FEATURED JOBS
Comments (0)The general consensus concerning the financial markets bailout is that not only was it a good idea, but also that it was necessary. The financial system, for myriad reasons, was at the brink of collapse, probably closer to disaster than most of us realized, and the infusion of taxpayer money saved the day.
Granted, this is a counter-factual argument, since it is difficult to ascertain where we would be if the bailout didn’t happen. I for one will agree the bailout was a good idea. The stock market (Dow Jones) has crossed the 10,000 mark, although no one seems to know exactly why or whether that level is sustainable, and the banks in such dire straits a year ago are now reporting record profits and rewarding themselves accordingly.
So what’s changed? Unfortunately nothing has—except for the free money, of course. The financial infrastructure that led us to the brink a year ago is untouched and that is inexcusable. The public opinion hot button right now concerns Wall Street profits and, specifically, compensation.
This is understandable, but misses the point. Hoping financial services execs would do the right thing—unclear as to exactly what that is—or even worse, trying to shame them into acting responsibly, is ludicrous. If a gambler in Vegas loses everything—and then some—you don’t make him flush him again and turn him loose in the Bellagio casino hoping he’s learned his lesson.
This is exactly what we’ve done with the bailout money. I’m not knocking the financial services community here. With the only incentive being to make money; most of us would do the same thing—go back to the tables and hopefully bet right this time. This year, the banks have bet right, but what happens next year if they’re wrong again? All we’ve done is created another financial bubble—the tech bubble that morphed into the real estate bubble is now the U.S. Government bubble. We can’t afford to have this one burst.
I don’t have a simple solution, but I do have a simple starting point. How about open, transparent trading exchanges for these mysterious derivatives? Don’t worry if you don’t quite understand what a derivative is, you’re not alone. But unlike stocks, bonds and commodities, many of these financial instruments that got us into so much trouble—and are now so profitable—are not openly traded and therefore are not transparent to you or me. Now that our money is being traded it’s time to open the proverbial derivative kimono. Free open markets are a good thing, remember?
And as a tax-payer I want my loan paid back, not just with interest but with the same odds that our money is being leveraged. Conservatively, we covered Wall Street losses when banks were gambling at 40-1. Payback should be at the same odds. We’re partners, right?
The health care debate has devolved in a similar manner, pretty much missing the forest for the trees, specifically with respect to the public option. The big worry prevails that government will simply take over health care and screw it up. If getting out the swine flu vaccine or the recent cash for clunker program is any indication of government efficiency, this is a valid concern.
On the other hand the, only people I know who are happy with their health insurance are covered by government or pseudo-government programs—teachers, police officers, senior citizens and of course, members of Congress.
The critical component of the public option is the word “option,” which means a choice. All of the eye-glazing rhetoric concerning the debate again misses the central point. For many of us, health care is controlled by a monopoly either because of where we live or for whom we work. There’s no choice, no options, and no competition. The last time I checked monopolies were bad for consumers, no matter what market. That our health care is dependent on the whims of a monopoly is—again—inexcusable.
Senate Majority Leader Harry Reid (D.-Nev.) has supposedly made a big gamble this week by including the public option in “his” bill with the caveat that states can opt out of this provision. This looks to me a lot like passing the buck. Senator Reid has made the decision to not make a decision all the while framing it as a “Big Decision.” Call me a cynic, but if Senator Reid spent half as much time on leadership as he does on schemes like this maybe there would be some actual progress in Washington.
Again, I don’t have a simple solution but a simple starting point. Let’s rid the health care system of monopolies. God only knows what could fall out in the break-up. For all we know drug companies may be taking advantage of us.
If the term monopoly is too complicated for your senator or congressman to follow, simply request that you want the same health care plan he or she has. That doesn’t sound like too much to ask, does it?
