Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : Politics for Pros- moderated -- Ignore unavailable to you. Want to Upgrade?

To: KLP who wrote (406093)	1/23/2011 3:50:24 AM
From: KLP	1 Recommendation Respond to of 794327

This was true 1.5 years ago, and today too for everything the government touches, including Medical Care: GM: A Question of Trust Posted by Larry Doyle on June 2nd, 2009 8:00 AM \| ShareThis “Trust me.” Have you ever walked away from a discussion with a person–be it a boss, a business associate, a prospective partner–in which you wondered why they felt the need to make that statement? In regard to trust, I feel much more comfortable when others assert, “you can trust him” rather than an individual asserting, “trust me.” Why? Very simply, trust is a virtue. As such, it is not given like a cheap bauble. Trust is earned. The foundation of our capitalist system is trust. When a basic trust is violated, regulators are compelled to act to rectify that violation. Let’s enter the Brave New World of the Uncle Sam economy and address the credibility of this virtue known as trust. CNBC recently aired a fabulous roundtable discussion, “The Future of Capitalism,” which touched on many of the economic issues currently debated. In the midst of the discussion, Mohamed El-Erian of Pimco strongly asserted that capitalism is ultimately a system based upon trust. Without trust, investors will not willingly commit capital to drive future economic growth. As with any virtue, trust is not a one way street. While trust is earned, it needs to be rewarded so as to promote even greater trust. In so doing, the model of trust is displayed as the shining beacon for personal and professional relationships, whether between two people or amongst three hundred million. Let’s get more specific. Investors who committed capital to General Motors in the form of equity took the greatest risk. In so doing, they positioned themselves to reap the greatest reward were the company to prosper. The company entered bankruptcy; the shareholders got wiped out. That is the way capitalism works. Or does it? Investors who committed capital to General Motors in the form of senior debt took lesser risk. In so doing, they positioned themselves to receive a lower fixed return knowing if the company failed they would be first in line. They made this investment based upon trust in longstanding rules of bankruptcy proceedings. These investors include large institutions and thousands of individuals. Their trust was violated in the GM bankruptcy proceedings. They were not first in line. Junior creditors, specifically the UAW, received substantially better treatment. What happened? Uncle Sam rationalized this “violation of trust” as being in the common good of our country. Regrettably, this violation received no real debate in our court system and limited debate within our general media. Uncle Sam, in the persons of Barack Obama and Tim Geithner, have put forth that the automotive situation is a special case; standard bankruptcy proceedings will continue to be practiced elsewhere. I would counter that we have a responsibility to future generations of investors to challenge Obama and team on this point. The future of capitalism itself rests on this debate. The true costs of this violation will be borne by future iterations of unionized companies that can not easily access the capital markets. I personally would only commit capital to such an entity at a much higher rate of return knowing full well the risks I am taking are now greater given the precedent set via the Chrysler and GM bankruptcies. Analysts, government officials, and others will continue to rationalize this violation of trust. In my opinion, this rationalization is akin to “the ends justifying the means.” That is a dangerous weapon. This “question of trust” will certainly be an ongoing theme as we venture further into the Brave New World of the Uncle Sam economy. In the process of making investment decisions, we now need to more aggressively question just how much we trust our counterparties, especially Uncle Sam. Please share your insights and thoughts so we can collectively be more diligent in navigating the economic landscape. senseoncents.com

To: KLP who wrote (406093)	1/23/2011 4:22:15 AM
From: goldworldnet	Respond to of 794327

Insurance companies have to be licensed in the states they operate in. This applies to collection agencies also. Licensing criteria varies from state to state and also varies for different types of businesses involving interstate commerce. * * *

To: KLP who wrote (406093)	1/23/2011 10:55:05 AM
From: Katelew	Read Replies (2) \| Respond to of 794327

After a lot of reading and pondering the whole thing, I always end up conflicted on this topic as to what could or should be done re costs. It seems to me that the root of the problem is that the typical competitive forces at work in our economy to drive down costs don't easily come into play with healthcare costs. The prices are set for us. Short of govt. regulation/intervention prices are free to go to whatever level the public will bear. Docs, dentists, hospitals don't have to compete for our business. There aren't enough of them. I can't shop for my doc on Amazon. I can't negotiate with him about the price of my surgery. (Yikes...would I even want to.) Pretty much all I can do to try and control my medical expenses is to use less of the products and services. Ae insurance companies allowed to sell to ANYONE in ANY State? Basically yes. Blue Cross, for ex., can sell in every state and does. What it has to do is formulate a choice of policies that conform to each state's mandates. If the federal govt. steps in and overturns those state mandates, it would then be interferring with "states rights".