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Category: snake oil

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Matt Tabbi on economic death by short-selling

In this month’s Rolling Stone, Matt Tabbi once again takes on Wall Street with an article entitled “Wall Street’s Naked Swindle.” This article is not yet available online. Tabbi’s focus this time is naked short selling. Tabbi has proven to be an excellent teacher of abstruse financial concepts, including the concept of short selling, and also including the insidious practice of naked short selling. With this technique (and others) Wall Street has turned the economy into “a giant asset-stripping scheme, one whose purpose is to suck up the last bits of meat from the carcass of the middle class.”

Tabbi’s article is an excellent read, which is not at all surprising given Tabbi’s track record. The bottom line is that naked short selling is a “flat-out counterfeiting scheme.” How bad is the widespread use of this technique?

That this particular scam played such a prominent role in the demise of [Bear and Lehman] was supremely ironic. After all, the boom that had ballooned both companies to fantastic heights was basically a counterfeit economy, a mountain of paste that Wall Street had built to replace the legitimate business it no longer had. By the middle of the Bush years, the great investment banks like bear and Lehman no longer made their money financing real businesses and creating jobs.

As Tabbi then reminds us, there is more than one way to counterfeit. Consider credit default swaps:

If you squint hard enough, you can see that the derivative-driven economy of the past decade has always, in a way, been about counterfeiting. At their most basic level, innovations like the ones that triggered the global collapse-credit default swaps and the collateralized debt obligations-were employed for the primary purpose of synthesizing out of thin air those revenue flows that are dying industrial economy was no longer pumping into the financial bloodstream. The basic concept in almost every case with the same: replacing hard assets with complex formulas that, once unwound, would prove to be backed by promises and IOUs instead of real stuff.

In this related piece, Tabbi further discusses “naked short selling”:

Again, a lot of this stuff is complicated and not only hard for people outside the finance world to follow, but kind of, well, boring as well. But it’s through these tiny regulatory loopholes, these little nooks and crannies, that the economy gets manipulated. The effect of all of these regulatory gaps has been to transform Wall Street from a means of connecting capital to good business ideas into a giant casino, where the object of the game is shaving little slices off the great flows of money as you push them back and forth using a great big toolbox of manipulative techniques. This is one of the tools.

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Excuse me . . . my mortality is showing: meditations on life and death

Excuse me . . . my mortality is showing: meditations on life and death

Have you ever wondered why so many Americans wear clothing when it’s warm outside? Are they really covering up for sexual propriety—because of shame? Or could it be that they are wearing clothes to cover up their animal-ness– their mortality? I’m intrigued by this issue, as you can tell from my previous writings, including my posts about “terror management theory,” and nipples.

This issue came to mind again recently when I found a website that allows you to completely undress people. The site has nothing to do with sex, I can assure you, but it has a powerful set of images that raise interesting questions about human nakedness. To get the full experience, go to the website and select an image of a fully clothed person. These are absolutely ordinary looking people, as you will see. Then click on the images of any of these men or women and watch their clothes disappear.

If you are like me, when their clothing disappears, this will not cause you to any think sexual thoughts. If you are like me, you will find yourself thinking that these people looked more “attractive” with their clothes on. For me, the effect is dramatic and immediate, and it reminded me of a comment by Sigmund Freud (I wasn’t able to dig out the quote), something to the effect that we are constantly and intensely attracted to the idea of sex (duh!), but that sex organs themselves often look rather strange to our eyes–sex organs are not necessarily sexy. I think the same thing can be said for our entire bodies. Nakedness isn’t the same thing as sexuality or else nudist colonies would tend to be orgies (which, from what I’ve read, they are not). Rather, sexual feelings are triggered by the way we use our bodies. We do many things that are sexual, and most of these things take some effort. Simply being naked is not an effective way to be sexy.

In America, people constantly confound nudity with sexuality. I admit that the media presents us with many ravishing image of sexy naked people, but the sexiness of such images is not due to the mere nakedness. There’s always a lot more going on than mere nakedness. Consider also, that when people actually mate, they often bring the lights down low, further hiding their bodies.

Then why do Westerners cover up with clothing to be “proper”? I suspect that anxiety about death (not so much anxiety about sex) contributes to our widespread practice of hiding those naturally furry parts of our bodies—those parts associated with critically “animal” functions relating to reproduction and excretion of body wastes.

[More . . .]

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Neil Degrasse Tyson on the importance of scientific literacy

In this two-minute video, Neil Degrasse Tyson talks about the importance of scientific literacy.

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George Orwell’s concept of doublethink

I recently read George Orwell’s concept of doublethink and was impressed with how well he foresaw the way we would become:

The power of holding two contradictory beliefs in one’s mind simultaneously, and accepting both of them….To tell deliberate lies while genuinely believing in them, to forget any fact that has become inconvenient, and then, when it becomes necessary again, to draw it back from oblivion for just so long as it is needed, to deny the existence of objective reality and all the while to take account of the reality which one denies — all this is indispensably necessary. Even in using the word doublethink it is necessary to exercise doublethink. For by using the word one admits that one is tampering with reality; by a fresh act of doublethink one erases this knowledge; and so on indefinitely, with the lie always one leap ahead of the truth.

Beautifully terrifying given its prevalence in these times. Here’s a recent example: Selective Deficit Disorder. Now let’s get it straight. Are large budget deficits terrible or not? The answer is that it depends:

Where, for instance, were the conservative protest marchers when President George W. Bush vastly expanded the deficit with his massive tax cuts for the wealthy? Where was Sen. Lincoln’s concern for “deficit neutrality” when she voted to give $700 billion to the thieves on Wall Street? Where was Obama’s “dime standard” when he proposed a budget that spends far more on maintaining bloated Pentagon budgets than on any universal health care proposal being considered in Congress? Where were demands for “fiscal sanity” by Brooks and other right-wing pundits when they cheered on the budget-busting war in Iraq? Where were the calls from these supposed “deficit hawks” to raise taxes when they backed all this profligate spending? And where were the journalists asking such painfully simple questions? They were nowhere to be seen or heard, because those plagued by Selective Deficit Disorder (as the name suggests) are only selectively worried about deficits.

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Ideology Be Damned!

This is the reason we need healthcare reform in this country. Crystal Lee Sutton has died at age 68 because her insurance company diddled and dawdled over whether or not it would pay for the medicine necessary to save her life.

Don’t know who Crystal Lee Sutton was? She was the real-life inspiration for Norma Rae, Sally Fields’ excellent portrayal of a small-town union organizer who went to bat for workers’ rights.

This kind of thing should not happen. When profit—or overhead, however you wish to consider the problem—is placed ahead of life, those arguing against reform should hang their heads in shame. They cling to an ideology about free markets and consumer choice as though such things are part of the Ten Commandments (which most of them don’t follow either) and always at the expense of lives.

Dammit, people, we’re talking about a system which should operate for people’s benefit, not for its own. A system is simply a method of approach, a way of doing something, and if it can be changed once, it can be changed again if the reforms are found insufficient! It is no argument to reject reforms on the basis that the reforms might cause harm, since the present system is already causing harm.

It is a foulness to our present system that many people find that in order to vouchsafe their own health or the health of their loved ones they must fight for the very thing they were told they had purchased in the first place. This is in no way different from lending predators who lied to people in course of borrowing money to buy a home. The average person has neither the time or expertise to understanding every clause and addendum in a complex contract and must rely on what he or she is told. Either you have insurance coverage or you do not. It should not come as a surprise after you are already sick and discover that there are codicils which protect the insurance company from having to pay out what in principle they obligated themselves to do if not by the letter of the policy then by the spirit of agreement with a customer. Yet thousands, millions of consumers daily learn to their dismay that they don’t actually have what they thought they had bought.

This is not a game. If the private sector is more concerned over profit margins than providing service, then they should lose the privilege of offering said service.

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James (Amazing) Randi is still debunking and his $1M challenge fund is still safe

James (Amazing) Randi is still debunking and his $1M challenge fund is still safe

My local alternative weekly newspaper, The Riverfront Times, just published a detailed article on James “The Amazing” Randi, professional magician and debunker of claims of the paranormal. I learned a lot. Here’s an excerpt:

Randi has debunked more than 100 psychics and faith healers in a quest to rid the world of hucksters. It also makes him the subject of scorn among purveyors of the paranormal, true believers who say Randi has made himself rich, pulling in nearly $200,000 a year from his foundation, at the expense of others’ careers.

Now, however, Randi’s work may be in jeopardy. His foundation has been hemorrhaging money, and Randi, who has spent his career challenging the notion of an afterlife, now faces his own mortality. He has intestinal cancer and may not have long to live. Randi has been a commanding presence for four decades, but it’s unclear who could fill his role as the face of the skeptic community.

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Israeli lobby: if you’re against illegal settlements, you’re for ethnic cleansing of Jews

The Israeli lobby is at it again, according to a recent article by the U.K. Guardian. If you are against Israel’s illegal settlements on the land of Palestinians, you must supposedly be for ethnic cleansing of Jews:

The Israel Project, with an advisory board that includes 20 members of Congress from both parties, issued the confidential document to its supporters at about the time Obama came to power in January.

The report, marked as “not for distribution or publication” but since widely disseminated outside of the organisation, says that those who back the removal of the settlements should be told they are supporting ethnic cleansing and antisemitism. The guide offers what it describes as “the best settlement argument”.

Not coincidentally, there is a growing movement among British unions for the global boycott, divestment and sanctions campaign against Israel for its treatment of Palestinians and its failure to work toward peace.

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Holland House: a real world place to enjoy life after you die.

Holland House: a real world place to enjoy life after you die.

All my life I’ve been fascinated with the way most people refuse to deal with death. Many people simply can’t stand to talk plainly about death. When Uncle Fred dies, they can’t bear to say “Uncle Fred died.” Rather, it’s something like Uncle Fred “passed away” Or “Uncle Fred went to heaven,” even though no one is sure whether there is a heaven—or if there really were a heaven, no one knows how one would really know whether Uncle Fred really earned his way in. Regardless, whenever people die, most people talk as though they are sure the loved one is still alive and that they are absolutely certain that he or she didn’t go to hell.

Further, when people speak of the death of loved ones, they usually speak in a strange voice and with strange facial expressions. It’s difficult to say why people have such a difficult time talking plainly about death, but they do. I don’t claim to have the entire answer, but I am intrigued by the insights of Terror Management Theory.

People also talk this strange way when their pets die. A few months ago, an acquaintance told me that his 10 and 12 year old sons had been crying constantly, for several weeks, that their dog “passed away and went to dog heaven.” Good grief! Then again, we are also living at a time when Americans will go so far as to pay thousands of dollars for chemotherapy for their 15-year old dogs. Most of us just can’t let go.

As a teenager, I often noticed this discomfort with death and I wondered why so many people can’t shoot straight on such an important topic. Why can’t people plainly admit that within 150 years every person currently living on earth will be dead, and that this includes your parents, your children, everyone one of your friends and even those know-it-all preachers who so often assure you that you continue to live after you die?

This fascinating topic of death came up vividly last week. A co-worker was telling me about a strange request being made by her 70-year old mother. Her mother has repeatedly raised the topic of her own (eventual) death and she has requested that when she dies, she wants her children to embalm her and place her body into a glass coffee table, lying on her back, with her eyes open. She wants to remain part of the family forever, as best she is able. My co-worker and her family were somewhat amused by this request until it became clear that her mother wasn’t kidding. Her mother really wants her dead body to remain in the living room of one of her adult children, where it will be plainly visible to her children and grandchildren (and presumably great-grandchildren, etc). Here mother claims to be figuring out how to make this glass coffee table entombment a reality.

Hearing this story reminded me of a concept I co-developed with a buddy named Mike Harty back in high school (in 1974). Mike and I often discussed death back in high school. Many of our classmates found the topic to be disturbing, but it energized and entertained us. One day, we wondered what kind of potential market might exist for post-death “living” arrangements for families whose loved ones were now corpses. We called our concept “Holland House,” (I believe that we borrowed the named from this real life opulent estate). Our company slogan would be: “We think your loved ones should not be deprived of their earthly pleasures.” And also this one: Holland House: Open to all dead people from 7 to 70.” Mike even drew a photo of Holland House, which would offer wealthy families the finest in post-death community living:

[caption id="attachment_8651" align="aligncenter" width="445" caption="Art by Mike Harty"]holland-house-lo-res[/caption]

Holland House would be a large lavish resort for dead people, an alternative for families not willing to plop their dead loved ones into graves. Here’s how we planned to market Holland House.

Important announcement for bereaved families. Consider this alternative to burial or cremation. Simply send your loved ones to Holland House and we will carry on where the nursing home left off. Our attendants will start the day by taking your loved one’s corpse out of bed, dressing it and wheeling it to the breakfast table, where it would sit (admittedly stiffly and silently) in front of fresh food prepared by highly trained chefs. After breakfast, we will wheel your loved one to a wide variety of activities, including various classes and recreational activities.

There would be visiting hours, where the families could come to talk to their dead loved ones—Holland House staff would wheel the corpse into a brightly lit visiting area, with tea and cookies, where the family could present an update about what was going on with the living members of the family. Our professional staff would update the family as to their loved ones’ activities at Holland House. For instance, we might advise: “Yesterday we had a photography class and horseback riding. Tomorrow, we will have dancing classes–two attendants will assist each corpse–and shuffleboard.”

[caption id="attachment_8653" align="alignright" width="282" caption="Art by Mike Harty"]Art by Mike Harty[/caption]

Holland House would have a photographer on staff to keep the family photo album updated with photos of everyone in the family, alive or otherwise.

[I'm not recounting these ideas from pure memory. Mike and I wrote up an outline of the services to be offered by Holland House]

Mike and I planned that Holland House would have private rooms for each of the guests, with a color TV in each room. We’d have an extensive library and a medical center (where we’d we well stocked in deodorant). We offer night classes too, including a favorite: “How to get the most out of life.”). There would be a dating service, where we’d match residents based on their accomplishments while they were alive. We’d have a high end clothes store, so that our residents were always wearing up-to-date fashions. Our foods would be naturally grown organic foods fertilized by former residents. Oh, and we’d be careful at Holland House that we’d never refer to our residents as “dead.”

Perhaps you’re wondering how long would a corpse stay at Holland House? The answer is simple: as long as the family couldn’t bear to dispose of the corpse in some other way or until the family money ran out, whatever came earlier.

I am offering this idea for free to anyone who wants to offer Holland House services to people with far too much money. Then again, perhaps post-death living might get so popular someday that Medicare would pick up the tab, which could lead to multiple generation families residing on entire wings of Holland House . . .

Mike and I created all of this for our amusement many years ago, but this concept was all triggered by the fact that so many people can’t acknowledge that dead people were really and truly dead.

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Hitler and the Dining Room Table

Hitler and the Dining Room Table

I like Barney Frank. He says what he feels, usually in a way that makes his argument better. But it’s almost a no-brainer to do a comeback on the idiocy with which he was faced in Dartmouth, Massachussetts this past week. I mean, what do you say to someone who thinks it’s a valid statement to compare Obama to Hitler?

A woman carrying a poster with Obama’s image modified with a Hitlerian mustache stepped up to the microphone to ask why Frank supports a Nazi policy.

There are so many things wrong with this it boggles the mind where to begin. Frank’s response was probably the most effective.

“On what planet do you spend most of your time?” he asked. Then: “Ma’am, trying to have a conversation with you would be like trying to argue with a dining room table.”

He then commented that her freedom to carry that poster and make such lamebrained statements was a tribute to the First Amendment and Freedom of Speech. I salute his restraint.

To compare any president of the United States to Hitler is a stretch, even with the likes of Obama’s predecessor. (I might consider it for Cheney, but even he does not match the level of malignancy achieved by Adolph, nor does our system allow for such people to act with unrestrained impunity, hard as that might be for some to accept.) But to compare Barack Obama to the man man of the 20th Century is such a profoundly ignorant mischaracterization that it is tempting to write off this whole experiment in potential civilization as a failure.

Where does this shit come from?

The Republican Party, what is left of it, is grasping at straws, sinking in the quicksand of its own inanity. We must take care to not be pulled into the quagmire in some misguided attempt to rescue it through well-intentioned but doomed bipartisan sentiments. The Republican Party has devolved into a nasty cadre of ideologues, a shrinking room of hydrophobic screechers who claw and scratch at anyone who tries to do this country a service by bringing it back to some semblance of decency. They have fed on their own conspiracy-fevered viscera for so long that they cannot even hear the words much less the sentences of opposing viewpoints. We should perhaps let them sink and drown. It would be a kindness.

The fear-mongering is reminiscent of everything we’ve seen since 2000. Rachel Maddow, who is one of the most able of contemporary analysts on television, shows the process and the connections here.

Shouting, screaming, inane blather—noise filling the spaces in which rational discourse might take place if only the decibel level could be reduced. Platitudes, sloganeering, slander, and lies are flooding these so-called town hall meetings and shoving aside reason and discovery and thought. These are not people who are interested in understanding anything, they are people bent on stopping something they’ve been told—been told—they should not allow.

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The My Of It

The My Of It

Listening to the harangue over the health care reform squabble, I can’t help thinking—even I saw a few episodes of West Wing, I who do not watch television, so of all the Lefties out there who probably hung on every second of that show, why is it so hard to grasp how things don’t get accomplished in D.C. ? Yeah, it was fiction, but it was, in my opinion, pretty accurate in terms of the culture.

But people complain and wonder why Obama doesn’t just “ram his reforms through.”

Well. The man is a consensus builder. We just got done with a president who wasn’t. Obama has not yet been in office a year and already people are ready to jump ship because he’s not the second coming of FDR.

How thoughtless, ill-informed, and shallow supposedly intelligent people can be. It should not be surprising, yet…

First off, instead of presenting his reform package, he handed it to Congress—which is where all the arguing was going to happen anyway. Suppose he had presented a package. What is happening now would have happened anyway, and then he would be directly blamed for having drafted a lame plan. His plan would have been eviscerated and Congress wouold then proceed to draft something possibly worse than what it emerging now since Obama’s plan would have been discredited through failure. As it is, the plan being touted is All Congress’s. Anything wrong with it, it’s on them. Obama has been arguing that regardless what happens, things have to change—which is frightening. With the stimulus package, things were already broken. With health care they are merely on the verge.

Secondly, he’s got lots of balls in the air just now. A lot. Most of them are disasters he inherited.

Now, the metaphor has been used before, but that doesn’t make it any less true—this country is a Big Ship and you don’t turn it around on a dime. If you do that, you break more than you fix. Maybe that’s what needs to happen, and sometimes we’ve had leaders who did that when there was but one maybe two major things that needed to be tended to. But that’s not the case just now.

Everything is in a mess.

I’m not going to fault the man for failing to meet impossible expectations. Let’s assume he did just start “ramming things through” and taking a dump all over Congress in the process, and things would inevitably get worse. For the ideologues who are displeased with what they perceive as half-measures just now, he might be a hero. Maybe, but quite certainly he would be a one-term hero. The Republicans could make good book on a spectacular failure and be right back in power, at least in Congress, and then what?

So I think it a stupid thing to start bailing on him this soon into his term when he is possibly the most unifying, certainly the most intelligent and well educated president we’ve had since…hm.

Here’s what’s going to happen. Congress will put together a lame package. It will pass. Then likely as not it will fail. The system will collapse. On its own.

Then the big fix will come in. Congress will be discredited and Obama will be able to present a plan with legs and the public will back it because they will already have seen what happens when the really necessary steps are not taken.

Right now, the reality is that health care costs too damn much.

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Brownshirt guards prevent free-wheeling discussion at the Creation Museum

Brownshirt guards prevent free-wheeling discussion at the Creation Museum

It’s almost unbelievable. I suppose that too many thinking people were wandering in and criticizing the faux-science exhibits at the “evolution science” museum in Kentucky. Apparently, Ken Ham and his Creation Museum team simply can’t stand it when people talk real science in their “museum.” They’ll shut you up and kick you out. PZ Myers gives a detailed description of his visit, and it’s well worth reading the entire thing.

It’s pretty amazing that a “museum” would so unabashedly attempt to stifle all thinking. Myers almost can’t believe his own eyes and ears. Stifling thinking? But that’s how it is in most fundamentalist churches too. Fall in line or else. Pretend you know things you don’t really know. Pretend that you don’t know things that you do know. This is the foundation for an incredibly screwed up community, and the fundamentalists want to export it to the public schools too.

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More reasons to be pessimistic

More reasons to be pessimistic

I wish I could be more upbeat today, but I feel great danger all around us and what makes this danger real and pressing is our complacency. We Americans could meaningfully address many of our biggest issues, if only we took the time to inform ourselves and then focused our energy. But too many Americans don’t take the time to inform themselves and can’t bear the thought of prying themselves from their HD TVs. The result is that the social and corporate forces that are smart and organized will continue to quietly slink around picking our pockets on a massive scale; in the process, they will continue to insidiously demoralize us.

Consider this: We have never before seen such income inequity in the United States. It is now even greater than it was during the Great Depression. Paul Krugman indicates that as of 2007, the top decile of American earners . . . pulled in 49.7 percent of total wages. He further indicates that “as a result, in the economic expansion of 2002-2007, the top 1 percent captured two thirds of income growth.”

These aren’t just numbers. This disparity means real-life lost opportunities for real people, and I’m not just referring to the opportunity to buy an even bigger TV set. It means that month by month, this country belongs less and less to you and more and more to someone who doesn’t give a rat’s ass about you. I’m sorry to be so blunt, but there is no evidence for thinking otherwise.

Which leads me to a stunning article written by Chris Hedges: “It’s Not Going to Be OK.” He starts by characterizing Barack Obama as “a mortal waving a sword at a tidal wave.” What is the concern?

At no period in American history has our democracy been in such peril or has the possibility of totalitarianism been as real. Our way of life is over. Our profligate consumption is finished. Our children will never have the standard of living we had. And poverty and despair will sweep across the landscape like a plague. This is the bleak future. There is nothing President Obama can do to stop it. It has been decades in the making. It cannot be undone with a trillion or two trillion dollars in bailout money. Our empire is dying. Our economy has collapsed.

How will we cope with our decline? Will we cling to the absurd dreams of a superpower and a glorious tomorrow or will we responsibly face our stark new limitations? Will we heed those who are sober and rational, those who speak of a new simplicity and humility, or will we follow the demagogues and charlatans who rise up out of the slime in moments of crisis to offer fantastic visions? Will we radically transform our system to one that protects the ordinary citizen and fosters the common good, that defies the corporate state, or will we employ the brutality and technology of our internal security and surveillance apparatus to crush all dissent? We won’t have to wait long to find out.

The great danger is our massively widespread passivity at a time when we desperately need informed and focused action.

Our passivity and our ubiquitous proud ignorance make us susceptible to the next demagogue to come around. And we’ll probably be sitting around watching it happen on TV and convincing ourselves that it’s not so bad and that it was all inevitable and who cares about those olden days when the rest of the world actually looked up to the United States?

[Thanks to BJ for his link to the Hedges article.]

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The Wagons are circling!

While reading the Wall Street Journal this morning (courtesy of my hotel) I was appalled, but unsurprised, to read two extremely partisan opinion pieces on Obama’s healthcare proposals and the ‘reaction’ to them.

In a piece entitled “The Health Care Grail”, William McGurk clearly criticizes the White House, who “yesterday unveiled a new White House Web site accusing critics of scaring Americans ‘with half truths and outright lies’”. Unsurprisingly, Mr McGurk makes no mention that this is indeed a valid, and independently substantiated, criticism of the astroturf campaign against healthcare reform. Instead he attempts to make the case that this administration’s healthcare reform proposals are a “Doctrine” and that “the president and his allies see disagreement over health care as less a political dispute than the trampling of sacred doctrine”