Whose financial activities tell us what’s wrong with America — Mitt Romney’s or Newt Gingrich’s?
Romney released some tax returns this morning. In 2010, Goldman Sachs, one of the Romneys’ investment firms, reported that a trust set up for Ann Romney booked a $17,728.21 profit on the sale of stock in Novo Nordisk, a global pharmaceutical company based in Denmark. The Romneys paid a 15 percent federal tax levy on this capital gain, or $2,659.23.
Romney’s Novo investment was unremarkable. It was a tiny part of his portfolio. It catches the eye only because Gingrich, too, made cash off Novo Nordisk in recent years — just in a different way.
As the New York Times reported last month, Novo Nordisk paid $200,000 annually to be a big part of Gingrich’s “Center for Health Transformation.” Novo paid Gingrich separately, too, for lobbying in all but name.
What did Novo want? It wanted Gingrich to wring money from the U.S. government. The Times says:
Mr. Gingrich’s health center went on to help Novo Nordisk create a national diabetes campaign, and worked to shape government policies toward the disease. According to a presentation by a Gingrich aide to health care executives in 2004, the [Gingrich] center was “working to insure” that Medicare covered insulin products manufactured by Novo Nordisk, and Mr. Gingrich planned to meet with members of Congress “to help them develop priorities” on fighting diabetes.
Novo now boasts that its headliner diabetes drug, Victoza — the one that southern celebrity chef Paula Deen is hawking – is covered by Medicare.
This coverage — a key part of Novo’s strategy — could cost the taxpayer a pretty penny. The New York Post’s Steve Cuozzo, a diabetes sufferer, says Victoza can cost $500 monthly.
If we measure a person by taxes alone, Gingrich is the better presidential candidate. Gingrich made his Novo money by, well, working. It follows that Gingrich paid the ordinary income-tax rate — a rate twice as high as what Romney paid for investing in Novo stock.
Yet it is Gingrich, not Romney, who has created a huge liability for the U.S. taxpayer.
Okay, let’s say, for the sake of argument, that the capital-gains tax rate is too low relative to the regular income-tax rate. All that will happen is that someday, probably soon, the government will raise the capital-gains rate and get its money back anyway.
It’s not as easy to unwind what Gingrich has done. Gingrich’s lobbying — er, non-lobbying — activities have helped to turn much of the “private sector” into just another arm of the government.
These activities push the cost of health care up. Gingrich has perpetuated the idea that the government, not individuals, should pay for health care, even if that care is needed at least in part because of a lifestyle choice (see Paula Deen).
How Gingrich has made his money in the past decade carries a much more pernicious and long-term cost to the U.S. taxpayer and citizen than does how Romney made his money.
And it’s Gingrich’s activities, because they eventually push costs and taxes up for everyone, that it make it more difficult for a working-class person to get a new job if Mitt Romney’s private-equity successors lay him off (hey, Mitt — you’re welcome).
To be sure, the financial industry’s whole-scale takeover of the U.S. economy hasn’t been a good thing. Romney benefited from it, even if he didn’t invent it.
But Gingrich’s own industry — what Romney yesterday called “influence peddl[ing]” — and its similar takeover of the U.S. economy has been worse.
— Nicole Gelinas is a contributing editor to the Manhattan Institute’s City Journal.
you're so eager to take a shot at newt that you basically side w/ govt deciding which drugs a person deserves and which they dont. lots of new drugs are expensive but you will just let the govt decide its more feasible to let people suffer or die than spend that money. you've gone over to the dark side....
Reply to this commentLinkReport Abuse"basically side w/ govt deciding which drugs a person deserves and which they dont."
Welcome to socialized medicine - which is EXACTLY what Gingrich was advocating for, and it's exactly what Part D is.
When the government takes over the role of private insurer, this is what's going to happen. When "real conservatives" like Newt Gingrich advocate for the biggest expansion of the federal entitlement system in the last 45-years, this is what's going to happen.
SOMEONE has to say no.
"die than spend that money"
What part of "there is no money" don't you understand? Part D has increased the federal deficit by at least $7T. There is no money.
Reply to this commentLinkReport AbuseNope. I think a person should be able to buy whatever new drug he likes -- and that he should pay for it, too. You want to spend $500 a month on a drug, cut some other things out of your monthly budget. Drug companies are marketing this stuff directly to consumers, so it's time that consumers do what consumers do, and pay for it directly.
Reply to this commentLinkReport AbuseIt is getting tiring trying to respond to all the Romney sycophantism on the Corner lately. Simple point: Newt balanced the budget, defated HillaryCare, passed Welfare Reform after Clinton vetoed it twice, and impeached the Perjurer-in-Chief. Before that, he helped Reagan push through his conservative legislative agenda. Romney because his career disparaging Ronald Reagan (which should have disqualified him instantly if it wasn't for all the free campaign advertising given from the "conservative" media). As governor of Massachusetts, Romney banned guns and invented what later became Obamacare.
Only one of the two has ever done anything conservative in the policy arena. And yet NR, the magazine created by William F. Buckley to advocate for the conservative message, is shilling for a guy who is the Republican embodiment of the antithesis of that conservative message.
How much of this, I wonder, is the belief on NR that Romney really is the best candidate to advance conservatism, versus the preference for Romney simply because he went to an Ivy League school and is part of the northeastern community who use "summer" as a verb--the basic demographic profile of the writers on the Corner? Do you like him because he's qualified, or because he's "one of us"? Believe it or not, some of us Republicans think it might actually be harmful to have Thurston Howell III as the national spokesman for the party.
Reply to this commentLinkReport AbuseSpeaking as a woman, Newt Gingrich doesn't have the moral character to be President.
Cheating on and then leaving two ex-wives while they were both ill with disease is pretty despicable stuff.
Newt is a weak man.
Reply to this commentLinkReport AbuseBiscuits, "Impeached the perjurer in chief" while at the same time carrying on an adulterous affair with round heeled Callista, an epic triumph of hypocrisy and degraded morals. If I were defending the despicable Grindgrinch, I wouldn't go there. Cordially, Bill
Reply to this commentLinkReport AbuseI do not get it. Is it a good drug or bad? Does it help? Medicare is a liability altogether. So you agree with Obama that old people do not need knee replacements and better to amputate in case of diabetes than provide a drug? Hatred makes smart people look stupid when the catch derangement syndrome, whether id is Bush or Gingrich.
Reply to this commentLinkReport AbuseThat's a good point about how screwy Medicaid can be and the general perverse incentives of government funding such a huge segment of the economy.
BUT it should not be taken as criticism of the drug itself or the drug company. For all I know, this new drug might, for $500, save $10,000 in other diabetes-care costs. That is, it may be far cheaper than the current alternatives. In that case, having Medicaid pay for the drug makes a lot of sense, because it is cost-efficient.
The sad thing, though, is that the efforts of a non-scientist, non-expert in this area, Gingrich and his firm, can influence what should be an entirely apolitical, research-based decision on whether to include the drug or not. And there, you are quite right to criticize Gingrich and his lobbying enthusiasm.
Reply to this commentLinkReport AbuseExcellent points as well; thanks.
You're right than a $500 drug could certainly save more than $500, and thus be worth it. But Victoza (strange name) has a fuzzy marketing campaign aimed directly at consumers who cannot determine such a thing. This is why the company hired Paula Deen. Many people will respond to the marketing, and the cost will not discipline this response, as someone else (the taxpayer) pays the cost.
By the way, I don't blame a drug company for playing the lobby game -- but the drug company isn't running for president.
Reply to this commentLinkReport AbuseA few points about this:
1) Medicare part D went into effect on Jan 1, 2006
2) Victoza wasn't approved by the FDA for use in the U.S. until January 25, 2010
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3) There was the "Donut Hole" in Medicare part D (MpD), which meant that roughly $3400 of the (based on the referenced article) $6000 annual cost would have been paid out of pocket by the patient, depending upon the other drugs the patient was taking.
Obamacare phases out the donut hole by 2020, meaning MpD will pay all the costs by then.
http://en.wikipedia.org/wiki/Donut_Hole_(Medicare)
Now, it's possible that in 2004 Gingrich might have known that Novo Nordisk had Victoza in the pipeline, but I doubt he could have anticipated that Obama and the Dems in Congress would do away with the donut hole.
Reply to this commentLinkReport AbuseI didn't hear Newt complaining when they did take away the donut hole! (But maybe I just missed it.)
Reply to this commentLinkReport AbuseI haven't looked for any comments from Gingrich specifically mentioning the donut hole, but he came out squarely against the final vote on Obamacare in March, 2010, shortly before the House vote on the bill passed by the Senate:
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The Center for Health Transformation also came out against the bill:
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Reply to this commentLinkReport AbusePerfect points!
One more quote to add : " In 2010 Novo Nordisk pulls Victoza from Greece due to price cuts triggered by the financial crisis in the country. The act caused uproar among diabetics and relatives". While Nicole is quick to blame Paula Deen and her unhealthy lifestyle on need to use rather expensive taxpayer-subsidized drug, how about those Greeks ? Aren't they supposed to eat Greek diet, so good for health? How come they have diabetes en masse?
Reply to this commentLinkReport AbuseEven in exuberant enthusiasm the author of this article has for Romneys and their business acumen, should the question be asked further: why was the decision made to buy this stock in the first place? Two possible outcomes. 1. The drug is so advanced that despite of high initial price it saves lives and productive years - good drug, good investement. 2. The drug is too expensive and worthless, but the company has hired a strong lobby that is going to push it through to Medicare approval list at a great cost to US taxpayers - a lousy drug but a good investement.
This aritcle seems to imply the latter. if it is so, then Romney has directly profited from Gingrich lobbying. And , if I were a Democrat I would further insinuate that Romney benefited from inside knowlege . I know , i know - I hear howls already. No, I don't believe it for a second - but the mud is going to be thrown. We should be thankful to Newt re: Bain Capital. If not for him doing some rather dirty but much needed work ,we would walk all the way to Romney nomination with our eyes shut and our ears plugged. Then we would be up for some October surprise!
You forgot to add in the corporate taxes paid by Novo prior to the cap gains/ dividend distributions. Unlike ordinary (wage) income, investment income is taxed twice.
Reply to this commentLinkReport AbuseFirst, let me compliment Ms Gelinas for wading into the comments in order to engage with commentors.
That said, I find this to be a pretty bad example of Apples-to-Oranges comparisons. It basically boils down to "Newt advocated for a policy that will cost more than Romney pays in taxes." So what? Romney also advocated for all sorts of policies that ultimately cost more for the US than he or Newt will ever pay in taxes.
Let's just start with the obvious Romneycare that is costing MA an additional $1 Billion a year, give or take. How is Romney's work to get it passed any different than Newt's work to get a specific drug covered by medicare?
How about CO2 regulation? Bain has a long history of supporting the notion that carbon should be regulated. Its website boasts its prowess in helping companies lower their carbon footprint and contributed to environmental talks at the World Economic Forum- these talks could be considered "Lobbying in Name Only" as they were basically advocacy for a comprehensive suite of private and public sector reforms all aimed at decreasing CO2. And in 2005, Mitt Romney was proud to highlight the fact that MA was the first state to institute carbon caps on power plants.
"In addition to reaffirming existing stringent CO2 limits, the draft regulations announced today, which will be filed next week, contain protections against excessive price increases for businesses and consumers. They allow power generation companies to implement CO2 reductions at their own facilities or fund other reduction projects off-site through a greenhouse gas offset and credits program."
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Let's just repeat that: Mitt Romney used HIS REGULATORY POWER to pass carbon caps just like those that the company HE WAS CEO OF advocated.
See what happens when you start arguing "his apples are much worse than her oranges"?
Reply to this commentLinkReport AbusePaula Deen hid 2 big Facts
1. She knew she had diabetes and hid this fact from the public to keep the money rolling in
2. Her $500 dollar a month drug was beaten by a $20 dollar specialized diabetes diet in a study. She hid this fact from her viewers. This goes way beyond her terrible diet
3. She did not promote the fact that the diet could reverse diabetes without drugs
This was revealed on Midland News External Link
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Reply to this commentLinkReport AbusePeople think diabetes is all about sugar, but the saturated fat in meat and dairy appears to be the main culprit:
Reply to this commentLinkReport AbuseExternal Link