Fund Manager to individual investors on Thrusday: Open your wallets. At the close of the markets on Thursday, Jeffrey Kleintop jumped at the chance to blow bubbles, maybe hoping for the little guy to throw more of his savings into the market after the Dow closed up 2.1%. 

As reported by Bloomberg: 

Oct. 29 (Bloomberg) -- U.S. stocks rallied, sending benchmark indexes to their biggest advance since July, after the economy returned to growth following the worst contraction in seven decades. Treasuries dropped and the dollar and yen weakened, while commodities surged. 

...

"The stock rally is not over yet," said Jeffrey Kleintop, who helps oversee about $247 billion as chief market strategist at LPL Financial in Boston.  "The stock market can celebrate.  This news is an important confidence boost, in particular to individual investors."

But then Friday came. Dow down 2.5%. Oops!  Klientop's bubbles blow away.  Here he is on Reuters,  the next day, lamenting the lack of confidence of individual investors:
 

NEW YORK (Reuters) - U.S. stocks fell on Friday, the day after logging their best gains in three months, as sectors that have led the rally pulled back.

 

Several reports pointed to a mixed economic picture on the heels of a government report that showed gross domestic product grew at its best rate in two years. Midwest area manufacturing was strong, but consumer sentiment slipped this month.

 

"Confidence still strikes me as shockingly low," said Jeff Kleintop, chief market strategist at LPL Financial in Boston.  "Consumers are still very pessimistic, and that is evident in individual investors' hesitancy to embrace this rally."

As one of the 50 million Americans presently without health insurance, I'm sitting here, fingers crossed, hoping I don't get sick.  So far, I've been lucky.  As I observe politicians debate about how to best water-down reform of the health care system while acting as if they're actually doing something, one thing has become crystal clear:  The US system of health care is insanely inefficient. . 

 

Spending on health care in the US accounts for over 16% of GDP and continues to rise.  Other advanced countries, like Japan and the UK, spend around 8%.  Yet, they manage to insure their entire populations while providing measurably better results. 

 

From birth (America ranked 24th out of 27 countries in infant mortality in 2005) to death (America ranked 24th out of 28 countries in life expectancy) Americans fare far worse than countries with government managed health systems.   In between, medical costs for Americans are a factor in over 60% of personal bankruptcies.  Medical errors kill upwards of 100,000 patients a year.

 

Is this "best health care system the world has ever known"?  Maybe in the world of the Senator who said that - Alabama Republican Richard Shelby -  and some of his colleagues, but not for the country as a whole.

 

If a study carried out by the McKinsey Institute is accurate, the system is monster of inefficiency that led them to conclude that "the United States spends $650 billion more on health care than might be expected given the country's wealth and the experience of comparable members of the (OECD)."

 

As put by health care economist Uwe Reinhardt, who referenced that same study in an op-ed in the Times:

One thing Americans do buy with this extra spending is an administrative overhead load that is huge by international standards...excess spending on administration would amount to about $120 billion in 2006 and about $150 billion in 2008. It would have been more than enough to finance universal health insurance this year.

When republican strategist Frank Luntz tells his benefactors to cry out in mock obstinance: "No Washington bureaucrat or healthcare lobbyist should stand between your family and your doctor"  he ignores the fact that the political class itself, by failing to reorganize the healthcare system, IS that "bureaucrat".  The only thing standing between 50 million uninsured Americans and a doctor is our weak-kneed government itself. 

Since government managed healthcare has been  hounded off the table as an entrée into socialism, the public option, if it's not compromised out of existence, is the only item still on the menu of market failure mitigation.  President Obama says it could force the insurance companies to trim the fat of their own bureaucracies and discipline the system into greater efficiency.  Maybe companies would then reconsider the value of the wild salaries paid to executives like Aetna's CEO Ron Williams who walked with $24 million dollars last year. I'm not sure what good Mr. Williams has done to deserve $92,000 a day for a year of five day work weeks, including vacations.

 

Unfortunately, real reform that brings the US cost structure in line with our OECD counterparts would inevitably bring the loss of jobs.  You don't just squeeze out $650 billion in savings without eliminating jobs.  That will cause real pain to those workers and should be a consideration if reform ever looks like it will evolve from talking point to effective policy.  At least if reform is done right, those who do lose their jobs won't be sitting there without health insurance and hoping, fingers crossed, that they don't get sick.

While most of us don't worry about some government agent throwing a black bag over our heads and dragging us off to a secret prison where we'll be tortured, the thought that the president can, as he pleases, read our (e)mail and record our phone conversations is disturbing.  Will Barack Obama hold onto or even seek to expand some of these hidden powers George Bush carved out for the presidency?

 

In 2001, the Bush Administration instituted a broad domestic eavesdropping program.  Though a legal process was in place that would have likely allowed the president to implement such a program, he ignored it completely, opting instead to run it secretly.

 

This is reminiscent of Richard Nixon, whose use of government power to spy on political opponents led to the creation in 1978 of the law that President Bush violated beginning in 2001. The Foreign Intelligence Service Act (FISA) required that all domestic eavesdropping activity be reported to a special court, which would then decide whether the surveillance was warranted.

 

Bush never notified the court even as his spy agencies installed powerful data collection equipment at massive Internet and mobile phone hubs run by the nation's largest telecom providers.

 

After the program was revealed in 2005, the flurry of lawsuits that followed were mostly thrown out when the Democratic Congress passed a law that let the phone companies off the hook.

 

However, one prominent suit remains.  In the case of Al-Haramain vs. Bush, the plaintiff claims that the Bush administration violated the FISA statute when, without the required warrants, it monitored phone conversations between him and his lawyers.  The Bush Department of Justice denied this and sought to have the case dismissed.  But in the discovery phase, the government inadvertently sent to the plaintiff's the full transcripts of the phone conversations they'd denied ever recording.

 

After reviewing the transcripts, the judge ruled that they were grounds for continuing the case.  The government immediately claimed they were "state secrets" and sought to have the case dismissed.  The judge denied the motion.

 

When Barack Obama took the presidential wheel from George Bush, many Obama supporters believed he would steer clear of such secrecy.  They hoped he would restrain from using"state secrets" to put the brakes on court cases that could keep the president from off-roading into autocracy.

 

With this in mind, the judge slowed down the trial to see if the new DOJ would approach the case any differently.  As a candidate, Obama supported keeping the FISA statute and opposed granting immunity to the telecoms.  His stated positions led the judge to reason that change might be on the way.

 

So what happened?  The Obama DOJ filed an emergency motion with a higher court, citing the "state secrets" privilege and seeking to dismiss the Al-Haramain case.  When the court refused to hear the motion, the Obama DOJ said it will appeal.

 

In the Al-Haramain case, Obama has taken from Bush the wheel of the presidential truck and continued driving it straight through the "state secret" loophole.  Lofty rhetoric about a new age of accountability and transparency notwithstanding, Obama has acted not only to protect his predecessor, but to retain some of the kingly powers Bush scratched out for future presidents.

The Bush administration created an extra-legal structure within which it could conduct any number of "secret" activities which may or may not have been essential to national security. Obama, as president, wants the same privileges for himself. His actions in the Al-Haramain case leave no doubt that this president, too, will rely on the  use of "state secrets"  to do...what?  Well, we'll never know, it's a  "state secret."

Earlier today, Josh posted a thirty second spot from a pro-McCain org.  He asked for re-writes of the script that make explicit the ad's subtext.  It's a strange ad and worth checking out.  My re-write is below.

Dear White People: I am a "black" man who looks kinda white, so you can trust me more than regular black people.  Barack Obama is just the latest radical black man who wants to take money from you and "redistribute" it to his black brothers and sisters. Blacks will vote for him because they get that Obama is about restitution at white people's expense. Don't be fooled - their day may yet come, but not with Obama,  and not this time. Vote for the white man.