Obama's historic victory on health care

Posted by Shyam Moondra

The health care bill just passed by the House of Representatives is a stunning victory for President Barack Obama, who steadfastly pursued this biggest health care reform since Medicare was created in 1965. Regardless of political persuasion, this has to be considered as a major personal triumph for Obama. The health care success will now breed more success on many other issues such as financial regulations, immigration, and campaign reform. Had this health care effort failed, Obama's presidency would have been crippled making it harder to accomplish anything else in the remaining three years. Obama's success at home will also strengthen his hands on the world scene in dealing with issues related to the Middle East, Iran, and North Korea.

While the Speaker of the House, Nancy Pelosi, continues to be a polarizing figure, she sure came out as a big winner. She presented herself as a strong leader who could get things done. The biggest losers in this endeavor are the Republican leaders in the Congress, who performed very poorly and, therefore, should be replaced. While they may have been right in opposing the massive cost of the bill, the American people did not particularly appreciate their tactics of non-cooperation and partisanship.

The voters like the winners, even if they don't agree with the legislation in its entirety. Republicans' calculation that by voting "no" on health care, they would gain a political advantage in the mid-term elections in November would prove to be dumb-founded. I believe Obama's stature as a strong leader has been vastly improved; he will be perceived as a problem solver while Republicans will be viewed as merely playing politics for their own self-interest with almost no desire to solve people's problems. The November elections are not likely to yield any tangible benefits for the Republicans.

On the merit of the health care bill, I am not entirely happy with the cost of the reform. However, I am glad that this first step was taken. We can always fine-tune the reforms in the future by adding, subtracting, or modifying, as needed, to make them more effective. We just needed to start somewhere. I think we need to do more to bring down the health care cost:
· We need to regulate the rates and profits of health care providers through some kind of public commission, just as we regulate the telephone, gas, electric, and water companies today.
· We need to do more on malpractice suits and out-of-control awards with the objective to have the service providers pass on the reductions in malpractice insurance premiums and awards to the patients in the form of lower rates.
· We should allow re-importation of drugs from abroad and facilitate the introduction of generic drugs sooner.

Obama proved that he can think big and still deliver. This bodes well for his other initiatives such improving infrastructure, building high-speed railways, exploring alternative energy technologies, remaking our educational system, finalizing financial reforms, implementing campaign reforms, etc. The victory on health care can pave the way for Obama to have a remarkably successful presidency and thus become a shoe-in for a second term.

Stock market is ready to explode - DJIA headed to 12,000

Posted by Shyam Moondra

Yesterday, the Federal Reserve Board announced that they expect to hold interest rates low for an extended period of time to let the economic recovery take firm hold. Today, the Labor Department announced that Producer Price Index declined by 0.6% in February. Low interest rates and low inflation are like music to the ears of the stock market and yet the market has moved up only slightly with a very low volume. It's possible that investors are holding back because of the recent mixed consumer confidence and housing data that prompted some to entertain the thought of second dip in the economy. However, those unfavorable economic indicators may have been distorted because of one of the most severe snowstorms in the North East region in the last fifty years.

It's hard to ignore the following encouraging signs that suggest that economic recovery would accelerate in the coming weeks and months:

· The corporations with low inventories are lean and mean; any up-tick in the demand for goods and services would significantly increase their profits and employment levels.
. Manufacturing has a lot of unused capacity which means that economy can recover without rekindling inflation.
· The corporate world has very strong balance sheets, hoarding over $1.4 trillion cash that could fuel the capital investments over the next couple of years.
· Consumers are being cautious because of lingering high unemployment level; however, they have also shown their willingness to make big purchases as is evident by a strong pick-up in the automobile sales. They will start spending more freely, once they are convinced that economic recovery is taking hold.

The present cautious stock market is in fact a prelude to a stronger and sustained up move with heavy volume in the coming days and weeks. Based on the forecasted 50% increase in corporate profits this year, the Dow Jones Industrial Average could head to 12,000 by the end of third quarter and even hit 13,000 by early next year.

As the paper profits pile up, investors would be tempted to take profits and thus DJIA's move to 13,000 would not be without wild swings. At any sign that the market has temporarily peaked, there will be a floodgate of profit taking which will push the market down but then bargain hunters will move in and the market will move up again on a short order. The key to maximizing the returns would then be to have a good sense of timing in terms when to take profits and when to move back in.

This year and the next are the golden opportunities for investors to make good money, but only if they could master the art of market timing.

Chief Justice John Roberts is not above the People

Posted by Shyam Moondra

John Roberts, the Chief Justice of the U.S. Supreme Court, made a critical comment about President Barack Obama's recent State of the Union address given at the joint session of Congress. I thought that was out of line and offensive. Roberts seemed to suggest that the Supreme Court is somehow immune from criticism by the elected officials or the American people. Justices also occasionally make mistakes like all other humans, so there is nothing wrong if President or anyone else for that matter criticizes them for their wrongheaded decisions or poor performance.

Roberts said that Obama's criticism of the court's decision to allow unlimited corporate campaign contributions during elections was an attempt to politicize the independent court. Hello! When Justices Scalia, Thomas, Roberts, and Alito always vote as a block, representing the views of conservatives, isn't the Supreme Court already politicized by the very same people who now complain about politicizing the Court? Justices are supposed to decide cases without bias or personal prejudices. How is it then that the court watchers often can predict beforehand how these conservatives (or liberal justices for that matter) would vote on any given controversial issue? When conservative justices banded together to elect Republican George W. Bush as the President vs. Democrat Albert Gore, wasn't that a political decision?

Today, we have a gridlock on the Supreme Court between the conservative and liberal justices. Most cases are decided by a single justice, Justice Kennedy. So why don't we just fire everybody else and let Kennedy decide all the cases that come in front of the Supreme Court. Today's Supreme Court is a sham.

Roberts' criticism of Obama reflects abuse of power bestowed upon the justices by virtue of the fact that they are appointed for life by the President and confirmed by Congress. With lifetime appointments also come a certain sense of arrogance and misconceived belief that the justices are above everybody else, when in fact they are not. In a democratic country, it's the People that are the supreme and not the justices who sit on the Supreme Court.

In recent years, my respect for the Supreme Court has declined largely because of how it functions. The Court increasingly shows lack of objectivity in deciding divisive issues such as abortion, campaign contributions, school prayer, etc. Their decisions are often wrapped in medieval age thought processes that are no longer valid. As time changes, so do customs, views, and temperament. As such, legal decisions should be based on contemporary interpretation of the constitution and not as if it is a standstill constant.

I like to propose a few reforms of this declining institution:
· Lifetime appointments should be abolished. The idea behind lifetime appointments was that they wouldn't have to worry about the politics of re-appointments. However, the fact is that the court is already politicized by the justices themselves, so by appointing them for four-year terms at a time wouldn't take away their independence. On the contrary, it would take away their arrogance and make them more accountable.

· There must be a way to remove justices, who consistently interpret constitution based on their own personal philosophy and make unfair and biased decisions (and that's why we need a term limit for justices).

· The Congress should explore if we could do away with the Supreme Court and replace it with a new more fluid mechanism in which judges are tapped from the federal bench on a case-by-case basis depending on the nature of the case and the expertise required. That way we have constantly changing faces on the high court bench and not have this Scalia-Thomas-Roberts-Alito axis of bias who frequently vote as a block based on their ideology rather than the merit of the case.

For now, Roberts should apologize to President Obama and the American people for his outburst. He may be above the law but he is not above the People.