Wednesday, November 08, 2006

Immediate election fallout: Rumsfeld resigns and stocks decline

Rumsfeld is stepping down as Secretary of Defense, and former CIA Director Robert Gates will take over. Fox News talked a lot about this as a possibility last night, a change to give the impression that the President will be flexible in his approach to the war in Iraq instead of what appeared to be obstinant, "we move ahead as planned", and resistant to any change. Most of that is simply perception of course, not reality, but this is the olive branch to the American people who voted for change.

I think the more interesting story is the stock market decline.

Nov. 8 (Bloomberg) -- Shares of health-insurance providers such as Humana Inc. and drugmakers including Pfizer Inc. fell after voters gave control of the U.S. House of Representatives to Democrats who've pledged to cut government health-care payments.

Sounds good up front, but what it's saying is in an effort to cut costs the government is looking to stiff the pharmaceutical companies.

[...] House Democratic leader Nancy Pelosi has vowed in the first 100 legislative hours of the new Congress in January to seek votes allowing the federal government's Medicare program, the biggest U.S. buyer of health-care products and services, to negotiate with drugmakers for lower prices. Democrats who oversee Medicare also have said they want to cut payments to health insurers that manage certain types of government plans.

"It is going to give them a lot of leverage in dictating price rather than negotiating price, and that is the scariest thing coming out of this election," said Jack Lafferty, managing director at US Trust Co. in New York, in a telephone interview.

The Medicare system is a mess to begin with, and I've maintained the first step in fixing the problem is actually tort reform. Make it a loser pays system; that helps lower doctors' malpractice rates; might makee medical insurance rates decline, and reduce legal costs for the drug companies constantly scared about created wonderful new drugs to save lives since there will be that one person out there that has a negative reaction and is hurt who will sue for a bazillion dollars. More profit for drug companies due to less legal overhead means more money for research into new therapies and lower prices on existing drugs. With Democrats taking control, don't expect to see any legal reforms whatsoever. Instead they'll try to strong arm the companies into submission undoing the Medicare privatization efforts Republicans had begun.

It's a possiblity at this point. Hasn't actually happened.

We'll have to wait and see...

UPDATE @ 12:17pm: In from the Cold has a great post giving credit where credit is due with regards to Rumsfeld's tenure as SecDef. He's also got this blurb on the new choice Robert Gates.

Regarding Mr. Gates, he is a good man but the wrong one for the job. He spent most of his professional life at the CIA before retiring and becoming the President of Texas A&M University. Robert Gates certainly knows the intelligence end of military affairs, but his expertise ends there. Moreover, his management skills as DCI weren't particularly impressive, and as an analyst, he was part of a CIA team that consistently got it wrong on their assessments of the former Soviet Union. Gates strikes me as a easy confirmation, someone with no ties to the current Pentagon regime. That's probably a necessity in today's political climate, but that doesn't make Mr. Gates the right choice for DoD.

Reading through Gates' wikipedia page, he spent 2 years in the Air Force, and 26 in the CIA. He was involved in the Iran/Contra affair to a limited degree since he was never indicted for anything.

Ought to make for an interesting confirmation hearing...

UPDATE @ 2:52pm: BlackFive is not particularly thrilled with Rummy's resignation and he certainly doesn't mince words.

During a mid-term election that turned into a referendum on W's leadership overall, and in Iraq especially, he stands tall and says Rumsfeld will stay out the rest of his presidency. Knowing full well that this will alienate some of the moderate Dems and Repubs who support the war on terror, but wonder about Rumsfeld's prosecution of it. So these folks decide enough is enough and take their frustration to the only place they can voice it, voting the bums who support Bush out and a Dem majority in. Now both Houses of Congress will be run by a party that burns with hate from having 2 elections stolen.

[...] If this was a possibility then it should have happened before the election and would probably have shown the folks who voted against staying the course that he was making important changes. Instead he ensures they believe the prevailing story that W and Rummy are not listening and have no plan and it cost dearly.

Can't argue with his logic... How many votes would have swayed if this had happened before the election? Gates has said he was contacted about possibly returning to the government's service as SecDef a month or so ago. What might have been...

If nothing else check out BlackFive's post, Rumsfeld's 6 years: a pictorial...

It's classic...

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