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Tom Au, CFA
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In the early 1990s, during the middle of a secular bull market, I began work on "A Modern Approach To Graham and Dodd Investing," that was not particularly suited for the decade of the 1990s, but was ideally suited for the following "Lost Decade" of the 2000s. In the early... More
My company:
Carryl Capital Management
My book:
A Modern Approach to Graham and Dodd Investing
  • Health Care Seems to Have Been Put on the Back Burner 0 comments
    Jun 22, 2009 8:12 AM

    It had been the guesses of others, and ourselves, that the Obama Administration would give priority to health care over even banking reform. But Congress has its own priorities, and now seems to be giving the nod to banking reform, with health care "on deck."

    In part, it's because the issues and villains are easier to identify with regard to banking reform. A handful of bad banks (and bad bankers) took the American public "for a ride," saddling them with high balance, high cost, subprime mortgage, or other loans that they couldn't pay. Consumers need 1) to be protected against such practices happening again, and 2) at least a modicum of relief for the mess that they're already in. Much the same goes for the banks themselves, who had hanged themselves with the same (leverage) "rope" originally meant for consumers.  They need immediate relief, plus reforms against future malfeasance.

    Health care is a far knottier issue. Everyone wants more of it, no one wnats to pay for it. Making the problem more difficult is that people who are genuinely willing to pay for their own health care, are less interested in paying for the care of others. The main providing agents, doclors, hospitals, health insurance companies cannot be upset too much, or else they'll stop being providers. Then, there is an obstreporous group at the table that may not belong there; the trial laywers.

    These are issues that will take time and effort to resolve. Balancing the interests of various constituencies will be a tough job. It's unlikely that the government will be able to come up with a comprehensive health care program that will safifsfy all, or even most, nneds. The best that can be hoped for is an improvement over what we currently have.

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