Wednesday, August 15, 2012
Paul Ryan Blinked (ideologues always do)
A few points.
1. While I agree with this speaker's premise, TARP was hardly the first, although it is the largest, of the government bailouts. Barry Ritholtz has done the play-by-play in his entertaining and informative book Bailout Nation. Beginning with Lockheed and Chrysler in the 1970's, and regressing to the Greenspan easy- money era of irrational exuberance and dollar devaluation, the bailout of Orange County California, Long Term Capital Management, etc, Ritholtz weaves the entire sage up to TARP, which he calls "history's biggest transfer of wealth -- from the taxpayer to the Banksters..."
2. You don't have to be an acolyte of Ludwig von Mises to understand the damage that eliminating moral hazard does to the economy. Why should anyone be careful or honest when there is no punishment and all the players will live to see another day?
3. TARP had real losers, and I don't just mean the taxpayers. As referenced in this video, the banks who were not leveraged, who were responsible, had to fund bailouts of their competitors. And investors who saw this debacle coming likewise had to support failing banks with their taxes while perhaps knowing all along that it was a house of cards.
4. And Paul Ryan, the forthright student of Ayn Rand and von Mises, voted for this egregious bailout. This is the essence of hypocrisy and/or lack of conviction. If you don't believe in free markets that's one thing, but if you devote your life to the raw efficiency of free markets then why on earth would you go against those principles right when they are needed the most? Ryan blinked.
5. Which was proof then, and now, that his whole candidacy is an act. It's bullshit. This talk of the curative powers of free markets is a debating technique left over from high school. When the shit hits the fan, Paul Ryan has no trust that free markets can solve anything.
6. Which brings us to health care. Now Paul Ryan claims he wants to inflict free market theology on Medicare with the hope that it will bring down costs and improve quality. It won't. If any market is encumbered by inefficiencies, risks of spotty access, asymmetrical information, decision-making under duress, potential for malfeasance and cherry-picking customers, it's the health care industry. If seasoned bankers and investment analysts cannot evaluate financial instruments, then how can seniors be expected to comprehend medical efficacy, quality of care and insurance actuarial statistics?
7. Under Ryan's plan, blind and demented seniors (me in 20 years) will be forced to navigate the health insurance market place with a voucher that is projected be worth half of what my insurance will cost. Fraudsters and charlatans will eagerly separate me and my cohort from our life savings-- and who will bail us out? And at what cost?
8. And one final point: Ryan's plan does not require seniors to purchase insurance at all with that underfunded voucher, so what happens when (not if) some demented, blind senior goes into the emergency room with congestive heart failure and no insurance? Who pays for that? And who pays when thousands, or millions, do it? Is Ryan going to repeal EMTALA, too, and let them just die?