…or why people like Henry Waxman, who think they can run the economy, are ignorant fools:
“What AT&T, Caterpillar, et al did was appropriate. It’s earnings season, and they offered guidance about , um, their earnings.”So once Obamacare passed, massive corporate write-downs were inevitable.
They were also bad publicity for Obamacare, and they seem to have come as an unpleasant shock to House Energy and Commerce Committee Chairman Rep. Henry Waxman, D-Calif., who immediately scheduled congressional hearings for April 21, demanding that the chief executive officers of AT&T, John Deere, and Caterpillar, among others, come and explain themselves.
Obamacare was supposed to provide unicorns and rainbows: How can it possibly be hurting companies and killing jobs? Surely there’s some sort of Republican conspiracy going on here!
More like a confederacy of dunces. Waxman and his colleagues in Congress can’t possibly understand the health care market well enough to fix it. But what’s more striking is that Waxman’s outraged reaction revealed that they don’t even understand their own area of responsibility – regulation — well enough to predict the effect of changes in legislation.
In drafting the Obamacare bill they tried to time things for maximum political advantage, only to be tripped up by the complexities of the regulatory environment they had already created. It’s like a second-order Knowledge Problem.
Possibly this is simply because Waxman and his colleagues are dumb, and God knows there’s plenty of evidence that Congress isn’t a repository of rocket scientists. But it’s just as likely that adding 30 or 40 IQ points to the average congressman wouldn’t make much difference.
Well, they might at least be smart enough to know what they don’t know. You know, when the president claimed that he’d read Hayek? I don’t believe him. Or if he did, he didn’t read for comprehension.
I also think that they outsmarted themselves, and it’s going to justly bite them in their collective keister this fall. Outsmarting them is no big feat of course. Except for them.
[Sunday night update]
Over at Cato, David Boaz has further thoughts. And they’re a lot more intelligent (as usual) than commenter “Jim”‘s.
I think he read the “Road to Serfdom” for comprehension — it’s his road map.
If that doesn’t encourage skepticism toward big government, it’s hard to imagine what will.
For a third of the population it seems nothing will. I have a hard time wrapping my mind around that.
For at least a third of the population, ObamaCare represents in their minds “more free stuff from Democrats.” That’s all they care about politics – voting for people who’ll give them “more free stuff.”
It just doesn’t compute. They’ve already got the free stuff. This redistribution of wealth is not so much to the poor, but to the bureaucracy. I know, I am the poor. đ This is why it should be illegal for federal money to go to political organizations of any persuasion. Especially when the organization operates a front to pretend they are not political.
When Barry d’ zero said he “read Hayek”, he meant he read the wiki entry on him…..
Or maybe read one of Michelle’s magazine articles about Selma…
The most persuasive argument I’ve encountered for use with people who firmly believe they deserve XYZ is:
Taxes raised for fixing XYZ are $100,000.
Benefits paid to people needing help with XYZ are $45,000.
Wouldn’t you rather have a system with a lot fewer fat condescending bureaucrats micromanaging and taking slices of your pie?
That is: the form of the welfare is actually more important than the fact that there is welfare. There’s a big difference between the nearly flat-payment systems (Food Stamps) and something like Obamacare.
Obama: “We gotta spread the wealth around.”
Wall St.: “They’re spreading the wealth around.”
Waxman: “What?! Inquisition!”
The specific provision of the Affordable Care Act that resulted in those writedowns was the removal of a tax credit for retiree prescription drug benefits. Before the ACA those corporations got a tax credit — so it was the government paying for the benefit — and they also got to deduct the cost of the benefits from their taxes (!). Now they only get the deduction.
There is something funny about people invoking Hayek in defense of a corporate give-away.
And it’s something else when Waxman – who no doubt voted in favor of the corporate accountability laws – wants to host an inquisition for corporations complying with those very same laws. Either he’s a moron for not understanding that the corporations are required by law to report those changes or he’s something sinister for believing they shouldn’t comply with the accountability laws.
Way to miss the point, Jim.
Existing regulations force companies to publicly announce an alteration to projected earnings. Compliance with that set of regulations in light of the newly-enacted health care bill is the reason those CEOs are being summoned to congressional hearings on April 21st – presumably because Waxman didn’t like the message they sent.
This is the tip of the iceberg.
With every new tax, every new regulation, every new federal program or subsidy or tariff or levy or any other expansion of government power – past some critical point compliance with all regulations becomes impossible, because compliance with one means a violation of another. It’s like patients on multiple drugs, at some point the drugs interfere with each other and produce bizarre side effects. The US is probably near that tipping point.
And with every every expansion of government power, you have a corresponding increase in the number of government workers – people who would otherwise find employment in the economy, instead ensuring everyone else is in compliance with regulation X and law Y and subsection 2167 on page 3748691 of the tax code. Either that or a person who would otherwise be working on her small business is instead devoting a huge chunk of her time to the aforementioned government paperwork.
Ask yourself why the health care bill involved hiring sixteen thousand more IRS agents.
You do realize he considers that a sincere compliment, right?
And with every every expansion of government power, you have a corresponding increase in the number of government workers
That’s a theory, here’s a fact: there are fewer government workers today than when Obama took office.
Ask yourself why the health care bill involved hiring sixteen thousand more IRS agents.
Ask yourself where that number came from (hint: it was made up).
Whether they understand their own regulations aside. That Waxman or his committee thinks he or they know the ins and outs of daily operations, or the next 5 quarters sales orders, delivery schedules, procurement orders for parts, cables, steel, bandwidth, man power, WHATEVER, for these companies is laughable. And that’s the start of the list of items you have to know to make long range plans or to announce future earnings or charges.
Waxman assumed these companies get money the same way Democrats get it. Steal it. And if you need more, you steal more.
Ask yourself where that number came from (hint: it was made up).
FactCheck.org claims that this is a tax credit, not a fee on people who do not have health insurance. As far as I can tell, this is a very wrong interpretation of the law. Given that they are also affiliated with Obama from way back, I would not trust them on this.
From a comment by Jim
“Thatâs a theory, hereâs a fact: there are fewer government workers today than when Obama took office.”
Buzzzzzz – wrong but thank you for playing the game! Better luck next time.
From:
http://www.washingtontimes.com/news/2010/feb/02/burgeoning-federal-payroll-signals-return-of-big-g/print/
“From 1981 through 2008, the civilian work force remained at about 1.1 million to 1.2 million, with a low of 1.07 million in 1986 and a high of more than 1.2 million in 1993 and in 2008. In 2009, the number jumped to 1.28 million. ”
I believe 1.28 million is greater than 1.2 million.
JAH, maybe Jim includes state and local government workers. They’re appendages of the state after all. R.I.P. federalism.
Um, Jim . . .
Yes, the corporations in question were getting a tax credit, essentially a handout from the gummint. I don’t think they were complaining that this “handout” was being taken away. I think they were merely stating facts that now that his handout was being taken away, they would have to “restate” (i.e. report a smaller amounts) on their reports of earnings. As has been pointed out so many times, they have a regulatory responsibility to do this kind of restating when business conditions stand.
The story goes is that the Right Honorable Henry Waxman was having none of this, that these Big Bad Corporations were raining on his (Health Care Reform) celebration parade. He was going to call the CEOs in question before Congress for a public scolding.
So it wasn’t the vitriolic Right Wing hopping up and down, “See, AT&T revised their earnings forecast because of Health Care Reform, the sky is falling”, rather it was Henry Waxman, Member of Congress who was hopping up and down that an inevitable effect of Health Care Reform, in this instance the diminishing of the subsidy we are taking about and its effect on corporate earnings, that had his BVD’s in a bunch.
So Jim, explain to me one more time what your point is?
“But itâs just as likely that adding 30 or 40 IQ points to the average congressman wouldnât make much difference.”
Well, it would DOUBLE their intelligence!!!!!!
The point of a red herring is to divert the topic away from something Jim finds embarrassing, like idiotic Donkey grandstanding, and talk about something else instead — anything, really, it need not be coherent.
(hint: it was made up)
Not exactly Jim, it was an estimate assuming the worst. Isn’t that what each side does? Your link does say $5 to $10 billion which includes hiring new agents. I would have estimated it at it’s best, then you wouldn’t be able to call someone a liar when at the worst they are simply biased.
Let me repeat that, billions to the IRS because of this bill. Spin that.
“The specific provision of the Affordable Care Act that resulted in those writedowns was the removal of a tax credit for retiree prescription drug benefits. Before the ACA those corporations got a tax credit â so it was the government paying for the benefit â and they also got to deduct the cost of the benefits from their taxes (!). Now they only get the deduction.”
Nice attempt to deflect from the point of the post which was Waxman and his cohorts couldn’t run a lemonade stand much less understand their 2000 page monstrocity. So they get their panties in a wad because businesses following the law make them look bad. You rush to their defense by trying to change the subject in the comments. You could have saved the prose and just wrote RACIST.
Buzzzzzz – wrong
According to the Bureau of Labor Statistics there were 22,960,000 Americans on the government payroll in March, 2009, and 22,880,000 in March, 2010. So you’re freaking out about the growth of government, while the government is shrinking.
it was an estimate assuming the worst.
It doesn’t assume the worst, it assumes the impossible.
Let me repeat that, billions to the IRS because of this bill. Spin that.
Millions of newly-covered Americans. Thousands of lives saved. Hundreds of billions in deficit reduction because of this bill. Spin that.
Jim from someone who’s calling others crazy, it’s kind of nutty to think that the growth in government can be measured by the number of government employees on the federal payroll. A large part of the growth in government is all of the unfunded mandates (like the demand that restaurants have to print out the calories on their menu). When I do my taxes, I have become an unpaid employee of the federal government. The more the government demands of the private sector’s time and resources, the greater its growth. And when one considers that reality, the growth has been explosive, particularly with ObamaCare.
Thousands of lives saved. Hundreds of billions in deficit reduction because of this bill. Spin that.
That is spin. Only a fiscally ignorant lunatic believes that this is going to reduce the deficit.
Federal Government
Not seasonally adjusted
March 2009 — 2,779.0 (Thousands)
March 2010 — 2,892.0 (Thousands)
Seasonally adjusted
March 2009 — 2,779.0 (Thousands)
March 2010 — 2,911.0 (Thousands)
Since the president or the congress has any direct control over what state and local governments do in the way of hiring the only one that matters when discussing the growth of government due to congressional or presidential actions is the Federal government. That has grown in the last year under Obama and is slated to grow even more in the next year.
Stop trying to play games, the Federal government is getting larger.
while the government is shrinking.
Not as much as the private sector has. The bottom line is a higher percentage of US workers are now employed by government than at any time in the past 50 years.
I wonder, can the CEO’s that Rep. Waxman demanded to “…come and explain themselves….” on April 21st demand that the Chairman of the SEC show up also to explain regulations that they’re following to him? BTW, has Rep. Waxman moved beyond the hostility worded invitation to using Congress’s powers of Subpoena?
Alternately I’d suggest them uniformly responding to Hearing Committee ‘Good afternoon Congressman, Thank you for your question, Please ask the Chairman of the SEC for the ‘why’ and ‘how’ of my companies Legally Required Actions in this matter.’
It’s a thought. đ
Alternately Iâd suggest them uniformly responding to Hearing Committee âGood afternoon Congressman, Thank you for your question, Please ask the Chairman of the SEC for the âwhyâ and âhowâ of my companies Legally Required Actions in this matter.â
… and please ask Your Own Party’s Leaders to explain the decision as to the timing of the signing and implementation of the Health Care Bill.
Jim said:
So youâre freaking out about the growth of government, while the government is shrinking.
The employment category âFederal, except U.S. Postal Serviceâ increased 8.21% from Mar. 2009 to Mar 2010. That belies the statement âthe government is shrinkingâ. The primary source of the shrinkage falls in the category of âLocal governmentâ, and âState government, excluding educationâ. These areas are where the government workers who at least have the semblance of producing something useful, e.g. public school teachers, city sanitation workers, police, fire department workers, and state highway workers, and state highway patrolmen. So here we have shrunk the government in its most productive area.
Millions of newly-covered Americans. ⌠Hundreds of billions in deficit reduction because of this bill.
I donât see it. What about all the healthy Americans who will follow the same strategy as me and drop out, paying the much lower penalty. At that point the only people still covered will be those with large medical expenses. The insurance companies will need huge subsidies and/or bailouts just to survive.
The employment category âFederal, except U.S. Postal Serviceâ increased 8.21% from Mar. 2009 to Mar 2010. That belies the statement âthe government is shrinkingâ.
No, it doesn’t, it belies the statement “the federal, non-postal service government” is shrinking, something no one stated.
The primary source of the shrinkage falls in the category of âLocal governmentâ, and âState government, excluding educationâ. These areas are where the government workers who at least have the semblance of producing something useful
Yes, and they would have shrunk even further were it not for the ARRA.
What about all the healthy Americans who will follow the same strategy as me and drop out, paying the much lower penalty.
We can wonder whether that will happen, or we can look at Massachusetts and get some empirical data. It turns out that they’ve exceeded their enrollment targets for RomneyCare — people aren’t opting out — despite the worst recession in 70 years. Aren’t you relieved to learn that your fear is unfounded?
Only a fiscally ignorant lunatic believes that this is going to reduce the deficit.
So on the one hand with have the CBO, and on the other we have Rand. Whom to believe, whom to believe….
If you think that the people at the CBO really believe that the deficit will be reduced by this bill, you’re even more foolish than you appear. They’re certainly no fools.
Actually I think employee headcount is a pretty good measure of expenditure. While it is not a perfect measure, it is at least measurable and to the point, so is deserving of its name.
If we try to measure so called “externalities” we will nearly inevitably fall into overlegislating (most provisions in Sarbanes-Oxley), or underlegislating (repelling Glass-Steagall, behaving like the Sherman Act does not exist). It is a slippery slope once you start trying to measure things which are not supposed to be measured. Like the cost impact of food labels. To me it makes it easier for the consumer to evaluate different foods products. I also like to know what I am eating.
Oh and I do not believe global medical coverage this will reduce the deficit. Or increase it. I cannot see how implementing a global insurance of any sort would have any impact in the government deficit provided the insurance is run properly and the government cannot muck around with the fund money. Of course reality is often quite different. Not only for state insurance funds, but for private insurance funds as well.
on the one hand with have the CBO
The same CBO that uses static analysis, meaning it assumes that individuals and businesses wonât take any actions that might reduce their reported taxable income next year when federal income tax rates on the highest-earning 5% of the population are slated to go up dramatically. That CBO? You’re joking right?
This is the segment of the tax-paying population (the highest-earning 5%) that knows the most (or can afford to hire those who know the most) about what actions to take to reduce their tax bill.
Lunacy. Jim.
Like the cost impact of food labels. To me it makes it easier for the consumer to evaluate different foods products. I also like to know what I am eating.
So you and your friends in Congress are going to make all of us pay more when we go out to eat because of what you “like.” I’ve got an idea. How about not frequenting restaurants that don’t label their menus? Or better yet, employ a little common sense? The important thing is, don’t call it an expansion of government, right?
As a soon-to-be involuntary free-rider, I find this to be excellent news, especially since, again if we look at RomneyCare, premiums will be going stratospheric.
Jim,
So are you saying that it wonât be to my benefit to drop out? Or are you saying that I am one of very people that will be impacted in this way? Or are you saying that most people wonât realize the benefit of dropping out? Or is there a fourth option Iâve missed. What is wrong with my numbers? Iâm currently paying $8,500/year, which is projected to go to $14,000 in 2014. What benefit will I receive for that extra $12,000 over the $2,000 penalty? Do you think the penalty will be greatly increased before it goes into effect? I havenât really looked into Massachusetts plan since I donât live there. Iâve just looked at the federal plan, and evaluated various options open to me, and I just donât see what Iâm missing.
Trying again with emphasis…
billions to the IRS because of this health care bill.
Are you getting my point here Jim???
Millions of newly-covered Americans that don’t want the coverage. What lives saved? There ya go, spun for your pleasure.
Hundreds of billions in deficit reduction because of this bill.
Hold on. Picking myself up off the floor. Can’t. Stop. Laughing.
Hal,
I’m saying that the MA experience tells us that there won’t be enough people opting out to threaten the system’s finances.
Trying again with emphasisâŚ
billions to the IRS because of this health care bill.
Are you getting my point here Jim???
No, because you don’t appear to have one. The health care bill makes changes to the tax code — for instance, there’s a totally new tax credit for small businesses that provide health insurance to their employees. Publicizing and implementing those new provisions takes people, offices, phone lines, computers, etc. All those things cost money — a lot of money to you or me, but not much in the context of the overall bill.
Jim,
I posted this article (click on my name) in another thread. It mentions that at Harvard Pilgrim Health Care, the state’s second largest insurer, that 40% of consumers who purchased insurance from them on the open market kept it fewer than five months, and incurred, on average $2,400/month in expenses. Other insurers in Massachusetts are reporting similar patterns. Of course, it might be that 40% of the open market opting out might not threaten the systems finances. My own prediction is that once people realize how much money they can save by opting out many will. In my own case nobody has been able to explain to me what benefit I receive for the additional $1,000/month it would cost me to remain in the system.
Jim says, “No, because you donât appear to have one [a point].” All of the following comment then proceeds to make my point which is…
The health care bill expands the IRS. Which for Jim is not a point at all. Which is why it is invisible to him.
Yeah, I cannot imagine why they would need more IRS agents. It’s a total mystery.