Life, Liberty, and Technology

I stumbled upon an article on the web site of The New Yorker titled, “Why Obamacare is Good for Small Businesses.” As a small business owner myself, in addition to being well connected with many other small business owners across the country, I found the title of the article curious. All evidence to the contrary, Obamacare has been terrible for businesses in this country, small or otherwise. But I took the bait anyway and read the article just in case the author had come across some worthwhile knowledge.

Given the matter-of-fact tone of the title, boldly exclaiming that Obamacare is good for small business, the article reveals itself to be little more than conjecture. As stated in the first paragraph “… Obamacare may well be the best thing Washington has done for American small business in decades.” Later on the article states, “… the likely benefits of Obamacare for small businesses are enormous.” These two statements should be red flags that the author isn’t stating fact, but merely speculating why he thinks Obamacare might be good.

The article first talks about the employer mandate which only affects businesses of 50 or more employees. He out-of-hand dismisses the impact that Obamacare will have on the overall economy because he claims ninety-six percent of businesses in this country have fewer than 50 employees. I won’t argue this point because I’m not a business owner with over 50 employees. Plus this argument doesn’t explain why Obamacare will actually be good for small business, as the article’s title proclaims. Rather it simply tries to refute arguments why it will be bad. Regardless, simple observation of news headlines shows that large numbers of employers are in fact making workforce reductions because of Obamacare. At the very least this appears to be a significant enough trend to warrant further scrutiny, instead of simply shrugging off the very real ramifications this will have on very real people.

The first affirmative argument the author attempts is that Obamacare will make it easier for people to start their own business. The justification being that starting a business was risky because finding affordable health insurance was not guaranteed. People would prefer staying employed to keep their health insurance through their employer rather than try to find private health insurance. This phenomenon, labeled as “job lock”, I agree exists, but not to the extent that the author claims. Certainly one barrier to starting a business is finding health insurance. But starting a business is risky all the way around. Finding health insurance is a risk that can be mitigated (or at least could be until Obamacare). First, many people starting businesses join their spouse’s plan when possible. I know many examples of entrepreneurs who got around job lock in this way. Second, while there is no guarantee of finding affordable health insurance, it doesn’t take a lot of effort to verify this one way or the other. Someone considering starting their own business will know for sure if they can find affordable insurance with just a few phone calls. The simple “threat” of not finding affordable health insurance won’t actually stop someone from starting a business (at least not anyone who is serious). True, if someone actually can’t find affordable health insurance that might stop them from starting a business. But the author gives no supporting evidence to show that this is truly a problem. And if job lock actually was a problem, Obamacare has definitively made this situation significantly worse!

I run my own business consisting of myself and my wife as the only employees. When I launched this business full-time over 11 years ago, initially I went on my wife’s health insurance plan. That lasted about a year until my wife was downsized. Since that point, about 10 years ago, we have had private insurance. We too were initially fearful at the loss of our health insurance that we received from her employer. And while we did end up paying more once we went private, it was a lot less than many people were telling us it would be. While our private health insurance costs have increased steadily year over year, we recently received a letter from our health insurance company stating that our premium had gone up significantly. Additionally, the plan we currently have can not be renewed after December 31st of this year (hmmm … I wonder why?). The new plans they offer cost even more than our newly increased premium and have a higher deductible. Shopping around so far shows that other insurance carriers show similar trends. Obamacare has definitely effected my personal economy in a negative way. But I guess that’s an impact that is too small for the author to care about.

It would be one thing if my family’s siutation was an anomaly. But I’ve heard from many other business owners that they received the same news from their insurance companies as well. I’m actually lucky. My increase, while significant enough, is small compared to some other stories I’ve been personally made aware of. And if you don’t take my word for it, perhaps you’d take the word of another small business owner? Or if that isn’t enough, perhaps you’d take the word of people who championed Obamacare and voted for Obama twice? They’ve been shocked to find their private healthcare costs have skyrocketed recently.

The author states that Obamacare could enable 1.5 million people to become self-employed by eliminating “job lock”. The reality is that if health insurance “job lock” was keeping people from starting their own business, Obamacare has just thrown away the key. The increased cost of private health insurance due to Obamacare is yet another example of big government intrusion hurting entrepreneurship and the little guy.

The author then goes on to state that Obamacare will provide tax credits to small businesses that want to insure their employees, evening the playing field with large companies. He also states that “community rating” will restrict insurance companies from charging certain small businesses more due to higher risk employees. First, insurance costs are based on risk for good reason. It allows companies to charge fairly. Those with higher risk are more likely to use insurance, therefore are more costly to carry. But those with less risk benefit from lower premiums. As Obamacare has now proven with individual private insurance, if insurance companies can’t charge higher premiums due to higher risk, then they must charge everyone higher premiums! Just as I and many other business owners who have private insurance must now pay higher premiums due to Obamacare’s mandates, what do we think is going to happen to the cost of health insurance for small business? Obamacare will in fact further de-incentivize small businesses from carrying health insurance for their employees. I don’t think this supports the author’s assertion that Obamacare will be good for small business.

Interestingly the author points out that the fact most Americans get health insurance through work is a “historical accident”. During World War II, the government forced private businesses to freeze wages. In an attempt to work around what the government had done to the free market, employers started offering health insurance and benefits as a way to increase overall compensation. He then states that Congress gave corporations tax incentives after the war to keep providing health insurance (blaming conservatives and doctors for stymying the creation of universal health care, as if government-run health insurance is something to aspire to). What the author fails to point out is that this “accident” was caused by government interference in the free market. If government hadn’t instituted unconstitutional wage freezes and then given tax breaks only to corporations for providing health insurance (why had tax levels risen to such high levels that tax “breaks” were significantly beneficial and why didn’t they give tax breaks to small businesses and individuals?) then the whole “job lock” situation wouldn’t exist today. Hmmm … the overreach of government caused this problem? I wonder what other problems government overreach has caused?

The battle over Obamacare truly is a big waste of time and energy. Obamacare ultimately is just a symptom of a bigger problem. The real issue we all must deal with is the high cost of health care and the correspondingly high cost of health insurance. At the root of the problem lies big government. As the article titled, “Let’s Make Health Care Inexpensive Again,” correctly points out, the cost of health care and health insurance has steadily increased in direct proportion to the amount of government interference in the health care industry. Note that this article was written in 2002! As recently as the 1950’s, this country had the highest standard of health care at a fraction of what it costs today,  health insurance was available to nearly everyone – even people with pre-existing conditions, and doctors made house calls. As an example of the costly encroachment of government, the article points out that every time the government forces an insurance company to cover a particular medical procedure, the cost of insurance goes up for everyone. 11 years later, this should have been obvious to most people, but if it wasn’t, Obamacare has just made it painfully obvious to the entire country.

Instead of tackling the real cause of skyrocketing health insurance costs – big government overreach and interference in healthcare – Obamacare has doubled-down on failed policies, virtually guaranteeing that healthcare costs will continue to rise – except this time it will be a rise of unprecedented proportions. I’m not sure what the author was thinking, but increased healthcare costs aren’t good for anyone. Obamacare is definitely NOT good for small business.

Obama, I’ve worked with Apple. I know Apple. Apple is a friend of mine. Obama, you’re no Apple.

As usual, please read my Obligatory Obama Disclaimer if you haven’t already.

As expected, the rollout of the online Obamacare exchanges was plagued with issues. In an effort to make excuses, Obama compared the launch of his exchanges with the release of Apple’s iOS 7 just a couple of weeks earlier. He said Apple found a glitch at release, fixed it, and nobody was suggesting that Apple should be shut down. He suggested that we should give Obamacare the same latitude while it works through its glitches, even after they’ve had 3 years to get it ready. Well, Mr. Obama, you started this game, so let’s take your comparison for a little spin, shall we?

If Apple had a record of terrible programs and systems like that of the federal government, they wouldn’t be the most valuable tech company in the world. They’d be more like … well … Microsoft. Obamacare is to the federal government what Windows 8 is to Microsoft: disasters of unprecedented scale that threaten to bankrupt their creators.

Like Windows 8, if Apple had put out such a terrible system, a system that many experts predicted would be awful, there would have been a huge uproar from their customers. Why is Obama so surprised that his “customers” are pushing back?

Unlike Obamacare, if I don’t like a product Apple puts out I can choose not to buy it. Apple’s products don’t cause other increases in my cost of living. And Apple damn sure doesn’t forcibly take my money if I refuse to buy their products.

Comparing a socialist program like Obamacare – supported by forced taxation, coercion, and threats of violence to ensure compliance – to a product developed in free market – in which customers freely make the choice to purchase – is a slap in the face to the principles this country was founded upon.

Don’t worry, I guarantee the “shutdown” of the United States federal government will not last very long. Those who stand to lose the most from a prolonged shutdown are the establishment politicians. A protracted shutdown of “non-essential” federal government services will only serve to show the people just how non-essential they really are. Which will then make people start questioning why the federal government is handling those operations in the first place. Establishment politicians need their entitlement programs as leverage to get reelected. If entitlement programs start disappearing, this opens the door wider for small-government politicians to get into office. So again, don’t worry about the shutdown. The federal government will soon start spending our money (plus money it doesn’t have) at the same voracious rate it was before – likely even faster once the politicians make their deals.

The only thing I wish we would see is a tax break for every day the federal government was shutdown. If people would actually see a larger paycheck because they weren’t paying taxes on the days the government was shut down we’d see some serious reduction of government!

In the meantime, celebrate the idea of a government shutdown, even if it only lasts a little while. The reality is that the federal government in a partial shut down is much closer to the government the founders envisioned and that ran the country during the early days. You know, when the United States was truly considered the land of opportunity. Perhaps a little taste of small government might help us return to those days.

This quote by Elizabeth Warren shown in the picture floats around the Internet every so often, touted by many as some sort of great wisdom. But if we break it down, we find that it isn’t quite the benevolent quote many take it to be. So let’s take a look at my version of what Elizabeth Warren “really” said.

There is nobody in this country who got rich on their own. Nobody. You built a factory out there – good for you. I can say this because I’ve never started or ran a business myself.

But I want to be clear. You moved your goods to market on roads that were paid for with money forcibly confiscated from the people. You hired workers that were educated in a forced monopoly system which is paid for with money seized from the people. You were safe in your factory because of police forces and fire forces that are paid for with money forcibly extracted from the very people they protect. You didn’t have to worry that marauding bands would come and seize everything at your factory … unless you’re counting your own government.

Now look. You built a factory and it turned into something terrific or a great idea – God bless! Keep a hunk of it. Because I know better than you just how much of your own money you should be “allowed” to keep. Part of the underlying social contract – that you never agreed to – is that people like me forcibly confiscate a hunk of the wealth you gave your blood, sweat, and tears to create and give it to the next kid who comes along – so they can have their wealth forcibly confiscated too.

Doesn’t sound so wise now, does it? Another thing that is really, um, “interesting” about her quote is that she says “the rest of us”, as if business owners didn’t pay taxes for all the things she talks about. If in fact all that taxes actually paid for were those things, we’d be talking about tiny little slivers, instead of hunks. But instead they often pay for politicians’ pork projects, making those who exert influence on the government rich. So maybe she is right. Nobody gets rich on their own – they need a politician’s help for that!