Daily Read - 2/9/10

The Wall Street Journal says the government has no exit strategy for Fannie Mae and Freddie Mac.  "Fannie and Freddie remain troubled wards of the state, with no blueprints for the future and no clear exit strategy for the government...Nearly a year and a half after the outbreak of the global economic crisis, many of the problems that contributed to it haven't yet been tamed. The U.S. has no system in place to tackle a failure of its largest financial institutions."  A typical "exit strategy" would be to take the companies public again, but what investor in their right mind would buy shares.  After all, the government is "running Fannie and Freddie as an instrument of national economic policy, not as a business," says Daniel Mudd, Fannie's former CEO.  (And they have been for years)

The Cato blog has a post about a "National Summit on Health Care Fraud."  The GAO has noted in the past that requests for more people and resources to combat fraud in government health insurance programs are typically not met.  President Obama's budget requests an 80 percent increase in the budget for anti-fraud measures, but John Dingell (D-MI), among others, are opposing it.  James Roosevelt, CEO of private insurer Tufts Health Plan, "pointed out that the chief priority for Medicare/Medicaid is to pay claims as quickly as possible. Public programs lack the capabilities of their private sector counterparts to not only stop improper payments from being made, but also detecting such payments after the fact."

The New York Times has an interesting article on the SEC's challenges in trying to "unmask the next Madoff."  "Wall Street vastly outdoes the S.E.C. in terms of people, money and, many in the financial industry argue, talent.  The administration has requested a budget of $1.3 billion for the S.E.C. for 2011. Hedge fund stars can make that in a year."  The solution, according to Robert S. Khuzami, the S.E.C. head of enforcement?  The article says he wants "to infuse the S.E.C. with the ethos of a start-up company, making it faster, more proactive and even a bit entrepreneurial."

An article at The Hill says Democrats blame White House Chief of Staff Rahm Emanuel's politcal mistakes and lack of understanding of the Senate for the collapse of health care reform.  "Their plan was to keep all the Democrats together and work like hell to get Snowe and Collins. The Senate doesn't work that way. You need a radius of 10 to 12 from the other side if you're going to have a shot," said an unnamed source.