At Arm's Length - A Daily Market Commentary - Before the Bell Rings Financial Commentary about Money, Investing, and How It Affects the Average Investor

At Arm's Length: 08.30.04
Something the GOP should Keep in Mind

As the Republicans gather in New York City this week to celebrate what one writer noted, "hearing something they have heard before and continue to believe in" there are some things that they should note as many climb out of the bubbles they live in to venture to the most international city in the world. A good friend once suggested that New York should be country unto itself while offering a succession plan normally offered by Texans. I will give them their time to cover the topics that are so divisive to so many people, yet appeal so strongly to others.

There are a few things the GOP should think about as they coverage on the BIg Apple. The President's economic plans are not working. Reports released as recently as last week continue to point to a growing distance between who is making money in this country and who is not.

Forty five million people are now without health insurance adding pressure to the already overburdened health systems in this country. One in four Americans is now enrolled in some sort of public health program, a number that includes the swelling ranks of the troubled social program, Medicare.

The administration's response to these numbers is in line with previous policies of shifting the burden to the worker through savings plans that are self-directed. The wisdom of this plan is also hitched to some unrealistic assumptions. A White House spokesman quickly defended the increase in the number of uninsured as reflective of the 2003 economic sluggishness adding the the one million jobs recently created were a good corrective. Problem is, those new jobs, largely in service sector industries whose hours are often part time and almost always come without benefits. A coincidental number shows this anomaly in better light. The largest group of workers who have no insurance continue to be the worker aged 25 to 34 years old.

Cooperation among medical insurance providers and the medical profession has become increasingly strained. As technology advances, the cost increases as well. Deferring these decisions to the insured will force them to make some concession as they calculate the cost of their on health as well as their families.

Employers who provide insurance to their workers are bracing for sharp increases in 2005. With plans under increasing pressure, employers are looking for more creative ways to swell the ranks of the working poor. New workers are seldom offered the same benefits as senior workers. This two tier system of insurance coverage has been signed into a sizable number of contracts negotiated by unions, most notably the agreement that ended the grocer's strike in California.

Currently, the number of uninsured full-time workers stands at 20.6 million according to the Census Bureau, 90% of which are households that earn $50,000. There is more economic bad news and few solutions that seemed possible. Turning to a public system such as the one run by Canada may be only wishful thinking. Our current system has given us higher costs and comparatively poorer care with the special interest groups standing in the way of any shift in policy. Some health economist believe that the best change would come with government intervention, offering coverage for catastrophic events much the way it does during natural disasters. This would add an extra layer of coverage that often pushes costs unnecessarily higher.

It would be fun to hear the Republicans to admit that their economic plans have not made the middle class a pleasant place to live. That's fantasy though. In fact, there is little likelihood that the subject will even come up.

The previous week's articles.

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