It is to his shame and the nation’s embarrassment that the President of the United States is not man enough to accept responsibility for the mess our economy is in. Did the previous administration have some culpability for starting this mess? Indeed, it did. The fact that George W. Bush allowed himself to be pushed by third-rate scoundrels in the Congress into starting the stimulus package is something that he will have to account for as History writes her judgment on his tenure as Leader of the United States. Eleven months after winning the presidency, Barack Obama has a lot of nerve to keep trying to heap blame on Bush, as the problem has quadrupled under his watch. George W. Bush is rightfully enjoying his retirement and is busy writing memoirs. It would be nice if our current leader would quit crying like a spoiled partisan brat and get to work on fixing the economy. Slim chance of that happening, I know, but it’s worth “hoping” for.

For more on the Obama Administration blame game, check out Peggy Noonan’s article at the Wall Street Journal.

Cross-posted at RudyCarrera.com.

1^st article of 3 covering Health Care and Potential Health Care Reform

“Obscene profits,” a typical accusation by the Pelosi Democrats in the past few years.  First oil companies, then banks and/or financial firms, and now this meme is being directed at the health insurance industry.  It’s nice that the AP decided to fill their 1 conservative fact check every two months quota by exposing this recent claim for what it is, and what is obvious to many investors, that health insurance corporate profit margins are actually low compared to other industries*.

Here are a few links that should provide some useful information about the topic:

1)     http://news.yahoo.com/s/ap/20091025/ap_on_go_co/us_fact_check_health_insurance (the AP fact check itself)

2)     http://money.cnn.com/magazines/fortune/fortune500/2009/performers/industries/profits/ (the Fortune 500 industry by profit margin ranker)

3)     http://biz.yahoo.com/p/sum_qpmd.html (a yahoo business tracker of industries and profit margins that is more diverse than the Fortune 500 list and a few months more recent than the Fortune 500 list).  [Thank you to Dr. Mark Perry of Carpe Diem for a condensed version of the list http://mjperry.blogspot.com/2009/08/health-insurance-industry-ranks-86-by.html]

Out of the 53 industries ranked in the Fortune 500 list health insurance was ranked 35^th. What does that mean?  In 2008, out of 53 industries like food services, internet services and retailing, aerospace and defense, etc, health insurance was the 35^th most profitable industry out of 53 with its profits as % of revenue number coming in at 2.2%.  Using a different and more diverse metric provided by yahoo Health Care Plans are rated as the 86^th most profitable industry out of 215 so far in 2009 with a 3.3% profit margin.

Why is this important?  Two reasons:

1)      It explains why the health insurance industry supports an individual mandate.

2)      It shows that the health insurance industry shouldn’t be demonized for high profits **.

With an individual mandate the health care industry will be able to profit from young and/or healthy uninsured people because 1) the potential bills would force everyone to buy plans that cover even rare diseases which drive up the costs of the plans and 2) many young and/ or healthy people choose not to buy health insurance, thus they are not part of the adverse selection problem, and hence when they are forced to purchase health insurance it will result in higher profit margins for health insurers.

What you should take away from this is that the Pelosi Democrats are attacking health insurers’ profits for rhetorical and political reasons – claims like “profits while the bodies pile on” is merely a strategic invocation of pathos, but it is not logically sound.

*  When the Democrat’s attacked oil profits they were also off base – Exxon Mobil and the industry on the whole had a modest profit margin of 8.9% at the time.

** No industry should ever be demonized for its profits.  Attacking a company or industry for being successful is an utterly left wing idea.