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What’s Going on with the Mexican Cartels?

[ 13 ] November 6, 2014 |

Benjamin Smith has your day’s must read about the status of the Mexican drug cartels and what seems to be the Mexican government’s attempt to create a sort of super-cartel to keep the peace. There pretty much is no positive angle in any of this, be it the effects on the Mexican people, the possibility of a state-cartel alliance, or anything related to how it effects the United States. Depressing, but important and with excellent analysis.

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Soviet Housing Foundations

[ 74 ] November 6, 2014 |

Leave it to the Soviets to have done the worst possible thing in any given situation:

After the war, with Brest’s Jewish community devastated, the Communists set about getting rid of the remnants of Jewish culture in the town. In 1959 they dismantled the Jewish cemetery-one of the oldest and largest in Belarus-and turned it into a sports stadium. As the dismantling process got underway, Communist Party members, along with enterprising locals, recognized the high quality of the headstones and “recycled them.” As well as in the foundations of houses, these Jewish graves have since been discovered in the makeup of Brest’s road surfaces, pavements, and gardens.

In May, with diggers churning up the ground to build a new supermarket, more recycled headstones started popping up. Debra Brunner, co-director of the Together Plan, a UK-based charity supporting community empowerment in Eastern Europe and the Former Soviet Union, told me, “I can’t even begin to explain what it felt like to actually stand among the graves. Picture a huge mound of freshly dug mud with Jewish headstones coming out at all angles. It was a macabre sight.”

I just….

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Other people’s money

[ 16 ] November 5, 2014 |

Berkeley law professor Steven Solomon has a curious piece in the NYT today on how and why the Thomas Jefferson School of Law managed to survive, for now, by working out a deal with its creditors after defaulting on its bond obligations this summer.

Solomon argues that it doesn’t make financial sense for private creditors of free-standing schools, or central university administrators of university-affiliated schools (90% of ABA law schools are in the latter category) to close down a law school, at least while there’s any reasonable prospect of bringing revenues and expenses into balance:

[A] closed law school is worth little, or most likely nothing, to creditors. The value is only in the revenue stream it produces and perhaps its building. (You could say the books also, but these are increasingly fewer.) And these days, that revenue stream is down 20 to 40 percent, meaning that if law schools were for-profit businesses, most would be failures.

A troubled law school is like Dracula: hard to kill. Creditors will not do so because even keeping a struggling school alive means there is some possibility of repayment.

Most law schools, however, don’t have huge bonds to service, or at least, the debt they have is borne by the university. For these schools, the calculus is even easier. If a closed law school is worth nothing and a nice big building without students is useless, then keeping it open remains the only option.

Shutting down a law school at a larger university also puts the administrators and others out of work, with few options for employment. They have every incentive to keep the school alive.

This explains why, despite forecasts that up to a third of law schools could close, even the most financially dire have not. Instead, law schools are doing everything they can to push down costs hard and fast. Reports of layoffs of professors, buyouts and job cuts abound even for those with tenure. For years, central campuses sucked money out of law schools. Now they are keeping them alive.

Solomon sees all this as evidence that “the market” is working, if somewhat slowly and imperfectly:

The failure of law schools to close may also simply be a recognition that the market is adjusting to today’s realities. The struggle is pushing down the costs of operating a law school, and law schools are still valuable to universities. It may be tempting to shut them in these difficult times, but it can cost tens of millions to open a new one. Better to invest and cut back on expenses for a while and see what happens.

The status quo is likely to remain as some are forecasting that the bottom is almost here for law schools. This is how economics works: Markets tend to overshoot on the way up, and down.

Stephen Harper, author of The Lawyer Bubble, points out what’s missing from this analysis:

Solomon suggests that creditors made the only deal possible and the school is the ultimate winner. He gives little attention to the real losers in this latest example of a legal education market that is not working: Thomas Jefferson’s students, the legal profession, and taxpayers.

In retrospect, the restructuring agreement between the school and its bondholders reveals that a deal was always likely. That’s because both sides could use other people’s money to make it, as they have since 2008.

According to published reports, interest on the taxable portion of the 2008 bond issuance was 11 percent. Tax-exempt bondholders earned more than 7 percent interest. Thanks to federally-backed student tuition loans, taxpayers then subsidized the school’s revenue streams that provided quarterly interest and principal payments to those bondholders. (emphasis added)

That attending TJSL turns out to be a life-wrecking disaster for a very large proportion of its students is, as Harper emphasizes “irrelevant” in this sort of deeply dysfunctional market:

Thomas Jefferson’s low bar passage rate [54% in 2012] made no difference to most of its graduates because the full-time long-term bar passage-employment rate for the class of 2013 was 29 percent, as it was for the class of 2012.

Meanwhile, its perennially high tuition (currently $44,900 a year) put Thomas Jefferson #1 on the U.S. News list of schools whose students incurred the greatest law school indebtedness: $180,665 for the class of 2013 [Note that this figure doesn't include interest accrued during law school, so the average TJSL graduate has well over $200,000 in law school debt alone at graduation]. According to National Jurist, the school generates 95 percent of its income from tuition.

This invites an obvious question: How did the school survive so long and what is prolonging its life?

First, owing to unemployed recent graduates with massive student loans, bondholders received handsome quarterly payments for more than five years — much of it tax-exempt interest. The disconnect between student outcomes and the easy availability for federal loans blocked a true market response to a deteriorating situation. Bondholders should also give an appreciative nod to federal taxpayers who are guaranteeing those loans and will foot the bill for graduates entering income-based loan forgiveness programs.

Second, headlines touted Thomas Jefferson’s new deal as “slashing debt” by $87 million, but bondholders now own the law school building and will reportedly receive a market rate rent from the school — $5 million a year. Future student loans unrelated to student outcomes will provide those funds.

Third, the school issued $40 million in new bonds that will pay the current bondholders two percent. Student loan debt will make those payments possible.

Precisely.

Solomon doesn’t resist the urge to take a crack at certain unnamed critics of the law school status quo in America, who were supposedly enjoying “shivers of delight” at the prospect of seeing TJSL “keel over.” (Solomon links to an article in which I’m quoted using the latter phrase.) I’m not going to resist the urge to quote a couple of comments from the NYT site regarding his article:

Prof. Solomon’s stance in the face of this debacle is puzzling. He sardonically calls out the “shivers of delight” he attributes to critics such as Brian Tamanaha and Paul Campos who for years have been writing soberly and lucidly about these highly unethical operations that are just conduits of federal loan funds to overpaid faculty and administrators (the president/dean of Thomas Jefferson reportedly makes well over $500,00 per annum). Why Prof. Solomon feels called upon to defend this unconscionable system is a mystery.

To which another reader replies:

Yes, such a riddle wrapped up in an enigma why Prof. Solomon would support this money-printing operation. Someone please get the FBI on the case. We need answers, because I just can’t fathom why Berkeley law professor Solomon would support the Thomas Jefferson School of Law. It really makes no sense. I’m going to have to sleep on this one and see if I come up with some answers in the morning. Better yet, I’ll retain the services of an Ivy League consultant to perform an analysis on why Prof. Solomon would defend this institution. It’s a modern day mystery!

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At the State Level, Candidates Matter A Lot

[ 69 ] November 5, 2014 |

Here’s the thing: Republicans were slaughtered in 2006. Reagan’s Republicans lost 8 Senate seats in 1986. LBJ’s Democrats lost 3 Senate seats (with a more than 8% negative vote swing) and lost 47 seats in the House. FDR’s Democrats lost 72 House seats and 7 Senate seats, in 1938 — which understates matters, given that FDR’s attempt to get anti-New Deal Democrats defeated in primaries came up a cropper. (Bill Clinton, I will grant, broke even in the Senate and gained slightly in the House, but in addition to the frivolous impeachment that was in motion the deal-making he used to maintain popularity 1)is no longer possible, and 2)was dubiously desirable.)

You get the idea. The in-party — even in cases where presidents are transformative and/or have bold agendas that deliver plenty to their constituents — rarely fares well in the midterms of term 2. Combined with a very unfavorable map, the fact that midterms massively favor the Republican electorate, and Republicans at both the state and federal level figuring out that the damage you inflict on constituents will actually be held against the party controlling the White House, the Democrats were going to get clobbered, and the “this proves Obama should have led with leadership by (proposing the most politically efficacious policy which by pure coincidence happens to be the policy I prefer on the merits)” genre is mostly a waste of time. Messaging and position-taking might matter a little at the margins, but there wasn’t any magic formula that was going to prevent the 2014 midterms from being a bloodbath at the federal level.

As Alec MacGillis argues, though, it’s crucial not to lump the inevitable Republican wave at the federal level with the state races. Some of the factors pertain, especially with respect to turnout, but fundamentals become less important and cadidates moreso, which was bad news for Democrats in some blue states:

I’m skeptical of that claim. No doubt, disaffection and low turnout among core Democratic voters hurt the party’s gubernatorial candidates in blue states as it did Senate candidates in red and purple ones. And anti-Washington, anti-Obama sentiment certainly played a role in the GOP’s Senate takeover. But to explain why some Democratic gubernatorial candidates lost in blue states while others (such as Gina Raimondo in Rhode Island, Dannel Malloy in Connecticut, and John Hickenlooper in Colorado) managed to hang on, one really needs to take into account the state and local context of the races.

[...]

But why would Coakley and Brown go down, while Hickenlooper and Malloy survived? Here one has to consider the ultimate local context, the quality of the candidates. Hickenlooper and Malloy provoked plenty opposition in their states, not least with their signing of sweeping gun control legislation after the Newtown, Connecticut, massacre. But voters also had a clear sense of where these men stood. The same could not be said for the lackluster Coakley and, especially, for Brown, who ran one of the worst campaigns I’ve ever observed up close. The son of a Jamaican father and Swiss mother, a colonel in the Army Reserve and former JAG officer whom O’Malley plucked out of relative obscurity in the Maryland House of Delegates to be his running mate in 2006, Brown is an amiable enough fellow but gives off the distinct vibe of a second-stringer. His big chance to show his stuff, the launch of the Maryland insurance exchange under Obamacare, was a total fiasco.

This is a real problem. Massachusetts was the worst example, with a candidate who had already failed disastrously once winning the primary fairly easily, but the weak bench created in part by the 2010 wave might continue to have reverberations.

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Out of Sight

[ 40 ] November 5, 2014 |

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Out of Sight: The Long and Disturbing Story of Corporations Outsourcing Catastrophe is now available for preorder at Amazon. I know Amazon is evil. However, many independent bookstores now base their orders on preorders from Amazon. So what are you going to do? I am going to have a follow up post about this issue more specifically. In any case, preorders actually really help move a book, or at least this is what I am told.

Anyway, you know it’s going to be an awesome holiday present for yourself or your family. That it isn’t being released until June should not matter in your decision making! If you pay now, you’ll forget about it by then and be surprised by the “free” book you received in the mail!

I am also rather fond of the cover.

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Today In The Glory Of Third Party Politics

[ 109 ] November 5, 2014 |

Have any doubts about the brilliance of splitting the more left-wing vote into multiple parties as a way forward? Surely they’ve been erased now:

Republican Gov. Paul LePage secured a second term early Wednesday morning, defeating Democratic U.S. Rep. Mike Michaud after a long, expensive and often bitter campaign.

[...]

Independent candidate Eliot Cutler, who received 36 percent of the vote four years ago, less than 2 percentage points behind LePage, had 8 percent of the vote. The Cape Elizabeth attorney conceded shortly before 10 p.m.

“Tonight I’m very, very humbled and very proud – very, very proud – because for 50 years plus, I was raised across the street,” said LePage, referring to his childhood home near the Franco American Center. The governor left home at a young age, striking out on his own and fleeing an abusive father.

“I’m home,” he said Tuesday. “But home is Maine.”

He added, “Home is where every person born in Maine should have the opportunity to carve out their piece of the American dream. I have it. I have the American dream.”

LePage never mentioned Michaud but said he had a newfound respect for Cutler. LePage said Cutler should be the state’s attorney general, a position elected by the state Legislature.

I’m sure you do! But, really, what harm can he do?

The [Maine] legislature has voted for a Medicaid expansion five times, but each time it has been vetoed by Governor LePage.. An estimated 28,000 people would sign up for coverage by 2016 if the program were expanded, according to estimates from the Urban Institute.

Well, surely we can all agree that tends of thousands of poor people being denied medical coverage is a price worth paying if it allows onanists to congratulate themselves for being too good for mere politics.

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Postmortem

[ 321 ] November 5, 2014 |

A few thoughts, loosely tied together, on last night’s disaster.

Obviously Democrats need to spend some time figuring out what the heck happened. In many ways, few fundamentals had changed since 2012. Gridlock dominates Washington. The economy is not really any worse for the 99%, but nor is it appreciably better. Yet people seem to genuinely dislike Barack Obama at all points when he is not actively campaigning. Mitch McConnell deserves a lot of credit for understanding that the politics of fireeating would work wonders because everyone would blame the president no matter whose fault the problems in Washington actually lie with. He knows that most Americans simply don’t understand how politics work and want the president to solve problems, period. Manipulating that was horrible for the country but great for the Republican Party.

So it’s tough out there.

I don’t want to hear that the problem last night was the map. Yes, the Senate map was tough for Democrats. Winning at this point in Arkansas, Louisiana, West Virginia, and South Dakota is very difficult. However, that’s a limited explanation because it says nothing as to how the widely despised Paul LePage was reelected in Maine even after Eliot Cutler dropped out. It says nothing as to how Scott Walker was reelected in Wisconsin and Rick Snyder in Michigan. It certainly says nothing as to how a Republican became governor of Maryland. Maryland! This is a lot more than a tough map. Also, you can mostly forget about easily winning the Senate back in 2016. That map isn’t so great either and Democrats are in a deep hole.

I also don’t want to hear too much about money. It’s not that it isn’t important. It’s that a) the plutocrats always have tons of money and have always used it aggressively except for a relatively brief period in the decades after World War II and b) it can be overcome and has been overcome. Elections can be bought but grassroots campaigns can make that not happen. Obviously, Democrats failed miserably on this point.

So what’s up? I think there are a few really important points. Democrats need to just stop trying to appeal to old white people. White men voted for the GOP 64-34. It is a loser strategy. This demographic overwhelmingly votes GOP. Alison Grimes, who ran an utterly pathetic and embarrassing campaign, refusing to say whether she voted for President Obama is the prototype of how not to do it. No one is going to believe you. Heard a bunch about the North Carolina race last night and all the discussion about how Ebola, ISIS, and immigration dominated voters’ agenda. When I hear those three things in this context, I hear three words: racism, racism, and racism. And the Supreme Court supporting racist policies to restrict blacks from voting by eviscerating the Voting Rights Act allowed racists to indeed restrict black voting in meaningful ways that may well have swung North Carolina to the execrable Thom Tillis. Developing entire political campaigns to swing a few of these voters to the Democrats isn’t going to work–as we saw quite clearly last night.

Instead, Democrats need to give Latinos, African-Americans, and the young a reason to vote. Check this out:

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37%!! That means that Democrats simply could not get young people to vote while Republicans did an outstanding job motivating their base.

That means that Democrats have to rethink their midterm election strategy is a very real way. It’s one thing when there’s a presidential campaign. But the politics of midterm elections means that the same types of political calculations don’t work. How do you do that? You make your party about actual issues that young people and people of color care about. You support legalizing marijuana and prison reform. You support a vigorous government jobs program. You embrace immigration all the way, demonizing those who oppose a path to citizenship and the decriminalization of undocumented immigrants as racists. You make a $15 national minimum wage central to your campaign strategy. You have to call for student debt forgiveness. You have to make your party the party of the poor and the non-white, and not just in the passive way. If the racists and the plutocrats don’t like that, well, they weren’t going to vote for you anyway. Alexis Goldstein offers more radical ideas that may well be effective too. See also Harold Meyerson on this.

It’s increasingly clear, with the minimum wage hikes in deep red states and marijuana legalization continuing its march, that the nation wants these progressive policies, but they don’t see the Democratic Party as any vehicle to get them done. And maybe it isn’t. Certainly the party of Andrew Cuomo isn’t going to do much for the poor. And many may say that the Democratic coalition is too diverse for such a program. And the control of Wall Street over Democratic Party is toxic. But in the Senate at least, the remaining Democratic caucus is as progressive or more so than anytime in history. There simply aren’t conservatives left in that caucus outside of Manchin and King, both of whom could flip to the Republicans (although I am a bit skeptical McConnell wants them to since he can use them for his bipartisan cred). Mark Warner will be on the far right of the caucus. Elizabeth Warren, Bernie Sanders, Jeff Merkley, Sherrod Brown–these are people who represent what actual Democrats want to see. They are the future of the party. And the Democratic Senate can push forward really progressive legislation, even if it isn’t going to pass. They can lead the way in developing a left-leaning platform that, hopefully, motivates the young to vote.

Because whatever Democrats are doing is not working and will probably not work in 2018 either. Money will remain vital to that election and Democrats are scared of offending their big money donors (see Mark Pryor saying he doesn’t support raising the minimum wage even though it passes in his state). But that challenge must be overcome to motivate enough voters to compete in the midterms. More commercials about how Republicans are evil isn’t going to do that. Convincing base Democratic groups that the party wants to make their lives better and is the agent for doing that will.

So there’s a lot of work to be done. In case this post was too long, here is a short open letter to the Democratic Party with some visuals.

Dear Democrats,

Less this:

john-kerry-hunting-4

More this:

immigration-march-4

Thanks,
Erik

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East and South China Seas

[ 3 ] November 5, 2014 |

I contributed to and organized this report for Wikistrat:

The East and South China Seas territorial disputes, including but not limited to the Senkaku/Diaoyu Islands, the Spratlys and the Scarborough Shoal, have not only increased in complexity but are an area of concern for the United States. The lands in question hold historical and strategic significance and highly sought-after potential energy reserves. As China has grown in power and asserted its regional influence, it has looked to increase its claim to these territories, causing concern among neighboring states with similar claims. Under these circumstances, the current international order in East Asia, maintained by the United States, comes into question.

 

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What are the odds of a SCOTUS vacancy by November 2015 and November 2016?

[ 114 ] November 5, 2014 |

Last spring, Jon Chait pointed out that if the Senate flipped to the GOP in November, this would have no significant short-term legislative consequences (with the House under GOP control no major legislation was going to be passed during the remainder of the Obama presidency in any event), but that such a flip would have profound consequences for presidential appointments in general, for potential SCOTUS nominations in particular, and for nominations to replace a right-wing justice in even more particularity.

Given the gradual breakdown of informal political norms regarding presidential appointments, and especially SCOTUS appointments, it’s now arguably become game theory 101 that no GOP-controlled Senate is going to allow Obama to appoint a SCOTUS justice at any point during the last two years of his presidency, and this is especially true for an appointment that would flip the SCOTUS, by replacing anyone other than Ginsberg, Breyer, Sotomayor, or Kagan:

It may seem implausible that Republicans would simply refuse to allow Obama to appoint any justice to such a vacancy. That is only because things that haven’t happened before are hard to imagine. But such a confrontation is not only a logical outcome but the most logical outcome. Voting to flip the Supreme Court would be, if not a political death warrant for a Republican Senator, then certainly taking one’s political life into one’s own hands. Politicians do not like political death warrants — certainly not for the benefit of the opposing party’s agenda.

The modern pattern in American politics is that tactics that are legally available, but never used for reasons of custom, eventually become used. The modern pattern is also that the Republican Party, which is the most ideologically cohesive and disciplined party, leads the way. McConnell did not create this pattern, but he is an important innovator.

McConnell was among the first political leaders to grasp that Republicans had everything to gain and nothing to lose from withholding support for every major element of Obama’s agenda — that the old Beltway folklore, which warned the opposition party that voters would punish them if they appeared obstructionist, had no basis in reality. Most people pay no attention to the details of policy, and form rough judgments on the basis of how much noise and controversy rises out of Washington. “It was absolutely critical that everybody be together because if the proponents of the bill were able to say it was bipartisan, it tended to convey to the public that this is O.K., they must have figured it out,” he confessed. Political scientists understood this reality perfectly well, but it was utterly strange to the old-line purveyors of Washington conventional wisdom. McConnell moneyballed the Senate.

It stands to reason that if and when new powers are laid at his disposal, McConnell will once again deploy them creatively. A potential Supreme Court crisis, in which the Senate simply refuses to let the president fill a vacancy on any remotely normal terms, is one possibility. Others may be brewing at this moment deep within McConnell’s extensive imagination.

What are the odds that such a vacancy will occur? This of course has to be a speculative calculation, but it’s far from completely speculative. We can begin with the general actuarial probabilities that one of the SCOTUS justices will die within the next year, or the next two years (The distinction is important because the practical consequences of, say, a potential 20-month vacancy on the SCOTUS are very different from those of a three or six-month vacancy).

While it’s true that population-wide probabilities are of limited value in regard to particular individuals, it’s also true that the various reasons one can come up with as to why they aren’t going to be accurate in a particular case tend to cancel each other out. For example, the SCOTUS justices are in the American upper class, which means that all other things being equal their life expectancies are better than those of Americans in general, but on the other hand they are doing high-stress work, especially in comparison to most geriatric individuals etc. etc.

Anyway . . .

Approximate probability of at least one SCOTUS justice dying by November 2015: 22.5%

Approximate probability of at least one SCOTUS justice dying by November 2016: 36.8%

Approximate probability of at least one conservative SCOTUS justice dying by November 2015: 14%

Approximate probability of at least one conservative SCOTUS justice dying by November 2016: 26.2%

Of course to the extent these probabilities are accurate, they establish a floor for possible SCOTUS vacancies. They must be enhanced by the odds of a justice retiring for health or other reasons, which are naturally far more speculative. If we assume the combined odds of all such events are equivalent to even half of the mortality risk currently faced by members of the American Politburo Supreme Court, then the odds of a SCOTUS vacancy during the remainder of Obama’s presidency rise to just about 50/50, and the odds of a swing SCOTUS vacancy arising with more than a year remaining in Obama’s term are better than one in five.

Would the latter circumstance lead to the SCOTUS having only eight justices (or less) for more than a year? I agree with Jon that the answer to that question is almost certainly yes. Whether that would create some sort of political or constitutional crisis is another question, regarding which I don’t have an opinion at the moment.

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I Hear Jian Ghomeshi Needs Someone To Help Polish His CV!

[ 40 ] November 5, 2014 |

Tales from the new Gilded Age:

Bank of Canada Governor Stephen Poloz has sparked controversy by suggesting young people ought to consider unpaid work as a way to gain job experience.

“When I bump into youths, they ask me, you know, ‘What am I supposed to do in a situation?’ I say, look, having something unpaid on your CV is very worth it because that’s the one thing you can do to counteract this scarring effect. Get some real-life experience even though you’re discouraged, even if it’s for free,” Mr. Poloz told reporters Monday in Ottawa.

It becomes increasingly hard to do satire these days.

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#GamerGate in a nutshell

[ 44 ] November 4, 2014 |

I believe if you start reading here you’ll be able to see exactly what I’ve been dealing with tonight…but that’s not why I’m writing this.

I’m writing this because some people — who can not be proven to be the people involved in that conversation — are threatening to tell my employers that I’ve been accused of sexual harassment and am therefore an enemy to “true feminists” and “feminism” everywhere. They’re also claiming that I failed to act appropriately in another awful incident and this, I admit, is why I’m angry enough to write this post.

All of which tells me everything I need to know about them who would doxx me — I say let ‘em, as I know y’all remember things I’ve done that are far worse or more impolitic. Right?

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BREAKING! Working Poor In Florida Freed From Neoliberal Shackles of the Affordable Care Act

[ 149 ] November 4, 2014 |

rick scott

Shorter newly-reelected Gov. Lex Luthor to Florida citizens being offered Medicaid at little cost to the state: “Drop dead, literally.”

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