All Things in Moderation

This item is a week or so old, but Michigan’s Senate recently passed an Anti-Bullying law that requires schools to pass rules and policies to protect students from bullying….well most bullying at least.

Democrats have been trying to pass an anti-bullying bill for years but were always thwarted by Republicans, leaving Michigan as one of 3 states without such a laws. Why would Michigan Republicans oppose such a bill? Government intrusion perhaps? Nope, it was fear of the big, bad homosexual agenda that fueled opposition. In the decade Republicans have opposed the anti-bullying bill, at least 10 homosexual students committed suicide.

The controversial portion of the bill is the following: “This section does not prohibit a statement of a sincerely held religious belief or moral conviction of a school employee, school volunteer, pupil, or a pupil & parent or guardian.”

I suppose one could argue that the exception created by this language was aimed at making sure the bill complied with the First Amendment, but if that was the reason for the exclusion I would think political belief would have been added rather than just addressing religious beliefs and moral convictions.

The bill has been heavily criticized by the media and Democrats in Michigan. Stephen Colbert had a pretty funny and on point take on the bill, too.
By the way, keep an eye on Gretchen Whitmer who appears in the video in the second link. She is the Senate Minority Leader here in Michigan and will probaby be making a run at Governor or Congress in the next few years. She was also named one of the World’s Hottest Politicians a few years ago by Maxim.

The other big controversy in Michigan surrounds a bill which would change Michigan’s No Fault Car insurance law. To summarize, the bill would put a cap on how much insurance companies could end up paying at which point payment would come from Medicaid, Medicare or private insurance. I had also heard that the reimbursement amounts paid by insurers would also become tied to Medicaid amounts, but I can’t find a good article discussing that aspect of the bill at the moment. Anyway, assuming that is part of the bill, it would reduce revenue for hospitals and physicians while increasing profits for insurance companies. If catastrophically injured payments exceeded the cap, the government would likely end up on the hook for the medical care through Medicare or Medicaid.

One of the problems with the proposed reform (which has stalled) is that insurers are already protected from having to pay millions of dollars in medical benefits to injured victims since after $500,000, benefits are paid by a catastrophic claims fund. The money for that fund comes from, at least in part, assessments on consumers. If the insurers also contribute to that fund, then I can see how the cap would save them money, if not I don’t see where their costs are reduced. Obviously, their profits would be increased if they continued to charge the assessment. I also wonder what would happen with the $12.9 billion dollar fund if this law passes? Would I get a check?

Aligning payment with Medicaid payment would definitely save the insurers. This brings us to people’s biggest problem with the bill. There is no guarantee the insruance companies would pass this savings on to consumers nor is their a guarantee that they would end the assessment that has thus far funded the catastophic injury fund. Absent such a promise, this would simply be a giant giveaway to the insurance company while pushing costs to the Medicare and Medicaid and further reducing income to hospitals and doctors. Elections matter, people.

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Vital Statistics:

Markets are rebounding after the pummeling of the last two days. Italian and Spanish sovereign yields are slightly tighter this morning, and a number of banks are raising their 4Q GDP estimates. This has been the underlying story – the US economy is on the mend, but European headlines dominate the markets. If the US banks are taking up their GDP estimates, then analysts will be taking up their earnings estimates. The S&P 500 is trading at 11.8x forward earnings, which is a multiple last seen in the early 80s. Right before the bull market of a generation. I am not saying the secular bear market which began in 2000 is over, but it is getting long in the tooth, and the pieces are setting up for a new secular bull market, probably in the next few years.

Apologies for no report yesterday – was in the city all day yesterday.

Edit: Update 10:00 am – Leading Economic Indicators came in at .9%, higher than the .6% expected and close to the 2011 highs in March.

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Courtesy of The Economist.

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