At Skilly's in Montana and then on to the Mediterranean

At

At Skilly's ranch in Montana

A beauty on the Med

Voyagers of the Seas docked at Naples

Mount ???--still active volcano

leaving the Port of Naples

The Meltdown -- who and what caused it

There are two books published recently on the financial crises that everyone should read:  Peter Sweitzer's "Architects of Ruin", and Thomas Sowell's "The Housing Boom and Bust".  Both authors agree, by and large, that the root cause of the crises resulted from the influence of liberal politicians on financial institutions. This is contrary to the spin offered now by those very politicians at the heart of the disaster that it was a lack of regulation and therefore a failure of free market capitalism.  The solution from this perspective is obviously to rewrite and stiffen regulations and put the government more firmly into this sector of the economy.  Not so says these two authors.  The problem started with the notion that minorities were being discriminated against by stringent loan standards of banks and that the solution was for the banks to loosen these standards and thereby allow more low income people to get into homes, i.e.,  at the bottom of this debacle is social engineering, not the failure of the free market and capitalism.  It's hard to argue with the case these economist/historians make when you follow the trail of the CRA (Community Redevelopment Act) from it's inception in the 1960's, coupled with role of Freddie Mac and Fannie Mae, housing NGOs that benefited from the full faith credit backing of the government buying up the loans made by banks in the first place.  The bad guys in this scenario are not only the liberal ennablers, Barney Frank, Chris Dodd, et al., but also Acorn and the many other community activist groups who brought extreme and often physically threatening pressure on bank loan officers at the local level to ensure they complied with the spirit and letter of the CRA rules and regulations.  Freddie and Fannie were crucial in this equation freeing the banks from the consequences of bad loans by buying them up and passing them on to Wall Street for securitization.  Once this flawed paper was securitized it was passed on throughout the world helping trigger the worldwide financial crises from which it will likely take a generation to recover.  It bears mentioning that Freddie and Fannie were the largest contributors to the reelection campaigns of many politicians over the years, one of whom, Barack Obama, received more contributions than any other than Chris Dodd.  Ugh!  The books are most instructive for those who want to understand the invidious nexus of liberal politicians and the financial institutions.

LATimes goes to Switzerland

An LA Times reporter recently paid a visit to a doctor in Switzerland to see how the healthcare system was working there in view of the fact since 1994 it has been predicated on somewhat the same system now being proposed by Obama. What he found is that it doesn't work all that well because costs continue to rise rapidly and there appears to be a substantial overuse of the system by the Swiss. According to the reporter healthcare costs the Swiss about half of what it costs Americans but the costs appear to be rising there at least as fast as here if not more. So what's going on here? Everyone in Switzerland is required to have an insurance policy provided by a privately owned company (but there is no" public option"). The government runs the system by determining the costs of services provided and monitoring the providers according to norms established by usage. There is little paperwork as procedures are billed directly by providers electronically to the approved insurance companies and they receive payment within 10 days. Supposedly the insurers operate these healthcare plans on a not-for-profit basis, using them to establish consumer relationships for their for profit lines of insurance. There are no co pays after a small threshold is met ($300), and as s consequence the system is overused by just about everyone since docs have little incentive to say no to requests for services (MRIs, etc). and consumers basically get any service for free. Bottom line is costs are rising rapidly here, as in all systems throughout the world. Government oversight seems to be as inefficient as the totally operated government systems.

From all the evidence it appears the root cause of rising costs and over usage of service providers lies in the the third party payer nature of all systems including the totally government run systems like Canada, and the hybrids like the Swiss system. As Obama is wont to say, let's be clear about one thing. The system the Obama Administration is pushing, involving the public option, is designed to turn the US healthcare industry into a single payer, government run system in time. What the third party payer aspect of all these systems does that leads to rising costs is it removes the consumer from the cost equation. This leads to indifference to costs by consumers and removes the discipline of competiive pricing in the cost equation. I want and need a car. If I don't care how much a Mercedes costs, I'd just soon have it rather than a VW. To control rising costs competitive pricing is the answer. To get to competitive pricing in healthcare we need to get away from the third party payer system we now have. The simplest way to do that is to remove the third party from the system. That would mean eliminating employer provided healthcare insurance in the US and return to the system that existed before the 1940's when our current system was created. This would not be as difficult to accomplish as one might imagine which will be the subject of another post.