Category Archives: Economics

Obviously, he hasn’t met OUR governor

39 Replies

Seeking a column for tomorrow's page, I took a look at a writer I haven't run before (near as I can recall), Dick Polman of The Philadelphia Inquirer, who had written a column headlined, "Governing in the Real World."

It was pretty standard stuff, noting a tendency that usually holds true: The more local the level of government, the more pragmatic the people who serve in it. Governors are almost always more practical and less ideological than members of Congress, and mayors even more so. To cite the cliche, there's nothing Republican or Democratic about filling potholes or picking up the garbage.

But reading this column at this moment, with our own governor on my mind, I was struck by the fact that if Mr. Polman only knew Mark Sanford, he'd rethink his premise. An excerpt from the piece:

One big difference between governors and congressmen is that governors are out there on the front lines, dealing with the real everyday needs of their citizens. Whereas members of Congress can afford to retreat into ideology, governors have no such luxury.

Which brings us to Charlie Crist, the popular Republican governor of Florida, who today may well be known nationwide for two things: (a) the deepest tan since George Hamilton, and (b) the man-hug that he shared on Tuesday with President Obama.

Crist epitomizes the gap that separates Republican governors (who are trying desperately to safeguard the welfare of their citizens), and Republican members of Congress (who are opposing the Obama stimulus package that would help the governors safeguard the welfare of their citizens). Many of the Republican governors face huge budget deficits, thanks to the recession; they would welcome the infusion of federal money, which would allow them to keep paying (among others) the teachers and the firefighters and the unemployment checks of the jobless.

In other words, governors have to be practical. They can't take refuge in right-wing talking points that play well on the cable network talkfests, where ideological conflict makes for good TV.

That last sentence sounds as though Mr. Polman were describing Mark Sanford, which reminds us that 
at heart, our governor is still that congressional hermit who slept on his futon in Washington and advanced no significant legislation. Most people who leave that environment to become governor realize, even if they didn't before, that NOW they have responsibility to run things, to lead, to make sure government does what voters expect it to do. Not this guy. I've never seen anyone so unaffected in that way. You'd think he never left the futon.

Every move he makes — from lashing out at an Employment Security Commission that is embarrassing him by serving way to many unemployed people to jumping up and down and demanding look at me; I'm a governor who doesn't want stimulus money — is about a national audience of like-minded people, not about South Carolina and the challenges that face it. It's about the Club for Growth and the editorial board of The Wall Street Journal. The only logical explanation for his behavior would be national ambitions that make me shudder even to contemplate, so I'm not even going to mention them.

Even when he steps out on an issue that would seem to be about something else, we return to that same concern with ideology and a national audience. Environmentalists applauded his coming out yesterday against the coal-fired plant to the Pee Dee. But he didn't do it for their reasons (even though the environment is one of the few areas where he sometimes makes common cause with folks who might call themselves progressives). He was careful to make the point that no, this was more about the cost. He didn't want this state entity, Santee Cooper, spending the money. Which sort of makes you say, huh? Until you realize, oh yeah, he's not talking to US. He's talking to like-minded Republicans outside of South Carolina who will be thinking about whom to contribute money to in a year or two…

I just shuddered again.

Troubles in the private college sector

14 Replies

You know about all the budget cuts that have hit USC and other state institutions, but I was just talking to Caroline Whitson, president of Columbia College, and trying to operation a private college is no bed of roses these days, either. She had called me earlier in the day, and I got her back on her cell while she was walking the dog…

Most of the college's funds come from tuition (I had guessed it was from gifts, but I guessed wrong), and that's not exactly the most dependable funding stream at the moment. With so many families hurting, and student loans harder than ever to get, she said she's "not sure what enrollment is going to look like in the fall." So the college is looking at all sorts of contingencies.

As for gifts, well… whether your name is Pastides or Whitson, you tend to hear from a lot of people that their portfolios are down, and this just isn't the best time…

Me, I find it hard to imagine being in that situation, because I've never had a flippin' portfolio.

Real life anecdote follows: As I was getting off the phone with Caroline, my wife called on my cell to remind me that she'll be home late, so I might want to stop at the grocery on my way home if I want to eat. And I should remember that there is $15 in the checking account until I get paid, so don't go over that. Of course, as I recall she told me the day after I got paid LAST time — after she'd paid the bills — that there was only $11 in the account. I guess the additional $4 is all that's left from her pay after we paid some MORE bills.

You know how they say you should always have two months salary in an accessible account in case you lose your job? That always makes me laugh maniacally, because the only time I ever have two WEEKS pay is for about five seconds after I get paid every two weeks (and of course I never have two weeks gross, just net). And no, I'm not complaining. I know I'm well off. All I have to do is look around me — at work, in the community, among friends and family — to see how well off we are. But how other people build up portfolios, I don't know. Somehow, the world always knows EXACTLY how much is in my paycheck, and all the bills add up to that amount — give or take $15. I don't know how they coordinate it. Actually, I don't think they do. You know what I really think it is?
God doesn't want me to have money — he knows me too well, and doesn't trust me with it or something. I'm not being facetious. I'll explain my theological view on that another time.

Oh, and when they call from our alma mater — Memphis State, which has changed its name — seeking contributions, I do not laugh maniacally, but only because I'm polite.

If you want to be a hero, then just follow me…

$1.5 trillion with a ‘T’

15 Replies

Here's one reason why Obama kept saying didn't want to steal Tim Geithner's thunder last night and talk details on the financial sector buyout. The headline is the pricetag: $1,500,000,000,000. Ow. I think I just got a repetitive-motion injury for hitting all those zeroes.

Now we're talkin' some REAL money. Of course, it brings up the question: If making credit flow better is worth THAT, then why is it so important to keep the stimulus plan for the whole rest of the economy under a Trillion?

Seems to me the magic number isn't so magic any more.

Do we REALLY need people to be making RVs?

15 Replies

Yesterday, Mayor Bob Coble of Columbia said President Obama either had been, or would be, invited to address the National Hydrogen Association’s annual conference here in April. The mayor said, rightly, that such would be a great opportunity for the president to demonstrate his seriousness about the "green economy" and energy independence.

I heard the mayor say that yesterday afternoon.

So imagine my surprise to see that the president's first high-profile road trip beyond the Beltway (or one of the first; I'm not really keeping score) was to Elkhart, Indiana, which is suffering double-digit unemployment because…. well, because people aren't buying so many Recreational Vehicles these days.

Now, I consider it to be a BAD thing that all those people are out of work. But as the author of the Energy Party Manifesto, I have to say it's a GOOD thing, in the grand scheme and all that, that fewer people are buying RVs… In other words, I'd like to see all those good people of Elkhart working at good jobs doing something else.

One would think, given the things that he says about green technologies and energy independence, that Obama would think that, too. So I have to puzzle over the choice of Elkhart as a place to go campaign for his stimulus plan that is all about putting people to work AND protecting the environment and making us more energy-independent. It's just an odd setting. I mean, why not choose another town that's hurting, only from people losing their jobs building tubines for windmill farms or something, or printing Bibles or doing something else virtuous.

Obama's speechwriter seems to have been aware of this, so while he empathized with folks and promised jobs, he did NOT promise them jobs making RVs. Nor did he mention, specifically, that they needed to be something OTHER than making RVs, for the good of the country and their own economic future. He finessed it.

But he wouldn't have had to finesse it if he'd just made the speech somewhere else.

Midlands leaders band together to take advantage of stimulus

22 Replies

This afternoon we were visited by a rather distinguished and diverse group of business, academic and political leaders who have been putting their heads together to see how our various interlocking existing community ecodevo initiatives — Innovista, the 3 rivers greenway, hydrogen and fuel cell efforts, and so forth — can position our community to take advantage of the stimulus funds once they start flowing to achieve some of our existing goals.

As Lee Bussell said when he asked for the meeting:

With the first mention of the stimulus bill we pulled together a working group of about 25 people representing business leaders, USC, the city, counties, Midlands Tech, Central Midlands, The Chamber, Good to Great Foundation, SCRA, Columbia USC Fuel Cell Collaborative and a number of others .
Our purpose was not just to make sure Columbia participated in the creation of jobs through this special program. We identified that for the last 5 years we have been working toward building a sustainable and green community with the creation of an economy based on alternative energy solutions. Sustainability and green jobs have become a central part of our community development strategy.
I am asking on behalf of all of these groups that you consider pulling together a group at the State that we could come meet with next week. We think it’s critical that you understand what we are attempting to accomplish. It could truly enable our regions to find opportunity to not only create jobs, but also to create an everlasting impact on the sustainability of our community and a whole new economic approach.

Lee didn't actually make today's meeting (he's out of the country, I understand) but the following folks did come (starting with left to right in the photo above, from my phone):

  • Paul Livingston of Richland County Council
  • Neil McLean of EngenuitySC
  • John Lumpkin of NAI Avant
  • Columbia Mayor Bob Coble
  • Tameika Isaac Devine, Cola city council
  • USC President Harris Pastides
  • John Parks, USC Innovista
  • Bill Boyd, Waterfront Steering Committee
  • Judith M. Davis of BlueCross BlueShield
  • Jim Gambrell, city of Columbia
  • Ike McLeese, Cola Chamber of Commerce
  • Kyle Michel, Kyle Michel law firm

… and several other folks who I know I must be forgetting as I try to reconstruct who was sitting around the table (or whose names I missed).

Basically these folks represent a lot of different efforts that will be combined and coordinated as the situation warrants to seek funding for things they were going to do anyway, with the goal of long-term economic transformation for the community. As Harris Pastides said, the test of success will be whether, after the construction workers are gone, we still have jobs here that put us on the cutting edge of the nation's move toward a greener economy and greater energy independence.

Toward that end — and with Congress not yet decided toward the final shape of the stimulus — Mayor Bob has set up a War Room in his office at City Hall. Pres. Pastides says he'll be doing the same at USC. The watchwords, says Coble, will be nimbleness, persistence and resources as opportunities are seen to match local projects with stimulus funding streams.

The group was very optimistic that the sorts of things they're working on here in the Midlands are a good match, and at a good point in the pipeline, for matching up with priorities they're seeing in the stimulus, and also with longer-term priorities of the Obama administration.

That's what I recall off the top of my head; I haven't gone back through the recording I made. (Sorry, no video; I took out my camera last night for a family birthday party, and forgot to put it back in my briefcase.) I expect some of the news folks who were there will have something in the paper that will flesh this out a little. I just wanted to go ahead and get my contact report filed…

(And no, in case you're wondering, neither the governor nor any representative of his was there. As Coble said, our governor is seen as an obstacle in this process; whether that obstacle will be surmountable or not remains to be seen, but the folks in the room seemed determined to try…)

Joe sez it’s all that dope we’re doing

16 Replies



The Sanford administration keeps looking for explanations for the fact that we have too much unemployment in South Carolina. First, when the Employment Security Commission ran out of money for jobless benefits (the function of the tax being cut awhile back, combined with — duh — dramatically rising unemployment), he said it's gotta be the ESC's fault; they must be inefficient or something.

Now, his Commerce Secretary's come up with an alternative explanation: It's all that dope. From the AP:

South Carolina Commerce Secretary Joe Taylor has added a new wrinkle to the nation's third-highest unemployment rate by saying drug use is keeping people from getting jobs.

Taylor briefed Gov. Mark Sanford and his Cabinet on today about why he pushed the Employment Security Commission to document why people are out of work and how frequently they claim jobless benefits.

Taylor says the state needs to teach people that failed drug tests will keep them out of work for months. He says recruiting businesses to places with high drug test failure rates doesn't help.

The commission's three members face a Monday deadline to turn over information to Sanford or risk being fired. Sanford says his office will review the data before he decides their fate.

South Carolina's jobless rate was 9.5 percent in December.

Call it the Michael Phelps theory…

Of course, this has the state spin cycle up at full throttle. I first heard of the Taylor comment when I got this response from the S.C. Democrats:

Fowler Calls for Apology from Sanford for Commerce Secretary Slurs

COLUMBIA, S.C. – South Carolina Democratic Party Chair Carol Fowler on Monday called upon Gov. Mark Sanford to apologize for Secretary of Commerce Joe Taylor's slurs against South Carolina’s unemployed workers.

According to The Associated Press, Taylor who Sanford appointed as Secretary of Commerce in 2006, told the governor and others attending his cabinet meeting Monday that South Carolina workers are having trouble finding jobs because of their drug use.

“Instead of looking for real solutions to our state’s unemployment crisis, the governor and his cabinet are flailing around desperately, looking for any excuse that will divert blame during this time of crisis. The Secretary of Commerce is supposed to be the state’s ambassador for recruiting new businesses, but Sanford’s pick has been a failure.  Taylor’s comments reflect Gov. Sanford’s desperation to distract attention from South Carolina’s deep unemployment problems, and demonstrate his own poor management skills in supervising the Department of Commerce, which is part of his cabinet,” said Fowler.

“Sanford would rather slur the reputation of South Carolina workers than own up to his own failings and risk his ambition to be president. He and Taylor seem to have no evidence backing up the accusations of drug abuse, they just throw it out there in hopes it will stick.”

South Carolina’s unemployment rate was lower than the nation’s almost every year from 1975 through 2000. But the state’s average yearly jobless rate has been significantly higher than the nation’s since Sanford took office. In December it stood at 9.5 percent – the nation’s third highest, according to the U.S. Bureau of Labor Statistics.

I can't wait to hear the rest of this story…

(And no, that's not a photo of Joe demonstrating, a la Ross Perot, how drug use and unemployment converge on a chart. It just looks like it. That's a file photo.)

When centrists are wrong

27 Replies

The Paul Krugman column I picked for tomorrow's op-ed page has some things seriously wrong with it, as do most Krugman columns: He trashes Obama for seeking bipartisan support of the stimulus (Krugman HATES bipartisanship), and he demagogues like crazy:

    What do you call someone who eliminates hundreds of thousands of
American jobs, deprives millions of adequate health care and nutrition,
undermines schools, but offers a $15,000 bonus to affluent people who
flip their houses?

In its anti-UnParty sentiment, the column could be said to have precisely the opposite message of my Sunday column. But I chose it anyway, partly because one of the main missions of the op-ed page is to give you opinions other than mine, but also because he raises, in a backhanded way, a good point: Just because someone is a "centrist" doesn't mean he's right (or she's right, in the cases of Susan Collins and Olympia Snow).

In fact, one thing I ran out of room to say in my Sunday column, but had wanted to say, was that in the case of this bill, there are centrists and there are centrists. You'll recall that I ended the column thusly:

    But
if the president has a bill that Lindsey Graham and John McCain and Ben
Nelson of Nebraska and Susan Collins of Maine all voted for, the nation
would have a chance of moving forward together. And together is the
only way we can recover.

When she was proofing it Friday, Cindi came into my office to object that John McCain was not a member of the gang of "centrists" negotiating over this legislation. I said yeah, that's right. Neither is Graham. I didn't intend to say they were involed in the Nelson-Collins group. I meant to say that it would have to have even broader support than what it would take to get the Nelsons and Collinses on board.

In fact, as I would have explained if I'd had a couple more inches to work with, that particular group was guided by a principle that I thought was wrong-headed: They simply wanted to cut $100 billion out of the bill, period (or that's the message I got, anyway). Since I was worried that Krugman was right when he said in a previous column that Obama's stimulus proposal wouldn't be enough, I doubted that making it LESS, on principle, was the right thing to do.

I mean, take your pick: Spend $800 billion that you don't have or $900 billion that you don't have. How is the former necessarily better than the latter? Once you've decided that massive deficit spending is what you've gotta do, in for a dime, in for a trillion…

And yet, this press release from Susan Collins seems to indicate that for her at least, reducing the amount was the point:

After days of leading bipartisan negotiations, U.S. Senators Susan Collins and Ben Nelson (D-NE) tonight announced an agreement on an amendment to the Economic Recovery Act currently before the Senate. The Nelson-Collins amendment would reduce the total cost of the package to $780 billion-$110 billion less than the bill that the Senate is currently considering.

"This deal represents a victory for the American people," said Senator Collins… "We've trimmed the fat, fried the bacon, and milked the sacred cows…"

The idea that when it comes to stimulating the economy, less is more, seems unpersuasive to me. So does the DeMint position that all you need is tax cuts. So does the position that all massive spending is good.

So is the idea that just because someone is labeled a "centrist" doesn't mean they're right. (But it sure doesn't mean they're automatically wrong just because they're centrists, as Krugman believes.)

Nobody's got the monopoly on wisdom in this discussion, from what I've seen. There are certain things I think the stimulus ought to do: It should spend money as quickly as possible and spend it on things we'll have something to show for down the line — such as physical infrastructure that we needed to spend on anyway. I think the tax cuts are going to be pretty useless because they're spread too thin for anyone to feel them. But rather than cut them out, I'd direct that money to shovel-ready, needed infrastructure. I think any cost ceiling anybody tries to place on the plan is fairly arbitrary (such as Obama's own reluctance to go over the magic trillion mark).

But there's only one thing that I think is fairly non-negotiable: This thing needs to transcend the partisan spin cyle. To turn around our economy, we've got to be pulling together. This needs to be something that the overwhelming majority of Congress can go back home and sell, something that leaves the talking heads on 24/7 TV "news" little to natter about. And I believe that goal is worth spending a little more time to achieve.

If 2 of your 3 Republicans are from Maine, does it count?

31 Replies

Sort of underlining the fact that the Senate stimulus bill lacks the broad, bipartisan support I was advocating in my Sunday column, note that 66.7 percent of GOP support is from one state: Maine. There's Susan Collins, Olympia Snowe, and Arlen Specter.

And is Maine even a real American state? Somebody go check with Sarah Palin. I mean, it's got L.L. Bean, but otherwise isn't it almost like the same thing as Canada? And don't some people in Canada speak French? Must give us pause.

Seriously, this is disappointing. Now we have one of the two major parties invested in the failure of the stimulus. And that's never a good thing…

Reaganism, boiled down to its essence

9 Replies

Being a word guy, I got a kick out of this first paragraph of a letter we ran on our Sunday page:

Government is the problem. Stop it.

Although those two sentences actually make more sense, something about them reminded me of Stephen Colbert's "I Am America (And So Can You!)"

The temptation was strong to edit the letter so that it stopped there. It would have been perfect, a statement of Reaganism boiled down to its minimalist essence. If Reagan were the coal, this would be the diamond.

But I left the letter alone. Here it is:

Government printing too much money

Government is the problem. Stop it.

It
is printing unprecedented amounts of money. Continuing will lead to
hyper-inflation. Remember the Weimer Republic hyper-inflation, when a
wheelbarrow full of money was needed for a loaf of bread?

It's
simple supply and demand. When the government effectively prints so
many dollars, the value of the dollar will eventually go down,
drastically.

For now, call all members of Congress and urge them to kill the “stimulus” (incredible pork-barrel, not stimulus) bill.

In the longer form, however, the message lacked purity. It gave you things to argue with; you could say, "Hmmm. I seem to recall the Weimar Republic had certain other problems that contributed to the devaluation of the currency, something more than the act itself of printing too much money." Nevertheless, I do love a good historical analogy. My favorite with regard to Weimar inflation is this: The night of the Beer Hall Putsch, until it was time to make their move, one of Hitler's aides bought three beers so the two of them and one other follower could blend in. The beers cost three billion marks. But you know, if I wanted to talk about runaway inflation, I'd probably cite something more immediate: Zimbabwe has to print new denominations every week, because prices double every day. (Then again, though, Zimbabwe has bigger problems that contribute to having to print the money, not vice versa.)

But that first paragraph was very enjoyable, esthetically speaking. It was like haiku or something…

Worrying about the stimulus

44 Replies
By BRAD WARTHEN
Editorial Page Editor

    “This is your bill; it needs to be America’s bill.”

            — Sen. Lindsey Graham,
         addressing Senate Democrats

What
worries me, after all the rhetoric, exhortation, accusations,
counter-accusations, fault-finding and blame-laying, is that the
stimulus bill that spent the week staggering its way through the U.S.
Senate might not work anyway.

     There was always
that very good chance. Several weeks back, Paul Krugman — who as a
Princeton economist is a Nobel Prize-winner, but as a political
columnist is a partisan automaton — said as much. He said it wouldn’t
be enough to give the economy the jolt it needs to overcome the lack of
activity in the private sector. He made a persuasive case.

    Then,
last week, Mr. Krugman wrote that this bill just had to pass, that
those blasted Republicans opposing it were “putting the nation’s future
at risk.” Obama’s mistake, he now said, was trying “to transcend
partisanship” and work with the Republicans at all.

    I believe the
exact opposite to be true. I believe the chances of the bill doing any
good declined with each step into the thicket of partisanship.

    I
never won so much as a Cracker Jack prize for economics, much less a
Nobel, but there’s one thing I think I understand: Whatever Washington
does in the way of stimulus — and it needs to do something (with the
private sector in paralysis, this is a job for the Keynesians) — it
won’t work unless America can believe in it.

    Just as Mr. Krugman
is right about some things, so is Phil Gramm. Remember how indignant
the Democrats got when the McCain adviser said, in mid-campaign, that
we were experiencing a “mental recession”? Well, he had a point. While
it doesn’t make the real-life pain any less, the mechanisms that get us
into a predicament like this have an awful lot to do with what’s going
on in our heads.

    When businesses think they have a chance to
grow, they invest and create jobs. When they’re scared, they freeze up.
When buyers and sellers believe home values will keep appreciating, the
real estate market is hot. When they start to doubt values, buying and
selling stop. When everyone believes a stock’s value will keep rising,
it does keep rising; when they don’t, it crashes. When you think the
lousy economy is threatening your job, you stop spending and stuff your
earnings, literally or figuratively, into a mattress, and the workers
who depended on you to buy what they produce lose their jobs, which of
course increases everyone’s pessimism.

    No, it’s not all in our
heads. At some point, certain things have real value. But we’re not
going to start buying and selling and hiring and investing and taking
risks at the levels needed to pull ourselves out of this tail-spin
until we reach a consensus that things are getting better, or about to
get better.

    You can argue about the specific provisions in the
stimulus all you want, and Democrats and Republicans have been doing so
enthusiastically. But I don’t think I’ve seen a specific idea yet that
couldn’t be argued both ways. Even the worst idea pumps some juice into
the economy; even the best one is no silver bullet.

    With private
sector leadership — especially on Wall Street — having failed us so
spectacularly, we need something intangible from our political
leadership every bit as much as we need infrastructure spending and/or
tax cuts: We need to look at what Washington is producing and believe
that it actually is for the good of the country, and not for the good
of the Democrats or the Republicans or this or that politician.

    As
he entered office, I thought Barack Obama had what it took to lead us
in that direction — to pull us together and help us believe that we can
solve our problems. To persuade us, as FDR did, that we had nothing to
fear, that we were going to get through this, together.

    I still
think he can. But last week, I saw him stumble. I’m not talking about
the Tom Daschle business. As the stimulus package faltered, he reverted
to campaign mode, blaming Republicans who wanted to cling to those
failed policies of the past eight years we heard so much about in 2008.

    Helping
him in this counterproductive effort were such Republicans as our own
Jim DeMint, who most certainly was clinging to the ideologies that have
failed his party and the nation — such as the stubborn idea that tax
cuts are the only kind of stimulus anyone needs.

    A far more
sensible position was taken by our other senator late Thursday. Lindsey
Graham grabbed headlines by saying “this bill stinks,” but he had
smarter things to say than that:

    You know, my problem is that I
think we need a stimulus bill. I think we need to do more than cut
taxes. But the process has been terrible. The House passed this bill
without one Republican vote, lost 11 Democrats. Nancy Pelosi said, We
won, we write the bill…. (W)e’re not being smart and we’re not
working together, and people want us to be smart and work together, and
this has been a miserable failure on both fronts.

    As I wrote this
column, much remained unsettled. By the time you read it, something may
have passed. But as I wrote, I was sure of this: If the Congress gave
the president a bill that was pleasing only to the Harry Reids and
Nancy Pelosis, it wouldn’t help the president inspire the kind of
confidence that the whole nation needs to recover. (The same would be
true if Jim DeMint got all he wanted, but there was no danger of that.)

    But
if the president has a bill that Lindsey Graham and John McCain and Ben
Nelson of Nebraska and Susan Collins of Maine all voted for, the nation
would have a chance of moving forward together. And together is the
only way we can recover.

For more, please go to thestate.com/bradsblog/.

Caterpillar view of ‘Buy American’

18 Replies

Just now got to this e-mail of a letter from two officials with Caterpillar up in Greenville about the "Buy American" provision in Nancy Pelosi's version of the stimulus. All of our pages through Monday are now done, so on the off chance that the letter might get outdated before we could run it, and since the subject has been on my mind, I'll go ahead and run their missive here:

“Buy American” provisions could kill American jobs

Caterpillar is a proud American company. We were born in California, made our home in Illinois and maintained a strong U.S. manufacturing base that serves the global marketplace. Caterpillar laid roots in the Greenville area in 1994, beginning with the Greenville Engine Center (GEC). Our operations now include the GEC, Caterpillar Logistics Services, Inc., and the Marine Center of Excellence.  We are also proud of our global footprint that allows us to compete and support Cat equipment throughout the world. Today more than half of what we produce in the U.S. is exported to markets outside the United States.

We are also a company that will benefit from the infrastructure component of the proposed $825 billion U.S. stimulus package.  But there is one element of the stimulus proposal that greatly concerns us — it's the “Buy American” provisions.  Why would an American company be against a provision that forces the U.S. government to only buy American products?  Our reasons go beyond our confidence that we can compete and win business because of the value of the products we produce.

Today, countries from Asia to Europe are pursuing similar infrastructure packages to stimulate their economies.  In some cases, like China, these proposed projects are more ambitious than those in the United States.

This is our concern.  Caterpillar would like to sell U.S.-made products to infrastructure projects at home and abroad.  But if the U.S. sends the message that regardless of value, countries should only buy locally produced products, Caterpillar's exports, as well as the U.S. jobs they support, will be hurt. In some of our Illinois factories, as much as 70 percent of what we make is sold overseas. Over half of the engines produced in Greenville are for export use including those most recently “in-sourced” from our European factories.  That’s not surprising given that 95 percent of the world’s consumers live outside our borders, and most infrastructure growth is occurring in the developing world.

It's hard to be against something that sounds as patriotic as "Buying American."  But turning inward and embracing protectionism is what turned a bad recession in the 1930s into the Great Depression. Let’s show some political courage and learn lessons from the past. Our country doesn’t need to isolate itself from the international economy. Rather, we need policies that will help us improve competitiveness and grow.  For starters we need a "National Export Strategy” that keeps U.S.-made goods in demand globally, U.S.-based companies competitive and U.S. workers employed—including tens of thousands of Caterpillar and supplier employees.  The approval of these “provisions”, as they are written, could have a devastating impact on the operations of the Greenville Engine Center, Cat Logistics and the Marine Center of Excellence, as well as the lives of our employees and their families.

John Downey
Facility Manager
Large Power Systems Division
Caterpillar Inc.

Josh Frey
Facility Manager
Caterpillar Logistics Services, Inc.
Caterpillar Inc.

Graham helps me make my mind up about stimulus (It’s bad.)

54 Replies


First you might want to watch the above video, but if you can't be bothered, at least read what Lindsey Graham had to say to Democrats yesterday:

You can blame George Bush all you want to, but he didn't write this bill, y'all did. This is your bill. It needs to be America's bill. And we may get three or four Republicans to vote with you, but let me tell you what the country is going to inherit if we pass this bill in terms of substance and process. We're going to lose the ability as members of Congress to go to the public and say, Give us some money, let us borrow more of your money to fix housing, because this bill stinks.

The process that's led to this bill stinks. There is no negotiating going on here! Nobody is negotiating! We're making this up as we go! The polling numbers are scaring the hell out of everybody, and they're in a panic. They're running from one corner of the Capitol to the other to try to cobble votes together to lower the cost of the bill to say we solved the problem. This is not the way you spend a trillion dollars!

Here's the thing about this that makes up my mind on the bill he was commenting on: As he said in the interview that followed that clip at the start of the above video, Lindsey Graham believes we need a stimulus. He's not one of these GOP ideologues who opposes all spending and supports all tax cuts. And he, a very smart guy who speaks authoritatively from the sensible center — you know he'll work with the Democrats when they make sense, and stand with the rest of the GOP against them when they don't — indicts the legislation most persuasively.

Before, I was just worried about the legislation. Now, I believe that passing nothing (for now; before long something needs to pass) is better than passing the bill the House and Senate Democrats have been pushing.

The editorial I didn’t write for tomorrow

20 Replies

My plans for the day had included writing an editorial on the stimulus bill currently stumbling its way through the U.S. Senate, but then I spoke to someone in Washington who said it COULD pass tonight. If I knew it were going to pass tonight, and had some idea how it would end up, I could write about how it and the House version should be reconciled. If I knew it WEREN'T going to pass tonight, I could write about what should happen to it in the Senate before it passes. Not knowing, and not having started writing (and having a bunch of other stuff I need to be doing today), we'll be going with a local piece that one of my colleagues has almost finished instead.

But here are some of the points that I would have wanted to make:

  • The House bill is a nonstarter. I thought David Broder did a good job of explaining how it got that way in his Sunday column. Nancy Pelosi has done another partisan number on the country similar to what she did on the TARP bill a couple of months back. And the Republicans were only too happy to oblige her by voting against it unanimously. That means the $300 billion or so in tax cuts that were there to garner GOP support is wasted money (they are far too small and unfocused to do the taxpapers any appreciable good, so their ONLY theoretical value was political), without even getting into the waste the Democrats added for pet projects. A mess that would prove to be an overall waste in the end. A lot spent without giving the needed boost to the economy.
  • Kudos to the moderates in both parties — Ben Nelson of Nebraska and Susan Collins of Maine in particular — for working together to strip out some of the worst spending provisions. (As for our own Senate moderate — I'm thinking Lindsey Graham is supporting those efforts, based on statements I've seen, and if I were writing an editorial I would check to nail that down. But I'm not. I do know I haven't seen him mentioned in the national stories I've read.)
  • But as great as it is that we're getting rid of some of the worst spending ideas, is a SMALLER stimulus bill what we're aiming for? I don't often agree with Paul Krugman, but he IS a Nobel winner in economics, and I have found persuasive his arguments that Obama's proposed stimulus, even if all of it is properly focused, isn't big enough to give the jolt the economy needs. So rather than CUTTING stuff from it, should we not be trying to FOCUS the spending that's there into more productive channels? Such as, more shovel-ready infrastructure… In other words, it's good that the moderates want to prevent wasteful spending, but isn't the problem less the size of the stimulus (which as Krugman says, may not be large enough), but what it's being spent on?
  • The Buy American stuff — the latter-day Smoot-Hawley — should go. After a piece I read in the WSJ this morning, which sort of crystalized my half-formed thoughts on the matter, I'm more concerned about this than I was yesterday. If I had written the editorial, though, I'd have had to reach an agreement with one of my colleagues who is not as much of a free-trader as I am. Since I'm not writing the piece, we're not pausing in our work today to have that argument.

As you see, it would have been a fairly complicated editorial, pulling in many different directions, reflecting the complexity of the legislation and the lack of clear sense — on my part, on the Senators' part, on the House's part, on everybody's part (except for the ideologues who SAY they know what to do, but don't) — of exactly what will cure what ails the nation's economy.

Increasingly, I am pessimistic that what finally emerges and gets signed by the president will lead in any obvious way to the kind of dramatic improvement in economic activity that we need. That can further a crisis of confidence in everything from the new president to our ability to effect our own recovery in any way. And that can lead to depression, in more than one sense of the word.

(Oh, and before you comment that my thoughts on this are half-baked and incomplete — well, duh. I told you, this is the editorial I didn't write, so I haven't gone the extra mile of refining and reconciling these various points, as I made very clear above. Having done a bunch of reading and thinking about it, though, I thought I'd toss these points out for y'all to discuss. In case that's not obvious.)

‘Buy American’

8 Replies

Obama has sided with Republicans and biz types in opposing congressional Democrats' "Buy American" provisions in the stimulus bill, much to the chagrin of the Big Labor lobby.

I thought I had made up my mind on this when I read a story in the WSJ that put Obama on one side, and Harry Reid on the other (my instinct in such a choice is to go with Obama, every time). Besides, I'm a free-trader, and one of my beefs with Obama during the election is that he wasn't.

But when I mentioned that this morning, one of my colleagues strongly disagreed. She said (helping you guess who it was) that if taxpayers were putting up the dough, of course it should stay in this country.

Me, I don't want to take the global economy back to a bunch of little protectionist islands. If the economy starts to recover anywhere, I want the growth to flow freely. But I saw my colleague's argument.

Then, former U.S. Ambassador to Canada David Wilkins (below) came to see us this afternoon, and he talked about how our good friends in the Great White North — our biggest trading partners, the people we get the largest amount of oil from, etc. — are absolutely freaking out about the "Buy American" thing. And with good reason, from their perspective. And they are our good friends and allies. So I value their opinion.

Looking around, I see that Paul "Nobel Prize in Economics" Krugman is no help — on his blog, he argues it both ways (although I admit, I understand his anti-protectionist argument better than his wonkish one to the contrary).

What do you think?

An intolerable failure to communicate

50 Replies

By BRAD WARTHEN
EDITORIAL PAGE EDITOR
First, some sobering perspective: Some of you reading this will not have a job next month.
    As bad as things were through November, the bottom really dropped out in December. South Carolina lost another 22,000 jobs that month. Nationally, 2.5 million jobs were lost last year — the most since 1945 — and of those, 524,000 were lost in December alone. To do that math for you, if the rest of the year had been as bad as December, we’d have been down 6.29 million jobs. And to do the same for South Carolina: Our state lost 54,100 jobs in 2008. If the whole year had been as bad as December, we’d have lost 264,000.
    These things have a rippling effect — a business cuts back, more people lose their paychecks, they spend less in their community, so other businesses have to cut back, and so forth. So there is little reason to doubt that January (when we get those figures) will be worse than December, or February worse than January. Just as an early indication of that, the state Employment Security Commission said last week that in January it was paying out $19 million to $20 million a week, up from $13 million to $15 million a week in December.
    One more thing to note, in case you don’t know it: As bad as things are nationally, they are worse here. The national unemployment rate is 7.2 percent; in South Carolina it’s 9.5 percent.
    Got the picture? All right, then; let’s turn from tragedy to low farce — the ongoing spitting match between our governor and the aforementioned Employment Security Commission.
    You know how our Legislature likes to cut taxes? Well, back in the late ’90s, it cut the tax that businesses pay into a trust fund from which unemployment benefits are paid. It made sense at the time, given the fund surplus. But since 2001, the state has been paying out more each year in unemployment benefits than the trust fund has taken in. Only in 2006 was the amount taken in even close to the amount paid.
    So it is that, in light of the unemployment figures cited above, the ESC ran out of money and sought federal help to keep issuing checks. Unfortunately, the agency couldn’t get the money unless the governor signed off on the request. In most states, this would make sense, but in South Carolina — where only a third of the executive branch reports to the elected chief executive, with the ESC not being a part of that third — it can be awkward, especially with this governor.
    Gov. Mark Sanford said he wouldn’t OK the request until the agency provided him with certain information. The ESC didn’t provide the information, and things escalated. The governor claimed the agency was wasteful and incompetent, and demanded an audit. The ESC, absurdly, resisted. Finally, after fighting about this most of the month of December, everyone climbed off their high horses long enough for the governor to OK the request.
    Then, the ESC realized that things were getting worse and it would need even more money. The governor went ballistic. The commission resumed stonewalling him. The governor threatened to fire the commissioners.
    On Thursday, the commissioners — Chairman McKinley Washington, Becky Richardson and Billy McLeod — met with our editorial board, and said they would have 90 percent to 95 percent of what the governor wanted to him by Feb. 9.
    In the course of this interview, I asked: “Have y’all met as a group with the governor?” I got a chorus of simultaneous answers: “No.” “Absolutely not.” “Never.” (You can watch a video clip of this exchange on my blog.) Had they ever sought such a meeting? Oh, certainly, they said.
    “This is the only governor,” said Mr. Washington, “that never met with the Employment Security Commission that I know of; I’ve been there eight years.” Mr. McLeod said the same was true for his 20 years.
    As bizarre as this may sound to anyone not familiar with Mr. Sanford and his ways, it was believable. But Sanford spokesman Joel Sawyer said the governor had met with them, and he produced a letter, from agency Executive Director Ted Halley, which began, “The Commission and I would thank you and your staff for taking time from your busy schedules recently to meet with us.” It was dated March 25, 2003.
    I asked Mr. Washington on Friday about this. He said that the meeting was actually with Eddie Gunn, then the governor’s deputy chief of staff. He said at one point “The governor stuck his head in the door, said hello… and that was it.” So why the letter? “That was just a courtesy statement, but he did not meet with us.” He added, “You try to be nice.”
    This, ladies and gentlemen, is pathetic. Let’s say the governor’s version of events is true and Mr. Washington’s is wrong: His defense is that he met with the commissioners once, almost six years ago.
    Bottom line: None of this idiocy would be happening if the governor were responsible for this agency, which he should be.
    What! you cry — give this governor what he wants? Never! And indeed, this governor who claims to want greater authority for his office is, by his actions, the worst argument for such change that we have seen in many a year.
    But consider: If he had been responsible for the agency and its mission all along, he never would have been able to play this blame game. As long as the agency is out of his reach, he can snipe at it, and gripe and complain, and blame those people over there, rather than take responsibility. He shouldn’t do that, and most governors wouldn’t. But since this one can, he does, and he gets away with it. (And by being so intransigent and defensive, the agency helps him.)
    Given the growing number of people in this state who rely on this agency to enable them to put food on the table in their hour of greatest need, this absurd failure to communicate is intolerable.

For video and more, please go to thestate.com/bradsblog/.

Now, about that ‘zero Republican votes’ thing…

51 Replies

The last time they did this, I had no doubts that the Republicans were wrong. When not one of them voted for Clinton's Deficit Reduction Act in 1993, it was about as pure an example as I can recall of partisan mule-headedness and populist demagoguery. Not to mention the fact that they were wrong on the issue. Argue cause and effect all you like, the passage of that legislation WAS followed by dramatic deficit reduction. And the way the GOP went to their home districts and told everybody about how those awful Democrats had raised their taxes was unconscionable. Especially when South Carolina Republicans said it — most people in S.C. did not see their taxes increase, unless you count the 4-cent rise in gasoline tax. And what importance can you honestly attach to 4 cents a gallon when monthly fluctuations in price are usually far more than that? (Of course, you know what I think about gas taxes.)

I remember actually watching TV news — something you know I don't often do — during that vote. Somebody had Al Gore on live, and Al was as stiff and awkward and priggish as only he can be as he talked about how wrong the Republicans were not to support it, with the roll call going on in the background (I'm thinking it was the Senate; in any case not one Republican in Congress voted for it). But he was right.

This time, I'm not as sure. I'd LIKE for our elected representatives to get together on anything as big as spending $819 billion, rather than splitting along partisan lines. I mean, if we're going to do it, let's do it together — doing it divided increases the chances that it the stimulus will fail. I say that because Phil Gramm had a point — so much of the economy is psychological. If the country sees this as THE plan that everyone agrees on, the country is more likely to have its confidence boosted. If it sees every member of one of the two major parties (for now) decry it as a waste doomed to fail, we could be looking at some self-fulfilled prophecy.

That said, I don't know but what a Republican — or UnPartisan, or anyone else — who says this plan isn't going to do the job doesn't have a point. After all, Paul Krugman says it won't, and he's no Republican.

On the other hand, their reason why this package isn't quite the thing is all bass-ackwards. They complain that only about a third of it is tax cuts. Well, I'm worried that a third of it IS tax cuts, and that those tax cuts will have zero effect on stimulating the economy. I haven't seen figures yet on exactly what the tax cuts will mean to the average American, but as I pointed out before, in an earlier version, the amount we're talking about would have given each worker only about $9 a week — which is just barely enough to go to a movie. By yourself. If you don't buy popcorn.

If you're going to have a stimulus package, either SPEND enough to really kick-start the economy (and this doesn't appear to be enough), or target tax cuts to where they are likely to stimulate some real activity. Unfortunately, in trying to provide something for everybody — and then going to woo the GOP in person — Obama may have produced a solution that doesn't do enough of anything. And then, after all that trouble, you fail to get the bipartisan support that you were trying to buy with that $300 billion in tax cuts.

As for what you will probably hear them yammer about most on TV news (and in the rest of the blogosphere) — what partisan political effect this vote will have — I don't have a dog in that fight. Whether the Republicans have cooked their own goose by voting against a plan that will work, or set themselves up to be blamed for it NOT working, or are poised to recapture the House because they were the only ones to see it wouldn't work, or whatever… I don't care. I'd like to see both parties suffer in the next election, just on general UnPartisan principles. Unfortunately, I might get my wish: The stimulus could fail, and both parties be blamed — but that be the least of the nation's worries. You know what I'd be worried about right now if I were a Republican? I'd worry that my caucus just invested its hopes in economic failure — just as Harry Reid et al. bet all their chips on our failing in Iraq. That's not a position you want to be in — your nation having to fail for you to be right. But that's their lookout, not mine.

For my part, I hope the stimulus works. Or that something we do soon works. And as long as it does, I don't care who gets the credit — even a political party.

How porky can stimulus be, if Clyburn’s not getting his bridge?

14 Replies

There's a certain irony — not necessarily a contradiction, but irony — in the fact that Republicans are pinning their opposition to the ginormous stimulus bill the House passed yesterday on allegations that it's just a bunch of pork for Democrats' home districts…

… while the favorite public works proposal of the third most-powerful Democrat in the House is NOT included.

Yes, I get it that Jim Clyburn says it's not for a lack of political will to fund it, but rather a matter of those pesky environmentalists tying it up with a lawsuit. He maintains that if it weren't for the blasted tree-huggers, he'd have gotten the span between Lone Star and Rimini funded.

But it's still ironic. If this project that he has wanted so badly for so long can't make it into an unprecedented, extraordinary $3.2 billion infusion of federal funds into South Carolina, it's probably missed its best chance ever.

As for what IS in the $819 billion extravaganza, I have not audited it to see whether it's pork or not. It does occur to me that just about anything that would meet the standards of what the stimulus is supposed to be — extra spending, on stuff the federal government would not normally spend on, "shovel-ready" and labor-intensive — it would probably be something that someone could legitimately call "pork" if they are so inclined. Think about it: What IS pork? Generally, it means something spent in some elected representative's district that would not meet normal standards of being a national spending priority (or state priority, when we're talking pork on that level of government). Well, presumably if it were something that had been determined to be a national priority, it would have been funded already.

Bottom line, I don't know what the percentage of overlap between the two sets (good stimulus projects on the one hand, "pork" on the other) would be — say, 80 or 90 percent, just to venture a wild guess? — but it seems like there would be very strong correlation.

Or am I missing something?

Anyway, I made that point to a colleague earlier today, and he said, "Yeah, well what about this mandate that NASA spend on fighting global warming — that's not a job-producer." I said, "well, it would probably mean jobs for the engineers and techno-geeks required to implement it." He said, "but NASA already has engineers." And I said, "Yes, but if what I was reading in The Economist this morning is correct, a lot of them would otherwise be losing their jobs because Obama doesn't want to follow through on the Bush goals of going back to the Moon and on to Mars." That's gotta mean some latter-day Werner von Brauns joining the unemployment lines. (Which is a whole nother debate I may raise in a separate post.)

I don't know; we're probably both right. Which means Democrats can say this is a great stimulus bill, and Republicans say it's a bunch of pork, and nobody be lying…

In praise of good ideas, starting with school district consolidation

22 Replies

You know, I sort of damned the good news about the growing DHEC consensus with unfairly faint praise earlier today. (Or darned it, at the very least.)

I need to start looking more at the bright side. I don't spend enough time looking at things that way these days. We're all so overwhelmed by the economic situation — and if you are in the newspaper business, you are steeped in it (nothing is more sensitive to a slowing economy than an already-troubled industry that is built on advertising revenues). It's very easy to dwell on such facts as this one that has stuck in my head since last week: That not only did the U.S. economy lose 2.5 million jobs in 2008, the worst since 1945, but 524,000 of those jobs lost were in December alone. To do the math for you, if the whole year had been as bad as the last month, the total would have been over 6.29 million. And there's no particular reason to think January won't be worse than December.

I'm not a big Paul Krugman fan, but stats like that make me worry that he was right in his column, which we ran on Sunday, saying that the Barack Obama stimulus plan, overwhelming huge as it is, won't be nearly big enough.

And these are not cheery thoughts. Nor is it cheery to reflect, as I did in my Sunday column, about how resistant policy makers in South Carolina are to policies that make sense — even the more obvious policies, such as increasing the cigarette tax to the national average, or restructuring government to increase accountability, or comprehensive tax reform.

That's what we do in this business. We harp. Year in, year out. We can be tiresome. We can, as I suggested Sunday, get tired of it ourselves. But little victories such as this emerging consensus on DHEC, or the signs that we saw last year that even some of the stauncher opponents of restructuring in the Black Caucus are coming around on the issue (which is a real sea change) are worth celebrating, and encouraging — like putting extra oxygen on an ember.

So it is that I applaud Cindi today for, instead of doing her usual thing of mocking the stupider ideas among the prefiled bills, giving a boost to the better ideas. There were some good ones on her list.

In fact, I was inspired to do a little followup on one of them:

H.3102 by Reps. Ted Pitts and Joan Brady would shut off state funds to
school districts with fewer than 10,000 students, in an attempt to make
inefficient little districts merge.

Now that's the beginning of a good idea. Like most obviously good ideas, it isn't new. We've been pushing for school district consolidation as long as we've been pushing restructuring and comprehensive tax reform, etc., and with even less success. Everybody says they're for it in the abstract; no one lifts a finger to make it happen. Even Mark Sanford gives lip service to it (but won't work to make it happen, preferring to waste his energy on ideological dead-ends such as vouchers).

So it's encouraging that Ted Pitts and Joan Brady (and Bill Wylie and Dan Hamilton) want to at least set a starting place — a numerical threshold, a line that the state can draw and say, "We won't waste precious resources paying to run districts smaller than this."

Mind you, I'm not sure it's the RIGHT threshold. I've always thought that the most logical goal should get us down from the 85 districts we have now to about one per county — which would be 46. The 10,000 student threshold overshoots that goal, as I discovered today. I asked Jim Foster over at the state department of ed to give me a list of the sizes of districts. The latest list that he had handy that had districts ranked was this spreadsheet
(see the "TABLE 1-N" tab), which showed that as of 2006, only 18 districts in the state had more than 10,000 pupils. One of those — Kershaw County — has since risen over the magic mark, so that makes it 19.

Maybe we should have only 19 districts in the state, although I worry that a district that had to aggregate multiple counties to be big enough might be a little unwieldy.

But hey, it's a starting point for discussion on an actual reform that would help us eliminate ACTUAL waste in our education system, and provide more professional direction to some of our most troubled schools (which tend to be in those rural districts that just aren't big enough to BE districts to start with).

So way to go, Ted and Joan (and Bill and Dan).

I was particularly struck that Ted was willing to put forth an idea that would have an impact in his own county (although perhaps not, I suspected, in his actual district). That's the standard reason why district consolidation gets nowhere — lawmakers balk at messing with their home folks districts, because voters tend to be about this the way they are about other things; a reform is great until if affects them.

I suspected, and Jim's spreadsheet confirmed, that while Lexington 1 and District 5 were big enough to retain state funding under this proposal, Lexington 3 and 4 were not. More than that, Lexington 2 falls below the threshold, and at least part of Ted's district is in Lexington 2. (Unless I'm very mistaken. Ted is MY House member, and my children all attended Lexington 2 schools.) As for Joan Brady — I think her district would be unaffected, as Richland 1 and 2 would be untouched (even though they shouldn't be — they should be merged). But I still applaud her involvement.

Anyway, way to get the ball rolling on this, folks. Let's keep talking about this one.

Good news and bad news on health insurance

31 Replies

About the drugs…

I have good news and bad news from my own little private front in the constant battle to afford health care.

You probably don't remember this passage from my Nov. 26, 2007, column ("‘Health care reform?’ Hush! You’ll anger the Insurance Gods!"), so I'll repeat it here:

    Just the other day I went to my allergist’s office to get the
results of my first skin tests in 20 years. I’d been getting allergy
shots based on the old tests all that time, and my allergist, being a
highly trained professional, thought it might be a good idea to see if
I was still allergic to the same stuff. Actually, I can’t tell you for
sure that the shots ever helped. So why get them? Because my insurance pays for allergy shots, but won’t pay any more for me to take Zyrtec, which I know relieved my symptoms. The Insurance Gods say I don’t need Zyrtec.
…    Earlier this year, after surgery worked only briefly to relieve
head-pounding sinus pain, my surgeon gave me a prescription for Allegra.
I started to protest adding yet another drug to the 11 I was already
taking, counting the prednisone he was putting me on, but then he said
it was the generic version, so I said OK. My copay is only like $10 on generics; the Insurance Gods say generics are good.
    Then my pharmacy said my copay for my 30 generic pills would be $81.95. Stunned, I asked why? They shrugged and said no one knew; the Insurance Gods just said so.
I shut up and paid it, even though it meant delaying paying on my
mortgage or my electricity bill or some other frill. I think the pills
helped, but I certainly wasn’t going to get a refill.

Well, two good things have happened since then.

First, at the start of 2008, Zyrtec became available over-the-counter, quickly followed by the cheaper generic version, also available over the counter, so I've been able to supply myself with that for the past year at less than my co-pay would have been had my insurance covered it.

Unfortunately, the Zyrtec hasn't been helping all that much (and "helping" for me, with my extreme allergies, simply means keeping the ever-present symptoms down to a dull roar), even though I take twice the recommended daily adult dose every night (as my allergist told me to do).

So, on a whim, I asked him to write me a scrip for the generic version of Allegra 180, just to see what would happen at the pharmacy now that I have a different health care provider, and lo and behold — it went through, with only a $15 co-pay. So I said "fill it!" I'll tell you the results later, I've only taken it once so far.

That's the good news. Here's the bad…

The reason I was at the allergist yesterday is that I needed some Xopenex vials for my nebulizer to treat my asthma. I've been blessed the last couple of years by being almost completely free of asthma symptoms thanks to a miracle drug called Asmanex, of which I take two puffs nightly — and which, Thank The Lord, my insurance pays for, with a reasonable co-pay.

But the latest stage of this crud that I've had for three weeks is that ever since the weekend (about the time I was finishing the course of Levaquin, for the second stage of the crud, which was bronchitis), my bronchial tubes have been closing up on me even as the more obvious signs of infection subsided. A breathing treatment Tuesday night helped, but I needed refills. Rather than just calling in the refills, the allergist insisted I come in yesterday, and sure enough he told me what I didn't want to hear: I needed to do a course of prednisone.

He had me scarf down 60 mg. there in his office, and told me to take 20 mg more that night. Today, I scaled down to 40 in the a.m., and another 20 tonight. I'll repeat that tomorrow, then step down again the next day, and so on until I'm off it. You don't just go cold turkey off prednisone.

Now, I don't know if you've every had 80 mg. of prednisone rattling around in your skull, but that's just about enough right there to give you brief "Band of Brothers" hallucinations. And that's not the whole story.

Between the prednisone (which ought to have dealt with the worst of the asthma by tomorrow) and the Allegra, I forgot to get my Xopenex refill. I used my next-to-last dose last night, and called the doc back today, and they called it in.

But not so fast. They called me back minutes later, and said my insurance won't cover Xopenex. They had to go with the older, cruder drug, generic albuterol.

Now that's fine, except for one thing. Even when not taking prednisone, a dose of albuterol, administered via nebulizer machine, causes my heart to pound like I just ran about a mile. (If you take albuterol via the simple inhaler, it doesn't do that — but then, it does nothing for my asthma, either.) But I can live with that, because it opens me up. The only trouble is, if it's the middle of the night, I've got to sit up an hour or two until I calm down, because the pounding of my pulse through my throat and head against my pillow makes sleep impossible — pretty much the same as if I HAD just run about the block.

The nice thing about Xopenex is it has the therapeutic effect without the heart-pounding, so I can go to sleep within minutes after a treatment.

I asked my druggist, and he says Xopenex costs about twice as much. And of course, if my doctor and I jumped through a few more hoops and demonstrated that yes, we've tried albuterol, and yes, my doctor does have a legitimate reason to prefer that I use Xopenex because he is a trained medico and not a complete idiot (nor am I, but I doubt I could get them to believe that), they'd probably spring for the name brand. But of course, the business model of private, for-profit health insurance is to make you jump through enough hoops that you give up, and I had already spent WAY more time than I had time to spend on all this being-sick garbage this week. I've got work to do.

So I paid my $15 co-pay, took my albuterol and my nebulizer machine back to the office, and did a treatment sitting at my desk while reading The Economist. I started breathing a lot easier, and the only ill effect was that when I was proofing Robert Ariail's cartoon for tomorrow, I noticed my hand was shaking à la Tom Hanks in "Saving Private Ryan." But I could still lead my company up the beach.

Here's the thing about all this: If the insurance simply demanded double the co-pay for me to get Xopenex (the way they do with Asmanex), I'd probably just say the heck with it, give me the albuterol, and put up with the heart-pounding. I AM cost-conscious. (In fact, I tried to talk my primary-care doc into giving me the much-cheaper tetracycline for the bronchitis, but he insisted it wouldn't work but Levaquin would — my allergist agreed yesterday when I asked him the same question. I'm VERY cost-conscious, and am always asking about these things.)

But they don't do that. They get all "we-know-more-than-your-doctor" on me, and assume that I don't care about cost, and so they have to tell me what I can have and what I can't have. And frankly, that ticks me off. I've had asthma for 55 years, and I know what I need and what I don't need.

I know what you're thinking: If we had a single-payer National Health plan the way I want, the gummint might also tell me I can't have Xopenex. Maybe. Then again, if the gummint was the sole provider of coverage, the drug company would be MUCH more likely to figure out a way to offer it at a lower cost, since they wouldn't be able to play all these difference consumer groups with different payment rules against each other. If the gummint wouldn't allow it, they wouldn't sell ANY Xopenex.

Of course, if they COULDN'T sell it cheaper, we'd all have to take albuterol. But that wouldn't be the end of the world, either. It gets the job done — ba-boom, ba-boom, ba-boom…

Anyway, I think that explains the drug reference earlier. All perfectly legit, I assure you.

The subprime mess in microcosm

20 Replies

For those of you who have trouble wrapping your mind around the subprime mess that led to all our other economic woes, here's an instructive anecdote from the WSJ on Saturday. It's about a condemned house in Avondale, Ariz. An excerpt:

The story of the two-bedroom, one-bath shack on West Hopi Street, is
the story of this year's financial panic, told in 576 square feet. It
helps explain how a series of bad decisions can add up to the worst
financial crisis since the Great Depression.

Less than two years ago, Integrity Funding LLC, a local lender, gave
a $103,000 mortgage to the owner, Marvene Halterman, an unemployed
woman with a long list of creditors and, by her own account, a long
history of drug and alcohol abuse. By the time the house went into
foreclosure in August, Integrity had sold that loan to Wells Fargo & Co., which had sold it to a U.S. unit of HSBC Holdings PLC, which had packaged it with thousands of other risky mortgages and sold it in pieces to scores of investors.

You know, subprime aside, I was always uneasy about my mortgage being bought and sold as part of financial "instruments." But I figured the problem was me — the fact that I'm seldom comfortable with the way things work in the world of finance.

We could have avoided all this trouble if mortgages had remained on a personal level, with your banker or George Bailey or whoever you sat down with to take out the mortgage having a personal stake in your ability to pay him back — rather than having it bundled and bartered by people who made their money from the transaction itself, not from any real value the original agreement might have had. That's my communitarian take on it, anyway.