Jobs Bill and Facebook

I am worried that there is some connection between the recently passed Jobs bill and the Facebook IPO.  Facebook has been the poster child for huge IPOs that give preference to insiders.  Facebook was limited by the old restrictions of privately held companies.  It's not clear whether the new Jobs bill will change its situation. It may be too big, maybe not.  It's already in the situation where the number of shareholders of record is limited, but the actual number of shareholders is much higher.  Goldman Sachs counts as one shareholder, but it can hold shares for its preferred clients, raising the total well beyond 500 or whatever the limit was.  Even if this law does not directly affect Facebook, it will affect new IPOs, and while it may marginally aid new businesses, it will enormously aid rich Wall Street insiders.  At the same time, as the NYT article points out, it may increase the risks of bad investments in questionable companies by small, unsophisticated investors.  I would like to know what Elizabeth Warren thinks about the bill.  Is it good for America?  Is it good for the middle class (or what's left of it)?  Or is it just good for the super rich, especially those who live in Silicon Valley?  Unfortunately I do not trust Obama to do what is best for the middle class (and the country).  He has sold out to the super rich.

Sen. Bill Frist and Denver Hospitals

I have been upset for some time about HCA's takeover of a number of Colorado hospitals.  HCA is owned by the Frist family, whom Sen. Bill Frist represented in the Senate.  Health care is a mess; hospitals are making fortunes, and Bill Frist's is one of them.  Rather than using his expertise on health care to improve it while he was in the Senate, he used it mainly to enrich himself and his family.  Although he was Senate leader, he is remembered mainly for his provide-medical-care-at-any-cost argument to keep Terri Schiavo alive.  Frist is an example of what is wrong with the American health care system, and he was a leader in the Senate.  What is good for his wallet is not necessarily good for the country.

Now, Frist's for-profit HCA plans to take over many of Colorado's not-for-profit hospitals, creating concerns that the hospitals will no longer be run for the public benefit.

On the other hand, a Catholic-conected hospital systsem, SCL, plans to expand in Colorado, raising questions about whether the hospitals taken over will provide for the full range of women's health services that they provide now, since the Catholic church opposes contraception, abortion, etc.

Bernanke Lectures Aimed at Ron Paul

Fed Chairman Bernanke's lectures at George Washington University are aimed at Republican candidate Ron Paul, who represents a significant strain of thought about the Federal Reserve.  Paul believes that the Fed is evil because it interferes with the free functioning the American economy and most often encourages inflation.  Paul would like to see the US return to the gold standard.  Bernanke's first lecture dealt extensively with the issue, in particular recalling William Jennings Bryan's speech about "the cross of gold" on which the rich were crucifying average workers and farmers.

Bernanke correctly asked why the world economies should be restricted by the amount of gold that is mined around the world.  It's clearly better to have a money supply that can be managed to correspond the amount of goods and services being produced that the amount of gold being mined.  On the other hand, Paul is right that an irresponsible Fed can allow or encourage detrimental policies which might well increase inflation (or create deflation).  In an ideal world, however, the US would have a competent Fed which would maintain a proper money supply to facilitate growth and full employment.

One problem these days is that the US has no fiscal policy.  Congress is dysfunctional.  Republicans refuse to raise taxes; Democrats, to cut expenditures.  So, the full burden of trying to manage the American economy falls on the Fed, with some help from the Executive Branch, depending on what it can do by executive order, by the Treasury selling bonds, etc.

But Paul's gold bugs don't trust bureaucrats.  They would rather have the economy controlled by external forces, rather than the government.

I prefer to have Bernanke try to manage the economy rather than leave it hostage to South African gold miners.

Republicans Not Saving Money

In a legitimate debate about health care, Democrats would want single payer system assuring coverage for everybody.  Republicans would want a system that reduced costs.  What actually happened with Obama Care, however, was that the Republican insistence on using private heath insurance companies actually increased costs by increasing the power and profits of  insurance companies without reducing doctors' or hospitals' costs.  A single payer system would have given the government leverage to bring down costs; whether it would have actually done so will never be known.  Congress was quick to restore doctors' Medicare fees to the old, higher level when they were in danger of being reduced by some of the automatic budget reductions.  

Some doctors refuse to accept Medicare patients because Medicare pays less than private insurance.  If Congress had passed "Medicare for everybody," however, doctors would have had less opportunity to earn the high rates they currently do, although for the doctors who treat the richest "one-percent" price is irrelevant.  

In a New York Times report on the richest one percent,they found that after a general category called "managers," physicians made up the next largest portion of the one percent, with those working out of their own offices earning the most. Almost none of these rich doctors work in a world where fees are set by a free market; they are either paid by insurance companies or the government, in both cases with fees set in advance.  A patient who walks in the door of a doctor's office has no bargaining rights.  The doctors make sure up front that they are will paid.

The Republicans did nothing to insert free market principles in the health care law.  If anything, they strengthened the hands of the doctors in negotiating with the insurance companies and the government, assuring that the most expensive health care in the world will become even more expensive.