Rob, Dublin

Rob, Dublin

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Hey Dan, I was wondering what you think of Brown's first Sunday morning interview and his statements that he would join a GOP filibuster of the finance bill?  This doesn't really seem to correspond with the reasons he was elected to office.  How also can his position be reconciled with the views of the Tea Partiers, people he is well aligned with, whose number one qualm is with Wall Street (along with most Americans)?  Certainly finance reform is a solution most people can agree on and that deregulation during the nineties led to our current predicament.  Hope all is well, great work. Thanks. 

Good question. A few issues with assertions in the question itself and then I’ll do my best with it.

First, I don’t really see how this doesn’t correspond with the reasons he was elected to office. He was elected to be the 41st vote against Obamacare and to take back the Massachusetts Senate seat from simply being a legacy seat. Aside from healthcare, his goal, which I think he has accomplished thus far, was to make it so that both sides of any political debate need to pay attention to Massachusetts constituents. As someone who has sided with both Republicans and Democrats since his election, he holds incredible bargaining power, which he can use to benefit those who have elected him. Filibustering the current finance bill allows the measure to be brought back to the drawing board so that it can be more effective for those who elected him.

Secondly, I think Senator Brown is hardly aligned with the Tea Partiers. Many national Tea Party members may have helped to get him elected, either thinking that he would be a sure fiscal conservative or that his vote would simply be better than the alternative, but he has upset the Tea Party a number of times since becoming Senator. He was one of only a few Republicans who sided with Democrats and voted for the $15 billion jobs bill a few months ago and he also angered Tea Partiers by once again being one of only a few Republicans to vote recently to extend unemployment benefits. Additionally, Wall Street certainly isn’t the number one qualm of Tea Party voters. Instead, Tea Partiers have huge qualms with the ever-increasing size of government and its ability to interfere in both the market and everyday lives via new regulation, mandates, and spending. So, if anything, I highly doubt Tea Partier’s care very much about the workings of Wall Street- as long as the government doesn’t use their tax dollars to bail it out again.

In regard to the question- many people, though not all, agree that financial reform is needed for our markets. However, the issue is that financial reform is just a pretty term that hides incredibly complicated mechanisms that have the potential to have far-reaching effects on the world economy. And, unfortunately, financial deregulation in the 1990s is far from the agreed upon cause of our current predicament. The sole goal of one of my finance classes this semester is to pull apart the financial crisis and find the cracks in the system and propose ways to repair them for the future. It’s been almost an entire semester and the class is nowhere near coming to an agreemeent or understanding of the dozens of factors that lead to the collapse and how another one can be avoided. We’ve read books and articles that blame the Federal Reserve for keeping interest rates too low, the Clinton Administration for forcing mortgage companies to make risky loans in the seemingly-admirable name of “home ownership”, ratings agencies like Moody’s and S&P for failing to properly assess risk, Wall Street executives for being greedy and short-sighted, etc., etc. The list goes on and on.

If the financial and economic scholars who wrote these books are at such odds for what caused the crisis, how can we expect a bunch of legislators, most of whom didn’t even have a basic knowledge of the workings of Wall Street a few weeks ago, to write legislation that will adequately protect US taxpayers from reckless bankers, while keeping these vital markets flowing?

Instead of looking to score political points with an understandably upset populace before the ominous 2010 mid-term elections, members of both parties need to slow down and attack the problem in a piece-by-piece manner, starting first with actions that most everyone agrees should be taken to rein in banks, while saving the more complicated and controversial actions for later days when the crisis and the effects of legislation are understood. For example, everyone from free-market guru Alan Greenspan to the most radical blame-Wall Street-faction like Congressman Barney Frank believe that reserve requirements should be increased to make sure that banks are less leveraged and can cover their obligations in times of financial crisis like the one last year. Why not start there?

While it’s all the rage these days to bash Wall Street, we cannot forget the vital role it plays in the world economy and the effect that premature, rushed legislation could have throughout the world. Wall Street greases the economic wheel that keeps money flowing from people and institutions that have excess money to invest to people and businesses that need money through the form of loans, penions, etc. Without it, credit markets would dry up and economies would freeze to a halt.

So, as I have argued here, Scott Brown’s decision to filibuster the upcoming financial reform bill is a decision that both meets the promise of his election and best serves the future of the financial markets. Rushing to haplessly design new rules and reguations for such a vital, interconnected industry only serves to hurt American taxpayers and constituents in the long run- all for the sake of a flashy White House photo-op.

New York Times has an unusually helpful synopsis of the financial reform actions being taken by the House, Senate, and White House, which can be found here.


Tea Party Express

Sarah Palin and the Tea Party Express are making a stop on Boston Common tomorrow afternoon, casuing quite the uproar in nearby liberal enclaves Cambridge, Arlington, Newton, etc. Counter-protestors are allegedly planning all sorts of tricks to spin and distract from the true meaning of the gathering- overtaxation and an ever-expanding government.

I wish I could be there to witness.

I’m definitely going to pay a visit to the final stop by the Washington Monument on Thursday evening, though. If you’re in the area and want to see what a Tea Party rally is really like, feel free to tag along.

The Call

I get goosebumps every time I watch this music video. Check it out.


Another Problem with Socialized Medicine

The Boston Globe highlighted statistics yesterday that show many Massachusetts citizens gaming the state’s health care laws by signing up for insurance right before an expensive operation or treatment and then immediately dropping the coverage afterwards.

Globe comment’s section writer put it best: “Well Duh!!, who thought anyone would game the system. Maybe a better question would be who didn’t think it would happen”.

It’s cheaper (and financially smarter) for a relatively healthy person like a recent college graduate to pay the meager $93/month penalty for not having health insurance than to pay for insurance that would otherwise cost hundreds of dollars per month. Then, because insurers can no longer legally deny someone coverage for preexisting conditions, they simply sign up for insurance before fertility treatments or other expensive elective surgery. Post-operation, they drop the coverage, leaving the insurance companies with thousands of dollars in expenses.

Liberals would like you to think that insurance companies are pure evil, looking to snip the string of life like the three evil witches in Disney’s
Hercules. Thus, serves them right. However, as much as people like to forget, insurances companies are businesses just like McDonalds and the rest of them. They need profit to survive. So, when selfish, expsensive customers like these gamers take advantage of anti-business laws, someone has to pay. And of course, the sucker becomes the good guy who plays by the rules and carries insurance like it should be carried.

Representative Carol Shea-Porter (D-NH) (the congresswoman who became famous this past summer for oh-so-conveniently reversing her position on the value of town halls) was
embarrassingly met with hearty laughter from a crowd of constituents the other day after claiming that Obama’s health bill was “paid for”. The crowd legitimately thought she was cracking a joke. Health insurance gamers like those mentioned above are precisely why claims like Shea-Porter’s or claims that Obamacare is deficit-reducing are met with laughter throughout the streets of the United States. If only the liberal writers of the bill had the common sense and the reality-based thinking of the room full of laughing New Hampshire voters...

Scenes from Opening Night

Went to Red Sox Opening Night with Andrew last night at Fenway Park. What a game! Fireworks, the 5 year-old kid who impersonates the famous Miracle speech, Pedro Martinez first pitch, Steve Tyler’s “God Bless America”, and Neil Diamond’s live performance of “Sweet Caroline”. Plus, a 9-7 comeback win against the Yanks. I’ve also never seen so many people get thrown out of a game by security and the Boston police. The lull’s during the game were more than made up for with the action in the bleachers.


Spring in Scituate