Financial Reform, the "Public Option" and The Usual Naysayers

How are so many conservative politicians able to frame every debate as if their opinions were the springboard to truth in all things when false claims and obfuscation are the operational elements of their political lives? Their misrepresentations, however, may be as effective as cogent arguments because a public hungry for information is liable to throw up its collective hands in confusion and distrust of everyone in government.

Republican fear specialists speak with great authority claiming to know what will happen as a result of a particular program whether it is health care, climate change or economic reform. That wouldn't be so annoying if many of them weren't so notoriously invested in the status quo in terms of health care, for example. An article in The Progressive Populist, 6/28/09, listed the signers of a letter to President Obama opposing a public health-care option as Senators Grassley, Hatch, Bunning, Crapo, Roberts, Ensign, Enzi, Kyl and Cornyn. Referencing The Center for Responsive Politics the article stated that the nine "have taken $17.7 million from insurance and healthcare interests."

It would be hard to find a more vocal group of soothsayers convinced that 'the public option' would doom the country to lower standards, higher prices, less competition and a total collapse of "the best health-care system in the world", although that claim is not substantiated by our ranking compared to other high-level industrialized nations. And should we be instructed, in any case, by people whose political fortunes are financially enhanced by the very organizations that control a huge segment of the economy?

As for competition, the myriad of available medical plans, are not options for the vast majority of Americans since servers are usually chosen by an employer or other large organization. A small business seeking reasonable coverage for its staff is disadvantaged because its smaller pool provides less clout when it comes to determining appropriate coverage at reasonable cost. If polls show most people happy with their health care plans it is quite possible to receive good care and still be dissatisfied with the financial drain that ever-rising premiums and deductibles causes.

The general flaw in most conversations about Capitalism is that not everyone understands how it works. If large institutions make the rules and politicians acquiesce, regular folks are at risk. In a recent Washington Journal interview, Joseph Stiglitz, former World Bank Chief Economist, said that, while risk is an important facet of the financial world, it should be undertaken by hedge funds and venture capitalists not disguised in opaque derivatives that shift that risk to average consumers and the general economy.

Responding to a caller who posed the familiar rant that government pressed Fannie and Freddie to engage in imprudent lending practices, Stiglitz said noone forces banks to make bad loans. The banking establishment played fast and loose on its own, in a process complicated by the mingling of regular banking procedures with securities markets. He doesn't oppose risk taking, just where it occurs and how it is regulated. He and other concerned economists feel that regulations currently under consideration don't go far enough in protecting the public from the kinds of abuses so recently exposed.

Unfortunately, Stiglitz acknowledged, our financial institutions exercise enormous political power - - every politician is assigned a raft of lobbyists who threaten cajole and sometimes even write legislation, making reforms difficult to accomplish. Whatever happened to anti-trust regulations? In the end if banks and insurance companies are said to be "too big to fail", aren't they, in reality, simply "too big?"

There are those who argue that supporting a public health care option, for example, is like saying government might as well run groceries and all sorts of other businesses. But that is, of course, just another example of an attempt to conflate disparate elements of the economy. Picking out fruit at the local supermarket isn't the same kind of decision-making process that factors into the search for an adequate, affordable health-care plan. In fact that argument is pretty much a perfect example of confusing apples and oranges.

The president must be the strongest proponent of his health initiatives and stand up to financial gurus who would thwart meaningful financial reform. This is a political moment that requires something more than going along to get along and calling it bi-partisanship. Obama needs to remember to dance with the folks who brought him to the ball.