Morning Must Reads

The threat of massive inflation has investors demanding more return to stay ahead of what they believe will be the declining value of the dollar. The Wall Street Journal, meanwhile, reports that Brazil and Russia are preparing to dump billions in U.S. bonds, which they will convert into IMF notes. That will weaken the market and likely force the U.S. to pay even more to borrow money.

The impact is already being felt at home, where mortgage interest rates for U.S. homebuyers have climbed three-quarters of a point in three weeks.

Writers Michael Mackenzie, Alan Rappeport and David Oakley explain that today is a new opportunity, though.

“The next test of the US Treasury’s issuance program looms on Thursday with the sale of $11bn in 30-year bonds. An auction of 30-year bonds last month went badly as investors signalled their concerns about the budget deficit.

‘That did not go well last time, so there is also some additional concern,’ said Dominic Konstam, head of interest rate strategy at Credit Suisse.

Traders said the good news of the day was that buyers entered the market when yields reached 4 per cent. “There should be natural support for the 10-year note around 4 per cent,” said Mr Konstam. Late on Wednesday, the yield on the 10-year was 3.95 per cent, up 9 basis points on the day.”
 
New York Times — Doctors’ Group Opposes Public Insurance Plan
 
The American Medical Association announced its opposition to the idea of a government health care plan with surprising force and clarity.

The biggest, most important voice in the health care industry with 250,000 members, the AMA has been preaching health-care reform for many years and doctors have increasingly been supportive of Democrats, but on the only idea that President Obama says must be included in a plan – a government-run component – the organization was adamantly opposed.

The president backs the idea mostly because liberals in Congress, already resigned to multiple concessions, have chosen the “public option” as their sticking point.

Obama will address the AMA’s national convention on Monday in a bid to change their minds. Writer Robert Pear invoked Hillary Clinton’s 1993 speech to the group in which she promised to shield doctors from torts in exchange for their support of her health plan.
Aside from worries that the public option would eventually be the only option, the doctor’s group is keen to avoid having all of their practices be dominated by government-insured patients.

“Under a proposal favored by many Democrats, doctors who take Medicare patients would also have to participate in the new public plan. Democrats say that requirement is needed to make sure the public plan can go into business right away with a large network of doctors.

The medical association said it “cannot support any plan design that mandates physician participation.” For one thing, it said, “many physicians and providers may not have the capability to accept the influx of new patients that could result from such a mandate.”
“In addition,’ the A.M.A. said, ‘federal programs traditionally have never required physician or other provider participation, but rather such participation has been on a voluntary basis.’”
 
Washington Post — Obama Administration Finds Health-Care Model in Green Bay
 
President Barack Obama is going to Green Bay today to sell his health plan on the basis of cost savings. Wisconsin and Green Bay in particular have been lauded for having some of the country’s cheapest healthcare.

The greatest savings have come through a program that encourages doctors to let terminal patients die without heroic measures – urging patients to sign medial powers of attorney over to care providers and then electronically alerting primary physicians when someone is attempting a life-saving effort.

A Dartmouth study of the plan found the kinds of savings that could pay for the president’s ambitious plan if they were multiplied nationally. But as writer Ceci Connolly hints, what works in Green Bay may not work in Miami or Mississippi.

“In the final two years of a patient’s life, for example, they found that Medicare spent an average of $46,412 per beneficiary nationwide, with the typical patient spending 19.6 days in the hospital, including 5.1 in the intensive-care unit. Green Bay patients cost $33,334 with 14.1 days in the hospital and just 2.1 days in the ICU, while in Miami and Los Angeles, the average cost of care exceeded $71,000, and total hospitalization was about 28 days with 12 in the ICU…

Richard Cooper, professor of medicine at the University of Pennsylvania, says he thinks the variations identified by the Dartmouth researchers — due primarily to enormous hospital expenses — are often related to patients’ socioeconomic status. States such as Wisconsin have lower medical costs because they are predominantly white and middle class, he said. The notable exception is Milwaukee, with its “poverty corridor,” he said. ‘Nobody wants to talk about the fact that if you want to deal with health care you have to deal with poverty.’”
 
New York Times — U.S. Takes On the Insular Culture of G.M.
 
The White House claim that team Obama wouldn’t be running General Motors is looking increasingly risible. Car Czar Steve Rattner gave an interview to his old employer and talked about the need to remake the corporate culture of General Motors. Rattner sees himself as the man to turnaround a bankrupt health care company that still happens to make cars.
Writer Michelle Maynard credulously accepts that the federal government is just the entity to shake up and stream line bureaucratic old GM.

“For example, Mr. Rattner himself was behind the appointment Tuesday of Edward E. Whitacre, the former chief executive at AT&T, to become G.M.’s new chairman. Four more vacancies on the board also have to be filled.
The newcomers’ primary task will be to make sure that G.M. rewires the corporate DNA that led to a decades-long slide in market share and tens of billions of dollars in losses.

Mr. Rattner said he expects no less than the kind of wholesale restructuring that Jack Welch engineered at General Electric in the 1980s, where he decisively shed businesses, cut costs and jobs and demanded better performance.
The government, which has said it will not invest any more money in G.M., cannot settle for anything less, Mr. Rattner said in an interview.

‘We’re not going to fail,’ he added. ‘This is too important a company.’”
 
Wall Street Journal – Iranian Presidential Contenders Court Women Voters
 
With the Iranian presidential election on Friday, writer Farnaz Fassihi looks at how women have driven the issues of the contest and are the great source of pressure for reform.

“The top reform contender, Mir Hossein Mousavi, broke the taboo of mixing personal life with politics by campaigning with his wife, Zahra Rahnavard, an artist and scholar who has been dubbed Iran’s Michelle Obama by local media… Female voters have responded to the candidates’ appeals, with many attending rallies and street demonstrations.”