The Market Ticker
Commentary on The Capital Markets- Category [Health Reform]
2014-11-18 07:55 by Karl Denninger
in Health Reform , 529 references

This is pure comedy -- and a gross insult to the American public.

As an anchor at CNBC, I questioned the president’s claim that adding millions of people to the health insurance rolls would be free. How was that mathematically possible? If people with pre-existing conditions didn’t pay more, someone else would have to bear that cost. Healthcare isn’t free. The math didn’t add up.

One day, after raising these questions on air, I was called into my manager’s office and told to stop. When I pushed back, my manager explained that my questions were “disrespecting the office of the president.” The rebuke was surprising, but this incident wasn’t the only time I was called up and reined in.

Yeah, ok.

Anyone want another example?  Look up Cramer's "The Winners of The New World".  How did you do?

My point made, exactly.

But this sort of self-promotional crap is truly insulting -- and a bald lie:

So for anyone deciding which financial news channel to watch, know that CNBC is on the lookout for comedy writers and actresses. For their business channel.Here at Fox Business, we are looking out for your money.

Two words: **** you.

The medical system in this country is not bankrupting people or the nation because of Obamacare.  It is bankrupting people because it has managed to exempt itself from the very laws that I had to follow running an Internet company.

Those are the same laws, incidentally, that a company making cars, washing machines or for that matter computers must follow.

They are the reason that a computer today costs a tiny fraction of what a computer of equivalent capability cost a few years previous.  They are the reason you can buy a $3 calculator when the original Monroe "portable" cost a few hundred dollars.  They're the reason my original Sony D-5 CD player cost $350 in 1984 and yet today you can buy a CD player for $30 or less.  They are the reason my first 50" HDTV cost close to $10,000, while today I can buy one at WalMart that uses a tiny fraction of the power and is also a fraction of its size and mass -- for $500.

These laws are good, not bad.  They say that if you buy a laptop computer you own the ******ned thing and may do with it as you wish, including selling it to someone else for whatever price you may negotiate between you.

They also say that if I, as a manufacturer of said computer, get together in a room with other manufacturers and try to fix prices we all go to prison because that's a violation of 15 USC, the Sherman and Clayton Acts.  We can go to prison for a decade and be fined $1 million each, while our respective companies can be fined $100 million -- for each attempt.

These two laws say that any act designed to fix prices or restrain trade by agreement or conspiracy between two or more entities where market power exists is per-se unlawful and triggers these penalties.

Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce among the several States, or with foreign nations, is declared to be illegal. Every person who shall make any contract or engage in any combination or conspiracy hereby declared to be illegal shall be deemed guilty of a felony, and, on conviction thereof, shall be punished by fine not exceeding $100,000,000 if a corporation, or, if any other person, $1,000,000, or by imprisonment not exceeding 10 years, or by both said punishments, in the discretion of the court.

This is a good law.  It is a law that I lived by despite having one hundred competitors in my local market.  I lived by it not only because it was the law but because competition is good and it results in better goods and services, along with lower prices, for everyone.  Those who put forward a superior product at a lower price prosper, those who can't or don't fail.  That's what competition is and there is exactly none of it in the medical industry.

As just one example the common and in fact near-universal practice of pharmaceutical companies of selling drugs for different prices in different nations would not last 15 minutes if this law was enforced.  The reason is simple; I would immediately go to Mexico, for example, where the drug was cheap and fill my trunk with it, then come back into the United States and sell it for a few dollars more than I paid, immediately collapsing the price here in the US.  Thousands of other people would do the same in the other direction (Canada.)  15 USC says that any contract, agreement or otherwise that restrains trade in this fashion across a state or national boundary is a felony; it is only through passage of laws that exempt the medical industry in general from these laws that medical care and commodities are ridiculously expensive instead of dropping in price like a stone through technological progress.

Bluntly put the entire medical business is one gigantic monopolistic scam and these practices, all of them, are supposed to be felonies instead of an industry.

Let's make this perfectly clear:

When you're flat on your ass having a heart attack I assure you that market power exists.  It is only through that power that you can be charged $100,000 for $10,000 worth of care, where scalpels that can be had for a buck a piece are charged to your account at $20 and an aspirin that costs a penny is charged out at $10.

When you just got stung by a scorpion and need the anti-venom now (lest you die) market power exists.  It is only through that market power that you can be charged $60,000 for $100 worth of product.

When you are in the ER, market power exists.  It is only through that power that you can be charged thousands of dollars for a half-dozen stitches and 15 minutes of a doctor's time -- a service that should cost at most a couple hundred bucks.

Every one of the people involved in the US medical industry -- all of them -- ought to be rotting in a prison cell right now and yet Melissa Francis, and Faux News, just like CNBS, have said exactly zero about this fact over the years and that this, and this alone, is why our medical care in the United States costs five to ten times what it does in other industrial, first-world nations.

We would not need Medicare or Medicaid but for this fact, say much less Obamacare, as even the old and/or poor would be able to pay cash for anything routine and would also be able to afford inexpensive and private catastrophic insurance for that which is not.  In short your "health insurance" should and would cost less than your car insurance, yet nobody seriously argues that we need to "nationalize" and subsidize car insurance!

Resolving this problem alone would remove $1.18 trillion, or more than 29% (all-in) from Federal spending -- overnight!  In addition resolving this problem would instantly and permanently resolve the mess in state and local budgets all of which is caused by spiraling retiree health care costs. 

Worse, the impact on the economy as a whole is some three times the federal impact, with roughly 18-20% of our economic activity being stolen through these practices.

This is the reason, above all others, that this nation has become and continues to be uncompetitive in the global marketplace, it is why Detroit and Stockton CA went bankrupt and it is a ticking time bomb for corporations, state and local governments -- along with the federal government itself.  

In addition it is the cause of Federal Deficit spending -- all of it, literally.

For this intentional omission in Melissa's alleged "reporting" and peacock-style strutting in the cited opinion piece her ass, along with all of those at CNBS and Fox Business, ought to be brought up on those very same charges under those very same laws, because that law cited above states that everyone involved in conspiring to concoct or protect such a scheme is exposed to the same legal liability and penalty.

Do not prance around as if you, Melissa, and Fox News are better than CNBS because you are not, you mendacious witch.

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Will someone please start asking the actual question behind these sorts of "policies" and their "need"?

The biggest threat to a retiree's nest egg isn't a stock market crash. It's a long illness requiring round-the-clock care.

The statistics behind that scenario -- $81,000 a year for a nursing home, $184,000 for 24-hour home care -- are what sells long-term care insurance policies. But while past research suggested that many more people needed the coverage than bought it, a new study suggests that most people should just skip it.

The study, by Boston College's Center for Retirement Research, focused on singles, who now make up the majority of Americans. Long-term care insurance makes financial sense only for the richest 20 to 30 percent of unmarried people, it finds. For the rest, it makes more sense to go without. If they need care, spending down their assets and then letting Medicaid pick up the tab is the most practical solution.

Why does it cost $81,000 for a nursing home or $184,000 to have someone available (not necessarily present) 24x7 in your home?

What's the overhead on this crap?  200%, 300%, 400% or more?  Yeah.

We cannot solve the problems we have in this country until we talk about what they actually are.  It is not the cost of said "insurance" and whether it's a "good deal" or not.

It is the ridiculous ramp in the cost of care -- costs that exist at this level only because of monopoly practices that are supposed to be felonies and in fact are in virtually every other sort of business.

You can stop this insanity tomorrow.

All that has to be done is to apply the existing Sherman and Clayton Acts to Health Care in all of its forms, both goods and services, along with formally recognizing that once you buy a thing you own it and may do with it as you wish.

The latter would cost the price of drugs in developing nations to rise some 10%.

But they would collapse by 80-90% here, simply on the arithmetic.

And thus, even for complex, difficult conditions, most people could afford to pay cash -- and insurance for those who wanted it would cost less than it does on your car.

Until we are willing to enforce the law that is supposed to apply everywhere and imprison everyone up and down the line that is engaged in this crap there is no solution to the problem; there are only ways to hide the cost and make you think you're getting "a deal" when in fact you are not.

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Hoh hoh hoh...

Gee, who said something like this before?  Why that would be me and here's just one example from 2009.

Feel free to look at the rest of the publicly-available tickers I've written over the last five years, which is a small selection of the whole.  Why not keep reprinting them all?  Because you not only didn't do anything about them then you won't now.

Gruber is right America, and this only changes when you prove him wrong.

That is, when you prove to him -- and to Obama and the rest -- that you are not stupid.

Want a solution to this mess -- a real one?  You can find it right here.

But that would mean that you'd have to cut the crap about robbing someone else to get what you want, and instead demand that The Rule of Law be re-instated in the United States.  And that, my friends, means you demand that jackasses like this are brought up on charges for defrauding everyone in this nation -- intentionally.  After all he just admitted doing it.

The bottom line is that you won't do that, will you?


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News just came down this afternoon that the Supreme Court has granted certiorari in King v. Burwell (No. 14-114), to decide whether the subsidies provided by Obamacare for the purchase of health insurance policies are available on the federally operated exchange, or only on state-established exchanges in those states that have one (a diminishing number, given that several of those states’ exchanges collapsed and the architect of one of them, Maryland Lieutenant Governor Anthony Brown, was defeated in a stunning upset on Tuesday). Thus, the practical import of the case could be enormous across 36 states that lack a state-run exchange.

This is much more important than it first appears.

First, the genesis of this case is that a 3-judge panel ruled that the statute means what it says. That is, the subsidies are only available in states with a state exchange.  But, minutes later a different federal circuit reached the exact opposite conclusion.

This sucks. If the USSC agrees with the plaintiffs subsidies become unavailable and must be legally clawed back in states without a state-run exchange.  That's a majority of the states, by the way.  But worse, the penalties are potentially invalidated in those states as well!

The "right" decision is to invalidate the subsidies in the states without a state-run exchange.  That's the clear language in the statute.  But we've already seen the USSC ignore the clear language in the Statute itself and also unconstitutionally re-write the law and unconstitutionally impose a direct tax, none of which is lawful -- or Constitutional.

I can't handicap this case, given the history.

But I'm forced to gamble on it.

**** you, Justices.

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Gee, so you can't afford cash health care eh?

NEW YORK (MarketWatch) — Wal-Mart Stores Inc. pushed down prices for some generic prescription drugs to just $4 eight years ago, setting a new industry standard. Now it is trying to do the same for seeing a doctor.

$40.  Cash.  On the barrel.  Coupled with the $4 generics care to argue why you need so-called "health insurance" for anything routine any more?

We need to stop making excuses for the health-care scam at all levels -- individually, corporately, and in our government.  Those representatives and senators, whether state or federal, that refuse to take this scam on and dismantle it need to be shown the door -- with prejudice.

Now where are the honest reps and candidates that will take this on?

I've not yet seen one.

That's a problem.

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