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Gross: 'Ignore what Wall Street has to say about financial regulation'

The FinReg conversation tends to go something like this: Reformers propose to bring some new product, like derivative swaps, into the same regulatory and trading process that has worked for everything else. Banks start screaming that reformers don't understand their business and this'll be the end of credit in the economy and these reforms will end the crucially important delta-hedge-to-triple-axle trade, and you wouldn't want to do that, right?

Well, Daniel Gross says you actually do. The banks may know a lot about their business, but they don't know that much about changing it.

My general rule of thumb is that we should generally ignore what Wall Street has to say about financial regulation. Investment banks lack the common sense to know what's good for them. The financial sector opposed all the regulations that were good for it in the 1930s — i.e. the advent of the Securities and Exchange Commission and the creation of the Federal Deposit Insurance Corp. And the regulatory changes it requested and received in the past decade — eroding Glass-Steagall, getting the SEC to permit investment banks to increase their use of leverage — set the stage for the debacle of 2008.

For the past several decades, Wall Street has continually told Washington that if the Street can't do things the way it always has, and if the government changes the rules to mandate greater transparency and customer protection, that the geniuses in Lower Manhattan won't be able to make money, and it would stunt the industry. They've been wrong every time.

Gross goes on to give a number of examples.

By Ezra Klein  |  April 28, 2010; 3:57 PM ET
 
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Next: Republicans fold on FinReg filibuster

Comments

i'm often fascinated by how little confidence the capitalists have in capitalism. i mean, the big picture argument for market capitalism is that it adapts and reallocates more efficiently than centralized economies.

and yet, when it comes to changing the status quo, the affected parties always claim they can't possibly change! it's almost as if they weren't market-oriented capitalists at all, just privileged oligopolists.

Posted by: howard16 | April 28, 2010 4:06 PM | Report abuse

As soon as FinReg passes Wall Street will start lobying to have it repealed.

Does anyone truly believe that the GOP is going to abandon its "Deregulate it!" platform? Heck, "Deregulate it!" has been 1/2 of the GOPs economic platform for decades, (the other half being tax cuts for people like Paris Hilton).

Posted by: nisleib | April 28, 2010 4:24 PM | Report abuse

I think this article presents a false dichotomy.

It's not that regulation will be the end of credit or that we should ignore everything that people who have experience with these products have to say.

Some of the protest is absolutely because profits will be reduced, no question. Some change is warranted. However, there ARE several bad/boneheaded parts of the FinReg bill as I've outlined before.

Gross cherry picks some examples where government intervention was either a plus or not a big problem, in his view. However, anyone could easily go find cases where government regulation was disastrous - for example, unit banking regulations required 'one branch' banks in many parts of the country, which is why so many banks failed during the Depression.

http://mjperry.blogspot.com/2008/09/great-depression-not-single-canadian.html

Also, the government to increase the homeownership rate at all costs clearly was a net negative from a policy perspective (even if the most of the damage of the crisis can't be laid at the feet of the GSEs).

By the way, there is a decent number of people who argue that the FDIC a key contributor to the recent crisis, by allowing banks to raise risk free capital to fund the worst loans. Maybe the FDIC was 'good' for the banks in the 1930s, but it might only have been good because it offset the damage from previous bad regulation requiring unit banking. Maybe Gross is the guy who we shouldn't be listening to...

http://www0.gsb.columbia.edu/faculty/ccalomiris/papers/PrudentialBankRegulation.pdf

"Ironically, financial economists and economic historians regard deposit insurance (and other safety-net policies) as the primary source of the unprecedented financial instability that has arisen worldwide over the past thirty years (Barth, Caprio, and Levine 2006; Demirguc-Kunt, Kane, and Laeven 2009; Calomiris 2008a)."

http://www.ucwv.edu/news/news/Ex-Bank%20CEO%20Says%20Government%20Caused%20Crisis,382.aspx


Dismissing what bankers have to say out of hand as Gross does is foolish - consider each argument on its merits - if after consulting a lot of expert opinion (not necessarily current Wall St. bankers either) it appears that a given regulation is reasonable, then let's do it. But finance is complex and regulation often has unintended consequences. Let's just be careful how we go about it.

Posted by: justin84 | April 28, 2010 4:36 PM | Report abuse

DO NOT ignore what bankers say...listen to it:

http://realclearpolitics.blogs.time.com/2010/04/28/a-simple-question-about-a-simplistic-narrative/

~~~~~~~~~~
Now ask yourself a simple question: Notwithstanding yesterday's grilling of Goldman execs and Congressional histrionics about "sh_tty deals," why are the CEO's of two of the largest banks on Wall Street in favor of passing Dodd's bill while community bankers all across the country like Tippens are against it?
~~~~~~~~~~

Posted by: FastEddieO007 | April 28, 2010 4:41 PM | Report abuse

Eddie - They aren't. In fact they are spending millions trying to derail FinReg.

Posted by: nisleib | April 28, 2010 4:48 PM | Report abuse

nisleib - yeah...right.

.....and the Goldman-Sachs stockholders are so nervous about the passage of this bill that their stock is tanking....oh wait...I guess not.

Lets see---yesterday Goldman-Sachs was one of the few stocks to rise. Almost the whole market dropped. And this was on the day that Democrats got all huffy with them....hmmmm...and only a few days after an unprecedented SEC Suit during trading hours....yeah...I can see Goldman-Sachs investors are really scared of this bill.

They appear to me to be quite confident that their million dollar President will come through for them.

Posted by: FastEddieO007 | April 28, 2010 4:52 PM | Report abuse

...but if it helps with the charade, I'll go along with your whacky story...yeah, Goldman-Sachs is trying to stop this bill....yeah....thats the ticket.

Posted by: FastEddieO007 | April 28, 2010 4:54 PM | Report abuse

Calling all sheep...calling all sheep...Yo--Obama Sheep...Obama is standing tough against the Goldman-Sachs...you heard it here.

Posted by: FastEddieO007 | April 28, 2010 4:55 PM | Report abuse

Just like the Federal regulation, negative interference in, and taxpayer backed sponsorship of the mortgage market worked so well??

There's a lot of focus on derivative contracts here, including the idiotic proposals to ban them. Goal one should be openness, not banning contracts between people or corporations. The people in Congress don't even understand what these contracts are, as was abundantly clear yesterday. To expect them to be able to create a regulatory framework for derivative contracts is absurd.

WaMu didn't go under because of derivatives contracts, they went under because they lent too much money to people to buy homes that decreased in value. Instead of fixing that, the government continues to sponsor loans with 3.5% down.

None of this is to say that $GS isn't doing some wack stuff, but if you trust government to do better, you are a fool.

Posted by: staticvars | April 28, 2010 4:56 PM | Report abuse

Eddie - Wall Street is backing the GOP much more than the Democrats this cycle.

Writing a letter is easy, and it costs nothing. If you actually go to the link you provided and read the links it provides you will see that the CEO of Goldman says he supports reform, but knows little about reform. And the letter from the CEO of Citigroup? Well, so what? It is a PR move, nothing more. The acutall Wall Street money is going to try to derail reform.

This is nothing new. The same thing happened with HCR. Plenty of CEOs of insurance companies were saying they were for it in public, but fighting like heck against it behind the scenes. I'm guessing you know this and are just trying to spread nonsensical Republican talking points. But I could be giving you the benefit of the doubt.

Posted by: nisleib | April 28, 2010 5:01 PM | Report abuse

90% of the American corporations represented by Wall Street are honest and thus support Republicans devotion to the 250 year tradition of American corporation which has delivered our exceptional prosperity.

Make no mistake, the 10% of dishonest corporations on Wall Street are sticking with their guys in DC though, and this bill is payoff numero uno.

...just ask Chris "Countrywide" Dodd.

Posted by: FastEddieO007 | April 28, 2010 5:08 PM | Report abuse

I get it nsleib...the Obama Sheep who claim that what Obama/Dodd are doing will hurt Goldman-Sachs know more than the investors who are literally betting their money that this bill helps them.

Yeah. That must be it.

Posted by: FastEddieO007 | April 28, 2010 5:11 PM | Report abuse

Eddie - Whatever. If you think this bill is a payoff to Wall Street, and you think companies like Goldman aren't lobbying like crazy to kill this bill, well, then you are sadly misinformed. I could post links showing Goldman's lobbying doubling this year, but why bother?

You keep believing what you want to. Nobody can take that away from you.

Posted by: nisleib | April 28, 2010 5:14 PM | Report abuse

nslieb - please send me those links. Real bona fide links that show this. i am very interested in seeing this.

Posted by: FastEddieO007 | April 28, 2010 5:27 PM | Report abuse

Eddie

Ok - how about Bloomberg News. It took me about an eighth of a second to find this.

"The firm has been putting more money into Washington. It boosted its lobbying expenditures to $1.2 million during the first three months of 2010 from $670,000 during the same period a year earlier. Goldman Sachs’s political action committee contributed a total of $290,500 to both parties in March."

http://www.businessweek.com/news/2010-04-27/goldman-turns-to-new-lobbying-playbook-for-washington-battle.html

So, if this bill is the a give away to Wall Street, why is Wall Street trying so hard to kill/water it down?

But keep believing what you want to, I'm sure you'll have no trouble rationalizing this.

Posted by: nisleib | April 28, 2010 5:33 PM | Report abuse

They're spending lobbyiong money in Washington....but how do you jump to the conclusion they're lobbying to stop it.

I contend they spent a million dollars to get Obama in the White House precisely to pass this bill which entrenches the cozy power broker relationship between powerful politicians and big firms like Goldman-Sachs through the extraordinary powers being added to the executive branch.

This supports MY argument...not yours.

Posted by: FastEddieO007 | April 28, 2010 5:38 PM | Report abuse

This bill is all about helping the BIG GUYS destory the little guys....this bill acheives that thorugh increased powers of the federal government to target the individual small guys any time they begin to rise up to a level that could threaten one of the big guys....that is precisely why Obama is insiting on the "consumer protection" powers that literally give him carte blanche to run any one out of business vis-a-vis the way Elliot Spitzer ran the Attorney Generals office in NY----simply open up a big public investigation and the little guys are crushed without a single charge filed.

This is how Democrats have operated for some time....where have you been?


Posted by: FastEddieO007 | April 28, 2010 5:43 PM | Report abuse

Eddie

You see, there is that rationalization I knew you would excel at. Bravo!

By the way, look at the time frames of the lobbying expenditures. Obama was elected in 2008, the numbers linked to in that article are from the first quarter of 2010. That points to the fiction in your comment about getting Obama elected to pass this law. But you know that, you are just spinning out Republican talking points because that is all you have.

There is a term you should look up: epistemic closure.

Posted by: nisleib | April 28, 2010 5:45 PM | Report abuse

There is a clear public pattern going on....small guys and honest guys are unanimously against Dodd's bill....this is a very public position.

The large dishonest guys are unanimously supporting it. And their stocks rise as the passage of this looks more imminent.

If Republicans can strike a deal that eliminates some of the unsavory elements that Obama and Dodd are insisting on, than perhaps this could change.

Posted by: FastEddieO007 | April 28, 2010 5:46 PM | Report abuse

Getting Obama was easy. They began spending a lot more money in order to try and put together a PR campaign to pressure the Honest Congressman to go along with Obama and Dodd.

That is very expensive and involves huge theatrics, like choreographing a partisan SEC "attack" to distract Obama's Pro-Goldman-Sachs record.

Its all been quite clever. how about Levin's liberal use of profanity----now I'm convinced--Democrats are against Goldman-Sachs (wink-wink).

Posted by: FastEddieO007 | April 28, 2010 5:50 PM | Report abuse

My friend Mark Levine was on Fox News the other day carrying water for this ridiculousness, crying how he has bought things on the internet and been ripped off---that is why he wants the consumer protection part...yeah...right...

Its laughable.

Posted by: FastEddieO007 | April 28, 2010 5:53 PM | Report abuse

I think it is easy to ignore the extent to which people on Wall Street are not profit motivated. It seems obvious that they're in it for the money, but I think a lot of people, maybe even most people, work on Wall Street because it is a high stakes, high competition, high risk occupation.

This sort of activity really hits the sweet spot for a certain sort of personality; Tapping into basic instincts. It is the thrill of the hunt and the kill, even if it is more abstract than it used to be.

Regulations would be good for finance and society as a whole. It would lower volatility and even increase average profits, if not maximum profits. But people in Wall Street are always going to oppose them, because regulations would make Wall Street a lot more boring. Instead of wild west cowboys, they'd be reduced to glorified actuaries.

Posted by: zosima | April 28, 2010 5:54 PM | Report abuse

"The latest round of lobbying follows a first-quarter political spending spree by Wall Street, in which top banks and securities firms spent millions of dollars to lobby members of Congress while pouring hundreds of thousands of dollars more into the re-election coffers of key lawmakers -- mainly Republicans."

http://www.reuters.com/article/idUSTRE63R42B20100428

So, according to Reuters Wall Street is mainly supporting the GOP right now.

Eddie, I am in awe of your ability to rationalize.

Posted by: nisleib | April 28, 2010 5:55 PM | Report abuse

Read the opposition by the smaller plainly honest businesses opposing this nonsense. Its bona fide and they have the moral high ground. Chris Dodd certainly doesn't.

Posted by: FastEddieO007 | April 28, 2010 5:56 PM | Report abuse

The majority (90%) of Wall Street are good honest corporations like those that have generated our exceptional prosperity for 250+ years.

Its no wonder they support Republicans.

But the dishonest ones support Obama & Dodd. They are a powerful minority.

Goldman-Sachs gave Obama $1 million and gave John McCain nothing.

Posted by: FastEddieO007 | April 28, 2010 5:59 PM | Report abuse

I think the breathtaking we're seeing is how the American public is able to see through the carefully coordinated smoke and mirrors put forward by these corrupt Democrats.

The voters of Conneticut know how corrupt Chris Dodd and were it up to them they would send him packing. But the same Democrats who performed a whitewash investigation of his sweetheart mortgage from Countrywide have taken him off the ballot in November. What a pity. I would've loved seeing him get destoryed.

Posted by: FastEddieO007 | April 28, 2010 6:02 PM | Report abuse

Eddie - your tinfoil hat needs adjusting

1) Wall Street, especially Goldman Sachs, is giving far more to the GOP than Dems (See Reuters article above.)

2) The GOP has been holding secret meetings with Wall Street bigwigs.

3) The GOP has fillibustered even letting FinReg be debated. Not once, not twice, but three times they've filibustered it. They did this AFTER holding secret meetings with Wall Street lobbyist and AFTER receiving millions from Wall Street.

4) You say Goldman Sachs gave Obama 1M during the last election. But as the Bloomberg article I linked to shows, they gave 1.2 Million out in the first quarter of 2010, mostly to Republicans. 1.2 million in three months is more than 1 million over two years.

You should really try, at least try, to be better informed. You can start by not listening to Mark Levin and Rush Limbaugh. Oh, and look up epistemic closure.

Posted by: nisleib | April 28, 2010 6:50 PM | Report abuse

This is nothing new. The same thing happened with HCR. Plenty of CEOs of insurance companies were saying they were for it in public, but fighting like heck against it behind the scenes. I'm guessing you know this and are just trying to spread nonsensical Republican talking points. But I could be giving you the benefit of the doubt.

Posted by: nisleib | April 28, 2010 5:01 PM | Report abuse


Nisleib,

I understand you're getting attacked by, well, "Fast Eddie" so i get why you're going at him like this but this is 100% FALSE.

I know for a fact that insurers were NOT railing against it in private because I've been in those "private" discussions and conference calls etc. They didn't want the public option because they fear that its the first step towards socialized medicine. Some fear the MLR but they're already finding ways around that. But at the end of the day they've all been screaming that they wished the reform went further to control costs, specifically THEIR costs. They're obviously against the government saying that they have to lose money but who wouldn't be? In your business if you were told you could only charge $1 but it cost you $1.10 to produce your product how long would you stay in business??


I also heard Lloyd Blankfein say that he's for FinReg. There are some parts he doesn't like but he did say on the record that he believes that these derivative markets should be in the open and that they could (and I believe he's right) compete with the other players in that market. Now does he really believe that or is that PR? I don't know because I'm not in that industry but I do know about the healthcare and the statement you made is false and more talking points which are not needed.

Posted by: visionbrkr | April 29, 2010 8:04 AM | Report abuse

Republicans will quickly forego "secret" meetuing as soon as Obama and his Chicago mobsters stop.....great talking point though!

Posted by: FastEddieO007 | April 29, 2010 9:12 AM | Report abuse

I can stay informed by NOT listening...hmmm...wow that is a pretty amazing thing.

Goldman-Sachs will need to spend a lot more money to get on board the more honest Republicans than they pay to bribe...errr...i mean lobby the Democrats...after all its a sellers market in DC.

What can I say...Obama should have held out for more....the price of selling out Main Street is going up.

Posted by: FastEddieO007 | April 29, 2010 9:17 AM | Report abuse

Vision - So you are denying AHIP, and many CEOs of insurance companies, weren't spening millions trying to water down/derail HCR? Really?

Eddie - Yeah, you will be better informed by NOT listening to people who routinely lie to you like Limbaugh and Levin.

Posted by: nisleib | April 29, 2010 9:32 AM | Report abuse

nisleib,

sigh. Have you even heard Karen Ignani talk?

They were spending millions to "influence" how reform happened. They've been screaming about cost controls but no one was listening.

As an example do you remember when the SFC proposal came out and it weakened the individual mandate, the one thing that DOES work in MA to try to slow the cost of healthcare inflation? They weren't killing it and if you read their memo you'd see they are FOR reform but want to see more cost controls in the system and they fear a weak mandate would cause what's going on in California with people opting out who are healthy . . . the whole death spiral thing.

And again we are STILL waiting for the regs to come out that were due a week ago from HHS. If an insurer acted in that way it'd be splashed all over this site but for some reason it goes unnoticed.

Did you see earlier in the week how most large insurers are covering dependents to age 26 early (and even asking self insured groups to do so as well even though they're not required to) but the Federal government is saying not until January 1st 2011?

If it was happening the other way around I'm sure we'd see many letters from Secretary Sebelius screaming bloody murder to whoever would listen.

Hypocrisy at its worst. It'll be a horrible mess just like the ARRA subsidy is.


Personally I think you need to take off your blinders and look at it honestly because you're not.

Posted by: visionbrkr | April 29, 2010 10:02 AM | Report abuse

Vision - Hogwash. They were spending millions to derail HCR and they almost succeeded. They gave huge sums to the GOP, and what did the GOP do? They fillibustered, forcing Democrats to use parliamentary tactics and go around the GOP.

Personally I think you need to take off your blinders and look at it honestly because you're not.

Posted by: nisleib | April 29, 2010 10:54 AM | Report abuse

nisleib,


they gave huge sums of money to BOTH PARTIES. Just like every lobbyist and industry do.


Why didn't you bother to answer or even respond to my points about the HHS regs, insurers covering dependents early, ending recision early etc? Didn't support your points?

And you have an issue with my blinders??


Go back to Karen Ignani's conversations with Ezra to understand more about it. Its amazing but I've admitted directly to you when I've been wrong or may have "stepped over the line" yet you can't do the same on a subject you have admitted to me in the past that I was knowledgeable about.

When it doesn't fit your ideology I've suddenly got blinders on?

Posted by: visionbrkr | April 29, 2010 11:42 AM | Report abuse

and not for nothing but who says "hogwash" anymore??

Posted by: visionbrkr | April 29, 2010 11:43 AM | Report abuse

Vision - So you are saying AHIP didn't pay for a phony balony Price Waterhouse Study meant to kill HCR? Are you denying that AHIP helped pack and disrupt town hall meetings? There are dozens of examples I can pull up with a google search.

I know you were paying attention during the HCR debate. That you now are saying insurance companies didn't try to kill / water down HCR is laughable. Who do you think you are fooling?

http://thinkprogress.org/2009/08/27/ahip-lobbying-publicoption/

PS - My larger point was that CEOs tend to say one thing and do another. It is called PR. If you look at the title of this blog entry it begins with "Ignore..."

Posted by: nisleib | April 29, 2010 12:32 PM | Report abuse

nisleib,

you're absolutely right about the P/W study. I had forgotten about that. It was crap but there were many valid points to it too that obviously go disregarded. That being said the study if you remember was rushed to completion with the abrupt end of the SFC proposal which we all expected would be "liberalized" from there. It wasn't liberalized enough to have a PO in it but the mandate was weakened, the excise tax was pushed WAY back etc.

Its amazing how I can just admit something and you won't.

Still no take on what I mentioned above??

Do you understand or care how screwed up ARRA was by the Federal government?? HHS regs on the new law??? Does it not matter to you for some reason?? Why shouldn't they be held to the same standards that industry is? Forget it. I doubt you'll even comment on this part. Sad how partisan you seem to have become.

Posted by: visionbrkr | April 29, 2010 1:58 PM | Report abuse

in the end from the level that I knew of at least I didn't see any semblance of trying to kill reform. Insurers know that the employer market in many states was/is dying due to the death spiral without a mandate.

now they have that and we'll see if they step up to the table and negotiate better with hospitals and providers. Had a meeting this morning with a rep that is predicting that we'll see many insurers in the next 2-3 years say no to hospitals and we'll have many major hospitals leaving insurers networks. Then we'll see who holds the power.

Posted by: visionbrkr | April 29, 2010 2:09 PM | Report abuse

Vision - Hogwash. They were spending millions to derail HCR and they almost succeeded.

Posted by: nisleib | April 29, 2010 10:54 AM | Report abuse


Here's where you're most wrong. They weren't trying to derail it. They were trying to SHAPE it. There's a HUGE difference there.

Posted by: visionbrkr | April 29, 2010 2:13 PM | Report abuse

vision - I'm not addressing ARRA or HHS because it is completely irrelevant to my point.

My point was that CEOs say one thing in public and then behave in a manner completly in opposition to their comments. It is called PR. And yes, AHIP did exactly that during the HCR debate.

I'm not admitting I'm wrong about this because I'm not wrong about this. You may think you work for a wonderful industry that is without flaw, but you have claimed in the past that insurance companies don't cancel long standing policies once people get sick. And lo and behold, Wellpoint does exactly that to women with breast cancer.

So yes, you have blinders on about the health insurance industry.

http://abcnews.go.com/Health/wireStory?id=10446307

Posted by: nisleib | April 29, 2010 2:20 PM | Report abuse

"A top lobbyist for the major private insurance industry trade group, America's Health Insurance Plans (AHIP), urged Congressional Republicans to not even consider helping Democrats pass health care reform lest they aid an "enemy who is down."

"Steve Champlin, a lobbyist for the Duberstein Group who represents AHIP, declared that the road to a bipartisan health care reform bill was, essentially, dead. And he urged GOP members to keep it that way. "

http://www.washingtonmonthly.com/archives/individual/2009_10/020574.php


Posted by: nisleib | April 29, 2010 2:28 PM | Report abuse

so you're an accountant right? Let me make an analogy then. Let's say we all want to reform the tax code (as has been mentioned on here) that allows everyone to pay a set amount and then voila we no longer need accountants. I'm not saying it would happen, I'm not even saying its logical but bear with me.

Would not individual entities within accounting trade organizations say the same things?


I don't think AHIP is without fault but to make a blanket statement to say that they're all 100% against reform, trying to kill it is misleading on your part because as was mentioned in the article you linked to if you remember correctly insurers had been working with the White House and congress. Heck FDL was whining that Wellpoint basically wrote the bill. So they'd rail against a bill they wrote and gives them potentially 30 million new members? Many of which will be subsidized now by the government???

In the below linked HuffPost article it basically says that insurers just in October of 2009 were starting to attack reform. Do you know why? Because it started to go off the tracks in relation to the mandate, excise tax, cost controls etc.

http://www.huffingtonpost.com/2009/10/13/ahip-ad-campaign-targets_n_318690.html

What you're missing is the "reason" they were attacking it. That it didn't do enough to control costs.


I'd comment longer on your recision report but it has nothing to do with the topic at hand but I will say this, they are ending it now 5-6 months PRIOR to when its required by law. Long time coming, should have been done long ago and should stay done but that'll never get a mention.


And ARRA and HHS does have relevance because you like everyone else expects the insurance industry to abide by the law (as it should) yet the government for whatever reason doesn't feel it necessary to do that and yet when the implementation of the law gets botched you darn sure know who's going to get the blame.

Posted by: visionbrkr | April 29, 2010 2:56 PM | Report abuse

"...that allows everyone to pay a set amount and then voila we no longer need accountants."

That wouldn't do away with the need for accountants, just income tax preparers.

"Would not individual entities within accounting trade organizations say the same things?"

Of course they would! They would also send out their hacks to say they think something that is in direct oposition to what they were doing behind the scenes! THAT IS MY POINT!

"What you're missing is the "reason" they were attacking it. That it didn't do enough to control costs."

Nonsense, but whatever. The bottom line is that AHIP (which is controlled by Insurance Company CEOs) was saying one thing and doing the opposite. They tried to get the GOP to kill the bill all together.

Posted by: nisleib | April 29, 2010 3:13 PM | Report abuse

"What you're missing is the "reason" they were attacking it. That it didn't do enough to control costs."

Nonsense, but whatever.


Sorry but the NYT disagrees with you.

http://www.nytimes.com/2010/04/21/health/policy/21health.html

Karen M. Ignagni, president of America’s Health Insurance Plans, a trade group for insurers, said Congress should let the new law work before piling on additional requirements.

Congress, she said, has largely ignored the cause of rising premiums: the explosive growth of medical costs and the power of hospitals and other health care providers to dictate prices.

Posted by: visionbrkr | April 29, 2010 3:23 PM | Report abuse

Golly vision, so you are saying that the head lobbyist for the health insurance industry made claims about costs that made the industry she represents look good. Wow, that was such bravery on her part!

How does that disprove what AHIP was doing behind the scenes? It doesn't. Besides, that quote was from a little over a week ago, long after the passage of HCR. How does that prove anything? I'm not denying that AHIP says things that try to make the insurance industry look good. Duh. Of course they do. The question is not what AHIP was saying, but what AHIP was doing.

Thus far you have posted nothing that even hints at my being wrong.

Posted by: nisleib | April 29, 2010 3:34 PM | Report abuse

http://www.nytimes.com/2010/04/21/opinion/21wed1.html

http://www.ahip.org/content/pressrelease.aspx?docid=29767


and even some crazy kid at the American Prospect ;-)

http://www.prospect.org/csnc/blogs/ezraklein_archive?month=11&year=2008&base_name=a_conversation_with_americas_h&15


The overwhelming theme? The need for affordability and cost control.

Posted by: visionbrkr | April 29, 2010 3:44 PM | Report abuse

How are either of those links at all relevant?

They aren't. The question is not what AHIP said in 2008 but what it did in 2009. It said one thing and did the opposite.

I think we are having two completely different conversations. I'm saying CEOs and lobbyists tend to say things that contradict what they are doing. You are saying, well, something about how the insurance industry is a big fluffy bunny that says great things about controlling costs.

I don't care what AHIP is saying, it isn't relevant. They are saying things that boost the insurance industry, that is their job and if they did anything else they would get canned.

Posted by: nisleib | April 29, 2010 3:55 PM | Report abuse

Golly vision, so you are saying that the head lobbyist for the health insurance industry made claims about costs that made the industry she represents look good. Wow, that was such bravery on her part!


Posted by: nisleib | April 29, 2010 3:34 PM | Report abuse

wait? Which link are you referring to? How does what Ignani said in the Robert Pear NYT article make insurers look good? If anything honestly it makes them look weak and not able to negotiate with providers which to a large extent is true.

If rates for coverage are similar (which in many states they are) then employers and individuals choose their coverage based upon the doctors and more importantly hospitals they have access to. That's why MA's costs are escalating because of the abundance of teaching hospitals holding insurers hostage over rates.

"How does that disprove what AHIP was doing behind the scenes?"


Wait you know what they were doing behind the scenes? Are you Ignani? Zilenbach or whatever his name is? An insurance company CEO? Oh no you just read liberal blogs. Oh ok. So for everyone else its innocent until proven guilty but for insurers its the reverse??

Oh and as for the lobbyist mentioned above referencing how Republicans should remain in lockstep I would assume he was referring to the politicization of the issue and how at that time it would improve Republicans chances.

Posted by: visionbrkr | April 29, 2010 3:58 PM | Report abuse

vision - Enjoy your fluffy bunny.

Posted by: nisleib | April 29, 2010 4:02 PM | Report abuse

they are relevant because of what the insurance industry SAYS should be required from reform, what President Obama says should be required from reform. COST CONTROL. They don't believe its there. We've conveniently forgotten about the $2500-$3000 we're supposed to save as per the President. You still think that's coming??

I don't think they're any white fluffy bunny. I just don't think they're the anti-Christ either.

Personally you're not seeing the difference between fighting to make it actually workable and fighting to kill it. Insurers realize now what they didn't in 1994 that they're losing market-share to the uninsured and without reform it would be getting much worse as projections show. They just wished and hoped that it would have done more to control costs. They're calling out (in the AHIP piece) what most don't around here. For example that IMAC is now exempt for the first 5 years.

Personally as i've said before I'm not optimistic on the individual mandate which is key but i'm not so optimistic that the excise tax will supress costs. They need to go to the supply end to attack costs once this shot at reform is now done. That means ticking off doctors. Good luck with that one.

Posted by: visionbrkr | April 29, 2010 4:06 PM | Report abuse

nisleib,

enjoy your lack of cost control.

Posted by: visionbrkr | April 29, 2010 4:07 PM | Report abuse

nisleib,

one last point about the industry asking for cost control that proves you're 100% WRONG.

If as you say that screaming for cost control coming from AHIP doesn't matter because its AFTER HCR passed then why are they bothering to ask for it? Pretty soon they're going to be subsidized by the government no?


Posted by: visionbrkr | April 29, 2010 4:15 PM | Report abuse

vision - You should have taken critical thinking / logic courses in college. Nothing about AHIP going after cost controls counters anything I've said about the contradiction between lobbyists/ceo's actions vs their words. Nothing.

Why is the health insurance industry still looking for cost controls? The cynic in me says because they are less popular than castration and need someone to blame their poor behaviour (increasing premiums 40% in one year, cancelling long standing policies because the policy holder gets cancer, etc) on. They need a scapegoat.

But I don't know that, that would be asigning thoughts and motivations to a group that I'm not a part of and have no personal knowledge of. So I won't go there. Maybe they are being honest, I don't know and it really has nothing to do with my point.

The fact is that AHIP tried their level best to kill this bill alltogether. The AHIP lobbyists I linked to confirmed his statements were not misquotes. No, we don't know yet all of the actions AHIP took yet, but there are strong indications that I am correct and you are not. Just like on recision. Your claims that recision doesn't happen to policies over six months old (I'm going from memory here) was totally not true. You didn't know what you were talking about then and I'm doubting you do now.

But you don't want to address what I'm saying, you just want to defend your fluffy bunny.

Posted by: nisleib | April 29, 2010 4:35 PM | Report abuse

nisleib,


You can make all the fluffy white bunny jokes you like but it won't derail from the facts.


If they wanted to kill it they wouldn't have started in October 2009 as one article from a liberal blog suggested. THEY WOULD HAVE STARTED YEARS AGO WHEN THEY FIRST STARTED WORKING WITH BAUCUS ON THIS. Or heck they wouldn't have started working at all. They would have done it much earlier and they would have succeeded. If you choose to not listen to anything I state regarding facts then there's not much I can do. We'll have to agree to disagree.


I never said recision does not happen on policies over 6 months old. I believe what you're referring to is the fact that HIPAA law states that insurers can only, relating to pre-existing condtions look back 6 months to see if a condition was pre-existing. Had nothing to do with recisions.

I've always said as I did today that recisions are wrong (except in cases of fraud). But soon this won't be an issue (2014) and you'll have to find another scapegoat. Here's hoping its the doctors that DRIVE the costs.

As far as the AHIP lobbyist goes I would guess he was merely stating what a Republican looking to gain traction in the public sentiment against reform would do. If they sign onto the bill they get it warts and all. When it gets botched by HHS (and its already started as I pointed out and you chose to ignore for now) then its DEMS fault.

Posted by: visionbrkr | April 29, 2010 4:59 PM | Report abuse

Vision - As always I've enjoyed our spirited discussion. But I've gotta go. Have a good night.

PS - No hard feelings? Sometimes my snark can be harsh, I try to couch the 'tude, but do not always succeed.

Posted by: nisleib | April 29, 2010 5:05 PM | Report abuse

nisleib,

absolutely. no hard feelings. But if you were Lomillaor, hmmm.

JK. Good night.

Posted by: visionbrkr | April 29, 2010 5:14 PM | Report abuse

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