Relevant and even prescient commentary on news, politics and the economy.

Conservative Historical Awareness: Does ‘Falange’ Violate Godwin’s Law?

by Bruce Webb

I ask people to examine the following labels and concepts:
Arbitrary Executive
Permanent Majority
Homeland Security
New American Century

Did any of these labels or the concepts behind them come from the Left? Well no and we could easily assign names to people associated with each, for example we could name in the same order Addington/Yoo, Norquist/Rove, Bush, Cheney/Rumsfeld. Each man or pair of men openly and publicly associated themselves with one or more or generally all of these concepts.

Lets add some more terms:
American Exceptionalism
Christian Nation
Traditional Family

Are these in origin from the Left? Are there very many American Conservatives out there that wouldn’t endorse all three concepts? I think not.

If we examined only post-war history what country would (with its own changes on the tune) this combination best resemble? If you said ‘Spain under Franco’ you would have a winner. To which some would add ‘Chile under Pinochet’. There is a word for regimes that combine their version of all seven concepts. A word that by convention we cannot use because it is attached to a great deal of other historical baggage. Which doesn’t make it less historically correct.

Conservatism has always been wary of democracy, in fact 19th century conservatism in Britain and the United States was in large part by a determined effort to control democracy by retaining strict control over the franchise to vote. This effort went hand in hand with an attempt to retain control over the acceptable shape of the family and especially over the sexual conduct of family members.

While Conservatives by and large are fully aware of what they see as the dangers of too much license in speech, conduct and their expressions in things like art and music, they seem less aware of the dangers of slipping back into something that resembles Franco’s Spain. If it helps to reduce the temperature we can simply say that from the Left Bush/Cheneyism could not easily be distinguished from Falangism. (http://en.wikipedia.org/wiki/Falange)

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Trends in home values: becoming murky

by Rebecca Wilder

Actually, murky is something of a good thing when referring to business cycle dynamics. It usually means that a bottom is forming.

In some sense, the key to recovery is the stabilization of home values. If home values would just “stop” declining – I understand that there is a market mechanism going on here that is pushing home values to (or even below) an equilibrium – then the banking system can get on with its solvency issues. (Naked Capitalism has a nice piece today on banks not foreclosing in order to avoid further writedowns.) Let’s see what’s going on in the US from the perspective of several indicators.

The S&P/Case-Shiller and the Federal Housing Finance Agency (FHFA) reported their quarterly house price indexes today. Interestingly enough, the two (Q2 2009)reports diverge.

The S&P/Case-Shiller marked a quarterly gain of about 1.4%, while the FHFA reported a quarterly loss of about 0.7%. Is this the start of an interesting story on the downside? On the upside, the Case-Shiller index showed a much larger bubble in home values relative to imputed rents. Will the FHFA show a deeper trough than the Case-Shiller?

The chart illustrates the price to imputed rent ratio for the two measures of national real estate values. This can be thought as the tangible asset equivalent to a corporate stock price to earnings, or price to dividend, ratio. It measures the value relative to the flow of ownership gains, as represented by the imputed rent series measured by the BLS (owner occupied rent in the CPI table).

It is unlikely that the quarterly FHFA index will depart from the positive trend for too much longer (if indeed, it has stabilized), as the monthly index is showing more consistent gains over the last three months.

This is kind of interesting – the Case-Shiller, which includes foreclosures, is likely catching the upswing in foreclosure demand, while the FHFA is grabbing more of the downward trend in the “average” mortgage. But the LoanPerformance home price index likewise includes subprime loans and foreclosures, and it is showing some life (see chart below). Below is the 3-month annualized growth rate over the last two years for a cross-section of home value indicators. (In most cases, the monthly indexes are a subset of the national index.)

One indicator to note is the LoanPerformance house price index (LPHPI), which is used by the Fed to estimate the value of real estate in the flow of funds accounts, and is growing at a 9.1% annualized rate. States seeing at least a 4% 3-month gain include Ohio, Wisconsin, New York, Virginia, South Carolina, Georgia.

Likewise, the median existing home price and new home values are reported. These series are not seasonally adjusted; and therefore, are not extremely helpful in this context. But the 3-month existing home values remain in positive territory, although at a slowing rate of improvement. It should be noted that the median home prices is a cruder measure of home values – the Case Shiller and FHFA were developed in order to overcome the limitations of thinking in terms of the “median”.

So it looks like there is a chance that home values stabilize before 2010. We will see, as a 1 quarter increase by the Case Shiller index, although positive, is far from a trend.

Rebecca Wilder

(Edited slightly for readability….rdan)

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Nazis

rdan

Mudflats has the story of her dad to tell. My own father was navy, in the Pacific, and had a different story to tell. I have nothing to add.

…When he was 20 years old, he’d been taken prisoner by the Germans at the Battle of the Bulge, was marched for miles, imprisoned, and starved. Like many men of his generation, veterans of World War II, he didn’t talk about it much. He held his memories close to his chest. If he talked to anyone about them, I didn’t know. It was only many years after his service and just before his death that he shared some of those memories with me.

Starvation does strange things to people. He told me that after a while in the camp, he had the same recurring dream, every night – a stack of pancakes topped with two fried eggs, sunny-side up. He’d dream that dream over and over, a still frame, a picture of a breakfast that never came. He told me that his fellow prisoners got so hungry that once they had killed and eaten a cat that had strayed into the camp. You don’t forget a story like that.

(The rest of the story is below the fold)

Or the story of the man in the camp, who snapped. In peace time, we’d have called him a boy. Suddenly and without warning in the middle of the day, out in the yard, his mind went. He ran for the fence in a desperate effort to escape. There was nowhere to go, and in broad daylight with armed guards everywhere, he didn’t stand a chance. My father, who was quick to pick up languages, had learned some German. “Don’t shoot! He’s crazy! He’s lost his mind! He doesn’t know what he’s doing!” my father called out to the guards as he ran out in the yard waving his arms. The man kept running for the fence, and he climbed, and the guards didn’t shoot. They waited until he reached the top. And then they shot him. They left him there for three days as a warning to anyone else who might have been thinking about escape.

Any survivor of World War II has stories. Millions were never able to tell them. Their lives ended on battlefields, and in gas chambers, at the hands of the Nazis. My dad was able to tell me some of his experiences, but most of those memories died with him, like they died with many vets and victims of the war. I didn’t even know he’d received a Purple Heart until after his death. But he survived. He survived to marry the girl he left at home, to buy a house, to get a college degree, to start his own company, and to raise a family of five children.

I asked my dad if he ever got his stack of pancakes with the fried eggs on top. I imagined it being his first meal after the Russians had liberated the camp. The Germans had heard that the Russians were coming, and they left quickly in the night. The prisoners hadn’t known what was happening until two days later when the Russian army came and let them out, confused and near death. No, he told me, he never did have the pancakes and eggs. It took months in the hospital to build his system back up to where he could eat normally. He began at 5′11″ weighing less than 100 pounds, and started with an IV, then a liquid diet, then cream of wheat, and finally solids. A fellow prisoner, he said, on his way from the camp to the hospital in France had managed to get a hold of a box of donuts and had gorged himself. He died a free man, but still a victim. By the time my dad was able to eat that stack of pancakes and eggs, the desire had passed.

I remember as a child I was not allowed to watch Hogan’s Heroes. It wasn’t a joke in my house. There was nothing funny about prisoner of war camps. There were no handsome well-fed prisoners with secret tunnels under their bunks, and pirate radio equipment who always managed to play their captors for the fool. There were frightened, emaciated young men whose minds and bodies were broken an ocean away from home, who were shot on fences , and who ate cats, and watched their friends die. There was nothing to laugh about. Those were Nazis.

I am tired of people comparing Obama to Hitler. I am tired of seeing signs with swastikas and nazi symbols at health care rallies. I am tired of people saying that a health care plan designed to uplift millions of Americans to give them dignity, and choice and the ability to care for their families, is like Naziism. I am tired of Rush Limbaugh.

As time passes, and as the greatest generation becomes a memory, passing into history one soul at a time, it is up to the generations that follow them to keep “Hitler” and “Nazi” out of the clutches of those who would make them political buzzwords for people they don’t like, or policies they don’t understand. Those words remind us of the worst that people can be. There is nothing horrible about Germans in particular that caused them to do these things. This is humanity’s dark potential, and something that we all need to remember, whether we were there or not, or whether our family was affected or not, because this is what people can do to each other. To strip those words of their power and meaning in order to create political fear for self-gain is inexcusable and needs to be confronted and refuted whenever it arises, by all of us, whether we support the current health care bill and the current president or not.

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Somewhere Peter G. Peterson is weeping.

by Bruce Webb

People who follow the issues around what is known as the Entitlements Crisis are more than familiar with Peter G. Peterson a co-founder and financial sponsor of the Concord Coalition and a man who has devoted a billion dollars of his own money to endow the Peter G Peterson Foundation. The PGP Foundations’s main goal is to roll back not just the Great Society but also the New Deal by convincing America that even in the short run programs like Social Security and Medicare are bankrupting future generations. A good introduction to Pete G P and his works can be found in this cover story in the Nation from last February Looting Social Security

PGP is alive and as far as I know well for a man of his age (83) which is a good thing because if he was in his grave he would be spinning fast enough to be an energy source for a medium sized city. The Republican Party which has been since its inception firmly on message against Medicare and with the PGP agenda has suddenly become Gramma’s biggest defender. This started first with Sarah Palin’s introduction of ‘death panels’ into the discussion. Her partner in clownery, RNC Head Michael Steele decided to double down with this WaPo OpEd Protecting Our Seniors: GOP Principles for Health Care that reads in part:

Republicans want reform that should, first, do no harm, especially to our seniors. That is why Republicans support a Seniors’ Health Care Bill of Rights, which we are introducing today, to ensure that our greatest generation will receive access to quality health care. We also believe that any health-care reform should be fully paid for, but not funded on the backs of our nation’s senior citizens.

The Republican Party’s contract with seniors includes tenets that Americans, regardless of political party, should support. First, we need to protect Medicare and not cut it in the name of “health-insurance reform.” As the president frequently, and correctly, points out, Medicare will go deep into the red in less than a decade. But he and congressional Democrats are planning to raid, not aid, Medicare by cutting $500 billion from the program to fund his health-care experiment. The president also plans to cut hospital payments and Medicare Advantage, all of which will mean fewer treatment options for seniors. These types of “reforms” don’t make sense for the future of an already troubled federal program or for the services it provides that millions of Americans count on.

Somewhere Peterson’s minions Robert Bixby of Concord and former GAO Controller David Walker (now CEO of the PGP Foundation) are sitting pole-axed. Their message was pretty simple, in large part because it is mostly correct, this country cannot afford for Medicare and Medicaid costs to accelerate as they have. Their solution which involves slashing Medicare while not doing much for the rest of health care is not in my view correct, the solution has to be more broad-based. But that portion of Steele’s op-ed bolded by me is in effect the anti-Peterson message. He and his have spent decades trying to drain the juice out of the Third Rail of American Politics and now Steele with his Don’t Tread on Senior Citizens flag is serving to amp up the current in that Rail.

Heck of a job Mikey! Don’t expect your stipend check from the PGP Foundation this week. Because you went WAY off message here. But Gramma sends hugs and kisses.

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Debt fueled consumption

rdan

Rebecca Wilder will begin writing as a Bear soon. Meanwhile, she maintains her own blog NEWSNECONOMICS. Here is an example of an Aug. 19,2009 post, which I am cross posting today, and a follow up post here. There were several questions raised, but I think it an interesting notion. I own an old Malibu and not a Porsche, and have watched my premiums and out of pocket health expenses skyrocket this decade. I knew the money went somewhere! Here is the cross post:

Today I plan to rant just a bit about consumption because I was reading Yves Smith’s article today, and she referred to “debt-fueled consumption” – the now pejorative phrase that just rolls off the tongue. She says:

“no where does the article [referenced WSJ article in her post on the consumption share] acknowledge that the consumption level was unsustainable and debt fueled.”
And this is where I get just slightly irked, because it seems to me that the phrase “debt-fueled consumption” strikes the following chord: every American household was loading up on home equity debt just to buy big ticket items like Hummers and large sofa sets with cup-holders galore from Jordan’s Furniture (a discount furniture shop in the Boston area – generically, every city has one).”

I am sure that Yves Smith knows this, but the debt-fueled consumption was more likely paying surging health care bills than buying cute kitchenettes.
(charts are fixed…update rdan)

Myth 1: The years of debt-fueled consumption went into goods spending, jumping the consumption share of GDP to an excess of 70%.


Update: large edition of graph here.
Reality: The goods share of total consumption has been falling quite dramatically, while the service component surged. Therefore, it is more likely that the debt fueled consumption was going predominantly into the service component (paying service bills).

In Q2 2009, 25% of service spending went to health care – outpatient services (physician, drugs, dentist) or hospital and nursing home services – and 29% of service spending went to housing and utilities – rent, water, electricity, and trash. As such, over 50% of service consumption is more likely to remain stable, even rise faster, with the Boomers out there.

And as for the speculation that workers are postponing retirement due the drop-off in wealth, and consumption will be meager into the medium term, I simply don’t buy it. If anything, the aging population is going to fuel recovery – no matter when they choose to retire. Service sector consumption growth – much of it based on health care consumption – will simply become a larger share of GDP growth (cutting out autos, perhaps), and pick up some of the slack.

And here’s another thing. Myth 2: durables consumption – i.e., autos and furniture – are important contributors to the initial stages of the recovery. It helps, but service consumption is the biggie.

Update: enlarged chart is here

The chart lists the average contribution each GDP component during the initial year of recovery spanning the 1950-2007 (nine recoveries in total).

Reality: The average growth accumulated during the initial stages of recovery (1-yr following the recession’s end) following the last nine recessions is a remarkable 6.43% (consensus forecast for growth in 2010 is currently 2.3%). Only 0.47% of that came from durable goods. A huge 1.67% of that stemmed from the service component of consumption (again, health care and housing).

And as long as service spending rebounds, so too will the economy – even without a big pickup in autos. Inventories are almost a foregone conclusion, the residential construction sector is bound to pick up – 500-600k units is simply unsustainable for a US population that is growing at roughly 1% a year, and growth rates on such a small base can be large.

And here’s another link to jobs that has not been incorporated to many forecasts – growth in jobs means new health care insurance, means added spending on health care.

I could go on, but I won’t.

Rebecca Wilder

Chart from follow up here.

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Five Myths about health care

rdan

5 myths about health care round the world by By T.R. Reid, Commentary, Washington Post (hat tip Mark Thoma)

…I’ve traveled the world … to see how other developed democracies provide health care. Instead of dismissing these models as “socialist,” we could adapt their solutions to fix our problems. To do that, we first have to dispel a few myths about health care abroad:

1. It’s all socialized medicine out there. Not so. … In some ways, health care is less “socialized” overseas than in the United States. Almost all Americans sign up for government insurance (Medicare) at age 65. In Germany, Switzerland and the Netherlands, seniors stick with private insurance plans for life. Meanwhile, the U.S. Department of Veterans Affairs is one of the planet’s purest examples of government-run health care….
(the rest of the article is below the fold)

2. Overseas, care is rationed through limited choices or long lines. Generally, no. Germans can sign up for any of the nation’s 200 private health insurance plans — a broader choice than any American has. … The Swiss, too, can choose any insurance plan in the country.

In France and Japan, you … can go to any doctor, any hospital, any traditional healer. There are no U.S.-style limits such as “in-network” lists of doctors or “pre-authorization” for surgery. You pick any doctor, you get treatment — and insurance has to pay. …

As for those notorious waiting lists, some countries are indeed plagued by them. Canada makes patients wait weeks or months for nonemergency care, as a way to keep costs down. But … many nations — Germany, Britain, Austria — outperform the United States on measures such as waiting times for appointments and for elective surgeries. In Japan, waiting times are so short that most patients don’t bother to make an appointment. …

3. Foreign health-care systems are inefficient, bloated bureaucracies. Much less so than here. …

4. Cost controls stifle innovation. False. The United States is home to groundbreaking medical research, but so are other countries… Any American who’s had a hip or knee replacement is standing on French innovation. … Many of the wonder drugs promoted endlessly on American television, including Viagra, come from British, Swiss or Japanese labs. Overseas, strict cost controls actually drive innovation. …

5. Health insurance has to be cruel. Not really. American health insurance companies routinely reject applicants with a “preexisting condition”… They employ armies of adjusters to deny claims. If a customer … faces big medical bills, the insurer’s “rescission department” digs through the records looking for grounds to cancel the policy… Foreign health insurance companies, in contrast, must accept all applicants, and they can’t cancel as long as you pay your premiums. …

In many ways, foreign health-care models are not really “foreign” to America, because our … system uses elements of all of them. For Native Americans or veterans, we’re Britain: The government provides health care, funding it through general taxes, and patients get no bills. For people who get insurance through their jobs, we’re Germany: Premiums are split between workers and employers, and private insurance plans pay private doctors and hospitals. For people over 65, we’re Canada: Everyone pays premiums for an insurance plan run by the government, and the public plan pays private doctors and hospitals according to a set fee schedule. And for the tens of millions without insurance coverage, we’re Burundi or Burma: In the world’s poor nations, sick people pay out of pocket for medical care…

This fragmentation is another reason that we spend more than anybody else and still leave millions without coverage. All the other developed countries have settled on one model for health-care delivery and finance; we’ve blended them all into a costly, confusing bureaucratic mess.

Which, in turn, punctures the most persistent myth of all: that America has “the finest health care” in the world. We don’t. In terms of results, almost all advanced countries have better national health statistics than the United States… In terms of finance, we force 700,000 Americans into bankruptcy each year because of medical bills. In France, the number of medical bankruptcies is zero. Britain: zero. Japan: zero. Germany: zero.

Given our remarkable medical assets — the best-educated doctors and nurses, the most advanced hospitals, world-class research — the United States … should be the best in the world. To get there, though, we have to be willing to learn some lessons about health-care … from the other industrialized democracies.

There are, of course, groups that have a strong interest in perpetuating these myths as part of their attempt to block health care reform.

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Why are we still paying Insurance Companies for HealthCare?

by Bruce Webb

The above was the title to a blog post on TPM whose body read as follows:

if 77% of americans want an alternative to paying insurance companies for medical care,

why is more than 77% of the televised debate time being given to industry mouthpieces that oppose it, and the screaming stooges that dont understand it?

i have yet to see a convincing argument for having insurance companies in the healthcare equation. the costs to our economy and the public health are now well known. so what is their value added?

My answer there is below the fold here.

i have yet to see a convincing argument for having insurance companies in the healthcare equation.

I don’t know about convincing but the argument is simple enough. It is drawn from F. Hayek and can be seen in this Mises.org review of his 1944 Book The Road to Serfdom

What F.A. Hayek saw, and what most all his contemporaries missed, was that every step away from the free market and toward government planning represented a compromise of human freedom generally and a step toward a form of dictatorship–and this is true in all times and places. He demonstrated this against every claim that government control was really only a means of increasing social well-being. Hayek said that government planning would make society less livable, more brutal, more despotic. Socialism in all its forms is contrary to freedom.

Once you adopt this argument, which is really a faith-based belief system, every demonstration that a government program would deliver a service in a better more cost efficient way is just in the end a trick to induce you to take just one more step down the Road to Serfdom. That private insurance systems do not add value is no reason not to have them, they serve a conservative purpose all of their own.
Hayek is said to have abandoned the strong form of this argument by the sixties, the proof of the success of the Social Democracies of post-war Austria and the Scandinavian countries made the Socialism=Gulag equation obsolete. But his U.S. followers are still trapped in that worldview, something that is assisted by their near complete ignorance about conditions outside U.S. borders.

Insurance companies represent the American Way. And only a DFH commie intent on leading us down the Road to Serfdom will tell you any different. Pointing to examples where governmental planning and intervention worked, say Hoover Dam, the Interstate Highway System, and Social Security only hardens the resistance. Why believe what your eyes see when you know the Devil is out and about doing his works?

In fact you can best see this in a religious context. It doesn’t take any time at all to point out the deep inconsistencies between the four accounts of Jesus’ Passion in Matthew, Mark, Luke, and John and between those of the conventional understanding as seen in Mel Gibson’s version. The differences are not just those of perspective, the stories are totally different. None of that matters to a true believer, he knows what he knows and he does not need some snotty nosed atheist doing his reading for him.

The Health Care battle is no different, the varioius High Priests and Priestesses have given the faithful the Word and they don’t want to hear any heathenish babble about “value added”.

Capitalism=Freedom. So saith Rand, Hayek and Friedman. And if that Credo is good enough for Limbaugh Palin and Gingrich it is good enough for anyone.

Only a fool gets angry and frustrated that he can’t convert a Fundamentalist, instead you just have to work around them. As here.
___________________________
I have made this argument before, in fact as recently as yesterday in an exchange on an AB thread.

Free market fundamentalism is a faith based religion. This is not to say that its theorists including Hayek and Friedmen were not brilliant men. But you can say the same and more about some of the greats who built the intellectual superstructure that underpins Catholicism: St. Augustine, St. Anselm, St. Thomas Aquinas were in their various eras intellectual giants fully equal to such figures as Aristotle and Newton and Einstein. It is just that where the latter three were interested in breaking boundaries the first three were intent on fortifying the region between the barriers. Barrier breakers are by nature open to challenge, that is what they themselves are doing. Fortifiers take challenges into account but only to build the defense even stronger.

St. Anselm presented us with one of the earliest Ontological Proof of the Existence of God. But it was not like he needed it for himself. There is a reason the call Freshwater Economics ‘Orthodox’ and it is not just because it established its position first. Questions like “Why private insurance?” are more akin to challenges to the catechism.

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Cost Controls and the Public Option: Why Losing the PO Would be Terrible-but Not Fatal

by Bruce Webb

The part of the blogosphere that caters to the Progressive Left is hardening its position around the Public Option, it has become a non-negotiable point, the line in the sand, the “are you with us? or against us?” line. And I don’t have any problems with that position as a matter of strategy and tactics, the Public Option is much better policy than any proposal that would leave it out, and I don’t think it has the political risks that the appeasers believe it does. So ‘Fight, Fight, Fight for Old PO!’ can be our fight song.

But this does not mean that everyone who argues that life would be worth living even without a Public Option is some treasonous Quisling intent on selling us all out to the insurance companies, as the risk of introducting French into the discussion I suggest the situation is more nuanced than that.

Ultimately I don’t think we will ever get overall cost-controls in Health Care in place without the PO because only it allows you to attack both of the cost centers, that which comes from the providers and that which comes from the insurers. Now these two sectors of health care are both natural allies and mortal enemies. They are allies in that insurers would be glad to sell coverage to everyone, and providers would be happy to charge for giving care to everyone, meaning each has a lot to gain from mandated insurance coverage. But at that point their interests diverge, under current business models doctors and hospitals gain most when they can supply ever more and ever more expensive treatment, while the financial incentives of insurance companies work in exactly the opposite direction.

Which largely explains the current state of confusion with insurers and providers sometimes pulling in unison, as often in opposition and sometimes at cross purposes. What the Public Option provides is a place to pull from against the providers or from the insurers, and from time to time with one or the other.

Ultimately the Public Option will be bargaining with providers either directly or by accepting some sort of industry wide average itself decided by a bargaining process. too much is at stake to simply allow providers to declare a unilateral pricing monopoly. however large or small its market share may get and no matter how much latitude it is given to bargain as an independent agent the PO will add some pull against providers. On the other hand depending on that latitude it will equally have a smaller or greater pull against the other insurers on the basis of price of insurance.

So depending on how much freedom it is given the Public Option has the potential to help control cost growth in both sectors that of providing health care and that of insuring that families can pay for that care as needed. Without it the situation is a lot more dicey. But as my title suggests not fatal. And the reason why is something I blogged back on July 28th under the title HR3200 Sed 116: Golden Bullet? or Smoking Gun?

In the bluntest terms Sec 116 imposes profit controls on the insurance companies and would do so even in the absence of the Public Option. Its existence explains why Republican leadership are signalling, nay shouting, that they will not accept Health Care reform period even if reformers surrendered the Public Option, even if they abandoned the very weak beer that is Co-Ops. The Left by and large is convinced that giving up the PO simply hands the keys to the castle over to the insurance companies with the rest of us tied up in chains at their mercy, that they can just merrily raise rates at their whim. Well no and that control is hidden in plain view in the first two sentences of the Section.

SEC. 116. ENSURING VALUE AND LOWER PREMIUMS.

(a) IN GENERAL.—A qualified health benefits plan shall meet a medical loss ratio as defined by the Commissioner. For any plan year in which the qualified health benefits plan does not meet such medical loss ratio, QHBP offering entity shall provide in a manner specified by the Commissioner for rebates to enrollees of payment sufficient to meet such loss ratio.

(b) BUILDING ON INTERIM RULES.—In implementing subsection (a), the Commissioner shall build on the definition and methodology developed by the Secretary of Health and Human Services under the amendments made by section 161 for determining how to calculate the medical loss ratio. Such methodology shall be set at the highest level medical loss ratio possible that is designed to ensure adequate participation by QHBP offering entities, competition in the health insurance market in and out of the Health Insurance Exchange, and value for consumers so that their premiums are used for services.

Insurance companies and their allies/lackies in Congress insist that the House Bill is simply designed to force private health care insurers out of business. Well this claim is not the truth, the whole truth and nothing but the truth, but there is no question that it has some truthiness floating around it. Sec 116 guts the old business model which was based on insuring care to people who may not ever need it and denying it to those who had a proven need for it. Instead under this rule no care provision means no profits instead you have to rebate them to the insurees.

The CBO analysis of HR3200 that showed that it would only cover 10 million people by 2019 implicitly assumed that insurance companies would play fair and just go along with these profit controls. I am not so convinced on this point, and figure that many companies will just abandon those market components that become this profit constrained. Which is why we will need a Public Option to pick up those abandoned market sectors. And sooner is better than later. But ultimately a bill WITHOUT a PO but WITH Sec 116 and the other protections of Sec 111-115 puts us on a path that starts by controlling profits.

So by all means “Fight, fight, fight for Old PO!”, that doesn’t mean that people who suggest losing a battle means losing the war are traitors to their Alma Mater.

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The Maine Chance

Robert Waldmann

This seems important to me.


Small business representatives told [Senator] Snowe [R-Miane] that they were opposed to any mandates that came without a public option and that such an alternative was desperately needed for small business, which can’t afford the rising cost of health insurance for their employees.

In less good news, Snowe is still enthusiastic about the worst tax ever

“She added that she was considering requiring business with more than 50 employees to pay 100 percent of the cost of subsidies for their employees’ health insurance.”

Right can’t let people who need the work compete for jobs with people who don’t.

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