Webistics, or the Medicare Prescription Drug Benefit
You’re probably seeing a lot of headlines these days about how badly the Republicans are botching their Medicare prescription drug benefit, passed in 2004 as an example of the kinds of new, “business-friendly” entitlement programs they were going to pass now that they were firmly in control of Washington, D.C. Many Republicans, still trying to pretend they were “fiscal conservatives,” balked at the $400 Billion cost of the bill, so Tom DeLay had to resort to some pretty shady tactics to get the votes he needed.
But we’re getting ahead of ourselves. First, we must go back to 1999.
That year, season two of The Sopranos aired, just at the peak of the dot-com boom and associated stock bubble. Being the wonderfully timely show that it is, Episode 14, “A Guy Walks in to a Psychiatrist’s Office,” features a subplot where the family, led by Chris Moltesanti tries to get in on the dot-com action by pushing the stock of a phony tech company, Webistics, on unsuspecting retirees. They open a stock brokerage and start pressuring the clients and the brokers to sell Webistics. But sometimes the brokers didn’t exactly fall in line:
The company’s Webistics. It’s the next Yahoo right now. We’re really only selling it to preferred clients. (Broker) yeah, American forestry, 19 and 1/2, up 3/8s, a very sound company. Uh-huh. (Broker) well, it depends on whether you wanna go for growth or value. We got hundreds of mutual funds you can choose from. Ahh! You’re supposed to push webistics! I was giving them alternatives. Webistics is our pick of the week. Why, it’s got a three million float, and their technology’s two years behind. Your stock’s a dog. Ahh! Hey, stop that! Hey, I’m still the manager here, this is unacceptable. Where’s Moltisanti? I’m gonna make a call if you don’t think i know who really runs this operation. Get back in your fuckin’ office. Anybody else got a problem with Webistics?
So they beat the crap out of them.
In trying to get votes for the Medicare bill, DeLay went out on the floor (after holding the vote open way longer than is customarily allowed by house rules) and approached Rep. Nick Smith (R-Mich.). Rep. Smith was against the bill. DeLay promised him it would “only” cost $400B over 10 years, even though that number was artificially low (the plan wouldn’t even kick in until 2006, so that 10 years included 2 years when the plan wasn’t even going to be in effect!). In fact, the White House knew the number was far higher, but they kept it under their hat so that DeLay could get the votes.
Anyway, DeLay’s scrounging for votes, and so he and Duke Cunningham pay a visit to Rep Smith:
Horse-trading is a nice word for it. Vote buying is more accurate, and it doesn’t get any more blatant that this: Tom DeLay makes his final offer, promising to “personally endorse” Smith’s son Brad in the upcoming primary race to succeed Smith — if Smith will change his vote to Yea on the Medicare bill. Anyone who knows Tom DeLay knows his “personal endorsement” is worth a lot of campaign cash. When Nick Smith would not sell his vote on the Medicare bill, Representative Randy “Duke” Cunningham, Republican of California, walked up to Smith on the floor of the House chamber, waved money at him in the form of either a wallet or a checkbook, saying “We’ve got $10,000 … to make sure your son does not get elected.”
The point is, like Webistics, the Drug Benefit was a scam. Karl Rove was trying to buy off the senior citizen vote, and Medicare was the way to do it. No one cared whether the “stock was a dog.” It didn’t matter if the plan actually worked, or actually helped senior citizens. What was important was that the call went out from the senior leadership that they should push the Medicare Drug Bill, and so they pushed it, and pushed it hard.
Is it any wonder the actual plan ended up being such an utter catastrophe?
This what happens when you put thugs in charge of policy.