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Association of American Physicians and Surgeons, Inc.
A Voice for Private Physicians Since 1943
Omnia pro aegroto

Volume 64, No. 11 November 2008


Holding the threat of a world financial meltdown over Congress, President Bush and Treasury Secretary Paulson rammed through an unprecedented and unconstitutional financial takeover in record time: no hearings, no committee mark-ups, no open debates. Republicans did not use the tool that destroyed the Democrats' energy proposal: insisting that the 500-page bill be read into the Senate record in its entirety.

What's Really in the Bill

The root of the problem is supposed to be subprime mortgages, many a direct result of the 1977 Community Reinvestment Act (CRA). Caught in a Catch 22, banks could either make risky loans, or face financial penalties or "protests" by "community groups" that blocked mergers or branch creation, wrote Thomas DiLorenzo (LewRockwell.com 9/6/07).

The "troubled assets" that the Treasury could purchase, however, are not restricted to mortgages, or to American institutions. In addition to the $700 billion authorized for assets that could potentially be sold later say if the housing market recovers is $150 billion in outright subsidies or tax benefits.

To help capture the needed revenue, the IRS gets permanent authority to conduct undercover operations and to divulge personal tax returns to agencies involved in investigating "terrorism." Meanwhile, the Treasury will have to get the money by borrowing it; the bill increases the government's debt limit from $10.6 to $11.3 trillion.

The most dangerous stealth provisions lay the foundation for a carbon tax, or "cap and trade" ("tax and charade") regime like the one that is killing European economies. Section 117 calls for a "carbon audit of the tax code." On Oct 2, House Democrats released an aggressive set of principles even more restrictive than those in the failed $6.7 trillion Lieberman-Warner Climate Security Act. The bailout shovels subsidies into noneconomic "alternative energy," while loading CO2 sequestration requirements onto coal users.

Who Are Our Saviors?

Not coincidentally, Treasury Secretary Henry Paulson is former CEO of Goldman Sachs and an environmentalist true believer. Others from Goldman Sachs control large parts of the federal government and are involved in Generation Investment Management (GIM), a "green" company co-founded by Al Gore. The Goldman Sachs venture with the biggest money-making potential is carbon trading.

According to economist John Kenneth Galbraith, Goldman Sachs, with its "large-scale corporate thimblerigging" in the 1920s, set the stage for the Great Depression. See Fred Lucas, "In Goldman Sachs We Trust: How the Left's Favorite Bank Influences Public Policy," Foundation Watch, October 2008, www.capitalresearch.org.

Others who will be involved in re-writing the rules of the U.S. financial system include Rep. Barney Franks (D-MA), Chairman of the House Financial Services Committee. At September 2003 hearings, he called Fannie Mae and Freddie Mac ("Frannie") "fundamentally sound financially." Instead of a focus on safety, he said, "I want to roll the dice a little bit more...towards subsidized housing" (Wall St J 10/2/08).

The recent $200-billion nationalization of Frannie did not solve the credit crunch, but did help the owners of its $5.3 trillion in bonds largely governments with big trade surpluses with the U.S., such as China and oil producers.

"As the world's biggest debtor, the U.S. can ill afford...a reputation for stiffing its creditors" (Time 9/11/08).

Implications for Medicine

In the vice presidential debate, Sen. Biden said that the credit crunch wouldn't affect Barack Obama's idea of providing affordable healthcare to all Americans, but might slow his commitment to doubling foreign assistance. Gov. Palin noted that she hadn't made many promises, other than to put the government back on the side of the American people.

To skirt the constitutional requirement that bills that raise revenue must arise in the House, the bailout was wrapped in the House mental health "parity" bill a mandate that will increase premiums and the number of uninsured.

Will It Work?

Governments both in the U.S. and abroad have been pumping liquidity into the financial system for months; the latest rescue brings the U.S. total to $1.8 trillion. The Federal Reserve, suggests Richard Maybury, may be trying to "thread the needle," treading a narrow path of stagflation between runaway inflation or deflation and depression, while shaking out malinvestment the slow way. It's a tightrope act a misstep is likely, triggering a political crisis that will lead either to total fascism or a return to the Constitution, he said (EWR 10/08).

The debt pyramid is collapsing, and "it is the money that is broken," writes Judy Shelton. Money is the standard that defines the very substance of all economic contracts. "Fiat money does not represent a store of genuine value but rather an airy government claim to future wealth not yet created."

After this debacle, "no one can believe in the omniscience of central bankers any more" (Wall St J 9/30/08).

Sen. Chuck Schumer (D-NY) and Federal Reserve chair-man Ben Bernanke both referred to credit that is, debt as the "lifeblood" of the economy. Apparently, politicians think that "rescue" means getting Americans to resume overborrowing and overspending. Shut down the bone marrow, ignore the hemorrhage, and keep transfusing as long as we have donors.

The mental health shell is ironically fitting.

A Financial PATRIOT Act

AAPS life member Ron Paul, M.D. (R-TX) comments on the financial "rescue" at www.ronpaul.com:

"It took quite a bit of trampling of the Constitution, but the bailout bill passed, as I suspected it would.... The rallying cry...was that Congress must act. Our economy is facing a meltdown. Would this bill fix it? Nobody could really explain how it would....

"Sometimes doing nothing is better than thrashing about aimlessly. When one is caught in quicksand, for example, or when one doesn't understand economics and finds oneself in the position Congress was in...with decades of irresponsible monetary policy coming to a head. Why should we trust the same people who said just a few months ago that the economy was perfectly sound?... Why not consult the people who had the foresight and understanding to see this coming? They would have recommended such logical action as repealing the Community Reinvestment Act, which forces banks to make bad loans, or allowing the market to set interest rates instead of the Federal Reserve system. How about abolishing the Federal Reserve altogether?"


Ideas Have Health Consequences

The real lifeblood of the economy is energy. A major part of the financial hemorrhage of the U.S. economy is the some $600 billion required to import 30% of our energy supply.

Even without the mandatory carbon restraints envisioned by architects of the "rescue," the U.S. faces possible brownouts or blackouts as early as the summer of 2009, according to a study by NextGen Energy Council (www.nextgenenergy.org). U.S. baseload reserve generating capacity has declined precipitously from 30%-40% in the 1990s to 17% in 2007. Just to maintain a marginal 15% reserve will require 120 gigawatts of new capacity by 2016.

Power failures not only cost tens of billions of dollars but also can cost lives.

In the past year, Al Gore and his retainers have caused cancellation of plans for 60 new coal-fired facilities. The "rescue" continues to subsidize wind and solar, which could not compete without taxpayer help. Because of unreliability, wind cannot replace a single watt of fixed capacity. It would take 100-200 years for a solar panel to generate the amount of energy it costs to manufacture and install it; it lasts about 30 years (see www.ddponline.org/ddpnews/ddpsep08.htm).

The consequences of carbon restriction are already becoming apparent in the UK: "People will have to be rationed to four modest portions of meat and one litre of milk a week," states a report by the Food Climate Research Network (Guardian 9/30/08). The UK government has plans for 15 "eco towns" that would potentially house 100,000 people and reduce their ecological footprint by two-thirds. Constant monitoring in each dwelling would "help with behaviour change." Residents would have to pay a 2 fine each time they left. Some meal choices would be available but no choice about waste disposal mechanisms; i.e. no flush toilets.

"The dry fecal mater is captured by a built-in teflon-coated bowl with a turning mechanism and is flushed' into wheeled bins in the buildings' basements. Flushing' uses sawdust, dispensed from the back of the toilet, instead of water."

This was a "shock vote winner" for Conservatives, who promised to scrap the plans (Register 7/3/08).


AAPS Resolutions, Election

Resolutions passed at the 65th annual meeting:

BE IT THEREFORE RESOLVED THAT: the Association of American Physicians and Surgeons oppose the imposition of additional licensure or relicensure requirements that are not shown, in valid scientific studies, to produce gains in quality of care outweighing costs and diminished availability.

BE IT THEREFORE RESOLVED THAT: the Association of American Physicians and Surgeons promote legislation requiring that licensure boards assure that one or more competent expert witnesses are willing to support by sworn testimony any allegations requiring expert witness support (i.e. obtain the equivalent of a certificate of merit) before the licensure board investigates a complaint against one of its licensees and before any disciplinary action is taken.

The Assembly also reaffirmed Resolution 2003-1 opposing a single-payer medical system.

Mark J. Kellen, M.D., of Rockford, IL, assumed the office of President. Hilton P. Terrell, M.D., Ph.D., of Florence, SC, was elected President-Elect. Other officers: Tamzin A. Rosenwasser, M.D., of Lafayette, IN, is Immediate Past President; Charles A. McDowell, Jr., M.D., of Johns Creek, GA, is Secretary; R. Lowell Campbell, M.D., of Corsicana, TX, is Treasurer. Elected to the Board of Directors are: Curtis Caine, M.D., of Brandon, MS; Kenneth D. Christman, M.D., of Dayton, OH; James F. Coy, M.D., of Punta Gorda, FL; and Lee D. Hieb, M.D., of Yuma, AZ.


AAPS News of the Day

For more information on the rescue/bailout bill, with numerous links, including the text of the final bill and the votes, go to www.aapsonline.org. If you are not receiving the news, along with information and action alerts, send your email address to [email protected]. You can now submit comments on the news. Occasionally, messages get caught in spam filters, so you might want to check the site periodically; let us know if you miss something.

If you are not opted out of Medicare, note: CMS has changed Medicare Advance Beneficiary Notice (ABN) requirements. Learn more and download the new form; click on the red "Information Alert" tab.

Also available under the red "Issues and Analysis" tab: "Diagnosing the Obama and McCain Health Care Plans."


AAPS Calendar

Feb 6-7, 2009. Workshop, board meeting, Dallas, TX.
Sep 30-Oct 3, 2009. 66th annual meeting, Nashville, TN.


"Fannie Mae...has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people.... [T]he government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue...." (NY Times 9/30/99).

Your Office or Home May Need EPA Permit

No need to wait for Congress to impose carbon restrictions: a 5-to-4 vote of the U.S. Supreme Court has taken care of it in Massachusetts v. EPA. Even though the author of the Clean Air Act (CAA), Rep. John Dingell (D-MI), has stated that the Act should not be used to regulate greenhouse gases, the Court has directed the Environmental Protection Agency (EPA) to treat CO2 as a pollutant, or explain why not.

Career bureaucrats are eager to tackle the task, but in the introduction to the Advance Notice of Proposed Rulemaking (ANPR), EPA director Stephen Johnson and the heads of eight other departments explain the disastrous effects.

Far more draconian than the Lieberman-Warner bill rejected by the Senate, the rules are "a radical plan for restructuring the entire U.S. economy," writes Phil Kerpen of Americans for Prosperity.

Homes of more than 5,000 sq ft, if heated with natural gas, and the majority of small commercial buildings would require an EPA CO2 emissions permit.

A Greater Depression could result from enforcing the rules or might be required to achieve their CO2 goal.

For more information, and directions on how to file comments (due in early November), see Civil Defense Perspectives, July 2008).


AAPS Files Motion to Compel in TMB Case

Stating that the Texas Medical Board is withholding documents essential to the case, AAPS has asked the U.S. District Court for the Western District of Texas, Austin Division, to compel production.

The primary claim made by AAPS is the TMB's abuse of power. Specifically, the AAPS Complaint alleges that the president of the TMB, Roberta Kalafut, D.O., arranged for her husband to file anonymous complaints against her competitors. The proof is almost exclusively in the complaints filed against particular physicians which the TMB is withholding, claiming a state law privilege.

Although fewer than 10% of Texas physicians are the subject of a complaint each year, a far higher percentage of Dr. Kalafut's competitors have complaints against them. In a letter to State Senator Kyle Janek, Dr. Norman Dozier writes:

"I am the only doctor left in a 150 mile radius that is involved in Pain Management in any form or fashion that has not been sanctioned by TMB..., but God knows she [Kalafut] has been trying."

The motion is posted at www.aapsonline.org.


NPI: A Small Victory

Edward Chastka, M.D., of Wyomissing, PA, writes: "In my 16 years of psychiatric practice, I have never been a provider for any insurance company. This does not stop them from trying to intrude themselves into my relationship with my patients. Recently, Health America/Health Assurance rejected the claims filed by one of my patients on the grounds that I did not have an NPI number. On AAPS advice, I gave my patient a letter stating that I am not a HIPAA-covered entity, and I am not required to obtain an NPI. I included a copy of the appropriate section of the federal legislation that acknowledges that Health care providers that are not covered entities that do not wish to apply for NPIs will necessitate the need for healthcare clearinghouses to accommodate healthcare provider identifiers in addition to the NPI.' The patient forwarded a copy of the letter and the legislation to Health America/Health Assurance. The insurance company has now reversed its decision and is paying her claims."


ISMA Resolution on Sham Peer Review

At the 2007 meeting of the Indiana State Medical Association, Roger Jones, M.D., introduced a resolution concerning sham peer review. It was referred to the Board of Trustees, which formed a task force. A survey of members garnered 384 responses. Of the 14% who were subject/ reviewees, 74% felt the process was fair, and 26% witnessed misuse or abuse. Of the 54% who participated as reviewers, 93% felt the process was fair, and 12% witnessed misuse or abuse. While the task force did not find a "current widespread problem or crisis," the issue was of great interest and will receive continued attention (www.ismanet.org).


Tip of the Month: From a petition circulated at a South Dakota hospital (20% of the medical staff needed to sign it, in order to have policies approved by the medical executive committee discussed and voted on by the staff): The policy on "Medical Staff Members Access to Quality and Credential File" needs to include language that prevents the maintenance of files other than the official file contained in the medical staff office file cabinet. Several physicians have had "secret files" held outside the official file. The policy suggested by the hospital was written or heavily influenced by the Horty-Springer law firm, the largest U.S. law firm representing hospitals, and needs to be reviewed by an attorney hired by the medical staff.

As Lawrence Huntoon, M.D., Ph.D., Chairman of the AAPS Committee to Combat Sham Peer Review, points out, "The first time the physician learns of the secret file' is when the hospital administration unleashes it in an aggressive peer review action."


Surgeon General Accused of Scientific Misconduct

Four groups have filed complaints with the Office of Research Integrity, Health and Human Services, against former Surgeon General Richard Carmona, M.D., regarding his report on environmental tobacco smoke. The report, they state, ignored credible studies showing economic harm from smoking bans to the hospitality industry; inflated relative risks; omitted relevant large long-term studies; and relied heavily on discredited reports (Baltimore Business J 10/8/08).


Medical Identity Theft Widespread

For Isis Machado, a 22-year-old receptionist at Cleveland Clinic in Weston, FL, patient identities were a gold mine. She sold them for $5 to $10 each to her cousin, whom she met at a gas station. Fernando Ferrer then used the identities to fraudulently bill Medicare for services never provided.

Medical identity theft costs hundreds of millions of dollars each year, and leaves victims with corrupted medical records that may take years to remedy. With full digitization of medical records, the crime could grow exponentially. Thieves frequently bill for thousands or millions of dollars over several months before anyone asks questions. Medical records now sell for $60 each on the black market (BNA's HCFR 9/10/08).


Medical Boards Demand Reports from Hospitals. According to policy of at least one medical licensure board, any physician who is accused is apparently "guilty enough" to be reported to the board by the hospital even if he is not a member of that hospital's staff. A doctor who "voluntarily" stops practicing while the hospital is trying to sort things out is also "guilty enough" to be reported. Why bother with a hearing?
Lawrence R. Huntoon, M.D., Ph.D., Lake View, NY


Government v. Private Sector. Unlike politicians, who might have to stand for re-election every two to six years, corporate titans routinely come crashing down after a few quarters of lousy performance. They are far more accountable than politicians because customers get to vote on them every day. Consider Carly Fiorina at Hewlett Packard, Robert Nardelli at Home Depot, and Jim Donald at Starbucks. Fired one and all, and no scandal except poor performance.
Linda Gorman, Ph.D., Independence Institute, Golden, CO


Rights in Canada. I am a Canadian who immigrated to the U.S. This is what government medicine is like: The poorest part of society between 2% and 5% is uninsured. The uninsured can be and routinely are refused care. My sister, an R.N. in Canada, has had to refuse admission to them. In Canada, you do not have the right to medical care only the right not to pay. Getting care is much more difficult, as I discovered with family members. One reason for moving to the U.S. is the ability to receive care here. A "right," by the way, cannot infringe on others' rights or it becomes a privilege.
Ralph Weber, C.L.U., Paso Robles, CA


The End of Democracy? The fiscal crisis is black cloud hang-ing over the country. Are we approaching that magic critical mass that turns a democracy into a short-lived oppressive society where the producers are killed off by the consumers?
Frank Timmins, Dallas, TX


Lies. Lying is now accepted and systematic.... There is now nothing I would believe from any political candidate other than the past record; one can't afford to listen to the words. On Wall Street, in the schoolrooms, or in the workplace, as well as in politics, truth is harder to come by, as lying and hedging seems to be acceptable.... Yet a market depends on trust between a willing buyer and seller.
Kirby V. Nielsen, Delaware, OH


Plagiarism. The Soviet Union had the Komsomol. Red China had the Youth Corps. Under authoritarian rule, Taiwan had the China Youth Corps. The Third Reich had the Hitler Jugend. On Dec 5, 2007, Sen. Barack Obama proposed expanding AmeriCorps from the current 75,000 to 250,000 positions; creating a new Classroom Corps for mentoring young persons; and creating or greatly expanding a number of other such groups. To make college tuition affordable, we'll have a new American Opportunity Tax Credit of $4,000; to receive it, 100 hours of "public service" are required (that would be $40/hr). I can't decide which is worst: proposing government fixes for government-caused problems; borrowing from past dictators' playbooks; or the inability of the press to see the danger of more government indoctrination of youth.
Craig Cantoni, Scottsdale, AZ


Marxist Health Care Reform. The reality is that people who supported the Soviet Union and Marxist economics are still around and still committed to the cause. They have identified themselves as Marxists and written for Marxist journals. This is very public and available on Google. It is unfashionable to point this out, and I will be accused of red-baiting. But it is the simple truth, and no one is confronting it.
Greg Scandlen, Heartland Institute


Red-Baiting? We must start calling a spade a spade and confronting the communists/socialists on the real issues. If we want to preserve the capitalist economy, we have to stop being afraid of name-calling. These people want to change our country to one that takes away individual liberty. How can we fight them if we are afraid of the language?
Terri Buck, Burlington, IA


Whodunnit? A partial list of the entities responsible for the current financial mess, from "Mish's Global Economic Trend Analysis," sent to us by Craig Cantoni:

  • Fractional reserve banking, an inherently unstable con game
  • Congress, for creating the Federal Reserve
  • Woodrow Wilson, for using Fed to finance World War I
  • Herbert Hoover, for economic interventionism
  • John Maynard Keynes, for foundation of public miseducation
  • FDR, for banning gold ownership, founding Fannie Mae, etc.
  • FDIC, for training people to trust unquestioningly
  • LBJ, for 1960s guns and butter
  • Richard Nixon, for severing all ties between dollar and gold
  • Alan Greenspan, villain number one
  • George W. Bush, for embrace of "deficits don't matter"
  • Ratings agencies, for stamping garbage as AAA
  • Heads of major banks and brokerages, for massive leveraging
  • Lawmakers, for kicking looming crisis down the road
  • Home buyers who lied about income and credit worthiness
  • Predatory lenders who sold people unaffordable mortgages