Warren Buffett, CEO of Berkshire Hathaway (NYSE: BRK), and owner and investor of some very large financial firms including insurance companies, is paying favors backward and forward among the political appointees and politicians that have helped him through the financial crisis. This week, he brought Treasury Secretary Henry “Hank” Paulson to Omaha recently to help tout Paulson’s new book.
He’s also helping out Senator Ben Nelson (D-NE). A year ago, I button-holed Nelson after lunch with the Sarpy County (NE) Chamber of Commerce. He told us in March 2009 that he had discussed the Troubled Asset Relief Program (TARP) with Buffett before voting “yes” on the bailout. Now we are learning that Nelson is discussing other Congressional matters with Buffett – the health insurance bailout.
In October 2009, Bill Moyers investigative reporting gave us a complete outline of just how cozy the insurance industry is with Congress. I said it back then: what they are calling “healthcare reform” is really just “health insurance bailout.” President Barack Obama slipped up in July and called it “health insurance reform” which sent tongues wagging. How soon they forget, really. Seven months later, he’s back to talking about “Health Care Reform” only this time in the context of the possible failure of Congress to pass any legislation.
I doubt it’s necessary to reiterate, but just for the record: Nelson “added a provision (to the legislation) extending federal payment for Nebraska’s new Medicaid enrollees beyond 2017, when the federal share is set to begin to decline” The backlash on the “Kornhusker Kickback” came from a wide array of interests, including. Nebraska Governor Dave Heineman. Heineman appeared on Fox Business setting the record straight: he definitely did not suggest this idea to Nelson and he wanted no special deals for Nebraska.
So, who came galloping to rescue Nelson from the backlash and fallout? None other than Warren Buffett was quoted defending Nelson to the press. And Nelson didn’t let the effort pass unnoticed. Nelson is running television ads in Nebraska quoting Buffett’s comment that “he would have made the same vote” as Nelson on the health insurance bailout. Buffett called Nelson’s vote “courageous”: How much courage did it take for Nelson to vote in favor of legislation that is supported by his largest donor?
Did I mention, again, that Buffett’s BRK holds insurance companies – ten of them according to the 2008 annual report. The holdings include not only property and casualty insurance, but also “reinsurance” (which could include the full spectrum of insurance businesses). Buffett calls this “the core business of Berkshire.” His insurance operations, “an economic powerhouse,” provided $58.5 billion in cash “float” on which they earned $2.8 billion.
Berkshire Hathaway employees and PACS are top contributors to Nelson’s political campaigns. Nelson has a long history with insurance. According the Clean Money Campaign, his pre-politics career was spent as “an insurance executive” and “insurance company lawyer.” His “lifetime campaign contributions from the insurance industry rank him fourth in the Senate,” behind only McCain, Kerry, and Dodd.
Hank Paulson, Warren Buffett, the Financial Crisis Inquiry Commission and now Senator Ben Nelson: part of the problem – not the solution.
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So people are making money
So people are making money from health insurance just not in the way everyone would expect. They wright books about the insurance problem the country and all its people face everyday for the last few years. That's what I call getting the best out of a bad situation.
When was the America going to wake up
When was the America going to wake up and see who really destroyed health care? They are exempt from anti-trust laws. Anthem says future increases may have to come more than just annually. They have merged so much that in some cities, there are only 2 or 3 insurers to choose from.They have raised fees for coverage (only to pay out less in benefits) while physicians have been paid 25% less (including inflation)since 2004. Yet Anthem Blue Cross of California just requested, and received, a 39% premium increase. Another quirk: in many states, you cannot keep your child on your policy once they reach age 21 to 25 or are not a full time student. Even if you want to pay to cover them, they say no. Yet insurers complain that it's the youthful uninsured who are running up costs by using the emergency rooms for care and not buying policies.
Health for college you can visit me in that link.
So people are making money
So people are making money from insurance just not in the way everyone would expect. They wright books about the insurance problem the country and all its people face everyday for the last few years. That's what I call getting the best out of a bad situation.
My wife and I have had the
My wife and I have had the same term life insurance coverage for years and the bailouts weren't anything we worried about affecting us. It's a shame some companies didn't manage their assets that well i'm not sure they should have gotten a bailout considering so many small businesses go under every day because of finances with no help from the government.
RE: Affecting us
Hi, Pauls. We are all affected by the bailouts because it is being done with taxpayer money. And where it isn't federal dollars, it is Federal Reserve Dollars (increases in the money supply). Those bailouts affect us to because they can lead to inflation.
Thanks for posting your comment,
Susanne
Follow me on Twitter: SusanneTrimbath
Politics and financial
Politics and financial interests go hand in hand. That's how it's always been and it will always be. You were a bit moderated when saying he's been paying favors to politicians who helped him and his financial empire throughout this crisis, you could have just said payed. It's not the big corporations that take the fall, it's us, the small people that end up with all the problems. All we are left to do is keep faith.
RE: How it's always been
Actually, JonahClint, that phrase: "That's how it's always been.." is very dangerous. I believe it is the first step toward accepting corruption. Because, of course, what I'm describing here is corruption. Maybe I shouldn't be so coy about it, right?
What we have "left to do" is to fight it. Campaign against it. Inform ourselves about it. Don't ignore it. Complain about it -- like you did here -- by writing articles, letters to the editors, comments on websites. And, of course, being informed voters. It's not easy, but like my most active friends say: "Democracy is not a spectator sport."
Keep "the faith", JonahClint, and thanks for taking the time to post your comment.
Susanne
Follow me on Twitter: SusanneTrimbath
Home Insurance
The society is facing problems with such laws. This has to go legal and it’s needed to be sorted at the earlier.
Christina
Insurance Reform, not Health Care Reform
Candace Evans
Real Estate Editor
Dallas Dirt Real Estate Blog
HousingWatch, AOL
You are so right I wish every U.S. voter could read this. It makes sense, Buffet owns re-insurance companies. Of course insurance companies have been no more than printing presses for money during the last 20 years. They are exempt from anti-trust laws. They have merged so much that in some cities, there are only 2 or 3 insurers to choose from.They have raised fees for coverage (only to pay out less in benefits) while physicians have been paid 25% less (including inflation)since 2004. Yet Anthem Blue Cross of California just requested, and received, a 39% premium increase. Anthem says future increases may have to come more than just annually. When is America going to wake up and see who really destroyed health care? Another quirk: in many states, you cannot keep your child on your policy once they reach age 21 to 25 or are not a full time student. Even if you want to pay to cover them, they say no. Yet insurers complain that it's the youthful uninsured who are running up costs by using the emergency rooms for care and not buying policies. Guess what -- or rather guess who is not letting them retain coverage -- the insurance companies. We don't need a national health care plan -- we need to tightly regulate insurance companies. There is no reason on earth on why individuals should not be able to walk into a store just like a bank and buy health insurance. Or buy it online. No reason why the best rates only come from huge employer pools. Only reason? Because the insurance companies are making billions off of us!
By the way, Nelson is a disgrace. Get him out of Washington!