should be rendering lasting legal precedents, not political expediency. Expedient decisions, like Citizens United, are fleeting Pyrrhic victories that everyone will come to regret in time. I imagine Judge Roberts is already regretting that decision more than anyone else.

Yes. Yes I Can.

A Cult Member Deprogrammed

Remember that link I put up recently from Bill Maher in which he mentioned Johnathan Krohn?  Well, young Mr. Krohn has apparently outgrown his adolescent power fantasy and is now an Obama supporter. Why? check out the clip.

Visit msnbc.com for breaking news, world news, and news about the economy

So, he started....reading? Interesting.

Actually, it reminds me of this quote from a recent Op/Ed piece in my hometown paper.

Conservatives decry the liberal bias in the universities. It is true that most college professors are liberals, but I don't think it has anything to do with bias. It is because college professors are intelligent people, and intelligent people tend to be liberal. I have had many conversations with colleagues about why so many people vote against their own best interests, and the only conclusion that is ever reached is that those people are swayed by emotional arguments, not by intelligent thought.

Young Jonathan thankfully has discovered this as well and grown up.

I KNEW IT!!!!

The falling crime rate amid the worst economic downturn since the Great Depression has puzzled some criminologists, since crime historically spikes during hard times. But countering that trend, some say, have been improvements in US policing tactics, tough sentencing laws that keep recidivists off the streets, an aging population, the popularity of video games that keep young people inside, and even communal solidarity in the face of economic adversity.

Just like I have been saying all along...

We may have a whole other problem on our hands with laziness and lack of motivation but video games sure have made a significant dent in violent crime.

The Perfect Man For The Part

Well, this made me laugh my ass off about 89 times.

Kerry Will Play Romney in Mock Debates

I can't think of a better man for the role!

He Likes Mandates!

TomKat Splitting Up! Xenu to Blame!

Everyone is buzzing about TomKat splitting up. For those of you who aren't in the know, that means Tom Cruise and Katie Holmes are getting a divorce. And speculation is rife that the cause is Tom Cruise's religion, Scientology.

Apparently Cruise was planning on sending six-year-old Suri off to Scientology's Sea Org (the Sea Organization). Katie, however, has enrolled Suri in a Catholic school. Sea Org members sign a billion-year contract. Sea Org officers wear naval uniforms. They have ranks like captain, lieutenant and ensign. Officers, including women, are addressed as "sir."

If that sounds a little Trekkie to you, it's no surprise. L. Ron Hubbard, the founder of Scientology, was a science fiction writer who published a self-help book called Dianetics: The Modern Science of Mental Health in 1950. The book was announced in an issue of Astounding Science Fiction (which became Analog Science Fact & Fiction in 1960). The editor of Astounding, John Campbell, had published many of Hubbard's short stories and became an early convert to Dianetics. Campbell claimed that Dianetics cured his sinusitus. In a letter to Jack Williamson he wrote, "I know dianetics is one of, if not the greatest, discovery of all Man's written and unwritten history."

Many scientists and even other science fiction writers, like Isaac Asimov, blasted Dianetics as quackery. Writing in Scientific American, Nobel-prize winning physicist I.I. Rabi wrote, "this volume probably contains more promises and less evidence per page than has any publication since the invention of printing."

Hubbard apparently took the criticism to heart and formed the Church of Scientology in 1952. Many believe that Hubbard actually started the church because religions are exempt from taxes. Whatever the reason, Scientology is a money-making enterprise first and foremost. Members undergo "auditing" sessions to become "clear," all for a fee. While most religions want the Holy Word to be publicized broadly, the CoS sues anyone disseminating their sacred texts for copyright and trade secret violations. In order to rise to higher levels in the organization you are required to undergo training sessions that cost many thousands of dollars (which were apparently waived for sufficiently notable people, like Cruise and John Travolta). As you rise in the Church, more of the theology is revealed:

Among these advanced teachings is the story of Xenu (sometimes Xemu), introduced as the tyrant ruler of the "Galactic Confederacy." According to this story, 75 million years ago Xenu brought billions of people to Earth in spacecraft resembling Douglas DC-8 airliners, stacked them around volcanoes and detonated hydrogen bombs in the volcanoes. The thetans then clustered together, stuck to the bodies of the living, and continue to do this today.

Sure, the whole Xenu story sounds crazy. But is it any crazier than an angel named Moroni telling Joe Smith where to dig up the Golden Plates for the Book of Mormon and then make him give them back? Crazier than Jehovah's Witnesses who would let their children die rather than take a blood transfusion? Crazier than Christian Scientists who would let their children die rather than accept any medical treatment? Crazier than Catholics who think that any priest can miraculously transubstantiate bread and wine into Christ's actual flesh and blood, which parishioners then consume in ritual cannibalism and vampirism? Crazier than Jews who slice off bits of infant penises?

Sea Org's billion-year contract sounds preposterous. But is it any less ridiculous than the infinitely longer contract of eternal life in some unknown and unknowable place promised by so many other religions?

No matter how well respected a religion might be today, every single one started out as a heresy, in direct defiance of the established orders of the day. The real question isn't how crazy a religion is, but how well it serves the people. Does is provide harmony, happiness, health and long life? Or does it cause suspicion, strife, hatred and death?

The Highest Paid Member of President Obama's Re-Election Campaign

Man, I hope he keeps coming up with this stuff between now and November 6th. Maybe it's time for some comments on Latinos as well.

Votes cast with emotion? BWAAAAHAHAHAHAAHAHAHAA!!!!!!!

A Perfect Explanation

I've been thoroughly enjoying the new Aaron Sorkin show on HBO entitled The Newsroom. The show centers around a news anchor named Will Mcavoy who has a Howard Beale like moment at Northwestern University and changes his career path forever. He, along with his ex-girlfriend producer, decide to report the actual news without any of the usual bullshit we see in the media today.

The show is filled with all the atypical, frenetic Sorkin dialogue and last Sunday's episode had a line worth noting as it perfectly sums up the "liberal" media.

If the Republicans tried to pass a law that said the Earth was flat, the headline the next day from the Times would be Democrats and Republicans Debate Shape of Earth. 

The Cult of Both Sides perfectly explained by one of the best writers of this generation.

What's More Popular Than Congress?

The approval rating of Congress stands is around 10%. Here is a list of 10 things more popular than Congress. 

1.President Obama (46%)
2. The Internal Revenue Service (40%)
3.  The airline industry (29%)
4. Lawyers (29%)
5. Richard Nixon at his lowest (24%)
6. The banking industry (23%)
7. The oil and gas industry (20%) 
8. BP during the Gulf of Mexico oil spill (16%) 
9. Paris Hilton (15%) 
10. America becoming a Communist nation (11%)

The last one really cracks me up!

Also Perfect For Today.

I wonder if those people who are frothing at the mouth about the health care mandate would also be upset about the 1792 law, passed by 17 signers of the Constitution and President Washington, that every able bodied man in the United States must own a firearm.

A federal mandate saying that you must own a firearm? Personally, I wouldn't mind that at all but only if it were amended to include women as well:)

More Romney Money Uncovered?

It turns out Mitt Romney has been hiding his true wealth. He has a shell company in Bermuda named Sankaty High Yield Asset Investors Ltd. Because of the way the law is written (i.e., the wealthy lobbied Congress to make it that way), Romney wasn't required to disclose the investment.

But he's obviously hiding something, because of the tricks he's been playing:

Sankaty was transferred to a trust owned by Romney’s wife, Ann, one day before he was sworn in as Massachusetts governor in 2003, according to Bermuda records obtained by The Associated Press. The Romneys’ ownership of the offshore firm did not appear on any state or federal financial reports during Romney’s two presidential campaigns. Only the Romneys’ 2010 tax records, released under political pressure earlier this year, confirmed their continuing control of the company.

What is Sankaty? It's not really clear, and Romney refuses to say. But in the past it has been used as a slush fund for Bain Capital's financial machinations:

Named for a historic Massachusetts coastal lighthouse, Sankaty was part of a cluster of similarly named hedge funds run by Bain Capital, the private equity firm Romney founded and led until 1999. The offshore company was used in Bain’s $1 billion takeover of Domino’s Pizza and other multimillion-dollar investment deals more than a decade ago.

Today Romney's financial advisers have valued Sankaty at less than $1,000. But this is misleading:

While Sankaty no longer plays an active role in Bain’s current deals, private equity experts said such holdings could provide significant income to Romney under his 10-year separation agreement from Bain, which expired in 2009. Investment funds typically churn “carried interest,” profit shares due to the managers of the funds that often range as much as 20 percent of a fund’s annual profit — known as “the carry.” Even after investment funds are exhausted, profit shares and other late earnings from those stakes can continue to stream, arriving as lucrative “tails,” tax experts say. In some circumstances, the analysts added, offshore companies like Sankaty could also offer limited tax deferral advantages.

Which means Romney could still reap a ton of money from Sankaty. Last month he got a $1.9 million "true-up" payment from another asset in his separation deal with Bain. Thus, millions of dollars could erupt from Sankaty at any time.

The tax code is riddled with loopholes and exemptions that allow wealthy people like Mitt Romney to avoid paying taxes on literally trillions of dollars. The rest of us have to make up that missing revenue to pay for all that disaster relief for people hit by wave after wave of tornadoes, violent storms and wildfires, in addition to regularly budgeted items like defense and highway maintenance.

Mitt Romney obviously sees nothing wrong with this situation. His wealthy billionaire pals, ones like Sheldon Adelson who have business interests overseas and have been giving Republican PACs $10 million a pop, want to keep their special treatment going. They know Romney will never eliminate these tax gimmicks.

There's nothing wrong with being rich or legally using the tax code to maximize your income. Warren Buffett certainly does, but he has also acknowledged that it's outrageously unfair that he pays a lower tax rate than his secretary. And he's called for changes to the tax code to correct that injustice.

Mitt Romney, on the other hand, is still hiding his investments overseas, and refuses to release his tax records from his last years at Bain. If he were just an obscure businessman at Bain that would be fine. But he wants to be president of these United States.

A man who hides his true wealth, uses all these tax gimmicks and continues to defend those loopholes cannot be trusted to give all Americans an even break.

Perfect For Today

If one tries to imagine how Gouverner Morris, Thomas Jefferson, John Adams, and the others who wrote the Constitution would have felt--in an era when most Americans were yeoman farmers or craftsmen living in small towns--they would surely have found it preposterous that the federal government require people to buy insurance. But they would also have found it unbelievable that the federal government required hospitals to treat anyone who showed up for emergency care for free if they couldn't pay. In their view, that would have been a state issue, not a federal issue, since hospitals did not operate across state boundaries then. They also probably could not have imagined the federal government licensing the electromagnetic spectrum or sending rockets to the moon. A lot has changed since 1788 and not every modern dispute can be resolved by looking at the text of the Constitution.---Electoral-Vote.Com

An interesting statement that begs the question...what if it's OK to say that the Founding Fathers would have been against something like the health care law but it's still good policy for today? Given that they didn't face the same issues that we do, it's likely they really shouldn't be any sort of authority.

In addition, I'm not sure I agree with Andy here as President Adams signed into a law a bill that forced seamen to hand over some of their pay check for health care.

Too many liberals cower in fear when the right invokes the spirit of the Founding Fathers. I wish they would point out the fact that the FFs argued constantly among themselves. It was out of this debate that our country was born, for better or worse. Even with all the animosity that floats around these days, it's clearly been for the better. 

And it's improving every day. Happy 4th of July everyone!

Offshored, Outsourced and Out of Luck

Mitt Romney's strength is supposedly his experience in the private sector running companies. He knows how to make money. The problem is, his tenure at Bain Capital destroyed a lot of jobs, left a lot of companies in bankruptcy and ruin, but left him a whole lot richer from other people's misery.

I'll be the first to admit that some of those companies were were headed into the dumpster anyway. But Romney took a lot of cash out of less troubled companies and put it in his own pocket. How many of those would have survived and prospered had they not been milked dry and left to die in the ditch, so that Ann Romney could buy Olympic-caliber horses at $100,000 a pop?

A story in the Washington Post covers another aspect of Mitt Romney's experience in destroying American jobs. It examines the role of Bain Capital in the decades-long exodus of American jobs overseas. The Romney campaign complained that there is a difference between outsourcing and offshoring. It's a moot point: either way, Americans are out of luck.

A recent Doonesbury cartoon sums it up succinctly:

The problem with the massive exodus of manufacturing to Asia is that some industries are essential to the security of the United States: first and foremost, electronics and computers. These days every aspect of business, government and defense depends heavily on computers and electronic components.

Nearly all computers and their components are manufactured in Asia. American electronics companies are now even moving the design of integrated circuits to Asia. How can we be sure that Red Army agents haven't infiltrated these companies and are designing back doors into these circuits as you read this? There are reports that this has already happened, though it's not clear the design flaw was intentional. But these devices are incredibly complex and have millions of components and millions of lines of code, making it impossible to ensure that they don't have back doors. The only thing we can do is trust the source. Is that really wise?

Since corporations by definition exist only to make money, they have no allegiance to the United States. That means the US government needs to take steps to ensure that we have reliable domestic sources for all the technology critical to our business and defense needs.

Like any soulless, stateless corporation, Mitt Romney has shown his allegiance is to money and not America, American security and American workers. Romney may not be the Manchurian Candidate, but he helped send American jobs to Manchuria.