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Pickpocket policies 

It's fun to keep up with the mobster-and-oligarch news from Russia. And things get really interesting when our market-manic media tie Russia's economic woes to the privatization of former state enterprises. (There are limits, of course. Our media generally see privatization as bad medicine for them, but still necessary for us.)

            Yes, Russia is riddled with rip-off artists more in-your-face than Bonnie and Clyde. Take what they've done with the country's energy resources. Just eight years ago, says a Frontline backgrounder, the recently arrested billionaire Mikhail Khodorkovsky acquired the Yukos oil company for "a mere $309 million." Today the company is worth $15 billion, and Khodorkovsky is worth $8 billion himself.

            Meanwhile, Russian pensioners sell trinkets on the street to survive.

            These are vignettes from a national tragedy vast as a Tolstoy novel. I don't want to trivialize the situation by making inappropriate comparisons. But I can't help think that Russia is not the only superpower whose economy staggers under forced privatization and inequality.

This leads to a pair of very American stories --- which broke on the same day, November 25. The top headline was the Senate's passage of the final Medicare "reform" bill, following passage in the House a few days earlier. Though the bill has many provisions, it was marketed simply as a $400 billion prescription drug benefit to be paid out over 10 years.

            Before the bill passed, media reports routinely described it as something the country can barely afford. But not enough people called it what it actually is: a mountainous theft. The fine print reveals plenty about the bill's much-touted "benefits" and "reforms," which call to mind the old nightclub shtick: The food here is terrible --- and the portions are so small.

            First, look at the drug benefit. As widely reported November 26 --- naturally, the day after the bill passed --- the benefit is a lot less substantial than proponents let on during the Congressional debates. For one thing, there's the infamous "doughnut hole" in drug benefits, which will initially leave beneficiaries stuck with paying around $4,000 in premiums and out-of-pocket expenses for the first $5,100 in benefits. Admittedly, there's a silver lining: The plan will cover 95 percent of drug costs above $5,100. But one crucial provision in the bill hasn't sunk in yet: a phenomenal expansion of the doughnut hole after 2006.

            According to a Los Angeles Times analysis, the $5,100 cut-off point will have risen to $9,066 by 2013 --- making the doughnut hole several thousand dollars larger than people have expected, and leaving the majority of participants in the lurch.

            The doughnut, as opposed to the hole, goes to the drug companies.

            How so? The bill bans bulk-purchase agreements within Medicare; it also hobbles the re-importation of cheaper drugs form Canada. Both provisions mean more money for Big Pharma.

            Moreover, the bill doesn't address the wellspring of drug industry profits: publicly subsidized research through the National Institutes and universities, and government-protected monopolies untouched by price controls. (In a briefing paper early this year, economists Dean Baker and John Schmitt of the Center for Economic and Policy Research said the government could try funding the entire research system and putting the findings into the public domain for use by manufacturers. Such a new system, similar to what's done now with generic drugs, could save Americans $200 billion a year by 2013, the authors said.)

            The Medicare bill also establishes a pilot program aimed at seducing recipients into HMOs. The prognosis is not good. "Private insurance companies that participate in the Medicare program... will gain a huge and unjustifiable windfall," says a review of the legislation by Families USA. HMOs and insurers, says the group, will "cherry pick" the healthiest Medicare participants, decreasing payouts and inflating profits.

            The program, says Families USA, could even "lay the groundwork for privatizing Medicare."

            Don't be fooled about this being a "fiscally conservative" political victory, either. The Medicare bill is meant to funnel the cash-flow toward powerful lobbies. The cash will come in "non-medical expenses."

            A new study by the Foundation for Taxpayer and Consumer Rights notes the average HMO spends 17 percent of revenue on overhead. Traditional Medicare's overhead is just two percent. The 15-point gap will translate into impressive sums for privatizers and their beneficiaries.

            Time will tell if this upward transfer of wealth will create new American billionaires --- and elderly street peddlers.

Massive rip-off number two was George Bush's November 25 signing of next year's defense authorization --- lean and mean at $401 billion.

            It's amazing how the Flight Jacket in Chief can successfully hawk a measure that costs in one year what the Medicare drug benefit will cost over a decade.

            If present trends continue, the US will be spending something like $4 trillion on militarism and war over the next 10 years. Yet the typical take-home message on war-related expenditures is, It's such a dangerous world, we can't do any less.

            Some folks argue that US military spending as a share of GDP is within reasonable bounds. I disagree. In any case, the outlays in real live dollars are almost beyond belief.

            The Friends Committee on National Legislation has determined that US military spending for fiscal 2000 --- that is, before 9/11 and the War on Terror --- totaled $547 billion. All by itself, the Pentagon grabbed $296 billion that year. The remainder, says the FCNL, went for mandatory payments to the military retirement system, veterans' benefits, aid to foreign armed forces, and the military-related portion of the national debt.

            By the way, the FCNL says that in 1999, the Pentagon budget was "2.6 times greater than the combined military spending... of the nine largest potential US adversaries --- Russia, China, Iran, North Korea, Iraq, Libya, Syria, Sudan, Cuba."

            This is old news, of course. We now own Iraq and are busily leasing it to private contractors. The plump deals will make our military budget look even more depressing on the international charts.

            The military budget will torpedo social expenditures, too. Then we'll be subjected to a national ad campaign featuring --- as Al Franken might say --- lying liars pushing lies about privatization as a cure-all.

            If only we could shove the Pentagon into an HMO.

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