Category: Money Money

Another Healthcare Repeal Attempt

Senate GOP paves way for ObamaCare repeal bill” (Jordain Carney, The Hill)

Watch out for this. But also, don’t misinterpret it. Normally, you wouldn’t expect McConnell to bring a bill to the floor of the Senate unless he thought it could pass. However, with this healthcare-killing bill, because congressional Republicans used the budget reconciliation process to try to sneak it through without needing any Democrat votes, they’re in a jam: they can’t use that same procedural trick on any other bill while it’s still up in the air.

The Republican leadership wants to ram through a tax cut package for billionaires. They can’t do that with this healthcare turd clogging the pipe. McConnell is probably trying to flush it. (Maybe you’ve heard some of them grousing about how they “should have done tax cuts first” and wondered why they couldn’t pursue several legislative agendas simultaneously, like normal people. It’s because they have to use this cheat/exploit since their ideas are unpopular, and it’s strictly one-at-a-time. I’ll leave it to you to write a “camel through the needle’s eye” homily on the subject.)

So basically, worst case but unlikely scenario: this repeal passes. Best case but still bad scenario: it fails which lets them roll up their sleeves and start manfully widening the wealth gap so their pitiful wealthy selves don’t have to give up any comforts to feed the detestible poor. (Those housing-insecure kids should really get jobs. Non-voting losers.)

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Billfold Essay About Italian Austerity

New essay by me at The Billfold, “Social Trust in a Cash Economy” — a collage of cultural anecdotes about Italy and money, and the way a very calm Austerity crisis feels. It’s about a six-minute read. It starts like this:

There is a recurring bill I pay in Italy, in person, with a credit card. When I finish the transaction, the secretary makes a handwritten note in a small book. She makes the same note on a card-sized piece of notebook paper which I carry. One time, I forgot to bring the card-sized piece of paper. The secretary urgently retrieved an identical card and wrote down the entire history of our financial transactions, so that if she ever tried to cheat me, I could say, no, look here, in your handwriting it says I paid, because this ballpoint numeral is more meaningful than a credit card statement.

Something I didn’t know when I wrote the essay (because I just found out about it today) is that Italian banks get robbed a lot. A lot a lot a lot. (In the essay, I don’t write about banks at all, which probably wouldn’t have changed. But by coincidence, the essay came out the same day I knew this new thing.) Between 2000 and 2006 (the last timeperiod for which there is comprehensive data), Italian banks were robbed an average of 2771 times a year. That’s “walked in with a sack and robbed” robbed. For comparison, Germany’s number is 838. Spain’s is 523. Greece’s is 144. It is a pain in the ass to go into an Italian banks, with lots of, essentially, nested delayed airlocks you have to pass through solo. I figured this was the usual Italian security mania, but in this case it seems warranted

How the Stock Market Works, or the Myth of the Active Investor

Y’all, whenever I talk about the stock market being passive income, some bro shows up to valorize how much time an active investor spends on research.

This active investor is mostly a fiction.

The vast majority of individuals with stock holdings are buying ETFs or Mutual Funds, or received shares through an employer. (Or they’re indirectly invested through their insurer or pension.) They are not reading whitepapers and intensively researching investments in individual companies. What they are doing is not dissimilar from putting money in the savings account with the best interest rate and the lowest fee.

I know we’ve all seen exciting movies with people shouting on trading floors. But I know a lot of people (and I bet you do too) who have tried active investing, and almost all of them talked openly about how it was their “playtime” and treated it like going to the casino, clicking to buy things that were going up or down or had cute names, only risking money they were willing to lose. For money they were serious about, they’re in ETFs and Mutual Funds because they know they can’t beat the market and prefer a diversified portfolio.

Which is managed by someone else. Maybe a computer program.

So, you know, if you have a dream that through your insight and research you’re going to turn $100 into a fortune and the prettiest girl in town is going to swoon (maybe because she’s you! you can be a pretty girl and this fantasy still works!), that’s all well and good. But it’s not representative of most investors. Who are passive. Whose money does not come from working harder at understanding money.

Most of them don’t even fill out their own taxes, gosh.


(I’ve offered anecdotal evidence here as a kind of “search your feelings; you already know this” but my statements about the extremely low percentage of active investors in the market are data-driven. Look up any chart you want.)

Got To Look Out For Our Own

Really good to see all those “keep the refugees out and save those resources so we can help the poor and sick people who are already here” folks mobilizing hard to make sure endangered American citizens receive healthcare and other humanitarian aid like food and safe housing.

Great “band together and protect our own” hustle, everyone!

P.S. The taxes that have been funding expanded medical coverage are mostly on capital gains – on money people make by owning stock, not by doing anything. Stock market is doing just fine despite this 3.8% surcharge – doing historically wonderfully, making stockholders loads of money. Investment has not been constrained. But, sure, we need to protect those investors from the pain of passively accumulating free money that could be slightly more free money if it weren’t for those darned asthmatic kids.

Karl Marx, pivotal cultural critic and economist

Happy Cinco de Karl Marx’s 199th birthday!

Rahul Maganti says:

Mihir Shah, former member of the Planning Commission and my professor at Ashoka University once said, “You can’t understand modernity and capitalism without understanding Marx. If you don’t understand them, you can’t understand yourself.”

Happy Birthday, Comrade. 199, and counting.

Now read this to understand how much Marx’s philosophy influences your thinking (in a good way!) even if you think communism is ridiculous:

A Non-Marxist’s Gratitude for Karl Marx” (Avijit Pathak, The Wire)

Pre-Existing Conditions and Incentives to Conceal Information

I support single payer, because all the data I’ve seen tells me it’s what works. But that doesn’t mean I have contempt for people who want to find market solutions. Problem is, the recent Republican bill doesn’t remotely do that. And small-government conservatives should be as mad about it as I am. Here’s why. (This essay is by me.)

How Would You Lower Healthcare Costs Through the Free Market?”

Hint: The Republican bill doesn’t do it.

Health Insurers Are Making Lots of Money Already

FYI, if you’ve worried about the poor insurers who gosh can’t make money with all this existing regulation requiring them to cover sick people:

UnitedHealth claims that Obamacare has reduced its 2016 earnings by $850 million. While they might have $850 million less than they wanted, UntedHealth’s profits are still soaring.

In fact, UnitedHealth announced record-breaking profits in 2015, followed by an even better year this year. In July 2016, UnitedHealth celebrated revenues that quarter totalling $46.5 billion, an increase of $10 billion since the same time last year. And company filings show that UnitedHealth’s CEO Stephen J. Hemsley made over $20 million in 2015. To be fair, that is a pay cut. The previous year, in 2014, Hemsley took home $66 million in compensation.

Health insurance industry rakes in billions while blaming Obamacare for losses” (Amy Martyn, Consumer Affairs)

Meanwhile:

A Salon analysis of regulatory filings found that the top five health insurers — UnitedHealth, Anthem, Aetna, Humana and Cigna — have doled out nearly $30 billion in stock buybacks and dividends from 2013 to 2015. (The Supreme Court ruled in favor of the Affordable Care Act in 2012.) Meanwhile, the increase in customers that these health insurers received under ACA has helped raise the stock prices of the top five insurers — some 80 percent for Anthem and 165 percent for Aetna since the high court ruled on June 28, 2012 that Obamacare was constitutional.

Making a killing under Obamacare: The ACA gets blamed for rising premiums, while insurance companies are reaping massive profits” (Angelo Young, Salon)