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

There’s alot of truth in what you have stated, Frannie Em. The problem as I see it is that this administration is too far left and Americans aren’t going to accept that. To most of us healthcare reform is simple. No evidence of insurability, tort reform, no cancelling insurance due to illness and a reformed medicare plan to take care of those without the funds to pay for insurance. The rest of the garbage this administration is piling into this plan reminds me of the $787 billion failed stimulus package. My feeling is that they are more concerned with government control over our lives than listening to our fundamental needs. Americans who earn over $250,000 a year have been paying a higher percentage of taxes for decades. We need the younger generation to start paying into health insurance. We can’t always rely on the rich to fund everything. That’s a no brainer.

Frannie Em, I don’t have the answers but what I do know is that this administration isn’t capable of getting the job done. They are more concerned about re-election that delivering a product that will take care of the small percentage who are uninsured. It’s a financial trainwreck in my opinion with absolutely no guarantee of what it will cost each of us long term.

By deber B on 11/05/2009 5:06 am

e-mail alert

deber

I think you are right about the administration making the mistake in believing they had a "mandate" to do whatever they wanted. I remember after the ‘04 election and Bush was re-elected and there were no recount controversies, they announced that they knew they had a "mandate" to go forward. I thought "A WHAT?" No one has a mandate. The country is almost divided 50/50 so how could that be a mandate. Maybe if someone got 85% of the votes or something that would be a mandate, but sorry - no mandates in this country, it is supposed to be a democracy.

So now we have the new boys in town Rahm, Axelrod and Gibbs, along with the six political action groups that call into the WH on a daily basis believing they have a "mandate". Don’t they get it - this country has polled center right for decades - that was Clinton’s lesson and once he started governing from the center we had some changes and prosperity. So a "healthcare mandate" seems like an odd concept to hold. The two sides have to work together or it is disaster as we are having now.

I do not want big government in control of my life, they can’t even control medicare fraud. What a joke. I just know that the system is broken and something needs to be done.

By Frannie Em on 11/05/2009 12:44 pm

e-mail alert

deber, do you ever read what you print? 2 and 3 generations of welfare families? Presiden Obama"s doing? I know you are delusional about this man, but, come on. America cannot get back on her feet until we come to the realization, that all of us are equal, and deserve equal treatment. That means, for one thing, Universal Healthcare, equal education and the knowledge our government recognizes these facts as stated by our founders.

By Helen Moran on 11/05/2009 9:06 am

e-mail alert

Interesting, deber, "we" pretty much got rid of three generation welfare families when Clinton was prez.

You’re right on one thing though, after getting knocked down significantly under 8 long years of Bush — America does need to get back up on her feet.

Sadly, I believe one of Obama’s major problems is the fact that after being lied to continually by the previous Bush administration, Americans are more distrustful of their government than ever belore.

By Sara Smile on 11/05/2009 10:40 am

e-mail alert

Sara

During the Clinton years it was the republicans that were yelling for welfare reform. When the dems were routed in 94 and the republicans took the majority they pressed for welfare reform and Clinton was forced to do it. He didn’t want to. (I voted for Clinton and like and liked him ) I believe that Rahm Emmanuel worked on welfare reform with the repubs, but it took both dems and repubs checking and balancing each other to get it done.

I know Willy Brown (a dem) working with a repub governor, led the charge in California, which then led to more prosperity - but that was also dems working with repubs. When those legislators retired or were retired in CA, the new ones changed it back and bankrupted our state. Budgeted and funded programs with monies they didn’t have. At the time California was the 6th largest economic force in the world and now it is the 8th and we are going down further, which has never happened before. They made big bureaucratic programs that are sinking this state. That is one of the reasons I worry about this bill. People keep saying "look at California and don’t make the same mistakes." If only.

I wish on the run up to the Iraq war the dems had been the party of NO. We would have a very different nation right now.

You and I both know that there has to be change I just think that those guys have lost their way a little.

ONe of the things that upsets me most is that we have to borrow from the CHinese to do this. The Chinese have 400 million in their country who are not insured or get no benefits. THat is more than the population of the US. They are of the old communist workers who are considered not trainable for the new tech and manufacturing jobs. They have no homes, they wander through china looking for work - they are homeless. How can the Chinese lend us this money. THey are heading for a credit crisis like the one we just went through. So I just don’t see how this bill is feasible. Crazy.

By Frannie Em on 11/05/2009 1:13 pm

e-mail alert

Again, Frannie — you make excellent points! I, too, wish the Dems had not gone along with the Iraq War — but, the one the Bush administration excelled at was fear mongering after 9-11. I remember clearly they convinced most Americans that disagreeing with the Bush Administration was actually unpatriotic.

Like many Americans, how had there not been "hanging" chads and the Supreme Court giving the presidency to Bush — the United States would have stayed on the course that Clinton began. The 8 years under Bush were an American travesty. I don’t think any of us realized in November 2000 — what a mistake our country was making. But, then, the American people got a president who was not elected by the people.

In my opinion, the Bill is a start, Bills can be ammended over time — the Bill is not going to bankrupt the America short-term. Quite honestly, as you mention — that already happened during the Bush years. I think we have to start somewhere, there will never be a perfect Bill out of the box. As a business owner, I’m sure you have implemented policies just to get something started and then ammended them over time as you saw how the policies worked, I think this same approach is what we have to do to begin down the road of fixing the health insurance debacle.

By Sara Smile on 11/06/2009 8:00 am

e-mail alert

Deber has pinned the tail on the donkey, again.

As the facts bear out, in times of a Republican administration, volunteer contributions give more to the poor than any Democratic mandated entitlements do. The"Progressive Democrats" now in power, work to take down the midde class and create one "level playing field" of lower class.

These Progressive Democrats are tied with huge corporations, controlling huge profits aimed at taking over the private wealth of our country. They initmidate and lean on those that don’t go along with their program while dangling places at the table for those that will.

This administration is creating a world wide corporate control of our country while taking our freedoms along the way. If you are not in government or a huge corporation, you no longer have a chance of attaining the American dream.

Democrats are no longer the party that my grandparents supported. The Republicans need to get back to the party of Reagan. Therefore, I am an Independent and will vote in or out, those that do not do the will of "the people".

By True Grit on 11/03/2009 12:22 pm

e-mail alert

True Grit, you are entitled to your opinion. Seems like you forgot LBJ and the 60"s when sweeping changes were made for the better in this country, for millions. He was a Democrat. And if there is a party out to wipe out a middle class its elitist Republicans, the party of big business. Ronald Reagan was mediocre at best.

By Helen Moran on 11/03/2009 2:42 pm

e-mail alert

Here’s the skinny of some of those projects that amuse Ms. Peek that she mentions but doesn’t explain and in doing so they seem silly and frivolous, but instead make sense and have good purpose:

"Combating unwanted teen pregnancies, which are on the rise in Syracuse, and searching for ways to prevent sexually transmitted diseases is no joking matter. These kinds of studies go to the heart of ensuring the long-term economic viability of communities."

WASHINGTON — Anything that hops, burrows, buzzes, crawls or grazes near a nuclear weapons plant may be capable of setting off a Geiger counter. And at the Hanford nuclear reservation, one of the dirtiest of them all, its droppings alone might be enough to trigger alarms.

A government contractor at Hanford, in south-central Washington State, just spent a week mapping radioactive rabbit feces with detectors mounted on a helicopter flying 50 feet over the desert scrub. An onboard computer used GPS technology to record each location so workers could return later to scoop up the droppings for disposal as low-level radioactive waste

It’s part of the first stimulus, signed by George W. Bush. It was designed as incentive to purchase electric vehicles, but soon golf carts were being upgraded with lights, turn signals and beefed up batteries to take full advantage of tax credits. In some cases, a $9,000 LSV can qualify for $6,000 in tax credits.

…of the most surprising things about the golf cart tax credit is that it gives people almost as much money as the tax credit for first time home-buyers, which is $8,000.

The economic stimulus package is also paying people to install things like solar panels and energy efficient windows.

By phyllis Doyle Pepe on 10/30/2009 1:27 pm

e-mail alert

Phyllis, since you brought this up on the 30th and your comment still stands, I will respond to your comment about "solar panels and energy efficient windows". That is all rubbish, all that "green thinking" is nothing but rubbish.

According to the foremost meteorologist in the world, ( MIT’s Richard Lindsen) his 20 year study proves that there is not a Co2 problem on our earth.

Consider these facts; it takes 1 Trillon tons of Co2 in order to cut 1 degree off of the temperature. Hence, it would take 33 years of NO cars, industry, etc…NOTHING in the ENTIRE WORLD to cut 1 degree.

Global warming is a non issue. It is however the way to tax and control Americans into a global treaty which would by design put this country under a global governance.

When added to the 30% of private wealth already in the government’s control and a possible 17% more from government health care take over, that would be the majority of America’s wealth directly under the control of the government. what a nice tidy sum for Obama to use in his bid for a global postion of power and wealth.

Meanwhile, we argue about nonsense so that the real issue is not seen.

By True Grit on 11/01/2009 4:32 pm

e-mail alert

Dear John Wayne avatar person: Richard Lindsen is another person, like you, I imagine, that has true grit and agrees, from what I have read about him, with 90% of what the global warming scientists are warning us about. It seems to be the 10% that puts him in the category of the nay-sayers. He once was getting big bucks from oil and coal companies for speaking engagements which makes me wonder just how much his grit was really true. I always think "money" when issues like this arise––who are the losers, who gains, and all the while our planet is slowly imploding. You may believe global warming/climate change/ is a non-issue and that all this is a "way to tax and control Americans into a global treaty which would by design put this country under a global governance" but that kind of thinking seems to me to be ill conceived and wrong sighted. Your post also smacks a little of paranoia––just a wee bit?

By phyllis Doyle Pepe on 11/01/2009 5:21 pm

e-mail alert

Phyllis-

33 years without any cars, industry, worldwide just to decrease the temp one degree. CO2 is a non issue, Phyllis.

"The Senate is now considering a bill … to create a European-style ‘cap and trade’ system for carbon dioxide emissions… International pressure on the United States to adopt such legislation … will increase in December at climate talks in Copenhagen. That’s bad news for taxpayers. The Obama administration reluctantly admitted last month that cap-and-trade would cost the average American family $1,761 a year. That is a rosy prediction. A Heritage Foundation analysis pegs the cost at an average of $2,979 a year and as much as $4,600 a year by 2035. Jobs will disappear, energy prices will skyrocket, and the American Dream will become an unattainable fantasy for many."

— Phelim McAleer, Journalist and Film Maker Time for more Americans to get "paranoid" then. Our freedoms are being sold out by this administration to a world organization for profit, world sized profits. Our only hope is our Senate, that they do not allow such treaties to be passed. Better start paying attention. Because it sounds so "over the top" is exactly how these things are being done. America is needed to help support the failed socialist programs of the world. Our economy is needed. The government and their huge corporate pals will control the wealth. America as we know it is being sold out from underneath us.

By True Grit on 11/03/2009 12:45 pm

e-mail alert

Way to go, True Grit! Has anyone considered that when we breathe we expel CO2? Maybe we should all stop breathing? or just those in overpopulated areas? How about China? Or the fact that plants need CO2 to survive and thrive? The whole global warming issue is bunk. It is just another way to regulate our lives and for some specialty group to make money. Do I think that we should be conscious of taking care of our environment? Sure, but lets not get ridiculous about it. IF I could afford to retro-fit my house with solar panels or had room on my property for a windmill, I’d do it in a heartbeat. Anything to keep more of my money out of the pockets of the money grubbing energy companies. Would that make a nickels worth of difference with regard to the earth’s temperature…nope.

By STACY SEARS on 11/02/2009 3:53 am

e-mail alert

To Helen - if you dont like what Liz has to say dont read her threads…

Ok I have a question for all the "left leaning" : the stimulas money that Liz did mention above, your ok with where those funds went? Instead of seeing those funds go to oh lets say Healthcare costs????

Yes we need healthcare to every American but at what cost? At what cost to me and my family who is barely making it as it is now? Who goes to the Dr and uses her healthcare…thankfully havent had any major issues with it and hopefully never will…Love my Drs and dont want to see any of them suffer from this public option…

There is so much fraud with Medicare and yes its said they are trying to cut if down but were talking millions a month - checks go out before the cliams are even looked at??? Why not extend medicare to everyone who needs healthcare - why do we need something else….

I really do hate to say this b/c I hope Im wrong but so far I havent seen anything to prove me wrong but I think Obama is trying to pass this healthcare so he can go down in the history books again as the 1st President to do this or that…The only hope I have is the upcoming elections will show Obama how the American people really feel and maybe just maybe Obama and his team will listen, doubt it but it would be nice.

My last thought - where are the jobs? I mean we were promised jobs would be here NOW YET were still loosing them faster then getting them…so where are they?

By C Hardy on 10/30/2009 1:42 pm

e-mail alert

C Hardy, much of that money is going to health care costs . The Department of Health and Human Services, which is distributing $137 billion, has made available nearly $29 billion to the states. Just under $13.2 billion has gone to states to help them pay for Medicaid services. Another $100 million tagged for senior services — such as nutrition programs at senior centers and Meals on Wheels — is sitting unclaimed because states are in the process of requesting their share of the money as they figure out how to navigate the federal program and assess their needs back home. The $1 billion slated for prevention and wellness programs hasn’t even been committed because the agency is still working out details, ( spokesman Nick Papas). Specifics should be announced in early summer. In my city, two hospitals were joyous last week to learn they were receiving 100 million for continued research.

The massive recovery package was designed to stimulate the economy and create jobs, but that is not the only mission. It has also saved over one million jobs in the health care industry and in education. It was also designed to assist with unemployment benefits and food stamps… in an effort to help make life decent for people. Many " shovel ready" jobs are slow to start because the bidding has come in slowly and low, as to be expected. It takes months to get clearance to build a bridge, design it ,and then finally get permits to begin construction.

Handing out billions of dollars in a responsible manner is not easy, experts say. "You can only spend so much money really fast," said Michael Ettlinger, vice president for economic policy at the Center for American Progress.

By Maggie W on 10/30/2009 2:48 pm