Wall Street Weekly | 08/28/2009 12:15 pm

Ted Kennedy: Fan of Universal Health Care and Compromise, by Liz Peek

Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 8/24)

Editor’s Note: Liz Peek is a financial columnist and the author of wOw’s SHEconomics.

Will the death of Senator Ted Kennedy recharge the push for health-care legislation? Would he have wanted it to? Certainly Kennedy was keen to enact universal coverage. However, the long-serving senator was highly respected for his willingness to negotiate, and to work with opponents across the aisle. He was a master of "the art of the deal," knowing that success is best found in compromise.

As Congress streams back from the August recess, the gap separating Republicans and Democrats on how to control health-care outlays has not narrowed. Nancy Pelosi and others are talking openly about going it alone, and resorting to reconciliation if need be, which requires a simple majority vote to pass the measure – in other words, with not one Republican backer. I can’t imagine that Ted Kennedy would have approved of such tactics, which could become a disaster for the Democrats, the country and the stock market.

Americans have been alarmed by the Obama administration’s frantic efforts to re-order our economy, to change the rules of doing business and by the ominous build-up of our national debt. The view of our new president has changed; polls show that nearly half of our citizens now consider him "very liberal" as opposed to only 35% on election day. This growing anxiety is anathema to a robust economy. While the financial sector appears stabilized, and housing seems to have bottomed, we badly need consumers and businesses to resume spending to prevent the "double-dip" recession that some economists now predict.

Earlier this month it seemed that the consumer had put back on her rose-colored specs. The Conference Board reported that its index of consumer confidence, after sliding south in June and July, bounced ahead in August. The aggregate level of confidence is still quite low by historical standards – and in fact below where it stood in May. Still, if this recovery is going to produce jobs, consumers are going to have to open the spigots. And they’re not going to do that until they see the future with a less jaundiced eye.

I credit the successful push-back against President Obama’s health-care legislation as well as a peppy stock market for the bounce in August optimism. The notion that government would take over an ever-larger slice of the American pie has jarred a country still coping with a once-in-a-generation collapse in wealth. Well-founded concerns about higher taxes piled on top of continuing job losses have caused widespread alarm and, ultimately, a backlash. Raised voices at town-hall meetings may not be melodious, but to many they are comforting. We do have a voice, and even though the Democrats control all three branches of government, they may have to answer to voters after all.

Unfortunately, as Americans assess the most recent – and extremely fanciful – budget projections from the administration, their concern will only grow. Though the president’s men have boosted the estimated size of the deficit over the next ten years by $2 trillion to $9 trillion, the assumptions behind even this ghastly forecast are beyond optimistic. For instance, the White House is projecting that the economy will grow at 3.8% in 2011 and at 4% in each of the next three years – a rate that we have rarely experienced. At the same time, the plan calls for inflation to drop to 1.3% over the next two years, down from 1.5% this year. Notwithstanding this all-too-happy outlook, deficits in the out-years will average 4% of GDP, compared to 2.4% on average over the last 40 years. Moreover, total government debt is projected to rise to 76% of GDP by 2019, up from 56% in 2009. That’s trouble territory.

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deber b — "Seated on those little chairs" —— Felt like your knees were up under your chin. My favorite was teaching kids to read. I remember one child, being raised by her grandmother, she came with her to each reading evening. One night she asked me if I also would teach, in,her words, "an old lady" — she was in her 70’s and could read at a 3rd grade level - never finished school. I offered to teach her also. Her fondest wish was to read children’s books to her grandchildren. So I taught her to read from the "Golden Books" and we finally graduated to Dr. Seuss. And, at the same time I was teaching the little one to read "Run Spot Run". They learned together. I used to give her gold stars after she finished each story. So, I also gave "Grandmommy" gold stars for her reading.

It was the most rewarding experience of my life. I will always remember their smiles.

By Lady Gator on 08/28/2009 2:52 pm

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Lady Gator, what a wonderful story. Thanks for sharing that. My children are a year apart so I have one in kindergarten, first and second grade. The youngest, because we all read together, was reading on the same level as the second grader…I found that out by surprise one evening when I hesitated during reading a story to "yawn" (yes, I was a tired mommy by the end of the day) and he jumped in and read the entire paragraph. I have so many wonderful memories.

By deber B on 08/28/2009 3:10 pm

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correction: "so I HAD one in kindergarten, first and second." Gosh, they are 29, 28 and 27 now!

By deber B on 08/28/2009 3:12 pm

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There are numerous great programs. In my district, there was Business in Schools. There were Careers Ahead programs. An enormous grant followed kids from grade six through grade 10, called The Learning Curve. There was the nation wide DARE program, taught by police officers. Excellent program until funding was cut. I could go on and on, and many kids benefited from these programs. But, our drop out rate nation wide today is higher than it has ever been. Most teachers leave before their fifth year.Teach for America recruits last about three years, just long enough to collect their bonus money. NCLB put a choke hold on teaching creativity. More and more parents are going the double down route so they can place their kids in private schools. Charter schools are popping up more often.

My guess is many schools and school distrcts are happy to see that stimulus money. Under Duncan, failing schools will get plenty of help. How they choose to use those resources remains to be seen.

By Maggie W on 08/28/2009 2:42 pm

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that is awesome!!! I have my application into the school now as a aide for some extra pay now that I have os much free time on my hands with business so slow.

I mentor 25-28 young high school girls per season in my cheer program and I love it! Especially when they come back after graduation as grown woman, mothers and productive voting citizens! I feel the pride as their parents do in being apart of their lives!!!!

By S.J. Morgan on 08/28/2009 6:20 pm

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They passed a bad bill, No Child Left Behind, and then they made it worse by not funding it.

By DeBúrca obj on 08/28/2009 8:13 pm

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Liz Peek, thank you, as always, for producing another very important thread on the state of our economy and other tasty morsels of interest to all of us.

As I read daily articles like the following, I, for one, am reminded that the next shoe will drop with this inexperienced administration and I’m hanging on to my money. I’m not alone…..

"Obama’s ‘Path Toward Fiscal Discipline’ Paved With Average Annual Deficits of $900 Billion
(CNSNews.com) - A budget review released by the White House on Tuesday says that President Obama has “reoriented the Nation back to a path toward fiscal discipline.” It then reveals that the administration is planning for the federal government to run cumulative deficits over the next decade of $9.05 trillion, meaning that the average annual federal deficit will be $905 billion — almost twice as large as the largest deficit the United States ever ran before Obama entered office."

When Americans are faced with the bold facts that Obama’s idea of balancing a budget is very different from anything we’ve ever seen before, they lose faith in his administration. Quite simply, Obama has created a very serious trust issue with the American people here and abroad.

I’ve been posting since last year that recessions are generally real estate driven and real estate corrects a recession. I researched and found a study of recessions since 1948 which I posted on this site several times. It showed when the recession began and when it ended. The turnaround time for recovery was estimated to be around 14 months. It also showed that when a recession is tampered with it prolongs it. As predicted, our economy did, indeed, recover on its own…through real estate. We never needed a $787 billion stimulus to "stimulate" the economy and to "create" jobs. What we needed in January of this year was a heartfelt effort to save the jobs by putting cash into the hands of the American people so that they would go and "spend" within 60 days. If they didn’t spend it, they would be taxed heavily on it….it would’ve been an infusion into the arms of all of our small businesses…no layoffs…perhaps adding employees It would’ve also allowed those Americans who were behind on their mortgages or rent to be able to catch up and become current so that cash stimulus, in my opinion, would’ve hit on all of the economic pistons. We all know that President Obama didn’t do that. Instead, he felt it was more important to address special interest groups. His $787 billion stimulus failed and many Americans want him to return the remaining unused portion (2/3 ).

Obama, because of his healthcare bill (s), has lost the confidence of his "seniors" in America. The baby boomers represent 78 million of our population. They are a very important group of Americans and they are nobody’s fool. As their concerned questions are asked, they continue to go unanswered to their satisfaction. Obama has clearly lost the support of a huge portion of our population. He continues to ignore the illegal immigrants and has pushed that very important issue out to 2010 at the earliest.

Ted Kennedy was a dedicated politician. Many Americans liked and admired him, however, there were just as many who did not agree with his politics. I do believe that had he lived and been well physically he would’ve been the glue to bring the democrats and the republicans together. Obama is incapable of bipartisan mediation as he has shown. Nancy Pelosi has lost her "touch" and further angers the American people over the healthcare bill as she postures as arrogant and states she’ll get it through one way or the other. Because of Obama’s mishandling of healthcare reform from the start, he will more than likely not see a bill passed this year. It won’t be because of the republicans pushing back. It will be because his own democrats aren’t going to support a plan that is doomed to fail financially.

Americans are waiting for the fall report card and the next wave of foreclosures, personal bankruptcies and commercial real estate reports. Unemployment is predicted now at 16% and Mr. Inflation has a smile on his face. $15 trillion in debt and nothing to show for it and the added cost of a healthcare plan, Mr. Inflation knows the United States will be printing money soon and then he can get back to work. Inflation is ugly. Inflation always causes people to stop spending! It’s like a dog chasing his tail. Going around in circles until we hit Jimmy Carter’s 22% interest rates. We already know that’s a bad direction for any type of economic recovery.

President Obama is in trouble. He has not made the right decisions for our country. Instead of coming to the immediate needs of our citizens and their businesses, he addressed the needs of his campaign donors. It hurt America. The Cash for Clunkers & Appliances was a loose bandaid that served no pupose. Each time a dealership gave out a $4500 discount, we, the taxpayers paid for that. Imagine, being taxed on helping the auto business we own. It was so poorly orchestrated that Toyota got the most sales. What was the administration thinking?

Obama can’t pull the rabbit out of a hat when he no longer has a magic wand.

By deber B on 08/28/2009 1:33 pm

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Great article deber…..I agree 100% with everythign he said!!!

That being said..my very small real estate related business that has been struggling for over a year now..wrote 8 contracts in 4 days that amount for the total we have done a month since this began!!! ( fingers crossed it continues)

Our savings may be gone..but I feel the people are energized and angry and many have told us they strive to suceed in spite of him and what he is trying to do to this country!!

Obama may have united us in way he never intended….anger, fear and the American spirit!!! I pray it continues….

By S.J. Morgan on 08/28/2009 6:28 pm

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S J, actually, it was not an article, it was in my own words with the exception of the economic demise in quotations. I know you have an appraisal business that is affected by the recession. What I want to say to you and your husband, your business, is that real estate rebounds because there are people like us, millions of us, who were not pulled into the subprime fiasco….good, hard working people who want to do things correctly. I applaud you and wish you well….because real estate is on the rise and your business will now flourish…you are good hearted Americans who have weathered the storm. Obama’s ridiculous $787 billion stimulus was not directed at small businesses like yours and yet you prevailed…Americans are angry enough to shout…."Obama is wrong for America." I pray it continues not only for you but for those whose values have plummeted. The 40lK’s are right behind this insurgence….first we have to wait for the next wave of bad news (commercial) but after that….hang in there because you are going to have more business than you can handle….Americans are savvy people and they aren’t stupid like Obama thought. We need to vote to get him out of office in 2012 and take back the dignity of America. He isn’t one of us. America is speaking to this.

Americans are pulling for businesses like yours.

By deber B on 08/28/2009 7:00 pm

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Thanks Deb..we are actually in Land Surveying but eveything else is true! We have had 8 new jobs in the last two days..about the same as we have had in a month for the past 10 months. I truly have tears in my eyes as I type. It will be first night I go home with some HOPE in a very long time!

Our next step was loans on our life insurance to keep making the house payments…..still cautioiusly OPTIMISTIC but tonight will be the best friday night in a very long time!

Thanks for your kind and optimistic words!!! I thinkyou are very right!!!!

By S.J. Morgan on 08/28/2009 7:12 pm

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I’m VERY happy for you and your husband! I’ll keep my fingers crossed for you to continue this upward trend.

By deber B on 08/29/2009 5:12 am

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Senator Kennedy was a great loss to our nation. He was proud of his diplomacy in being about to cross the aisle and work with those who were adamantly opposed to his legislation at first.

He would have found a way to get at least some start on health care reform going and WITH the support of most of our representatives as well as the American citizens. That was Senator Kennedy’s particular talent.

The loss of this magnificent negotiator is a huge blow to all of America.

By K M on 08/28/2009 1:33 pm

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Ironically Kennedy was left out of conference and the negotiations for PlanD Medicare RX program when Tom Delay, Billy Tauzin and a group of republicans pushed for three additional votes after midnight to give us the horrendous Medicare Plan D which for $75.00 per month premium, gives us nothing. Anyone taking a moderate amount of meds falls into Doughnut Hole after spending $2700 and cannot be reimbursed again despite continued premium payments until they reach $6100. By that time it’s next year. Considering that many of the meds I take are generic, and many not even covered by Medicare PlanDRX, I pay for literally nothing.

Kennedy was not allowed to participate in this bait and switch Medicare Plan. Wholesale bulk prices with Pharma co’s would have made this meaningful, but even Obama seems to have caved and understand he’s made a deal with Big Pharma that they pay 80 billion into this plan over ten years. What will this mean? That we will have higher premiums and when in the Doughnut Hole, we will be reimbursed for 50% of what we spend.

Senator Tauzin wound up in a cushy multi million job for big phARMA where he still is being paid to obstruct any effort for real drug reform and true affordability to those that need it most.

Without a public option there will be no reform, and Obama appears to have caved. The Emmanuels seem to be running this and it has become an unclear and muddled message. Obama hasn’t provided details because he hopes for compromise? With who? The republicans are waiting for "their big white hope" and will block any real reform that can be attributed to the democrats.

Republicans are as obstructionist as possible and have formed a bloc against this administration. There are virtually no votes whatever the bill shapes up as that will have their support. Republicans are paid by Insurance and Drug monopolies and their election funds depend on their support..

And er, the Committee of 6 that are thrashing this in the senate with Max Baucus leading the charge of 3 Blue Dogs and 3 republicans are from sparsely populated states that represent about 1 % of our population. This is a joke and we have seen no leadership from the White House on this sellout.

By mitzi morris on 08/28/2009 3:11 pm

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mitzi: the horrendous Medicare Plan D which for $75.00 per month premium

The vast majority of seniors and disabled people pay about a $30 per month premium for Medicare Plan D. They also never reach the donut hole if they take generic drugs. This plan, although not perfect, has helped many seniors and people on disability pay their medical costs.

The premium for Medicare Part B is about $96. For some seniors the premiums for Part B and Part D are about a tenth of their income. When this administration talks about reducing the funding to Social Security or the various Medicares, seniors panic because they are already living on the edge. This is one of the reasons they all turn out for the town hall meetings to voice a protest.

By Marjorie C. on 08/28/2009 4:15 pm