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Contents
AUGUST 5, 2013
ON THE COVER
V O L U M E L X V, N O . 1 4
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Page 24
p. 29
BOOKS, ARTS
& MANNERS
with. The real import of his political career will be felt long after
he leaves office, in the form of a
39
40
ARTICLES
by Ramesh Ponnuru
42
by Arthur Herman
by Andrew C. McCarthy
44
QUEEN OF HYANNIS
by John OSullivan
47
FEATURES
LAW, NATURALLY
17 SENSITIVE SEAL
by Kevin D. Williamson
27 TREATY BY DECREE
SECTIONS
29 THE ANTI-CHE
by Jay Nordlinger
by Avik S. A. Roy
2
4
37
38
43
48
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Letters
AUGUST 5 ISSUE; PRINTED JULY 18
EDITOR
Richard Lowry
Senior Editors
Richard Brookhiser / Jay Nordlinger
Ramesh Ponnuru / David Pryce-Jones
Managing Editor Jason Lee Steorts
Literary Editor Michael Potemra
Executive Editor Christopher McEvoy
Washington Editor Robert Costa
Roving Correspondent Kevin D. Williamson
National Correspondent John J. Miller
Art Director Luba Kolomytseva
Deputy Managing Editors
Nicholas Frankovich / Fred Schwarz
Production Editor Katie Hosmer
Editorial Associate Katherine Connell
Research Associate Scott Reitmeier
Assistant to the Editor Madison V. Peace
Contributing Editors
Shannen Coffin / Ross Douthat
Roman Genn / Jim Geraghty
Jonah Goldberg / Florence King
Lawrence Kudlow / Mark R. Levin
Yuval Levin / Rob Long
Jim Manzi / Andrew C. McCarthy
Kate OBeirne / Reihan Salam
Robert VerBruggen
N AT I O N A L R E V I E W O N L I N E
Art of War
As an (NRA) card-carrying gun nut and NR subscriber, I was surprised and delighted
to read Remington, U.S.A. in the July 15 issue. But perhaps author Charles C. W.
Cooke should have shared his newfound knowledge of this great company and its history with the illustrator. Even conceding that the rifle pictured above the title was
offered as a generic representation, it nonetheless misses the mark badly enough to
require correction. For the last hundred or so years of its existence (and leaving aside
its recent foray into AR-type weapons), Remington has been known for two iconic
products: pump-action shotguns and bolt-action rifles. The illustration (ignoring the
Monte Carlo butt stock, which would never be found on such a firearm) is the
equally iconic lever-action product of the Marlin Firearms Company of North Haven,
Conn., and since 2007 a subsidiary of Remington with principal operations in
Madison, N.C. Indeed, the pieces unique lever pivot and ejection port identify it as
the Model 336, a gun that to shooters virtually defines Marlin and which has never,
ever been manufactured by Remington, notwithstanding its corporate parentage.
Otherwise a fine and inspiring story.
Thomas M. Sullivan
Lake George, N.Y.
You probably dont need another letter telling you about the graphics accompanying
the excellent article Remington, U.S.A., but please add this one to your stack. The
cover graphic is, of course, the iconic Colt model 1911A1, and the story graphic is
an artists rendition of a Marlin 336, both fine firearms, by the way. Remington does
manufacture its own version of the 1911, but it has never produced a lever-action rifle
similar to the Marlin 336.
Kenneth Scheel
Green Bay, Wis.
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The Week
n Mike Bloomberg may want to sit down with Bob Filner and
explain what stop and frisk means.
n According to conventional wisdom, the Gang of Eight immigration bill went from inevitable to dead in all of 60 seconds. Its prospects were exaggerated, though, as are current
reports of its demise. While Speaker Boehner says the House
wont take the bill up, his caucus is divided on immigration
and has yet to settle on a tack. We believe it should pass incremental reformsenforcement measures, perhaps packaged
with a carefully crafted version of the DREAM Actbut
worry about what would happen in a conference committee
with the Senate. The pressure to adopt a version of the Gang of
Eight bill and then send it to the House to pass with the support
of Democrats and some Republicans would be enormous.
Boehner should make an ironclad assurance to his caucus
never to go to conference. This pledge will enhance Boehners
ability to pass incremental measures, since House conservatives wont feel compelled to try to block them for fear of an
eventual conference. More important, it will truly kill the Gang
of Eight bill, which deserves a place in the congressional dustbin.
ROMAN GENN
n Edward Snowden, the worlds most famous fugitive interruptus, was still, as of this writing, bargaining for his future
from the Moscow airport. Snowden is seeking asylum from
that paragon of transparency, Vladimir Putin. Various Chavezite
countries in Latin America have offered to take him in.
Meanwhile the United States has revoked his passport and
wants him returned to be prosecuted. His journalistic collaborator Glenn Greenwald says Snowden has a trove of documents describing exactly how the NSA does what it does.
True, or bluff? Besides which, two more questions: How did a
flighty creep like Snowden get to have access to such info?
And do we conceal too much? Every war, including the war on
terror, requires secret ops. How wide-ranging are our secrets?
When we spy, when must it be secret that we do spy? A responsible Congress and a responsible executive should weigh these
matters. In the meantime, keep him on the run.
n Texas state senator Wendy Davis became a media star and a
national hero to the Left for filibustering a bill to protect unborn children. Many states have been passing such laws. But
her filibuster, combined with disorder created by a large group
of her supporters, kept the legislature from passing the bill during its special session. It also got her in front of the likes of Anderson Cooper of CNN, who asked her such tough questions
as, What was it like standing for that long? Governor Rick
Perry promptly called another special session, which passed
the bill. Abortion will now generally be banned after 20 weeks,
and clinics will have to adhere to new safety standards. Daviss
allies say that the standards will close down all but five clinics
4
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in the statewell believe that when we see itand were designed solely for that purpose. Actually, the standards follow
the recommendations of the Philadelphia grand jury that indicted Kermit Gosnell. During the special session, protesters
on Daviss side brought tampons and jars of excrement to
make some sort of point. As though by instinct, they chose tactics perfectly suited to the ugliness of their cause.
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THE WEEK
AP PHOTO/JACQUELYN MARTIN
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separated farming from food stamps, and now, for the first time
since 1973, the House has the opportunity to consider food
stamps on their own merits. A record 47 million Americans
one in sevenreceive food stamps, at a cost to the federal government of $85 billion a year. House Republicans are trying to
introduce a modest work requirement (like that added by the
1996 welfare-reform law to the Temporary Assistance for
Needy Families program). They also want to change the rule
that lets people qualify for food stamps when they have merely
received a brochure from a welfare office. And they want more
efforts to fight fraud. Outraged Democrats are accusing
Republicans of snatching food from the hungry. Actually,
theyre trying to help struggling Americans get back on their
feet.
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Presidential Hopes
and Hopefuls
A look at the 2016 Republican field
BY RAMESH PONNURU
16
He
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Laden, would want to avoid monkeying
with this 2,500-man elite force.
Youd be wrong. Last month Secretary
of Defense Chuck Hagel approved a
17
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Sharia after
Morsi
Egypt revolted against inept
governance, not Islamic supremacism
BY ANDREW C. MCCARTHY
nLY
Morsis victory in the June 2012 election was not a landslide, although given
that he got a slightly higher percentage
of the vote than Barack Obama did in
the 2012 U.S. presidential election, it is
amusing to hear hopeful commentators
portray his thin three-point winover
a Mubarak-regime relic, not a democratas a sign of Islamist decline. (Yes,
its dizzying to hear both that Islamists
are moderate democrats and that their
occasional setbacks are boons for democracy.) Still, it is worth emphasizing that
Islamic supremacism is far more popular
in Egypt than is the Brotherhood. The
Western media conflate the two, but they
are saliently different. The Brothers have
successfully marketed themselves globally as the Islamist vanguard. Yet in
Egypt, while they have their legions of
loyalists, they are widely regarded with
contempt, not just by secularists but even
by other Islamists.
Coverage of the latest upheaval missed
this phenomenon. In the main, the revolt
was against Morsis governance and the
Brotherhoods aggressive duplicity.
Secularists and progressivesprobably
less than 20 percent of the electo rateagitate against sharia implementation, but their passions are not the
countrys passions. Most Egyptians fear
a failed state, which is what Egypt is well
on the way to becoming: a net importer
of food and fuel, with much of its starving population subsisting on two dollars
a day, and the tourism industryEgypts
major drawmade a shambles by ji hadists.
Morsi was incompetent. Worse, the
ambitious Brothers are viewed as a threat
by the Gulf monarchies, whose largesse
is badly needed by a government with a
structural deficit that now exceeds $20
billion annually. The Saudis and the
United Arab Emiratesmajor supporters of the Egyptian army and, not coincidentally, the al-Nour partywere sitting
on their wallets when the Brothers ran
the show. As soon as Morsi was shown
the door, they injected $8 billion in aid,
with promises of more to follow.
The media vastly exaggerate the importance of Morsis usurpation of neardictatorial powers as a cause of his fall.
He claimed legislative authority and the
insulation of his sovereign acts from
judicial review because the military and
the courtsstaffed with Mubarak holdoversvoided parliament after Islamists
won control of it, then threatened to
vacate the constituent assembly before it
could finish the sharia constitution. But
the Brotherhoods overarching goal was
not dictatorship by Morsi but by sharia.
Given the Wests obsession with elections, it made perfect sense for Morsi, as
the only elected official left standing, to
AP PHOTO/AMR NABIL
21
assert that only he had democratic legitimacy, and that the public, not the court,
should decide whether to adopt the sharia
constitution. This angered the secularists, who blasted Morsi as a dictator in
an effort to prod the judges and the military to block the sharia constitution.
But it did not upset the vast majority of
the population. When Egyptians overwhelmingly approved the constitution
last December, Morsis approval rating
was 60 percent.
It nosedived in the following months
because Egypt slipped deeper into
chaos: food shortages, starvation, rising crime, andemblematic of sharia
culturesincreasing repression of religious minorities and women. Nevertheless, Egypt as a whole has not shed its
Islamic-supremacist character.
Thus, the Islamist flank of General
Sisis ad hoc support network vanished
within days. The army killed scores of
riotersIslamists and their jihadist
shock troops demanding Morsis restoration. The al-Nour party quickly bolted,
though not before blocking the secularist effort to appoint Mohamed ElBaradei
as prime minister (he was later appointed vice president for foreign affairs).
Meanwhile, for green-lighting Morsis
ouster, Grand Mufti Tayeb was scalded
by Islamist scholars. Sheikh Yusuf alQaradawi, the globally renowned sharia
jurist and Brotherhood totem, an nounced that most of the al-Azhar faculty found the coup to be a profound
affront to Islam.
Struggling to defuse the tension, the
new interim president, Adly Mansour
(plucked by Sisi from the High Constitutional Court), issued a constitutional
declaration under which Egypt will be
governed in the post-Morsi transition. Its
opening articles reaffirm that Islam is the
religion of the state and that sharia, de rived from ancient Sunni canons, is the
main source of legislation.
Naturally, the secularists, progressives,
and religious minorities professed shock.
We did not take to the streets to give
legitimacy to religious-based political
parties that were about to erase Egypts
identity, thundered the Maspero Youth
Union, one of the savvy progressive
groups spotlighted by the media as Morsi
fell. But these groups are actually trying
to create a new Egyptian identity. The
current one, Islamic supremacism, will
not be easily erased.
22
w w w. n a t i o n a l r e v i e w. c o m
Salon and
Breakfast
Kenneth Minogue, R.I.P.
BY JOHN OSULLIVAN
identities from whatever their social status had previously dictated to whatever
their economic and social interests now
require. They can do these things (in
different times and places) because
human beings are self-conscious: They
reflect upon themselves and their circumstances and act in accordance with
their reflections. They can be influenced,
of course, but they cannot be conditioned.
They have to cope with reality.
That is why ideologies from Marxism
to feminism that claim to liberate people
from false consciousness are not only
false, and condescendingly so, but are
One can trace in this set of ideas certain echoes and influences from the
philosopher Michael Oakeshott, the
economist F. A. Hayek, and the political
and literary critic Shirley Robin Letwin.
Ken, within a decade of arriving in
Britain from New Zealand and Aus tralia, where he was respectively born
and educated, was appointed a junior
lecturer in the LSE politics department
headed by Oakeshott. (Ken remained
there 50 years and, in due course, became head of the department.) Not long
afterward, he became a close friend of
two Americans prominent in Londons
social-cum-political life: Bill Letwin,
professor of government at LSE, and his
wife, Shirley. Shirley ran one of Londons few intellectual salons, and Ken
was a regular participant at the Letwins
tennis and dinner parties, which Hayek
also frequented when in London.
Ken absorbed all these influences but,
mixing them with his own experience
and insights, he turned them into something distinctive. Not for nothing was he
an individualist. By the early 1970s he
was a central figure in a group of writers,
academics, politicians, and journalists
who exerted intellectual influence on
the Torieswho were then reeling from
two election defeatsthrough outlets
such as the Daily Telegraph editorial
page, the magazines Encounter and The
Spectator, and the conservative think
tanks then beginning to sprout: the Centre
for Policy Studies, the Salisbury Group,
and the Conservative Philosophy Group.
Margaret Thatcher was derided by the
Tory Wets as Daily Telegraph Woman. She was a founder of the CPS; a
friend to the Salisbury Group; and a
scholarship girl, ever eager to learn, at
the CPG, where Ken was an equally regular pundit. As he might have put it himself, he risks the guilt of being a founder
of Thatcherism.
And somewhere along the way he got
a taste for salons, which, fortunately,
Beverly shared, and from which all his
friends benefitedand maybe the wider
world too.
23
24
onservatives
w w w. n a t i o n a l r e v i e w. c o m
AP PHOTO/CHARLES DHARAPAK
BY KEVIN D. WILLIAMSON
It
soon wastes, exhausts and murders itself. There was
never a democracy that did not commit suicide. For
liberal regimes, a very common starting point on the road to
serfdom is the over-delegation of legislative powers to the
executive. France very nearly ended up in a permanent dictatorship as a result of that error, and was spared that fate mostly
by good luck and Charles de Gaulles patriotism. Long before
she declared her infamous state of emergency, Indira Gandhi
had been centralizing power in the prime ministers office, and
India was spared a permanent dictatorship only by her political
miscalculation and her dynasty-minded sons having gotten
himself killed in a plane wreck. Salazar in Portugal, Austria
under Dollfuss, similar stories. But the United States is not
going to fall for a strongman government. Instead of delegating power to a would-be president-for-life, we delegate it to a
bureaucracy-without-death. you do not need to install a dictator when youve already had a politically supercharged permanent bureaucracy in place for 40 years or more. As is made clear
by everything from campaign donations to the IRS jihad, the
bureaucracy is the Left, and the Left is the bureaucracy.
elections will be held, politicians will come and go, but if you
ongresss
The president not only ignores the law but in some cases
goes out of his way to subvert it.
grand mufti of al-Azhar for their overthrow of the unpopular
Mohamed Morsi, but the law does not make exceptions for
presidential embarrassment. The president is not legally em powered to assassinate American citizens, but he has done so,
after going through the charade of drawing up a legal argument
under which he judged himself entitled to do what the
Constitution plainly prohibits. The law also prohibits the president and his allies from using the instruments of government to
persecute their rivals, but that is precisely what the Irs has
been up to for several years, as it turns out. And not just the Irs:
Tea-party activist Catherine engelbrecht was subject to an Irs
audit, two FBI visits, an osHA investigation, and an ATF
inspection of her business (which does not deal in A, T, or F).
And although the Irs has no statutory power to collect
Affordable Care Actrelated fines in states that have not voluntarily set up health-care exchanges, obamas managers there
have announced that they will do so anyway.
The president not only ignores the law but in some cases goes
out of his way to subvert it. The U.s. military carried out the
killing of osama bin Laden, but the records of that event have
been removed from military custody, where they are subject to
inquiries under the Freedom of Information Act, and moved to
the CIA, where they can be kept in secrecy. He has attempted to
make recess appointments when Congress is not in recess and
has been stopped from doing so by the federal courts, which
rightly identified the maneuver as patently unconstitutional.
There exists a federal law called the religious Freedom
restoration Act, which restricts the federal governments
power to force Americans to violate their consciences. The
obama administration is forcing an abortifacient mandate upon
practically all U.s. employers, in violation of that law. Kathleen
sebelius, the secretary of health and human services, who is
responsible for drafting those regulations, received a number of
letters from lawmakers arguing that the mandate she was contemplating violated the law; she proceeded anywaywithout
so much as getting an opinion from her departmental lawyer.
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Treaty
By Decree
Obamas end-run around the
Senate, and the Constitution
B Y J O H N R . B O LT O N
& JOHN YOO
ITh the exception of the SALT I agreement,
every significant arms control agreement during the past three decades has been transmitted
to the Senate pursuant to the Treaty Clause of
the Constitution, veteran senators wrote the president. We see
no reason whatsoever to alter this practice.
These words did not flow from the pen of Senator Ted Cruz
(R., Texas) or Mike Lee (R., Utah) in a quest to block presidential power. Instead, the authors were the unlikely duo of thensenators Joe Biden (D., Del.) and Jesse helms (R., N.C.). Biden
and helms did not see eye to eye on much, but they agreed that
President George W. Bush had to submit his 2002 nucleararms-reduction pact with Russia as a treaty: No constitutional
alternative exists to transmittal of the concluded agreement to the
Senate for its advice and consent.
After announcing last month that he would seek deep cuts in
American and Russian nuclear stockpiles, President Barack
Obama should consider those words from the man who is now
his vice president. Obama has not been shy about his goal of a
nuclear-free world, despite the continuing quest of North Korea
and Iran for nuclear weapons, Russias extensive modernization
of both its warhead arsenal and its ballistic-missile force, and
Chinas ongoing expansion of its nuclear capabilities. As Obama
said at Berlins Brandenburg Gate, Peace with justice means
pursuing the security of a world without nuclear weaponsno
matter how distant that dream may be.
The policy arguments against bilateral negotiations with
Russia in a multipolar nuclear world would seem obvious,
especially to a president who barely knew the Cold War. The
capacity and technology build-ups by China, the appearance
of India and Pakistan as nuclear powers in the late 1990s, and
the continuing proliferation efforts by North Korea, Iran, and
others all demonstrate that the Cold War paradigm is no
longer an adequate basis for determining strategic-weapons
levels or deployments. Obamas massive cuts in Americas
already tattered nuclear umbrella, with more to come, are far
more compelling proof of a failed strategy than is his airy and
diaphanous notion of nuclear zero.
Mr. Bolton is a senior fellow at the American Enterprise Institute (AEI) and a
former U.S. ambassador to the United Nations. He is the author of Surrender Is
Not an Option: Defending America at the United Nations and
Abroad. Mr. Yoo is a law professor at the University of California, Berkeley, and an
AEI visiting scholar. He is the author, most recently, of Taming Globalization:
International Law, the U.S. Constitution, and the New World Order.
27
nationalreview.com/nrdsubscribe
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AUGUST 5, 2013
The
Anti-Che
Felix Rodriguez, freedom fighter and patriot
BY JAY NORDLINGER
Miami, Fla.
elix RodRiguez seems fated to be linked to Che
guevara. This is not entirely just. Rodriguez loves
freedom, and has worked tirelessly for it; guevara
loved tyranny, and worked tirelessly for it. Two sides
of the same coin, some people say. Maybebut only in the
way that light and dark are two sides of the same coin.
Rodriguez had a role in stopping guevara. He was there, in the
Bolivian mountains, in 1967. He was the last person to talk with
guevaraa man who did so much to tyrannize the country
where Rodriguez was born, Cuba.
The story of guevaras last day has been told many times, in
many ways. Rodriguez told it in his 1989 memoir, Shadow
Warrior. it is told in a book published earlier this year, Daybreak
at La Higuera, by Rafael Cerrato, a Spaniard. la Higuera is the
village where guevara met his end. Cerratos main sources for
the book are Rodriguez, who was working for the Central
intelligence Agency, and dariel Alarcn Ramrez, whose nom
de guerre was Benigno. A Cuban, Benigno was guevaras
lieutenant in Bolivia. He was also a member of Fidel Castros
inner circle. He defected in 1996and now he and Rodriguez
are friends.
Just a week ago, Rodriguez made a donation to the CiA
Museum: ashes from guevaras last pipe. But he has a few more
of those ashes here, in his Miami home. His den is chock-ablock with mementos. on the wall, for example, is a bond signed
by Jos Mart, Cubas national hero. in this den, we talk about
events past, present, and future. Rodriguez is an excellent talker
(as well as doer). He is large, sharp, and commanding.
He was born in 1941. His hometown is Sancti Spritus, in
central Cuba. His father was a storeowner; his mother helped
out in the store and tended the house. Rodriguezs earliest
memory is of being with his mom while she talked about
what Hitler was doing in europe. The little boy was scared
that the Nazis would come to Cuba. Among his forebears are
notable figures from Cubas wars of independence. one of
these figures is Alejandro Rodrguez Velasco, who would
become the first popularly elected mayor of Havana. in
1895, Mximo gmez sent a letter to this mans wifewho
had asked whether her husband might come home from the
field. gmez wrote her a tender letter about the value of
fighting for freedom. This letter is one of Felix Rodriguezs
treasures.
And who was Mximo gmez? Cubans know: He was an
officer from the dominican Republic, who went to Cuba to help
that country win its independence from Spain. For Cubans, he
29
was possible through something called the AntiCommunist Legion of the Caribbean, being formed in the
Dominican Republicwhich itself was ruled by a dictator, Trujillo. Felix joined up against his parents will. He
arrived in Santo Domingoor Ciudad Trujillo, as it was
thenon July 4, 1959. He hoped that this date, the Fourth of
July, would be as auspicious for Cubans as it had been for
Americans. The Anti-Communist Legion staged just one
mission into Cuba, a disaster: Castro was waiting for them,
and all the troops were killed or captured. Rodriguez had been
excluded from the mission at the last second. A friend of his,
Roberto Martn Prez, was captured and spent the next 28
years in Castros prisons. Rodriguez vowed to keep doing what
he could.
One of the themes of his life is that too few people know
what it is to have your country seized by totalitarians. In a 60
Minutes piece, aired in 1989, Mike Wallace asked Rodriguez
why he was helping the Salvadorans. What is it, are you a
war-lover? Is that it? Are you constantly in search of adventure? Rodriguez replied, in short, that people in general are
clueless. You can read about Communism, but until you have
experienced it for yourself, you have no idea. Also, there is the
experience of exile: to be ripped from your country and family
and friends, and not be able to return.
Many people think of Castro and his brother as Northern
Europeanstyle socialists who occasionally get a little rough
or as traditional caudillos who flavor their speech with
Marxism-Leninism. In reality, they are in the mold of Hoxha
or Ceausescu, monsters. And the Castros grip on Cuba is monstrous. Like many Cubans and Cuban Americans, Rodriguez
often refers to Fidel Castro simply as he or him. Equally
often, he refers to him as the son-of-a-bitch.
At the beginning of 1961, he had an idea: He would assassinate the son-of-a-bitch. It would avoid or shorten the coming
war, he reasoned. He and a friend volunteered their services
and the CIA accepted. The Agency equipped Rodriguez with a
German rifle, which had a telescopic sight. The Agency also
added a radio operator to the team. Three times, this team
headed to Cuba on a luxurious yacht, whose captain was
American and whose crew was made up of tough, hardened
30
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The last picture taken of Che Guevara alive, October 9, 1967. Felix Rodriguez is on the left.
W
32
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AUGUST 5, 2013
An Arm
And a Leg
Hospitals are to blame
for obscene health-care costs
BY AVIK S. A. ROY
n 1994, two eminent Boston hospitals, Massachusetts
General Hospital and Brigham and Womens Hospital,
merged. Officials hailed it as a new era for integrated, highquality care. The states secretary of health and human services signed off on the merger without a public hearing, with
the blessing of Republican governor William Weld.
The merged hospital entity, called Partners HealthCare,
immediately went about raising rates for insurers. Blue Cross
Blue Shield of Massachusetts, the states largest private insurer,
wanted to fightin 2000, at a gathering of the companys executives, some suggested refusing to pay the higher fees. But executive Peter Meade delivered a cold slap of reality: Excuse me, did
anyone here save anyones life today? We are a successful business up against people that save peoples lives. Its not a fair fight.
For 50 years it hasnt been a fair fight. And understanding that
is the key to solving a mystery that has puzzled conservatives for
decades: Why is it that no matter what, the largest component of
government spendinghealth carekeeps rising?
In debates about health care, we spend a lot of time arguing
over how we buy it: whether through government payers, private
insurers, or health savings accounts. But theres an equally
important story, one that nearly everyone in the political class has
neglected: how we sell health care. Hospitals are at the center of
this story. And they are using their economic and political power
to drive up the price of their product.
If the Congressional Budget Offices projections are right,
health care will account for almost all increases in government
spending for the foreseeable future, excluding interest on the debt.
And increasing spending on hospital care is the biggest driver
of rising health-insurance premiums, which are in turn the main
cause of wage stagnation for middle-income Americans. Put
simply, we cannot confront the growth of government, nor of
middle-class economic insecurity, without first confronting the
central role that hospitals play in causing both.
Mr. Roy is a columnist for NATIONAL REVIEW ONLINE and a senior fellow
at the Manhattan Institute.
33
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Private insurers dont have the same leverage as the government. If a private insurer refuses to play ball with the major hospital in town, the insurer will lose customers to a competitor who
is willing to pay the hospital more. And, as the Blue Cross executives in Massachusetts understood, politicians demonize insurers and lionize hospitals, so insurers look like the bad guys if they
deny their customers access to famous but costly local hospitals.
This problem, in turn, is caused by the fact that most consumers of private insurance dont buy it directly, but instead
receive it through their employers, making them less sensitive to
its price. Workers want access to the top hospitals and get upset
when their plan denies that access, because they dont directly see
how much they would save by choosing a cheaper hospital.
He Partners case is just one example of a tactic that hospitals all over the country have used to gain leverage over
private insurers: consolidation. In most sectors of the
economy, the government uses antitrust laws to prevent the formation of monopolies. But federal agencies and courts have been
uniquely passive in the face of hospital monopolies.
economists and regulators measure market concentration
using a tool called the Herfindahl-Hirschman Index, or HHI. The
HHI is calculated by taking all the players in a given market,
calculating their market shares, squaring each market-share
percentage, and adding up the total. For example, a market consisting of four airlines, two with 30 percent each and two with 20
percent each, would yield an HHI of 2,600 (twice 900 plus twice
400); a duopoly that split a market 5050 would yield an HHI of
5,000; and a perfect monopoly would have an HHI of 10,000.
According to guidelines published by the U.S. Department of
Justice and the Federal Trade Commission, a market with an
HHI between 1,500 and 2,500 is considered moderately concentrated, and one with an HHI above 2,500 is considered
highly concentrated and subject to regulatory scrutiny.
In 1992, hospital markets in the U.S. had an average HHI of
2,440. Nearly half of all localities in America already had a
highly concentrated hospital market. Based on antitrust guidelines for the rest of the economy, the U.S. government ought to
have blocked the vast majority of hospital mergers that took
place thereafter.
Instead, however, the DOJ and the FTC challenged only a
handful of deals. The agencies determined that they would
bother to address hospital mergers only if those mergers drove
the HHI to near 5,000. Hospitals, defending their mergers
against the governments opposition, played up their traditional
image to sympathetic judges: as instruments of charity, as nonprofit pillars of their communities.
The tactic worked. From 1993 to 2008, the DOJ and the FTC
failed to block a single hospital merger in the United States. By
2006, the average hospital-market HHI had increased from 2,440
to 3,261.
Hospital monopolies and oligopolies use their market power
just as other monopolies do: to raise prices. James Robinson of
the University of California looked at six common categories of
hospital procedures, such as pacemaker insertions and knee
replacements, and compared what hospitals charged for those
procedures. He found that hospitals in markets with aboveaverage HHI scoresthe highly consolidated onescharged
44 percent more than their brethren in markets with below-
average HHI scores. And nearly all of that extra revenue from
higher prices went straight to hospitals bottom lines, where it
could be used to pay higher salaries, build new wings, and swallow smaller competitors.
Most hospitals are nonprofit entities for tax purposes, which
gives the public the impression that hospitals focus on healing the
sick instead of making money. But thats not true. Nonprofit
status simply prevents hospitals from distributing earnings to
owners or shareholders; it does not prevent them from paying
large salaries to their executives and piling up cash for their proprietors. A McKinsey study found that the nations 2,900 nonprofit hospitals have higher profit margins, on average, than our
1,000 for-profit hospitals do; they just retain the profits and use
them for expansion, improvements, and so forth.
YaleNew Haven Hospital (YNHH), as the name implies, is
the academic hospital associated with the Yale School of
Medicine, in New Haven, Conn. In 2011 New Haven had a population of 129,585, making it Americas 192nd-largest city. But
YaleNew Haven is the fourth-largest hospital in the country. The
YaleNew Haven Health System, of which YNHH is the flagship, has gradually acquired many of the major hospitals in
Connecticutmost recently its major crosstown competitor, St.
Raphaels, for $160 million. Rest assured that hospital prices in
New Haven will not be going down.
And hospitals arent just buying up rival hospitals. Theyre
also acquiring physicians in private practice. According to an
analysis by Aetna, in 2002, two-thirds of medical practices were
owned by physicians, compared with one-quarter by hospitals.
By 2011, these numbers had reversed.
Hospitals acquire private practices because it lets them control
the patients whom private physicians see. Independent physicians can refer their patients to any hospital that accepts their
insurance; hospital-affiliated doctors are required to refer patients
to the hospitals they work for.
Hospital-affiliated physicians, in turn, can take advantage of
hospitals market leverage to charge higher prices to patients with
private insurance, an important counterbalance (for them) to the
increasing number of people on government-sponsored health
insurance, which pays much less.
ATHeR than address this problem, Obamacare, at the hospital lobbys behest, actively suppresses the ability of
physicians to compete with hospitals. Section 6001 of
the Affordable Care Act bars the construction of new physicianowned hospitals if those hospitals will accept Medicare patients.
While a few such hospitals have dropped plans to accept
Medicare patients in order to evade the laws restrictions, in
other cases investors have lost fortunes shuttering halfwaycompleted projects.
Physicians are trying to persuade Congress to reverse the ban.
But that effort faces an uphill battle with Democrats, reports
Alicia Mundy of the Wall Street Journal, because the ban was a
crucial tool they used to gain the hospital industrys support to
begin with.
Democrats learned an important lesson from the failure of
national health-care reform in the Clinton years: Dont anger
powerful special interests. So Obamas team took great care to
buy off the pharmaceutical industry and the AARP, to cow the
insurers into silence, and to cater to the interests of hospitals.
35
HE biggest domestic-policy problem facing America today is our fiscal crisis. The biggest driver of our fiscal crisis is the growth and scale of our health-care entitlements:
Medicare, Medicaid, Obamacare, and related programs. And the
growth and scale of our health-care entitlements is, in turn, driven by the enormous political and economic power wielded by
hospitals.
Furthermore, as hospitals charge ever-higher prices to a shrinking cohort of privately insured and uninsured individuals, more
36
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Athwart
BY JAMES LILEKS
37
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BY ROB LONG
w w w. n a t i o n a l r e v i e w. c o m
Prudence
And Principle
DANIEL FOSTER
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Law,
Naturally
EDWARD FESER
w w w. n a t i o n a l r e v i e w. c o m
Queen of
Hyannis
FLORENCE KING
in your life, she wrote. As for touchfootball games: Mention of them could
be eliminated for awhile.
She gave Teddy even blunter advice
when he was recovering from a broken
back sustained in a private-plane crash:
When you are lying in bed, you can read
a paragraph and then try to rewrite it or
resay it. Then notice the difference between the succinct, dramatic impressions
of the author and your verbose, discursive, dull recital of the same events.
She never let up on Teddy. When he was
preparing to challenge Jimmy Carter for
the 1980 nomination, she watched his
interview and promptly told him: You
said If I was president. . . . You should
have said If I were president.
The high point of her maternal devo-
BACHRACH/GETTY IMAGES
The Kennedy family: seated from left are Patricia, Robert, Rose, John F., and Joseph P. Sr. with Edward on his lap;
standing from left are Joseph P. Jr., Kathleen, Rosemary, Eunice, and Jean
w w w. n a t i o n a l r e v i e w. c o m
Film
The Bard
In SoCal
R O S S D O U T H AT
LIONSGATE
Happy Warrior
BY MARK STEYN
Cinema ex Machina
F my two local-ish movie theaters in New
Hampshire, one has an irksome habit of always
showing the film just a little larger than the
screen, so that anything happening out on the
borders of the frame remains a mystery: If memory serves, it
was the most recent Die Hard sequel that had all the dateline
stuff in the lower left-hand corner, so that the two-line
MOSCOW. AUGUST. appeared intriguingly as COW.
GUST. My second local theaters even worse, a dingy
box that always reminds me of being a young cadet at my
boys school, and the dispiriting huts the
sergeants used to muster us in to show us
ancient public-service films on how not to
catch venereal diseases.
So, when Im in the big town, I like to
catch up on the big movies and see them on
the big screen. The other day, the big town
wasnt that bigBurlington, Vt.but it
had a multiplex or two, so I scanned the
listings: Monsters University, the prequel
to Monsters Inc.; Man of Steel, the rereboot of Superman; Pacific Rim, something to do with
robots vs. aliens; Despicable Me 2, a sequel to a computeranimated cartoon about a reformed supervillain; Grown Ups
2, an Adam Sandler sequel with all the urine and feces gags
they cut from the first film; Grown Ups 2 in 3D, the same
urine and feces gags but viewed through cardboard spectacles . . . And, for the first time that I can recall, there wasnt
a single movie I could face the thought of sitting through.
I see that conservative critics are blaming Hollywoods
listless summer on its blockbusters off-putting politics: In
the new Lone Ranger, the sidekick is the star and the bland
pretty boy playing the Ranger is just (in Tontos words) a
stupid white man; in White House Down, an Obama-esque
hopeychangey president comes under siege in the peoples
house from Tea Partytype terrorists.
Granted, its all terribly tedious, but its not really political in any meaningful sense. In The Lone Ranger, the baddies are top-hatted mustachioed railroad barons because the
formula dictates someone has to be the villain and, for a
multinational conglomerate like Disney, big business is the
easiest to hand. In Olympus Has Fallen, last months blockbuster about terrorists attacking the White House, the baddies were North Koreans, which superficially has some
connection to reality but in the end is no more grounded than
the right-wing Palin worshipers. Theres a scene in which
the president demands to know why traitorous Secret
Service agent Dylan McDermott has gone over to the Norks,
and he mumbles something about banks . . . bailouts . . .
whatever . . . Are we done yet? Can we get back to the explosions now? Rehearsing Damn Yankees 60 years back, the
great Broadway director George Abbott was famously asked
48
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AUGUST 5, 2013
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