I have an opinion about.....

Santa Claus (The Economic Stimulus Package)

Yes, Virginia, there is a Santa Claus. What? The deuce you say! 

You might as well believe in Santa Claus if you think that the recently passed economic stimulus bill was exactly what newly minted President Barack Obama really wanted.

Nobody on Capitol Hill gets exactly what they want, not not even a president with a House majority. Stop reading here if you understand what I’m talking about. Keep reading if you have to be reminded how government works.

Every candidate makes promises. The promises he makes are based partly on what he wants, partly what his party wants, and partly what he thinks you want that will encourage you to vote for him. He makes the promises knowing that he won’t be able to keep all his promises for a variety of reasons. Nevertheless, he or she comes into office determined to make a Herculean and public effort to keep a major, timely campaign promise as soon as presidential feet hit the oval office carpet.

President Obama had very timely and important goals: reform the healthcare system, get our troops out of the middle east, and save the economy. No? Well he promised to remove our troops from the Middle East on a shorter timetable than President Bush, see that every American is covered by some kind of insurance, and do something to stimulate the economy. Close?

All these goals and every plan are organic. That is to say, there are so many people who are expected to put their toes and hands in the pot on these issues, that a President cannot possibly be expected to get exactly what he wants in fulfilling any campaign promise, short of having a majority of his own party in the house AND Senate, and no political enemies there.

I have read some very apt criticisms of the new stimulus plan. They make sense, the criticisms, but they miss the mark in criticizing the President as though he alone fashioned the legislation. This is how it really works: President Obama and his advisors -- political and economic -- fashion a bill that most certainly contains some provisions that his opposition WILL NOT vote for. Since the House of Representatives is the legislative body that deals with budget matters for the nation, the bill is presented to the appropriate House committee for consideration (House Appropriations Committee).

Often with an important budget bill, there will be a joint House-Senate Committee to consider the bill. During this process, the bill is massaged, amended, pork is added in, taken out, other pork is added, taken out, more important pork……

If President Obama (and his advisors) were smart ENOUGH, then some of the bill’s provisions that the opposition didn’t want, were the provisions that the President added for the purpose of having compromises to make, so that he could pass some provisions that he wanted. Huh?

If he played the politics really well, he didn’t lose the core of the bill he intended to pass, and did not lose essential provisions. And he had to accept some pork.

Pork is a way of life. It’s in there.

So when the political mavens criticize any legislation sponsored by a sitting President, remember that the bill that they authored is usually not the bill that passes. And why.

It's just my opinion.

Yvette Carmon Davis, 02/09 

http://en.wikipedia.org/wiki/Pork_barrel_spending


HEALTH CARE REFORM

It's difficult to listen to people talk about health care reform. Health care reform is another one of those polarizing issues that have beset us of late, regarding the economic health of this nation. I don't criticize the need for dialog. After all, this country is built on the free exchange of ideas. In the climate where free exchange takes place, we get good ideas.

Well, good ideas survive and bad ideas are exposed for what they are. Everybody wants to go to heaven, but nobody wants to die. Everybody agrees that health care reform needs to take place, but nobody wants to bite the financial bullet that will make it take place. That's bad.

What's good is looking at this issue in a new way that will help us pay for more health coverage, for more Americans.

My pet peeve is that we pay hospitals and doctors whatever they ask for, without looking behind the prices they charge. With regard to most other services that the federal and state governments pay for, there is competitive bidding. If there is sole source procurement, it is because of the unique nature of the service or goods.

There may have been a time that medical services were so unique that treating payments made to doctors and hospitals as if they were sole source procurements was a fine idea. But now--except for cutting-edge and experimental treatments and procedures--medical treatment isn't all that unique. In fact, medical treatment is quite standardized, and there are usual and customary practices among physicians and hospitals. (We won't talk about whether that violates any anti-trust laws.)

So, we're trying to lower the cost of medical treatment and care, aren't we? Don't we want to use the money we've got to get more services? That's better than having the reformed health care system cost so much more that we need to raise taxes, right?

Here's an idea: require hospitals, clinics and medical organizations to justify the price of their services. Tell the federal government and the state governments with Medicaid state plans, that they cannot pay for medical services, unless they approve the profit margin.

I can hear the screams. This is a free market economy. We MUST not touch the profit margin. But..we've done that already. We did that when we bailed out the failing companies who caused us to be in this economic quagmire. Some of  them had a negative margin, red ink flowing like blood, until the federal government bailed them out, twice!

Recently, a high-profile bank announced a profit for it's most recent quarter. It received stimulus money, and now has money left over after it has paid for all of its operation necessities. That's a profit and we like it and it makes the economy grow. We want hospitals and others providing medical services to be profitable. We want them to survive because we need them. But we don't want them to gouge us at a time that more and more people are under served.

Let's start in the right place with the medical industry. Let's not let the unscrupulous and just plain greedy swallow up what is a great idea. Require the hospitals to tell us how much that cutting-edge diagnostic equipment costs them, so that the states can pay for diagnostic procedures for patients at a reasonable rate -- not overpay, not underpay -- reasonable pay. Require clinics to reveal their overhead, so the state plan can establish a reasonable reimbursement rate for each patient.

This idea is not new or unprecedented. Nursing homes receiving Medicaid reimbursement are now scrutinized in many states, including Ohio. 

And it's not socialism, or even socialistic. It's not Canadian (with all due regard to our good friend and neighbor). No, it's American, built on the idea that reform is good when an economic segment has gone bad, and we can't let the industry bite the dust. So we built a better one.

Americans always build a better one. At least we have in the past. From the slaves in the south who worked without pay to build a Southern economy, mansions and roads, to the urban masses that sprang from European shores with skills, trades and strong backs, Americans have always had a better idea. Ford had a better idea. If you are third, you work harder, and come up with a better idea. Fast food, fast cars, curbside service, drive through pharmacies, were all better ideas.

Health care reform is American. It's a better idea.

Yvette Carmon Davis, 03/09


 I have an opinion about.....

The Deficit

I am not an economist. I think I took one course once, just an introduction, so I know what people are talking about.

I'm not an expert. If there are experts reading, then forgive me, or send me an email to correct any misperceptions I might reveal herein.

Having a deficit is a bad thing. It contributes to inflation. Logically, then, it's a good thing when a president or  congress wants to reduce the deficit, and a bad thing when the deficit grow.

Our growing deficit contributed to the crazy economic place we find ourselves in ("crazy" is not a term of art, but everybody knows what it means). It didn't MAKE the problem, but it had a part.

Deficit. It means that the government spends more money than it actually has, and thus is in the red, and owes money. To whom?

That was my question the first time I heard that the federal government owed money. To whom is this money owed? Who does the federal government borrow from?

Banks. I mean, really, who else would loan an entity money, which is already in the red in billions, and now trillions, of dollars? Hmmmmm.

That realization made me wonder whether banks take collateral from the federal government the way they take collateral from you and me for loans. I don't know.

Segue. I know that the Federal Reserve "saves" banking institutions when they get into trouble, to keep consumers from suffering from a bank failure. The Fed also insures our deposits, so even if a bank has to fail, our deposits are protected up to certain limits.

All good. But outside of that process, at the end of the Bush administration and now in the Obama presidency, we have given stimulus money to banks. This money saves them from failure, and is also designed to loosen credit. In tandem, the Fed has lowered interest rates. All designed to stop our stagnating economy from continuing to sit still instead of grow.

Then I think I heard that the stimulus funds give the federal government ownership interests in the banks. That's part of the reason whey there was a really short burst of public-media conversation about nationalizing banks.

Now thrown into the mix are these prognostications that the federal government could go bankrupt! Holy moly! Sounds scary doesn't it?

But not so scary when you consider that the federal government might own banks instead of having to federalize them in the very near future. It's hard to go bankrupt when you own trillions of dollars worth of assets in financial institutions such as banks and global banking insurance companies.

I'm not an expert....it's just my opinion.

Yvette Carmon Davis 03/09