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Frontline Oct. 20, 2009. The Warning:

In the midst of the 1990's bull market, one lone regulator warned about derivatives' dangers--and overnight became the enemy of some of the most powerful people in Washington.

You can watch the entire program on line here as well as additional invertiews with Brooksley Born, Gary Gensler, Michael Greenberger, Arthur Levitt and Joseph Stiglitz.

From Frontline's interview with Brooksley Born:

Q: What's the message that you're trying to spread now in the ashes of what happened in 2008 and '09?

BORN: I think we have to close the regulatory gap. ... We cannot afford as a society to go forward with an enormous unregulated market that poses this kind of danger because it’ll happen again if we don't take the appropriate steps. ... We need to take a lesson from the existing futures markets where exchange trading has been safe. As much as possible of the over-the-counter derivatives market should be traded on a regulated derivatives exchange. The transaction should be cleared on a regulated clearinghouse. There should be robust federal regulation of any remaining OTC derivatives market. And personally, I think that remaining market should be limited as much as possible to no more than the customized contracts that are needed for specific businesses to hedge particular business risks. ...

Q: If this moment passes again, the consequences are what from your perspective?

BORN: I think we will have continuing danger from these markets and that we will have repeats of the financial crisis. It may differ in details, but there will be significant financial downturns and disasters attributed to this regulatory gap over and over until we learn from experience.

Frontline also put together a video timeline of the events starting in 1987-today.

I highly recommend watching the entire hour at PBS's site, but here's one more portion I wanted to share here.

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Thom Hartman interviews Russell Mokhiber about the Frontline controversy.

In response to my earlier post quoting Russell Mokhiber from Corporate Crime Reporter on the dispute over Frontline's "Sick in America" (which in turn quoted T.R. Reid, the journalist who worked on the story), Frontline sent this letter (you'll have to read all the way through to see Reid's response):

FRONTLINE takes a strongly different view of the characterization of its editorial disagreement with T.R. Reid as presented by Mr. Reid and Russell Mokhiber in the recent blog entry, “Something is Rotten at PBS” (Counter Punch, April 2, 2009).

That blog entry describes the dispute about FRONTLINE’s “Sick Around America” as a disagreement about the correct health care policy for the United States and says that FRONTLINE “had a point of view — they wanted to keep the for-profit health insurance companies in the game.” Those claims are not true and falsely characterize the reporting in the film.

“Sick Around America,” in fact, made no assertions about the path health care reform should take, but simply reported on the current state of health insurance in the country, focusing primarily on how inadequacies in the current private health insurance system, both for-profit and non-profit companies, were negatively impacting many Americans. Our reporting revealed that both non-profit and for-profit insurance companies were concerned with keeping costs down and maximizing their market share. As a result, both write policies that can be changed yearly based on the experience of the particular business in the case of employer-based coverage and both use medical underwriting (in all but five states) to reduce the number of sick or potentially sick individuals they cover. Both employ the practice of rescission, as we reported.

In his blog entry, Mr. Mokhiber makes this erroneous critique of one portion of the film:

During that segment, about halfway through Sick Around America, the moderator introduces Karen Ignagni, president of America's Health Insurance Plans, the lead health insurance lobby in the United States.

Moderator: Other developed countries guarantee coverage for everyone. We asked Karen Ignagni why it can’t work here.

Karen Ignagni: Well, it would work if we did what other countries do, which is have a mandate that everybody participate. And if everybody is in, it's quite reasonable to ask our industry to do guarantee issue, to get everybody in. So, the answer to your question is we can, and the public here will have to agree to do what the public in other countries have done, which is a consensus that everybody should be in.

Moderator: That's what other developed countries do. They make insurers cover everyone, and they make all citizens buy insurance. And the poor are subsidized.

But the hard reality, as presented by Reid in Sick Around the World, is quite different than Ignagni and the moderator claim.

Other countries do not require citizens buy health insurance from for-profit health insurance companies – the kind that Karen Ignagni represents.

But Mr. Mokhiber made a factual error that seriously undercuts this critique. His argument rests on the assumption that Ms. Ignagni represents only for profit health insurance companies. In fact, her organization, America’s Health Insurance Plans, represents both for-profit and non-profit companies. FRONTLINE rejects Mr. Mokhiber’s assertion that we were misleading viewers in this section of the film.

I normally wouldn't butt into a response letter, but since Frontline's editors say this factual error "seriously undercuts" Reid's critique, I'll point out a few things. The first is, AHIP was the result of a merger between the Health Insurance Association of America (HIAA) and American Association of Health Plans (AAHP) - in other words, it's the lobbying arm of the health insurance industry. The HIAA ran the "Harry and Louise" advertisements that helped kill the Clinton health care reform.

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There was never any doubt in my mind that once PBS was moved by the Republicans to corporate sponsorship instead of full public funding, their content would inevitably grow to reflect the viewpoints of the people who wrote the checks.

It seems that insurance company investments are paying off in the healthcare debate. While this Frontline piece does address corporate abuses of their clients, the journalist who worked on it says it was altered to reflect insurance company interests, according to Russell Mokhiber, editor of Corporate Crime Reporter:

Last year, former Washington Post reporter T.R. Reid made a great documentary for the PBS show Frontline titled "Sick Around the World."

Reid traveled to five countries that deliver health care for all – UK, Japan, Switzerland, Germany, Taiwan – to learn about how they do it.

Reid found that the one thing these five countries had in common – none allowed for-profit health insurance companies to sell basic medical coverage.

Frontline then said to Reid – okay, we want you to go around the United States and make a companion documentary titled "Sick Around America."

So, Reid traveled around America, interviewing patients, doctors, and health insurance executives.

The documentary that resulted – "Sick Around America" – aired Monday night on PBS.

But even though Reid did the reporting for the film, he was cut out of the film when it aired this week.

And the film didn't present Reid's bottom line for health care reform – don't let health insurance companies profit from selling basic health insurance.

They can sell for-profit insurance for extras – breast enlargements, botox, hair transplants.

But not for the basic health needs of the American people.

Instead, the film that aired Monday pushed the view that Americans be required to purchase health insurance from for-profit companies.

And the film had a deceptive segment that totally got wrong the lesson of Reid's previous documentary – Sick Around the World.

During that segment, about halfway through Sick Around America, the moderator introduces Karen Ignagni, president of America's Health Insurance Plans, the lead health insurance lobby in the United States.

Moderator: Other developed countries guarantee coverage for everyone. We asked Karen Ignagni why it can't work here.

Karen Ignagni: Well, it would work if we did what other countries do, which is have a mandate that everybody participate. And if everybody is in, it's quite reasonable to ask our industry to do guarantee issue, to get everybody in. So, the answer to your question is we can, and the public here will have to agree to do what the public in other countries have done, which is a consensus that everybody should be in.

Moderator: That's what other developed countries do. They make insurers cover everyone, and they make all citizens buy insurance. And the poor are subsidized.

But the hard reality, as presented by Reid in Sick Around the World, is quite different than Ignagni and the moderator claim.

Other countries do not require citizens buy health insurance from for-profit health insurance companies – the kind that Karen Ignagni represents.

In some countries like Germany and Japan, citizens are required to buy health insurance, but from non-profit, heavily regulated insurance companies.

And other countries, like the UK and Canada, don't require citizens to buy insurance. Instead, citizens are covered as a birthright – by a single government payer in Canada, or by a national health system in the UK.

The producers of the Frontline piece had a point of view – they wanted to keep the for-profit health insurance companies in the game.

TR Reid wants them out.

“We spent months shooting that film,” Reid explains. “I was the correspondent. We did our last interview on January 6. The producers went to Boston and made the documentary. About late February I saw it for the first time. And I told them I disagreed with it. They listened to me, but they didn't want to change it.”

From PBS:

In this sneak peek from "Inside the Meltdown," FRONTLINE revisits a pivotal moment in the fall of Bear Stearns: CEO Alan Schwartz appears on CNBC to address Wall Street rumors that the investment bank is in trouble.

In "Inside the Meltdown," airing Tuesday, February 17 at 9 pm on PBS, FRONTLINE investigates the causes of the worst economic crisis in 70 years and how the government responded. The film chronicles the inside stories of the Bear Stearns deal, Lehman Brothers' collapse, the propping up of insurance giant AIG, and the $700 billion bailout. Inside the Meltdown examines what Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke didn't see, couldn't stop and haven't been able to fix.

If you missed the show tonight it can be watched in its entirety on line on Frontline's web site.