Health Care Reform, Taxation, and Investor Confidence

The rally in health care stocks on Tuesday, the 19th, is reported to be largely a function of speculation that a Republican was about to win in Massachusetts - and that health care reform legislation, in turn, willl fail to pass.  But it might be helpful to also look from a broad perspective at the 115-point moon shot the Dow rode today.  Feelings, albeit subjective feelings, about a possible turn in  the direction of tax policy, in general and long-range, has something to do with it.

After the huge upset in the Massachusetts special election, Investors and would-be investors may at this moment see themselves positioned in a penumbra between confidence and despair.  Reams of op-ed pieces ruminating about domestic policy prospects a year into the Obama administration define the atmosphere.  Whatever the merits, today's social policy aspirations largely drive our collective hopes for equality and safe harbors for all.  But these hopes are tempered, if they are not utterly nullified, by deep-seated fears about tax issues:  What are the costs and who will bear them?  What plagues of chronic waste and fraud will emerge from well-intentioned programs for the uninsured? 

It can all turn on a dime, but today naysayers see redemption in the health care reform mess.  But it is temporal redemption, and so is the confidence of naysayers.  In spite of ample contradictory evidence, the Dems insist that their agendas in taxation and social programs will drive down costs and benefit all.  But what if we never get the chance to see that they were right all along?