February 28, 2014

Figures on Economic Growth in 2013 Revised Down…Way Down

Real gross domestic product, the total output of goods and services in the U.S., increased at an annual rate of 2.4 percent in the fourth quarter of 2013, the Bureau of Economic Analysisannounced Friday.
This is the second revision for the fourth quarter and a severe disappointment, considering initial estimates put GDP growth at about 3.2 percent.
“The deceleration in real GDP growth in 2013 primarily reflected a deceleration in nonresidential fixed investment, a larger decrease in federal government spending, and decelerations in [personal consumption expenditures] and in exports that were partly offset by a deceleration in imports and a smaller decrease in state and local government spending,” the report said.
But there was some growth in the fourth quarter, which can be attributed to positive contributions from exports, “nonresidential fixed investment, and private inventory investment.”
Government spending fell in the fourth quarter by 12.8 percent, compared the third quarter’s decline of 1.5 percent. Meanwhile, state and local government spending decreased by 0.5 percent, compared to the 1.7 percent increase in the quarter before that.
Imports, a subtraction in the calculation of GDP, increased by 1.5 percent.
“The second estimate of the fourth-quarter percent change in real GDP is 0.8 percentage point, or $32.7 billion,” the report said.
Real personal consumption expenditures increased by 2.6 percent in the fourth quarter, compared to the increase of 2.0 percent in the third.
Durable goods in the second revision of the fourth quarter increased 2.5 percent, down from an increase of 7.9 percent in the third quarter. Non-durable goods increased by 3.5 percent, up from earlier posting of 2.9 percent. Services increased in the second revision to 2.2 percent, up from earlier estimates of 0.7 percent.
Here’s a breakdown of the fourth quarter by its components:
Image source via Zero Hedge
Image source via Zero Hedge
Real final sales of domestic product, that is, GDP minus change in private inventories, increased by 2.3 percent in the fourth quarter, down from the third quarter’s increase of 2.5 percent.
Markets are poised to open mostly lower:
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February 27, 2014

Spending trillions and upset the constitutional order to please 17 percent of the people

In response to Contrary to Harry Reid, 29 Percent of Americans See Negative Impact from Obamacare:

Call me demanding, but I can't help thinking a plan that spends trillions of dollars, and upsets the American constitutional order, to make 17 percent of the public happy should be judged a hideous failure.  For considerably less money, we could have bought everyone who didn't have insurance in 2008 a policy.  And probably a car.
As I mentioned earlier, the hard truth shifting beneath all of these polls is that there never were all that many "hardcore" uninsured Americans.  The most thorough analyses I recall from the days of ObamaCare's unlovely passage pegged the number at less than 8 million, which seems fairly consistent with the results of these polls, and especially with the number of previously uninsured people who are signing up for ObamaCare.  
On that score, the Administration is of course concealing most of the vital data, but if we're still hovering around 3 million paid and valid policies, and (by some accounts) 70 or 80 percent of them are "churn" from Big Lie victims replacing their old plans with ACA policies... well, that's just not a lot of people "rescued" from the primary problem ObamaCare was supposed to solve.  Another big problem was the use of emergency rooms as clinics, dumping a "cost shifting" burden on the people who have insurance - a problem that also turned out to be nowhere near as large as we were led to believe, and hasn't gotten much better due to ObamaCare.  In fact, some say it's getting worse.
No sane person can possibly believe the expense and heartache of ObamaCare were worth the benefits to society.  Obviously the people getting screwed by 80% premium increases, 100% deductible surges, and lost access to their favorite doctors are very angry, and the very small group of people who see concrete benefits due to the ACA are happy.  But judged in total, there is no logical case to be made that all of this was worth it, or that nearly any of it was presented to the American people honestly.

February 23, 2014

Comcast’s deal with Netflix makes network neutrality obsolete

(Paul Sakuma / AP)
(Paul Sakuma / AP)
For the past two decades, the Internet has operated as an unregulated, competitive free market. Given the tendency of networked industries to lapse into monopoly—think of AT&T's 70-year hold over telephone service, for example—that's a minor miracle. But recent developments are putting the Internet's decentralized architecture in danger.
In recent months, the nation's largest residential Internet service providers have been demanding payment to deliver Netflix traffic to their own customers. On Sunday, the Wall Street Journal reported that Netflix has agreed to the demands of the nation's largest broadband provider, Comcast. The change represents a fundamental shift in power in the Internet economy that threatens to undermine the competitive market structure that have served Internet users so well for the past two decades.
The deal will also transform the debate over network neutrality regulation. Officially, Comcast's deal with Netflix is about interconnection, not traffic discrimination. But it's hard to see a practical difference between this deal and the kind of tiered access that network neutrality advocates have long feared. Network neutrality advocates are going to have to go back to the drawing board.
The classic Internet
To understand what's going on, it's helpful to review the structure of the "classic" Internet.
(Washington Post)
(Washington Post)
This diagram is an idealized depiction of how the "classic" Internet of the late 1990s worked. Backbone Provider B provides Internet service to Yahoo, carrying traffic to users around the world. Provider B connects with other companies, such as Backbone Provider A. The residential ISP on the right is a customer of Backbone provider A, and it, in turn, offers Internet access to individual households. The red arrows indicate who pays whom for service. Because the two backbone providers are roughly the same size, they engage in what's called "settlement-free peering": They exchange traffic with each other with no money changing hands.
A big advantage of this industry structure is that the backbone market is competitive. If Backbone Provider B overcharges Yahoo for connectivity, Yahoo can switch to another backbone provider. I've only drawn two backbone companies, but in the real world there were a number of them competing with one another. The fact that the largest backbone providers engage in settlement-free peering ensures that every computer on the Internet can reach every other computer. Competition among backbone providers helps keep prices down and service quality up.
This industry structure has another virtue, too: Network neutrality is protected by default. Traffic from Yahoo comes to the residential ISP in a big bundle along with traffic from lots of other Web sites. As I argued in a 2008 paper for the Cato Institute, that makes non-discrimination the default and gives residential ISPs limited leverage over distant Web sites. If the residential ISP wanted to discriminate against Yahoo traffic, it would need to make an explicit decision to block or degrade it, which would likely trigger a customer backlash. That has allowed network neutrality to thrive in the 1990s and 2000s even though there was no formal network neutrality regulations until 2010.
But the Internet is changing. One sign of that change is the just-announced deal between Comcast and Netflix. Another is Ars Technica's recent story about a dispute between the backbone provider Cogent and Verizon. Netflix is a Cogent customer. Surging Netflix traffic has been overwhelming the links between Cogent and Verizon. Cogent has asked for those links to be upgraded, but according to Cogent, Verizon has demanded payment for upgrading the links. (When Ars asked Verizon for comment, a spokesman declined to comment on the specifics of the negotiation.)
We can depict the dispute like this:
(Washington Post)
(Washington Post)
In this version of the Internet, two big things have changed. First, Netflix is really big. The video streaming site now accounts for about 30 percent of all traffic on the Internet. Second, Verizon acquired the formerly independent backbone provider MCI in 2006, helping to turn itself into a major backbone provider in its own right.
Those changes matter for Cogent's negotiations with Verizon. In the first chart, Backbone Provider A's leverage was limited by the fact that Backbone Provider B could always connect directly to the residential ISP, potentially costing A a customer. That gave A a strong incentive to keep its network fast and its interconnection terms reasonable.
The negotiation between Cogent and Verizon is different. Verizon plays the role of both backbone provider and residential ISP. That puts Verizon in a much stronger negotiating position, because Cogent doesn't have any practical way to route around Verizon. If Cogent wants to reach Verizon's customers, it needs to cut a deal with Verizon.
The FCC's dilemma
The fact that Netflix agreed to pay Comcast suggests that Cogent will likely lose its fight with Verizon as well. And as Cogent's chief executive Dave Schaeffer told Ars, "once you pay it's like blackmail, they've got you, there's nowhere else to go. They'll just keep raising the price in a market where prices [for transit] are falling."
Indeed, in the long run, this development threatens the survival of independent backbone companies like Cogent. If it becomes industry practice for backbone providers to pay residential ISPs, companies like Cogent will become mere resellers of access to the networks of large broadband companies. Or they may be cut out of the loop altogether, as large customers such as Netflix cut deals directly with broadband providers such as Comcast.
Cutting out the middleman might make the Internet more efficient, but it will also make it less competitive. Cogent has many competitors. Verizon's FiOS service does not. If companies like Cogent are squeezed out of business, it will make these already powerful network owners even more powerful.
It would also transform the network neutrality debate. As I mentioned before, the conventional network neutrality debate implicitly assumes that residential ISPs receive Internet traffic from one big pipe. Network neutrality advocates want rules prohibiting ISPs from divvying this pipe up into fast and slow lanes based on business considerations.
But in a world where Netflix and Yahoo connect directly to residential ISPs, every Internet company will have its own separate pipe. And policing whether different pipes are equally good is a much harder problem than requiring that all of the traffic in a single pipe be treated the same. If it wanted to ensure a level playing field, the FCC would be forced to become intimately involved in interconnection disputes, overseeing who Verizon interconnects with, how fast the connections are and how much they can charge to do it.
At this point, the FCC doesn't have any good options. Regulating the terms of interconnection would be a difficult, error-prone process. Trying to reverse the decade-old mergers that allowed America's broadband market to become so concentrated in the first place would be even more so. But the growing power of residential broadband providers will put growing pressure on the FCC to do something to prevent the abuse of that power.
One clear lesson, though, is that further industry consolidation can only make the situation worse. The more concentrated the broadband market becomes, the more leverage broadband providers like Comcast and Verizon will have over backbone providers like Cogent. That gives the FCC a good reason to be skeptical of Comcast's proposed acquisition of its largest rival, Time Warner Cable. Blocking that transaction could save the agency larger headaches in the future.

February 18, 2014

64% Earning At/Below Minimum Wage Are Under 30; 63% Work in Restaurants, Bars, Retail

February 17, 2014 - 2:59 PM
(AP Photo)
(CNSNews.com) - Sixty-four percent of Americans who earned the minimum wage or less in 2013 were 29 years old or younger, according to new data from the Bureau of Labor Statistics, and 63 percent worked in restaurants, bars or retail.
People 30 years or older equaled only about 36 percent of those who earned the minimum wage or less in 2013--and only 0.8 percent of the people employed in the United States.
President Barack Obama has made one of his key economic initiatives for this year an effort to get Congress to increase the federal minimum wage from $7.25 per hour to $10.10 per hour.
In 2013, according to the Bureau of Labor Statistics, there were 143,929,000 people employed in the United States during the average month. Of those, 75,948,000—or 52.8 percent--were paid an hourly rate.
Of the 75,948,000 who were paid an hourly wage in 2013, 3,300,000 earned at or below the minimum wage.
That means only about 4.4 percent (3,300,000) of hourly wage earners (75,948,000) earned the minimum wage or less in 2013--or only about 2.3 percent (3,300,000) of all U.S. employees (143,929,000).
But the 2.3 percent of American employees paid at or below the minimum wage in 2013 was not evenly distributed across age groups and industries.
50.4 percent—1,663,000—earning at or below the minimum wage were 24 years old or younger.
Another 436,000 were from 25 to 29 years of age. That means 63.6 percent—or 2,099,000—of the workers earning at or below the minimum wage in 2013 were 29 years old or younger.
The 1,201,000 employees who were 30 years or older and earned the minimum wage or less equaled 36.4 percent of those who earned the minimum wage or less--and only 0.8 percent of the 143,929,000 employed in the United States.
Where did Americans earning at or below the minimum wage work?
The industry that employed the largest number of workers at or below the minimum wage in 2013, according to BLS, was the “food services and drinking places” industry.
“Industries in the Food Services and Drinking Places subsector prepare meals, snacks, and beverages to customer order for immediate on-premises and off-premises consumption,” says BLS. This included “full service restaurants,” “limited-service eating places,” “special food services,” and “drinking places (alcoholic beverages).”
In 2013, according to BLS, businesses of this type employed 1,610,000 people at or below the minimum wage. That means 48.78 percent of all workers earning at or below the minimum wage were working in restaurants and bars.
This industry, according to the BLS, employed 10,503,600 people in January at an average hourly wage of $12.37. But it had an unemployment rate of 9.3 percent—41 percent above the national unemployment rate of 6.6 percent.
The industry that employed the second largest number of people at or below the minimum wage was the “retail trade industry,” which, according to BLS, “comprises establishments engaged in retailing merchandise, generally without transformation, and rendering services incidental to the sale of merchandise.”
This “retail trade” industry employed a total of 15,259,500 people in January and had an unemployment rate of 8.5 percent—or about 29 percent above the national rate of 6.6 percent.
468,000 of the people employed in the retail trade industry in 2013, according to BLS, made at or below the minimum wage.
The combined 2,078,000 peoplewho earned at or below the minimum wage working in restaurants, bars and retail in 2013 equaled 62.96 percent of the overall total of 3,300,000 who earned at or below the minimum wage.
“The presence of a sizable number of workers with wages below the federal minimum does not necessarily indicate violations of the Fair Labor Standards Act, as there are exemptions to the minimum wage provisions of the law,” says BLS in its annual report for 2012 on the characteristics of people earning the minimum wage.
For example, explains the Congressional Research Service, “a ‘tipped employee’—a worker who ‘customarily and regularly receives more than $30 a month in tips’—may have his or her cash wage from an employer reduced to $2.13 per hour, as long as the combination of tips and cash wage from the employer equals the federal minimum wage.”
Of the 1,610,000 workers who made at or below the minimum wage working in the “food services and drinking places” industry in 2013, 1,079,000 were paid below the prevailing minimum wage, and 531,000 were paid at the minimum wage.
Also, according to CRS, employers can be certified by the Department of Labor “to pay full-time students who are employed in retail or service establishments, an agricultural occupation, or an institution of higher education a wage at least 85% of the federal minimum wage ($6.16 at the current minimum wage).”
- See more at: http://cnsnews.com/news/article/terence-p-jeffrey/64-earning-atbelow-minimum-wage-are-under-30-63-work-restaurants-bars#sthash.IB79XW6e.dpuf

February 10, 2014

    The Hillary Papers
Archive of 'closest friend' paints portrait of ruthless First Lady
On May 12, 1992, Stan Greenberg and Celinda Lake, top pollsters for Bill Clinton’s presidential campaign, issued a confidential memo. The memo’s subject was “Research on Hillary Clinton.”
Voters admired the strength of the Arkansas first couple, the pollsters wrote. However, “they also fear that only someone too politically ambitious, too strong, and too ruthless could survive such controversy so well.”
Their conclusion: “What voters find slick in Bill Clinton, they find ruthless in Hillary.”
The full memo is one of many previously unpublished documents contained in the archive of one of Hillary Clinton’s best friends and advisers, documents that portray the former first lady, secretary of State, and potential 2016 presidential candidate as a strong, ambitious, and ruthless Democratic operative.
The papers of Diane Blair, a political science professor Hillary Clinton described as her “closest friend” before Blair’s death in 2000, record years of candid conversations with the Clintons on issues ranging from single-payer health care to Monica Lewinsky.
The archive includes correspondence, diaries, interviews, strategy memos, and contemporaneous accounts of conversations with the Clintons ranging from the mid-1970s to the turn of the millennium.
Diane Blair’s husband, Jim Blair, a former chief counsel at Tyson Foods Inc. who was at the center of “Cattlegate,” a 1994 controversy involving the unusually large returns Hillary Clinton made while trading cattle futures contracts in the 1970s, donated his wife’s papers to the University of Arkansas Special Collections library in Fayetteville after her death.
The full contents of the archive, which before 2010 was closed to the public, have not previously been reported on and shed new light on Clinton’s three decades in public life. The records paint a complex portrait of Hillary Clinton, revealing her to be a loyal friend, devoted mother, and a cutthroat strategist who relished revenge against her adversaries and complained in private that nobody in the White House was “tough and mean enough.”


On July 28, 1997, President Clinton was facing yet another wave of allegations from yet another woman. Kathleen Willey had accused Clinton of sexually assaulting her, and Blair faxed a Drudge Report item about her claims to one of the president’s aides.
Blair’s handwritten note attached to the story: “Do we take Matt Drudge seriously?”
Six months later, Drudge would break the story of an affair between Clinton and 22-year-old White House intern Monica Lewinsky, setting in motion the events that would lead to the president’s impeachment.
Hillary Rodham Clinton
When Clinton finally admitted to the relationship after repeated denials, Hillary  Clinton defended her husband in a phone call with Blair. She said her husband had made a mistake by fooling around with the “narcissistic loony toon” Lewinsky, but was driven to it in part by his political adversaries, the loneliness of the presidency, and her own failures as a wife.
She told Blair that the affair did not include sex “within any real meaning” of the term and noted President Clinton “tried to manage” Monica after they broke up but things spiraled “beyond control.”
Blair described the contents of the Sept. 9, 1998, phone call in a journal entry.
“[Hillary] is not trying to excuse [Bill Clinton]; it was a huge personal lapse. And she is not taking responsibility for it,” Blair wrote.
“But, she does say this to put his actions in context. Ever since he took office they’ve been going thru personal tragedy ([the death of] Vince [Foster], her dad, his mom) and immediately all the ugly forces started making up hateful things about them, pounding on them.”
“They adopted strategy, public strategy, of acting as tho it didn’t bother them; had to. [Hillary] didn’t realize toll it was taking on him,” Blair continued. “She thinks she was not smart enough, not sensitive enough, not free enough of her own concerns and struggles to realize the price he was paying.”
Hillary Clinton told Blair she had received “a letter from a psychologist who does family therapy and sexual infidelity problems,” who told the Yale Law School graduate, “most men with fidelity problems [were] raised by two women and felt conflicted between them.”
The psychologist suggested that Bill’s infidelity had its roots in his childhood.
“He’d read about Bill’s bio; grandmother despised [Bill’s mother] Virginia, tried to get custody of Bill; Bill adored by his mother, but she left him, etc. etc.”
In her conversations with Blair, the first lady gave her husband credit for trying to end the affair with Lewinsky, and said he did not take advantage of his White House intern.
“It was a lapse, but she says to his credit he tried to break it off, tried to pull away, tried to manage someone who was clearly a ‘narcissistic loony toon’; but it was beyond control,” wrote Blair.
“HRC insists, no matter what people say, it was gross inappropriate behavior but it was consensual (was not a power relationship) and was not sex within any real meaning (standup, liedown, oral, etc.) of the term.”


Hillary Clinton’s blunt assessments were not confined to Monica Lewinsky. In a Dec. 3, 1993, diary entry, Blair recounted a conversation with the first lady about “Packwood”—a reference to then-Sen. Bob Packwood, an influential Republican on health care embroiled in a sexual harassment scandal.
“HC tired of all those whiney women, and she needs him on health care,” wrote Blair. “I told her I’d been bonding w. creeps; she said that was the story of her whole past year. Fabio incident—sweeping her up, sending her roses.”
Privately, the Clinton White House was acutely sensitive to public perceptions of President Clinton’s treatment of women.
Supreme Court nominations were not immune from such considerations. In a three-page May 11, 1994, memo, Blair recounted her phone conversation with President Clinton about reservations he had about his preferred nominee to the high Court, the late Arkansas Judge Richard Arnold.
Noting Clinton allies had “really been trying to keep the women’s groups in line since Paula Jones filing,” Bill Clinton, according to Blair’s account, was concerned feminist groups “might blow sky high” if he appointed Arnold to the Supreme Court. Arnold had ruled that the Jaycees club could bar women from full membership—a decision later overturned by the highest court in the land.
Hillary Rodham Clinton
The president was also concerned about accusations of infidelity in Arnold’s divorce records—allegations the president believed had the potential to reignite scrutiny of his own background.
“Stuff is in the [divorce] record—apparently includes other people—and no matter what Hatch says, this will come out, and will make it sound like the only friends [Bill] has in Arkansas are adulterers,” wrote Blair.
“This thing is so sick, according to [Bill], in a way he wants to stand up to it, but will come out and will be part of the pattern of sleaze.”
The president asked Blair to discuss the Arnold nomination with Hillary Clinton, who was dismissive of “grassroots” women’s groups.
“[Bill] wanted me to talk to [Hillary], so we got plugged in (at one point had 2 White House operators trying to get me),” wrote Blair.
“[Hillary] listened to what I had to say re women; thought those grassroots groups didn’t count for much; it was the DC groups who would be doing damage, and obviously [Hillary] concerned about [the] ‘climate’ because of the sexual harassment charge.”
The Clinton camp found itself dealing with Bill Clinton’s infidelity early on. In a confidential Feb. 16, 1992, memo entitled “Possible Investigation Needs,” Clinton campaign staff proposed ways to suppress and discredit stories about the then-Arkansas governor’s affairs.
Campaign operatives Loretta Lynch and Nancy McFadden wrote the memo, addressed to campaign manager David Wilhelm.
The first item on the itinerary discussed “GF,” a reference to Gennifer Flowers, the actress and adult model who had recently disclosed her 12-year affair with Bill Clinton.
“Exposing GF: completely as a fraud, liar and possible criminal to stop this story and related stories, prevent future non-related stories and expose press inaction and manipulation,” said the memo.
In 1998 Bill Clinton admitted he had had a sexual relationship with Flowers.
Another item, headlined “Women,” referred to Elizabeth Ward and Lencola Sullivan, also rumored to have had relationships with Bill.
“Elizabeth Ward … determine attitude & check out background; Any Reep connections? When does Playboy come out?”
One of the documents in the Blair archive is an unsigned note from Bill Clinton, handwritten on the personal letterhead he used in the mid-1970s. The addressee is unknown. A cover page reads: “Tomorrow is Thursday.”
The undated letter is written on the same personal letterhead that Clinton was using in 1976, prior to becoming attorney general of Arkansas. Hillary Rodham and Bill Clinton began dating in 1971 and were married on Oct. 11, 1975.
“Yesterday the recurring shakes came over me again and to rid myself of them I decided to go and buy something for you as much to be doing it as to actually wind up with things,” Clinton wrote.
He said he recently had bought books, including One Hundred Years of Solitude by Gabriel Garcia Marquez and Bread and Wine by Italian anti-Communist Ignazio Silone.
“By the time I could call last night it was too late and I was too spent,” the future founding chairman of the Clinton Global Initiative went on.
“Today is Thursday. I will be at the little place downstairs in the union at 11:30. If you aren’t there, I’ll understand. And if you are, I will.”
The fast-food lover and amateur sax player closed by confessing that he had fallen asleep the night before while reading an erotic love poem from the seventeenth century.
“At 3:30 this morning I fell asleep over Andrew Marvell’s To His Coy Mistress,” wrote Clinton. “It has been a while since I could feel something so sharply across three hundred years.”
Attached to the letter is a photo of a young Bill Clinton holding a saxophone, with the note, “I thought you might get a kick out of this—I was once even younger.”


Days after President Clinton’s impeachment in 1998, the first lady called Blair in good spirits, telling her friend that, “Most people in this town have no pain threshold.”
“[Hillary] sounded very up, almost jolly,” wrote Blair. “Told me how she and Bill and Chelsea had been to church, to a Chinese restaurant, to a Shakespeare play, greeted everywhere with wild applause and cheers—this, she said is what drives their adversaries totally nuts, that they don’t bend, do not appear to be suffering.”
Hillary Clinton’s “adversaries” included the media, Republicans, and top members of President Clinton’s staff, according to a Washington Free Beacon analysis of the contents of the Blair archive.
“HC says press has big egos and no brains,” wrote Blair on May 19, 1993, during the White House travel office controversy. “That [the White House is] just going to have to work them better; that her staff has figured it out and would be glad to teach [Bill’s] staff.”
The First Lady often confided in Blair about her “hellacious” first year in the White House, and her many clashes with staffers, administration figures, and her husband. By the spring of 1994, Hillary was “furious” at Bill for “ruining himself and the Presidency.”
“She keeps trying to shape things up, knows what’s wrong, but [Bill] can’t fire people, exert discipline, punish leakers,” Blair wrote on May 17, 1994. “Never had strategy for Whitewater, troopers, Paula [Jones]. … Inability to organize, make tough choices, drives her nuts.”
Blair, a frequent guest at the White House, recounted two nights in mid-March 1993 when President Clinton spoke on the “theme of being spied on, taped, watched, imprisoned.”
“[Bill] told me last 2, 3 months hideously stressful, and has really never had a break since campaign,” Blair wrote. “Said when he named [Warren] Christopher to [State Department], screwed up the transition.”
The insularity of the Clinton White House was not lost on administration officials.
“Chat w. [Attorney General] Janet Reno,” Blair wrote on April 24, 1993. “She concerned that [Hillary Clinton is] resenting her ‘celebrity’ status.”
“Janet wants to connect w. HC; not communicate thru Carol Rasco,” Blair added. “Finds HC a ‘mask.’”


On Feb. 23, 1993, Blair joined the Clintons for a family dinner at the White House. The subject of health care reform came up.
“At dinner, [Hillary] to [Bill] at length on the complexities of health care—thinks managed competition a crock; single-payer necessary; maybe add to Medicare,” Blair wrote.
The account is at odds with public statements by the former First Lady that she never supported the single-payer option.
In an interview with the New York Times as she ran for president in 2008, Hillary Clinton said she had never seriously considered adopting a single-payer system, in which the government, using funds appropriated from taxpayers, pays for all health care expenses.
“You know, I have thought about this, as you might guess, for 15 years and I never seriously considered a single payer system,” said Clinton in the interview.
At the time of Blair’s account, the First Lady recently had been appointed to the president’s health care task force and had started her push for an insurance reform that hinged on the “managed competition” model.
However, at the February 1993 dinner, the First Lady already seemed to regret her decision to take on health care reform.
“[Bill’s] tenderly hugging and thanking [Hillary] for sucking up to all thos ego’s nd taking all this shit [sic],” wrote Blair. “She’s signaling him what a mess health care is, bu also, sweetly, ‘Don’t worry’ [sic].”
By the spring, the First Lady seemed deeply anxious about the effort.
“[Hillary] adamant; [Bill] must devise new outside strategy; we’re getting killed. Congress a bunch of whiners; no courage. Her health care plan will save billions in long run but will cost big $ up front. [Members of Congress] don’t work; only 3 days a week; only care for re-election,” wrote Blair. “[Bill] clearly not very happy w. his own crew and advisors. [Hillary] urging hard ball.”
As the First Lady prepared to testify before Congress in September 1993, Blair wrote that “she’s begun to see that they don’t really care about the issues but want to feel they’re part of the process. So she’s slobbering over their ‘craft’ as she testifies.”
Hillary Clinton’s testimony is seen in retrospect as the high point of her failed health care campaign.
“The week may have been the pinnacle of her career as First Lady,” wrote Carl Bernstein in his 2008 book Woman in Charge. “Hillary was making history, and there were comparisons on the floor of Congress to Martha Washington, Eleanor Roosevelt, and in one particularly tortured leap of logic, Abraham Lincoln.”



On April 21, 1993, during a speech at the opening reception for the United States Holocaust Memorial Museum in Washington, D.C., President Clinton drew parallels between the genocide in Bosnia and the Holocaust.
That same month, he met with top U.S. military officials, diplomats, and aid workers advocating for military action against the Serbian forces of Slobodan Milosevic.
At the time, however, Hillary Clinton was not on board with the use of deadly force. According to Blair’s April 29, 1993 account, the First Lady said she “was very much against any intervention—had been killing each other for 900 yrs.”
Blair later spoke with President Clinton in mid-May and gave him “messages a la [Hillary’s] instructions: stop ruminating aloud re Bosnia.”
The White House was under increasing pressure to address the atrocities in the Balkans. Yet the United States waited more than two years before taking military action.
Blair’s papers are not the first indication that Hillary privately opposed U.S. intervention in Bosnia prior to 1995.
An unnamed friend of the Clintons told Newsweek in 1993 that the First Lady “regards [Bosnia] as a Vietnam that would compromise health-care reform.”
The author and controversialist Christopher Hitchens later reported a similar account from then-Secretary of Defense Les Aspin.
Since leaving the White House, however, Hillary Clinton has said that she favored earlier intervention in the Balkans, decrying “the tragic failures in Rwanda, early Bosnia, and up to now, the inadequate response in Darfur in a 2005 speech to the United Nations.


Hillary Clinton’s influence on White House decisions went beyond policy, according to the Blair papers.
A three-page memo written by Blair on May 11, 1994, shows the First Lady privately urging President Clinton to reject his preferred 1994 candidate for the U.S. Supreme Court because of political considerations.
While Bill Clinton favored the late Arkansas Judge Richard Arnold, he and his wife had concerns about the judge’s health.
Hillary Clinton also argued that rejecting Arnold would send a “message” to the judge’s ally, Arkansas Democrat-Gazette publisher Walter Hussman, Jr., whose paper often printed unflattering stories about the Clintons.Hillary Rodham Clinton
“Goddamn Hussman needs to know that it’s his own goddamn fault; that he can’t destroy everybody from Ark. and everything about the state and not pay the price for his precious Richard [Arnold],” Hillary said, according to Blair’s account.
“He needs to get the message big-time, that Richard might have a chance [to be appointed to the Supreme Court] next round if Hussman and his minions will lay off all this outrageous lies and innuendo.”
The details in Blair’s memo challenge the contemporary understanding of Hillary Clinton’s role in the debate over the 1994 appointment. The First Lady has been credited as one of the few members of the president’s inner circle who lobbied in favor of Arnold’s nomination.
However, that seems not to be the case.
President Clinton has said he did not appoint Arnold for health reasons. The judge had been diagnosed with advanced lymphoma, and according to the Blair memo his doctors could not guarantee he would live more than five years.
He died in 2004.
The health concerns were related to President Clinton’s fear that Arnold could be his last Supreme Court appointment.
“At this point BC not sure he can get re-elected; they’re killing him in the South, rise of fundamentalism, the Nazi’s. Some of that he did to himself—gay rights in the military. Others just hate the one who’s in,” Blair wrote in an account of one of her conversations with the president.
According to the memo, Bill Clinton dispatched Blair to discuss the issue with Hillary, but the First Lady stood her ground.
“If HRC carried the day, and it sounds as if she is, [the nominee] will be [Bruce] Babbitt,” wrote Blair. “She’s not wild about him. Wishes there were a 3rd choice.”
President Clinton ended up appointing Stephen Breyer, who became an associate justice of the Supreme Court in August 1994.


As Hillary Clinton prepares for a possible 2016 presidential run, the Clinton team has a great incentive to focus on the future.
However, recent weeks have made it clear this will not be easy.
Sen. Rand Paul’s remark about Bill Clinton’s “predatory behavior” on a recent Sunday talk show generated a days-long media firestorm and reignited the decades-old Lewinsky controversy.
While Hillary Clinton has gone from the White House to the Senate to the State Department, experts say she will likely be forced to readdress some of the controversies that defined her husband’s presidency if she decides on a 2016 bid.
Neither a Clinton spokesman nor a spokesman for the Clinton Foundation returned a request for comment from the Free Beacon on the materials contained in the Blair archive.
As the 2016 contest draws near, however, the contents of this little-known archive of one of the closest friends of the most famous woman in the world are sure to receive fresh scrutiny.
While thousands of Diane Blair’s papers are available to the public at the University of Arkansas Library, an undisclosed number of documents remain kept in a restricted section of the archive. The Free Beacon was unable to gain access to those documents.
“With this collection, [Diane Blair’s] contributions will grow and live on, enlarging our understanding of history, politics and culture,” Hillary Clinton said in a video address at the opening of Blair’s archive in 2010.
“I hope also that some young scholar will come along and write the story of Diane,” she added. “We miss her still but this, along with so many of her contributions to us, lives on.”