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

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

© Shutterstock

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

Frannie Em

Sherrie

Great points, but I think that right now more than anything, people want jobs.  We get our self-respect and self-worth from our ability to work and how and what we do.  The government and congress has benefited greatly from how well Americans work.  Americans love to work and do it well.  If the environment is there for business to grow and create more jobs, then people will get employed, most of them would get insurance.  The government’s only "true" or not borrowed, revenues come from people who have jobs and therefore pay taxes.  

During the Clinton years I was always fascinated by how many jobs were created during that time, because he never said much in any interviews about it.  I always wondered what steps they took to do it.  I knew some because I was a small business and had many of my deductions cut therefore had higher taxes.  But that wasn’t all it was - then I heard him speak about it after he was out of office.  At first they raised taxes on small business, he didn’t raise them much on his rich friends, but he did on us. (Just so you know, I liked Clinton and voted for him).  Anyway then they gradually lowered or reversed those taxes.  But, then he said something to the effect of - "there is not much a president can do about job creation except foster a healthy environment for it."  Well that is not happening today.  Why didn’t they focus on jobs and saving more jobs?  If they had done that and had some wins and started the healthcare debate next year when he was more experienced at his job, the environment would have been more conducive to it.   

Cokie Roberts was on Sunday Morning a couple of weeks ago and said that not 40% of the GDP is government jobs - federal, state and local.  That means the rest of the population pays taxes to sustain that.  Once they cannot borrow anymore, it will be unsustainable - impossible to maintain.  Since the economic meltdown government has grown - where is that money coming from if there is less employment therefore less tax revenues?   

By Frannie Em on 11/01/2009 12:31 am
Frannie Em
Last paragraph should read… "said that now 40%…"
By Frannie Em on 11/01/2009 12:33 am
Mel Berg
Frannie, this is an old article but I believe it is a good one. Our jobs have gone, they have been leaving for many years, how to get back on track is a good question. President Clinton still had jobs here, so it was easier for him to turn the economy around, now I don’t know what it is going to take…http://www.counterpunch.org/roberts09302006.html
By Mel Berg on 11/01/2009 5:29 am
Mel Berg
By Mel Berg on 11/01/2009 6:18 am
Frannie Em
THanks Mel
By Frannie Em on 11/02/2009 1:03 am
STACY SEARS

Sherrie, I believe tort reform is intended to target frivolous lawsuits and awards, not the situations you describe above.  Case in point, my former doc had a patient steal a script pad from her office.  This patient then proceeded to write for thousands of Vicodin tablets split between 5 counties and several pharmacies.  The only reason she found out is that a pharmacist took the time to call her and question why she was supplying lethal amounts of Vicoden to her patient.  She then wrote a letter to the patient "firing" him.  Fortunately, she did this a week before the DEA showed up in her office, otherwise her license would have been in jeopardy.  The patient was charged and sent to prison.  From prison, he filed a malpractice suit stating that he was experiencing liver failure due to her irresponsible prescribing.  This took 2 years and $50,000 to resolve.  So, yes, Liz is correct in stating that tort reform needs to happen.

 FYI, many docs graduating now aren’t "rich" and probably won’t be.  Family practice docs and pediatricians make about as much as retail pharmacists.  Many are hundreds of thousands in the hole from student loans when they get out of school, then the expense of setting up a practice is substatial.  Would you go to school for at least 8 years, be about a million in the hole when you set up your practice and then not expect to make a decent living?  As Bob McEwen says, "the greater the blessing, the greater the reward".  Maybe you should go to medical school, incur the debt, work your ass off for years and not make a profit.  I figured out years ago that there was no way I was going to medical school, live my life being on call 24 hr/day, and have to work for 15 years just to break even. 

Since you believe that healthcare should be a right and a service…step right up and serve

 

 

By STACY SEARS on 11/01/2009 1:09 am
True Grit

If we are duped, lied to and pushed into government take over of health care, we the American people will be the "boy in the bubble". Our very lives will depend on if the government thinks that we qualify for proceedures, and if we survive long enough to get them.

Health care is a serivce and an industry. Why not, it has created major cures for the world. It is no more a "right" than owning a flat screen TV is.

Don’t mimic the propaganda, emotion at the expense of analysis is a mistake.

We can reform tort and make affordable insurance available to many more, those that need the care can be given it. Simple.

By True Grit on 11/01/2009 6:16 pm
Sara Smile

Right now our very lives depend on whether or not the insurance industry can make enough of a profit on us.   The insurance megacorporations now decide whether of not we qualify for procedures.   

Health care is no more a right than food and shelter — sadly more and more Americans seem to be losing all three.

By Sara Smile on 11/03/2009 9:10 am
True Grit

Reality is, that the government will ration, cut costs and deny you the right to purchase a proceedure even if you can afford it. Amazing that some are still taking the bait; the big bad insurance companies.

Try tort reform, eliminate fraud and allow National insurance purchases. Better yet, just GIVE the money to the 2% who really can not afford insurance.

Food and shelter,  health insurance is not a right. They are all something that may be a personal necessity. Considering that most Americans live better than 99% of all people that have ever walked this earth, we have it pretty good as is.

Now this administration wants to tax pace makers, etc. How silly we are to take the bait and point to the insurance companies as the "bad guy". Manipulation, pure and simple. The hard facts do not support that propaganda.

With the addition of health care, the government will have control of 48% of all persoanl wealth in this Nation. That is the point, that is the target. Just think what that would mean when a party opposing your views gets into power…oh ya…think about that one.

 It can happen, no matter what the "plan" with this administration, the  people are speaking out, they will be voting out representatives. So you see, America will not become a "one party" Nation. It is not a done deal. As usual, the elistist are out  of touch with the heartland of America. They will not accept a socialist America.

So, think about one, all that money and power in the hands of, *gasp* conservatives.

By True Grit on 11/03/2009 11:19 am
Sara Smile

Except it’s not just 2-3% who can’t afford health insurance, it’s the millions who can’t even get health insurance which will cover their pre-existing conditions — regardless of the premium. 

How pompous to suggest that Americans live better than 99% of the people who have ever walked this earth — seriously, there are many people around the world that have a high quality of life than most Americans — they may not make more money, but they are not working themselves to death.   Americans work longer hours and more days than most socialist nations.

If anyone is being manipulated at this point in time it is anyone who falls for the right wing conservative gnashing trying to use falsehoods to scare people into staying with the status quo……….like "hey we may have it bad, but we got it better than 99% of the rest of the world"….now there’s a fallacy if there ever was one.

How exactly does the public option give the government control of 48% of all personal wealth in this nation?   Seriously, how exactly would that work?

By Sara Smile on 11/03/2009 11:57 am
True Grit

Ok Sara, here goes (because you asked).

Pre-existing conditions will be a moot point in a government take over over. You will be able to get the public option alright, you just won’t get the care. You must meet the "requirements" of the government board, it’s called rationing. At least with private care, you can pay for it when able to.

Pompous? No, fact. American live better off than most people, (hint; that’s why they swim oceans to get here) The reason that most socialist nations work less is because the governments DON’T HAVE THE MONEY TO PAY THEM. Forced vacations, etc. is because of the lack of funding to PAY EVERYONE.

You keep attempting to tie me to the "right wing conservatives". But of course, I made that clear in an earlier post, but I guess that is better than being called a racist!

FYI; At this time the government controls over 30% of private wealth (banks, auto comp. etc) with the additional 17% + of health care that brings it to 48%. But it does not stop there, cap and tax is next.

This administration has grabbed control of our economy and our personal freedoms along with it.

Time to face the facts, as unbelievable as they may seem.

By True Grit on 11/03/2009 1:33 pm
Sara Smile

That’s the "point", True Grit — make pre-existing conditions a "moot point".   Right now healthcare is rationed by the health insurance companies.   My grandmother has been on Medicare for 30 years now (she’s 95) — never, ever has she been denied any health care by the government.

Wealth is made of assets, Grit………not liabilities……..right now the government controls LIABILITIES tied to the irresponsible activity of bankds, auto co., etc)………that’s not controling wealth.

Specifically what personal freedoms has this administration "grabbed" from you in the last 9+ months?

By Sara Smile on 11/03/2009 3:14 pm
Mary Quite-Contrary

The Federal juggernaut is incapable of doing anything efficiently.  Cash for Clunkers, another inane idea cost the Federal government $24,000 in real money for each $2,500 to $3,500 ‘incentive’ to purchase a new ‘green car.’  They operated at a loss of of over 20k per vehicle!  It would have been cheaper for the Fed to write checks for 24K directly to the dealerships and ‘given’ free cars.  But THIS is what passes for government ‘help.’

The $8,000 tax deduction for first time home buyers converts to $41,000 in costs to the Fed.  This time a $33,000 loss per rebate issued.  INSANITY!!!

Medicare, the Government’s healthcare system will be bankrupt…in less than three years.  What props up Medicare is the supplemental insurance sold BY PRIVATE INSURERS (the ones Madame Speaker Pelosi says make ‘obscene profits’ — when in reality 2 to 3 percent profit!!!).  How about allowing the free markets to try and fix Health Insurance by allowing all companies to sell all policies in all states.  That would cost the Fed ZERO!!! And it might work!

For those who think the government is the answer (remember Social Security will fail soon too) what government program actually has come in on budget; and done what it is purported to do?

Liz, I will end with this, ‘if you think health care is expensive now, wait til it is free.’

By Mary Quite-Contrary on 10/30/2009 3:57 pm
Maggie W

Mary, " ‘if you think health care is expensive now, wait til it is free."  is a reach.  If we don’t allow reform to get a foot hold, there will be no Medicare, Medicaid, ,PPO, HMO, etc.  There will be no "free" anywhere. We all understand health care is big business, but if we do not revamp our current system, we all lose. 

For many years now,  Medicare and Social Security have been doomed to fail in short time, yet they march on.  According to the Congressional Budget Office, because Medicare reimbursements rates can be 30% lower than those of private insurers, a government plan could be powerful and hold down costs considerably, especially in subsidies for low and middle income people.

But we are in uncharted waters here.  The only thing we know for certain is people are going bankrupt daily ; others are sick and dying because they have no recourse.  That is horrific.  As caring people, we should applaud any effort to go forward with the realization that it will not be perfect and all inclusive in short order.  There are many hurdles ahead, but that should not be the sole reason to become a part of the boo-ing section.

There is much shouting about the public option that is not true.  Most Americans are insured through employer; they would not be able to participate at first.  Also, it would not be free.  Those who sign up will pay a premium.  There are those who are already use county hospitals and our ERs ( approximately $ 1000 a visit) who don’t pay a dime.  Hospitals cannot maintain this expense.

I think we have no recourse but to give this a chance to succeed.  We cannot allow  Americans to fall into the " indigent" category simply because they have no health care or care that does not deliver.  Most have worked hard and paid those premiums on time.  We know where we have been; we know where we are now.  It is not working and there is not a single reliable indicator that tells us it will get better without reform.  

By Maggie W on 10/30/2009 5:15 pm
Mary Quite-Contrary

Maggie, the public option (robust or not) is where any program that has been presented falls apart.

Simple math.  If the ‘fine’ for an employer NOT offering Health Care Insurance to their workforce is less than the actual cost of the Health Care they had provided (and this IS validated each time by the math and setting the fine (ie, trigger) lower that makes financial sense for a business to pay a flat tax rate (static cost) than it is to provide employer sponsored Insurance…so what happens.  Private insurers fail.  They are out of business and the only option then become the public option.

Nancy Pelosi (channelling my inner Joe Wilson) lies.  Her plan sets the ‘triggers’ so low that within a decade private insurance would be gone.  Even for the mega wealth like her (but never for her, because she, like every member of the House, the Senate, the Federal Judiciary, the Executive branch have a super, duper, ‘golden’ plan that they will have forever…til they die.)

Isn’t anyone else suspicious of the FACT that the very ‘government employees’ that are dictating this WILL NOT PARTICIPATE IN IT!?!?!?!

By Mary Quite-Contrary on 10/30/2009 5:26 pm