Tipping Point? On The Cusp? First Time Jobless Claims Plunge

The AP is reporting:

The number of Americans applying for unemployment benefits tumbled 23,000 last week to 298,000, nearly a six-year low that shows companies are laying off fewer workers.

The Labor Department said the less volatile four-week moving average declined 10,750 to 322,250.

Last week's unemployment benefit applications nearly matched a September figure that was distorted by late reporting from California. When excluding the September report, last week's figures were the lowest since May 2007. 

With regard to these unemployment numbers, folks may want to scan down this page: https://www.google.com/#q=ny+post+on+phony+employment+numbers

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A Note To The Granddaughters

Stories about how badly Obamacare is going fill the blogosphere and even mainstream media (to include NPR).

We saw the same thing when the Department of Defense rolled out Tricare. It was a disaster getting the program rolled out. But Tricare has survived and has turned out to be a pretty good insurance program. Not perfect, but not bad.

We'll see the same thing with Obamacare. It's the law of the land, and one can't put the genie back in the bottle.

There are three "components" to consider: a) access; b) coverage; c) cost. These were the same "components" we saw when Tricare was rolled out.

Access:  yes, there are problems with the website. It was amateur hour. But the website will be fixed. This is simply a technological problem and it will be solved. A year from now, the website problems will be history.

Coverage: this is why the genie cannot be put back in the bottle -- the coverage is incredible. No one can be denied insurance for pre-existing conditions. When one applies, not one question is asked about one's medical history. Only three questions are asked: sex (male/female), age, and zip code. After the annual deductible, the insurance company is on the hook for every last penny. The coverage cannot be beat.

Cost: this is where the rubber meets the road. Folks think once they see the cost of the premiums, the annual deductibles, the co-pays, etc., Americans will be outraged, and not enough Americans will enroll to make the program viable. 

But like "access" the issue of "cost" is a technical issue; the issue of "cost" is not insurmountable. If Europe can afford "it," Americans can afford "it." Americans are not going to give back the "coverage" (no questions about pre-existing conditions; ceiling on personal liability; unlimited liability for insurance companies) because of cost.

If the genie cannot be put back in the bottle, how will it play out?

The insurance companies are on the hook for huge losses. Initially we will get reports of smaller, under-capitalized insurance companies pulling out or going bankrupt. There will be panic.  The larger insurance companies will testify before Congress, and Congress will be left with no choice but to bail out the program -- Americans are not going to give back the "coverage" (no questions about pre-existing conditions; ceiling on personal liability; unlimited liability for insurance companies).

And then we are left with one simple question, the question that was there all along: how do we pay for national health care? That is not a very hard question to answer when it finally sinks in that Americans are not going to give back the "coverage" (no questions about pre-existing conditions; ceiling on personal liability; unlimited liability for insurance companies -- what's not to like?).

Tricare (the military insurance program) had the three same issues: access, cost, and coverage. The coverage was/is incredible, and that's why Tricare, like Obamacare, was not going to fail. Access was the big issue (or better said, execution was the big issue): rolling out the program was a disaster; it was a good three years before it really got going, and finally on auto-pilot. The third component, cost, was never an issue. The Department of Defense/federal government had deep pockets to take care of the cost.

From the perspective of the Oval Office, this is all going according to game plan. It might cost the president and his party some political points over the next five years, but the basic plan will survive. How much credit the president will get in history books twenty years from now is yet to be seen.

I think folks are going to be surprised.