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By Root 816 0

that a public option would “save the government around $150 billion,”29 by putting competitive pressure on insurance companies to keep their rates low. That competitive pressure seemed to many only fair, as insurance companies, like PhRMA, were about to get a big boost from the bill: a requirement that everyone have insurance. But alas, as Cohn describes, “That money would come out of the health care industry, which prevailed upon ideologically sympathetic (and campaign-donation-dependent) lawmakers to intervene. They blocked a bill until Waxman [dropped the public option].”30

The lesson here is obvious. There are “institutional constraints” on change in America. Central to those “constraints” is, as Cohn lists it with others, “the nature of campaign finance.”31 And what is its “nature”?: that “corporate interests” (Cohn’s words) “use lobbyists and campaign contributions to rig the system and get [their] way, no matter what it costs ordinary Americans”32 (Obama’s words). Here that “nature” “cost ordinary Americans” up to $250 billion: apparently the price we have to pay for reform to please these corporate masters, given the “nature of campaign finance.”

After health care passed, Washington Post columnist Ezra Klein wrote with praise that Obama had “succeeded at neutralizing every single industry”33—insurance, PhRMA, the AMA, labor, and even large businesses. Klein meant that term neutralizing precisely: that Obama had succeeded in balancing the forces of each powerful interest against the other, with the result that his reform (however hobbled it was) would pass.

That meaning for the term neutralizing was made ambiguous, however, by the title that the editors gave to the essay (“Twilight of the Interest Groups”), a title that suggested that Klein was arguing that Obama had weakened the power of the interest groups. That he had in fact, as promised, “fundamentally change[d] the way Washington works.”34

Glenn Greenwald picked up on this hint, and as is his style, picked on it in a merciless way. As he wrote,

If, by “neutralizing,” Ezra means “bribing and accommodating them to such an extreme degree that they ended up affirmatively supporting a bill that lavishes them with massive benefits,” then he’s absolutely right.

Being able to force the Government to bribe and accommodate you is not a reflection of your powerlessness; quite the opposite.

The way this bill has been shaped is the ultimate expression—and bolstering—of how Washington has long worked. One can find reasonable excuses for why it had to be done that way, but one cannot reasonably deny that it was.35

Greenwald’s criticism of Klein is debatable. The criticism of Obama, however, is completely fair. Had President Hillary Clinton passed health care as Obama did, she would deserve great praise. That Obama passed health care the way Clinton would have does not earn him the same great praise. Rather than “take up the fight” to “change the way Washington works,” Obama has simply “bolstered” “how Washington has long worked.” That’s not what he promised.

The story is very much the same with just about every other area of major reform that Obama has tried to enact. Consider, for example, the reform of the banks.

I’ve already described the reckless behavior of the banks—encouraged as it was by idiotic government regulations—that threw the economy over the cliff in 2008. Reckless from the perspective of society, not from the perspective of the banks. In my view, following Judge Richard Posner, the banks were behaving perfectly rationally: if you know your losses are going to be covered by the government, gambling is a pretty good business model.

Reform here therefore needed to focus on the incentives to gamble. The government needed to ensure that it no longer paid for the banks to use other people’s money to gamble with our economy. After spending an enormous amount of public funds to save the banks so as to save the financial system, we should at least ensure that we don’t have to save the system again.

From this perspective, the fundamental flaw in the