Healthcare Express

I keep hearing from Obama that he intends to extend healthcare coverage to the supposed 46 million (I can’t truthfully say Americans) in the US who do not have it, AND at the same time, reduce healthcare costs. What I have not heard, not even once, is how he plans to do it. Today, in his 'virtual’ town hall meeting, he said he is open to ‘all serious ideas’.

Obama and the dem leadership obviously have no clue on what to do and plan on encountering stiff resistance from even democrats. To combat this anticipated resistence, Pelosi and Reid intend on employing a little used ‘reconciliation’ procedure that allows Congress to ‘fast track’ legislature that only requires 51 votes, as opposed to the normal 60 majority vote.

Prepare to get railroaded.

Tim Geithner, Superstar

The new secretary of the treasury, Tim Geithner, was anointed our knight-in-shining-armor by an adoring press. Surely the ‘genius’ (have you noticed the trend that all of Obama administration’s appointees are dubbed ‘smart’), who as assistant secretary for international affairs of the IMF, led the Asian markets out of their crises in the ‘90s, would come to the rescue again, this time for US markets. However, it appears that the markets themselves have not been so admiring of either his credentials or his financial rescue plans (or lack thereof) for the US; the stock market has continued its decline, and bank stocks in particular have plummeted since his appointment.   

Perhaps the financial ‘boots on the ground’ know something about Geithner that lay-people do not? Perhaps they understand that the economic solutions that Geithner imposed on the Asian markets were not exactly as brilliant as they have been trumpeted to have been? According to the former Prime Minister of Australia (who, as an economist, was also Treasurer for eight years), the economic solutions applied by Geithner to Indonesia were totally wrong, due to a flawed diagnosis of the problem (read the article if you would like the details); suffice it to say, that the ‘solution’ he imposed caused a precipitous drop in that country’s GDP--and political turmoil that lasts till this day.

The extent to Geither’s IMF solutions were wrong is seen in the fact that NO Asian countries have asked for help from the IMF SINCE! In addition, it is thought that China, not wanting to ever have to deal with an IMF imposed ‘solution’ itself, began investing in US debt as financial backup--this in turn allowed for credit market conditions (cheap credit) that allowed for the over-borrowing/overspending that precipitated the credit crisis that is rocking the global economy today!

We don’t know much of Geither’s plans, but what has the Obama administration done so far? Well, implausibly, they have demanded of China that they buy YET MORE of our debt! Talk about adding fuel to the fire. We can only hope that Geithner asks for outside help when determining what other ‘solutions’ to apply to our economic ills.

Watch the price of oil climb

Today, Secretary of the Interior, Ken Salazar, announced that the Obama administration is reversing yet another Bush administration decision; this one granted leases for the exploration of oil-shale in some western states. A Washington DC think-tank, The Institute for Energy Research, believes there is more energy locked in western shale than all of the reserves in the Middle East.

Oil prices, like any commodity, are priced based on future value. Regardless of the political leanings of a given economist, to a man they understand that price is directly proportional to supply. We all remember the rise in oil prices that began in late 2007 and did not stop until the summer of 2008; But, you ask, what happened in the summer of 2008 that caused the precipitous drop of oil from almost $150 per barrel to the current level of under $35 per barrel?

On July 22nd of 2008, President Bush announced the beginning of the lease granting process I mention above. Immediately oil prices dropped and haven’t stopped. Coincidence?...I think not; but we shall see in the coming weeks how much damage this decision by the Obama administration will cause.