Robert Samuelson on ObamaCare, which he calls "the illusion of reform.":
How often, for example, have you heard the emergency-room argument? The uninsured, it's said, use emergency rooms for primary care. That's expensive and ineffective. Once they're insured, they'll have regular doctors. Care will improve; costs will decline. Everyone wins. Great argument. Unfortunately, it's untrue.
A study by the Robert Wood Johnson Foundation found that the insured accounted for 83 percent of emergency room visits, reflecting their share of the population. After Massachusetts adopted universal insurance, emergency room use remained higher than the national average, reports an Urban Institute study. More than two-fifths of visits represented non-emergencies. Adult respondents to a survey said it was "more convenient" to go to the emergency room or they couldn't "get (a doctor's) appointment as soon as needed." If universal coverage makes appointments harder to get, emergency room use may increase.
President Obama, health care speech to Congress, September 9, 2009: "I am not the first President to take up this cause, but I am determined to be the last."
Speaker Pelosi, yesterday morning: "Once we kick through this door, there'll be more legislation to follow."
The House reportedly is scheduled to vote on a health care bill on Friday or Saturday, but The Washington Examiner quotes Ms. Pelosi as saying yesterday, "We don't have a bill yet."
The long term record of the stock market when filibusters are not available is downright awful. The numbers have improved slightly since I first pointed this out in September 2009, because of last year's sharp rally. However, even including last year's robust rally, during the two periods when the Senate Democrats held a 60 vote majority, the S&P 500 index has gone up in price about 2.6% a year in the 15 years since 1934 when such a majority existed. Through the end of 2009, in the 60 years where the minority could successfully filibuster, the market appreciated 7.6%, an annual difference of 5%. For comparison's sake, the S&P 500 Index has risen from 9.50 at the end of 1934 to 1115.10 at the end of 2009, an overall annual compounding price return of 6.6%.
Here's the top of the Wall Street Journal's market-wrap story from today's paper, about yesterday's market activity: "An analyst upgrade of Wal-Mart Stores and a partial comeback in the financial sector Monday afternoon helped the stock market post a fifth consecutive rise ahead of today's Federal Reserve rate-policy meeting. The Dow Jones Industrial Average traded in the red most of the day before ending with a 17.46-point gain, up 0.2%, at 10642.15, and up 0.8% over its five-day rally."
Here's how the New York Times explained it: "energy shares keep the market lower for much of the day, but a late turnaround in financial shares helped offset those losses. By the end of trading, the Dow Jones industrial average and Standard & Poor's 500-stock index had ventured into positive territory, while the Nasdaq was lower. The day's volatility reflected a tug of war between investors who believe the recovery is plodding forward at a steady pace and those who doubt its durability. Some traders see the lack of a consensus as an opportunity to sell short, analysts said, while longer-term investors have thrown in money in hopes of profiting from a recovery that is slowly gaining steam."
And here is the explanation from the Financial Times: "US stocks closed broadly higher on the session on Monday following Senator Chris Dodd's presentation of the finalised version of his financial regulation reform bill, but fears that the Chinese government would ramp up its monetary tightening efforts following comments by Wen Jiabao, Chinese premier, over the weekend weighed down on sentiment. Moderately better-than-expected US industrial production figures and some positive corporate news provided some further support."
Explaining what makes markets go up or down is often more art than science -- after all, there's no requirement that buy or sell orders come with explanations attached. But it is interesting, at least to me, that none of the three major papers note the 15th-of-the-month effect.
The New York Times's Nobel laureate economist, Paul Krugman, proposes that America threaten to impose a 25% tariff on goods imported from China. As a general rule it's a bad idea to make threats you can't follow through on, and a 25% tax on imports would do enormous harm, both to the American consumers who would have to pay it and to America's relations with our trading partners in the rest of the world. What a way to slam the brakes on an economic recovery. Regular readers know we aren't big fans of the Chinese Communist government, but there must be some way to press China that doesn't require imposing a punitive tax that would come out of the pockets of Americans.
There, I managed to write the entire item without invoking Hawley or Smoot.
The editorial page editor of the Washington Post, Fred Hiatt, has "a theory about why President Obama is having a tough political time right now: He doesn't seem all that happy being president." The whole Hiatt column is worth a read, even if you don't buy the theory.
"A substantial part of the inequality literature in the United States has focused on yearly levels and trends in income and its distribution over time. Recent findings in that literature show that median income appears to be stagnating with income growth primarily coming at higher income levels. But the value of health insurance is an important and growing source of economic well being for American households that is missed by focusing solely on income. ...Ignoring the value of health insurance coverage will substantially understate the level of economic well being of Americans and its upward trend and overstate the level of inequality and its upward trend." So says a new working paper from the National Bureau of Economic Research.
The paper's title is "Measuring the Impact of Health Insurance on Levels and Trends in Inequality," and the authors are Richard Burkhauser and Kosali Simon, both of Cornell University.
The British newspaper the Guardian gives Pimco bond fund co-founder Bill Gross a forum:
"It was a terrible display of excess and greed. Wall Street has had it too good for decades, it's time for Main Street to go on the ascendancy."
Markets will be downsized by regulation, even if governments are slow in applying new laws. "The sun is not setting on Wall Street – there will always be sunshine on financiers – but high noon is in the past. It's time for ordinary people to benefit."
Governments should raise taxes on bankers, who "don't deserve all this", Gross says, including himself. "I don't need so much," he says. Economies such as the UK and the US should look to making "things, rather than paper" to prosper.
FutureOfCapitalism.com reaction: The "excess and greed" on display wasn't just on Wall Street. Plenty of ordinary Americans were living in houses that maybe were too big and too expensive for them when they would have been better off renting or owning something smaller and cheaper. Plenty of Main Street mortgage brokers and real estate agents were making money on the way up.
If Mr. Gross feels he doesn't need so much, nothing is stopping him from writing a check to the U.S. Treasury or to a non-profit organization to give the money away. But like many left-wingers, he wants to impose his own personal preference on others in his profession, by raising their taxes -- even though he's unwilling to follow through on his personal convictions by voluntarily giving away that money he says is too much.
Meanwhile, Mr. Gross was all over CNBC back in 2008 urging the government to come in and back Fannie Mae bonds, which he held plenty of in his Pimco bond funds. We noted back in August that the Federal government had put at least $46 billion into backing those bonds, which was an outcome good enough for Pimco that Mr. Gross could afford to buy an 11,000 square foot, nine bedroom, 12 bathroom house for $23 million as a tear down. The Guardian article doesn't mention the house, preferring to depict Mr. Gross as a man of the people: "Gross's idea of a fun weekend is to have a $12 dinner with Sue, his wife of 25 years, in the local El Torito Mexican chain."
Now Mr. Gross wants the government to raise his taxes. How about this, Mr. Gross: the government leaves your tax rate alone, but you give back your share of the $46 billion that the taxpayers put into propping up your Fannie Mae debt? And you also give back the value of the equity in Fannie Mae and in the rest of the financial system that was destroyed by the confidence-sapping effects of the seizure that you cheered on?
Senator Scott Brown of Massachusetts on ObamaCare, via YouTube video: "Somehow, the greater the public opposition to the health care bill, the more determined they seem to force it on us anyway. Their attitude shows Washington at its very worst – the presumption that they know best, and they're going to get their way whether the American people like it or not." Quote via Politico's Mike Allen.
"Is Your Breakfast Giving You Cancer?" is the attention-grabbing headline in the April issue of Prevention magazine, which reports:
For more than a decade, the government has required enriched grains -- most notably white flour and white rice--to be fortified with folic acid, the synthetic form of the B vitamin folate. Many food manufacturers take it further, giving breakfast cereals, nutrition bars, and beverages a folic acid boost too. The extra nutrient isn't meant for you, though -- it's added to protect fetuses from developing rare but tragic birth defects. The fortification effort appears successful: Since 1998, the number of these birth defects dropped by about 19%. But for women past the years of having children, as well as for men of any age, unnatural dosages of this nutrient don't seem to be helpful--and may even be harmful.
The news Thursday and Friday of the closure by government authorities of two New York City banks -- LibertyPointe Bank and Park Avenue Bank -- got me thinking about the effect that the existence of deposit insurance has on how banks compete for customers.
Back in 2007, The Brooklyn Paper wrote an article describing LibertyPointe Bank as "A bank for Jews, by Jews." Said the article, "In Brooklyn's Orthodox Jewish community, the bank has its appeal. Zvi Bar-Levav, an Ocean Parkway resident and the owner of a software company, said he's drawn to the idea of banking with people he knows."
The article went on to quote "Meyer Eichler, Liberty Pointe Bank's vice-chairman and a prominent merchant of Judaica products," as saying that the only thing that differentiates banks these days is customer service. "In the end of the day, finance is finance," Mr. Eichler is quoted as saying.
A reader sends along a campaign fundraising plea from Rep. Barney Frank, chairman of the House Financial Services Committee:
In the coming months, I will be the target of a national right-wing fund drive. The right will use this money to lie, distort and misrepresent.
Here is an example. Last fall, John Fund, a member of the extremely conservative Wall Street Journal editorial board, claimed that I supported legislation on "universal voter registration" which he said was part of a scheme to win elections fraudulently. This was a lie – no such bill even exists – but Rush Limbaugh, Glenn Beck, and others repeated this fiction to an audience of tens of millions. ...
Jack Shafer, employed by the Washington Post Company's Slate, calls out the Washington Post Company's Washington Post newspaper for what Mr. Shafer says is a news story that "cheerleads for a tax increase." The Post chalks up what it portrays as the Maryland legislature's stubborn and hard-hearted refusal to raise the alcohol tax to the power of the liquor lobby:
This week, advocates for the poor and mentally ill have made hours-long pleas to powerful legislative committees in Annapolis, contending that raising alcohol taxes by a dime per serving would restore much-needed funding for health-care programs for the poor, services for the developmentally disabled, and drug and alcohol dependency programs hit hard by budget cuts.
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Arthur Sulzberger Jr.'s overall compensation as chairman of the New York Times Company "more than doubled to $6 million in 2009," reports Dow Jones Newswires. That during a year during which many Times reporters and editors, who make about $100,000 a year, were subjected to a 5% pay cut, and reporters at the Globe, who make less than those at the Times, took a 5.9% pay cut. Something to remember the next time you read one of those New York Times editorials piously denouncing income inequality.
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