Wall Street Weekly | 10/30/2009 12:00 pm

Liz Peek: Grandiosity, Not Common Sense, Drives Health-Care Bill

Bears, Bulls, Chickens and Pigs: wOw’s Wall Street Weekly with Liz Peek (Week of 10/26)

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

The stock market cheered the resurgent economy yesterday, after losing ground for four days in a row. The 3.5% gain in real GDP was welcome but, since nearly half of the improvement came from the Cash for Clunkers program, I wouldn’t break out the bubbly quite yet.

ISI Group notes that economic recoveries historically mirror the extent of the downturn; the worse the falloff, the faster the bounce-back. They say that, given the recession-caused 3.8% collapse in GDP, the quarter should have jumped 10%. No one was looking for that kind of pop, given the debt load and job anxieties still weighing on Americans. Indeed, today’s report that consumer spending sank 0.5% in September (the biggest drop in nine months) underlines the fragility of the recovery. For further proof, just ask the 530,000 newly laid-off Americans that went looking for unemployment insurance last week.

HSBC’s economists had forecast 4% growth for the quarter. They were too bullish because they overestimated the government’s stimulus spending. The shortfall was in outlays from the cities and states, which unexpectedly turned down. This raises an interesting question, no doubt being asked by the 26 million Americans looking for full-time jobs. What ever happened to the stimulus program?

We do not have to risk fundamentally weakening the health care currently found satisfactory by nearly 80% of Americans.

If you’re wondering where our $787 billion went, visit the Recovery.gov website. The quick answer is … nowhere. Out of the entire program, only $173.2 billion has been paid out. Of the $14 billion in federal contracts awarded so far, for example, only a little over $2 billion has been received. There are some terrific projects that have received funding, though. My particular favorite is the $219,000 spent on a study of the sex lives of freshmen women at Syracuse University. You might prefer the "Week Mapping Radioactive Rabbit Feces With Detectors Mounted on a Helicopter Flying 50 Feet Over the Desert Scrub," which cost $300,000. If you’re a golfer, you’re probably thrilled with the $5,500 tax credit being applied to the purchases of golf carts.

Some of these projects make me chuckle, but the failure to create jobs for Americans is no laughing matter. A story in today’s Financial Times points out that "more than 8 out of 10 U.S. stimulus dollars spent on wind energy farms have gone to foreign companies." Cash that has gone to wind farms has funded 4,500 jobs overseas. Oops.

Well, after all, it’s the government, and no one expects perfection, or timeliness, or accountability. Then why in heaven’s name are we about to allow the government to interfere in our health care? It is inconceivable to me that Democrat leaders in the House and Senate and the Obama administration are bulling ahead with health-care legislation that Americans do not want, that we cannot afford and that is likely to detract seriously from the most pressing issue before us: putting people back to work.

Harry Reid, Nancy Pelosi and President Obama have reinvigorated the so-called "public option" based primarily on a couple of recent polls that say that Americans favor a government-run insurance program. Everyone should look up the actual WSJ/NBC poll that supposedly "green lighted" the public option. Early on, respondents are asked if the country is headed in the right direction. Over half (52%) say no, up from 43% in April. The sixth question asks people whether they approve (43%) or disapprove (48%) of the way Obama is handling health-care reform. In answering question No. 10, 48% of those surveyed say the government is doing too many things, while 46% say it is not doing enough. Responding to question 26, 42% said they think the president’s health plan is a bad idea, versus 38% who think it is a good idea, and in the follow-up 40% think that the legislation will make their health care worse (vs. 21% who think it will get better) and 47% think the cost will go up, while 13% think it will go down. Does this group sound enthusiastic about more government involvement?

268 Reader Comments (so far…) Sign In or Register to comment

Hi Frannie……..health insurance has become a real rock around the neck of business. When American companies take jobs overseas, they sure do not provide health insurance for those employees. It is an extremely expensive benefit to offer employees. The older the average age of business’ workforce, the more expensive it becomes — ditto the higher the proportion of women employees. Young employees do not see it as a particularly important benefit unless they happen to have a pre-existing health condition. Every year business struggles with the rising cost of providing employees health insurance which can easily go up 20% in a year. How do you pass a 20% increase in health insurance costs on to employees when you are only offering a 2-4% "merit" increase in pay? The net result is a decrease in employee pay totally negating any incentive a "merit" increase might have for employees. How do you manage the difference in actual benefit realized between an employee with a family vs the benefit realized for a single employee or an employee who is married w/o children?

The practice of tying health insurance to employment is a leftover from the days of lifetime employment with one company — that ship sailed a long time ago.

For whatever reason, Rasmussen polls always seem to be at odds with all the other polls outthere. =) Several recent polls show over half the American public is beginning to favor the public option……..because that is all it is, AN OPTION. Every day more and more Americans are losing their jobs or becoming aware how tenuous their employment is — with health insurance tied to employment, that puts their health insurance in jeopardy also. Also, right now is Open Enrollment for most companies — I suspect most employers are increasing the cost of health insurance to employees while lowering the actual benefit. http://www.washingtonpost.com/wp-dyn/content/article/2009/10/19/AR2009101902451.html

By Sara Smile on 11/03/2009 7:37 am

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Sara

You make a very credible and interesting argument and I understand the reasoning behind it since I am an employer. The only point I would make is that the public option is for those without insurance and so, I think we are led to believe, that employers would go on supplying health insurance benefits to their employees. For a time anyway, until an employer would decide that the fine was cheaper than paying the insurance.

The government is never competition for industry. THe state fund Workers comp in CA took over the business several years back and small firms went out of business. Unfortunately, State Comp then became rife with corruption because dishonest people took advantage of the system due to lack of oversight. There was just a huge budget that paid out claims and charged employers exorbitant premiums. I know - it almost put us out of business, but we were required to have it so we had to keep it.

It wasn’t until work comp insurance was opened up to interstate competition that the prices went down - it took time, but ours eventually went down by 75%. Unfortunately, recently, although we have never had a claim against us ( thank God), our prices have almost doubled because the SEIU (which has had 22 meetings at the WH) made a deal with the President that if Gov Schwarzenegger insisted on continuing furloughs, CA would be excluded from more stimulus funds. Well, the governor didn’t relent so State Fund raised their prices on everyone because they didn’t want to lose jobs because of lack of funds. I called them and asked them to come to my office for an appointment so they could decide which employee was going to have to be fired because we cannot afford this. Now, it seems that State Fund is shooting we the employer and themselves in the foot. Since unemployment is close to 12% they have lost revenue, so they think, we don’t want to fire more people, we will just make small business pay more. Isn’t that stealing from me? Feels like it. And they can do it too - just like the feds can do with that crazy bill.

From what I have been able to learn, the public option will be run by the current insurance industry, there are always guidelines, but in government, there are always ways to get around a guidelines which eventually bankrupts the system. If you didn’t see the 60 Minutes segment a couple of weeks ago called Easy Money, you should take a look - it is on the CBS website. Thieves come in and raid the larder of we the people’s money and there is very little oversight or prosecution. The estimates I have heard regarding medicare fraud are $90billion per year. It is often said that the US has the highest medical costs in the world but no one mentions that over 50% of our costs are due to Medicare and $90 Billion of that is fraud.

I think the government should clean up medicare and after saving some money try to come up with a better bill that will actually do something to bring down costs.

The reason Rasmussen are sometimes at odds with other polls is that they poll likely voters, not just everyone. This election cycle they did not poll the 18-25 crowd because they usually don’t show up for these cycles. They are highly respected in the industry for their work and accuracy. Although, I am no fool, any pollster can get whatever info they want by how they phrase an idea or question. They all do it. I get telephone polled by political groups a lot and mail polled by the ACLU. It is interesting to see how they phrase questions to get the viewpoint they want. Sometimes the questions are unanswerable and I tell the pollster or write in the margins to the ACLU. LOL

By Frannie Em on 11/05/2009 1:43 am

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I suggest that anyone that thinks that the majority Americans support the public option stops watching MSNBC. Americans support health care reform; tort reform, fraud abuse, competitive polies…not the worst piece of of legislature to ever be written in the history of our country, Pelosi’s government take over of our private wealth.

Walgreens is developing retail heath clinics. Low cost, access to a medical professional right in the pharmacy. Despite the slow down of the economy, the number of retail clinics increased 30% in ‘08. They plan to have 400 clinics opened by 2010. CVS plans to have over 500. Competion such as this is what keeps prices down and the free market system as the answer.

When WalMart started a price war with prescription drugs, CVS,Target, Krogers, First Giant, Giant Eagle, Food Lion, Publix and Safeway ALL DROPPED THEIR PRICES to compete. Why? Knowing that by creating bonds with customers by providing them the most inexpensive medicine as possible, those customers would likely return to purchase other products.

The pursuit of of profits lower prices, stimulates innovation, retains freedom of choice, and keeps Americans free from government control.

Ever heard of "catastrophic savings plans?" There has been many plans that have suggested such a thing. But I guess that because it was from "the right", that wasn’t an option.

I too, am constantly surprised at how many people drag the Iraq war into a health discussion. But then, it doesn’t appear that this administration is doing much about that, now does it?

Time to give up this "right" and "left" thing America, it is all about saving our Nation now.

By True Grit on 11/03/2009 11:58 am

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Ahhh, Diana — Liz Peer is a lot of things, but not an idiot — she KNOWS a majority of Americans are vulnerable because of the current mess our healthcare and health insurance is in — she just doesn’t give a flip. She prefers to make money on the backs of these people, plain and simple.

By Sara Smile on 11/02/2009 12:42 pm

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Liz Peek, has consistently shown her prejudice to anything this administration does. That is her perogative, but, must the rest of us listen to her prattle? No. Her ideas about the poor and sickly are nothing short of the same old same old that the haves have spouted about the have nots. Read the founding documents again, Liz. All men are created equal, now look up the word equal. At best you are an elitist, and at worse a very callous person. I for one, could care less about any polls, they tend to obscure what real people are really feeling, so knock off the talk about numbers and get out on the streets and check out real life.

By Helen Moran on 10/30/2009 1:02 pm

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Helen, all men being created equal, doesn’t have anything to do with healthcare being an entitlement or a right. I am involved in real life, fortunate to have insurance because I’ve poisitioned myself to be employable by entities that have the means to provide such benefits. I still have some pretty hefty bills as I’ve had several health issues this year. I do not feel entitled to the care I’ve received, if I had no insurance I would expect to have to pay for my care in full. You and I will continue to butt heads on this issue because I will not change my position. Those who are able need to work to earn their benefits, period. I believe that those who are putting forth effort to take care of themselves and their families should receive some help with their health insurance costs. I would like for there to be money available in the federal budget to fund such a program. At this point in time, we cannot fund this. We have a decreased tax payor base and increased outflow. Until we focus on job creation and get folks back to work, this country will not have the money to fund the program. Those of us that are still working are already stretched to the limit and cannot afford the necessary increased taxes to fund the healthcare program. Most people I know already donate to outreach programs to help folks with food, housing, medical costs, tithe at church, etc. Many of us already work more than 1 job. It is time that our government becomes fiscally responsible (since half of Congress is routinely overdrawn in their personal bank accounts, it will probably never happen). Social programs are okay if we can fund them, right now we cannot. There are many things that Liz is right with, such as tort reform. She also is correct that expanding Medicare to include those CITIZENS that fall through the cracks would go a long way in alleviating the problem. Being a realist is not callous or elitist.

By STACY SEARS on 10/31/2009 4:39 am

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Stacy, you’re right, we will never agree. Equality has no conditions. If we would stop throwing money into weapons programs and the upkeep for keeping thousands of American soldiers overseas, we would have the money we need to do things here. The war with Germany and Japan ended 60 years ago, Korea 50 years ago etc. Bring these troops home, and while we are paying and feeding them anyhow, there is an unlimited number of city and state repairs that need doing. I guess being a "super power" satisfies some egos but, I am a realist, and want home fixed first. You are not the only one with health issues, but some folks either physically or mentally are unable to care for themselves or work, and these qualify as "the least among us" to some people, but they are the people who need help the most. I am all for the fit and healthy to work, but that can’t be the prerequisite for health care. I have a daughter who is a nurse, and believe me, anyone who shows up at a hospital needing help HAS to get it, and there have been cases where they were turned away. I am not a professional Christian, but needs must be met for every person in this country, no exceptions. Jobs are a priority, so start calling your cable co. your insurance co. your credit card co., and find who is answering the phones, then raise hell. You will be talking to Manila or India. Its a start.

By Helen Moran on 10/31/2009 12:30 pm

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Helen, FYI, I work in a hospital as well and do not dispute the fact that our patients need help. Noone is turned away from our ER. We give top-notch care to "the least among us" (although I thought that you were not going to debate the Bible with me), including drug seekers, etc. We spend our time and resources dealing with unkind patients who demand narcotics to be kept at their bedside (which is illiegal), ungrateful patients…one family member threw a fit because the cable was messed up and the Cowboys game was coming on (like we can control the cable company)…and fortunately some wonderful people. I have spent hours locating rare medications for uninsured, illegal aliens in the middle of the night while trying to provide care for 200 hundred other patients. I believe in an earlier post that I supported helping out those who are unable to care for themselves or work. I will stand by my opinion that those that are fit and able to work, should do so or at least be in training/ college etc. I believe in a hand up not a hand out. Look at our Native American reservations and you will see what a hand out does to society. Before I am criticized here, please know that I am part Blackfoot Indian and my great-grandmother lived on the res in Montana and I have also served in the Indian Health Service for 5 years. When you provide food, housing and health-care for a group of people it removes the incentive for them to grow as individuals and attempt to provide for themselves.

You and I do agree to the extent that I would prefer for our tax dollars to be spent taking care of issues at home first. I have mixed feelings about pulling all of our troops from abroad. I believe that for safety reasons our country needs to have a world-wide presence, however I believe that we could scale back. Those troops could patrol our boarders to help stop the constant influx of illegals that are burdening our system. I would also pull back the foreign aid to all of these countries and use that money to fund programs here at home….let some other country step up and fund these programs. I also believe in employing Americans. I don’t deal with customer service for anybody anymore because I can’t freakin understand them. I have a huge problem with the outsourcing of these jobs. I also no longer support many creditors with my business. I have 1 Visa with an extremely low limit to facilitate car rental when I have to travel, otherwise, I pay cash. If more people operated this way, that would send a huge message, and people’s lives would improve because they wouldn’t have the constant stress and worry about their debt.

I also agree that jobs are a priority. I believe, however, that they should be a bigger priority than universal healthcare. Again, if people aren’t working, there is no money to fund any kind of program.

By STACY SEARS on 10/31/2009 11:56 pm

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Obviously, Stacy, we have a large area where we agree on a number of things. I also believe, that to achieve everything we want for this country, universal health care is a necessity. How much time would be better used in patient care, than looking up different insurance carriers policies? I don’t know if anyone has a perfect type of this insurance available to be put into effect, but, its the best solution. When I see the profit margins for the insurance companies and the millions they spend on buying senators and congressmen, it makes me sick. Another one of favorite rants is about career politicians. These men and women spend their whole adult lives in Washington, and the only real thing they are interested in is keeping their cushy positions and all the perks that go with it. Supposedly, the most powerful position is the world is President of the United States and no matter who that is, he can only serve 4 years. But these others are not limited to terms. It is the biggest weakness I see in our form of government. I am a Pennsylvanian, and Arlen Specter is a perfect example of this. He is 79, has switched parties twice, had cancer which has recurred 2 times and is running again. I will not vote for him. He is just not qualified anymore. But there is no law stopping him. As for troops abroad, okay, maybe a token force in some places, but what we need is better intel all over the world. None of our standing troops around the world stopped 9/11, but we had they intelligence and did not pay attention to it.

By Helen Moran on 11/01/2009 10:28 am

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Helen, I too think that there should be term limits for the House and Senate, maybe a max of 12 yr? I find it sad that our Founding Fathers understood that their time to serve was limited without having to be told to do so. They served their time in whatever capacity and returned to being regular citizens, earning their way like everyone else. I bet they never imagined that nearly every politician in office would be bought and paid for by either the corporations or the unions or special interest groups.

By STACY SEARS on 11/02/2009 12:33 am

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We totally agree Stacy. Our founding fathers also had to apy their own expenses while doing the peoples work. Can you imagine these modern politicians having to go to Washington to work on laws and then have to Amtrak their ways back home and then work at a job? heaven forbid. They are used to having dirty hands but not from honest labor. At least most of them. As a matter of fact, I know we can not get rid of lobbyists, but it should be illegal for them to donate one dime to a sitting Senator or congressman. We should work towards that. Can you imagine what that would be like? Politicians would actually have to vote on the merits of a bill, and on the wants and needs of the constituents. Oh, happy daydream.

By Helen Moran on 11/02/2009 1:06 am

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LOL! Helen, for these politicians to have to vote on the merrits of a bill, that would mean they actually have to read it! How many of those greedy bastards are really gonna read Pelosi’s 1990 pg healthcare bill? If these folks were serious about healthcare reform, they would have expanded Medicare eligibility to those on unemployment and those in low wage jobs, while making a concentrated effort to administer Medicare more effeciently. Here’s another idea…how about opening urgent care clinics with sliding scale fees? The money we are giving away to fund social programs in other countries could fund this. I would also be in support of a healthcare bill that allotted funding for this type of a program, addressed the anti-trust issues with the insurance industry and fostered competition among private insurers. I would like to see small businesses be able to co-op together to be able to buy more affordable insurance for their employees. Some of this stimulus money could go to build and staff the above fantasy clinics, therefore putting some folks back to work. If this were to happen, there would be an enormous burden put upon the current numbers of healthcare workers, therefore low cost training programs to add healthcare staff need to happen as well. Education and training costs for pharmacists, doctors and dentists are through the roof. Nursing programs are still reasonable. Unfortunately, the bill that is on the table isn’t so simple. From what little I’ve managed to plow through, its pretty obvious that it is gonna cost us a bundle, hit the middle class hard in the form of taxes (not just the wealthy), and push the national debt beyond anyone’s imagination. Haven’t these politicians ever heard of the KISS principle? keep it simple,stupid!

By STACY SEARS on 11/02/2009 1:53 am

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Stacy, I agree 100% with you ideas. Simple and straight forward, and doable. Shame they will not occur to any of the balloon boys in Washington. I am referring to the fact that they are so full of hot air they could all keep a balloon afloat for a long long time. If you have never seen it try watching that old Dolly Parton movie, "The Best Little Whorehouse In Texas". Charles Durning’s song and dance routine called "Slippin" Around" is so hilarious, and I always try to picture some of present day Washington favorites doing the number. Its sad, but sometimes thats how I amuse myself. Oh, if any of them knew the meaning of "simple" they would not be politicians. Again, a movie reference-Since "stripes", whenever someone is trying to sell me swamp land I tell my girls thats razzle dazzle. Humor is the only thing that gets me thru sometimes. Honestly, it is why I watch Bill Maher and Keith Olbermann. I live for the witty sarcasm and irony. I actually agree with them most of the time, and if I have to hear bad news I want it delivered with humor. I am Irish, after all, and we have to make fun of just about everything, its a coping mechanism. Okay, have to go now, talk soon.

By Helen Moran on 11/02/2009 1:05 pm