The other day I wrote a piece comparing the change in stock prices for Aetna, Wellpoint, United Health and Cigna to the S&P 500. The data showed the folks who buy stocks in this sector took the killing of the public option as a big win for future earnings. No surprise there.
This chart covers the last three months and compares the S&P 500 (brown line) to stock prices for some large health insurance companies as I explained on Sunday.
Well, how did stocks fare today?
People who ignore the charts, ignore the fact that stocks went DOWN in Feb. and Sept. on the heels of Obama's public speeches pushing the public option and fundamental reform. They went UP on the news of the public option's demise. The jumped at that. Comparing this to 2007 or 2008 misses the point. Compare the news of the day to the stocks motion and you see there is a clear correlation.
This chart shows the activity for the last 5 trading days. The S&P 500 is in brown. As before, the stocks are for Aetna (blue), Cigna(red), Wellpoint (gold), and United Health (green).
It's pretty clear that "buy on the rumor, sell on the news" isn't working here. The big jump at the open this morning is probably a combination of factors. However, by the end of the day all the stocks continued to do much better than the index.
Some people complained that looking at stock performance for the last year was a mistake because almost everyone is up over last year. Some claimed comparing health insurance stocks to the S&P 500 was a mistake because they had taken such a beating in 2008 that 2009 made their percentage gains look unrealistically good.
No one has explained the jumps in the last three months or even today based on those arguments. The only constant in all that... when it is clear the public option is out, these stocks go up.
While everyone is congratulatng themselves for a "win" here, I think progressives need to take a hard-eyed look at what happened. The reality is we were on board early for nothing except the belief that this was good policy. No progressives held out for a quid pro quo. No progressives threatened to derail this if they didn't get their back scratched. Consequently, we got taken for granted and wound up with "reform" that doesn't appear to have any cost containment controls in it. At least not for the insurance companies. Big deal, they are going to be forced to put more of their profits back into services instead of bonuses. You think they won't find a way to bend that curve to their advantage? If you do, I have some really hot real estate to sell you.
Bottom line: Maybe progressives should take Rahm Emanuel at his word. Maybe we should sit down and shut up. Of course, when I sit down that means I can't reach my wallet anymore. When I shut up, that means you can't count on my support, either.
If progressives want to have any voice in the future direction of this administration, I think we will have to make them beg for it. Otherwise, we're giving away the store for nothing. Just because they keep telling us there's no other game in town, doesn't mean we have to pay for the privilege of getting screwed.
I'm not going to have a lot of sympathy for people who find themselves in trouble when the midterm elections roll around. If they aren't worried about our concerns, why should we be concerned about their worries? I don't buy Honda because I hate Toyota. I don't vote Democratic because I hate Republicans. I sure as hell won't be burning up any shoe leather for folks who can't be bothered to address my concerns. Been there. Done that. Got the poster.