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Thursday, May 26, 2011

Selling Medicare Reform Short

Republicans are getting cold feet. Thank God these people don't have to trade stocks for a living. Successful traders aren't successful because they are smarter than their peers but rather they are successful because they are as smart as their peers but have the courage to hold their positions when everyone else is bailing out. In other words they don't fold when they know they are holding the winning hand. A professional bear is a trader who shorts a stock and then starts rumors to drive the price of that stock down and some of their schemes have made millions.

Paul Ryan has put forth a budget that includes reforming Medicare. All but four House Republicans voted for that plan. Why? Because they thought it was a good plan. In other words they "bought" into the plan. They are long Medicare. The Democrats had no plan. They had no position but as questions about the Ryan budget arose they began to take a short position. Using rumors and misinformation they have driven down the value of the plan and hope to profit by winning elections and then buying into the plan or one very similar when of course, the political price is cheaper. Now all the Republicans can do is fret and panic. When the Ryan plan reached the Senate, five Republicans "sold" out their position by voting against it. Now some House Republicans would like to bail out at the bottom. Republican pundits are saying it was a mistake to attempt to reform Medicare prior to the 2012 elections. They bought in but now they want to sell. Instead of panic selling Republicans have to hold firm and forcefully explain that the Ryan Medicare proposals are far more preferable than health care rationing seniors would face under Obamacare. On such Republican is Marco Rubio.


Perhaps Republican should remember Warren Buffet's dictum: "Be worried when people around you are greedy and be greedy when people around you are worried."

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