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Old 04-22-2008, 12:51 PM   #1 (permalink)
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Big Business Big Gov. Strange Bed Fellows

Henry Waxman is the original sponsor of HR 1108, Family Smoking Prevention and Tobacco Control Act. This is a bill which would give the FDA regulatory control over tobacco products. On the surface - you would think that there is nothing unusual about a Democrat sponsoring legislation to enhance regulatory control over a "deadly" product. But in this case the nations largest tobacco company supports the legislation and the head of the FDA does not. The Commissioner of Food and Drugs Stated the following during a Congressional hearing on the subject:

Quote:
The Agency has three primary categories of concern with the proposed role for FDA.

First, we have concerns that the bill could undermine the public health role of FDA. Second, we have concerns about aspects of the bill that may be extremely difficult for FDA to implement. And third, we have significant concerns about the resources that would be provided under the bill and the expectations it might create. Let me elaborate on each of those areas.
http://www.fda.gov/ola/2007/tobacco100307.html

Phillip Morris had the following to say:

Quote:
One of the bill's more surprising backers: Philip Morris USA, the nation's largest tobacco producer, which controls about half of the U.S. cigarette market, including Marlboro, the nation's bestselling brand.

The company has said it supports legislation as a way of meeting the goal of FDA regulation that was called for in a recent U.S. Institute of Medicine (IOM) report.

"These bills provide the framework for comprehensive FDA regulation of tobacco products and provide important policy solutions to many of the complex issues involving tobacco products," Howard Willard, Philip Morris USA's executive vice president of corporate responsibility, said in a prepared statement. "FDA regulation, as introduced in Congress, would be the most effective way to address the Institute of Medicine's concerns."
http://www.medicinenet.com/script/ma...ticlekey=84304

There have been topics on TFP concerning regulation, free markets, competition etc. Here we have a clear example of either the potential for unintended consequences or politics at its worse where those pretending to support the health and well being of people are actually in bed with "big business". I think its the latter.

Just to be clear on why Phillip Morris would support this - it is because the restrictions the bill would place on new tobacco products being introduced into the market and advertised or existing products being advertised will give Phillip Morris a virtual lock on their current US market share. No competition. Phillip Morris recently separated its international and domestic tobacco companies. The international company (ticker: PM) is positioned for growth and the domestic company (ticker: MO) currently has a dividend yield of over 5% and they anticipate buying back billions of dollars of stock using cash flow. This legislation will virtually lock in their current US market share giving the company a very measurable and predictable cash flow for decades to come..

You may think the FDA could ban tobacco products all together because of the health risks, right? Well think again, because the bill reserves that authority to Congress regardless of what the FDA thinks.

Quote:
Requires the Secretary to establish tobacco product standards to protect the public health, but reserves to Congress the power to ban any tobacco products or reduce the nicotine level to zero.
http://www.congress.org/congressorg/...8&congress=110

I guess Congress doesn't want to risk the loss of billions in tobacco tax revenues overnight and hey - whats wrong with a little nicotine between friends. the next time you read a post about Bush and oil/defense/Haliburton/etc., think about the 189 Democratic co-sponsors of this bill.

Quote:
Original Sponsor:

Henry Waxman (D-CA 30th)

Cosponsor Total: 224

189 Democrats

35 Republicans
P.s. - I am going to buy a few more shares of MO. I love this country.
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Old 04-22-2008, 01:04 PM   #2 (permalink)
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I'm still not sure if smoking should be under the jurisdiction of the FDA. It's not a food, and it's really not a drug (in that a drug is taken to benefit the health of the user).
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Old 04-22-2008, 01:38 PM   #3 (permalink)
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Quote:
Originally Posted by aceventura3
P.s. - I am going to buy a few more shares of MO. I love this country.
I feel dirty, but thats exactly what I thought while reading this.
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Old 04-22-2008, 01:45 PM   #4 (permalink)
 
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We discussed this bill pretty thoroughly in Up in Smoke.

My position hasnt changed.

ace...when mentioning Phillip Morris' support, you neglected to mention the fact that the bill is also supported by over 600 national/state/local organizations, including every major national health related organization.

Compromises were made.......so its not a perfect bill.....so what....it is addressing a national health issue...you have to start somewhere.

Quote:
Originally Posted by aceventura3
I guess Congress doesn't want to risk the loss of billions in tobacco tax revenues overnight and hey - whats wrong with a little nicotine between friends. the next time you read a post about Bush and oil/defense/Haliburton/etc., think about the 189 Democratic co-sponsors of this bill.
Before focusing any further inflammatory charges solely on Waxman and the 189 Dem co-sponosrs (or Kennedy, the lead sponsor on the Senate version), you should know that a similar bill introduced by Repub Senator Dewine in 2004 passed by UNANIMOUS consent in the Republican Senate, only to be stalled in the House.

If you really want to make it partisan....follow the money and which party received more tobacco money over the last 20 years:
Total tobacco industry contributions - nearly $60 million
26% to Democrats and 74% to Republicans


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Last edited by dc_dux; 04-22-2008 at 02:55 PM.. Reason: Automerged Doublepost
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Old 04-22-2008, 04:26 PM   #5 (permalink)
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Quote:
Originally Posted by dc_dux
We discussed this bill pretty thoroughly in Up in Smoke.

My position hasnt changed.
I never read the thread you referenced above. Regardless, if my view on this issue is here or in the other thread, after researching the issue I came to my own conclusions and you can read my views.

Quote:
ace...when mentioning Phillip Morris' support, you neglected to mention the fact that the bill is also supported by over 600 national/state/local organizations, including every major national health related organization.
I did not neglect to mention the full amount of support for the bill, it simply is not relevant to my view and certainly doesn't change the fact that Phillip Morris will be the primary benefactor of this legislation with a virtual lock on the US tobacco market - even more so than the one they currently have. If you are disputing that supposition, then we have something to discuss. If I am wrong, I might suffer financial consequences - so I am very interested in the views of others on this topic. I think investing in Phillip Morris if this legislation passes would be like investing in a 30 year AAA rated corporate bond paying over 5% with the potential for capital appreciation and increasing dividend payments.

Quote:
Compromises were made.......so its not a perfect bill.....so what....it is addressing a national health issue...you have to start somewhere.
I disagree. I don't think good starting points are when you compromise your principles. If I thought smoking was as harmful to society as some say it is, I could not support it being legal. If I worked at the FDA with the following mission:

Quote:
The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health.
http://www.fda.gov/opacom/morechoices/mission.html

I could not support smoking being legal.


Quote:
Before focusing any further inflammatory charges solely on Waxman and the 189 Dem co-sponosrs (or Kennedy, the lead sponsor on the Senate version), you should know that a similar bill introduced by Repub Senator Dewine in 2004 passed by UNANIMOUS consent in the Republican Senate, only to be stalled in the House.

If you really want to make it partisan....follow the money and which party received more tobacco money over the last 20 years:
Total tobacco industry contributions - nearly $60 million
26% to Democrats and 74% to Republicans


I understand your point here, but it does not have any impact on the points I have made.

Quote:
Originally Posted by Ustwo
I feel dirty, but thats exactly what I thought while reading this.
Why feel dirty for loving this country?
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Last edited by aceventura3; 04-22-2008 at 04:29 PM.. Reason: Automerged Doublepost
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Old 04-22-2008, 04:34 PM   #6 (permalink)
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Quote:
Originally Posted by willravel
I'm still not sure if smoking should be under the jurisdiction of the FDA. It's not a food, and it's really not a drug (in that a drug is taken to benefit the health of the user).
Science says it is a drug. Vernacular disagrees. In my opinion, science wins.

drug: a substance that has a physiological effect when ingested or otherwise introduced into the body

To respond to the OP... Uh, yeah. Corporate interests have a stranglehold on our government and our culture. I am starting to think that this is an unavoidable consequence of our worship of the "free market" (or at least the variation thereof which we have implemented). By making the market and economics the ultimate arbiter, you sort of place yourself in the position of being a whore.
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Old 04-22-2008, 04:45 PM   #7 (permalink)
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Quote:
Originally Posted by ubertuber
To respond to the OP... Uh, yeah. Corporate interests have a stranglehold on our government and our culture. I am starting to think that this is an unavoidable consequence of our worship of the "free market" (or at least the variation thereof which we have implemented). By making the market and economics the ultimate arbiter, you sort of place yourself in the position of being a whore.
Whores at least get paid, better than being a slave which is the alternative if you want to use that type of analogy
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Old 04-22-2008, 04:48 PM   #8 (permalink)
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Quote:
Originally Posted by ubertuber
Science says it is a drug. Vernacular disagrees. In my opinion, science wins.

drug: a substance that has a physiological effect when ingested or otherwise introduced into the body
Then the FDA should ban it completely. It's clearly a harmful drug with absolutely no benefits.
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Old 04-22-2008, 04:56 PM   #9 (permalink)
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Quote:
Originally Posted by willravel
Then the FDA should ban it completely. It's clearly a harmful drug with absolutely no benefits.
Yeah, but the ho doesn't tell the pimp what to do.
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Old 04-22-2008, 05:06 PM   #10 (permalink)
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Quote:
Originally Posted by ubertuber
Yeah, but the ho doesn't tell the pimp what to do.

*Pimp slap*

Fair enough. I'll see if I can dig up that other thread about smoking.
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Old 04-22-2008, 05:07 PM   #11 (permalink)
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Quote:
Originally Posted by ubertuber
Yeah, but the ho doesn't tell the pimp what to do.
But to be serious, this type of legislation is not a free market consequence but just the opposite. It is an erosion of the free market due to government regulation which favors one company over all others, which is closer to fascism.
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Old 04-22-2008, 05:12 PM   #12 (permalink)
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Don't forget that not everyone is down with a free market, Ustwo, at least not completely.

Fascism would be capital punishment for the sale or use of cigarettes.
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Old 04-22-2008, 05:28 PM   #13 (permalink)
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Quote:
Originally Posted by willravel
Don't forget that not everyone is down with a free market, Ustwo, at least not completely.

Fascism would be capital punishment for the sale or use of cigarettes.
I don't see how that would be fascism thats just a possibility under any authoritarian government edict.

If anything such simple, and unhealthy pleasures would be encouraged by the governments in such situations.
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Old 04-22-2008, 05:52 PM   #14 (permalink)
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I'd agree with that assessment if I thought that congressmen were writing these bills using their own judgment. Maybe I'm cynical, but I suspect that PM had something to do with the form this bill takes.
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Old 04-22-2008, 06:15 PM   #15 (permalink)
 
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Quote:
Originally Posted by ubertuber
I'd agree with that assessment if I thought that congressmen were writing these bills using their own judgment. Maybe I'm cynical, but I suspect that PM had something to do with the form this bill takes.
I dont have any doubt that PM influenced the bill to a greater extent than the public health organizations that also support it.

PM contributes to Congressional candidates through its PAC; public health organizations dont. Thats the dark side of US politics....money is often more influential than the public health or the public good. That should come as no surprise.

I also wouldnt be surprised if they (PM, the anti-smoking groups and the Congressional staff bill righters) met privately and crafted mutually acceptable provisions for the bill.

But the fact remains, the bill (initially proposed 4 years ago) is the first meaningful attempt to regulate tobacco products beyond the limited labeling and advertising restrictions enacted in the 70s.

For me, thats a good thing...even if PM benefits at the expense of other producers. I suspect that is why every major national public health organization supports it as well.

Quote:
Originally Posted by aceventura3
I don't think good starting points are when you compromise your principles. If I thought smoking was as harmful to society as some say it is, I could not support it being legal.
I dont agree that the public health organizations compromised their principles....they accepted the political reality in order to get "half a loaf" instead of none. Thats the real world of politics as opposed to the "Disney" version you often allude to.

And I wont be buying PM stock.
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Old 04-22-2008, 07:50 PM   #16 (permalink)
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I find it unfortunate that what is apparently in large part engineered by the worlds largest tobacco seller for its own benefit is considered good legislation because its a 'start'.

While perhaps some good may come of it, this sort of corporate favoritism so clearly displayed is just the sort of government I thought the democrats were elected to stamp out.

While claims of this level of collusion have been flowing from their lips for the last 7 years, only here does it seem to be laid bare.

Well done congress well done, a generation of young voters have never seen a democrat run congress in action, now they will learn what I learned growing up in the 1980s.
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Old 04-22-2008, 07:58 PM   #17 (permalink)
 
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Quote:
Originally Posted by Ustwo
I find it unfortunate that what is apparently in large part engineered by the worlds largest tobacco seller for its own benefit is considered good legislation because its a 'start'.

While perhaps some good may come of it, this sort of corporate favoritism so clearly displayed is just the sort of government I thought the democrats were elected to stamp out.
Ustwo..you and ace obviously believe the bill benefits PM (and the large existing tobacco companies) more than it the benefits the public health. I understand that, I just dont agree with it.

I come down on the other side (with the 600+ national organizations), that the benefits to the public health are greater...and that the lesser benefits to the industry are a trade-off that had to be made in order to get a bill that could gain bipartisan support.

Quote:
Well done congress well done, a generation of young voters have never seen a democrat run congress in action, now they will learn what I learned growing up in the 1980s.
The generation of young voters can decide for themselves.

I hope those young voters dont judge either party in a vacuum when considering the issue of corporate favoritism...and that they also consider bills like:
the Dem FISA reform bill that removes corporate favoritism to the large telecomms (re: retroactive immunity) in the Repub bill

the 08 Dem energy bill that removed the corporate favoritism to Exxon/Mobile (and friends) at the expense of small, start-up alternative energy companies in the 05 Repub energy bill

the 07 Dem contracting reform bill that addressed favoritism in government contracting that benefited companies like Haliburton to the detriment of smaller companies wanting to compete for government contracts
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Old 04-23-2008, 03:55 AM   #18 (permalink)
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Quote:
Originally Posted by Ustwo
Well done congress well done, a generation of young voters have never seen a democrat run congress in action, now they will learn what I learned growing up in the 1980s.
Well done indeed Mr. Ustwo!

And to think that they still haven't used up their first 100 hours to (as Nancy Pelosi stated) "drain the swamp" after more than a decade of Republican rule? Amazing!

Let's take a peek at the aggressive game plan of this brash new (well not so new) maverick congress:
Quote:
Originally Posted by washingtonpost.com

Day One: Put new rules in place to "break the link between lobbyists and legislation."

Day Two: Enact all the recommendations made by the commission that investigated the terrorist attacks of Sept. 11, 2001.

Time remaining until 100 hours: Raise the minimum wage to $7.25 an hour, maybe in one step. Cut the interest rate on student loans in half. Allow the government to negotiate directly with the pharmaceutical companies for lower drug prices for Medicare patients.

Broaden the types of stem cell research allowed with federal funds _ "I hope with a veto-proof majority," Nancy Pelosi added in an Associated Press interview Thursday.

All the days after that: "Pay as you go," meaning no increasing the deficit, whether the issue is middle class tax relief, health care or some other priority.
Look out America! The "people's mandate" is here and they mean (meant?) business ...at least all the way up to actually being elected.

Good thing they still have those "first 100 hours" to get started on these bold measures or wrap up the half-assed boiled down versions in time to take a vacation. Hopefully they'll have time to delay emergency troop funding, line emergency bills with patriotic pork "like a veto magnet", take fact-finding trips, redecorate offices, take breaks instead of voting, meet with leaders of terrorist nations, and score the best approval rating ever!

Yes, well done indeed Mr. Ustwo!

... Go Peoples Mandate! Phillip Morris does have a friend in Congress.
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Old 04-23-2008, 04:01 AM   #19 (permalink)
 
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Quote:
Originally Posted by ottopilot

Good thing they still have those "first 100 hours" to get started on these bold measures or wrap up the half-assed boiled down versions in time to take a vacation. Hopefully they'll have time to delay emergency troop funding, line emergency bills with patriotic pork "like a veto magnet", take fact-finding trips, redecorate offices, take breaks instead of voting, meet with leaders of terrorist nations, and score the best approval rating ever!

Well done indeed Mr. Ustwo!

... Go Peoples Mandate!
So you still want to pretend there have been no accomplishments in the last year:
FISA reform, FOIA reform, contracting reform, lobbying/ethics reform, US attorney hiring reform, VA reform, FEMA reform.

Renewal of SCHIP, implementation of 9/11 Commission recommendations, new education and economic competitiveness initiatives, expansion of student loan programs, investments in renewable energy and energy conservation...
You ignored it in another recent thread so I assume you will ignore it here and instead continue with your obsession with redocorating
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Old 04-23-2008, 04:04 AM   #20 (permalink)
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I don't know dc: essentially, what you're saying is that the health organizations, the tobacco companies, and the guys the tobacco companies are paying off got together and found a compromise that benefits the tobacco companies. Yes, I know that our Congresspeople do more than get payed off, and I'm sure that it's a tough job...but in this type of context, the only real difficulty I see for the Congressperson - the only reason they have to give concessions to the tobacco companies - is because if they don't, their money flow will be cut off. Unless you're stipulating that these companies will start kneecapping people, then I see this as a classic sense of one hand washing the other, corporate politics.
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Old 04-23-2008, 04:08 AM   #21 (permalink)
 
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Originally Posted by pig
I don't know dc: essentially, what you're saying is that the health organizations, the tobacco companies, and the guys the tobacco companies are paying off and found a compromise that benefits the tobacco companies.
I am saying they crafted a bill that is likely to get enough votes to ensure passage and benefits the public health. Its virtually the same bill that the Republican Senate passed unanimously in 2004 only to be stalled in the Republican House.

Its not the best bill to regulate tobacco, but "politics makes strange bedfellows" and IMO, the trade-off is acceptable in order to take that long overdue and necessary first step.
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Old 04-23-2008, 04:24 AM   #22 (permalink)
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dc: 'get enough votes to ensure passage" is the heart of this...i don't really care that much about the whole dem vs. repub bit, and i gotta shower to get off for work...but that's the part that bothers me.
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Old 04-23-2008, 04:27 AM   #23 (permalink)
 
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pig....in some respects, without the corporate interests, its much like the gun control issue in the 90s.

Congress would never have been able to enact the Brady bill or any meaningful gun control legislation without the support of the NRA and its hold over many Republican members of Congress.

Concessions were made by the gun control advocates, NRA got some its pet provisions included (gun show loophole) or other provisions removed, and the bill became law with bi-partisan support.
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Old 04-23-2008, 04:29 AM   #24 (permalink)
 
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so how did this thread about the tobacco bill spill over into a space of conservative fantasizing about the early phase of an administration that has not yet happened? it's like you comrades are practicing the art of remainingin opposition. funny stuff.

on the general question: i don't know where on earth anyone got the impression that the american state and the corporate sector are not intimately intertwined, like entirely, like wholesale--what distinguishes republicans and democrats primarily is which factions within the corporate sector they work with. republicans in the main like one sector of defense contractors; democrats another. republicans in the main talk about free markets while practicing a military keynesian approach to economic management; democrats talk more about comprehesive approaches to state interaction with the economy. neither republicans or democrats in fact operationalise "free markets" anywhere, ever. to think in terms of "free markets" is to confuse 18th century political economy textbooks with reality--to think in terms of "free markets" really means you don't understand the first thing about contemporary capitalism--you know, the result of the history of capitalism since around the 1870s. "free markets" are nice nietzchean fantasies, and they function on small scales in limited ways--within overall legal contexts that are state creations. markets and state are intertwined in a wholesale fashion--if you think about it, the only real distinction between republican and democrat approaches is aesthetic--whether you want to see the regulatory functions or not--and ethical--whether you think it's ok for the population which does not hold capital to suffer the consequences of volatility in the economic sphere--and so tactical.

it's pretty straightforward in a framework that looks at actual history and actual conditions rather than at market metaphysics.



the american agricultural sector is extremely heavily subsidized by the state. tobacco farmers, because they farm, receive these subsidies. presumably there was once a space where people ate tobacco.

o yeah---i smoke still---as mark twain said quitting is the easiest thing in the world to do, ive done it hundreds of times.
i support the bill.
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Old 04-23-2008, 04:53 AM   #25 (permalink)
 
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Quote:
Originally Posted by ottopilot
... Go Peoples Mandate! Phillip Morris does have a friend in Congress.
Phillip Morris has many friends in Congress...far more Republican than Democrat


Donor Profile: Altria Group (formerly Phillip Morris)
In this case, they played both sides...they won and public health won.
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Old 04-23-2008, 05:10 AM   #26 (permalink)
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Originally Posted by dc_dux
So you still want to pretend there have been no accomplishments in the last year:
FISA reform, FOIA reform, contracting reform, lobbying/ethics reform, US attorney hiring reform, VA reform, FEMA reform.

Renewal of SCHIP, implementation of 9/11 Commission recommendations, new education and economic competitiveness initiatives, expansion of student loan programs, investments in renewable energy and energy conservation...
You ignored it in another recent thread so I assume you will ignore it here and instead continue with your obsession with redocorating
We don't want to feel ignored now, do we?
The recent redecorating of the House dining facility and an initial fixation in redecorating the congressional offices during those critical first 100 hours of which were delayed, stretched, extended, redefined, hardly or never accomplished. That redecorating. Not to say that no other congress hasn't redecorated. But in light of the great sense of urgency touted by the new/not-so-new/current congress, it seems that the momentum never really took hold on anything substantial. The few measures you mention are hardly ground breaking. The phrases "all talk" or "say anything to get elected" come to mind.

You seem to ignored all the accomplishments (or "non") I mentioned in my previous posts, how say you? The bigger issue is ... how long have these fine "leaders" been in congress? Is this the best work of the "peoples mandate"?

I understand the sentiment "now" of championing low expectations so not to feel used or disappointed ... sort of like conservatives realizing George Bush really isn't a conservative ...still slappin' the knee on that one. Congress did set this goal of the 100 hours "people's mandate" which essentially turned out to be a bait-and-switch to get elected and a joke on their supporters.

Note: I'm not giving the Republicans any slack on their performance either. They are all the people's representatives.

Congressional Report Card - a big fat "F"!

Sorry to have gotten so far off topic. This should be taken somewhere else.

dc_dux ... perhaps start a new thread about the successes of the first 100 hours of congress and the "people's mandate"?
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Old 04-23-2008, 05:14 AM   #27 (permalink)
 
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otto--how is this "people's mandate" business any different from republicans talking about "americans"?

aren't you just addressing a matter of rhetoric, the word that is used to address a constituency? you can't possibly not see this for what it is...o course the terminology has resonances (that's what makes it rhetoric)---puts you in a position kinda like the 1820s right watching the jacksonian thing happen--that would make the republicans the defenders of a narrow elite and the democrats the populists.

well, maybe it does make some sense that you'd be a bit bent.
the right has run the show in terms of rhetoric for a while now.
now maybe you folks are loosing that too.

funny how these things turn on their heads and back again.
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Old 04-23-2008, 05:21 AM   #28 (permalink)
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Quote:
Originally Posted by dc_dux
Phillip Morris has many friends in Congress...far more Republican than Democrat


Donor Profile: Altria Group (formerly Phillip Morris)
In this case, they played both sides...they won and public health won.
I believe I said Congress, which implies "Congress". Political parties were not mentioned. I'm an equal opportunity critic of Congress.
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Old 04-23-2008, 05:22 AM   #29 (permalink)
 
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Quote:
Originally Posted by roachboy
otto--how is this "people's mandate" business any different from republicans talking about "americans"?

aren't you just addressing a matter of rhetoric, the word that is used to address a constituency? you can't possibly not see this for what it is...o course the terminology has resonances (that's what makes it rhetoric)---puts you in a position kinda like the 1820s right watching the jacksonian thing happen--that would make the republicans the defenders of a narrow elite and the democrats the populists.
A more recent comparison would be the '94 Republican Contract with America, which accomplished few its initiatives in its first year.
Hoping to duplicate the electoral success of the Contract with America, Democrats ran on a platform of "Six for '06." As of late summer, two of the items--9/11 reforms and an increase in the minimum wage--had become law, while Bush had vetoed funding for stem-cell research. Proposals to reduce subsidies for oil companies and expand Pell grants remain tied up in conference committees (note: enacted later in the year); a bill to fix Medicare's prescription-drug problem has stalled in the Senate. Still, the GOP passed only two of the 11 Contract with America items in its first year back in charge.

One man's Congressional report card
Now back to the issue at the heart of the OP....big business/big government bedfellows!

ace, Ustwo and otto:

I'm curious why you dont have problems with these big business/big government bed fellows:
Exxon/Mobil et al getting $billions in tax benefits in the Republican 05 energy bill at the expense of supporting small, start-up alternative energy development companies.

Verizon, Bell South et al getting retroactive immunity for assisting in spying on Americans in the Republican FISA bill.
But you have problems with Phillip Morris getting benefits from this bill.

IMO, the benefits to those companies in those bills had a far greater negative impact on the public good than the benefits to Phillip Morris in this bill.
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Old 04-23-2008, 10:43 AM   #30 (permalink)
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The newly spun off international unit of Phillip Morris (or Altria the new company name), announced its earnings this morning, a 29% increase in net profits from a year ago. Shareholders of Phillip Morris before the spin-off received one share of PM and one share of MO for each share of Phillip Morris that they owned prior to the spin-off. The primary reason for the spin off was to protect the international company from US regulations and litigation exposure releasing the true value of the international unit.

Quote:
The stock was recently up 3.4% to $51.75.

The international company was recently spun off from parent Altria Group Inc. and this is the first time the company is reporting as an independent company. Philip Morris International is officially based in New York and trades on the New York Stock Exchange, but gets all its sales from outside the U.S.

The company posted net income of $1.87 billion, or 89 cents a share, compared with $1.45 billion, or 69 cents a share, a year earlier. Revenue jumped 18% to $15.6 billion, while revenue excluding excise taxes rose 14% to $6.33 billion.

Analysts' latest mean estimates were earnings of 77 cents a share and revenue of $6.15 billion. Gross margin was flat at 25.8%. Shipment volume rose 2.2%, but the European Union posted a 5.9% drop.

Philip Morris, which was Altria's international arm, is growing faster than the U.S. cigarette business. Last month's breakup was designed to separate the lucrative international division from U.S. regulators and had been planned for years despite concerns that the tobacco litigants would try to stop the transaction.
http://online.wsj.com/article/SB1208...?mod=wsjcrmain

MO, the domestic company will release earnings Thursday. They have already made their $4 billion annual master settlement payment on 4/15/2008.

Quote:
Altria Group Inc.'s (MO) Philip Morris USA made its annual Master Settlement Agreement payment of $4 billion, including about $156 million the company disputes it owes as a result of the 2005 nonparticipating manufacturer adjustment, which takes into account the effect of settlements on companies' market share loss.
http://online.wsj.com/article/BT-CO-...?mod=wsjcrmain

In 2007 they paid about $36 billion in excise taxes (combined international and domestic) and about $4 billion in income taxes.

Some argue that the States are not adequately spending settlement money on public health.

Quote:
Since the November 1998 multi-state tobacco settlement, we have issued regular reports assessing whether the states are keeping their promise to use a significant portion of their settlement funds – expected to total $246 billion over the first 25 years—to attack the enormous public health problem posed by tobacco use in the United States.

This year, we find that the states have made important progress by increasing funding for tobacco prevention and cessation programs by 20 percent to a total of $717.2 million in fiscal year 2008, which is the highest level in six years. However, most states still fail to fund tobacco prevention programs at minimum levels recommended by the U.S. Centers for Disease Control and Prevention (CDC), and altogether, the states are providing less than half what the CDC has recommended.
http://www.tobaccofreekids.org/reports/settlements/

No matter how you look at it, things are looking good for our largest tobacco company. I just find it ironic that some of us who are highly critical of big business, rich getting richer, Republicans being greedy, Haliburton, etc, etc. are perfectly willing to sellout their principles as long as a company like Phillip Morris is willing to fund government spending in exchange for protected status - even if the product as they would say, "kills".
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Old 04-23-2008, 11:33 AM   #31 (permalink)
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They want to be regulated because regulation is protection. Companies that have a constituency in the government tend to have their voices heard. The bureaucracies protect their own. A bureaucrat needs to protect the entity s/he is regulating or s/he's out of a job. PM understands that. The tobacco companies' situation had gotten to the point that they need regulation to survive, or at least to avoid having to drown in litigation.

That's my objection to state-lovers - there are always unintended consequences.
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Old 04-23-2008, 01:38 PM   #32 (permalink)
 
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Quote:
Originally Posted by loquitur
They want to be regulated because regulation is protection. Companies that have a constituency in the government tend to have their voices heard. .
This is the commonly held reason given for PM's support of the bill...and I agree.

And even with the unintended consequences, for the most part, the bill still begins to meet the goals of the public health community.

I still dont see the sellout. I would describe more as a trade-off...such is politics. (The FISA bill with retroactive immunity for the telecomms was a sellout - no public good at all comes out of that concession.).
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Old 04-24-2008, 06:50 AM   #33 (permalink)
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Quote:
Originally Posted by dc_dux
I still dont see the sellout. I would describe more as a trade-off...such is politics. (The FISA bill with retroactive immunity for the telecomms was a sellout - no public good at all comes out of that concession.).
There are a few truisms that can be taken from Phillip Morris situation and generally applied to other situations like the FISA bill with retroactive immunity for telecoms.

1) On a macro level over the long-term corporations will pass increased costs to consumers and maintain a fair profit margin commiserate with market risk as long as there is demand for their product.

2) When competition is restricted profit margins will grow and become excessive relative to market risk.

3) Corporations will cooperate with government to restrict competition.


In the case of Phillip Morris smoking litigation and settlement costs were passed on to consumers. If there is litigation against telecoms for cooperating with the Bush administration those costs will be passed on to consumers. In the case of the telecom industry in this country compared to some Asian and European nations we are behind. Excessive litigation against telecoms will require them to set aside billions of dollars for settlements and incur hundreds of millions in legal costs. This redirection of capital will put our nation further behind in the telecom industry compared to some other countries. The only true winners will be trial attorneys. Consumers will lose because of increased cost and less innovation.

In the case of Phillip Morris, they cooperated with government to restrict competition to protect market share. In the case of the telecom industry, market entry is already greatly restricted. If the companies that cooperated with government by releasing communication records are put at financial risk where survival is at question, competition in the telecom industry will be reduced. Profit margins of the remaining companies will go up, potentially becoming excessive relative to market risk. The winners here will be investors, the rich will get richer.

In the case of Phillip Morris, they negotiated settlements with government. Individuals actually damaged did not benefit. The settlements were a in reality a tax increase on the company and on the industry. A form of misdirection on the part of our government. In the FISA situation Bush is stating clearly that government and his Administration is responsible for any violation of the FISA law and that the Telecoms acted in good faith. This form of honesty is refreshing in my opinion.
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Old 04-24-2008, 06:56 AM   #34 (permalink)
 
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LOL....Ok, if you say so, Ace.

You can continue to characterize support of this bill as a "sellout" of one's principles and I will respectfully disagree.

There is nothing more to be said.
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Old 04-24-2008, 07:09 AM   #35 (permalink)
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Quote:
Originally Posted by aceventura3
The only true winners will be trial attorneys. Consumers will lose because of increased cost and less innovation.
You don't say. You know this reminds me of a graph I saw a few days ago. Ah here it is....
Lawyers/Law Firms:
Long-Term Contribution Trends
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Old 04-24-2008, 07:12 AM   #36 (permalink)
 
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Ustwo....I understand how trial lawyers may benefit if the telecomms are not given retroactive immunity for their willfull illegal actions of assisting the administation in spying on American citizens without a warrant.

Are you suggesting that trial lawyers will benefit from this bill to regulate tobacco?

Perhaps you can elaborate.
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Old 04-24-2008, 07:23 AM   #37 (permalink)
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Quote:
Originally Posted by dc_dux
Ustwo....are you suggesting that trial lawyers will benefit from this bill to regulate tobacco?

Perhaps you can elaborate.
I'm suggesting the 100's of millions given by the trial lawyers to the democrats is something to look at as compared to the 10's of millions you are tossing about in relation to tobacco money, which just so happens to be in red states to start with local to them.

Your party is owned by the lawyers and unions, we don't need to pretend about that do we?

As such any legislation which opens the doors for massive legal action sponsored by the democrats is tainted and suspect to me, such as with Bush pushing for telcom immunity. The senate passed it from what I gather but the house democrats won't. I don't think its because they feel people need to sue their telephone company, but to give back some of those 100's of millions to the people who really make money in these giant class action suits.
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Old 04-24-2008, 07:27 AM   #38 (permalink)
 
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Quote:
Originally Posted by Ustwo
As such any legislation which opens the doors for massive legal action sponsored by the democrats is tainted and suspect to me.
Sorry....but I am still confused.

How will this bill to authorize the FDA to implement greater regulatory control over tobacco result in "massive legal action"?
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Old 04-24-2008, 07:32 AM   #39 (permalink)
 
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this is such a myopic way to understand regulation, it's dizzying.
what is required for ace or ustwo's position to be coherent is that you see regulation as an end in itself carried out in the interest of the technicians who fashion the regulation. which means that you exclude up front anything and everything that could make of regulation something coherent--you even exclude the end=point. i don't understand--maybe it's something that happens in conservativeland to normalize the way of "thinking" that has resulted in the iraq war--you know, whaddya mean incoherent, this is a way of thinking across the board.

in the context of any negociated process, there are going to be trade-offs--it's what negociation is about--i don't see anything particular problematic in this particular situation--obviously pm supports this because if they don't, they are concerned about more draconian regulation against tobacco further down the road. obviously it is in the interests of other organizations who support such regulation to have something rather than nothing to show for their efforts. obviously it is in the interest of congress to appear to be operating in a direction that distinguishes it to some extent as an actor or arbitor. all this requires is that you think in a vague way about the process itself--but if you're going to claim that this is somehow about trial lawyers alone, you can't even do that: no wonder ace and ustwo oppose regulation in principle--they have views of it that MAKE regulation incoherent, and so they see only incoherence in it.

it's mind-boggling, really, that this sort of construct has any purchase with anyone.
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Old 04-24-2008, 07:39 AM   #40 (permalink)
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Quote:
Originally Posted by dc_dux
LOL....Ok, if you say so, Ace.

You can continue to characterize support of this bill as a "sellout" of one's principles and I will respectfully disagree.

There is nothing more to be said.
For the record I don't think I ever used the term "sellout". As you know, because I stated this several times, people will do what is in their best interest ( I don't make moral judgment, it is what it is - its the nature of life) . I don't consider that "selling out". What I have a problem with is: pretense. If you need a word to characterize this issue that is it - "pretense". If you disagree, I understand. If you don't "see" it ("it" being the logical basis that could lead one to the conclusions I have drawn) I think some things I will not state.
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