Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 11/16) 

Editor’s Note: Liz Peek is a financial columnist.

That assessment is derived from studies – analyses which deal in probabilities and cost curves – the authors of which generally do not encounter the mothers or sisters impacted by their decisions. Such a study made headlines in the U.S. this week; it argued for less frequent mammograms for women under the age of 50. The report from the U.S. Preventive Services Task Force raised a firestorm, as those frightened by a government takeover of our medical establishment saw it as likely to influence "best practices" and provide ammunition for those trying to rein in costs.

Americans should be alarmed. Our president has told us that his program will "bend the curve" on medical outlays. Are we so naive as to imagine that cutting costs will not mean reduced care – for someone, at some time? It is shocking that both the House and Senate bills include huge bites out of Medicare, and few are questioning what that really means for seniors. The Senate bill establishes a commission of 15 people, to be appointed by the president, who will determine how to limit Medicare spending. If you disliked the autocratic decision making practiced by your HMO, wait until you have to argue your case to Beltway bureaucrats.

Americans are spoiled. The 85% of our population that has health-care insurance is accustomed to receiving the medical care that their doctor prescribes. They are not interested in whether that treatment is "cost effective." Unhappily, a government facing ballooning budget deficits is going to have to make choices. Just as the English have.

The tough choices will not only target health care. President Obama, in a Beijing interview with Fox News (amazingly), warned that "if we keep on adding to the debt, even in the midst of this recovery, that at some point, people could lose confidence in the U.S. economy" and bring on a "double-dip." The ugly possibility of another downturn, raised recently by some wobbly economic indicators, rattled investors yesterday, causing a nasty sell-off in stocks. The housing market fell sharply in October for the first time since April, dropping 10.5%. Monthly housing starts peaked at an annualized rate of 2.27 million at the beginning of 2006 and are now running at 529,000. Manufacturing activity also slowed last month, with output increasing only 0.1% compared to an average gain of 0.9% in the prior three months. Part of the drop-off stemmed from lower vehicle assembly rates as the Clunkers program concluded. One bright spot was the October reading of leading indicators, which climbed for the seventh straight month, albeit at a lesser rate than expected.

What are the odds of another downturn? Slim, I think, but real. Today’s economy is one-of-a-kind, but many continue to look toward the Great Depression for clues. Skeptics of growing government spending argue that the New Deal prolonged – rather than countered – the 1930s slump and are equally wary of today’s mammoth deficits. One such critic is noted columnist Amity Shlaes, who spoke to a Manhattan Institute gathering in New York this week, raising alarming parallels between the Obama administration and that of Franklin Roosevelt. Shlaes is the bestselling author of The Forgotten Man: A New History of the Great Depression, and is a senior fellow at the Council on Foreign Relations. She describes the 1930s as a period during which populist outrage at bankers allowed for unprecedented government incursion into private enterprise and private life. The Roosevelt White House was staffed by a well-educated and arrogant team known as the "Brain Trust" who considered the rule of law an inconvenience and was confident that government knew best. (Is this sounding familiar?)