Economist: Health Care Bill "Is Just Another Bailout Of The Financial System"

George Washington's picture

It is obvious that many republicans oppose the proposed health care bill. But many liberals and progressives oppose it as well.

For example, economist L. Randall Wray writes:

the opportunity, Wall Street’s newest and bestest gamble: there is a
huge untapped market of some 50 million people who are not paying
insurance premiums—and the number grows every year because employers
drop coverage and people can’t afford premiums. Solution? Health
insurance “reform” that requires everyone to turn over their pay to
Wall Street. Can’t afford the premiums? That is OK—Uncle Sam will kick
in a few hundred billion to help out the insurers. Of course, do not
expect more health care or better health outcomes because that has
nothing to do with “reform” ... Wall Street’s insurers... see a missed
opportunity. They’ll collect the extra premiums and deny the claims.
This is just another bailout of the financial system, because the tens
of trillions of dollars already committed are not nearly enough.

points out that - with the repeal of Glass Steagall - the financial
sector and the insurance businesses (the "f" and "i" in the "fire"
sector) are somewhat merged.

Wray is no conservative. He is Ph.D. is Professor of Economics at the
University of Missouri-Kansas City, Research Director with the Center
for Full Employment and Price Stability and Senior Research Scholar at
The Levy Economics Institute - which focuses on
inequality in the distribution of earnings, income, and wealth.

Dr. Andrew Coates describes the bill as "a guarantee of insurance industry dominance and the continued privatization of health care in every arena.”

Dr. Coates is no conservative. He is a medical doctor,
a member of the Public Employees Federation, AFL-CIO, secretary of the
Capital District chapter of Physicians for a National Health Program,
and teaches at Albany Medical College.

And - as I have previously pointed out - progressives such as law school professor Sheldon Laskin, anti-war activist David Swanson, and Miles Mogulescu are calling the bill authoritarian and unconstitutional because the government cannot legally force people to buy private health insurance.

given Wray's point that this is just another bailout in disguise, the
bill should more properly be called a "wealth reform" bill than health
reform legislation.

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Anonymous's picture

Allegations of price-fixing, bid-rigging, exclusive sales contracts, local price cutting to freeze out competitors, and the dividing up of markets need to be fully explored through subpoenas and depositions (a law suit by all 50 States and joined by the Feds) so we can get rid of our dysfunctional corporate health care system that's choking the economy to death.

Federal workers and retirees can select plans at a cost range from $100 dollars a month for the cheapest individual coverage to $500 dollars for the most expensive family plan. I’m voting “MY” pocket book - I want lower premiums and less money taken out of my paycheck - if they want to help spur on the economy they will make sure this happens for all - not just a select group.

90% of the wealth concentrated in 1% of the population is no way to run a country but a heck of a way to establish a royalty ruling class. Yacht sales can not sustain 350 million people. I'm for the public option, competition and a level playing field or break up the big insurers like we did AT&T.

A slavish focus on profit margin might be good for the individual or a business, but it is one helluva lousy way to "govern" a Country. The GOP being a wholly owned subsidiary of Corporate America has a hard time with that concept.

Paul Burke
Author-Journey Home

Anonymous's picture

Health Care "reform" is just another way to control the gov dependent sheeple, transfer wealth from those who produce it and put another layer of control over American lives. This, along with dumbing down Americans, is about lowering our quality of life so we can be more "equal" with the rest of the underprivileged "world citizens." The insurance companies may reap a windfall in the short term, but my guess is the government, who will be requiring them to pay out 80% of what they take in, will put most of them out of business in the next 5-10 years until we get a Canadian style health care debacle. I just have one thing to say about this....don't get sick.........


Master Bates's picture

You say that both aren't conservative because they have doctorate degrees and are professors?

That has nothing to do with whether they are conservatives or not.  Oh wait, I forgot, ALL professors and phD's are liberals somehow, says the "alternative" media.

What a crock of shit, really.

If you're going to base your argument around that premise, you should provide some actual facts that are better than "well, they're professors, and we all know that any teacher anywhere is liberal.  Case closed."

George Washington's picture

The key phrases are "AFL-CIO" and "inequality in the distribution of earnings, income, and wealth", not PhD or professors.

Rick64's picture

If you look at the other side of the argument then it is the same as liability car insurance. If somebody hits your car and they don't have insurance, and you do then your insurance pays(if it is full coverage). Is that fair? Or if you don't have full coverage then you are stuck with the outcome, and worse yet if somebody got hurt. So states have fines for driving without it to prevent this which can include suspending your driving license. So in theory without any law the insurance companies have to jack up their rates to cover these kind of losses.  Although I don't trust congress to pass anything that would actually help both sides or solve anything, there are some logical reasons to the argument of requiring health insurance.

Anonymous's picture

FRAUD, CORRUPTION and PONZI Schemes as far as the eye can see!!

More on the GOLDMAN SACHS Cayman Islands crime sprees---

Anonymous's picture

If you the government can force you to buy a product (insurance) then they can make you buy a book or make you do anything. Freedom is GONE.

Please spare me the car insurance nonsense. I walk to work and do not have a car, hence I do not have car insurance.

Anonymous's picture

With regard to the government not being able to legally force somebody to buy health insurance, I would normally agree. However, we have a national policy that anyone who walks into an emergency room with a serious medical problem will be treated regardless of his or her ability to pay.

A serious medical problem can quickly wipe out the financial resources of most people in this country. So the 25 year old who is healthy and doesn't want to pay for health insurance because he's statistically unlikely to have significant health care expenditures is in fact free riding the system. He doesn't think he needs insurance but next week he might seriously injured in a car accident or find out he's got a brain tumor or leukemia.

As a society we're not going to let hospitals check the financial resources of an emergency room patient without insurance before deciding whether or not to try to save his life. So I don't have any issue with requiring people to buy health insurance.

KevinB's picture

Yeah, well.. I'm Canadian. I travelled to the US about a decade ago, and after being re-routed and delayed, my 6 hour flight from Toronto to LA ended up taking 12 hours. Instead of arriving after the morning rush hour, I arrived smack dab for the evening one. I'd had no sleep for almost 19 hours at this point, and while driving south to Irvine, I was in a car accident after falling asleep at the wheel. Not a major one - I broke my foot and bit my tongue from the airbag. The other driver walked away with no injuries. I was taken to the Irvine medical center. As they wheeled me in, I asked "Who's going to pay for this?" "Don't worry" I was told. I was there from 10 pm Monday to 6 pm Tuesday. In between, even though my BP, heart rate, respiration, etc. were all normal, I was given a CAT scan, an MRI, and a second MRI with contrast. I didn't consent to any of these procedures, but they went ahead any. When I got home, they sent me at bill for $30,000 US for less than one day. I was facing personal bankruptcy - that was close to $50k CDN at the time, and I sure didn't have that laying around. Luckily, after a fight with my car insurer, they covered me. But this is my point - so long as US doctors have to practice "defensive" medicine to avoid tort-happy lawyers, your system is fucked. In Toronto, they would have set my foot, held me overnight to make sure I wasn't concussed, and discharged me in the morning - total bill: $3,500 CDN. That's why the US system spends more money per capita but achieves worse outcomes than Canada.

Anonymous's picture

The ER is an instrument of financial rape.

Anonymous's picture

Dedicated to our feckless public servants....

Anonymous's picture

Whats' the difference between health care taxes (tax on being alive) and carbon taxes (taxes on breathing when you exhale carbon).

They really think the people are stupid.

foreigners think the Americans are really stupid for going along with this nonsense.

IE's picture

Of course - it is so transparent... have been saying this to friends for weeks as well.  Has little to do with reforming healthcare ... although the admin will certainly chest-thump in a fact-free way ("look - we GOT our healthcare legislation") no matter how far this is from what their supporters assumed/wanted/voted for.  They had to make sure to pump up the "I" in the FIRE economy (which IS the American economy).  That's what this is. 


Ripped Chunk's picture

It's the same with the "financial reform legislation"

Every single time they have a chance to create legislation to help the electorate they bastardize it and instead use it to take money from us and line the pockets of the casinos and insiders.


The money and the patience have run out.

Rainman's picture

Am I nuts ?? Probably yes....but

What the fuck does financial reform have to do with introducing a $ 4 trillion bailout package to the banks ?? Absolutely zero.

An amount of this mega magnitude should NEVER be hidden away in some other proposed bullshit legislation. Another back door sneak attack on America's already insolvent condition...... in a 1,200 page HR bill !!! 


This travesty deserves maximum Tyler/Marla attention.

Anonymous's picture

It's always the same:

The new POTUS comes in, buys some new carpet and drapes, but the structure remains the same.


anarkst's picture

You get what you pay for.

masterinchancery's picture

the Bill is blatantly unconstitutional, apart from being economic suicide. So bad we might even find Justices with the spine to say so.

Psquared's picture

This will make an interesting argument. My guess is Thomas, Kennedy, Scalia, Alito and Roberts form the conservative side with Alito the sole "possible" defector. The argument in favor is that it is consitutional to require individuals to enter into private contracts for insurance because states have done it for decades with auto insurance. The contra argument is that requiring auto insurance protects third parties by providing coverage for their injuries. Health insurance also drives down the cost to everyone else (unproven) so the rationale will be the same.

Also, the law does not force anyone to buy insurance ... you can refuse and pay an annual fine - just like most states allow you to do with auto insurance. Of course, ultimately it will probably be on your credit report that you don't have health insurance and your FICO score will go down.

Prediction: In a 5-4 vote the SCOTUS will uphold the "personal mandate" as constitutional.

Anonymous's picture

No, you're way off. Any argument remotely related to autos will be blown up with comic ease. You really ought to be embarrassed to make that claim. It is so overwhelmingly un-constitutional it may not get a single vote....shot down decisively in SCOTUS.

The individual mandate is unquestionably un-constitutional.

Taking it a step further, which isn't even necessary, you will also be attempting to individually mandate white americans to forcibly buy a product because of a bill that is rigged with massive racial hiring preferences that rig the game severely against whites trying to gain employment within the healthcare sector.

Problem Is's picture

"Thomas, Kennedy, Scalia, Alito and Roberts..."

You are discussing corporate whores my freind. Roberts to fascist extents. Mandated cash for Wall Street? They won't even hear the case.

"The argument in favor is that it is constitutional to require individuals to enter into private contracts for insurance because states have done it for decades with auto insurance."

Good point Psquared. But don't forget the obvious one. I can decline to buy auto insurance by... drum roll please... not owning a car and not driving. No code violations and no fico damage.

Which I do since I have lived in a city with lousy parking, constant vandalism if you park on the street and lots of public transportation. It was a no brainer based on cost/benefit.

With health care I cannot choose not to. That is the difference. Driving is optional.

Anonymous's picture

Remember that roads are PUBLIC. The government funds the transportation system, and they can require all sorts of things in return for the privilege of use.

So what does the government provide in return for the mandate to purchase private health insurance?

Anonymous's picture

"You are discussing corporate whores my freind. Roberts to fascist extents."
Remember this post, then watch and learn grasshopper.

Ned Zeppelin's picture

+1 as to the car being optional argument.  It is a privilege, not a right.

The health care law is different by kind.  Hard to say what might be analogous.  Requiring that you have a social security number comes to mind.  But imposing a cost to be alive? This seems new territory.  Opposing it on sort of murky grounds of personal freedom being infringed sounds awfully like a Roe v Wade type analysis, which supported a woman's right to "self determination" within a zone of personal privacy (the infamous "penumbra") discerned within the Bill of Rights.  Under that line of cases, the healthcare mandate would fail, as it clearly invades this physical zone of privacy and does not survive strict scrutiny.

Alas, the right wingers have supported the notion that the Constitution and Bill of Rights do not protect abortion, that the privacy argument is rubbish, and that therefore the sole redress is political.  I predict on balance the measure passes constitutional muster.  Maybe right wingers should have fiercely protected the notion of an individual's absolute right to self-determination as far as one's body is concerned, as a sort of last bastion of personal liberty,  but it's too late now.  The same "constitutional law" logic that supports anti-abortion laws supports mandatory healthcare.



KevinB's picture

Maybe right wingers should have fiercely protected the notion of an individual's absolute right to self-determination as far as one's body is concerned

Really? Then what would have happened to the war on drugs? And, more important, the billions of dollars thrown into that futile war, and of course, the prison business. The US government is ridiculous; it should tax marijuana, and use the proceeds against the debt. Amsterdam does a thriving "dope tourism" business; so could the US.

Slewburger's picture

Preemptive bailout....Don't forget the stress the baby boomers are going to put on the health industry over the next few decades.

This is all just another farce for a ponzi scheme.

Socialized risk and privatized profits coming to a W2 near you.

Anonymous's picture

I have been saying this for weeks and I kept getting funny looks from my colleagues. Yet it was quite obvious what it is and why it is so urgent. The insurance cos have blown themselves up using the same novel models and vehicles as the finance industry.

seventree's picture

The "reform" debate was often presented as socialism vs free markets. Yet Medicare, which supplies equipment like motorized wheelchairs (as seen on TV!) to anyone who can get a doctor's approval, is forbidden by law from taking competetive bids. Instead it must pay locked-in top dollar prices that no retail buyer would ever consider. A bill to change this was submitted early on, quickly squashed, and the subject never mentioned again by either party.

It was never about government-controlled healthcare -- thats a given -- only about protecting vested interests.


Ripped Chunk's picture

"The "reform" debate was often presented as socialism vs free markets"

Kabuki theater of the highest form.  None of this crap is what any of this is about.

Health insurers have divided up the market and colluded to set pricing. They took deductions to travel to the meetings where these crimes were comitted.

They would not under any circumstances allow this legislation to take away their anti-trust exemption. Health insurance industry OWNS CONGRESS.



Orly's picture

Ah-ha!  Now we know!

It takes a while for the ulterior motives to surface but, when they do, it all finally makes sense.


Rainman's picture

ObamaScare basically trades the uninsured premium subsidy to Uncle Sugar versus continuing to layer it onto the jacked-up premiums of the employer insured (or so we are told ). No way the uninsured will cover a subsidized premium when they get treatment for free in a hospital emergency room. Get the bill and tear it up.

Now the insurers can raid Uncle Sugar's wallet AND jack employer premiums too.

A beautiful setup.

loki's picture

Oh, and lest I forget, two words you will not hear or read of ever in this bill or any other:  TORT REFORM.

loki's picture

No way the uninsured will cover a subsidized premium when they get treatment for free in a hospital emergency room. Get the bill and tear it up.


Amen to that!   I know.  I work there and see it firsthand.  Besides getting free (for them) care, immediate testing s/a labs, ekgs, CTs, xrays and even MRIs! they see mostly board certified ER docs who are forced (many times in appeasement of Press-Ganey surveys) to do everything for them and smile sweetly, though working for -- yes--- free!

Where else can you go and receive everything free???  Need I tell you about the fake names, fake addresses, fake phone numbers and other fake info we're given?   You can't go to a restaurant, store, grocery, pharmacy etc and get stuff free.

On the flip side:  what other industry works for free?  Some lawyers work pro bono, I know... but how many other -- volunteers aside, are mandated (by EMTALA) to work for free.....oh, right. and assume all the liability associated with said treatment?


/rant off.

Anonymous's picture

The US Government has already collapsed.

Now, we've just got marauding gangs setting fire to the country, looting the public treasury, and stealing whatever they can carry before the whole thing goes up in flames.

Crooked politicians are no longer even bothering to cover up their tracks.


MarketTruth's picture

Well... there is this extremely large gang in the USA. They have infiltrated nearly every city big and small and are armed with normal guns. Some have 'advanced' weaponry that only a handful of years ago was reserved only for the military. If Americans make a move, they need to realize this huge gang of thugs might have some small factions in larger cities that are military-like, some even have ex-military in their gang(!). They also fleece the sheeple for money, harass citizens, physically harm both person and property on a regular basis and use illegal interrogation tactics more often than i care to mention here. You can see a compiled videos of these terrorists in action at the link below. BTW, they have been known to kill innocent US citizens and cover up the facts.

Anonymous's picture

If you go by puplic sentiment, we could have easily foudn a popular public compromise, repeal insurance companies anti-trust exemption, improve enforcement of deceptive and fraudulent practices by insurance companies (recission etc..) and cap malpractice awards. This would cost taxpayers almost nothing.

The first and third option would be fine by conservatives, libertarians, the first and second would be well-supported by progressives and progressives woudl be okay with capping trial earnings if there is an effective way to insure big company cannot prey on single claimant unfairly simply cause big company has muscle.

Why did we not get such a solution? Big insurance companies that want to reamin feral and above the law and big trial lawyer lobby. Us regular folks could find an acceptable compromise to help us all in an efficient manner, but our corrupt congress will never allow such things

KevinB's picture

+100 on all paragraphs.

Ripped Chunk's picture

Health insurers remain exempt from anti-trust regulation.

No changes seen ahead. This "historic" bill is a piece of shit.

Problem Is's picture

Congress granted anti trust exemptions to Major League Baseball and the Health Insurance industry...

Obviously two industries of strategic national importance.

And these idiots want a vote from us to be political leaders?

Anonymous's picture

Except congress doesn't mandate that everyone purchase baseball tickets