Markets

Last night, I was one among 15 progressive bloggers invited to an informal and intimate meeting with President Bill Clinton to discuss the 2008 Clinton Global Initiative, the annual massive convening of world leaders, celebs, corporate executives and progressive NGO activists to make commitments to solve some of the world’s greatest challenges. Told the meeting would last 30 minutes and to limit our questions (“if there is time for any”) to this year’s CGI commitment areas, I wasn’t expecting much more than fluffy rhetoric and quick sound bites on each of this year’s issues -- education, energy and climate change, global health and poverty alleviation.  But, President Clinton took his first question early -- “Will the financial turmoil in the United States be a distraction from efforts to advance CGI commitments?” Indeed.  This question ended up dominating an hour-long discussion of the causes and effects of the current financial crisis, and what needs to be done about it. 

Michael Tanner of the Cato Institute pointed out that health care costs are out control and spending, projected to rise from about 17 to 20 percent of GDP in less than a decade, is unsustainable. We agree. No health reform proposal will be sustainable without serious efforts to reduce costs and improve quality. However, because the uninsured are inextricably linked to the cost of care for the insured, we cannot solve the cost problem without covering the uninsured.

Think of it this way. The uninsured have a harder time paying medical bills. When medical bills go unpaid, providers—hospitals and doctors—need to find a way to recoup the lost revenue and raise the rates they charge insurers for services. The insurers, now faced with larger bills for enrollees, raise premiums. End result: the insured end up paying more for health care.

It is great to see candidates on both sides of the aisle talking seriously about cost-containment and a high-value delivery system and we cheer Tanner's conclusion: "Regardless of who becomes president, we can expect major changes for the American health care system."

The Hong Kong Heng Seng Index fell 8.7% overnight, and is down 22% this year. The Shanghai Composite Index fell 7.2% giving it a loss of 13% so far this year. Snapshot asks, are the declines in the Chinese stock markets an indicator of China’s reliance on the U.S. market for growth or an internal market correction?