Tuesday, 18 August 2009

Today's Gotta Reads, Aug. 18, 2009 Edition

I thought I was lucky to score a trifecta on "must reads" this morning and then -- boom -- nailed a quad-fecta. Or whatever.

Let's start with health care.

1. This CBS news story tells us that America's senior citizens are losing confidence in the future of health care. Remember these are the same older Americans whose resistance is reportedly stiffening to the inchoate plans on the table to revamp health care. In recent polling, most over-50s opposed "Obamacare;" most under-50s supported it.

Let's just go straight to the irony meter on this one, folks: the biggest group of over 50s are actually over 65s, and guess what you get when you cross that magic age threshhold? Yup, Medicare. Government-run health care. That's right: they got their government-run health care, they like it, but they'd rather the rest of us not get any.

Or is that fair? A critic might rebut that older Americans are just fearful of change, fearful that their Medicare benefits will get cut in the overhaul, fearful that they'll wind up on ice floe #66 that sets sail with 24,000 other grandmas to the middle of nowhere. Okay, these are concerns that should be addressed but the bottom-line remains: they got their government-run health care. They like it. And they don't want anyone to touch it.

2. Obama's Teflon Melting as Outrage over Health Care Heats Up.

Marshall Auerback has a thoughtful, overarching and sobering piece here that is only superficially about health care. More profoundly, it's about the ugly zeitgeist of the country right now, and how Obama squandered good will with his coddling of the banker class, and how that may be helping fuel the town hall anger over health care. Auerback even raises the specter of people, en masse, refusing to pay their taxes in protest.

I think that he has a very good point that I have been making myself lately. People feel more disenfranchised and powerless than ever. There's a growing sense that the system has been bought -- lock, stock and barrel -- by moneyed interests and pity the poor fool out in Akron or Daytona Beach who can't make his mortgage payments. Tsk, tsk, he's not too big to fail, so he'll get ignored. He's too small to succeed ...

3. Odd WSJ Story on Vermont.

Tim Duy is absolutely brilliant here in deconstructing a WSJ story about Vermont, and the state's apparently burdensome policies toward realizing home ownership -- mortgage brokers partly on the hook when their clients fail, banks required to warn would-be borrowers who are about to pay higher-than-normal interest rates. The net result of this onerous Vermont regulation: one of the lowest foreclosure rates in the U.S.

Which leaves Tim scratching his pate and wondering, like the rest of us: And this is bad, uh, because ... ???? (Related note: on a list of "problem banks" I saw recently over on the Calculated Risk blog, only about five or six states had zero problem banks. Among them: Vermont.)

4. And finally: Janet Tavakoli goes all cash (doesn't trust the brown shoots spray-painted green).

I think she's right and I'm personally quite worried that the other shoe has yet to fall in this super-recession, despite all the happy talk of late. She points out that unemployment remains high, one-quarter to one-third of U.S. mortgages are underwater (more is owed on them than they're worth), credit card problems are rising, and a whole new wave of banks are in trouble, making their way to the fore.

I hate to seem bearish, but I think next year will prove her prescient. The stock market has made a head feint higher, but I don't think it's "real." What is truly troubling, I would add, is that the Fed has already massively intervened to support the economy. So we've got a listing edifice even with the massive crutches arranged around it. What scares me is that, if we suffer some big-enough shock, the Fed may be out of bullets to fight back.