On Friday, investors ignored the fact that the U.S. economy was in
“recession” at the end of last year. They said the fall in GDP in the
fourth quarter was a one-off fluke. The Dow went up 149 points.
They weren’t bothered by the failure of the Fed’s “QE to Eternity”
plan either. It’s buying bonds to reduce interest rates. Instead,
they’re going up. The 10-year note hit 2% on Friday.
This is not a good time to be in stocks or bonds, in our opinion.
But let’s move to another subject: revolving zombies.
The defining characteristic of a zombified system is the way it hands
out its rewards. In an honest economy people do their best. They work
hard. They take their chances. Some prevail because they are productive.
Others are just lucky. The chips fall where they may.
But as zombies take over the system, the chips fall where they are
told to fall. Rather than to honest and efficient producers, the rewards
go to those who curry favors.
The Strange Case of Elizabeth Fowler
Elizabeth Fowler knows how it works. She labored at the left hand of
Sen. Max Baucus (D-Mont.), drafting the collection of crimes and
punishments that came to be known as “Obamacare.”
Sen. Baucus admitted he had better things to do than read it. But he
didn’t have to. His chief health policy counsel, the aforementioned Ms.
Fowler, knew what was in it. As a former top lobbyist for Wellpoint,
America’s largest health insurance provider, she had made sure the chips
fell where she wanted them to.
“If you drew an organization chart of major players in the Senate healthcare negotiations,” wrote Politico at the time, “Fowler would be chief operating officer.”
Fowler had already been through the revolving door more than once or
twice. She worked for Baucus before joining Wellpoint… and after. When
she came back to Baucus she replaced Michelle Easton, another Wellpoint
lobbyist, who helped guide the senator on health policy while Ms. Fowler was on the Wellpoint payroll.
After the legislation was passed, the White House turned to the
clever lobbyist to implement it. After all, the sweet spot in the
legislation was the provision requiring people to buy products from
companies such as Wellpoint, whether they wanted to or not.
As America’s new Special Assistant to the President for Healthcare
and Economic Policy at the National Economic Council, she had to make
sure Wellpoint got a good return on its investment.
And then in December 2012: Whoosh… she went back through the
revolving door. Type in “Elizabeth Fowler” and “revolving door” into
Google and you will get the whole story. The “architect of Obamacare,”
say the papers, left the White House to go to the honeypot at Johnson
& Johnson.
What will she do there? Will she test the adult diapers? Will she
take out the trash or write advertising jingles? No, she is up to her
old tricks – in a “senior position” at their “government affairs and
policy group.”
You go girl!
(This is not the first time this sort of special privilege has been
granted in the USA. The ethanol industry got it coming and going. Tax
credits subsidized farmers for growing corn and then federal mandates
required fuel companies to buy it.)
How the Zombie System Works
Wellpoint was not the only winner in the healthcare sector last year. The New York Times reports:
Just two weeks after pleading guilty in
a major federal fraud case, Amgen, the world’s largest
biotechnology firm, scored a largely unnoticed coup on Capitol Hill:
Lawmakers inserted a paragraph into the “fiscal cliff” bill that did
not mention the company by name but strongly favored one of its drugs.
The special favor was buried in Section 632. It involved a kidney
dialysis drug, Sensipar, that was spared from cost-cutting restrictions
for another two years. This was the fruit of efforts by 74 Amgen
lobbyists. It is expected to cost the Medicare system up to $500
million.
That’s how a zombie
system works. Congressional staff members slip favors to private sector
companies. Then the companies return the favors, giving staff members
cushy jobs.
One of the chief Amgen lobbyists, for example, had been an employee
of Sen. Baucus, head of the Senate Finance Committee. Jeff Forbes was
the senator’s chief of staff. Amgen has given the politicians $5 million
since 2007… with $68,000 going to Baucus.
But poor Elekta AB. The Swedish maker of radiation tools got stabbed
in the back by the same last-minute legislation. That’s the way
zombiedom works: The rewards go to people who are best able to pervert
the political process.
Elekta was at a disadvantage. A foreign company, it couldn’t give
money to the politicians. Varian, its competitor, could. Plus, Varian
put 18 lobbyists on the case and managed to get Elekta’s payments cut in
half.
More to come…
Regards,
Bill
http://www.billbonnersdiary.
