In Sumi's court prophecy is law.....and testimony

Tom Foley:

Prophecy, is what Oliver Wendell Holmes, Jr. called the law.

On Tuesday, WisPolitics Budget Blog reported (my emphasis):

Dane County Judge Maryann Sumi issued an order this afternoon blocking further implementation of the collective bargaining bill.

Sumi stopped short of signing off on a proposed declaration that publication by the Legislative Reference Bureau does not make the law take effect. But she made clear during her ruling that "further implementation of the act is enjoined."...

Sumi struck that portion of the order, saying that testimony on that issue has not concluded. The case is set to resume Friday.

Today, that would be Thursday, the Journal Sentinel reports:

Madison — A state law to sharply curb union bargaining by public employees is not in effect, a Dane County judge ruled Thursday,...

"Based on the briefs of counsel, the uncontroverted testimony, and the evidence received at the March 29, 2011, evidentiary hearing, it is hereby DECLARED that 2011 Wisconsin Act 10 has not been published within the meaning of (state statutes), and is therefore not in effect," Dane County Circuit Judge Maryann Sumi ruled in a two-paragraph order.

So on Tuesday, sufficient testimony hadn't been reviewed to issue a ruling on whether or not Act 10 was law. That testimony was scheduled to resume on Friday.  On Thursday, however, the very same testimony that had been in evidence on Tuesday was cited as the reason for declaring Act 10 "not in effect". Huh?


I would like nothing more than to give Judge Sumi the benefit of the doubt, but even the most generous interpretation of her actions make her look bad.  What happened on Wednesday that allowed for this dramatic new ruling?  Perhaps the judge was able to divine Friday's testimony and rule preemptively.  On the other hand, perhaps the ruling was preordained and Tuesday's protestations about insufficient testimony were little more than a farce.


It seems easy for testimony to remain "uncontrovertd" if you just stop taking it, but hey, I'm not a lawyer.

FDA Statement on Makena

Welcome news.

Press Announcements > FDA Issues Statement on Makena

On February 3, 2011, the U.S. Food and Drug Administration approved the drug Makena (hydroxyprogesterone caproate) for the reduction of the risk of certain preterm births in women who have had at least one prior preterm birth. KV Pharmaceuticals, the drug’s owner, received considerable assistance from the federal government in connection with the development of Makena by relying on research funded by the National Institutes of Health to demonstrate the drug’s effectiveness. It also obtained seven years of exclusivity under the Orphan Drug Act, obtained approval under FDA’s accelerated approval program, and received expedited review.

For many years, a version of the active ingredient of Makena, which is a synthetic progestin, has been available to patients whose physicians requested the drug from a pharmacist who compounded the drug. Generally, FDA has exercised enforcement discretion with respect to most products made through traditional pharmacy compounding. This has included products made from the active ingredient in Makena, hydroxyprogesterone caproate.

Because Makena is a sterile injectable, where there is a risk of contamination, greater assurance of safety is provided by an approved product. However, under certain conditions, a licensed pharmacist may compound a drug product using ingredients that are components of FDA approved drugs if the compounding is for an identified individual patient based on a valid prescription for a compounded product that is necessary for that patient. FDA prioritizes enforcement actions related to compounded drugs using a risk-based approach, giving the highest enforcement priority to pharmacies that compound products that are causing harm or that amount to health fraud.

FDA understands that the manufacturer of Makena, KV Pharmaceuticals, has sent letters to pharmacists indicating that FDA will no longer exercise enforcement discretion with regard to compounded versions of Makena. This is not correct.

In order to support access to this important drug, at this time and under this unique situation, FDA does not intend to take enforcement action against pharmacies that compound hydroxyprogesterone caproate based on a valid prescription for an individually identified patient unless the compounded products are unsafe, of substandard quality, or are not being compounded in accordance with appropriate standards for compounding sterile products. As always, FDA may at any time revisit a decision to exercise enforcement discretion.

Is war taken seriously by anyone in America anymore?

Call me old fashioned, but I still think war is serious business.  Obviously the combatants themselves have the most at stake, but even beyond that there are at least some consequences for the nation as a whole.  These include the fiscal ramifications as well as the effect a state of war has on our liberties.  I'm beginning to wonder if these consequences aren't nearly invisible to most of us in general, and to the political class in particular.

Rudy Giuliani sent us shopping after 9/11.  George W. Bush had a good laugh with his friends in the media elite by pretending to search the oval office for WMD as a part of gag for the White House correspondent's dinner.  Now we have neo-con Bill Kristol becoming best pals with President Obama over starting another war in the middle east and then joking about it:

Throughout 2007 and 2008 in the race for the Democratic presidential nomination, Obama ran as the anti-war candidate. But Obama has taken on different stripes with this gesture, Kristol joked.

“What’s the joke – they told me if I voted for McCain, we’d be going to war in a third Muslim country?” Kristol said. “I voted for McCain and we’re doing it.”

Here's a reality check for Kristol and his gang, and anyone else who forgets exactly what is at stake:

An Army Reserve soldier from Green Bay died Saturday during action in Afghanistan.

Spc. Justin D. Ross, 22, was shot and killed when his unit came under fire from insurgents in the Helmand province of Afghanistan, said Lt. Col. Nathan Banks of the 364th Public Affairs Operations Center.

He was assigned to the 863rd Engineer Battalion of Wausau. His unit specializes in route clearance, the first soldiers to enter an area before more units move in.

There will be times when it is necessary and proper to ask men to pay the ultimate price.  Is it too much to ask for those of us over here to treat the occasion with the seriousness it deserves?

Caller on line one kicks off Wisconsin Bastille Days

We are still a few months away from the time when "the streets of Milwaukee are transformed into a mini French city complete with Eiffel Tower," but that didn't stop a caller to the Ben Merens program on Wisconsin Public Radio from urging the use of physical force against members of the Wisconsin state government.

Aside from reminding me why I usually avoid call-in radio programs, the caller's suggestion was terrifyingly ignorant.  She called and asked why someone couldn't perform a "citizens arrest" on Governor Walker, the legislative leaders Scott and Jeff Fitzgerald, and DOA Secretary Mike Huebsch.  Her reasoning for such an action were what she saw as the "moral" and "ethical" failings of these gentlemen, and their trampling on "first amendment rights".

Merens and his guest responding to the calls were either too professional or too numb from the insane rhetoric to denounce the caller, so they made some vague responses about criminal violations of the law being enforced by police.  Let me amplify their response by saying that attempting to turn back the actions of duly elected officials by imprisoning them is tantamount to revolution.  It is most assuredly NOT democracy, no matter how many times you tell yourself otherwise.

Further, I would note that suggesting HHS Secretary Sebelius be subject to a citizens arrest for enforcing the individual mandate is likely to get you branded as a potential hate group faster than you can say Southern Poverty Law Center, but, hey, this was Ben Merens, not Alex Jones.

My advice to the caller if she wants to lock up "moral failures" would be to start with Charlie Sheen and work her way down the list.  Maybe (maybe) there will still be some room in our nation's prisons by the time she gets to Huebsch, but I doubt it.

I really shouldn't be surprised I guess.  It was not that long ago when a letter writer took to the pages of the Green Bay Press Gazette advocating for Secretary of State Doug La Follette to act as a "decider" when it came to what was law in this state.

Even if the courts ultimately rule that the budget repair bill is not law due to an open meetings rule violation, I doubt the remedy will be imprisonment for members of our legislature.  Yet to this caller, locking up lawmakers with whom one happens to disagree seemed like the most natural thing in the world.

You don't like Walker or Fitzgerald or Cowles?  Fine, take it up at the ballot box.  What seems lost on these folks advocating that we jettison our system of governance just because they don't like the current majority, is the fact that our system virtually guarantees the majority will change with some regularity.

There is no chance Scott Walker will rule Wisconsin for forty years like some third-world dictator, unless of course his current opponents get their wish and Wisconsin exchanges the rule of law for the rule of the mob.

Determining the law in Wisconsin isn't as easy as it used to be.

Oyez! Oyez! Oyez! The Court of the Cheddarsphere is now in session.  Today's case Foley v. Esenberg.

Foley:

The point is that publication by 35.095(3)(a) (what Scott Fitzgerald "ordered") does not fulfill the requirements of 991.11. It still remains for 991.11 to be satisfied and so in nowise might it be said that 2011 Wisconsin Act 10 has taken effect, nor that it is enforceable.

Esenberg:

In an odd twist, the law was nevertheless published today and will become effective tomorrow. This isn't defiance of the judge's order by the Republicans or Scott Walker. They didn't do it. It's not defiance of the law at all. It seems to have been mandated by the law.

The question before the court is, of course, whether or not Governor Walker's budget repair bill is or isn't now law based on its "publication" by the Legislative Reference Bureau on Friday.  Esenberg says it is and Foley says it is not.  If you read the two complete posts you may be able to draw your own conclusion.  Such a conclusion might even be totally uninformed by your prior partisan leanings, but I wouldn't hold your breath.

Normally, I wouldn't be concerned that two lawyers can't seem to agree on a matter of the law.  After all, that is what we have courts and judges for.  In this case, however, even that recourse seems out of reach.  We have a judge in Madison who issued a restraining order related to the law and we have state supreme court race which has for all intents and purposes a referendum on the Governor and this particular law.  For a nation that has the rule of law among its foundational principles, this is a very bad sign

In this case, we can't even agree on whether or not the particular words voted on by the legislature and signed by the Governor are, in fact, law in the state of Wisconsin.  Add to that even if (when?) the Supreme Court rules definitively that this particular Act is or isn't the law, a substantial number of people will see the ruling as incorrect.

Generally, I'd say that the hand-wringing about the polarized partisan nature of our politics is overblown.  At the same time we should not underestimate the negative consequences of having the law descend into just another partisan battleground.

Hey Sean Duffy, You're in the Congress!

While I didn't follow the election of Republican Sean Duffy (WI-7) as closely as the race in my own district, I do know he was not the "Tea Pary Candidate" despite what his foes will tell you.  Beyond that, I did have some hope that his prominence might shine a positive light on larger families since he and his wife have six children.  But after hearing him on Wisconsin Public Radio today, I can't help but wonder if he even understands his role in government.

On the Joy Cardin show Duffy said that he supported the President's actions in Libya, citing in particular the fact that the President had built a coalition prior to taking action.  In our system of government, I would suggest that coalitions begin at home and work outward from there.  Specifically, they begin in the Congress, where the power to declare war and the power to fund war reside.  In the case of the Libyan action, President Obama has treated Congress like an annoying kid brother allowed to tag along while Barak, his French friend Nic, and their buddy Ban Ki-moon go off on some African adventure.

If you want to play amateur Con Law professor and tell me that missiles launched from sea and bombs dropped from the air don't amount to a declaration of war, I'll tell you at best that amounts to a technicality.  What happens when the Congress has to vote to pay for the ongoing non-war Libyan operations?  I got no sense from Duffy's comments that he would think twice about voting for the funding.  This was after a ten minute discussion in which Duffy said that NPR needed to tighten its belt since we are facing severe fiscal challenges in this country.

Somehow, the Congress has gone from the first branch of the government to the worst branch.  None of the blame for this rests with Duffy.  But from what I heard from him today, I doubt that reversing this condition will begin with him either.

Financial crisis allows Fed to pay for 800 weeks of operations in Libya

From The Wall Street Journal:

The Federal Reserve‘s net income surged 53% to $81.74 billion last year from 2009 mainly due to higher earnings from securities the central bank bought to counter the financial crisis, according to final audited results released Tuesday.

From The Hill:

A no-fly zone like the one military officials described Monday, covering just the northern portion of Libya, likely will cost between $30 million and $100 million per week, CSBA said. But because it required coalition forces to deal with Libyan air defense systems, there are one-time bills that could cost between $400 million and $800 million, the think tank concluded.

Makena & Big Government

This is part III, for some background read part I & part II first.

"I'm from the government and I'm here to help."  President Reagan called these the some of the scariest words in the English language.  The newly FDA approved drug Makena is a clear example of just how right Reagan was.

My wife and I are expecting our 7th child. Since my wife has a history of premature labor, we were hoping this time around that she would be treated using a form of progesterone known as 17P.  This drug was not specifically made for treatment of premature labor, but in recent years its use for this purpose has increased following some studies demonstrating its effectiveness.  Also, 17P was relatively inexpensive, in some cases costing as little as $10/dose. Sadly, our plan has been called into doubt due to a recent development.  Under a federal law known as the Orphan Drug Act, KV Pharmaceuticals sought and won FDA approval for their version of 17P, known as Makena.  Along with this approval comes 7 years of market exclusivity (that is, only KV can sell this drug) and the announcement that KV would sell Makena for $1,500/dose.

You can read my previous post on why the moral outrage over this dramatic price increase should be directed at KV, a distressed company that saw an opportunity to get healthy with a safe bet on Makena.  But who created the conditions that allowed them to make the bet in the first place?  Clearly in this case, the answer is the federal government.

Whether or not my wife is treated with Makena, the $1,500 price tag will mean that some women who need it won't get it.  Some people will look at circumstances like these and think they require a government intervention, but it was government intervention that allowed for the price increase in the first place. Some problems are not the result of "greedy business" or "heavy-handed government," but are actually the result of these two elements combining.  The Orphan Drug Act, a federal law, allowed KV to become the sole supplier of  a drug that was widely available at a relatively low cost simply by pushing it over the finish line of FDA approval.  Many people fear, and are willing to denounce, the market distortions that come with private monopolies, why shouldn't we be just as concerned over those created through government intervention?

Even if you prefer markets over government solutions, there is no need to demonize the federal intervention in this case.  It is not at all hard to believe that the lawmakers who crafted the Orphan Drug Act did so with the best of intentions in an effort to promote drug development for rare diseases. Because these diseases affect a relatively small number of people, markets for these drugs may not be large enough to entice private investment in research and development (I'm not sure premature birth really qualifies as rare).  But the result in this case is not a victory for anyone except KV Pharmaceuticals, since they will benefit from a government granted monopoly.

Unfortunately, what should be a cautionary tale about unintended consequences and the dangers of government intervention, will likely be used to call for even further government involvement (of one from or another) in this case.  This is a response that simply boggles my mind.  The opportunity for KV to profit from the marketing of Makena was a direct result of government intervention, so now we need more intervention to try and correct what went wrong the first time around?  It kind of reminds me of that children's song about the old lady who swallowed the fly.

I believe that markets are superior to government planning when it comes to deciding what we produce as a society and how much what we produce costs.  That is not to say the government can't or won't ever be involved in markets, it will.  When we contemplate government action we need to recognize that there will be unintended consequences. Some of which we will be good at anticipating and some of which will come as a complete surprise.  Given the power of markets and the potential dangers of government intervention, there should be a very high bar for government involvement in markets and an even higher one for times when the government is going to grant monopoly powers to a private business.

The story of Makena will have a human cost.  It will be reflected in the children born too soon because their mothers never received 17P, which just a few weeks ago was widely available at a fraction of the current price.  It is also the story of a private business seeking extra profits by using the power of the government.  Finally, it is a story that will be repeated many times over whenever big business sees an opportunity to use big government as a weapon to be deployed in pursuit of profits that would never exist in a competitive market place.

The cognitive dissonance of Walker foes

Proud La Follette is waiting to publish law | Green Bay Press Gazette | greenbaypressgazette.com

I am proud that Doug La Follette is refusing to immediately publish Gov. Scott Walker's extreme agenda....

La Follette is following the rules in government that have been established to protect our citizens. I support La Follette. I am so confused as to why Walker feels he has the power to do whatever he wants. We teach our children to play by the rules, and this man is an adult who isn't following them.

La Follette has shown true character by standing up to Gov. Walker's bullying. I would hope that he delays publishing as long as possible. La Follette should consider listening to the Wisconsinites who oppose this bill and never publish it....

Tammi Dernbach

To put a fine point on it, Ms. Dernbach is suggesting that the Secretary of State unilaterally decree what is or isn't law in Wisconsin through the publishing duty he has. I don't know which rules she is teaching her children to play by, but that is not how we make laws in this state.  In fact, I would argue the entire concept of American representative democracy is diametrically opposed to the model of a single man making law at will, as advocated in the letter.

For some time Americans have had a terrible fondness for imperial executives.  Citizens that opposed the budget repair bill think of Governor Walker as such a figure, I submit that setting up Doug La Follette as final arbiter of Wisconsin law would be nothing less than despotism. 

It would be humorous if it wasn't so sad and dangerous that citizens of Wisconsin can denounce Walker as tyrannical in one breath and in the next clamor for the Secretary of State to exercise unlimited power to decide what is law.  After all, is a tyrant who agrees with you on the right of public employees to collectively bargain any less tyrannical?

Makena & The Orphan Drug Act

This is part II, you may want to go back and read part I for some background

When my wife was a child she and her sister shared a beloved record of the the songs from the musical Annie.  At some point, one of them, I'm not sure who, left it out in the summer sun and it melted.  The fact that this story is still told, and told with no small measure of sadness, attests to just how traumatic the experience was.  This week it's another kind of orphan that has my wife upset.

She is 13 weeks pregnant with our 7th child.  She has had a spontaneous preterm delivery before.  During this pregnancy my wife and her doctor had decided she would be treated with 17P injections from week 16 through week 36. 17P is a form of progesterone and is used to prevent premature delivery.  Even at around $200 a dose when delivered in our home by a home health company, this cost seemed like a bargain compared to the cost, both monetary and emotional, of having a preemie.  At 13 weeks, we are only about 3 weeks away from the beginning of the treatment.  On Monday, I read this on one of my favorite economics blogs, Marginal Revolution:

Makena is a drug used for premature birth therapy. It’s been available off-label for a long-time but KV pharmaceuticals ran a clinical trial and applied for FDA approval under the Orphan Drug Act (ODA). Under the ODA, KV is entitled to seven years of market exclusivity, this is even stronger than a patent because it gives KV the right to exclude from the market any drugs (not just similar drugs) that treat the same condition.

Now that KV has a monopoly—enforced against compounding pharmacies by threats from the FDA—the price will rise from about $10 to a listed price of $1,500. Naturally a lot of people are outraged.

I'm not exactly outraged, but I am a little bit sad since a treatment my wife and I had put so much hope in will now be substantially more expensive.  As someone who comments on the consequences of public policy from time to time, it's not that hard for me to set aside my personal feelings for a minute and ask whether or not granting a monopoly to KV in this case makes sense, and I'm not sure that it does.

First, it is important to remember what we are NOT talking about here.  This is not a case where KV developed and brought to market some entirely new treatment that was previously unknown. The patent protection given to new drugs is a related issue, but it is not a factor in this case.  As noted in the quote above, Makena has been given off-label for a long time. This means it hasn't been approved by the FDA as treatment of the condition for which it is being prescribed (in this case preterm delivery).  Given the fact that it has been in wide use, it would seem the standard arguments about patent protection for new drugs wouldn't apply to Makena.  Here is drug researcher Derek Lowe:

What's irritating, to someone like me who works at a "find a new drug" type of company, is that these no-name generic outfits (KV in this case, URL Pharma for colchicine) are doing pretty much what critics of the industry think that we all do, all the time. That is, walk up to situations where other people have done a lot of the work, a good amount of it with public/NIH money, and step right in and profit. Now it's true that these companies have to basically run Phase II/Phase III trials to take the data to the FDA, and that's a significant amount of money. But their risks in doing so have been watered down immensely by the history of these drugs in the medical community.

So KV has some risk in that they have to perform the final series of trials and then go through the FDA approval process, but is this cost proportional to the benefit?  In this case seven years of exclusivity, and the tremendous run up in price that comes with it.  History suggests that what KV added to the Makena story may not have been that valuable to anyone other than KV since the durg had been gaining popularity as a treatment for preterm labor at least since 2003 when a study demonstrated Makena's effectiveness.

The Orphan Drug Act, under which KV has gained the exclusive rights to Makena, is a law intended to promote drug development for rare diseases.  According to the March of Dimes more than half a million babies a year are born prematurely.  Given those numbers, it's not clear to me how prematurity still qualifies as a rare disease.

Finally, there are the circumstances around the company now selling Makena at $1500/dose, KV Pharmaceuticals.  This is from the St. Louis Post-Dispatch:

Staring down at the former chief executive of KV Pharmaceutical Co. — what used to be among St. Louis' most successful companies — the federal judge portrayed Marc Hermelin as an example of capitalism gone awry.

"What I see when I see Mr. Hermelin is greed, abuse of power, recklessness," U.S. District Judge E. Richard Webber said Thursday. "He had this great company of 1,700 (employees), and once diverted, he was sending pills across the country that were twice the strength of their labels."

...By 2008, KV was considered one of the most successful publicly traded companies based in the St. Louis area. But the criminal case against Ethex resulted in a two-year shutdown of KV's production facilities and layoffs of three-quarters of its work force. Now, the drug company is hoping to revive itself with a new prenatal drug, Makena.

KV is a distressed company making a bet on Makena.  But how much does KV really have at risk?  Given the fact that 17P was in wide use and there were studies demonstrating its effectiveness, it would appear they weren't risking much.

It is still not clear if we will be able to get a compounded form of 17P or if we will have to buy Makena at the new higher price.  Even at the higher price, my wife will likely still get Makena.  It just means we will hit our out of pocket maximum this year.

If there is any shame in this situation, and I believe there is, it belongs to KV and KV alone, but it would be a mistake to ignore the government's role in this. Without federal intervention in the form of the Orphan Drug Act, women would continue to get 17P and prematurity would have an effective and low cost treatment.

Makena: Public Policy & Private Consequence

I don't actually believe the universe is out to get me, but I can't help but wonder if in this case I might be forgiven if I did.

Recently a drug company known as Ther-Rx sought and received approval for the first FDA approved treatment to reduce the risk of preterm birth in pregnant women.  Ther-Rx is a wholly owned subsidiary of KV Pharmaceuticals, a St. Louis based company.  The drug will be sold under the name "Makena" and was available to be prescribed the week of March 14th.  Makena is actually alpha-hydroxyprogesterone caproate injection, prior to Ther-Rx's involvement, it was known popularly as 17P.  Among women and doctors who deal with prematurity, 17P was well known and was given to women as a weekly injection starting around the 16th week of pregnancy and continuing to the 36th week.  The announcement of FDA approval was hailed by the March of Dimes as a step forward in the prevention of premature birth, which undoubtedly helps women and babies.  Ther-Rx also announced that the price of Makena would be around $1500 a dose, so with a typically course of treatment running 20 doses over 20 weeks, the cost would approach $30,000.  A large sum of money, to be sure, but relative to the costs of treating prematurity and the potential life long health effects that can result from a preterm birth, this price may actually represent a tremendous deal.

This description of Makena reads like a medical that a local news station might slot for late in the half-hour, or a pitch to potential investors looking for a company on the cusp of taking off.  So why does the announcement of Makena make me feel like the universe is conspiring against me?  The short answer to that question is that my wife is 13 weeks pregnant, all of our children have been born early, four of them early enough to require hospitalization, and we were both counting on using 17P injections during this pregnancy to help avoid another premature delivery.

If you want to read more about our experience with premature birth and how our attitude toward family size has changed over the years (including much more personal information than I usually go into on this blog), click below.  Otherwise, in the next post (or two) I'll look at how KV came to be the beneficiary of this sudden increase in the price of 17P and the possible implications for public policy.

WEA Trust's Red Herring

From the Journal Sentinel:

In freeing school boards from bargaining with employees over anything but inflation-capped wage increases, Wisconsin lawmakers might have opened the floodgates for districts seeking to drop coverage by the state's dominant - and highly controversial - health insurance provider for teachers.

WEA Trust, the nonprofit company started 40 years ago by the state's largest teachers union, currently insures employees in about two-thirds of Wisconsin school districts. The company's market dominance has dropped in recent years, although not as much as some school officials who complain about the company's costs would like.

This has only been a minor issue in the coverage of Wisconsin lately so many people may not even know that  many teachers are covered by an insurance company run by the teacher's union and that this particula insurance coverage is negotiated into contracts by the union.  It is not clear whether or not the insurance provided is competitively priced.  This article gives a good, short account of the situation with reaction from both sides, but it also includes this ridiculous piece of obfuscation:

But Steve Lyons, director of public affairs for WEA Trust,... also said in an e-mail that the insurer returns 93 cents out of every health care premium dollar back to the districts in health care coverage, while "some of our for-profit competitors keep more than 20 cents out of every dollar."

How much an insurance company spends on claims (also known as the medical loss ratio) may be good to know, but by itself doesn't tell you whether or not the insurance premiums are priced too high or too low, compared to the competition.

Imagine an insurance company that just paid every claim without checking it's veracity.  It would likely have low administrative costs since it didn't bother to check if any of the claims are real, meaning it would pay out much of every dollar it took in as a claim.  At some point it would have to raise premiums, since it would likely attract a higher percentage of phony claims once it developed a reputation for paying them no matter what.

If you think my example of the all-trusting insurance company is too ridiculous to shed any light on the matter, consider Medicare.  There is debate about exactly how much it costs to run Medicare, but many on the left argue that Medicare spends more than 93 cents of every dollar on claims, and yet high Medicare spending is one of the major items driving our large long-term deficits.

School districts purchasing insurance from the WEA Trust may or may not be getting the best possible price on insurance.  But don't be fooled by the quote above, knowing that they spend 93cents of every dollar on claims doesn't automatically make WEA Trust a good deal.

Comparing the Madison and the Tea Party rallies

ThinkProgress » Madison Rally Bigger Than Biggest Tea Party Rally

Police estimated up to 100,000 people turned out in Madison, WI yesterday to protest Gov. Scott Walker’s (R) assault on unions, making it bigger than any protests the city has witnessed, even those during the Vietnam War....But yesterday’s rally in Madison is noteworthy because at 85,000-100,000, it was bigger than the biggest tea party protest, the September 12, 2009 rally in Washington, D.C., which turned out only an estimated 60,000-70,000.

I can think of at least one other reason that the 100,000 people is noteworthy. There are about 300,000 public sector workers in Wisconsin, so even if you assume all 100,000 at Madison on Saturday were directly affected by Governor Walker's budget repair bill, then 2/3 of people who had their pay cut didn't bother to protest at all.

I don't actually believe these folks are happy about having their pay cut. In fact I'm sure they are not, but I wanted to make a point about the ridiculous framing of the crowd size in this post by Think Progress.

The left in this country has basically spent two years in the enthusiasm wilderness, after dominating that category in 2008.  It is understandable that they would be invigorated by the Madison protests.  The quote above demonstrates that even as they pull away in this category, they can't help looking over their shoulders at the Tea Party.  An indication that even the left sees any gains in momentum from the Madison protests as tenuous.

The Tea Party was motivated by spending and debt, problems that even now may remain a generation or more away to really have meaningful consequences for America.  The Madison protests, by contrast, involve a cut in pay effective in the very near future.  These are two very different movements, not only in political leanings, but in the time horizons that are moving them to action.

When Think Progress draws this comparison, I can only conclude that the Tea Party still matters and that given the immediate nature of the consequences, the Madison protest aren't as large as one might expect.

Talking through Governor Walker's budget repair bill

As expected today, I got a lot of questions/comments about the passage of the modified version of Governor Walker's budget repair bill.  At times like these no one remembers the fact that I am often critical of the Governor, I guess that just goes with the territory.  Here are some of the items that I found myself repeating during conversations today, and a few that didn't come up, but I wish they would have.

1.  The Senate was able to pass the bill without any Democrats because they took out the fiscal items.  Yes, asking public workers to take a pay cut is in a sense "fiscal," but in this case fiscal is referring primarily to times when the state takes on new spending obligations (so there is a higher bar for consideration, that 20 Senators be present).

2.  Yes, Walker has been telling us this is a fiscal item.  That is a political argument, and not likely to bear on any pending legal case.  This is a problem that should be solved at the ballot box (either in 2014 or before if there is a recall).

3.  What you are hearing about the 24 hour notice has to do with a requirement in Wisconsin law on opening meetings.  The State Senate Clerk (not a partisan official) notes an exception to the 24 hour rule, so it is possible that no violation occurred.  This argument may still have some legal legs, but it is far from the slam dunk that some have portrayed it as.

4.  With passage in the assembly, the fight moves to legal challenges and the recall efforts.  Unfortunately, many people can't even name their state senator, so a successful recall effort will most likely be rooted in fear and anger.  These will be directed at the Governor, and channeled into the recall by those with interests in the outcome (including out of state interests).

5.  Recall of the missing Democrats will go on, but without the galvanizing figure of an unpopular Governor, may be at a disadvantage.  (See item #4.)

6.  There is a State Supreme Court election in April.  It could easily become (likely will be?) a referendum on Walker.  If you thought there was too much outside money in the court race before, I suspect you ain't seen nothing yet.  Oh, and if most people don't know their state senator, how many will know the court candidates?

7.   I don't think you can overstate the impact of the public perception of teachers and public schools on this debate.  You may show me studies that they are underpaid relative to the private sector, but I wonder if the differential shouldn't be greater given the desirable schedule and more secure employment (relative to the private sector) that teachers enjoy. (By the way, I think the opinion of teachers is much like people's opinion of congressmen - "my kid's teacher (congressman) is great, but it's all the others that are the problem.")

8.  No, I don't believe public sector wages collected as union dues amount to taxpayer funding of the Democratic party.  I do believe that having the state collect dues amounts to a taxpayer funded Accounts Receivable department for big labor.  Is it so bad that we put a stop to that?

9.  I'm sure the union will still accept dues checks every month.  Whether members are willing to send them or not is another question.  Perhaps we will get some real world data on just how much public sector workers value union membership.

10.  An end to public sector collective bargaining may end a 50 year tradition on Wisconsin, but federal employees and several states don't have collective bargaining for public sector workers, including states like Virginia and North Carolina.  Are they much worse off than Wisconsin?

11.  I don't believe this new law, or the proposed budget will "gut education" or "hurt kids".  His proposal will reduce per pupil spending from a little more than $10,000 to a little less than $10,000 (pdf).  If we cannot educate children at the K-12 level for a little less than $10,000 per child, I'd say we have a problem.

There is still much more to be said, and I don't see this as the end of the process by any means.

Be sure to let me know what you think.

WI Senate Passes End to Collective Bargaining

It happened quickly, so in case you missed it, here is what happened tonight.

At 6pm there was a meeting of a conference committee (made up of members from both the Senate & Assembly) and they took a vote on a revised version of Governor Walker's budget repair bill.  The committee passed the revised version on a party-line vote.

The bill was revised to take out any items that were "fiscal" items.  Doing this allows the Senate to vote on the bill without any Democrats.  The Senate needs the Democrats to vote on any fiscal items, but the Democrats remain in Illinois.

The Senate then took up the revised bill and quickly passed it 18-1.  Dale Schultz was the only Republican to vote against the bill.

Tomorrow, the Assembly is scheduled to take up the bill.  They already passed the earlier version of this bill, so they should still have the votes. The question is whether or not Democrats can stall an actual vote.

Protesters have entered the Capitol, and I have seen some cell phone video of protesters on the streets of Madison.

As I said, they took the fiscal items out of the bill.  What they didn't take out was the end to collective bargaining for public employees.  This is the portion of the bill that has been the source of most (if not all) of the anger over the bill.  If the Assembly passes this bill tomorrow, the Governor will sign it and then collective bargaining by public employees will be prohibited, except (I believe) with respect to wages as outlined in the Governor's original proposal.

Tomorrow, you will likely hear that this was a "nuclear option" and that the bill was "rammed through."  The bill has been out for close to a month, and was debated in the Assembly for around 60 hours, so I don't believe you can make a case that is was "rammed through."

So was what the GOP did legal?  With respect to passing the bill without the fiscal items, the answer is probably yes.  If I recall correctly (I couldn't find a link quickly) during the original analysis by the Legislative Fiscal Bureau, they noted the collective bargaining provisions were non-fiscal items.

During the conference committee meeting Rep. Barca raised the question of whether or not the committee meeting followed Wisconsin law with regard to open meetings. Specifically, that not enough time had passed since the meeting was announced to the public.  We will have to wait and see what happens on this particular point.  This could potentially be something that prevents a vote in the Assembly tomorrow.

What will happen next is anybody's guess.

Walker used as bait in Cowles recall effort

There is an effort underway to recall Republican State Senator Robert Cowles here in the second senate district where I live.  On the way home tonight I passed a sign on the side of the road that read, "Walker & Cowles recall sign the petition here."

Wisconsin law requires that lawmakers be in office at least one year since their last election.  Governor Scott Walker is not even eligible to be recalled until the beginning of 2012, so why advertise Walker's name when he's not up for recall?

My first thought was just that the person collecting the signatures doesn't really understand who the target of the recall is.  That is still possible, but there is another sadder (and more likely) possibility.  Namely, that most of the people in the second senate district don't know who Senator Robert Cowles is, what party he belongs to, or how he stands on Governor Walker's budget repair bill.

Given the intensity of the debate and the media coverage, many (most?) people are now familiar with the Governor, and at least one part of his bill.  I suspect that the recall organizers are counting on that familiarity to drive the recall effort as opposed to any groundswell of opposition to Cowles himself.

Regardless of where you stand on this particular bill, I think we can agree it's more than a little bit sad that so few people are familiar with their elected leaders.

When you are deep in debt you should stop going to Starbucks

When you access news from a  fairly wide array of sources like I do (not Fox News though since I don't have cable) you sometimes glimpse lines of thought that have thoroughly captured the imagination of much of the nation's media.  I don't think they get together and plan this; they don't have to.  People in the news business are always attuned to what the competition is doing.

The latest of these notions I've noticed is that because non-defense discretionary spending is such a small portion of federal spending that we are just wasting our time talking about it.  What we really need to do, the thinking goes, is move on to entitlement and defense spending.  Don't be fooled by this argument.

While the analogy between a household and a government is an imperfect one, it can still be useful.  Imagine you had a friend that complained daily about how terrible his finances were and that he had some very large debt payments coming up.  Every time he was complaining though, in his hand he held the easily recognizable white cup from the Starbucks coffee chain, which you know can cost around $2 or more. Now imagine you pointed this out to him and his argument was that the coffee only cost $2 but his debts are much, much more than that.  Would you be convinced by this argument?

Getting non-defense discretionary spending isn't the only thing we need to be doing, but it is one thing we need to do. Someone should alert the media.

Monopoly is in the eye of the beholder

I would bet that if you surveyed the protesters that have gathered in Madison in the recent weeks on the question of, "are monopolies a bad thing," you would find broad agreement that they are.

I'd be curious to know, then, what the protesters would make of this entry in the Concise Encyclopedia of Economics from the Center for Economics and Liberty:

Although labor unions have been celebrated in folk songs and stories as fearless champions of the downtrodden working man, this is not how economists see them. Economists who study unions—including some who are avowedly prounion—analyze them as cartels that raise wages above competitive levels by restricting the supply of labor to various firms and industries....

According to Harvard economists Richard Freeman and James Medoff, who look favorably on unions, “Most, if not all, unions have monopoly power, which they can use to raise wages above competitive levels” (1984, p. 6).

Tale of two recalls: WI Senators Hansen & Cowles

One of the consequences of Governor Walker's budget repair bill has been efforts to recall both Democratic and Republican state senators.  The Green Bay area happens to be represented by one of each, Republican Robert Cowles and Democrat Dave Hansen.  There is one crucial difference in these recall efforts, however, Cowles is being targeted for doing the job he was elected to do.  Hansen, on the other hand, is being targeted for leaving the state to avoid that very same job.

The Journal Sentinel recently offered a glimpse into which state senators are particularly vulnerable to a recall by taking a look at the vote for Obama in 2008 and Walker in 2010 in each senate district.  You can read the article here.  They remark that Cowles represents a district where Obama got more than 50% of the vote in 2008 and then end on this note, which they included in an update:

Update:  Related to the point above about personal popularity, some of the lawmakers on this list had very narrow victories last time, while others won unopposed or by large margins. It's important to factor that in as well. Republicans

In 2008 Hansen won re-election with 66% of the vote, a healthy margin to be sure, but the margin for Cowles was even bigger.  In 2008 there were just under 61,000 votes cast in the 2nd Senate District that Cowles represents, he got 99% of them.

So in Cowles, we have a state senator subjected to a recall drive who just two years ago was able to command 99% of the vote in his district.  Add to that the fact that he is the subject of a recall primarily because some Democratic leaning interest groups don't like the efforts of the Governor to curtail collective bargaining for public employees, and Cowles has publicly been supportive of the Governor's bill.

Hansen, by contrast, didn't command that much of the vote in the last election.  More importantly from my perspective is the fact that Hansen has fled the state with the express intent of shutting down  legislative activity in the state of Wisconsin, at least with respect to fiscal matters.

As I've said before, I'm dubious with respect to the value of recall efforts.  Elections have consequences, and we shouldn't seek to undo them without cause.  Perhaps some see the end of collective bargaining for public employees as such a cause  For my money, leaving the state just to avoid losing a vote in the legislature  seems like a much more compelling reason to undo election results.

Separating Collective Bargaining from the Budget Repair Bill

A New Strategy for Wisconsin - James Lindgren - National Review Online

On February 17, the 14 Democratic members of the Wisconsin senate fled across the state line to the Best Western Clock Tower Resort in Rockford, Ill., the city in which I grew up. They were denying Republicans a three-fifths quorum on a bill that would restrict public unions in Wisconsin. They are believed to be still wandering about the Midwest, on an odyssey that poses problems for democratic government.

One potential solution that has not received enough attention is dividing Wisconsin Senate Bill 11 into several separate bills, and passing the parts that do not require a three-fifths quorum. The most controversial provisions — the restrictions on collective bargaining — are subject to a quorum of only a majority of elected senators, and Republicans hold 19 of the Wisconsin senate’s 33 seats.

This author is not the first to suggest such a strategy. While it may make perfect legal sense, it may be a tough sell politically. Governor Walker has argued that collective bargaining is a fiscal matter since he sees removing it as critical to returning the state to fiscal health.

On the other hand, if we see any more stories about efforts to thwart democracy by the Mayor of Madison's office, perhaps voters will be fed up enough to allow Walker to get creative in passing his budget repair bill.

Best of the Cheddarsphere 3/3/11

I think my google reader was actually smoking today.

The Recess Supervisor:

I'm all for opening the Capitol to protesters. But leave when the building closes and stop taping your s@#$ everywhere. Just hold your damn sign. Is it really that hard?

Illusory Tenant:

O! for the olden days,* when "judicial conservatives" purported to honor the plain text of the law, and counsel "restraint."

Dad29:

By the way, another of Warren's [as in Buffett] companies makes guaranteed-to-break oven cookstones. We oughta know, having returned THREE of them in 8 months.

Special second entry from Dad29 with reference to my favorite frequent commenter:

If Krugman's simple-minded education errors are a proxy for his economic "thought," then my pal Struppster is probably considering honorable suicide.

Democracy Madison Style

This is what democracy looks like?

WITI-TV in Madison reports:

Before protesters stormed the capitol, the mayor of the city of Madison tried to pull a fast one. The governor's budget repair bill was on the fast track, and Madison Mayor Dave Ciesliewicz was racing against the clock to pass new union contracts first.

E-mails obtained by the FOX6 Investigators show that the mayor enlisted the help of State Senator Mark Miller. They both tried to convince the Secretary of State to hold up the bill by taking the maximum 10 days allowed by law before publishing the bill.

With friends like this in government, someone is going to have to remind me why, exactly, it is that public employees need collective bargaining.  The only party on the other side of this particular deal, the taxpayer, clearly didn't have a voice in the negotiation.  Perhaps that is no big deal in Madison, but the actions of some clearly have statewide implications.

Here is the mayor's chief of staff, Janet Piraino, in one of the emails:

Hey, have you guys given any thought to asking [Secretary of State] Doug LaFollette to take the maximum 10 days before publishing the bill??  We're trying to negotiate and settle contracts this week....

...(I know I'm getting ahead of myself and we're still working to stop the bill, but we need to put things in motion now in case it's approved on Walker's timeline.)

I would say Ms. Piriano is getting ahead of more than herself.  How about the fact that just a few short months ago voters of this sate elected a Republican governor and Republican legislature.  Since she's clearly not happy with the outcome she thinks it's a good idea to try and enlist the Secretary of State to delay implementation of a proposal she believes will become state law.

Got that, a chief of staff to one city's mayor saw fit to try and thwart the will of a majority of Wisconsin voters by scheming to obstruct the enactment of a law.  The Secretary of State apparently wouldn't play ball.  Ultimately it didn't matter due to the flight of the Senate Democrats to Illinois.

If the Governor's actions aren't suitable to a majority of voters then he will be shown the door at the next election.  That is the way democracy works.

I really don't think you have to be a wingnut to believe these emails provide a glimpse into the statist mindset.  Ms. Piraino clearly sees the battle as one between her Democratic colleagues inside Madison city government and the Governor himself.  I'm not sure if her vision even permits room for the average father of six from NE Wisconsin.

So to my friends on the left, you'll have to forgive me if I ask again:  This is what democracy looks like?

Governor Walker's Budget

There will be much more to say in the days ahead, but for now let me highlight these numbers as reported by WisPolitics:

All funds spending:
Actual FY 2010 and adjusted base FY 2011: $62.32 billion
Agency requested spending 2012-13: $67.44 billion
Walker proposal 2012-13: $59.2 billion...

When the guv touted his budget yesterday for reducing all funds spending by $4.2 billion, he was comparing his proposal ($59.2 billion) to the fiscal year 2011 doubled ($63.5 billion), which is how guvs have traditionally built their budgets. 

You can read the budget bills here:  Senate Bill 27 & Assembly Bill 40 (they are both pdf's).

Don't be frightened by their length of these bills (about 1300 pages).  Only the first 45 pages or so are written in plain English describing the bill.  The remaining pages are the legal language changes that will be to the law.  I think we can all afford to read 45 pages when it comes to how we are going to spend our money in this state over the next two years, can't we?