Posts tagged Regulation
By Hunter Lewis
Why Are the Medical Insurance Companies Silent?
What exactly are they afraid of?
John Goodman, the leading medical care analyst in the country, asked this question a few weeks ago. His piece was entitled: None Dare Call It…. The missing words were economic fascism.
Economic fascism, the system developed by Italian dictator Mussolini and later adopted by Hitler, is a highly developed form of crony capitalism. It has its own code of silence, not unlike the oath of omerta associated with the Mafia.
Private interests and government officials make their deals behind closed doors and are then not supposed to talk about them. To break the oath of silence is considered a grave offense.
In the past, medical insurance companies have been regulated by the states. They enjoyed their crony capitalist deals, but principally with state officials and regulators.
The federal government could not easily bring the insurers to heel, despite periodic efforts to do so. They were quick to put up ads defending their interests. They were not the least bit silent.
For example, when Hillarycare was first proposed during the early years of the Clinton administration, the largest insurance companies came out in loud opposition. They spent huge sums advertising against it on television.
The Clintons were furious, but unable to do much about it. In the end, the insurance companies succeeded in humiliating the Clintons: Hillarycare couldn’t even get through a Democratic controlled Congress.
Perhaps remembering this history, President Obama took a very different approach to developing Obamacare.
First he announced that there would be a game-changing new federal program. Insurers knew this would make or break medical insurance company profits. The president then assembled at the White House the major medical players, including the hospitals and the American Medical Association as well as the insurers, in order to offer them a deal.
Out of hearing of press or public, the president in effect told the big special interests: You can help us craft the legislation, but if you later oppose it, you will be dead meat.
Only one insurance company failed to keep this “deal.” It was threatened with both Senate and Justice Department retaliation and quickly fell into line.
The medical equipment manufacturers alone failed to sign on to the deal at all. They were punished with a stiff new tax on medical equipment.
President Obama is now trying to shift the blame for millions of canceled policies onto the insurance companies. You would expect them to defend themselves. But they don’t, either because they are too deep in the deal or too intimidated– or both.
Thanks to Obamacare’s passage, the federal government has much more control over them than during the Clinton administration. They have in effect become government sponsored and controlled entities, and the days of their speaking out publicly against their federal overlords are over.
Do the insurance companies like the crony capitalist arrangements they have become party to, or do they think they have no choice but to go along?
No one can be sure. As Breitbart’s Wynton Hall pointed out, the medical insurers are enjoying both record profits under this administration and buoyant stock prices.
The S&P 500 healthcare stock index has so far this year gained 37.5%, making it the top performing sector. All public shares have benefited from the Federal Reserve’s money printing spree, but medical insurance companies are doing especially well, at least for now.
There is, however, a potential fly in the ointment. The new Obamacare policies are really bad medical insurance policies.
They are bad because they severely restrict your choice of doctor and hospital and often pay the doctor barely more than Medicaid. Paying so little means that doctors may not want you as a patient or will give you very little time.
Medicaid patients are familiar with not being able to find a doctor who will take them. Obama exchange policy holders will now often find themselves in the same boat.
These exchange policies are not private insurance in the traditional sense. As John Goodman says, they are “Medicaid Lite.”
Eventually the public will catch on to all this. There will be a lot of anger. At that point, the crony partners, government and business, will fall out, and insurance profits will be anything but safe.
For now and for the forseeable future, government remains the dominant crony. It is not the private interests controlling government, as much as they would like to. It is the government controlling private interests.
Growing government dominance of crony capitalist arrangements is also documented in a new book by Peter Schweizer called Extortion.
Image credit: http://www.againstcronycapitalism.org
About Hunter Lewis
Hunter Lewis is co-founder of AgainstCronyCapitalism.org. He is the former CEO of Cambridge Associates and the author of 6 books. His most recent book is Where Keynes Went Wrong. He has served on boards and committees of fifteen not-for-profit organizations, including environmental, teaching, research, and cultural organizations, as well as the World Bank.
What is the “Baptists and Bootleggers” theory of regulation? (A very important concept.)
In some places one can not sell liquor on Sundays. The “Baptists” love this law as they hate booze. But the bootleggers like the law too, as without the law they’d be out of business. One could even throw in the alcohol cops (we still have them in Virginia) which also like the law, who don’t care about “demon rum”, or the artificial market which provides an opportunity to sell to thirsty customers on Sunday, but do care about keeping their jobs. So perhaps the theory should be expanded to include not only “Baptists,” and “bootleggers”, but also bureaucrats.
Seemingly diametrically opposed forces work together to keep this kind of regulation on the books and it happens throughout the economy as this brief video explains.
Image credit: http://www.againstcronycapitalism.org
About Nick Sorrentino
Nick Sorrentino is the co-founder and editor of AgainstCronyCapitalism.org. A political and communications consultant with clients across the political spectrum, he lives just outside of Washington DC where he can keep an eye on Leviathan.
By Hunter Lewis
Monsanto’s Friends in High Places
Editor’s Note: The following is adapted from Hunter Lewis’s new book Crony Capitalism in America, now available in the Mises Store.
Many companies hope to send an employee into a government agency to influence regulation. How much better if the employee can actually shape government regulation to promote and sell a specific product! Monsanto seems to have accomplished this — and much more.
Michael Taylor is among a number of people with Monsanto ties who have worked in government in recent years. He worked for the Nixon and Reagan Food and Drug Administration in the 1970s, then became a lawyer representing Monsanto. In 1991, he returned to the FDA as Deputy Commissioner for Policy under George H. W. Bush, and helped secure approval for Monsanto’s genetically engineered bovine (cow) growth hormone, despite it being banned in Canada, Europe, Japan, Australia, and New Zealand.
This was only a start for Taylor. He also did not like some producers advertising their milk as bovine-growth-hormone-free. That seemed to put Monsanto’s product in an unfavorable light. So in 1994 he wrote a guidance document from within the FDA requiring that any food label describing the product as bovine-growth-hormone-free must also include these words: “The FDA has determined … no significant difference has been shown between milk derived from [BGH] and non-[BGH] supplemented cows.”
It apparently did not concern Taylor that this new pronouncement by the FDA was unsupported by either Monsanto or FDA studies. A private company making any such unsupported claim could have been charged with fraud. But since it came out of the FDA, milk producers would place themselves at legal risk by not printing it on their label.
Taylor moved to the US Department of Agriculture (USDA) in the mid-1990s. During this period, he tried to persuade the FDA and Federal Trade Commission (FTC) to take a further step and make it illegal for dairies to make any claim to a bovine-growth-hormone-free product. Failing in that, he reached out to state governments to make such a claim illegal at the state level. This was finally blocked by a court decision in Ohio that there was indeed a “compositional difference” between BGH and non-BGH-treated milk. Long before this 2010 ruling, Taylor had returned to Monsanto as a vice president, and then returned to President Obama’s FDA, first as Senior Advisor on Food Safety and then Deputy Commissioner for Foods.
Taylor’s story, however, is not just about milk, or even mainly about milk. During his second posting at the FDA, as Deputy Commissioner for Policy 1991–1994, Agency scientists were grappling with questions about the overall safety of genetically engineered foods (often labeled Genetically Modified Organisms). As Jeffrey Smith notes,
[Internal] memo after memo described toxins, new diseases, nutritional deficiencies, and hard to detect allergens. [Staff scientists] were adamant that the technology carried “serious health hazards,” and required careful, long-term research, including human studies. …
The Agency, under Taylor’s and later under others’ leadership, simply ignored these findings. No human studies were required. GMO foods were allowed to enter the food supply unregulated by the FDA and barely regulated by the USDA, which views them as an important US export product. By 2012, in the US, 90 percent of sugar beets (representing half of overall sugar production) was GMO, 85 percent of soybeans (which are to be found in 70 percent of all supermarket food products), and 85 percent of corn, including the corn used to make high fructose corn syrup, a sweetener used in most soft drinks and processed foods.
The few scientists trying to conduct independent research on GMO often found their careers damaged. Most food research, conferences, and fellowships are funded by “Big Food” companies including Monsanto, which has a chilling effect. Even sympathetic colleagues may be reluctant to back those who dare speak out.
Those who persevered in conducting independent research, often abroad, reported worrisome findings. An Austrian study found that mice fed GMO corn seemed fine in the first and second generations, but by the third were sterile. A Russian study of hamsters fed GMO soybeans found a similar result. Could human beings exhibit a similar, delayed response? No one knows. Another, unrelated study showed that the pesticide used in large quantities on engineered Roundup Ready crops is toxic to male testicle cells and threatens both testosterone synthesis and sperm count.
At the same time that the FDA tries to remain as silent as possible about GMOs, the US Department of Agriculture and other parts of the US government are doing everything they can to promote them. The USDA under both George W. Bush and Obama has sought to accelerate what is already an automatic rubberstamp for new GMO products, to “deregulate” them (including grasses such as alfalfa that cannot be restricted to the planted area), and to provide immunity from lawsuits over the spread of GMO crops to adjoining organic farms. Immunity from lawsuit was especially ironic. For years, GMO producers had threatened, intimidated, sued, and in every imaginable way attempted to bully adjoining farmers. If any of the patented seeds drifted and were found on the neighboring farm, that farmer would be charged with “theft.” The clear message: buy the patented seeds or face destruction through legal costs. Remarkably, courts were buying this specious argument. But finally the persecuted began to counter-sue successfully, and the USDA immediately rushed to provide legal immunity to the GMO producers in the form of an insurance policy that organic farmers would have to buy and that would be their only available form of compensation.
Although we have chosen to focus on the remarkable revolving door career of Michael Taylor at the FDA and Monsanto, because it has potentially affected the future health of hundreds of millions of people, stories like his are not uncommon. A Chicago Tribune article from 2012 is headlined: Chemical Firms Champion New EPA (Environmental Protection Agency) Expert. It describes how Todd Stedeford worked at the EPA from 2004–2007 under the George W. Bush administration, then joined chemical firm Albemarle Corp. While at Albemarle, which makes flame retardants, he defended chemicals used in many products and even suggested that the standard set by the EPA for flame retardants was 500 times too high. Having returned to the EPA in 2011, under President Obama, he is now “in charge of a … program studying whether dozens of industrial chemicals, including flame retardants, are too dangerous.” One must ask: what was the EPA thinking when it made this appointment?
Bill Ruckelshaus, twice EPA head, once said that “at EPA you work for a cause that is beyond self-interest. … You’re not there for the money, you are there for something beyond yourself.” But on leaving the EPA, he himself became a Monsanto director. Meanwhile the Geneva-based Covalence group placed Monsanto dead last on a list of 581 global companies ranked by their reputation for ethics.
A look at some Monsanto representatives and their positions in government:
|Suzanne Sechen, worked on Monsanto-funded academic research||A primary reviewer for bovine growth hormone in FDA|
|Linda J. Fisher, VP, lobbyist for Monsanto||Assistant Administrator at EPA|
|Michael Friedman, MD, Sr. VP, GD Searle, subsidiary of Monsanto||Acting Commissioner of FDA|
|Marcia Hale, international lobbyist, Monsanto||Assistant to President under President Clinton|
|Michael (Mickey) Kantor, director||Secretary of Commerce and US Trade Representative under President Clinton|
|William D. Ruckelshaus, director||Head of EPA under both Presidents Nixon and Reagan|
Hunter Lewis is cofounder of Against Crony Capitalism. He is the former CEO of Cambridge Associates and the author of eight books, including two new books, Free Prices Now! and Crony Capitalism in America: 2008-2012. He has served on boards and committees of 15 not-for-profit organizations, including environmental, teaching, research, and cultural organizations, as well as the World Bank. See Hunter Lewis’s article archives.
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Image credit: https://mises.org
By Ron Paul
Internet Sales Tax Could Crush Small Businesses
One unique aspect of my homeschool curriculum is that students can start and manage their own online business. Students will be responsible for deciding what products or services to offer, getting the business up and running, and marketing the business’s products. Students and their families will get to keep the profits made from the business. Hopefully, participants in this program will develop a business that can either provide them with a full-time career or a way to supplement their income.
Internet commerce is the most dynamic and rapidly growing sector of the American economy. Not surprisingly, the Internet is also relatively free of taxes and regulations, although many in Washington are working to change that. For example, earlier this year the Senate passed the Marketplace Fairness Act, more accurately referred to as the national Internet sales tax act. This bill, which passed the Senate earlier this year, would require Internet businesses to collect sales tax for all 10,000 American jurisdictions that assess sales taxes. Internet business would thus be subject to audits from 46 states, six territories, and over 500 Native American tribal nations.
Proponents of the bill deny it will hurt small business because the bill only applies to Internet business that make over a million dollars in out-of-state revenue. However, many small Internet businesses with over a million dollars in out-of-state revenues operate on extremely thin profit margins, so even the slightest increase in expenses could put them out of businesses.
Some businesses may even try to avoid increasing their sales so as to not have to comply with the Internet sales tax. It is amazing that some of the same conservatives who rightly worry over Obamacare’s effects on job creation and economic growth want to impose new taxes on the most dynamic sector of the economy.
Proponents of the law claim that there is software that can automatically apply sales taxes. However, anyone who has ever dealt with business software knows that no program is foolproof. Any mistakes made by the software, or even errors in installing it, could result in a small business being subject to expensive and time-consuming audits.
Some say that it is a legitimate exercise of Congress’s Commerce Clause power to give state governments the authority to force out-of-state businesses to collect sales taxes. But if that were the case, why shouldn’t state governments be able to force you to pay sales taxes where you physically cross state lines to make a purchase? The Commerce Clause was intended to facilitate the free flow of goods and services across state lines, not to help states impose new burdens on out of state businesses.
The main proponents of this bill are large retailers and established Internet business. Big business can more easily afford to comply with a national Internet sales tax. In many cases, they are large enough that they already have a “physical presence” in most states and thus already have to collect state sales taxes. These businesses are seeking to manipulate the political process to disadvantage their existing and future small competitors. The Internet sales tax is a bad idea for consumers, small Internet business, and perhaps most importantly, the next generation of online entrepreneurs.
For more information about the small business program well as all other aspects of the Homeschool curriculum please go here. And to purchase a copy of my new book, The School Revolution: A New Answer for Our Broken Education System please go here.
Schools Issue Fat Letters to Parents Warning of Obesity Based on BMI
Nineteen states, including Arkansas and Illinois, are sending students home with reports on their annual weigh-in program. Parents will be informed of whether or not their child has a high body mass index (BMI) or not.
According to the Centers for Disease Control and Prevention (CDC) BMI standards , a child or teen that falls between the 85th and 95th percentile are considered overweight. If the child or teen falls beyond the 95th percentile they are considered obese.
In Clark County, Nevada, the state law requires students in the 4th, 7th and 10th grades to be checked for obesity in 19 schools.
The CDC has given grant money to Nevada to support 3rd, 6th and 9th grade students to get tested as well.
Obese children are being singled out for potential mental health conditions that could manifest later in life. These include:
• Lacking social skills
• Low self-esteem
• Victim complex
Lanre Omojokun Falusi, pediatrician and spokesperson for the American Academy of Pediatrics (AAP) claims that BMI readings are “the best means we have to determine whether a child’s weight is healthy or unhealthy.”
Misinterpretations of how BMI should be understood abound.
School officials may not be aware of how the relationship between height and weight work together.
An athlete or someone who has more muscle mass than body fat would score within the obese range when the BMI is calculated; this pertains to teenage boys in high school who focus on sports such as football.
The American Medical Association (AMA) published a report stating that obesity is not a disease. This classification would necessitate pharmaceutical intervention, treatment and prevention.
However, a team of representatives at the AMA decided that obesity would be called a disease.
Patrice Harris, member of the AMA board said: “Recognizing obesity as a disease will help change the way the medical community tackles this complex issue that affects approximately one in three Americans.”
To control what and how much children eat while at school, the US Department of Agriculture (USDA) released “Smart Snacks in School” that outlines federal standards for nutrition stands for “students, parents, school stakeholders and the food and beverage industries to implement the new guidelines, and make the healthy choice the easy choice for America’s young people.”
Caloric restrictions mandate that snack items can contain no more than 200 calories and entrees cannot contain more than 350 calories.
While low-calorie diets cause weight loss, they are also extremely dangerous because they decrease metabolic rates which throws the human body into survival mode and could lead to health problems such as heart disease, less muscle development, hypo-glycemic conditions; as well as the development of diabetes.
Caloric controls for school nutrition programs state that “kindergarteners to fifth-graders, lunches must contain 550 to 650 calories, and for ninth- to 12th-graders, lunches must have 750 to 850 calories.”
Using “science-based nutrition guidelines” with recommendations from the National Institute of Medicine (NIM) children and parents will have choices that are pre-approved by the federal government and First Lady Michelle Obama.
Tom Vislack, secretary for the USDA said: “Nothing is more important than the health and well-being of our children.
Parents and schools work hard to give our youngsters the opportunity to grow up healthy and strong, and providing healthy options throughout school cafeterias, vending machines, and snack bars will support their great efforts.”
Image credit: http://www.occupycorporatism.com
About the author:
Crony funeral directors try to kill monk’s casket building business through regulation
We’ve written about this before, but there is a possibility that this case will be taken up by the Supreme Court so we’ll revisit it. Plus one just has to love monks. They are committed to a spiritual life, basically just want to be left alone, and as far as I have known (I grew up Catholic) always seek to pay their own way. Often monks make beer or ale to get by, and so have long contributed to the corporeal world. Anyone who enjoys craft beer owes a debt of gratitude to Catholic monks.
In this case the brothers don’t build hearty stouts, or hefeweizens, they build caskets.
The funeral directors of Louisiana are not very happy about it.
(From The Washington Times)
The monks are locked in a legal struggle with the Louisiana State Board of Embalmers and Funeral Directors, which objects to them selling handmade caskets, something the monks began doing several years ago. It’s a crime in Louisiana for anyone but a state-licensed funeral director to sell caskets. The state threatened the monks with criminal charges, fines and jail time unless they stopped selling their wooden caskets.
Image credit: http://www.againstcronycapitalism.org
John Stossel – Detroit Gutted By Government
Published by XRepublicTV
John Stossel discusses the demise that is Detroit with guests Darcy Olsen and Shikha Dalmia, regarding causes behind the Detroit collapse and other cities following a different model running in the black unlike the bankrupt situation facing Detroit.
Thinking Sandy Springs, Georgia is a model worth much more study.
A remarkable anti-crony capitalist video manifesto
Like I said I have no idea who this guy is. Saying that, this 12 minute analysis of our current crony capitalist system is damn good. It’s white lightning so be warned. Distilled and powerful.
Published by minivanjack
Notes from the video:
Journalists and political partisans have expressed the mistaken presumption that government is a “balancing force” against the excess powers of corporations. This video explains that most excess power of corporations is provided and granted by government and that government seeks partnership with corporations and shares in the profits. This “public-private partnership” is so advanced that the public interest is no longer a primary concern of government. Government is now a for-profit operation serving itself at the expense of the public interest.
Obamacare to be Launched with a Star-Studded Celebrity Propaganda Campaign
If you need a sure way to identify that a proposed law or regulation is bad news, perhaps the fact that it has to be presented by movie stars and professional athletes to make it palatable could be a clue.
The White House is apparently getting celebrity endorsements to help sway the public opinion on Obamacare.
After all, if that NFL superstar thinks it’s a good idea, all the wannabe jocks will think it’s a good idea. If that beautiful, compassionate starlet thinks that Obamacare is indicative of the Second Coming, then it must be true. And then there is that comedian, you know, the liberal one that wears the funny glasses – you can tell he’s brilliant by just listening to him use big words to make fun of liberty-minded folks – he thinks Obamacare is great too!
The White House is working to recruit Hollywood celebrities to help promote ObamaCare, a top celebrity political adviser told The Hill.
Trevor Neilson, a veteran of the Clinton White House, said he’s in talks with the Obama administration and that his clients are “looking at ways to be involved.”
“I think the White House is very wise to identify partners to help market the Affordable Care Act,” Neilson said Tuesday. ”Just like any good product, when people are aware of the many benefits it provides, there will be increased demand.” The Obama administration is working on ways to sell its signature healthcare law to the public over the next six months. (source)
And this is how socialism is going to be rolled out – on a star-studded red carpet.
If this tactic sounds familiar, you need only look back at the aftermath of the Sandy Hook Elementary School shooting, when NYC Mayor Michael Bloomberg assembled a group of celebrities to seriously stare into the camera and shill for gun control. (See that video HERE)
It’s all advertising. Millions of dollars are spent on celebrity endorsements of products every year because it is a marketing scheme that works, particularly in today’s star-struck, reality-TV-loving society. Young people and people of a lower IQ are particularly likely to be influenced by celebrity endorsements.
Another name for this is “testimonial propaganda”:
This is the celebrity endorsement of a philosophy, movement or candidate. In advertising, for example, athletes are often paid millions of dollars to promote sports shoes, equipment and fast food. In political circles, movie stars, television stars, rock stars and athletes lend a great deal of credibility and power to a political cause or candidate.Just a photograph of a movie star at political rally can generate more interest in that issue/candidate or cause thousands, sometimes millions, of people to become supporters. (source)
There is a reason that celebrity endorsement is a billion dollar industry. According to Bloomberg, last year just in social media endorsements, advertisers spent $4.8 billion. That amount is expected to increase to a whopping $9.8 billion by 2016. Many stars get paid to “tweet” about a product they’re endorsing, or to talk about it on Facebook. It is a direct way into the consumer’s phone or computer, and because it seems to be unscripted and coming right from the famous individual, people are more likely to pay attention than an advertisement on TV that will just reach them passively.
What does this mean for the rest of us?
By rolling out the movie stars and athletes, the Obama administration is taking their propaganda to the next level. They are attempting to divert discussion about their unconstitutional behavior and about their descent into a nanny state by steering the masses toward acceptance.
This manipulation makes it far more difficult to have a realistic debate about the topic. While one side is presenting facts (like the one that the Affordable Care Act could cost some families as much as $20,000 per year) the other side is presenting glossy movie stars in $2000 red-soled Louboutin pumps.
If an administration must use propaganda, and manipulation to get citizens on board with a legislation, that legislation must be looked at with the utmost suspicion. Coating fecal matter with a sparkly layer of sugar might make it prettier, but it’s still a turd underneath.
By Judy Morris
Regulators Discover a Hidden Viral Gene in Commercial GMO Crops
How should a regulatory agency announce they have discovered something potentially very important about the safety of products they have been approving for over twenty years?
In the course of analysis to identify potential allergens in GMO crops, the European Food Safety Authority (EFSA) has belatedly discovered that the most common genetic regulatory sequence in commercial GMOs also encodes a significant fragment of a viral gene (Podevin and du Jardin 2012). This finding has serious ramifications for crop biotechnology and its regulation, but possibly even greater ones for consumers and farmers. This is because there are clear indications that this viral gene (called Gene VI) might not be safe for human consumption. It also may disturb the normal functioning of crops, including their natural pest resistance.