Winstonm Posted December 23, 2009 Report Share Posted December 23, 2009 The Senate passed its health care bill "by standing up to the special interests who prevented reform for decades and who are furiously lobbying against it now" -- Barack Obama, December 21, 2009. http://t3.gstatic.com/images?q=tbn:2b3zJqSv2V5WaM:http://forthardknox.com/wp-content/uploads/2009/01/pinocchio-51108.jpg Uh, not exactly. "'Healthcare shares rose on Monday as a bill to reform healthcare passed the first critical test in the Senate . . . Shares of Cigna rose 5.3 percent to $37.69. Shares of Aetna Inc rose 5.84 percent to $34.41. Humana Inc rose 3.79 percent to $45.17 and United Health Group Inc rose 5 percent to $33.14. Shares of Wellpoint Inc rose 3.8 percent to $60.51" -- Reuters, yesterday, with this ironic headline: "Healthcare shares rise as reform bill progresses". "Investors are seeing the Senate's version of health care reform as a massive public subsidy for insurance companies -- and as a result, are sending the sector's stock prices shooting up, up, up. . . . Stripped of a government-run insurance plan, the bill would give tens of millions of Americans no option but to start paying hefty premiums to private companies.".I guess these double secret especially special "special interests" couldn't have been the ordinary "special interests" to whom Obama referred - you know - the ones with all the money to buy politicians... I wonder how you integrate Obama's "reform" with the efficient market theory? Quote Link to comment Share on other sites More sharing options...
mike777 Posted December 23, 2009 Report Share Posted December 23, 2009 We Finance majors must pip up.....:lol: efficient market theory is not really about reform of the markets to make them more efficient In fact in efficient market theory there can be all sorts of special interest groups...buying of politicians....etc....:( Quote Link to comment Share on other sites More sharing options...
kenrexford Posted December 23, 2009 Report Share Posted December 23, 2009 When the solution to the "uninsured folks problem" is to simply order the "folks" to buy insurance, insurance companies get more clients, at gunpoint, and their expected profits go up. Of course, rates could go up, too, as We the People have no option any longer but to get insurance, and the sellers now know this. How's that Hope and Change working out for you? Quote Link to comment Share on other sites More sharing options...
mike777 Posted December 23, 2009 Report Share Posted December 23, 2009 Again as a Finance major I pip up....:lol: Me thinks most miss the main point of this bill Health Insurance companies have become regulated Utilities.... kiss innovation goodbye in that market. When was the last time you looked to your local gas or elec company for new products? Quote Link to comment Share on other sites More sharing options...
jdonn Posted December 23, 2009 Report Share Posted December 23, 2009 Why is that so surprising? If more people have to buy insurance, and there is no public option to buy insurance, the private insurance companies will make a lot more money. That doesn't mean it was somehow bad or wrong to force more people to buy insurance. What if they catch more cases of cancer early on, will you go after the corrupt cancer research lobby? Quote Link to comment Share on other sites More sharing options...
blackshoe Posted December 23, 2009 Report Share Posted December 23, 2009 You know, I can't think of a single thing the US government has stuck its nose into in the last 220 years where the cost of that thing has gone down. I don't expect health care to be any different. Quote Link to comment Share on other sites More sharing options...
hrothgar Posted December 23, 2009 Report Share Posted December 23, 2009 You know, I can't think of a single thing the US government has stuck its nose into in the last 220 years where the cost of that thing has gone down. I don't expect health care to be any different. Corn and soybeans are the most obvious example. (I don't favor the massive subsidies that we ship to agribusiness, but it has definitely lowered the cost of corn and soy) There are all sorts of examples of products and technologies that have spun out of government projects and research ranging from TCP/IPvelcoradarany number of advanced materials With this said and done 1. There is pretty widespread inflation in the world. The price of most products goes up over time... 2. The government doesn't intervene into the market on a whim... In theory, if the government is involved it means that the market is broken. Quote Link to comment Share on other sites More sharing options...
hrothgar Posted December 23, 2009 Report Share Posted December 23, 2009 We Finance majors must pip up.....:( efficient market theory is not really about reform of the markets to make them more efficient In fact in efficient market theory there can be all sorts of special interest groups...buying of politicians....etc....:( This isn't what Winston is discussing: There is a displine within modern Finance called an event study. You look at stock market swings and try to detect a statistically significant movement in the share price. You then try to determine whether the movement in the share price is linked to a specific event. In this case, Winston is suggesting that the run up in the share price of various publicly trading insurance companies suggests that the market believes that said insurance companies will do better than expected under the new health care bill. The share price is adjusting to reflect the net present value of the unexpected future cash flows. Personally, I think that Krugman got this one right: I would have preferred to see a much more ambitious health care bill pass. I am strongly in favor of a single payer system (the sort of system that works very well for pretty much every other developed country in the world). However, I view incremental reform as better than no reform. The Democratic party has been trying - and failing - to pass health care reform for decades. Shortly before his death, Ted Kennedy said that his greatest mistake in the Senate was his failure to accept a compromise on health care when Nixon offered one. Kennedy tried for the whole loaf, and now, 35+ years later, we're finally getting a less comprehensive bill passed. Quote Link to comment Share on other sites More sharing options...
spwdo Posted December 23, 2009 Report Share Posted December 23, 2009 i wonder why in America more educated healthcare people work in insurance companies getting bonuses denying people healthcare then educated people work in real healthcare. Anyone seen that movie "sicko" ? Its a real shame Or this might wake some people healthcare around the world and Sick in america Its a basic need that people have healthcare to fall back on if they become sick. Off course there are excesses everywhere but for a country claiming to be an example for other countrys healthcare should be avaible for all. If Obama provides cheap/free healthcare for even one family more then now giving people hope/future i can only support that. Must say i didnt follow the exact bill or what it would mean/change, i can only hope that lots more inhabitants of the US are provided with medical solutions for their health Quote Link to comment Share on other sites More sharing options...
hrothgar Posted December 23, 2009 Report Share Posted December 23, 2009 Andrew Sullivan has a nice post that addresses some of these issues http://andrewsullivan.theatlantic.com/the_...-meep.html#more Quote Link to comment Share on other sites More sharing options...
kenberg Posted December 23, 2009 Report Share Posted December 23, 2009 OK, I should buy stock in Healthcare. Got it. If you can't beat em, join em. Well, I won't really be doing that. But how to evaluate the results? It depends on priorities. I have no expectation that this reform will help me in any way. Will it hurt me? Probably not, or at least I can handle it. Will it help the country achieve a balanced budget? Probably not. Will it hurt? Well, compered to doing nothing, I'm not sure but maybe. Compared to what might/should have been done, yes, I would think so. Will it help some folks badly in need of help? I sure as hell hope so because I don't see any other real upside to it. I think the fundamental political issues are: 1. Those with a large financial stake in the outcome have full time lobbyists with large bankrolls. 2. Everyone cheers when Congress passes a benefit, everyone boos when Congress attempts (if they ever do) to figure out how to pay for it. 3. Quite a few of our representatives have their head up their ass. Quote Link to comment Share on other sites More sharing options...
jonottawa Posted December 23, 2009 Report Share Posted December 23, 2009 Leave George H W Bush alone! Quote Link to comment Share on other sites More sharing options...
jdonn Posted December 23, 2009 Report Share Posted December 23, 2009 You know, I can't think of a single thing the US government has stuck its nose into in the last 220 years where the cost of that thing has gone down. I don't expect health care to be any different. Then you aren't trying very hard. For example, have you traded in a clunker this year? Quote Link to comment Share on other sites More sharing options...
kenberg Posted December 23, 2009 Report Share Posted December 23, 2009 You know, I can't think of a single thing the US government has stuck its nose into in the last 220 years where the cost of that thing has gone down. I don't expect health care to be any different. Then you aren't trying very hard. For example, have you traded in a clunker this year? I don't know about Blackshoe, but while my car seriously clunks, it doesn't clunk enough. I am not exactly complaining, but generally reforms don't help me. I am mostly more or less ok with this, there are people who need help, I got that. However I think that effectively helping people, at least on a large scale, is not a completely simple matter. I hope that what they have produced will help, I wish I had more confidence. I guess we will see. Quote Link to comment Share on other sites More sharing options...
jdonn Posted December 23, 2009 Report Share Posted December 23, 2009 I would go so far as to say that, strictly speaking, almost everything having to do with money that the government sticks its nose has its cost go down. For example, being poor has a lower cost since you can get food stamps, medicaid, etc. Quote Link to comment Share on other sites More sharing options...
blackshoe Posted December 23, 2009 Report Share Posted December 23, 2009 I have a ten year old Buick. It runs like a top, gets decent mileage, and is in very good shape inside and out - so far. Even if it qualified as a "clunker", whyinhell should I trade it in? As I understand it, I'd still have to pay out something for whatever replaces it. And that whatever probably wouldn't be something I want to drive, anyway. When I spoke of cost, I wasn't speaking of the cost to the lucky folks who got subsidized, but the cost to the economy as a whole. What percentage of your income every year goes to pay taxes*? How does that compare to what you think it should be? *All kinds of taxes, not just income tax. Including the indirect or "hidden" ones, like gas taxes. About a quarter of the price of a gallon of gas here is taxes. Granted, NY has the second highest gas taxes in the nation, after California, but that's still a lot of taxes. Ostensibly, all or most of that goes to highway maintenance, so the question is whether that would cost us more or less if we weren't paying gas taxes (and, perhaps, if the State didn't own the roads). Hard to know the answer to that, though, isn't it? Quote Link to comment Share on other sites More sharing options...
hrothgar Posted December 23, 2009 Report Share Posted December 23, 2009 I have a ten year old Buick. It runs like a top, gets decent mileage, and is in very good shape inside and out - so far. Even if it qualified as a "clunker", whyinhell should I trade it in? As I understand it, I'd still have to pay out something for whatever replaces it. And that whatever probably wouldn't be something I want to drive, anyway. When I spoke of cost, I wasn't speaking of the cost to the lucky folks who got subsidized, but the cost to the economy as a whole. What percentage of your income every year goes to pay taxes*? How does that compare to what you think it should be? *All kinds of taxes, not just income tax. Including the indirect or "hidden" ones, like gas taxes. About a quarter of the price of a gallon of gas here is taxes. Granted, NY has the second highest gas taxes in the nation, after California, but that's still a lot of taxes. Ostensibly, all or most of that goes to highway maintenance, so the question is whether that would cost us more or less if we weren't paying gas taxes (and, perhaps, if the State didn't own the roads). Hard to know the answer to that, though, isn't it? There are entire disciplines with in Economics that deal with precisely the set of issues. "Public Economics" which deals with various market imperfections monopolies, externalizes, etc. is the best example. Unfortunately, many of the examples from public economics are designed to effect the quantity demanded and don't always have a direct impact on price. However, the principle remains the same... The best examples where government action would have a direct impact in lowering prices are probably related to the regulation of monopolies. Goods characterized by a very high fixed cost relative to the variable cost are the prototypical examples (electric utilities, infrastructure for transportation, the water works, that sort of thing...) Quote Link to comment Share on other sites More sharing options...
jdonn Posted December 23, 2009 Report Share Posted December 23, 2009 What percentage of your income every year goes to pay taxes*? How does that compare to what you think it should be? I don't now what percentage of my income goes toward taxes, half? Whatever it is I have no problem with it. In fact I consider myself very financially fortunate to live in a country with such low taxes relative to many others. Quote Link to comment Share on other sites More sharing options...
cherdanno Posted December 23, 2009 Report Share Posted December 23, 2009 When I spoke of cost, I wasn't speaking of the cost to the lucky folks who got subsidized, but the cost to the economy as a whole. I can give you a lot of examples where things would be cheaper if the US government would stick its nose into things a little more deeply.My car got stolen in May, and found again 2.5 months later. The police didn't immediately reach me (I was at the NABC actually), so they had it towed. I was also at the other coast, my friend who had the other key was away, etc; in any case, it took 4 days until another friend of mine could pick up the car from the towing company. The towing company charged 500$ for that (s.th. like 70$/day storage fee, and of course a couple of other fees).In Germany, we pay a little bit more in taxes, and so the police would have taken care of the car for a few days (i.e. keep it at a police lot somewhere). I doubt they would have spent 500$ for that, more like 100$. (They would also have taken fingerprints and tried to find the thieves, but that's another story.) But since you are Republican, I suppose the 500$ are good, because they are profits, and the 100$ are bad, because they are taxes. Quote Link to comment Share on other sites More sharing options...
blackshoe Posted December 23, 2009 Report Share Posted December 23, 2009 What percentage of your income every year goes to pay taxes*? How does that compare to what you think it should be? I don't now what percentage of my income goes toward taxes, half? Whatever it is I have no problem with it. In fact I consider myself very financially fortunate to live in a country with such low taxes relative to many others. Something like 20 years ago, I first heard of "Tax Freedom Day", the day on which, if all your income to date that year went to taxes, you'd be free of paying them, and could spend your money on what you wanted to spend it on. At the time, "Tax Freedom Day" was in May - the 15th, iirc. Now it's sometime in July. What will you do when it gets to December 31st? Or January 1st of next year? Quote Link to comment Share on other sites More sharing options...
Echognome Posted December 23, 2009 Report Share Posted December 23, 2009 What percentage of your income every year goes to pay taxes*? How does that compare to what you think it should be? To answer the first question, it will obviously depend on what city you live in (since taxes vary down to very granular levels when you include things like sales taxes), what income you make, what income your household makes (if you file jointly), how many dependents you own, whether you own a house and are paying interest, etc. etc. To answer the second question, what difference does it make? Can't I just answer that I think I should pay 0 taxes and have everyone else pay for me? Why should we care what people think their taxes should be individually? We should only care what they think collectively. The collective answer should depend on what benefits people are getting for their taxes and that goes back to public goods and, as Richard points out, an entire field of economics. Quote Link to comment Share on other sites More sharing options...
Echognome Posted December 23, 2009 Report Share Posted December 23, 2009 Something like 20 years ago, I first heard of "Tax Freedom Day", the day on which, if all your income to date that year went to taxes, you'd be free of paying them, and could spend your money on what you wanted to spend it on. At the time, "Tax Freedom Day" was in May - the 15th, iirc. Now it's sometime in July. What will you do when it gets to December 31st? Or January 1st of next year? When it gets to December 31st, we should all go revisit the Laffer curve. Quote Link to comment Share on other sites More sharing options...
jdonn Posted December 23, 2009 Report Share Posted December 23, 2009 I have to admit when it gets to January 1 I'll stop working. When it gets to December 31 I'll just assume everything is free and probably go shopping at the Armani store at Bellagio. Quote Link to comment Share on other sites More sharing options...
hrothgar Posted December 23, 2009 Report Share Posted December 23, 2009 Something like 20 years ago, I first heard of "Tax Freedom Day", the day on which, if all your income to date that year went to taxes, you'd be free of paying them, and could spend your money on what you wanted to spend it on. At the time, "Tax Freedom Day" was in May - the 15th, iirc. Now it's sometime in July. What will you do when it gets to December 31st? Or January 1st of next year? Curse the idiot Republicans who have drowned us in debt for 30 odd years and driven the economy into the ground... http://thinkprogress.org/wp-content/uploads/2008/10/debt2.gif http://www.cbpp.org/images/cms//12-16-09bud-f11.jpg http://www.cbpp.org/cms/index.cfm?fa=view&id=3036 Quote Link to comment Share on other sites More sharing options...
Winstonm Posted December 23, 2009 Author Report Share Posted December 23, 2009 If more people have to buy insurance, and there is no public option to buy insurance, the private insurance companies will make a lot more money. That doesn't mean it was somehow bad or wrong to force more people to buy insurance. I would feel remiss if I didn't point out how incredibly Obama-apologetic this sounds. I will give Obama credit for being really good at politics - at making smoke and mirrors illusions of change appear to be real. Quote Link to comment Share on other sites More sharing options...
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