9/24/12 – No News Is . . . Good News?

Posted by Brad McMillan, CFA, CAIA, MAI

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This entry was posted on Sep 24, 2012 12:22:21 PM

and tagged Politics and the Economy, Yesterday's News

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Honestly, when the lead headline in the Wall Street Journal (WSJ) is about the costs of “free” checking, and it runs right above a story about the Emmys, you know it is a slow day. We have the usual follow-up stories: Greece will probably be back in the headlines soon in a big way, but for now, France is trying to buy it some more time; in China, Bo Xilai’s police chief was sentenced to 15 years, and Japan warned China on the island conflict. And, of course, we have U.S. politics.

The U.S. political stories are the most interesting, in that they don’t focus on the elections but rather on the underlying issues. The New York Times (NYT) has two articles, “Liking It or Not, States Prepare for Health Law” on the front page and “What Do Teachers Deserve? In Idaho, Referendum May Offer Answer” on page A14.

The first NYT article talks about how many Republican-run states are quietly planning, as required, for implementation of the health care law by designing insurance exchanges; it also discusses the political difficulties that have arisen because of the law. For example, some Republican lobbying and interest groups—insurers and health care providers—are for state preparation, and some—the Cato Institute and Americans for Prosperity—are very much against it. The argument for setting up the exchanges is that if the states do not set them up, the federal government will. The argument against state setup is that the insurance exchanges should be controlled by the federal government, as they will be anyway. Notably absent from the discussion is what voters think. One clear message from the article is that the fights will not be over until after the November election and probably not even then. Stay tuned.

The second NYT article ties in nicely with the just-settled Chicago teachers’ strike. Idaho and Chicago are very different places, but the article quotes the Republican Governor of Idaho as saying, “I could empathize with Rahm and what he was going through.” The Chicago strike and the Idaho referendum are textbook cases about how government will be wrestling with limited resources going forward and how public sector workers are probably going to be facing lower pay and benefits. With Democrat Rahm Emanuel on one side and Republican Idaho on the other, this is clearly a trend that will most likely continue no matter who wins in November.

Finally, the most interesting story of the day also comes from the NYT, “Discovery of Skeleton Puts Richard III in Battle Once Again” (p. A8). Dug up from what used to be a priory but is now a parking lot, the hunchback king is being brought back for physical, and who knows, maybe reputational, rehab. As a Shakespearian—I belong to a group that meets every month or so to eat and drink and read a play (although I have to admit we are much better at the eating and drinking part)—I hope that the real Richard turns out to be a better guy than he has seemed based on Tudor propaganda. He died with a battleax in the back of his head—kind of puts our politics in perspective.

Have a great day!

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