Private health insurance is an oxymoron. Like "socially useful Wall Street"

For exactly the same intuitively obvious reason.

Adam Smith eloquently manufactured an economic theory out of  the common place observation that most people, most of the time will work harder for their own self interest than for any other reason.

Or more succinctly, greed is powerful.

 We all know that. The rational rationale (if you'll permit me)for  the Conservatives'  defense of Capitalism is that people are motivated by self interest and almost not at all by the common good  c.f. The tragedy of the commons..The rationale for the Liberals' enthusiasm for Regulation is that people are so motivated by self interest that they will lock fire exits, can poisonous food and foist sub prime mortgages on their fellow citizens if they can strike it rich while doing so.

As I blogged a couple of days ago the various explanations of the financial melt down omit the real one:that when US taxes ceased to be progressive , the resulting escalation in the after- tax return on Wall Street's bonuses become so enticing that a generation of smart young people  shut their eyes to the disaster they were creating. The motto became "Pull up the ladder mate, I'm aboard".

And not just them.There was  Bernie Madoff.

Now consider the insurance industry.It has share holders, ceo's , managers. They walk on two legs, went to college somewhere, have a mortgage , kids and aspirations to.: .... pay off that mortgage, send their kids to St. Grarklesex and some ivy covered college, ski at Chamonix, own a villa in Tuscany . And  more . Much more. As much as all those Wall Streeters

Call it self interest, call it greed. Whatever. That's the way it is, folks.

And how do they achieve that?. By making a profit. And how does an insurance company make a profit? By not providing insurance..    

Every dollar an insurance company pays to settle a claim from its customers  is a dollar less profit,And moves the owners, the ceo and the managers that much further away  from that goal to live like the Lords of the Universe.

It's not just that the goals of the health insurance industry are different from Obama's. It's that they are in complete conflict The industry can only achieve its goals by frustrating Obama's.

-and mine.

TPM has been mercifully free of my effusions while I've been dealing with , wait for it, an insurance company.

A contractor excavated the street in front of my house. The porch is falling down-it's dangerous to walk by. I filed a claim with my insurer and was told there's no damage.

Of course. No one's surprised. Not me. Not my attorney. Not the civil engineer who examined the damage.Because if the company pays my claim it will have lower profits. And that villa in Tuscany will be just that more unachievable for the ceo.

If that's the way my home owner's insurance works why should anyone expect health insurance will be any different.

Private health insurance is dangerous to the health of the nation and all its inhabitants-except for those eimployed by the private health insurers.

* with apologies to Norman Podhoretz for the rif on the title of his essay written as he was in the process of  morphing from a brilliant literary critic to an unthinking conservative. reactionary

......restricting those Goldman Sachs bonuses. Not.

Didn't some  bonuses of that type  help create the financial crisis? Yup.

And even if some of those bonuses  didn't impact the financial system isn't it "wrong" for them to be so large compared to the median annual wage? Well, actually:No. Take it one step at a time.

o GS charged a lot of money for its services. Shouldn't the government limit the prices GS charges  for its services ? If you say yes, stop reading That's a whole n'other discussion..If you think the government should mostly let the market set prices, read on

o In that case, shouldn't the government limit how much of its profits GS pays to its workers?Nope. The profits are either going to go to its very capitalistic workers or its equally capitalistic owners.What's the moral argument for giving less to the worker and more to the owners?  Speak up. I didn't hear your answer.

So if  these bonuses contributed to the financial crisis but I don't think they should be limited, can we rely on regulation to prevent them from causing future crises?

 Fugeddaboutit.

Can a $70K /year accountant or an army of $70K accountants stand between the beautiful ivy leaguer and that first seven figure bonus for which he's gunning ? He's  got a chance to say good bye to that charming flat in the village and move into a doorman equipped condo in the  East 80s. Plus paying off his school loans and putting aside enough for junior's tuition at the Dalton School. Guess who's going to win that round.

So if it ain't "wrong".And the Government can't  price fix or regulate against it, what then?

Bring back a progressive tax code. 

Wall Street didn't turn toxic because the bankers lost their morals. Or the Government lost its grip. Or  because the Partnershps morphed into Corporations.. It happened because the 90% tax bracket was abolished by Ike. And the 50/60/70/80 brackets went west under his successors. That's what changed banking into an anything goes environment. And gifted us with this current crisis.And the ones to come until we restore those brackets.

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