Tag Archives: Obama

A spear carrier's view of the 1994 health care reform debacle (DeLong)

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I get annoyed by blogs that are mostly just links to other people's stuff... but I had to link this great post from Brad DeLong on his inside view of the 1994 debacle in health care...

I"ve been wondering for the last few weeks or months... why can't Obama be more like LBJ?  Still, everyone has to operate from their own strengths... he may yet pull off health care reform in his own style, and for those who care about the horse-race aspect of this (and I certainly do inasmuch as it affects the Democrats' chances in the next two elections): by now, anything decent (or even apparently decent) by way of a health care bill will be viewed as a victory for Obama.

I'm worried, though, that although there are apparently European models for well-functioning healthcare that don't involve a public option, they involve nongovernmental nonprofit entities, or high levels of regulation.   Such models may be very difficult to replicate in this country where they may be easily co-opted or weakened by the money and influence big insurance can put behind things, and by the continual possibility of politically motivated medldling/sabotage.  Ironically, I fear our politics and culture may make a public option more workable than a semiprivate one.

Change the culture, and pander to it---restructure the zombie banks

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President Obama, on why the new financial bailout/rescue plan doesn't temporarily "nationalize" the banks (as Sweden successfully did in its 1990s financial crisis):

"Obviously, Sweden has a different set of cultures in terms of how the government relates to markets and America's different. And we want to retain a strong sense of that private capital fulfilling the core -- core investment needs of this country.

And so, what we've tried to do is to apply some of the tough love that's going to be necessary, but do it in a way that's also recognizing we've got big private capital markets and ultimately that's going to be the key to getting credit flowing again."

Well, we voted for change, didn't we, so let's start changing the culture that says we can't even temporarily nationalize the largest banks with the worst balance-sheet issues, in an emergency that threatens the world economy and is in part attributable to these banks' irresponsibility.  Say, as many, including lefties like the former IMF chief economist Ken Rogoff, and lefty financial-history prof Niall Ferguson seem to believe, a belief perhaps even reflected in the stock market's fall on Geithner's press conference, we need to temporarily nationalize the banks.  Call it restructuring, make the call that the zombie banks are effectively bankrupt and an expedited, not court-supervised, receivership is needed, call it tough love, pander to our "culture" of responsibility.  Nationalization is a stupid word to use---it suggests an intention for long-term transfer of banking to the government, and few are seriously suggesting that.  We can do bank restructuring and still "retain a strong sense of that private capital fulfilling the core investment needs of this country." Maybe it can be done, in a stealthier way, through Geithner's plan---but it's apparently not clear to most what Geithner's "plan" will turn out to be, in practice.

Specter and the moderates' second pound of flesh---$30-48 billion

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To prevent a filibuster, the administration has to coddle the Senate's Great Men (and Women) Of The Center.  Specter insisting the plan cost less than either the $820 billion house bill or the $838 billion senate version---knocking $40-58 billion, 5% or more, off of a stimulus that may already be too small.  And with the final total looking like it will be $790 billion, pretty much succeeding.   A few Republican moderates (and a Democrat or two) holding the economy hostage so that --- what?  Their power be recognized?  It's been a while since I saw Specter in action in a hearing, but I recall, perhaps erroneously, a really bad gut-check about the guy as he browbeat some poor sap, or maybe some perfectly reasonable guy he happened not to agree with.  True, he's been a voice of reason on some issues, but I was not impressed.   Maybe the Republican moderates feel they have something to take back to their party in order not to be drummed out of it for supporting the plan at all.  Specter also insisting on keeping $10 billion for NIH untouched, while an increase for the NSF was scaled  back by the Senate plan---what's with that, does NIH have a facility in Pennsylvania, or is Specter just a health nut?

Probably Obama's playing it cool at this point is the right game plan... getting the thing passed without having to break a filibuster is probably much better for his long-run efficacy.   But I worry that it is not large enough---that by not signing on, but effectively watering it down through the implcit threat of a filibuster, the Republicans are setting up---not consciously for the most part, except that there probably are those who believe an extended recession is better than any increase in government spending---to try to benefit from an unnecessary extension of the recession.  At some point---perhaps on the second batch of stimulus that will likely turn out to be necess, crying "stimulus was ineffective".  I'm not sure Obama will get a chance to put in another round of stimulus, though he occasionally talks of it.  And, he may be able to get in another round under the guise of longer-term public investment, which he has called for, with stimulus as a side-benefit.  But I imagine there will be a filibuster showdown at some point.  Hopefully the chits will be called in and the moderates will help him break it, maybe with another ceremonial multi-billion-dollar bone or two as compensation.   But it is frustrating that the "senate moderates" are as boneheaded as they are about this.  One can only hope they are doing it because they feel the need to shelter themselves from the ire of their party.

From the AP:

"Earlier Tuesday, the Senate sailed to approval of its $838 billion economic stimulus bill, but with only three moderate Republicans signing on and then demanding the bill's cost go down when the final version emerges from negotiations.

Negotiators initially were working with a target of about $800 billion for the final bill, lawmakers said. But GOP moderate Arlen Specter, R-Pa., said Tuesday night on MSNBC's "Hardball" that he was insisting on a figure at around $780 billion."

Credit for the pound of flesh metaphor to Paul Krugman, back on Feb. 6th.