What If We Had A Financial Meltdown - And Did Nothing

I.  What Financial Reform Says

Earlier this year, we discussed the Obama Administration's financial regulation proposals in detail, breaking the discussion into a four part series.  Here is the full text of the proposal http://documents.nytimes.com/draft-of-president-obama-s-financial-regulation-proposal#p=2

If you didn't have a chance to read that discussion, here it is.

1. http://womensfinancialplanning.blogspot.com/2009/07/obama-administration-financial.html
2. http://womensfinancialplanning.blogspot.com/2009/07/obama-administration-financial_07.html
3. http://womensfinancialplanning.blogspot.com/2009/07/president-obamas-financial-regulation.html
4. http://womensfinancialplanning.blogspot.com/2009/07/president-obamas-financial-regulation_10.html

Given the severity of the recent recession, not to mention its causes, the one issue I did not discuss was the possibility that Congress would take no action at all. 

So, of course, that's exactly what our elected representatives did.  Or, did NOT do, to be more precise.

II.  What does Financial Reform have in common with Health Care Reform?
Last month, http://womensfinancialplanning.blogspot.com/2009/09/health-care-reform-meets-financial.html we saw how financial reform is inextricably entwined with health care reform.  As you know, an integral part of health care reform addresses insurance reform,e.g., mandatory covering of pre-existing conditions, the much-discussed "public option" and so on.

Since we, as taxpayer/owners of insurance bohemoth American International Group ("AIG"), have paid $1400 per family to date for its bailout, after it took extraordinary unregulated risk in the housing market, you'd think this issue would demand resolution.

Think again.

Whether you support the "public option," a government-run program that will compete with insurance companies, or the insurance "co-op," designed to provide a more competitive environment for health insurance, know this.  Insurance is regulated by each state - not the Federal government - and in many states, as much as 85% of health insurance is held by one insurer. 

If this were true for Microsoft, the company would be sued for having a monopoly in that state.   Yet, it is okay for insurance companies, because each state operates with different rules.

This is unnecessarily complicated, non-competitive and does absolutely nothing for anyone except insurance companies.

III.  Dare we ask that two things be done at once?

If you think it's too much to address financial reform and health care reform in one Congressional session, then be prepared for more of the same. 

If not, you may want to drop a quick note to your elected representatives, with whom, by the way, financial lobbyists have spent $3.4 billion to ensure their support. 

Here's where to find them.  http://www.visi.com/juan/congress/