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The Keating Five Legacy

OurFuture.org Staff — Wed, 09 Apr 2008 12:34:10 -0400

William K. Black is Associate Professor of Law and Economics at the University of Missouri, Kansas City. He was counsel to the Federal Home Loan Bank Board during the savings and loan crisis of the 1980s and was a whistleblower in the Keating Five scandal. His book on the crisis is "The Best Way to Rob a Bank Is to Own One."

Twenty-one years ago today five U.S. senators met with federal savings and loan regulators at the request of Charles Keating, who controlled Lincoln Savings and Loan. They became known as the "Keating Five"—Alan Cranston, D-Calif., Dennis DeConcini, D-Ariz., John Glenn, D-Ohio, John McCain, R-Ariz., and Donald Riegle, D-Mich. The Keating Five meeting was the event that transformed the S&L debacle from a story buried in the business section to one of the worst financial and political scandals in U.S. history (though the current financial crises have proven even worse).

The Keating Five, including McCain, were perfectly situated to take action to protect their constituents. They could have held oversight hearings. They could have warned the widows. "All that is necessary for the triumph of evil is that good men do nothing," an anonymous commenter one said (in a statement generally, but inaccurately, attributed to Edmund Burke). These men did nothing.

Lincoln was (and remains) the most expensive S&L failure of an insured U.S. depository, costing the taxpayers $3.4 billion. Keating recruited the senators because the regulators were about to remove his control over Lincoln. The regulators had discovered that Lincoln had large losses and was engaged in widespread fraud and forgeries designed to hide its violation of the "direct investment" rule. That violation was the largest in history — over $600 million. S&Ls that had large amounts of direct investment always failed. Direct investments were fatal not because of their intrinsic risk, but because they were superb aids to accounting fraud, the "weapon of choice" of financial firms.

When Keating launched a jihad against the proposed direct investment rule in 1984, he used politicians as his most important ally. He began in the House of Representatives. Within a few weeks, he was able to get a majority of members to co-sponsor a resolution intended to kill the direct investment rule. The supporters included John McCain (then a congressman), Jim Wright, D-Texas, (soon to be the Speaker of the House), and Newt Gingrich, R-Ga., (soon to be Wright's nemesis and a strong critic of his aid to fraudulent S&L owners). McCain was, and remains, a strident opponent of financial regulation. Federal Home Loan Bank Board chairman Edwin Gray, convinced that direct investments posed a critical threat to the taxpayers, went ahead with the regulation.

Second, Keating tried to get President Reagan to fire Gray. Keating's lobbyist, "Mickey" Gardner, reported that they found significant support within the administration for this effort—particularly in the office of Vice President Bush (who chaired the administration's financial deregulation task force). The (Republican!) lobbyist reported in disgust that he couldn't get Gray fired because "like so many before him in this Administration, [Gray] would have to be criminally liable or worse before they would be removed."

Third, Keating followed Gardner's advice to stage a hostile takeover of the regulator in 1986. He had already used large political contributions and the lobbying of Alan Greenspan to recruit the "Keating Five." He now used several of the congressmen, principally McCain (the only Republican among the Keating Five), to help convince the Reagan administration to appoint two of his cronies to the Bank Board (which would have given Keating majority control of the agency).

Keating needed the senators' help to overcome rival candidates and internal opposition to the nominations. Phil Gramm, a more senior Republican senator on the banking committee, pushed the nomination of Durward Curlee, a Texas lobbyist representing the most notorious S&L frauds in Texas and, after Keating, the strongest opponent of S&L regulation. Keating was a major contributor to President Reagan, but he had never held elected office. His ability to convince the Reagan administration to reject Gramm's proposed nominee and agree to appoint both of Keating's proposed nominees was an astonishing demonstration of political power.

Keating also had to overcome serious internal opposition within the Reagan administration. The administration attempt to nominate Keating as U.S. ambassador to the Bahamas in the early 1980s had to be abandoned in embarrassment when it was revealed that Keating had signed a Securities and Exchange Commission consent decree to settle allegations that he had defrauded a financial institution. The White House personnel director, Robert Tuttle, was in charge of vetting Keating's proposed nominees. He called Republican contacts in Arizona (where Keating lived) and learned that Keating's had a reputation "for buying politicians." Tuttle recommended against the Keating appointments.

Keating's flaws were immediately obvious. In addition to his SEC problems, he was arrogant, domineering, rude, nasty, and a virulent bigot. Senator Garn (R. UT) refused to meet with him again after their first meeting. Treasury Undersecretary George Gould, instructed the Treasury guards to bar Keating from entry after their first meeting. Nevertheless, President Reagan rejected Tuttle's recommendation and tried to appoint both of Keating's choices. Had he succeeded, the cost of the debacle would have grown tenfold and the political scandal would have dwarfed Teapot Dome. Fortunately, Senator Dole blocked the nomination of one of Keating's choices.

President Reagan did make Lee Henkel a recess appointment in 1986. Henkel became Keating's "mole" on the Bank Board. His first substantive act was to propose an amendment to the direct investment rule (secretly drafted by Keating's lawyers) that would have immunized Lincoln's massive violation of the rule. (The amendment was cleverly drafted in a manner that did not mention Lincoln, but fit it like a glove.) Unfortunately for Keating and Henkel, I spotted the effort and blew the whistle. Henkel was severely criticized by the media and resigned in a deal with a Justice Department (in return, they dropped their investigation). (Years later, the Bank Board's successor agency "removed and prohibited" Henkel from the industry for his misconduct.) The Keating Five knew that Henkel had sought to amend the rule to immunize Lincoln, and they knew that he had resigned in disgrace. Appropriately, the resignation became public on April Fools' Day — the day before four of the senators (Riegle was a surprise no show) met with Bank Board Chairman Gray at Keating's request to urge Gray not to take any action against Lincoln's violation of the rule.

The Keating Five waged Keating's fourth political campaign against the direct investment rule. The context of the campaign was the Bank Board's effort to "recapitalize" the Federal Savings and Loan Insurance Corporation ("FSLIC Recap) in order to secure funds to further its top priority — closing the fraudulent S&Ls like Lincoln. The FSLIC Recap bill had a second vital element — it would restore the Bank Board's lapsed powers to close many state chartered S&Ls like Lincoln. This meant that Keating had a vital need to block passage of the bill.

Senator Cranston, at Keating's request, blocked passage of the bill in the Senate by placing a secret "hold" on the bill. House Majority Leader Jim Wright, D-Texas, and Representative Pryor openly blocked the bill in the House. Wright extorted Gray, demanding favorable treatment for Texas frauds Pryor, demanded that fewer Arkansas S&Ls be closed and sanctioned. (He would later serve on the Senate ethics committee investigating the Keating Five — so they truly had a jury of their peers!) FSLIC Recap was the Bank Board's ultimate priority. The FSLIC fund was down to $500 million — to insure an industry of over $1 trillion in liabilities that was insolvent by perhaps $100 billion in 1986. The S&L frauds' political allies had total leverage over Gray and he repeatedly made concessions demanded by Majority Leader (and Speaker of the House in January 1987), Jim Wright. The CEOs of each of the S&Ls that Wright sought favors for were looting "their" S&Ls — including Vernon Savings (after Lincoln, the worst S&L fraud).

Keating knew that adding the Keating Five's political clout in the Senate to Speaker Wright's domination of the House would doom the FSLIC Recap bill (which was reintroduced in 1987) and put irresistible pressure on Gray to back off from taking enforcement action against Lincoln. He made the threat explicit by telling Undersecretary Gould that he could induce five senators to either be a great help or strong opponents of the FSLIC Recap bill. (This is the conversation that caused Gould to bar Keating from the Treasury building.) By April 2, 1987, Speaker Wright's House allies had made a travesty of the FSLIC Recap bill — reducing the funding from $15 billion to $5 billion and mandating "forbearance" provisions designed to gut the Bank Board's ability to close failed S&Ls. Our only hope was that the Senate would pass a better version of the bill and that the conference committee would favor the Senate version. Keating had arranged for the Keating Five to pressure Gray at exactly the time they had maximum leverage over him.

Keating Prepares the Senators for the April 2, 1987 Meeting

Keating prepared the Senators carefully for the April 2 meeting. He sent them detailed explanations of how severely a Bank Board enforcement action would limit his ability to control Lincoln. He explained how passage of the FSLIC Recap bill would allow the Bank Board to end that control. He called Gray a "Mad Dog" and a "Nazi." He asked the Senators to convince Gray not to take any enforcement action against Lincoln in return for his promise that Lincoln would begin to make home loans.

Senator DeConcini hosted the April 2 meeting. He carefully set up the meeting for deniability. His staff instructed Gray not to bring any staffers. Each of the Senators came to the meeting without any staff. The chances of that happening without prior agreement were non-existent. The meeting was designed to make sure that if things went badly it would be the word of five senators against that of Gray. The senators thought there was safety in numbers. They were disturbed that Senator Riegle did not attend the April 2 meeting.

McCain's Attendance at the April 2 Meeting

Senator McCain has said that upon reviewing Keating's written materials about what he wanted the Senators to do in their meeting with Gray he decided that Keating's requests were improper because they called for the Senators to negotiate an agreement to escape enforcement action on Keating's behalf. McCain informed Keating that he would not attend the meeting. Keating met with Senator Riegle and told him of McCain's decision — and said that McCain was "a wimp." Riegle's aide told McCain what Keating had said. McCain, enraged, summoned Keating to his office. Keating, who dominated virtually every conversation, could not get a word in during McCain's tirade. Keating's insult, of course, was absurd. McCain is the last person in the world that anyone would believe was a "wimp." Keating, however, apparently knew how successful his taunt would be with a man who still felt (against all reason) that he had not always sufficiently resisted his North Vietnamese torturers. McCain, despite believing that what Keating wanted the Senators to do was improper, decided to join his colleagues at the April 2 meeting.

The April 2 Meeting

Senator DeConcini began the meeting by stating that "we" wanted Gray not to take enforcement action against Lincoln and that in return "our friend" Charles Keating would ensure that Lincoln would begin to make home loans. He was speaking on behalf of the group — and no Senator expressed any disagreement or difference with the position he articulated. The Senators also complained that the agency was harassing Lincoln and demanded Gray's explanation for the abuse. Gray told them there were 3000 S&Ls and he did not know the details of Lincoln's regulation, but that he had total confidence in the Bank Board's regulators for Lincoln at the Federal Home Loan Bank of San Francisco (FHLBSF). He said that if the Senators needed the details they would have to talk to the FHLBSF supervisors. Gray informed several of us at the Bank Board of what had happened at the meeting immediately after the meeting.

The April 9 Meeting

All five of the Senators attended the April 9 meeting with James Cirona (FHLBSF President), Michael Patriarca (chief supervisor), Richard Sanchez (Lincoln's supervisory agent), and me. I took the only notes of the meeting. They are extraordinarily detailed. I circulated them to the other FHLBSF participants to ensure their accuracy and Gray sent Riegle a copy. Each of the Keating Five testified that the notes were accurate and complete. The Senators again excluded their aides from the meeting. Senator DeConcini began the meeting by again using the word "we" and proposing Keating's "quid pro quo" of dropping any enforcement action against Lincoln's violation of the direct investment rule in return for Lincoln making some home loans. No Senator disagreed or distinguished his position.

Senator Cranston accentuated the group nature of the Keating Five. He was the floor manager for a bill that was very important to him and was coming to a critical vote that night, yet he left the floor and came briefly to Senator DeConcini's office to state that he supported his colleagues' position. Each of the Senators was aware of the group position supporting Keating's efforts to immunize the massive violation of the direct investment rule.

At the meeting, because it was the only way to treat to get the Senators to back off their pressure, we revealed to them that we had decided to make criminal referrals against Lincoln's leaders because of widespread fraud. Mike Patriarca guaranteed that Lincoln would fail if it continued its investment practices.

The Keating Five Prove Lucky in their (Initial) Regulatory "Opponents"

The paradox is that the Keating Five proved so unlucky in their choice of Keating as their ally and so lucky in their initial regulatory "opponents." We were not the Keating Five's opponents, but that is how they perceived us. We were their public servants trying to warn them that they were being manipulated by a fraud that was causing enormous harm to their constituents and exposing the Senators to scandal. Had Gray caved, Lincoln would have been untouchable. Lincoln would have been able to resume its extraordinary growth and expand its direct investments. No line supervisory would have dared to take on Keating. Lincoln's losses would have grown at an even faster rate than its asset growth. By the time it collapsed losses would likely have exceeded $10 billion. The Keating Five's decisive role in producing these catastrophic results would have been undeniable. Gray, however, refused to be intimidated. Keating's timing, which had seemed so perfect, proved too late. Gray had decided that Speaker Wright simply increased his demands when Gray gave in to his extortion, and that he could not in good conscience continue to give in to Wright's pressure. The Bank Board moved to close Vernon Savings (the second worst S&L fraud) and publicly criticized Wright's efforts to secure regulatory favors for Vernon.

The Senators also proved lucky in that, while Gray did not cave in to their pressure, he also could not afford to criticize them publicly given the tenuous fate of the FSLIC Recap bill. Gray's term ended on June 30, 1987. (Wright and Treasury Secretary Baker had agreed at a secret meeting that Gray would not be reappointed.) Gray's successor, Danny Wall, was acceptable to Wright. Wall, while a Senate staffer, had encouraged Gray to give in to Wright's extortion. Among his first acts was to issue a gag order forbidding me to speak to the press.

The Keating Five Prove Unlucky in Allying with Keating

Keating proved to be the worst of the S&L looters, and Lincoln the most expensive failure at $3.4 billion. Deposit insurance meant that there were no identifiable individual victims when S&Ls failed. Lincoln's parent company, however, sold uninsured, worthless junk bonds out of Lincoln's branches. Worse, it targeted widows. This created individual victims who lost their life's savings — and the face of the victim was your grandmother. Keating then compounded the Senators' problems. The Associated Press recently reported the story as follows:

The banker's attitude was summed up the day a reporter asked whether his political donations to the senators encouraged their intervention.

"I want to say in the most forceful way I can, I certainly hope so," Keating replied.

The AP quotation is correct, and it is obviously the worst possible thing Keating could have said from Senators' perspective. The first sentence of the AP story, however, is wrong, and it shows that the reporter did not grasp the trait that made Keating the worst of the looters — audacity. Keating called a press conference, but he did not allow the reporters to ask any questions. He read written answers to questions he had prepared. This was a planned statement, not off the cuff.

Keating adds Speaker Wright's Pressure to that of the Keating Five

Wall, the self-described "child of the Senate", came into office determined to avoid conflicts with powerful politicians. He promptly ordered the FHLB examination and the enforcement investigation of Lincoln halted. Both actions were unprecedented. They followed a meeting between Bank Board staff and Lincoln's leadership. The FHLBSF was not informed that the meeting would occur. It was consulted prior to the order to stop the examination. Wall then ordered that the agency re-examine the FHLBSF's findings. This was unprecedented. The review disappointed Wall because it supported the FHLBSF's findings and found no basis for Keating's complaints against the FHLBSF. Despite these facts, the Bank Board refused to consider the FHLBSF's recommendations to place Lincoln in conservatorship or take stringent enforcement actions based on the violation of the direct investment rule and fraudulent acts. (FSLIC Recap passed in August 1987, and restored the Bank Board's lapse conservatorship powers.)

The Wall Bank Board also refused to be briefed by the FHLBSF on its recommendations. Both refusals were unprecedented. Wall then sought to induce the Federal Home Loan Bank of Seattle (FHLBS) to permit Lincoln to transfer to its jurisdiction. The FHLBS declined, stating that it agreed with the FHLBSF's concerns and that they were disturbed by Keating's response to their question of why he was neither an officer nor board member of Lincoln: "I don't want to go to jail." This action was unprecedented. While the Bank Board Chairman Wall and Board Member Martin declined to be briefed by the FHLBSF, they met several times with Keating. This was unprecedented.

When Bank Board and FHLBSF staff members were to meet with Keating in early 1988, Keating demanded that I be excluded from the meeting, and the Bank Board acceded to his demand. At another meeting with Lincoln's leaders the FHLBSF was allowed to have only one representative present — and only on the condition that he would not be permitted to speak. All of these actions were unprecedented.

Remember that by this juncture the Bank Board had confirmed that Lincoln had committed the largest violation of a rule in history, was engaged in widespread forgeries and other forms of deception that had led the agency to file an extensive criminal referral, was investing primarily in assets (direct investments) in quantities that had proved fatal in every S&L, and was growing rapidly. By any logical standard it should have been the agency's top enforcement priority. Instead it got unprecedented favors that destroyed the agency's integrity and exposed the taxpayers to enormous losses. Fear of Keating's political power was the only possible explanation for these actions. James Boland, Wall's chief of staff, emphasized this fear in discussions with the FHLBSF's top supervisor, Michael Patriarca. He said that Keating was so powerful that: "he can get you in ways you'll never know you've been got."

Keating's and Wall's mutual problem, however, was that the FHLBSF refused to back down. Keating's top priority became another unprecedented demand — Wall must remove the FHLBSF's jurisdiction over Lincoln. Keating now used the Keating Five to recruit Speaker Wright as an ally and to make Wall aware of that alliance. He used Senator Cranston to set up a late afternoon meeting with Wall for January 28, 1988. He used Senator Glenn to set up a luncheon with Speaker Wright on the same day. At the luncheon meeting Keating experienced the second occasion in which a prominent politician dominated the conversation. Speaker Wright dominated it, denouncing Gray and me. The Speaker then invited Keating to come to his chambers and work with his staff. Wright urged Keating to get me fired and to sue Gray and me. (He soon sued both of us for $400 million — suits eventually dismissed by the courts.) When Keating met with Wall he first made clear that he had just come from a meeting with Speaker and Senator Glenn. Keating next told Wall:

That is one man in Congress you would get along with much, much better if you took care of the problem in San Francisco. There is a red-bearded lawyer that's a real problem. If you took care of that problem, you would get along much better with Speaker Wright.

Keating was referring to me. Unfortunately, for Keating (and Wall), Wall could only fire me "for cause" and he had no cause. The only way to take care of the problem was to remove the FHLBSF's jurisdiction over Lincoln Savings. Wall promptly ordered his staff to reach an "amicable resolution" with Keating. The only way to do that was to remove our jurisdiction. In addition to that unprecedented act (which sent shock waves throughout federal regulators), Wall agreed that the FHLBSF's examination findings (which the Bank Board had confirmed to be accurate) could not be used. This too was unprecedented.

The result of Wall's surrender to political intimidation was devastating. Lincoln remains the most expensive insured depository failure in U.S. history. Lincoln's parent defrauded over ten thousand widows. The Bank Board's reputation was destroyed (the 1989 legislation terminated it). Wall, of course, denies that he capitulated to Keating's political power. To admit that he did so would have destroyed Wall's efforts to remain head of new S&L regulatory agency. The facts, however, falsify Wall's denial. Note that the Wall Bank Board never took any enforcement action against Lincoln's massive violation of the direct investment rule even though it agreed that it was the largest regulatory violation in the agency's history. This immunity is precisely what Keating sought to achieve through his mole's (Lee Henkel's) proposed amendment to the direct investment rule and the Keating Five's effort to induce the Bank Board not to take an enforcement action in return for Lincoln beginning to make home loans.

McCain's Relationship with Keating

Senator McCain is the only member of the Keating Five still in office. He was unique among the group on several dimensions. He was the only Republican. He had the longest, closest relationship with Keating. The relationship was social — Lincoln's airplanes flew Senator and Mrs. McCain, their children, and a nanny to stay at Keating's vacation home in the Bahamas. Senator McCain blames his failure to reimburse the expenses (which he was required to do by law), on his staff. He reimbursed only years later after the scandal broke. No other Senator had a close social relationship with Keating or similar airplane use issues. Keating was a bully and a nasty bigot, whom many politicians refused to deal with once they knew him, but Senator McCain viewed him as a personal friend (and major contributor) for a decade.

Only Senator McCain (and Lee Henkel) had a financial conflict of interest involving the direct investment rule. Senator McCain's wife and father-in-law were engaged in a direct investment with Lincoln. Had the Bank Board taken enforcement action against Lincoln's violation of the direct investment rule Senator McCain's wife and father-in-law's investment would have been placed in substantial risk of loss.

Only Senator McCain was in the House at the time Keating enlisted a majority of the House to co-sponsor his resolution designed to kill the direct investment rule. He was the only member of the Keating Five, therefore who was a co-sponsor. More generally, Senator McCain was the Senator most opposed to financial regulation in general and Gray's "reregulation" of S&Ls in particular. As his March 25, 2008 speech on the ongoing mortgage crisis makes clear, he continues to call for greater deregulation of the kind that is causing our financial crises to become more severe and more common.

Senator McCain's efforts to convince the Reagan administration to give Keating de facto control over the Bank Board by appointing two nominees chosen by Keating to run the agency were not unique among the Keating Five, but he was the most important support for Keating's effort because he was a Republican.

Senator McCain was not unique in not giving direct aid to Keating after the April 9 meeting. It is important to consider how Keating shaped Wall's perspective of the Keating Five's support. He used both Senator Cranston and Senator Glenn's active, continuing support (in February 1988, almost a year after the April 2 and April 9, 1987 meetings) to show Wall that he retained the Keating Five's loyalty and he used Senator Glenn to help recruit Speaker Wright as an ally — knowing that Wall had advised Gray to give in to Wright's political pressure. Wall had no way of knowing that Senator McCain and Senator Riegle were no longer taking affirmative actions to help Keating get the Bank Board not to bring an enforcement action against Lincoln.

Omission and Commission

None of the Keating Five members helped protect their constituents by supporting regulatory efforts to end Keating's looting of Lincoln. We told them in fair detail at the April 9, 1987 meeting that it was a fraudulent institution and that it was guaranteed to fail if it continued its policies. The Keating Five were well aware of their political power and Keating's political power. They were aware that the Wall Bank Board was taking unprecedented actions in favor of Keating. We could not act. We were gagged. We were forbidden to examine Lincoln. We were excluded from meetings or ordered to remain silent. The new examiners were forbidden by Wall to speak to us about Lincoln.

I noted that the senators structured the April 2, 1987 meeting to ensure deniability by designing it to be the word of five Senators against one "bureaucrat" should things go wrong. They knew that the meeting was dangerous because they knew agencies are supposed to take stringent enforcement actions against massive, intentional violations of rules — particularly when the nature of the violation causes failures. They also knew that Keating's mole, Lee Henkel, had just resigned in disgrace after we had blown the whistle on his attempt to immunize Lincoln's violation of the direct investment rule. This is why they excluded all staff from the April 2 meeting. When the meeting became public, along with Gray's criticism of their effort to pressure him to agree to Keating's quid pro quo deal, each of the Senators lied about the meeting. They lied by claiming that Gray had lied about their support for Keating's deal. (Eventually, it emerged that Senator DeConcini was reading from a staffer's memorandum that expressly stated the quid pro quo.)

The Senate ethics committee ignored the Senator's false statements about the meetings. (It also failed to investigate the impact of the Senator's actions in Keating's behalf.) I believe that structuring a meeting to set up a lie, lying, and defaming another person you know has told the truth (i.e., claiming that Gray's statement about the quid pro quo proposal was false), demonstrate severe character flaws and should be considered unethical in the context of the U.S. Senate.

Learning from the Cultural Conservatives, Part II: Talking Up The Worldview

Sara Robinson — Wed, 05 Mar 2008 16:00:22 -0500

This is Part II of a series on the strategies used by the conservatives to promote their worldview, and the lessons progressives can learn from them to promote our own. Part I is here.

As we saw in the previous post, the entire conservative movement was organized around the single goal of changing the country's dominant worldview, weaning it away from liberal assumptions about how the world works, and teaching Americans to assign meaning to the world using conservative values instead. They firmly (and rightly) believed that that once the rest of the country evaluated and prioritized reality the same way they did, the rest of the conservative political, economic, and social agenda could be implemented with strong popular support, and no meaningful resistance.

But the early architects of this plan, including Paul Weyrich, also realized that having strong ideas wasn't enough. To succeed, they would also have to master the arts of persuasion.

"Ideas do not immediately have consequences," wrote Eric Huebeck in his 2001 update of Weyrich's long-followed plan. "They do not have an impact in direct proportion to the truth they contain. They have an impact only insofar as adherents of those ideas are willing to take measures to propagate those ideas."

Or, as a more cynical conservative once put it: You gotta catapult the propaganda.

This may seem like heresy to liberals. We like to believe that the progressive worldview is so patently superior that intelligent people will readily see the logic of it, and then sensibly adopt it as the best way to think and live. If people resist it, it's only because they don't completely understand it (yet). Fixing that is simply a matter of education: we just need explain our vision more clearly. Our own resolute faith in the power of reason convinces us that reasonable people will be reasonably persuaded by reasonable discussion of reasonable ideas.

It's time to consider the reasonable possibility that we may be wrong.

To our enduring detriment, movement conservatives never bought into that idea. They understood from the start that their ideas (which, frankly, don't stand up nearly as well in the face of clear rationality) would need to be aggressively promoted and sold, using emotional appeals that went to the heart of human beings' deepest desires and motivations. People don't commit their time, energy, and fortunes to a movement because it's all so logical and sensible. They join up because they've taken the movement's worldview deep into their hindbrains as their basic model of reality, and made an emotional connection to the ineffable feelings the movement deliberately stimulated -- in this case, fear, hate, and xenophobia as well as solidarity, reverence, hope, and security. In this model, the ideas only exist to provide a way to rationalize and express the deeper feelings the movement has already activated through other appeals.

Liberals operate from a position of strength on the battlefield of ideas -- and this may be why we consistently overvalue reason and undervalue emotional appeals. Our ideas do have a strong intellectual appeal. But we tend to forget that they also have a far healthier emotional appeal, since we don't have to resort to stimulating fear and hate to get people to buy into them. Still, we've been notoriously terrible at stirring people's more positive and hopeful emotions, and getting them to resonate on a soul-deep level with the values that define our worldview. Clearly, we could stand to learn a thing or two from the conservatives about how they did this.

In this second part, we'll look at some of the essential communications rules Huebeck gleaned from Weyrich's original plans -- and see how these rules might be adapted to make us more effective at winning people's hearts and souls as well as their minds.

Don't be afraid to set 'em on fire
The hard, cold fact is that words and logic will never get us down to the deep, pre-rational places where people's foundational worldviews are shaped. If we want to create change at that foundational level, we need to engage them emotionally, in the pre-verbal places where images, poetry, myths, and ritual reside.

The first thing we need to do is lighten way up on the long recitations of facts and figures and programs and policies. Most non-wonks don't care about this stuff -- the details just make them yawn. They're bored by promises of new programs: most Americans are pretty well convinced by now that whatever the program is or how well-funded it may be, they probably won't see any personal benefit from it, so it comes across as an empty promise. Yet Democratic candidates all the way back to Walter Mondale have been running and losing on just this kind of dispassionate, uninspiring wonk-talk. And then we wonder why the conservatives keep whipping our asses.

You'll seldom catch conservatives talking wonky. They're told from their very first candidate trainings to steer clear of anything that dwells on abstract facts or figures. People want viscerally engaging stories -- emotional stories about people like them, inspiring mythic tales taken from history that express their highest ideals, vivid invocations outlining the shining details of a better future to come. They want clear-cut portrayals of good guys and bad guys that reverberate with the promise that justice will be done, and that they will be honored in the end as agents for good. We may grow up, but we never lose our childhood taste for an illustrative tale well-told. The conservatives knew this from the beginning, and turned this knowledge into a potent political strategy.

Mitt was singularly bad at it, which explains much of his failure. (McCain's not much of an inspirational speaker, either.) On the other hand, Obama is singularly good at it, which is why he's doing so well -- even though the emotional outpouring he inspired by hitting these buttons makes a lot of more reason-based liberals squirm and reach for words like "cult" and "mass hysteria." It's potent proof of just how very uncomfortable we are with this -- and also that we need to get serious about getting ourselves over it. Because Obama is doing exactly what every great progressive icon of the past did -- and every modern progressive needs to learn to do -- if we're going to inspire the nation and get people to commit themselves, body and soul, to our worldview.

We've got a different message; but we've also got a long tradition of progressive speakers (Jefferson, TR, FDR, JFK, MLK) who knew how to tell our story in ways that grabbed people's imaginations and set them on fire. It's a proud liberal tradition that we are way past due to reclaim -- and the conservatives are going to keep beating us until we do.

Talk in tangibles, not abstractions
Offer clear examples wherever possible. Use real people in real situations. Tie values statements to everyday experiences. Listeners need to understand how your message ties directly into the way they live their daily lives, so bring it down to ground level.

When we do use numbers, it should be in ways that are direct and personal. This war is costing your family $XXXX per year. Cancer rates in your neighborhood are up X% due to lax oversight of the plant. This program will enable XXX more kids from this county to afford college. If it can't be expressed in terms of direct, concrete benefits to the individual listeners, it's probably a waste of breath.

Live out loud
Weyrich declared that the cardinal premise of the conservative movement is that "the power of example is far greater than the power of exhortation." They actively sought out and promoted people who were living their worldview, and held them up as examples to others of the success that awaited anyone who joined up. They understood that the best salesmen for the cause were the people who weren't afraid to live their conservatism right out loud.

Liberals tend to break out in a rash if you suggest that we should allow ourselves to be held up as role models for anyone. Who are we to be telling anyone else how to live? And besides: who needs all that scrutiny and judgment? But I'd argue that we might want to reconsider this. Like it or not, when we step up as leaders, people are watching -- and many would-be progressives will be judging our movement and modeling their own lives after our example. Being a leader means accepting that burden with some grace, and recognizing example-setting as a central part of the job.

It's an act of courage to step up, tell the world, "This is what a progressive looks like," and then commit yourself to living up to the movement's highest ideals. But it would only take a few million of us openly living out our values that way -- not full of self-righteousness and judgment (people have had a bellyful of that), but modestly and graciously and without apology -- to change the way our movement is perceived throughout the country. We're offering the world an alternative. We need to commit our lives -- literally -- to showing them through our actions what that alternative looks like.

No whining
Huebeck and Weyrich told conservatives to quit their bitching about "leftist double standards and hypocrisy." They recognized whining and pity-parties as a huge time and energy sink that drags everybody down, and sucks resources away from the movement. The real question movement conservatives needed to confront, they said, is: "What are we going to do about it?" They offered two solutions for the swamping despair that comes with the never-ending gush of stupidity from the other side.

First, they suggested that conservatives regard their opponents' excesses with the same kind of dispassionate detachment one uses to survey the ravenings of rabid dogs or the aftermath of natural disasters. Accept that they do what they do because that's who they are. They can't help themselves; and it's a useless distraction to be angry or frustrated with them, let alone to think for a minute that we can change their essential nature. If liberals got that detached and gave up complaining, it would dramatically reduce the volume of bloggage coming from our side; but it would also enable us to conserve our energy, stay focused on what matters, and help us endure for the long haul.

Second, they told conservatives to take responsibility -- not only for themselves, but for the country as well. "Leftists are never morally responsible for the evil they commit," wrote Huebeck, "but we as conservatives are morally responsible for not having done more to prevent them from committing that evil." (Take a minute and breathe. Laugh, if you must. I know -- the stupendous projection in that statement is just too much to take in all at once.)

Voluntarily assuming personal responsibility for everything the conservatives do sounds preposterous at first. But if you think about it, it's actually a neat piece of ontological Aikido, and we might consider borrowing it. The right-wing has savaged the country. We are morally responsible for not stopping them. No, it's not quite true -- but if we go ahead accept responsibility for the outcome anyway, it reframes the situation in a way that puts us back in control of events. We're no longer helpless underdogs at the mercy of an overwhelming foe outgunning us on every front. Instead -- in our own minds, and eventually that of the country -- we become the rightful People In Charge, endowed with a clear duty to stand up and put a stop to it.

The conservatives adopted this "we accept responsibility for the mess, and are thus in charge of cleaning it up" stance early on. They believed they owed it to God, the country, and their grandchildren to seize the reins of power and call a halt to the liberal onslaught. This belief has been central to keeping their troops engaged through 30 years of hard fighting -- and it also mentally prepared them to move briskly into leadership when they finally started winning.

Know your enemy
Huebeck advised conservatives to "know more about the history of the left than any leftist, and be ready to beat liberals in any debate" -- preferably by knowing so much that you can easily make them look foolish.

This advice has been mostly honored in the breach, which isn't surprising when you consider how few serious scholars there are in the conservative world. (Buckley's gone; and David Brooks and Bill Kristol couldn't fill his shoes with all four feet.) Most of us have run into smart conservatives who've read Marx and Mill and Bentham and can debate their ideas; but a ridiculous amount of their so-called scholarship has been more along the lines of Jonah Goldberg's Through-The-Looking-Glass rantings in Liberal Fascism. And their rhetorical skills -- which rely largely on being able to out-scream people on cable talk shows or simply deny the existence of contrary facts -- aren't up to left-wing standards of proof, either.

Which means that it's not all that hard to beat them, especially with that big steaming pile of conservative failures to point to. And every time we can humiliate a conservative in public by exposing their worldview as a barrel of hateful, immoral bilge, we win another small battle.

Master the mass media
"The ideas of the masses never come from the masses," wrote Huebeck. "The most important thing any movement can do is capture the imagination of the people. One must give them dreams and ideas that have been put in terms they understand, and touch their hearts as opposed to their rational minds. If we cannot capture the imaginations of our members, then we cannot expect our members to make great sacrifices for us."

To this end, conservatives have tried (with varying degrees of success) to produce movies, songs, radio, TV, and other popular culture products promoting their worldview. The religious conservatives have been so stunningly successful at this that you can now live your entire life in America, cradle to grave, watching nothing but conservative Christian TV, reading Christian books, using Christian school curricula, and listening to Christian radio stations. Tens of millions of Americans now live inside this cozy media bubble, where everything that fills their eyes and ears affirms their religious worldview, and nothing ever interferes to disturb it with unsettling questions.

Fortunately for us, apart from that seamless Christian cocoon, the only truly mass media that conservatives really seemed to have a flair for were talk radio and war movies. They really wanted to take over Hollywood, and are actively looking to grow their own Michael Moore-type documentarians, but neither effort has gone very well.

That's because most American media professionals -- including the best creatives -- almost all skew toward the progressive side. The conservatives fully understand what that means, and they openly envy us these talented treasures. We'd do well not to underestimate their value, and to keep pioneering new outlets through which they can put their skills to work telling the progressive story.

Don't be afraid to be obnoxious
"The thing we have most to fear is that we will be ignored....Complacency only serves the interests of our opponents," wrote Huebeck. "We must be willing to take measures that perhaps we would be unwilling to take under different, more ideal circumstances. We will have standards -- we will never try to justify dishonesty, destruction of the personal reputation of our opponents, cheating, assault, etc.....however, we will not consider ourselves above appearing "unseemly" or surrendering some of our personal dignity...Which means being obnoxious if the situation requires it."

This just explains so much, doesn't it? From the get-go, the conservatives weren't afraid of making total public asses of themselves (which is why they do it so often -- and on such a grand scale). They figured out early that bad publicity was better than no publicity; and that at least some of the voters would soon realize that anyone willing to look like that much of an idiot must really have the strength of his or her convictions. Not only does being an obnoxious blowhard make you fearsome at school board meetings and garner stratsopheric ratings on talk radio; there's also a certain martyrdom value in being harassed and ridiculed by the media for having the courage to stand on principle.

I don't doubt that Weyrich borrowed this idea from the civil rights movement. Civil disobedience -- which always involves making a public nuisance of yourself in the name of a higher good -- is an old progressive idea. Old-style protests are a dying tactic; but the larger theme of boldly and fearlessly standing down conservatives, even when it might scuff up our dignity, is coming due to be resurrected and re-worked by a fresh generation.

Don't be afraid to talk about morality
"'Sensible' people do not go to the barricades, do not make great sacrifices for a movement," wrote Huebeck and Weyrich. "We need more people with fire in the belly, and we need a message that attracts those kinds of people. We must reframe this as a moral struggle, as a transcendent struggle, as a struggle between good and evil. And we must be prepared to explain why this is so. We must provide the evidence needed to prove this using images and simple terms."

The way progressives talk about morality is one of the salient differences between the 2004 and 2008 elections. Somewhere in those four years, we've begun to find our moral voices -- and are using them to tell stories that the country is strongly responding to.

Liberals are not, as the conservatives are wont to paint us, immoral. We believe in family, community, prudent budgets, and that America should be a force for good in the world. We think torture and pre-emptive war are wrong. We believe in equal justice and equal opportunity. And we believe that the planet's ecosystems and the survival of humanity are more important than any amount of profit. Those are intensely moral stances that, taken boldly, draw the majority of Americans to our side.

Beyond that: America's moral high ground rightfully belongs to progressives. It was progressive morality that formed the nation and fought the revolution. It freed the slaves, fought back the robber barons, unionized workers, ended the Depression, and won World War II. The conservatives have, on occasion, wrenched it out of our hands for couple decades here and there; and the results have invariably been a disasterous betrayal of our core values. This last time, they did it by promoting their own idea of "morality" -- packaging it in a worldview that, ironically, opened the door to unprecedented amorality and lawlessness.

It's time for us to seize back the moral high ground-- but it won't happen unless we overtly step up to fill the void and articulate a clear and specific moral vision to replace the decadent conservative worldview. Both Democratic candidates are doing a strong job of this -- for now. But we can't afford to stop talking this way when the campaign is over. The conservatives embedded their moral stance in every message they conveyed to Americans, regardless of the medium or the political cycle. Morality was central to every aspect of their communications strategy, and did much to cement their worldview in the public mind. We need to be equally scrupulous in expressing all of our ideas in the context of the larger progressive morality that drives them, without exception and without fail.

Don't be afraid to use social intimidation as a weapon
"We must be feared, so that they will think twice before opening their mouths. They must understand that there is some sort of cost involved in taking a 'controversial' stand....we will be able to take some of the trendiness out of leftist cultural activism, because lukewarm advocates of leftist causes will be forced to actually get their hands dirty. Support of leftist causes will no longer be the path of least resistance."

The conservative letter-writing campaigns really got rolling sometime in the mid-70s. Any time an article appeared in any paper -- from the Sunday Suburban Shopper to the New York Times -- that could be construed to disparage conservative values or conservative leaders, editors were deluged with cranky letters accusing them of bias, closed-mindedness, lack of professionalism, and worse. It was a blatant effort at operant conditioning, and it worked: within a few years, there wasn't a newspaper editor in the country who didn't develop a visible, involuntary twitch at the very thought of printing something that might reflect badly on conservatives.

That was a deliberate social intimidation campaign, and it played a large role in creating the right-wing media bias we're working against today. And the intimidation was everywhere, to the point where many other Americans who didn't really agree with the conservative agenda went along with it anyway because they didn't want the trouble these people could dish out. A right-wing whispering campaign could tank a small business, ruin a reputation, put an end to a career. The Dirty Fucking Hippies slander was another social intimidation attempt, this one aimed at silencing an entire generation of liberal voices.

Two generations of Americans have internalized the "don't-piss-off-the-wingers" lesson all the way down to their bones. They may not like the right-wingers -- but they sure as hell don't want to be on their bad side.

We are, quite frankly, not that mean -- and it goes hard against our grain to intimidate people into doing our bidding. But we progressives could stand to get much, much more assertive about pushing back against this long siege by defending our own boundaries, standing up for our own dignity, and demanding that people present our ideas fairly and accurately. After all, nobody else is going to take us or our positions seriously until we learn to carry ourselves like powerful people worthy of their careful respect. We don't have to be overtly intimidating; but it wouldn't hurt for people to think twice before messing with us.

The good news on the media front is that our own letter-writing campaigns are now underway. Eric Boehlert at Media Matters points out that the AP got over 15,000 letters last week protesting the unprofessionalism of Nedra Pickler's recent article parroting Republican talking points about Obama's alleged lack of patriotism. Most of the letters were generated by Firedoglake's brand-new tool that makes it easy to target local papers for e-mail complaint (and praise) campaigns.

But demanding respect from the media is just one step. We need to get not just good, but reliably great, at insisting on being treated with dignity and fairness on every front. The conservatives have had a good time for the past 30 years being the national political bully. It's time to step up and give that bully the facedown he deserves.

We are Just Cooler Than That

One of the biggest problems the early conservatives faced is that they were the straight, hopelessly out-of-it dweebs in a decade that valued Cool above everything. Weyrich, in another brilliant stroke of memetic Aikido, found a way to take this disadvantage and turn it into an enormous asset.

As Huebeck explains it, conservatives remedied this by taking on an added veneer of sophistication. "We must make it clear that we are seceding from modern life not because we are unable to cope with modern life, but because we are superior to modern life. We understand popular culture -- we get it -- we simply find it empty and meaningless."

The Young Republicans of the early '80s declared that they were the New Coming Thing, a counter-counterculture that offered a stinging critique of the 1960s Cultural Revolution. They declared that they old rebels and their anything-goes value system were exhausted and bankrupt; and announced that they were the New Rebels come to supplant a tired old order. Their clean-cut morality and real-world pragmatism served as irrefutable proof that they were, quite simply, Cooler Than The Rest Of Us.

It was a ridiculous conceit, but it worked. A large swath of Gen X, annoyed by Boomer excess and looking for change, were more than ready to sign on the more "pragmatic" conservative agenda; and their votes helped fuel the Republican takeover. The whole definition of "cool" made a similar generational shift. "Cool" wasn't Peter Fonda in Easy Rider any more. "Cool" was scheming Ferris Bueller, ambitious Alex P. Keaton, and Melanie Griffith's spunky Working Girl. "Cool" was an Armani suit, a Hermes tie, and a Harvard MBA.

But "Cool" is also a sword that cuts two ways. Progressives can easily adopt this same skeptical, above-it-all stance to launch a scathing critique of corporate greed-is-good culture. Supply-side economics? Unregulated markets? CEOs as cultural heroes? Yeah, we understand corporate culture -- we get it -- but we are sooo over it. It's just so 1988. It's empty and meaningless, and we (and all the other cool kids) are heading out toward something better. If you're really cool, you'll ditch that tie, find a job in sustainability, and come along with us. Because we're the ones who own the future now.

In the third and final piece in this series, we'll look at the specific ways that the conservatives took their ideas and their messages out into streets, and made themselves into a truly mass movement.

Citizen Padilla (Part I: Judge Cooke's Torturous Sentence)

lzkoch@comcast.net — Tue, 22 Jan 2008 13:23:02 -0500

[Note: I'm awfully pleased and proud to present the first in a major several-part series from Chicago investigative reporter Lewis Z. Koch on the Jose Padilla case and its meaning for the American republic. Check back here daily for more. His co-author is Brad Jacobson — Rick Perlstein]

Jose Padilla, the first United States citizen in the “War on Terror” to have his constitutional rights stripped from him by a stroke of George W. Bush’s pen, was sentenced today to 17 years and four months in Miami by Federal Court Judge Marcia Cooke, five and a half years after his arrest. The charges—this time—were that he and two others conspired to murder, kidnap and maim individuals in a foreign country, as well as conspiracy to provide material support to terrorists, and providing material support to terrorists. The prosecution never named any specific individual or nation where this violence was to have occurred.

The two other conspirators tried and found guilty with Padilla, Adham Amin Hassoun of Ft. Lauderdale and Kifah Wael Jayyousi of Detroit, sentenced to 16 years and nine months and 12 years and eight months respectively. The jury, after listening to three months of testimony, arrived at its verdict—guilty on all counts—in a day and a half.

The Padilla case is central to the question of whether President Bush, CIA chief George Tenet and others lied when they said “the United States does not torture.” Judge Cooke, a protégé of both Jeb and George Bush, refused to allow the showing of videotapes of Padilla being questioned and probably tortured during his three and a half years in solitary confinement in a Naval brig in Charleston, South Carolina.

Prior to the start of the trial, the prosecution revealed it had 78 videotapes of Padilla’s interrogation in the Naval brig; although the final tape, the 78th, according to the prosecution, had somehow turned up “missing.” Despite the current controversy over the CIA’s destruction of tapes showing severe “interrogation techniques” (a k a “torture”) used on two Al Qaeda suspects—one of whom, Abu Zubaydah, was said to have named Padilla as a terrorist in training—Cooke was only mildly distressed about the missing tape. Though she had the option of insisting the Government produce the tape or dismiss one or more of the charges against Padilla, she never exercised it. She also threatened harsh sanctions against defense attorneys caught leaking the contents of any of the 77 tapes.

Cooke did, however, exercise her judicial discretion to prevent psychiatric defense experts from fully explaining the extent of the damage to Padilla’s mental health.

Government-funded research over the past half century has shown that sensory deprivation is a technique that produces a near-psychotic break, sometimes in less than 24 hours. Padilla experienced such conditions for three and a half years. His defense attorneys, based on expert psychiatric evaluations, argued that such a duration of relentless questioning and isolation—which included extreme sensory deprivation—had driven him to a state where he could not assist his attorneys in his defense.

The very tapes that Cooke, in her discretion, had ruled inadmissible, could have been used to demonstrate the evolution of Padilla’s deteriorating mental condition, from coherent and capable of grasping his situation to a broken, disoriented man unfit to stand trial.

“I’m not sure that any of us know what happened at the brig, but I know that something there put the fear of God into Mr. Padilla,” psychologist Patricia Zapf, a defense expert witness, testified. “Mr. Padilla is an anxiety-ridden, broken individual who is incapacitated by that anxiety.” After examining him for 22 hours, Dr. Zapf concluded Padilla exhibited symptoms of post-traumatic stress disorder.

Rodolfo A. Buigas, a Bureau of Prisons psychologist and member in good standing of the American Psychological Association, disagreed with Zapf’s diagnosis. Buigas testified that when he first saw Padilla he appeared to be “actually pretty happy.” Buigas contended that Zaph’s diagnosis should be dismissed because she conducted the interview with Padilla while he was handcuffed. Yet cross-examination revealed that Padilla was handcuffed as a condition imposed on Zapf by prison officials.

So what were the conditions of Padilla’s confinement?

Over strong objections from the government, elements of Padilla’s confinement were revealed. Here’s how the Christian Science Monitor described it:

“Padilla’s cell measured nine feet by seven feet. The windows were covered over… He had no pillow. No sheet. No clock. No calendar. No radio. No television. No telephone calls. No visitors. Even Padilla’s lawyers were prevented from seeing him for nearly two years.”

Craig S. Noble, a psychologist at the brig, saw Padilla once for a “brief evaluation” and noted Padilla was “responsive, made good eye contact, and in fact, smiled periodically.” It would be another two years before psychologist Noble saw Padilla during a “cell front visit,” in which he spoke to him through a rectangular slot on the cell door. Noble found no signs of “distress and lethality.”

Indeed, a thorough psychiatric evaluation if there ever was one.

While forensic psychiatrist Dr. Angela Hergarty was allowed to briefly testify at Padilla’s trial, what she could say was limited to restrictions demanded by the prosecution and, for the most part, sustained by Judge Cooke. Consequently, the jury was prevented from hearing Hegarty’s analysis about what had happened to Padilla in the brig, the effect of which surely would’ve been devastating to the prosecution. Dr. Hergarty’s description would have to wait for a comprehensive, nuanced interview with Amy Goodman, host and executive producer of Democracy Now!

“What happened at the brig was essentially the destruction of a human being’s mind. That’s what happened at the brig. His personality was deconstructed and reformed,” Dr. Hargarty told Goodman. “In the darkness or in the light—in the cells, the light would be all dark for a long time or all light for a long time. And for a very long part of his detention he had no mattress at all. And sometimes he would try to sleep on the pallet, if you will, the hard steel pallet, or other times he would be in essentially stress positions where he’s got shackles and a belt and is in an awkward and uncomfortable position for long periods at a time....he would hear the click of the door opening, which is a loud click that sort of echoed, and then a very loud bang over and over and over again for hours at a time, possibly days. He had no way of knowing the time. The light was always artificial. The windows were blackened. He had no calendar or time, as you mentioned earlier. He really didn’t see people, especially in the beginning. He only had contact with his interrogators.”

These conditions define classic sensory depravation.

In Dr. Hergarty’s estimation, Padilla had become “a different man,” living in an “absolute state of terror, terror alternating with numbness, largely. It was as though the interrogators were in the room with us. He was like—perhaps like a trauma victim who knew that they were going to be sent back to the person who hurt them and that he would, as I said earlier, he would subsequently pay a price if he revealed what happened.”

In addressing the definition of torture, Hergarty told Goodman, “Well, ‘torture,’ of course, is a legal term. However, as a clinician, I have worked with torture victims and, of course, abuse victims for a few decades now, actually. I think, from a clinical point of view, he was tortured.”

To this day, those 78 tapes remain unseen and unanalyzed by the public.

Judge Cooke, however, was simply the last in a long line of so-called public servants to undermine the constitutional rights of Jose Padilla.

Part I of a series. Read Part II.

lew.koch@gmail.com

Mythbusting Canadian Health Care -- Part I

Sara Robinson — Mon, 04 Feb 2008 16:23:27 -0500

2008 is shaping up to be the election year that we finally get to have the Great American Healthcare Debate again. Harry and Louise are back with a vengeance. Conservatives are rumbling around the talk show circuit bellowing about the socialist threat to the (literal) American body politic. And, as usual, Canada is once again getting dragged into the fracas, shoved around by both sides as either an exemplar or a warning -- and, along the way, getting coated with the obfuscating dust of so many willful misconceptions that the actual facts about How Canada Does It are completely lost in the melee.

I'm both a health-care-card-carrying Canadian resident and an uninsured American citizen who regularly sees doctors on both sides of the border. As such, I'm in a unique position to address the pros and cons of both systems first-hand. If we're going to have this conversation, it would be great if we could start out (for once) with actual facts, instead of ideological posturing, wishful thinking, hearsay, and random guessing about how things get done up here.

To that end, here's the first of a two-part series aimed at busting the common myths Americans routinely tell each other about Canadian health care. When the right-wing hysterics drag out these hoary old bogeymen, this time, we need to be armed and ready to blast them into straw. Because, mostly, straw is all they're made of.

1. Canada's health care system is "socialized medicine."
False. In socialized medical systems, the doctors work directly for the state. In Canada (and many other countries with universal care), doctors run their own private practices, just like they do in the US. The only difference is that every doctor deals with one insurer, instead of 150. And that insurer is the provincial government, which is accountable to the legislature and the voters if the quality of coverage is allowed to slide.

The proper term for this is "single-payer insurance." In talking to Americans about it, the better phrase is "Medicare for all."

2. Doctors are hurt financially by single-payer health care.
True and False. Doctors in Canada do make less than their US counterparts. But they also have lower overhead, and usually much better working conditions. A few reasons for this:

First, as noted, they don't have to charge higher fees to cover the salary of a full-time staffer to deal with over a hundred different insurers, all of whom are bent on denying care whenever possible. In fact, most Canadian doctors get by quite nicely with just one assistant, who cheerfully handles the phones, mail, scheduling, patient reception, stocking, filing, and billing all by herself in the course of a standard workday.

Second, they don't have to spend several hours every day on the phone cajoling insurance company bean counters into doing the right thing by their patients. My doctor in California worked a 70-hour week: 35 hours seeing patients, and another 35 hours on the phone arguing with insurance companies. My Canadian doctor, on the other hand, works a 35-hour week, period. She files her invoices online, and the vast majority are simply paid -- quietly, quickly, and without hassle. There is no runaround. There are no fights. Appointments aren't interrupted by vexing phone calls. Care is seldom denied (because everybody knows the rules). She gets her checks on time, sees her patients on schedule, takes Thursdays off, and gets home in time for dinner.

One unsurprising side effect of all this is that the doctors I see here are, to a person, more focused, more relaxed, more generous with their time, more up-to-date in their specialties, and overall much less distracted from the real work of doctoring. You don't realize how much stress the American doctor-insurer fights put on the day-to-day quality of care until you see doctors who don't operate under that stress, because they never have to fight those battles at all. Amazingly: they seem to enjoy their jobs.

Third: The average American medical student graduates $140,000 in hock. The average Canadian doctor's debt is roughly half that.

Finally, Canadian doctors pay lower malpractice insurance fees. When paying for health care constitutes a one of a family's major expenses, expectations tend to run very high. A doctor's mistake not only damages the body; it may very well throw a middle-class family permanently into the ranks of the working poor, and render the victim uninsurable for life. With so much at stake, it's no wonder people are quick to rush to court for redress.

Canadians are far less likely to sue in the first place, since they're not having to absorb devastating financial losses in addition to any physical losses when something goes awry. The cost of the damaging treatment will be covered. So will the cost of fixing it. And, no matter what happens, the victim will remain insured for life. When lawsuits do occur, the awards don't have to include coverage for future medical costs, which reduces the insurance company's liability.

3. Wait times in Canada are horrendous.
True and False again -- it depends on which province you live in, and what's wrong with you. Canada's health care system runs on federal guidelines that ensure uniform standards of care, but each territory and province administers its own program. Some provinces don't plan their facilities well enough; in those, you can have waits. Some do better. As a general rule, the farther north you live, the harder it is to get to care, simply because the doctors and hospitals are concentrated in the south. But that's just as true in any rural county in the U.S.

You can hear the bitching about it no matter where you live, though. The percentage of Canadians who'd consider giving up their beloved system consistently languishes in the single digits. A few years ago, a TV show asked Canadians to name the Greatest Canadian in history; and in a broad national consensus, they gave the honor to Tommy Douglas, the Saskatchewan premier who is considered the father of the country's health care system. (And no, it had nothing to do with the fact that he was also Kiefer Sutherland's grandfather.). In spite of that, though, grousing about health care is still unofficially Canada's third national sport after curling and hockey.

And for the country's newspapers, it's a prime watchdogging opportunity. Any little thing goes sideways at the local hospital, and it's on the front pages the next day. Those kinds of stories sell papers, because everyone is invested in that system and has a personal stake in how well it functions. The American system might benefit from this kind of constant scrutiny, because it's certainly one of the things that keeps the quality high. But it also makes people think it's far worse than it is.

Critics should be reminded that the American system is not exactly instant-on, either. When I lived in California, I had excellent insurance, and got my care through one of the best university-based systems in the nation. Yet I routinely had to wait anywhere from six to twelve weeks to get in to see a specialist. Non-emergency surgical waits could be anywhere from four weeks to four months. After two years in the BC system, I'm finding the experience to be pretty much comparable, and often better. The notable exception is MRIs, which were easy in California, but can take many months to get here. (It's the number one thing people go over the border for.) Other than that, urban Canadians get care about as fast as urban Americans do.

4. You have to wait forever to get a family doctor.
False for the vast majority of Canadians, but True for a few. Again, it all depends on where you live. I live in suburban Vancouver, and there are any number of first-rate GPs in my neighborhood who are taking new patients. If you don't have a working relationship with one, but need to see a doctor now, there are 24-hour urgent care clinics in most neighborhoods that will usually get you in and out on the minor stuff in under an hour.

It is, absolutely, harder to get to a doctor if you live out in a small town, or up in the territories. But that's just as true in the U.S. -- and in America, the government won't cover the airfare for rural folk to come down to the city for needed treatment, which all the provincial plans do.

5. You don't get to choose your own doctor.
Scurrilously False. Somebody, somewhere, is getting paid a lot of money to make this kind of stuff up. The cons love to scare the kids with stories about the government picking your doctor for you, and you don't get a choice. Be afraid! Be very afraid!

For the record: Canadians pick their own doctors, just like Americans do. And not only that: since it all pays the same, poor Canadians have exactly the same access to the country's top specialists that rich ones do.

6. Canada's care plan only covers the basics. You're still on your own for any extras, including prescription drugs. And you still have to pay for it.
True -- but not as big an issue as you might think. The province does charge a small monthly premium (ours is $108/month for a family of four) for the basic coverage. However, most people never even have to write that check: almost all employers pick up the tab for their employees' premiums as part of the standard benefits package; and the province covers it for people on public assistance or disability.

"The basics" covered by this plan include 100% of all doctor's fees, ambulance fares, tests, and everything that happens in a hospital -- in other words, the really big-ticket items that routinely drive American families into bankruptcy. In BC, it doesn't include "extras" like medical equipment, prescriptions, physical therapy or chiropractic care, dental, vision, and so on; and if you want a private or semi-private room with TV and phone, that costs extra (about what you'd pay for a room in a middling hotel). That other stuff does add up; but it's far easier to afford if you're not having to cover the big expenses, too. Furthermore: you can deduct any out-of-pocket health expenses you do have to pay off your income taxes. And, as every American knows by now, drugs aren't nearly as expensive here, either.

Filling the gap between the basics and the extras is the job of the country's remaining private health insurers. Since they're off the hook for the ruinously expensive big-ticket items that can put their own profits at risk, the insurance companies make a tidy business out of offering inexpensive policies that cover all those smaller, more predictable expenses. Top-quality add-on policies typically run in the ballpark of $75 per person in a family per month -- about $300 for a family of four -- if you're stuck buying an individual plan. Group plans are cheap enough that even small employers can afford to offer them as a routine benefit. An average working Canadian with employer-paid basic care and supplemental insurance gets free coverage equal to the best policies now only offered at a few of America's largest corporations. And that employer is probably only paying a couple hundred dollars a month to provide that benefit.

7. Canadian drugs are not the same.
More preposterious bogosity. They are exactly the same drugs, made by the same pharmaceutical companies, often in the same factories. The Canadian drug distribution system, however, has much tighter oversight; and pharmacies and pharmacists are more closely regulated. If there is a difference in Canadian drugs at all, they're actually likely to be safer.

Also: pharmacists here dispense what the doctors tell them to dispense, the first time, without moralizing. I know. It's amazing.

8. Publicly-funded programs will inevitably lead to rationed health care, particularly for the elderly.
False. And bogglingly so. The papers would have a field day if there was the barest hint that this might be true.

One of the things that constantly amazes me here is how well-cared-for the elderly and disabled you see on the streets here are. No, these people are not being thrown out on the curb. In fact, they live longer, healthier, and more productive lives because they're getting a constant level of care that ensures small things get treated before they become big problems.

The health care system also makes it easier on their caregiving adult children, who have more time to look in on Mom and take her on outings because they aren't working 60-hour weeks trying to hold onto a job that gives them insurance.

9. People won't be responsible for their own health if they're not being forced to pay for the consequences.
False. The philosophical basis of America's privatized health care system might best be characterized as medical Calvinism. It's fascinating to watch well-educated secularists who recoil at the Protestant obsession with personal virtue, prosperity as a cardinal sign of election by God, and total responsibility for one's own salvation turn into fire-eyed, moralizing True Believers when it comes to the subject of Taking Responsibility For One's Own Health.

They'll insist that health, like salvation, is entirely in our own hands. If you just have the character and self-discipline to stick to an abstemious regime of careful diet, clean living, and frequent sweat offerings to the Great Treadmill God, you'll never get sick. (Like all good theologies, there's even an unspoken promise of immortality: f you do it really really right, they imply, you might even live forever.) The virtuous Elect can be discerned by their svelte figures and low cholesterol numbers. From here, it's a short leap to the conviction that those who suffer from chronic conditions are victims of their own weaknesses, and simply getting what they deserve. Part of their punishment is being forced to pay for the expensive, heavily marketed pharmaceuticals needed to alleviate these avoidable illnesses. They can't complain. It was their own damned fault; and it's not our responsibility to pay for their sins. In fact, it's recently been suggested that they be shunned, lest they lead the virtuous into sin.

Of course, this is bad theology whether you're applying it to the state of one's soul or one's arteries. The fact is that bad genes, bad luck, and the ravages of age eventually take their toll on all of us -- even the most careful of us. The economics of the Canadian system reflect this very different philosophy: it's built on the belief that maintaining health is not an individual responsibility, but a collective one. Since none of us controls fate, the least we can do is be there for each other as our numbers come up.

This difference is expressed in a few different ways. First: Canadians tend to think of tending to one's health as one of your duties as a citizen. You do what's right because you don't want to take up space in the system, or put that burden on your fellow taxpayers. Second, "taking care of yourself" has a slightly expanded definition here, which includes a greater emphasis on public health. Canadians are serious about not coming to work if you're contagious, and seeing a doctor ASAP if you need to. Staying healthy includes not only diet and exercise; but also taking care to keep your germs to yourself, avoiding stress, and getting things treated while they're still small and cheap to fix.

Third, there's a somewhat larger awareness that stress leads to big-ticket illnesses -- and a somewhat lower cultural tolerance for employers who put people in high-stress situations. Nobody wants to pick up the tab for their greed. And finally, there's a generally greater acceptance on the part of both the elderly and their families that end-of-life heroics may be drawing resources away from people who might put them to better use. You can have them if you want them; but reasonable and compassionate people should be able to take the larger view.

The bottom line: When it comes to getting people to make healthy choices, appealing to their sense of the common good seems to work at least as well as Calvinist moralizing.

10. This all sounds great -- but the taxes to cover it are just unaffordable. And besides, isn't the system in bad financial shape?
False. On one hand, our annual Canadian tax bite runs about 10% higher than our U.S. taxes did. On the other, we're not paying out the equivalent of two new car payments every month to keep the family insured here. When you balance out the difference, we're actually money ahead. When you factor in the greatly increased social stability that follows when everybody's getting their necessary health care, the impact on our quality of life becomes even more signficant.

And True -- but only because this is a universal truth that we need to make our peace with. Yes, the provincial plans are always struggling. So is every single publicly-funded health care system in the world, including the VA and Medicare. There's always tension between what the users of the system want, and what the taxpayers are willing to pay. The balance of power ebbs and flows between them; but no matter where it lies at any given moment, at least one of the pair is always going to be at least somewhat unhappy.

But, as many of us know all too well, there's also constant tension between what patients want and what private insurers are willing to pay. At least when it's in government hands, we can demand some accountability. And my experience in Canada has convinced me that this accountability is what makes all the difference between the two systems.

It is true that Canada's system is not the same as the U.S. system. It's designed to deliver a somewhat different product, to a population that has somewhat different expectations. But the end result is that the vast majority of Canadians get the vast majority of what they need the vast majority of the time. It'll be a good day when when Americans can hold their heads high and proudly make that same declaration.

Next week: More mythbusting on common conservative canards about efficiency, innovation, and competitiveness.

The Rescue of Bear Stearns Marks Liberalization's Limit

OurFuture.org Staff — Wed, 26 Mar 2008 11:24:20 -0400