Bankers robbed the banks

Wasn’t it only in October ’08 that we all were told to believe that the whole financial system had collapsed/was on the verge of collapse and that we need to shell out $780 billion of tax payers money to the exact same bankers has cost us upwards of $5 trillion to-date (per President Obama on the Letterman Show)?

So what happened?

Goldman Sachs (GS) reported $3.4B in profits for the 2Q09. GS plans to pay $18B in total compensation to employees averaging a staggering $600K/employee.

However, Unemployment is still at 16.5% (including semi-employed and people who have given up looking for a job).

That’s what happened.

People are so worked up about the Health Care reform when what we are talking about is A) keeping people alive/healthy which will “actually” benefit the economy B) saving the long term “social” model (yes, social) of Medicare, Medicaid and VA that will not survive unless we control cost and C) most importantly, making it affordable to buy insurance for individuals.

That to me is completely misplaced anger. We all have reason to be angry, reason to feel disoriented, reason to feel like we’ve been had and reason to lose trust. But directing it at Health Care reform is not only wrong it is a disservice to the country. It is much better to focus on reforming our Financial Industry and I contend, the only way to do that by reforming our election campaign finance – remember that issue that was hot before the 2008 elections and oh yes, also before the 2004 elections? Though, I must admit right on the outset that I am not very hopeful that either can happen.

However are some plausible ways to make a dent:

1. Make Banking boring —  Banks should, asPaul Krugman points out, return to being “boring” and provide money at reasonable, conservative rates to support the rest of the society to invest, innovate and develop “real products” not consider credit default swaps as a product….ever! In effect, behave like a Utility Company….like they use to back in the 50s and 60s.

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Health Care Reform 2.0

Just like Microsoft and Apple — both of them are poised to launch new versions of their Operating Systems in the fall, President Obama seems ready to launch health care reform 2.0.

An article titled, “Obama Aides Aim to Simplify and Scale Back Health Bills” in today’s New York Times has these head scratching contradictory paragraphs that I surely couldn’t reconcile and I quoting them below.

“By signaling that they would seek to revise existing versions of legislation moving through the House and Senate, administration officials and Democratic leaders in Congress — many of whom had said earlier in the summer that they saw no need to scale back their ambitions — made clear that their political calculations had changed. With Congressional Republicans standing almost unanimously in opposition to the Democratic approach, the target now for Mr. Obama is primarily a handful of moderate Democrats and the one Republican who seems open to a deal, Senator Olympia J. Snowe of Maine.

“It’s so important to get a deal,” a White House official said, speaking on the condition of anonymity in order to be candid about strategy. “He will do almost anything it takes to get one.” <End Quote>

What is this deal that is so important that President Obama is ready to do almost anything for when it is with only one Republican? Please explain that to me.

Democrats are no saints but Republicans do deserve the label of “Party of No.” President Bush owns the dubious distinction of creating the largest negative swing in the Federal budget but somehow Republicans want to hold the title of fiscal conservatives!

I do agree with the title of the article that President Obama should simplify the message and in my opinion health care reform 2.0 should hit on these basic points:

1. I am a fiscal conservative and that is exactly why we want to reform. Cost of Medicare, Medicaid and cost to your household for health care will sky rocket out of the stratosphere bankrupting the Government and you in the next 20 years if nothing is done.

2. That is why we are proposing regulations on Insurance companies to not raise insurance when you get ill and not to deny coverage if you have a pre-condition. Believe me, they will still make a handsome profit.

3. We are proposing a public insurance option to provide basic coverage for those who cannot afford and also help reduce cost for drugs by using our subscriber base as negotiating power with big Pharma. This will help reduce prices for all of us even those who have private plans and also help insurance companies since they have to pay less for drugs. Believe me the pharmaceutical companies will still make a handsome profit. Case in point: Pfizer is ready pay $2.3B in penalty for illegal promotion of drugs and its stock dropped only 0.61%.

4. Lastly, but very importantly, this is not socialized health care and do not listen to anyone who tells you so. Socialized health care in Britain means all doctors are employed by NIH, all hospitals and hospital workers are employed by NIH and allowed procedures and medicines are recommended by the NIH (which BTW, is a better version of US insurance companies denying coverage for many medicines and procedures).

With this approach we achieve triple play: reduce cost while extending coverage on something as basic and necessary as care for human body and still preserving the businesses that are currently engaged in the health care industry.