Forget the death panel stuff -- Karl Rove may have hit on a scare tactic that could really get people angry about a government takeover of health care.
In one paragraph in his latest Wall Street Journal column, Rove wonders which industries might be next to face President Obama's criticism of health insurance profits. Here's the key quote, with emphasis added:
Mr. Obama's dig at profits reveals a certain disdain for markets. Health insurers have a 3.3% profit margin, less than the 4.6% average for all businesses in the country. Drug companies do enjoy, on average, a 17% profit margin. But that's still less than software companies, which earn on average a 22% profit margin. Brewers make 18%. Are these industries the next targets for a revenue hungry Obama administration?
Sure, Obama can pull the plug on grandma -- but if our freedom is threatened on beer, he can count on losing a whole lot of swing states!

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ClosetLuddite
September 24, 2009 12:47 PM
I read "...he can count on losing a whole lot of swing states!" as "...swig states!". heh.
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hunter
September 24, 2009 3:40 PM in reply to ClosetLuddite
I'm from Missouri; swig state number 1. Too bad the Bushies dropped the dollar in the dirt so they could pay their war debt and let the Europeans buy up AB on the cheap.
Anyway, the important point here is that the beer industry makes a real profit. The health insurance just makes economic rent. Profits are good for our economy. Economic rents are bad for it. This is not controversial.
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CT Voter
September 24, 2009 12:54 PM
Thursday: Karl Rove speculates in the Journal.
Friday: Fox News goes ballistic about the proposed rationing of beer to pay for the death panels in Obamacare.
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glogrrl
September 24, 2009 5:34 PM in reply to CT Voter
Excellent post! And soooooo true!
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magster
September 24, 2009 12:54 PM
The price of beer shot up by about as much as health ins. (supposedly because of gas prices), and haven't come back down with gas prices.
I would heartily endorse the option of an affordable "public brew"
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Stiggs
September 24, 2009 2:55 PM in reply to magster
Actually my understanding was that poor hops harvests were to blame for the spike in beer prices a year and a half or so ago. And a decade ago I could get a 12 pack of Sam Adams Boston lager for $10 in NH. It now costs $12. (A six pack costs $9 and that is ridiculous but a different conversation.)
As for socialized beer, I say no thank you. Some things should be left alone (government cheese also holds negative connotations in my mind). It is really only after the past 10 or 15 years that we have begun recovering from the last time the US government interfered with alcohol production (yes I'm still cranky about prohibition).
The artistry of beer isn't something which scales well. Compare a brewery like Harpoon or Rogue to Budweiser or Coors and it is pretty clear to me that nationalized beer isn't the direction we should head in (Sam Adams is anomalous but still small potatoes next to the big producers). What the government should really do is let states set their drinking ages and relax the restrictions which make it difficult to get into commercial alcohol production (it represents a much lower health hazard than the production of cheese). The fact that we think of a beer "industry" makes me feel like we miss the point.
Sorry, I really like beer.
(Oh yeah, didn't they have crappy government beer in 1984? Creepy.)
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fkaZk0sm0
September 24, 2009 3:00 PM in reply to Stiggs
and the fact that republicans think fondly of a health care industry proves that they miss the point.
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Stiggs
September 24, 2009 4:29 PM in reply to fkaZk0sm0
Damn you and your sneaky return to matters of importance. It's almost like you are a covert issue ninja, uniquely suited to counter the injustice and misinformation machine which is Karl Rove.
Will you be our leader?
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AnswerFrog
September 24, 2009 4:55 PM in reply to Stiggs
Agreed, artistry doesn't scale well, which is why GOP's big business friends make some awful stuff. (Coors, for instance). I don't think the smaller brewers make these big profits either. Coors can probably get away with it, because that swill is probably dirt cheap to make.
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fpie
September 24, 2009 3:25 PM in reply to magster
But will it be mandatory for everyone to buy it? And will it be priced to compete with Victory Vodka?
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Jaycal
September 24, 2009 7:42 PM in reply to magster
He's just pissed off the small brewers coalition is actually working legislation:
"Companion bills HR 836 and S 1058, the Brewers Excise and Economic Relief Act of 2009, have been introduced in the U.S. House of Representatives and U.S. Senate respectively by Congressman Earl Pomeroy (D-North Dakota) and Congressman Tom Latham (R-Iowa) and Senator Mark Udall (D-CO). This legislation seeks to reduce the tax burden for all brewers and specifically reduces the small brewer rate by 50% to $3.50 a barrel."
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Hussein Stemper
September 24, 2009 1:24 PM
It looks like Jowl Boy has had a brew or two, so he must know whereof he speaks.
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Stiggs
September 24, 2009 4:30 PM in reply to Hussein Stemper
If having thrown back a couple makes you a health care policy expert then I want to be the surgeon general (and I'll totally drink you for it).
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LuxVeritas
September 24, 2009 3:11 PM
3.3% my ass: http://thinkprogress.org/2009/09/23/cnbc-braly-wellpoint/
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pppwww
September 24, 2009 4:25 PM
If the chin industry falters, Karl's in trouble
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Shrubbit
September 24, 2009 4:41 PM
Who cares? This is a DISTRACTION and TPM is falling for it. Again.
How come there is not a single mention of the HISTORIC anti-nuclear proliferation resolution that Obama led today on TPM? How come?
http://www.nytimes.com/2009/09/25/world/25prexy.html
I guess national security issues get in the way of the really important things. Like making fun of Karl Rove.
TPM had better start getting its act together.
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we r all husseins
September 24, 2009 5:11 PM in reply to Shrubbit
Really? I thought TPM presented this article for our amusement. It certain worked on me. Rove's attempts at sounding like an informed person are quite comical.
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SOS ICEBERG
September 24, 2009 4:47 PM
I only want to hear stories about his arrest. Or about really tragic misfortunes befalling him. Or, best of all, about him being stung in a "To Catch a Predator"-type sting (and I wouldn't put it past him).
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AnswerFrog
September 24, 2009 4:52 PM
Wow, what a fact-free commentary! Obama just cut a big deal with drug makers and make bigger profits, yet Rove suggests they are a target of some sort.
And it's not profit margins that irk people about health insurance, it's their deceitful and unethical business practices, as well as waste and fraud. They might not make huge profits, but they sure as hell squander some 20-30% of their revenue (and of our countries enormous health costs) with administrative, legal, underwriting and advertising. (Actually low profit margins are merely a sign of incompetence on their part. They are stupid in addition to sleazy)
Comparing these bloodsuckers to any other sector of the economy is bizarre. Health insurance is a necessity, and these assholes are wasting our money, and cheating and conniving to boot.
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we r all husseins
September 24, 2009 5:14 PM in reply to AnswerFrog
Well said. Let me buy you a beer before Obama's goon squad confiscates them.
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glogrrl
September 24, 2009 5:38 PM in reply to we r all husseins
Hey, yeah........we can have a beer before it's taxed into oblivion and then go load up on ammo for the coming military takeover of the country!!
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Will work for shoes
September 24, 2009 6:11 PM in reply to glogrrl
Slightly OT but I read in my local paper today that tax revenue is up nationally 31% this year from 2007 on ammo sales 'cause everyone's trying to buy their bullets before Obama takes away their guns.
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AnswerFrog
September 24, 2009 5:47 PM in reply to we r all husseins
LOL
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jeffgee
September 24, 2009 5:18 PM
Most important- how does this affect John McCain?
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Iluvbeer
September 24, 2009 5:20 PM
Well I love beer, but I would still be willing to pay an even greater tax on it than currently if it would provide universal health care. I'd rather they taxed soda pop first though - it's worse for people than moderate alcohol consumption, which has been shown to reduce the risk of cardiovascular disease.
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eve cairo
September 24, 2009 5:20 PM
What exactly is his job now? Is he just freelancing for the GOP? Or are these brilliant ideas his alone? Well next trip I make to stockpile some more guns and ammo I guess I will also get some brewskis for the bunker. Can't have target practice on the Obama as Hitler photo sober.
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jsdc007
September 24, 2009 5:30 PM
Obama will start taxing abdominal and cranial fat of the jiggly, pale white, pimply Republican variety. This country will be rich again and no one will ever have to do without. Thank you, Karl Rove. Your tax dues for 2009 are 41 jagillion.
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crsbfish
September 24, 2009 5:46 PM
Call BS on his numbers! Where does that 3.3% number come from?
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Nancy Irving
September 24, 2009 5:52 PM
Profit margins tell you little about how much money you're making. Return on investment is what's relevant.
Readers of the WSJ would know that, but of course they will not point it out...
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Will work for shoes
September 24, 2009 6:13 PM
Meh. Obama likes his beer. And, unlike his own doctor, most likely has to pay for it himself.
(I find it creepy that they keep vials of his blood handy in case of emergency.)
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Berkyjay
September 24, 2009 6:28 PM
Health care profits are bad because they benefit from human sickness and suffering. It is a completely different thing from beer or software.
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Spider
September 24, 2009 7:05 PM
I can remember seeing my local grocery store advertise on its brown paper bags that its profit margin was less than 2%. But it failed to point out that that was only part of the story. Make 2% on stock you can turn over almost daily, and you do very well over the course of a year. Indeed, if you you mark up milk 2%, and it spends just two days, on average, on the shelf, you'll make 2 X 162 or 365% profit for the year. Rove should know better -- and maybe he does.
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afisher
September 25, 2009 2:49 PM
In an interesting article from the Alternet.org, there is a discussion regarding the Religious Right vs the TeaParty group and how the Religious Right is trying to join WITH the TeaParty or lose their political positioning after 30 years. http://www.alternet.org/politics/142787/overshadowed_by_tea_party_movement%2C_the_christian_right_scrambles_to_claim_it_isn%27t_racist/?page=entire
So what is Carl Rove doing? Is he helping or hindering...or has he decided taken the side of the TeaParty by raising the fear of tax on beer!
Somehow, the Religious Right and all their "born again" teetotalers may have difficulty defending the TeaParty exhuberance in alcoholic consumption, as they should be arguing for a tax that would inhibit alcoholic consumption.
Is this an example of GOP's inability to harness that which they so willingly promoted as their grassroots? Or do they need to get out the lawnmower and cut the grass to keep the Religious Right as the political force of the GOP?
Should be an interesting sideshow to watch as they attempt to merge two very different ideologic groups of their own making!
What was an just another CR statement of stupid may be an indicator of bigger problems within the GOP.
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