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Happy Friday! There are more good news articles, commentaries, and analyst reports on the Web every week than anyone could read in a month. Here are the eight most fascinating ones I read this week.
1. Who wants Obamacare?
Harvard professor Jeff Frankel shows that a group most likely to gain from Obamacare -- "those who have a pre-existing condition or are pre-disposed to illness, for example because they are overweight" -- are the most likely to oppose the law, at least based on statewide averages:
[States] where more people are overweight, such as Mississippi, Alabama, South Carolina, and Texas, are more likely to oppose Obamacare. In those parts of the country where people are slimmer, such as New England, New York, and Colorado, there is strong support for health care reform. For every one percentage point increase in obesity, support for Obamacare declines by an estimated four percentage points on average.
2. Pay to play
But it grated on [Sen. Orin] Hatch and other senators that [Bill] Gates didn't want to want to play the Washington game. Former Microsoft employee Michael Kinsley, a liberal, wrote of Gates: "He didn't want anything special from the government, except the freedom to build and sell software. If the government would leave him alone, he would leave the government alone."
This was a mistake. One lobbyist fumed about Gates to author Gary Rivlin: "You look at a guy like Gates, who's been arrogant and cheap and incredibly naive about politics. He genuinely believed that because he was creating jobs or whatever, that'd be enough."
Gates was "cheap" because Microsoft spent only $2 million on lobbying in 1997, and its PAC contributed less than $50,000 during the 1996 election cycle. "You can't say, 'We're better than that,' " a Microsoft lobbyist told me on Friday. "At some point, you get too big, and you can't just ignore Washington."
With assumptions of rising health care costs the key factor in forecasts of runaway budget deficits, this might be one of the most important stories of the next few decades. Writes the Wall Street Journal: .
For the past couple of years, U.S. health-care spending has been growing at a surprisingly slow pace … Adjusted for inflation, U.S. per-persons pending on health care grew at an annual average rate of 2.1% between 2005 and 2010 compared with 4.3% in the five previous years and 3.2% in the five years before that.
I put this in historical context earlier this year:
Source: National Health Statistics Group.
4. What's it done?
After another weak jobs report this morning, some think another round of quantitative easing by the Federal Reserve is due. What's that mean for the stock market? The Finance Blog Calculated Risk shows S&P 500 performance during the last two rounds of QE. In short, it's been good:
5. "People who say money doesn't buy happiness don't have any."
Financial advisor Carl Lewis -- one of the best finance writers around -- talks about buyers' remorse and sticker shock:
What if we focus … on making sure the way we use our money is aligned with what we say is important to us? In other words, shouldn’t we be happy about spending money on things we value and are within our budget?
In fact, I believe it’s this kind of aligned spending that makes it possible to spend our way to happiness. So instead of looking for pain, let's look for alignment. Next time you reach for the debit card, or cash (if you like pain), ask yourself this:
- Does this fit in my budget? In other words, can I afford this?
- Is this something I value?
If the answer to both is yes, then you should be able to put a stop to most of the pain and actually enjoy the purchase. This is one way we really can spend our way to happiness.
6. The purpose of bankers
As most big global banks, including JPMorgan Chase (NYSE: JPM ) , Citigroup (NYSE: C ) , and Bank of America (NYSE: BAC ) are being eyed for possibly engaging in a massive fraud to manipulate interest rates, Martin Wolfe of the Financial Times wonders why banks really exist these days:
My interpretation of the Libor scandal is the obvious one: banks, as presently constituted and managed, cannot be trusted to perform any publicly important function, against the perceived interests of their staff. Today’s banks represent the incarnation of profit-seeking behaviour taken to its logical limits, in which the only question asked by senior staff is not what is their duty or their responsibility, but what can they get away with.
7. The heart of health-care reform
This is old, but I found it while researching another article. It sums up why health-care reform is badly needed:
According to the Centers for Medicare & Medicaid Services, 55% of U.S. emergency care now goes uncompensated. When medical bills go unpaid, health care providers must either shift the costs onto those who can pay, mainly those with health insurance or government programs, or go unpaid. In 2008, the total amount of uncompensated care in the US was an estimated 57.4 billion (Hadley, 2008). In California, it’s estimated that cost shifting amounted to $455 per individual or $1,186 per family each year (Peter Harbage and Len M. Nichols).
8. Trickle down
Robert Frank of CNBC shares a mind-blowing stat: "In Russia … 100 billionaires control 20 percent of the country’s GDP." Russia's population is about 142 million, so 0.00007% of the population controls 20% of the income.
Enjoy your weekend.