JPB wrote:
Quote:"You aren't seriously going to make the claim that because their economy was largely based on income due from the worthless derivatives that our markets created that the capitalist market is preferable to the socialist one, right?"
Nope. But derivatives (or any financial instrument), of course, are not why the financial crisis was precipitated. Neither can we blame ‘Wall Street’ greed, personal greed, or even American "decadence". These are human foibles that have been with us, well, since day one. Derivatives are contracts (simple or otherwise) that allow individuals and institutions to better forecast future business climates by decreasing price volatility and reducing risk. The most simple, like futures and stock options, demonstrate their usefulness to investors. A few years back, before the price of petrol started heading for the stratosphere, South West airlines bought jet fuel contracts to hedge against an increase in price. This allowed them to set up a business model informed by fuel prices that were guaranteed. When oil prices rose dramatically SW was the only airline that was profitable because they were already correctly informed about their true fuel cost.
Derivatives are only worthless when the item or service they are based on and the party contracting to take on the risk becomes, respectively, worthless or insolvent.
The real precipitating event of the financial crisis was in MBS (Mortgage Backed Securities) involving sub-prime loans. Essentially, these were "bundled" sub-prime loans sold mostly to GSE's Fannie Mae and Freddie Mac. That government involvement in this market along with the Fed keeping interest rates way too low for too long was a major contributing factor has been amply documented on this thread and elsewhere. However, if one has a tendency to believe government has a role in the financial markets he could point out its failure to properly oversee CDS (Credit Default Swaps) which were some of the major problems of large firms such as AIG.
The point of my post was simply that socialism is a system that only works within the framework of a capitalistic society that is able to use its capital efficiently enough so that a portion can be siphoned off and redistributed. Greater state control over capital resources inevitably is directly proportional to decreased efficiency and productivity and a subsequent decrease in the standard of living for all members of society. Without a capitalistic system to supply wealth, socialism, left on its own, soon withers. It would seem Obama’s Admin, presently, would like to see just how far socialism can be carried before it fails. That is the absolute best thing I can say of the Obama Admin. But my and Steyn’s comments point out that once that bridge is crossed only drastic measures will insure its return. In the words of Dan Fogelberg love (like liberty itself) “once deceased, is not easily exhumed”.
Quote:"I'm not big on socialism, but what we have is close enough to the real deal that we may as well do it right (equal access for everyone to the level of health care that we can afford to pay for all) or kill it completely, remove insurance from the workplace, and put hc at the local level for everyone. There's no excuse for providing HC for the elderly and the indigent while taxing the working poor at a level which prevents them from having any reasonable coverage. And, NO, dropping in at the local ER is not reasonable coverage for the uninsured.
I assume that since you are “not big on socialism” you recognize its danger to American society. Your strong feelings towards health care for every one are well taken. But the questions are hard to answer if we want equal health care for everyone. Congress itself seems reluctant to participate in such an overall national plan itself. This implies a down grade for those not members of the U.S. Congress and an unfairness in and of itself in the context of equal HC for every citizen. Would you be willing to have different levels of health care? If so how would this be determined? Would those who have health care be able to really keep it if they chose? Can you tolerate rationing? Can you envision a plan w/o rationing? We have rationing now, not only in health care but just about any good or service one can imagine (other than utilities). Presently that rationing is done by price. If one can envision a commodity or service that is not rationed by price what determines how it is distributed?
I must agree that HC insurance availability should be attached to an individual/family and not his place of employment. The role for government here is in tax credits. How about being able to buy HC insurance on an interstate level? Guaranteed Issue and Community Rating have to be addressed as does the third rail (for democrats at least) of health care Tort Reform. This of course implies a correct pricing of HC via the private sector.
Perhaps we can keep a system where 85% of those that like their HC can really keep it and just fix those parts that would make it better and include those that want it at a decent price.
But then we should ask Obama why something so important (his words), complicated, and controversial must be accomplished before Congresses’ August recess? From where does such urgency spring? Did he foresee those 9/12 demonstrations in Washington DC? As he flew, in Marine One, over the thousands protesting what they felt was over the top government spending and a perceived increased government infiltration of their lives did he understand them? Did he see them? Did he look? Didn’t President Nixon come down and talk to the war protestors?
JM