Apologies for bearish call gone sour, and a new Obama plan that is not a plan and not new.
My Iran election call has proved wrong. Though I did not underestimate the effectiveness of "yes we can" rhetoric, I forgot that what matters is not how many votes you get, but how you count these votes. If seems for now that the "democtatization" of Iran has been postponed, which is good for oil prices, but increases risks to my Dow 14000 call.
The news de jour: the new plan for health care reform, which is not a plan, and is not new.
First we learn that the demagogue has "found" savings in the amount of 313 billion. Oh, really? Last time I checked, he was about to run a debt of 100% of GDP by the end of this year. It's reassuring to know that a debt junkie who'd just maxed out all his 20 credit cards has found some "savings" to afford a new limo. America's creditors will be happy to hear that.
But that 313 billion part almost sounds like a distraction when you think about the main issue. For those who still don't get the point: the US spends 2 times more on healthcare than normal countries that have a one-payer system. The Illinois demagogue has decided to "reform" this abomination, and as a result, the new abomination that he envisages is going to cost $1 trillion more. Now, that's what I call a great reform plan.
But I am digressing, which is too bad because this new 313 billion announcement deserves attention on its own merits. How can I skip, for example, this beautiful sentence in the news release: "White House officials insisted the new savings were rock-solid, but also acknowledged they had yet to settle on a specific mechanism to achieve lower prescription drug costs that make up nearly one-quarter of the new savings."
Don't you feel jelous? I do. If I could only learn to speak in these phrases: "player zloj insisted his savings for a new limo were rock-solid, but also acknowledged he had yet to find a specific way to come up with the cash that makes up nearly one-quarter of the price of the car".
Or how about this: "the latest announcement signaled that the White House had met its obligation to identify funding sources for a broad-based effort to make health insurance more affordable and more widely available. "
If only pigs had wings. "More affordable" is a fine way to describe an insurance whose price has just risen by a whole $1 trillion. But let's get to gory details. "The bulk of the new $313 billion in savings would come from cutting or reducing the growth of payments to hospitals, medical equipment manufacturers and laboratories". Yes, I appreciate that Orszag has a masterful command of the language, but how about some more specifics, for instance, how much will come from "cutting" and how much from "reducing the growth"?There is a difference between "cutting" and "reducing the growth": the former means you are paying less, while the latter means you're paying more.
What about the other $110 billion that is "slated to come from reducing reimbursements to take account of what Orszag described as the ability of providers to improve their efficiency"? To translate that from Obama-speak into conventinal English, it means that Obama has looked at the graph that showed exponentially increasing costs, and ordered his aides: "take that curve and move it down for me". Let us say that the people who drew the politically incorrect graph were all wrong, and let us sketch another graph, the one that we like more.