by | ARTICLES, BUSINESS, ECONOMY, OBAMACARE, POLITICS
When Chuck Rocha, from the Center for National Policy, was a guest on Bulls and Bears last past weekend, he continued to spew out statistics that touted the economic benefits of Obamacare. His assertions were based on a Price Waterhouse report that indicated health care cost had come down 4%.
Of course, health care costs have not come down. If Mr. Rocha was referring to the fact that the rate of growth of health care spending has slowed (by a not really significant 4%), this trend started long before Obamacare. In fact, the Price Waterhouse Study lays out the reasons for the slowing growth, including individuals delaying treatments, individuals using the internet to find lower pricing, large employers finding ways to get cheaper alternatives for their employees – all specifically NOT RELATED to ObamaCare.
What’s worse, although Mr. Rocha acknowledges that this country does have a debt problem, he insists that it does not need to be dealt with currently. He espouses the clearly dangerous and uneducated view that unfunded costs of future promises are not a real liability.
He also claims that incentives to manufacturing are necessary to keep employment in this country, totally ignorant of its effect on free trade, which is really what is necessary to get the economy moving.
The frustrating part of the entire segment was that nobody on the show thought to contradict any of these assertions, which were patently and demonstrably false.
by | ARTICLES, BUSINESS, ECONOMY, OBAMACARE, POLITICS
Rick Ungar, the “Token Lefty”, usually comes very well prepared for his appearances on Forbes on Fox. But it is disappointing to watch when he regurgitates the same absolutely misleading statistics, despite the fact that he’s been corrected so many times before.
Mr. Ungar argues that the changes which President Obama continues to make to Obamacare are not a significantly harmful to the economy, since “the Obamacare mandate excludes 96% of businesses”.
One might ask: if Obamacare only affected 4% of businesses, how could it be such a major program? The answer is simple. Those 4% of businesses include the vast majority of employees in this country. Most businesses have zero to very few employees, with the total number of employees for all businesses that have 100 or fewer employees making up a relatively small number of the total employees in this country.
This statistic-fib is reminiscent of the exact same tactic that the Democrats were using when pushing to raise the income tax margins of the highest earners making above $250,000. Democrats continuously argued that “only 3% of all small businesses made above $250,000”, a seemingly low percentage.
What they purposely failed to disclose, however, is that that figure accounted for more than 50% of all small business income — most of which would be taxed at individual rates due to the structure of the company. So when the Democrats raised taxes on those upper income brackets, through the process of letting the tax cuts expire, they willfully and quietly were raising taxes on small businesses. Now, high earning non-corporate entities pay more in taxes (39.6%) than even their corporate counterparts (35%).
We have the same chicanery going on here. Nothing could be more intentionally misleading, for those who don’t know better, than Mr. Ungar’s statement that only 4% of businesses are affected by Obamacare. “It’s the number of employees, stupid”.
by | ARTICLES, BUSINESS, ECONOMY, POLITICS, TAXES
Democrat politicians and “economists” have found a wonderful populist issue for the the current election cycle – raising the minimum wage. The economists (including Krugman, Goolsbee, etc) make the argument that the most obvious, serious problem — loss of entry level jobs and non-hiring at new entry level positions — is not a significant factor, and they have even been able to marshal some studies to support this.
They then argue that the higher minimum wage puts more money into needy families and therefore strengthens the economy. This argument just happens to have a wonderful political effect for these Democrats: it makes them seem sensitive to the plight of the needy, while making Republicans look like shills for those greedy Republican businessmen who are only trying to squeeze every last dollar out of their poor employees.
Just one problem — the Democratic position is baloney, and the economists know it, because it is simple economics 101. No businessman would be willing to pay an employee more than the economic value of the employee.
Let’s assume that the rise in the minimum wage puts the cost of employee in excess of the value of that employee. The employer may then 1) terminate the employee (saving the excess of cost over productivity) or 2) buy equipment which, at that price, becomes cheaper than the employee.
But let’s say the employer keeps the employee, just paying him more for the same work he did before. The employer will then either a) earn a smaller return on his investment, reducing the amount he will be able to invest in the business in the future; b) he will raise his prices, which will maintain his profit margin, but will reduce his sales volume, or c) some combination of a) and b). In either case, economic growth of the economy will be hurt.
By citing narrow studies where short-term noise could easily hide the effects of small changes in the minimum wage, these political “faux-economists” are abusing economic appearances to serve a political end.
Furthermore having a national minimum wage when price and wage levels vary so markedly across the country is truly nonsensical.
The country will be better off when economists remain true to their profession.
