08/20/09 – Greg Palast – The Scott Horton Show

For Antiwar.com, I'm Scott Horton.
This is Antiwar Radio.
And introducing our next guest, it's Greg Pallast.
The website is gregpallast.com.
He's the author of the New York Times bestsellers, The Best Democracy Money Can Buy and Armed Madhouse.
He's got a new DVD out called Pallast Investigates, which is a compilation of his reports for BBC Newsnight.
Welcome back to the show, Greg.
How are you doing?
Glad to be with you, Scott.
So, wow, there's some audio of you on somebody else's radio show on Air America, I guess, which is part of why it's gone viral.
Somebody made a YouTube out of it or some kind of video out of it.
And if people just Google charming liar, they'll get 10,000 results or something already, because that's what you've called Barack Obama.
And now before I let you explain exactly what you're talking about, I can go ahead and vouch for you that you're not a right-winger or a libertarian.
I already know you, and I already know that you count, and anybody who does know you and knows your audience knows that you're an Air America kind of a guy.
You're a reporter, but in your personal life you lean a bit left.
You're not some, you know, Dick Army clone here.
Okay, now go ahead and tell us, what's your problem with Barack Obama and his health care plan, Greg?
Well, I'll fess up to being a progressive, yes.
And I'm on that sinkhole of progressivism, Air America, where I have the regular commentary and spot.
So, yeah, that's a fair characterization.
What I'm not is partisan, and I've been getting very nervous that my fellow journalists have decided they are now a wing of the Democratic Party, now that the Democrats are back in as the establishment.
Well, and see, I can vouch for that, too, because in your book, The Best Democracy Money Can Buy, you do a great job of covering the scandals of Bill Clinton, who, after all, is a politician, and your job as a reporter is to report on his crimes, not to prefer him to the other side or anything.
Yeah, so what really disturbed me, and this charming liar is actually my host of the show on Air America.
I used the term, which kind of scared me when I saw the video of myself.
I didn't realize I was getting so whipped up.
I simply said that this administration is an example of absolute fascism, or that we have a fear of heading in that direction.
By its technical terminology, a corporate-government combine, in which the power of government is tied to corporate interests for their profit.
And particularly, I was looking at and speaking about the secret deal, and now we know it's a deal, between a big pharmaceutical company, then in the back room with the Obama administration on the so-called health reform bill.
And there was a similar, very much not-covered story of a secret agreement, also with Chip Kahn, the chief lobbyist of the American Hospital Association.
And what disturbs me is that, you know, look, I was part of the crew.
In fact, I was one of the journalists who investigated and uncovered the story of Dick Cheney's secret meetings, the so-called bunker meetings, with the oil companies and Ken Lay, in discussion of the energy bill and other matters.
And I was one of the people that found government by secret meeting of corporate powers quite frightening, and it was certainly one of the elements that led us into Iraq.
Besides giving these corporations the special access to basically write the bills on energy deregulation, Ken Lay had a direct involvement, and the oil companies a direct involvement in oil policy.
And Obama, if there's one thing that Obama promised, that even I thought might change a bit, I'm a pretty cynical guy, was that some of that might end.
That is, we wouldn't continue the Bush administration's penchant for doing everything in secret with the powers at interest.
But instead, instead of a Cheney meeting in the bunker with the oil companies about the oil bill, we have Obama's people meeting in the bunker with the drug companies.
And not just anyone, Billy Tozin, T-A-U-Z-I-N, Billy Tozin was a guy that Barack Obama personally, personally attacked for his secret meeting with the Bush administration.
Tozin's the chief lobbyist for Pharma, which is the big pharmaceutical drug lobby.
And Obama attacked Bush and the Republicans for allowing secret meetings with Tozin, said he would never do it, never allow it, and that all negotiations with the drug companies would be held on C-SPAN.
He said the game would end, he said he wouldn't participate in the game, the game would end.
He not only cut a deal with the drug companies, but it was specifically cut in secret meetings with Billy Tozin.
The guy said he wouldn't meet with, in fact he cut a handshake deal with the guy.
Creepiest can be.
Alright, now so let us understand what this deal is exactly.
I'm very glad to hear you, by the way, using the F-word.
It's something that gets thrown around too much, so then people are scared to use it when it really counts.
And, you know, sometimes you call this laissez-faire free markets when the empire is at work like this.
But I'm glad to hear you correctly defining the economic system we're dealing with.
Well, what's so fascist about it, Greg?
Why isn't it socialism, you know, like Acorn and Bill Ayers and all that stuff?
Well, I'm not afraid of the S-word.
I think, in fact, I believe that our solution, I was just in the middle of drafting something, I'll give you a heads up, I'm not afraid of the S-word.
Oh, good.
But we needed socialized medicine in America.
We've had it.
I lived in England, and my mother-in-law broke her arm there, said she never got such good or fast service, except in the British health system, and she's a nurse in America.
She's a registered nurse.
Well, I'm for a total laissez-faire system of health care as for everything.
But that's neither here nor there.
Let's talk about what's the recording here.
The problem here is that it's not socialism, which is government control, government service, like a health service, national health service.
What we're talking about here is a private system, but using the power of government to extract your money from it.
So we could have government mandated, the government tells you, you must have private health insurance.
We're going to end up with a health mandate that we will have to go with these private insurers and to support their profits.
In addition, we're now going to have a system in which the government is basically locking into law high drug prices, which if we had a free market, drug prices would be lower.
In fact, one of the things that the Bush administration put in place was something called a non-interference law, simplest term.
The U.S. government, believe it or not, is not allowed to bargain with drug companies on the price of drugs, to make a mass purchase on the price of drugs.
For example, you take a cholesterol medicine like Lipitor, Medicare needs literally a billion doses a year.
You can imagine if it put out a bid for that, the deal it would get.
Well, the Bush administration, when they set up the Medicare prescription program, said the free market is not allowed to work in drugs.
We will absolutely prohibit free market bargaining by law.
This is a Republican.
I thought, well, here's an easy one for a Democrat to overturn.
He could be pro-market, and Obama said we will end that practice.
We will bargain for lower-cost drugs, and we will have free trade.
We will import drugs cheaply from Canada.
Well, as part of this backroom deal, Obama's agreed to give up importing drugs from Canada.
So, you know, buying Lipitor from Canada makes you a criminal as if you were importing heroin.
So don't get, you know, if your granny gets caught, you know, taking some, you know, Lipitor across the border.
Uh-oh.
Well, you know, in a sense, Greg, the patent system, at least as it is, is basically fascism right there, guaranteeing a monopoly on, you know, certain chemical combinations for extended periods of time and making it basically a crime like being a heroin pusher to make it generic, to compete with drugs that have already been invented.
Right.
So we have, unfortunately, the Obama administration taking this position against free trade, neither socialism, government's going to have to take over and run it as cheaply as possible.
What Winston Churchill did, you know, the conservative prime minister of Britain, who created the socialist medical system of Britain.
But we're not going to do that, and we're not going to have a free market system where market pressures would bring down prices.
We're going to have the worst of all worlds.
A government-mandated, government-controlled, privatized system that the government tells you you must buy from private operators at the price they set and just shut up about it.
In a deal cut in the back room with guys that Obama himself has literally nailed as sleazy, corrupt operators.
You know, and here's the problem, you know, and I want to say something on your show that I said on Air America, which I know is going to shake up my fellow progressives, which is, what if the right wing is correct?
Do we really want Rahm Emanuel running our system?
And when they say, you know, all this crazy stuff, we're not going to unplug grandma.
Well, I heard from Obama, and I just looked at the tape again today, he said three times, we will have all negotiations on C-SPAN.
And now he promises he won't unplug grandma.
So we heard all negotiations will be on C-SPAN.
We heard that four times.
We heard, I will not negotiate with Billy Posen several times.
We will import drugs from Canada if it's cheaper several times.
And all those things are, were just not true.
But now we're told, don't worry, we won't unplug grandma.
Now, there's a good old phrase, you know, fool me once, shame on you.
Fool me twice, shame on me.
What do you mean you won't unplug grandma, Mr. Emanuel?
Well, and look, what about when Obama gets unelected or in eight years when he gets replaced by a Republican, then you're turning it over to the next equivalent of Dick Cheney.
How's that?
Even if you love Barack Obama like he's your own dad, what about the next time the Republicans have the power?
Or, you know, if there's that much of a difference there on this matter.
I mean, there's no question.
What I'm very, very concerned about also with these deals with the drug companies, first of all, I think I have the secret deals on the public interest.
Let's go through, again, go back to a specific on it.
The deal is that the drug companies are going to provide $80 billion in so-called savings.
Now, I want to give a big up to a brilliant investigative reporter, a young guy, Ryan Grimm of the Huffington Post, who actually got the memo in which a big pharma, Tozin, wrote down what big pharma is giving and what they're getting.
Now, it's $80 billion, which Obama, by the way, acknowledges.
He doesn't say there was no secret deal.
He says big pharma will give up $80 billion.
So he's already acknowledged that the deal has been made.
The $80 billion, though, of what?
I actually, because I used to study health care economics at the University of Chicago hospitals, where Michelle Obama, by the way, was a trustee.
And I went back, you know, looked at some of the numbers and records.
It's $3.6 trillion, $3.6 trillion in drugs over the next, that we're going to pay for drugs over the next 10 years, minus $80 billion.
That's 2% off, 2.2% off, Scott.
That's what this creepy deal gets us.
And then to forego, in exchange, it foregoes the right to try to negotiate anything further is the point.
It says, okay, the Veterans Administration right now gets a 40% discount because it buys in bulk for veterans.
Medicare, which is even a bigger buyer, is not allowed to bargain for a discount.
It's insane.
Let's just skip everything else and just get our discount.
That's 40%.
Just let the free markets work.
We have NAFTA, which says that you can import cars and lumber tariff-free from Canada.
But God forbid drugs.
Why can't we just say let the free market flow in drugs?
That would save us 15% to 30% if we could use the threat of bringing in drugs from Canada.
Understand, by the way, what that means, bringing drugs from Canada.
Drugs manufactured in the United States by drug companies like Pfizer in the United States, shipped to Canada at a discount because they do buy in bulk for their national health service, then reshipped back to the United States.
So we could say, look, we'll either get it from your supplier, from your wholesalers in Canada, or we'll get it from you here.
Wait, wait, wait.
Leave out Canada for a second.
If they were simply allowed to negotiate, say, over the next, I don't know, 10-year period or whatever, what kind of savings could you expect above $80 billion?
A million percent above that?
A thousand percent?
Ten percent?
Well, I would say it would be easy to figure over 10 years we'd have a trillion-dollar savings, so maybe 120% or 1,200% or at least 1,000% better deal.
If we simply said, we're going to bargain.
And, in fact, I do wonder if Obama, through his executive power, can simply say, we're bargaining anyway.
I mean, you know, Bush wasn't too careful about some of those laws, and I think there's a good case to be made that you can't tell an executive agency not to get the purchase price, no matter what is written in the law.
And so the question is, I think Obama can just do it, do the right thing.
He doesn't need to meet in a dark room with Billy Tozin.
And I'm very, very concerned that just meeting in a dark room with Billy Tozin, we don't know at all.
And, in fact, it took Ryan Grimm, this great reporter, to get the actual memo.
And even the $80 billion, I'm beginning to see a suspect, because now that I see the details of it, and it's highly technical, but let me give you one aspect of it.
One aspect is filling in what's called the donut hole.
Seniors do not get coverage under the drug prescription plan, the new drug prescription plan, after they spend $2,000.
But then it kicks back in at a higher level, $5,000 or $10,000.
So there's a hole of non-coverage in the government program, which is politically devastating.
So anyone who fills in that hole is going to be a big political winner.
So that's what the drug companies were offering.
We'll fill in the hole.
We'll say that we'll cover 50% of the cost of medicine in that Medicare donut hole.
And that's where most of the $80 billion is coming from.
And, you know, keep in mind that what that means is that they're actually selling more drugs.
Most drugs are highly profitable at 50% of their price because the marginal cost, the added cost of making an extra pill, is very, very small.
So it's unlikely that the drug companies will lose a dime on that provision.
And that's the biggest hunk of the $80 billion.
So they gave up very, very little and got much, much, much.
When you look at the details, you really want to puke.
Well, and they try so hard, at least on TV, to make this just a political football, which I guess speaks to the future of any, well, all government control of health care that we already have and any more we might have.
But the whole thing seems to be portrayed as this kind of black and white issue, left and right issue.
And yet, you know, I was watching MSNBC, and they have the advocate of the single-payer system and all the progressive stance that I guess you agree with and so forth.
And then they have on the other side, and it's the lady from the insurance company lobby, and she's saying, look, we're totally on board for this, this, this, this, this, this, this, and that.
We love it.
We think it's great that you're going to pass a law forcing everyone to come to us, to make the entire United States a captive market for us to prey on.
That's beautiful.
We're for that.
We're just not for the one other thing that might cost us a little bit or whatever.
These are the two sides of the debate going on, representing what kind of law is going to be passed, as opposed to the debate out in the street, which is more, you know, ACORN versus the Glenn Beck fans or whatever, and breaks down in what appear to be much more opposite stances.
Well, what I'm concerned with, yes, is that the whole debate is poised.
It's about whether grandma will be unplugged or not.
And while I definitely don't believe Mrs. Moose's line that there's going to be some death panel, I don't trust the Obama administration's backroom dealings with Billy Tosin or Chip Kahn of the American Hospital Association.
No, there won't be a government panel, but instead will be turned over to the ethno-rejecto-bot, which will unplug grandma because you'll be denied coverage.
And I'm very, very concerned that that will now be in a government-enforced system.
We have death panels now.
What I'd like to do is see an end to that.
So I don't trust, yeah, the debate is totally poisoned, completely poisoned, because we're only looking at those couple of options that are thrown in by two sides.
One, you know, the crazies don't do anything, which we cannot support, because the current system is a disaster.
And the other is that we have to have some horrendous private-governmental combine, which is going to mandate that we participate at a high cost in a horrible system.
And that's what I'm very concerned about.
There is, though, for example, libertarian solution, which is a true and free market in medical services.
I don't agree with that one, Scott.
But that certainly is not on the table.
No one is discussing it.
No one is dreaming about it, or even applying some free market solutions like importation from Canada.
Right.
That's NAFTA, right?
Well, let me ask you this, because you're a reporter.
Report on this to me.
Are the people, at least the TV people who talk about this on the cable news shows and so forth, are they just really incapable of thinking beyond such binary, kind of both sides, ways of framing issues?
I mean, I saw an interview of Ron Paul, where he was advocating the total laissez-faire libertarian solution, and it was like they just couldn't understand.
They continued to kind of reset back to he was arguing for the status quo of what we have now, even though he said ten times, no, I want to repeal everything we already have, because it's already fascism, it's already horrible, and what we need is a free market.
It was like they couldn't compute in their stupid little brains on the TV show there.
What's the matter with these people?
Well, what's the matter is that they are not supposed to take on the subject.
For example, something very, very simple.
When he said they don't compute, you're darn right.
Do any of them know anything whatsoever about this subject?
I mean, we just lost Robert Nobak.
It's like another gaseous, empty hole.
Are we missing any information because of his passing?
I don't think so.
I know that's a cruel thing to say.
But these talking heads know nothing and want to make sure that you stay ignorant on the topic.
For example, when Obama's running around saying, well, we cut this wonderful $80 billion deal.
Did anyone say $80 billion of what?
I couldn't find anywhere.
I had to do the calculations myself.
These guys are never going to do this stuff that it's 2%.
And by the way, there's a deal for so-called savings of $155 billion on hospital costs for the next 10 years.
Well, guess what?
Hospital costs in the next 10 years are $26 trillion.
So the deal cut by the Obama administration, which has gotten no attention, with the hospitals, is for one half of 1%.
Now, are you getting that information on these talk shows?
And very frankly, I'm not sure why Ron Paul should be on there because I don't know what he knows about this topic.
Why doesn't he get someone who knows something about it?
He's a doctor.
He's delivered 4,000 babies.
Yeah, but he hasn't delivered health insurance.
I mean, one of the problems is that, look, we're getting no information.
Well, he's an economist.
You know, we're getting no information, real hard information.
That's the problem that's missing here.
And the entire debate is whether Mrs. Moose is correct about death panels and whether, you know, Obama's a nice guy, and even, to some extent, it's almost a distraction for him to be called out on these meetings.
I actually never expected much else other than backroom meetings.
What I'm concerned with, though, is what we are getting, of what this Obamacare really does do for us or not and whether it's the way to go at all.
And, you know, I think that that's the problem, that there's virtually no information out there.
For example, probably the most important part of the entire bill, which is probably the part, if it passes, is the only thing that's going to pass, which is to eliminate the ability of insurance companies to turn you down on a preexisting condition.
Well, that's already, by the way, the law in several states, including the state of New York.
And people in New York have insurance coverage, and the world didn't come to an end because New York has a rule against denying people coverage because of a preexisting condition.
So if we make that nationwide, it'll cut everyone's cost and we'll expand coverage.
Well, and even there, all you've got to do is, again, repeal protections and just allow people in Texas to buy insurance in New York.
Right?
Okay.
Now you're, yeah, that's one thing.
That's right.
Cross-state buying.
I mean, that's what the Interstate Commerce Clause was for in the first place, to prevent those kinds of protections from interstate trade within the United States.
Well, see, yes.
You could, right, you could end the issue immediately by saying, if everyone could buy in New York, then that would end that type of preexisting condition disaster.
You know, it's very interesting.
They allow you to get a credit card from Citibank that actually says South Dakota or Delaware on it where there are no interest charge restrictions.
But you cannot buy drugs from Canada or health insurance from another state.
So in other words, it's very interesting.
When it's pro-corporate, there's suddenly a free market and state lines are right.
Right.
When the free market might take away someone's profit, suddenly we regulate.
This is, I mean, I can understand the frustration of libertarians who do see the concept of free market utterly abused.
Now, I've got to tell you, Scott, I'm going to take issue with you on the issue of a libertarian health care solution because I can tell you right now, you know, like I'm sitting here in front of a computer.
I won't tell you what brand, but it's an expensive one, right?
And I can choose to get an expensive computer.
Or I can choose to get a cheap one.
Or I can choose, in fact, though with difficulty, to go without.
I can't say, you know what, I think I don't need that pancreas this week.
No, doctor, that's too expensive.
Give me a cheaper one.
Yeah, but here's what you're missing, Greg.
There's no choice.
Here's what you're missing, though.
The cost of computers have gone steadily down, down, down as the quality has gone up, up, up.
What do they say?
The bankerships double in power every two years.
And that's the exact opposite of the medical industry.
And why?
Because the medical industry is such a fascist industry, and we have basically a free market in computer manufacturing.
Don't you see?
Well, I'm not going to disagree that the horrible combine, we have kind of the worst of both worlds now.
We have government in deep involvement.
The government pays roughly a little bit more than half of all medical costs in the United States, as it is.
After all, if you're in Medicare, if you're 65, you're part of a socialized medical system if you're 65 and over.
So we have most medical care in America covered by the government anyway.
We just have a little bit of the free market left.
And that system of government-private combine is that kind of fascistic system, and I'm using that in a very technical sense of fascistic system, which is the worst of all worlds.
Right.
And see, this is what Ludwig von Mises said, was that the middle of the road always leads to socialism.
Once you get a little bit of it, the government will always drive up prices and screw everything up more and more until the people end up demanding that they want the bill is so high that somebody else has to pay it for them, and then you end up with the total state, which is where we're headed.
Well, I don't think so.
I don't think we're headed to the total state because, as you know, I've worked for BBC television, lived in England, and had a total state system.
And by the way, very, very important to understand, when I say it's a total state system, it is a misconception that there is national health insurance in Britain.
There is no such thing as national health insurance in Britain.
There's a national health service in Britain.
Just like we have socialized fire departments in the United States, when you have a fire, you don't call your insurance company.
You call the fire department.
It's the service provided by the government.
When you're ill in England or France or Germany and you're ill, you don't call your insurance company.
You go to your health service, and that is a relatively inexpensive, relatively well-functioning system, certainly better functioning than the United States, and a heck of a lot cheaper.
So I've seen socialist government-controlled health care, and it works.
Yeah, but there are serious problems with Britain's health care, too.
I read one in the London Times, and you can see the economics of this at work.
Again, I know you're a University of Chicago-trained economist.
You can see exactly how this works.
Sonograms have been around for 30 years or 40 years or something, and this whole time they've been able to tell if the baby's got his umbilical cord wrapped around his neck in there.
And if so, then they do a caesarean section in order to make sure that it doesn't tighten like a noose around his neck.
The problem is, at least at this one hospital, as part of the national health system in England, was that when they find with the sonogram that the baby does have the umbilical cord wrapped around his neck, they have to hospitalize the woman until she's ready to give birth, which could be months.
And you know what?
We just don't have the beds for that.
So you know what they did, Greg?
They quit doing the sonograms in order so that they wouldn't have to, which this is, again, something that, you know, medical technology has taken care of this problem more than a generation ago.
And here they quit doing the sonograms so they wouldn't have to bed the women, and so babies were dying.
And you know that in a free market system, when that pregnant woman comes in, she is a customer, and they're glad to have her.
Only government complains about having too many customers.
She is bringing in, she's paying for her own bed plus a little bit more, and so it's in everybody's interest to take good care of her and her child.
Right?
Well, wait.
Wait just a second, Scott.
That's very interesting.
No one, there is no bar in the United States.
First of all, you're implying that all pregnant women in the United States get sonograms.
No, no, no.
Again, look, look.
No, no, no.
I'm wrong all here.
I'm saying we need to completely repeal every law we have in America all the way back to 1791.
I'm not saying, I'm not advocating for the default of what we have now.
I'm just saying you can see how the economics of socialism is killing those babies in England, is what I'm saying.
Well, I disagree.
In two ways.
Number one, they have a lower infant mortality rate than the United States.
Well, I'm just saying in that specific example about not doing the sonograms anymore.
Number two, you are also taking one of the worst systems, socialized systems, and not comparing it to France or Germany.
Believe me.
Remember, if you go to the World Health Organization, which ranks nations by health care service, you have France at the top.
You have France at the top.
And the United States is number 37.
Now, England is way down at the list because the British public has made a decision since Thatcher to spend less on health care.
A national decision was made, which I think is a stupid one, to underspend on health care.
So they just don't spend enough of their GDP.
In the U.S., we spend way too much.
In England, they spend too little.
In France and Germany, they spend about the right amount, and they have fabulous, absolutely gold-plated health care.
Now, you're going to always find mistakes anywhere.
But, you know, if you're going to use the British system, yeah, it's not far from the best.
But it beats the hell out of the U.S.
And I would add that there is no law in the United States that says someone can't set up a sonogram company and take care of poor women who need prenatal care.
And I haven't seen the market fill in that gap.
Well, but, of course, you have to jump through a million government hoops.
I mean, how many lawyers would you have to have if you wanted to set up a medical practice?
And would it be of your design, or would it be of the law's design?
I mean, to ask the question answers it.
Well, there's no question.
We now have something new in the last few years of a massive increase in private hospitals, which we didn't have when Clinton was taking his disaster stab at changing the system.
We have a massive increase in private hospitals and a massive increase in the margins obtained by health insurance companies.
When Clinton was talking about changing health insurance, he was looking at a time when insurance companies were making 2% to 5% margin on insurance.
That's all they were keeping.
The rest went back out to care.
Now insurance company margins have increased by 500%, like about a fifth of what we pay goes right into the insurance company pockets and operations.
So now you have this massive, massive increase in the profitability of the insurers, so they don't want to give that up.
Now, again, a lot of that has to do with the fact that the U.S. government pays the bill, more than half the bill.
So the insurers are basically collecting from our captive treasury, and they're writing rules like these no-bargain rules that make sure that their profits are insured.
So why do the private hospitals now provide care cheap when they can figure out a way to build a government under some program and crank those prices through the ceiling?
Well, and as you said, it is the worst of both worlds, because you have the profit motive, but it's not tempered by risk in the market.
They have their hand in the till.
So let me ask you this, because you mentioned about, I mean, it sounds to me you got exactly right.
They'll charge the maximum when the government's the third payer, is basically what you're saying.
And this is one of the points that Ron Paul makes, is that when he first started in medicine, he worked at a church hospital, and they charged everyone the absolute minimum for everything.
And when a person is trying to compete with government in the marketplace, if I'm going to the doctor, and someone on Medicare is going to the doctor, and I'm trying to pay cash, and the guy on Medicare, you know, the doctor can charge the maximum to the state, he's going to charge me that same price or not see me at all.
Right.
So you do have a problem.
You do have a tremendous problem with this hybrid system in which government is picking up private bills.
We have to go one way or the other.
You have to either add a greater element of the market to drive down prices, or we have to have a simple and complete government takeover.
And I don't mean insurance.
Again, we don't have, the best systems do not have national health insurance.
Germany and France don't have national health insurance.
They have a national health service.
And we saw socialized medicine in California worked well for many years, for decades, under the Kaiser Permanente system.
World War II required a massive influx of workers in the aluminum and shipbuilding plants, steel plants owned by the Kaiser family in California.
They had to set up and bring in, they had to create an entire hospital system for California, and they let everyone in on it.
And for decades, the people of California had a low-cost system in which basically everyone participated.
Doctors were on salary.
All your costs were covered from beginning to end.
And it was only when Clinton and then later Bush Jr.pushed the subsidy of private insurers to undercut Kaiser that the Kaiser system began to fall apart as people left the system.
And basically, we've tried socialized medicine in America and California.
It worked pretty well.
Kept the costs down and the health care high.
And it was all tax money and state-run?
No, that was actually, that was a private operator.
I will agree.
In the case of a private operator.
But it basically required that the other privateers be kind of kept away from that market.
And again, look, I have to agree with you.
The only reason privateers could come in and compete with Kaiser, whose costs are incredibly low compared to most operators in California, the Kaiser hospital system, is that in California Bush came up with this massive subsidy to pick off Medicare patients into a private health care system.
So Kaiser has had a tough time competing against government-subsidized private operators.
Once again, this is, again, using a technical term, a fascistic system in which government and private enterprise team up, team up to force people to pay for a broken system.
You and I don't get a choice about whether I get, whether I am subsidizing someone else's overpriced Medicare policy.
That's clearly not a free market choice.
And if that subsidy removed, another thing, by the way, that Obama is trying to remove, and that I applaud.
But I don't know, again, I don't know if he's going to get that.
If he keeps going with the idea that he needs the insurers to agree, and the hospitals to agree, and the drug companies to agree with their own cut in profit, I don't see that happening.
He's got to get away from the idea that they need to agree on these points.
They have to agree on their own demise.
They're not going to agree to it.
Yeah, insurance companies on board for sticking it to the insurance companies doesn't sound too plausible to me either.
Well, you know, to me, I even especially look at the hospital deal.
When you're talking about locking in $26 trillion in charges over the next 10 years, which includes a hike of $6 trillion embedded, and the Obama administration says we're going to lock that into law, if you cut the projected amount by one-half of one percent, I'd rather take my chances that we'll come up with another way of cutting that by a half percent than locking in that massive increase.
Now, I will say my suspicion is, listening to Obama's speeches where he's vilifying the insurance companies, and praising the hospitals and doctors and AARP and the drug companies, that his strategy may be we're going to buy off everyone in the debate.
We're going to buy off all the guys that shot down the Clinton plan and put all our guns aiming at the medical insurer.
Of course, he just dropped his biggest weapon.
He's agreed to stand down his Howitzer, which is the public option that is a public competitor to a private system.
So I'm not quite sure how this strategy is going to work.
But that does seem to be his strategy.
Let's buy off all the opposition except for the insurers, because they're the big weight that's been put on us.
And I agree with that.
They're the worst players here.
And we're going to go after them.
Yeah, but even then, they're only going after them rhetorically.
Like you already said, they've got this whole thing where they're going to force everybody to join this captive market like car insurance, where you have no choice but to buy it, or else they fine you.
Yeah.
What are we going to have?
Big busts?
We're going to round up thousands of people?
Up against the wall, show me your health insurance?
Yeah, exactly.
Homeland Security, man.
Yeah, right.
Medical security, police.
I agree.
I'm quite frightened.
Billy Tosin is now deputized to kick in our doors at midnight.
Yeah, they'll be like the private thugs that collect music royalties.
Yeah, I'm worried that we're going to give out Marshall badges to Billy Tosin and his gang.
We're going to have these midnight raids where it's going to have these guys wearing big pharma badges and kick in your door and say, we've got a report from an informant that you don't have our medical insurance card, and that we've heard that you are keeping drugs from Canada, insulin from Canada for grandma.
Oh, man.
So, Greg, are we going to see you at the next Tea Party rally with all the Glenn Beck fans?
Oh, my God.
The problem is the right-wing guys are losing the plot with all these silly scare tactics.
I'm not worried about whether Obama doesn't like white people like his mommy.
Obama is a white people.
Let's remember that.
But you have to remember...
There's skin tone and then there's white, okay?
I'll get killed for that, David, but it's true.
David Allen Greer on his short-lived show on Comedy Central said, oh, come on, he barely passes the brown paper bag test.
So all I'm saying is give me a break.
If the right-wing would get itself together and say what we need is to open the market, I'd be a bit sympathetic to that because I don't see socialized medicine heading down the road here.
So that I would not, you know, if people would talk intelligently instead of silly scare stuff and attacks upon Obama's personality.
It's so funny the way things realign, especially when the party's in power flip.
You know, Ron Paul was saying, look, if we just end all the war in the empire, I'd go ahead and compromise and go for socialized health care.
You know, I'd be willing to compromise for a free market.
It's better than this fascism we have.
Well, yeah, that's the point.
We've got to go one way or the other in health care because, you know, you and I will disagree.
Because I did study under Milton Friedman, who was my mentor.
And I started out working with him.
I later moved to energy and regulation, but I started out in hospital studies, the Center for Hospital Administration Studies.
And I quickly realized that, to me, free market doesn't work because free market is all about choice.
And you just don't have a choice when you're ill.
And when those who've been to a hospital know, they don't give you a choice when you walk in and say, here's this procedure costs this much and this procedure costs this much.
But you can go to the hospital down the street where it's cheaper on this or that.
You don't get a choice.
They drag you in.
They bill you to death.
And then a month later you get a bill with a threatening notice that they're going to seize your bank account and sue you.
And that's how – that's not a market.
It's hard to have a market in medical care because you don't have a free – you can't have a free market unless you have a free buyer.
Well, but, I mean, presumably people could take care of those things beforehand a bit, right?
I don't think so.
You know, we'll disagree on this, but, you know, that's really a kind of blue-sky debate.
What we have now in front of us is a backroom deal.
It's a type of – frankly, a type of sleazy deal that Dick Cheney would cut, except that there's a very – you know, as I wrote in – if you go to GregPowell.com, I have a piece called Obama on Drugs, 98% Cheney.
And, you know, Dick Cheney had his meetings in the bunker.
Now Obama has his meetings in the bunker.
And what's the difference?
Well, we know from the outcome, 2.2%.
That's what we get.
You know, the difference between Cheney and Obama is 2% or 0.5% to deal with the hostile.
That's the story.
And you can hear my assistant telling me it's time to go.
All right.
Well, thanks a lot.
It's always interesting to see where our minds converge and diverge.
And great reporting as always, Greg.
Appreciate it.
Thanks a lot.
See you at GregPowell.com.
Bye.
All right, everybody.
That's Greg Powell.
Best democracy money can buy, Armat House.
And Powell investigates BBC News Night.
And here's a short clip, if I got it cued up right, of Barack Obama making bold, false promises during the campaign.
And we'll tell the pharmaceutical companies, thanks but no thanks for overpriced drugs.
Drugs that cost twice as much here as they do in Europe and Canada and Mexico.
We'll let Medicare negotiate for lower prices.
We'll stop drug companies from blocking generic drugs that are just as effective and far less expensive.
We'll allow the safe reimportation of low-cost drugs from countries like Canada.