Obamacare Kills the Family Farm

Obamacare is poised to put the family farm out of business. Although not directly applicable to the food industry, it has spawned sibling legislation whose ends are aligned with the Obamacare mandate of lowering health care costs for the nation – by any means necessary. Toward that end the “Food Safety and Modernization Act” was passed in 2011 which has now spawned a new round of FDA rulemaking known as proposed rule “Current Good Manufacturing Practice and Hazard Analysis and Risk-Based Preventive Controls for Human Food.” The primary stated goal of this proposed rule (according to the FDA) is to “reduc(e) the public health burden of foodborne illness associated with contaminated produce.”  A worthwhile goal, I’ll grant that. However setting aside for now the question of constitutionality of a federal agency laying down rules to govern activity that is wholly intrastate in nature, there are a number of problems with both the implementation, results and costs associated with this end goal.

Some of the more absurd components of this proposed rule include (a) WEEKLY testing of water “before it touches the surface of any fruit”, (b) where manure has been spread one must wait 9 MONTHS before harvesting, and (c) the maintenance of DAILY clipboards of records of every event that takes places on the farm related to food production. As with any regulation there is a cost involved. Irrespective of the industry it is always the large entity that has the advantage relative to its smaller competitors in terms of bearing the additional costs of new regulation. Therefore it should come as no surprise that this proposed rule would have the effect of putting many small farmers out of business (there are exemptions for “small” farmers, however these merely delay the timeframe of implementation). But don’t take my word for it, you can read the comments of such farmers themselves at the FDA’s comment site.

Now at this point the progressive may be protesting, “But, but, this rule will save lives and if some small farms must be sacrificed to achieve that goal then as long as the greater good is being served this is an unfortunate side-effect.” Although seeing as how most progressive types are proponents of buying locally grown produce (itself not a bad concept) I imagine their heads will explode when they realize this “greater good” will have the net effect of putting so many small farmers out of business it will all but kill the “buy local produce” industry.

Even by FDA’s own best estimates this rule would potentially reduce the incidence of food borne illness by 2-5% (i.e. save no more than 67 lives per year or about $14 million per life). And while I would gladly spend $14 million to save the life of a loved one, I don’t have $14 million nor do I (or anyone) have the right to use government to fleece my neighbors pockets for that $14 million on the off chance it might save a life I care deeply about.

The emotional response of “we can’t put a value on a human life” runs afoul of the economic law of diminishing returns. Whenever a brand new type of regulation was introduced (pollution, car safety, etc) we witnessed massive improvements – because nothing existed before that (not that such regulation was necessary however, seeing as how these types of regulations were merely a response to prior government induced market distortions). As a hypothetical example, seeing that $1 billion in regulatory costs reduces deaths from 1 million to 1 thousand legislators naturally will assume even tighter regulations costing another $1 billion will do the trick – but it doesn’t work like that. Those new regulations reduce deaths to only 900, another billion to 850 and so on. The low hanging fruit was picked with the initial round of regulation; the minuscule amount of fruit at the top takes exponentially more effort to pick.

Ok, fine, you may say, a human life should not have a dollar value attached – we should spend and spend to stop all deaths. Although publicly we may profess such sentiments, our actions speak very differently. If our safety were paramount to the exclusion of all monetary and non-monetary costs then we would either choose to drive at 1 mph at all times or spend hundreds of thousands of dollars to drive a military grade armored tank. But we don’t do that because safety is a luxury and we can only afford luxuries to the extent we have produced above more than the bare essentials. This, by the way, is why human conditions were so much less safe years ago and are so in third world countries today – not due to any lack of government oversight but rather due to lower productivity, which puts luxuries (such as safety) out of reach. So although we are bound by our productive capacity when determining how much we personally want to spend on safety, government knows no such bounds. Whether it might cost $100 billion or $100 trillion to potentially save one life is of no concern to those that bear none of the costs.

Marietta Braves?

Unless you are a baseball fan or local politics wonk you may have missed the big news last week: the Atlanta Braves will be leaving Atlanta for greener fields in Cobb County beginning with the 2017 season (speculation has already begun whether they will change their name to the Marietta Braves). This move has created a teachable moment concerning bureaucrats who credulously believe they can derive a net benefit by subsidizing the profits of private business via the public tax trough.

The particulars of this prospective Braves relocation are rather interesting in light of the epidemic of head-in-the-sand disease that is sweeping through Cobb County government. The Braves have released an infographic that details the massive extent to which Cobb County will be bribing, err, supporting them. The Cliff Notes version is this: Cobb will cover 45% of the overall $672 million cost of the project through a mix of new and increased taxes amounting to $18 million per year over the next 16 years. This tax expense will however be offset by increased local retail spending that will bring in an (estimated) whopping additional $89 thousand per year in sales tax revenue. I don’t know, maybe I’m being unfair: Would you pay $180 a year for the opportunity to possibly earn as much as a cool 89¢? The math for this deal just does not work. Cobb County would have to realize an ADDITIONAL $1.8 billion in retail sales just to break even. Given that the current total amount of retail sales in Cobb County is $2.1 billion that seems a bit of stretch to imagine that a mere baseball team could nearly double the entire retail economic output of the county.

There is nothing wrong with the Braves relocating to wherever they desire. However, they should bear 100% of the cost of their relocation speculation. It’s lose-lose for the taxpayer. If the move goes well for the Braves then the taxpayer has paid for something the Braves could have paid for themselves. If the move goes poorly then the Braves are shielded from the effects of that bad decision via the taxpayer picking up nearly half the tab. Some will invariably argue that the local community should bear some of the costs to lure the Braves to their neck of the woods because the local community will indirectly benefit. To accept such a flawed argument one must also accept the premise that Walmart should likewise demand to be subsidized by other businesses nearby because those businesses will derive increased traffic owing to the “anchor” location of the Walmart. Everything each one of us does will conceivably benefit someone else indirectly. This argument, taken to its logical conclusion, demands that we should all attempt to extort money from our neighbors before we do anything.

But, we can’t really blame those in charge over in Cobb County for making such absurdly wrong-headed decisions; they are simply following precedent. Those who can think, think, those you can’t, follow precedent. Local (and national) governments have been hooked to the same economic voodoo for decades. They wish/hope/believe that if they offer up financial support to a private business looking to relocate within their territorial boundaries that the potential increased economic activity will provide a net benefit to them and their constituents. Unfortunately wishing for something doesn’t make it so. In fact there has never been a situation where such subsidization has bore net economic fruit. So why do governments keep making the same mistake over and over? Because government has no feedback mechanism to correct their mistakes. There is no profit and loss test. If they subsidize some boondoggle and it doesn’t pan out (a loss), oh well, the taxpayers will still have to continue paying for it for years after the private entity they were subsidizing is gone and those elected officials have left office. Government legally can’t go out of business, so they are free to make the same mistakes over and over. The people may “vote the bums out”, but the institution remains. The aphorism “Those who fail to learn from history are doomed to repeat it” is nowhere more true than with government.

Where’s the beef? Sorry, it’s been banned.

This past week the FDA proposed an outright ban on artificial trans fats in prepared foods.  Trans fats occur naturally and artificial ones have been used for decades in foods. As a foodstuff they are safe insofar as they don’t make you sick upon ingestion and have known physiological benefits in proper amounts (and known harms if consumed to excess, which is the case with all food components). The FDA is not banning some new dangerous unknown substance. They are banning something that has, in large part, already been voluntarily reduced in the past few years to the point that average US consumption of trans fats is now half of what the American Heart Association recommends as being safe. So if it’s already hardly used, where’s the harm in a ban you might say? Setting aside the ethics of the ban, the direct type of harm that can be envisioned would be a situation wherein the use of trans fat solves a problem for which there is no good substitute. Furthermore any substitutes might very well themselves be more harmful than the trans fat. That’s called “unintended consequences” and occurs with every single government mandate ever issued.

Some examples where trans fats are used include cake frosting, microwave popcorn, frozen pizzas and various fried foods. These are mere treats, things eaten a handful of times in a month if even that (how many cakes have you eaten in the last month?). But given the government’s penchant for quixotic battles against virtually riskless activities (trillions of dollars spent fighting terrorism even though jaywalking kills more people each year than terrorism) it should come as no surprise that Uncle Sam would relish the role of micromanaging the minutiae of our lives (“exactly how many calories are in the candy bar sir?”).

Lifelong dependency of the citizen ensures eternal power for the state.

 

There is nothing wrong with the FDA educating the public about the healthiness or lack thereof of certain kinds of foods (although forcing the public to pay for such education through taxation rests on ethically dubious ground). However, the outright banning of this or that substance crosses a line. The metric upon which prohibitions have been based (such as drug prohibition, however ill conceived) is one of “imminent harm”, i.e. if someone is about to jump off a bridge we can plainly see their free will is immediately deleterious to their own well being therefore one could argue intervention is justified. However, the bar has been moved from “imminent” to “eventually possible” i.e. should we tear the bridge down so as to make it impossible for anyone to ever jump off it? Should we now ban every conceivably risky activity?  If so, that’s going to be a mighty long list! Nearly every action in our daily lives carriers some level of inherent risk.

The FDA’s justification for this ban is a mere estimate (i.e. best guess) that it will result in 20,000 fewer heart attacks and 7,000 fewer deaths each year. The rationale is of course the “Greater Good” argument. This ban will naturally lead to lower health care costs for the nation. Why stop there? Perhaps the FDA could implement other policies that have the net effect of lowering health care costs. Perhaps they could ban foods that naturally contain trans or saturated fats (all meat, cheese and dairy). Next they could ban all foods that are not considered to be “healthy” (according to the whim of whoever happens to be in power at the FDA). These directives would surely save more lives, so how can one object? Eventually the government could require all citizens join a gym and exercise each day… because this would lead to fewer deaths each year… so how can one object? Oh, and what of those that refuse to do their quota of exercise? Well, we’ll just levy a fine, err, I mean tax on those that refuse the directive of the collective.

This trans fat ban is just the first step in sacrificing the individual on the altar of the collective state. If you agree to take what the collective offers (free or subsidized health insurance), then you must submit to having your life directed by that same collective. Children accept the care of their parents and thus are obligated to follow their rules. Likewise government demands we follow their rules because they view us as but children. Lifelong dependency of the citizen ensures eternal power for the state.

Lost in translation

Like millions of Americans you probably have received a letter like this (see below) from your health insurance provider (for both individual or group plans). As the farmer said to the pigs about to be slaughtered, “We’re going to be transitioning you to an environment free of worldly concerns.” Reading between the lines can often be critical to our own well-being, therefore, in that vein I shall endeavor to offer a translation of the following:

 Dear Subscriber:

The federal Affordable Care Act (“ACA”) has been changing how Americans get their health care coverage. The next big step begins in 2014. For many individuals like you with coverage through their employers, it includes important changes to coverage.

 ACA requires us to make significant changes to our health benefit plan designs. We have redesigned our entire employer portfolio to include new health benefit plans that comply with 2014 ACA requirements.

 There is nothing for you to do at this time. Your employer’s existing policy will continue until your next renewal. We are unable to renew your employer’s existing plan in 2014, but your employer can purchase any of our new plans with the 2014 ACA requirements for your coverage.

 We value you as a member and look forward to a long-standing relationship with you.

Sincerely

Health Insurance Company

 

Dear person-now-required-to-buy-our-product-under-penalty-of-law,

Obamacare has transformed a government manipulated healthcare market into a government controlled healthcare market. Unadulterated fascism rears its ugly head once again in America in 2014 (fascism = state control of a putative private market). For those of you who already get insurance through your employer, the paltry level of choice you used to have will be whittled down to next to nothing.

Obamacare requires us to add on coverage options we formerly begged you to buy but now you are forced to buy, therefore we have the perfect excuse to inflate premiums as high as possible. Apparently Nancy Pelosi thinks you are too stupid to make your own decisions when it comes to buying health insurance, therefore she has empowered bureaucrats to make those decisions for you. Do not fret gentle citizen; you will be well cared for in Obama’s gentle bosom.

You are helpless to avoid this, so sit back and enjoy the ride. You have a few months left to see your doctor before multi-hour waiting room camp-outs and month long waiting lists for medical procedures turn the US into Canada 2.0. We are unable to renew your employer’s existing plan in 2014, but that’s just fine with us because we’re content to get in bed with the government and be more tightly regulated if it means we will be guaranteed a steady stream of customers and profit. Crony capitalism and fascism is what made this country great after all!

We value you as our cash cow and look forward to milking this relationship for all its worth until either the federal government collapses under its own weight or the American public becomes so irate that they finally elect people that will remove all government influences from the medical market so that prices can naturally fall until medical insurance is no more costly than auto-insurance.

Sincerely

Health Insurance Company (a wholly owned subsidiary of the Federal Government, Inc.)

And Justice for All…

The 19th Century saw an end to chattel slavery. The 20th Century saw an end to conscription slavery. Will we now, in the 21st Century, witness an end to the one remaining form of labor slavery, namely jury service? For those that do not consider jury service to be a form of slavery consider this: If a complete stranger sent you a letter ordering you to appear at a specific location at a specific time, what would you think? What if that person then also threatened you with imprisonment if you did not comply and with physical violence if you resisted the enforcement of compliance and you knew full well they could carry out that threat? Who would that person be, if not your master? The State is your master; the judge is merely its errand boy and the police its henchmen.

So if jury service mirrors the master-slave relationship and is thus a variant of slavery, why is there is no public outcry? Why the quiet acquiescence to our own subjugation? There are two reasons. Cost and confusion. The costs of jury service over one’s lifetime are relatively low (since many are never called and those that are get called only 2-3 times over a lifetime). For example, if the state imposed a new tax whereby everyone paid $10 a year and a randomly chosen 10 people would pay $100,000 instead, it simply would not be worth it for the vast majority of people to fight that. The odds you’ll be hit with the “big” tax are infinitesimal and the $10 tax isn’t costly enough to fight. Just because one puts up with something doesn’t mean it is ok or that consent is implied. It simply means that the costs of fighting it are greater than the burden imposed.

But if low costs are not enough to keep the masses in line, the state can rely on the modus operandi of the con artist: manipulate and confuse your victim into choosing to do your bidding. This is accomplished through public school mediated state sponsored indoctrination that convinces the masses that there exists this mystical thing called “civic duty” and that jury duty falls chief among those. There is no such thing as “civic duty” – we as individuals owe nothing to society by mere virtue of having been born and likewise “society” owes us nothing in return. Our only obligations in life are those that we explicitly consent to (employment, parenting, volunteering, etc.) But even if one does believe in the “civic duty” of jury service, does it not strike you as odd that everyone else in that courtroom (the judge, the lawyers, the bailiff, the court reporter, etc) are all there voluntarily and are being paid market rates for their service, yet the jurors are there involuntarily and are paid well below even minimum wage? Given that jurors by and large are present involuntarily the entire incentive structure of jury service is geared toward producing a low quality product as quickly as possible. That is not to say in ALL cases jurors behave this way, simply that most of the time that will be true since most of the time people just want to get back to their own lives, jobs, etc.

There are two ways the jury system can be improved. Just as we did with the military, we can move from a conscription-based model to an all-volunteer based model. I was called for jury duty last year and found the process to be fascinating. The timing was terrible so I was glad to be dismissed. However that is not to say I would be opposed to volunteering in the future. The point is I would be making the choice of when and where I serve.

The second method to improve the jury system would be to switch to a professional juror system. There is no reason that being a juror cannot be a full time paid profession just like any other. Think of it not so much as a panel of jurors and a judge but rather a panel of 13 judges with one judge guiding the proceedings. Those judges/jurors that gain a reputation for judicious verdicts would be sought out and used for more and more cases. Those that likewise had a poor reputation resulting from their unfair verdicts would cease to be used.

Today’s jury system is an anachronism. It pays homage to an era when the abuse of natural rights was commonplace. A slave may work under threat, but an employee works by desire. Which system do you want delivering you justice?

One Banana, Two Banana …

As the political pundits and state apologists breathed a sigh of relief over last week’s deal in Congress to end the government “shutdown” a subtle wrinkle in this deal went largely unnoticed. But this wrinkle, like the proverbial butterfly whose flapping wings results in a hurricane, sets the stage for the transformation of the American Empire into a banana republic and with it the ultimate collapse of that empire. How could this go unnoticed? As with all new government initiatives it is cloaked in the innocence of being “temporary.” As the astute observer of history Milton Friedman once observed, “there is nothing so permanent as a temporary government program.”

The deal that was rushed through Congress last week is, like Obamacare, now withering under the light of public scrutiny of those very details our overlords wished to keep hidden. Although laced with several “special deals” in order to buy the votes of particular congressmen, this deal carries with it something far more sinister than the usual run of the mill horse trading. It carries with it the “temporary suspension” of the debt limit until February 7, 2014. What does that mean in practical terms? Quite simply that the US Treasury may issue an unlimited amount of debt between now and February 7. They could issue treasury bonds for tens of trillions of dollars if they wished and it would all be nice and legal. Now is it likely they will do that? Not really. That is not the source of the hidden danger. The real danger lies in the fact that this “temporary” suspension of the debt limit will never end. This is because through procedural gamesmanship this component of the deal was added in such a way that it will take a two-thirds (!) majority of both the house and senate to reverse it. Considering both sides of the aisle are too craven to face the hard choice of reducing spending or increasing taxes you can lay down good money on the fact that they will never vote against something that would require them to ultimately face that quandary of a decision.

So although there will still technically be a debt-limit on the books, it will for all intents and purposes not exist since all who are bound by it have agreed to simply ignore it. Once this new reality becomes the status quo there will be absolutely NOTHING holding back Congress from spending as much as they desire. As they further inflate the currency through more and more debt creation, prices will rise year after year. This will further devalue the purchasing power of the dollar. Eventually, one day soon the United States’ largest creditors (foreign governments) will decide the US dollar is simply not an asset worth holding (would you continue to own a stock whose price dropped every year?) and will cease buying US Treasury debt and will also begin selling the debt they do own (further plunging the value of the dollar). Once that happens it will be declared a “crisis” by those in power who will once again clamor for a “temporary” suspension of even the most tenuous of rules that support the façade of separation between Fed and State. Currently it is illegal for the Federal Reserve to directly purchase US Treasury bonds (although they can do so indirectly through “the market”). However if no one is willing to buy our debt that leaves just one customer standing: the customer that has the legal monopolistic right to create counterfeit money out of thin air – the Federal Reserve. Once the Federal Reserve is “temporarily” permitted to begin buying US Treasury debt, that will be the last nail in the coffin of the American Empire. History has taught us clearly time and time again that once a government starts printing its own currency with no restraints of any kind, hyperinflation is not very far behind.

Perhaps this might seem like hyperbole to some, however if we combine the lessons of history along with our current government’s unwillingness to cut spending and face the economic failures of their socialist inroads into our economy (i.e. subsidization of ANY economic activity) there is simply no other plausible outcome. So get ready, the roller coaster is poised to plunge straight into the ground. And it all begins not with a “bang” but a mere unnoticed whimper.

The Giving Tree of Debt

It’s that special time of year once again – The Giving Tree in Washington DC sheds its last few monetary leaves as fall approaches. The congressional summer recess has left the tree starving for the one thing it needs to flourish and produce those precious greenbacks: BS. As the pontificating blowhards in Congress resume their duties there is once again a renewed hope that The Giving Tree will be restored to health via the abundance of manure spewed forth by inept congressmen and a credulous media who act merely as an amplifier for Washington inspired propaganda.

That’s right, it’s time to raise the debt ceiling. I could write an entire book on what is wrong with the system (although there is little need to do so as Tom Woods’ “Nullification” leaves no stone unturned in that endeavor) and why we are in the mess we’re in. However, space constraints compel me to simply address the two most salient points of disinformation making the rounds of the mainstream media outlets.

Fallacy 1: We have to raise the debt ceiling because we as a country are legally committed to making good on all financial obligations made by our government. It’s like agreeing to pay your credit card bill after you charged the goods on it.

FALSE: No, no, no (sound of head banging desk). It is not at all comparable to agreeing to pay your credit card bill (i.e. committing to purchases AFTER funds are secured). The more apt example would be signing a contract to buy a house BEFORE you have secured the ability to pay for it and then going to the bank and demanding a loan because you “have made a commitment buy the house.”  Clearly, the only result of raising one’s credit limit every time one goes over said limit would be to instill an overriding sense of restraint and fiscal responsibility. Even if one subscribes to the flimsy moral precept that one has a duty to repay financial obligations made by total strangers who happen to reside in the same geographical region as yourself, one must agree shifting the burden of that repayment onto one’s children is the act of a coward. If you believe we have this obligation, fine, then don’t use debt to pay for it, use taxes – raise them through the roof. Because were the present generation to bear the full financial burden of the government programs they pine for they would quickly come to realize they are not so necessary after all.

Fallacy 2: If we don’t raise the debt limit then the US government will be in default and (insert scare tactic) that would undermine confidence and collapse the financial markets.

FALSE: This is the same line of fallacious reasoning employed by Obama when he compared the only possible outcome of not raising the debt limit to being equivalent to a homeowner simply deciding to not pay his mortgage. So apparently the concept of prioritization has never occurred to Obama? Naturally if one has a pay cut or loses their job their first instinct is to cease their mortgage payments so that they can continue paying their cable bill and manicurist. Duh, no, you prioritize and pay your food, housing and utilities first, then you cut off all non-essentials remaining. So if the projected 2014 budget were $1 we see that the government now collects 84¢ in taxes and can pay out 67¢ to fully fund all debt interest, Social Security, Medicare, Medicaid and defense payments. Yes, the remaining 33¢ of spending would have to be economized over the 17¢ of remaining revenue, but the point is it would not be the “essential” obligations that for some bizarre reason are perennially assumed would hit the chopping block first.

Continuing to give the addict money because you’re afraid he won’t buy food provides him no incentive to end the addiction because it insulates him from having to make the choice between the addiction or eating. With the money he can have both. Without it, a choice must be made.

Barricading Liberty

“We’ve been told to make life as difficult for people as we can” said a National Park Service Ranger in Washington, DC recently. The revelation of this directive has only served to add more color to the canvas of a feckless presidency. What sort of leader seeks to augment, rather than minimize, the impact of a deleterious event upon those he putatively serves?

“We’ve been told to make life as difficult for people as we can”

The behavior of the Obama administration during this current government “shutdown” is reprehensible and petty. The deliberate closures of a number of “public” parks – un-manned, un-ticketed, open air parks mind you – says more about Obama than any of his self-serving oratory. These are the actions of a petulant, spoiled child. He’s not getting what he wants (unconstrained limitless federal spending) so rather than leading (engaging in and brokering a meaningful dialog between both sides) he’s lashing out at the very citizenry he is supposedly serving by using them as pawns in a game of Congressional chess. Obama and his minions are well aware that most of what the federal government does on a daily basis does not impact the public in any obvious manner. The longer the shutdown continues unnoticed by John Q. Public, the weaker his position becomes. Therefore, to strengthen his hand he must make the public squirm as much as possible, even if that means spending additional funds to pay people to barricade open-air facilities that cost nothing to keep open (bike lanes, children’s playgrounds, unmanned parking lots, etc). Even virtual resources such as websites and Twitter accounts have gone dark despite the fact that they are either free or already paid for. But the “shutdown” of public resources was not sufficient. They are now deliberately blocking access to private businesses as well because they happen to be leasing government owned buildings. These businesses make the government money (leases). They do not cost them money (Pigash Inn in North Carolina is just one example). That’s like quitting your job because you ran out of money – it simply defies all rationality! And then there is poor George Washington; he must surely be spinning in his grave because even his house (Mt. Vernon Museum) was shut down by Mr. Obama! Why? The parking lot for the facility is jointly owned by the Mount Vernon Ladies Association (the private owners of the Mt. Vernon facility) and the National Parker Service (NPS), so apparently the NPS felt it necessary to barricade an un-ticketed and un-manned parking lot that the NPS bears no daily cost to operate. How long will it be until Obama orders all US interstate highways shutdown as well?

These actions have revealed an essential truth of a state run society: there is no “public” property. There is only the property of the Royal Court – the federal government that is – and the king (Obama) may do whatsoever he pleases with his property. If he doesn’t get what he wants, then just as a petulant child would, he will pick up his ball and go home. Or rather, he’s going to barricade off the playground so no one else can play either.

The strategy here is of course plain to see. If he can’t pressure Congress, then he can pressure the public by taking away those things the federal government has so graciously bequeathed to the “people”. If the people value them, then they should rightly be mad at Congress for forcing their poor king to take away their goodies. Fortunately most people are not this blind to his manipulative strategy. In perhaps the best publicized exampled, the day the shutdown began the NPS barricaded the WWII memorial in Washington DC, preventing numerous veterans from visiting the site. However, the veterans were not so easily intimidated. These dauntless men pushed the barriers aside and again demonstrated their strength of character. Character that, ironically, is honored by the very memorial this President strove to separate them from. By fighting the will of past and present tyrants they have set an example for us all. If we value our liberty, then we have a duty to overturn both the barricades to liberty and those that would erect them.

Counting, Government Style

As Obamacare looms nigh small employers such as myself who are near the margins of the 50 employee threshold of being an “applicable large employer for Section 4980H” have found it necessary to waste time and money just trying to figure out if we have reached that threshold or not (and yes, we already provide health insurance). At face value it seems like this should be simple enough: just count. But as with most things generated via government bureaucracy nothing is ever as simple as it seems. The statute is filled with ambiguous and undefined terms such as “stability period”, “measurement period”, “standard measurement period”, “upcoming stability period”, “safe harbor”, and so on. I’m actually trying to comply with this nightmare of a law but even our accountants admit some of the questions simply can’t be answered yet. Typical government: “Here, comply with this” – “Ok, how do I do that?” – “We haven’t decided yet, but don’t worry, if you get it wrong we’ll let you know with a fine.”

For example, there are two calculations that must be done. The first determines how many full time employees there are and the second determines how many “full time equivalent” employees there are. However a full time employee is only eligible to be measured as such if they are considered to be an “ongoing employee” (meaning they are employed for at least one “measurement period”). But… if they become full time during the measurement period or otherwise have a status change then there is a whole different set of rules for counting them – except those rules have not yet been issued (insert picture of chimpanzee with pencil scratching his head).

Assuming we have figured out who the “ongoing employees” are, we are now ready to determine if they are part time or full time. This calculation procedure all too predictably betrays the fact that whoever came up with it clearly has never worked in the private sector. They are laboring under the delusion that employees are paid on a calendar monthly basis as opposed to a weekly or biweekly basis (perhaps because governments reserve to themselves the exclusive right to pay monthly – that practice is illegal for private employers). “Fine”, you may say, there are 4 weeks in a month, what’s the big deal? Well, in fact, no, there are not 4 weeks in a month – there are up to 4.42 weeks in a month. So we cannot simply add up 4 weeks of payroll hours for a part time employee and divide by 120 to see if they exceed an average of 30 hours per week (the newly defined “full time” standard under Obamacare). No, rather than simply using data we already have (weekly or biweekly hours worked) for each employee, instead we must now warehouse up to 7-times more data by saving daily hours details. Although all employers already track daily punches, smaller employers store this massive amount of raw data off-line after getting the totals for payroll. Why waste resources if there is nothing to be gained by storing the number “8” five times vs storing the number “40” one time. The storage space is not the central issue however, it’s that we must incur a cost to reprogram payroll systems – in short wasting money to rebuild something we already had.

With monthly hour data in hand, we can now count up the employees that exceed 130 hours and count them as “full-time”. For all other employees we total up the lesser of actual hours worked or 120 and then divide that sum by 120 to get the “full time equivalents”. This means, in short, that two part time employees working 60 hours in a month will count as one full time employee. This calculation subtly explains the incentive behind large employers (such as Trader Joe’s or Kroger) who already fall under Obamacare but who are nevertheless cutting back their part time employee’s hours to below 30. This allows them to reduce their potential fine exposure. For example, in the case of Kroger, if all of their 340,000 employees work at least 30 hours, then they will be counted 340,000 full-time employees. However, if this same number of employees works only 29 hours per week, then they would be equivalent to 328,666 employees or a net potential savings of $23-34 million in Obamacare fines. That’s nothing to sneeze it at, but if you do at least you’ll be covered under Obamacare.

In the dark

As a small business owner I have had the unique misfortune of being exposed to a wide array of state-imposed roadblocks. Whereas the individual may only be disturbed by the occasional run in with their tax bill or prohibition against engaging in activities frowned upon by our wise overlords, a business is daily confronted by a multitude of meddlesome intrusions (and I am not speaking of regulation of efficacy or safety, such standards would still exist in an insurance driven, rather than regulation driven, free market framework).

For example, my company manufacturers chemical products used to maintain aquariums (i.e. to keep fish, plants and corals alive and healthy). A good portion of our products is classified by various state agriculture agencies as either feeds or fertilizers (because they help living organisms grow). Such products are subject to the same agriculture rules and regulations intended for the products aiding in the production of food or large animal husbandry. These rules not only specify a set of taxes (fees) you must pay just for the mere privilege of selling such products within a particular state (50 States, 50 different fees per every product, every year) they also specify the manner in which you may artistically design labeling, the verbiage you’re permitted to use and the manner in which you can market said products. If an ingredient is not on a particular state’s “approved” list then that means you can’t say anything about it on the label – even if it confers a competitive advantage. Therefore the product must get “dumbed down” to meet the most obtuse standards, as printing 50 variations of the same label is not economically viable (for smaller businesses). In some states a lone bureaucrat can unilaterally block the sale of a product to an entire state if they perceive said product does not provide value to the consumer – all on their own personal whim and without any appeal recourse. By way of example I actually had such a bureaucrat in Wisconsin tell me that aquatic plants in Wisconsin don’t need iron to grow (therefore justifying the blocking of sale of our iron supplement). Curious. I know legislatures can enact laws, but I didn’t know they could repeal laws of nature as well.

Now, and here’s the rub for those of you that might think even these onerous regulations ensure efficacy – no state agency actually cares whether a product does what it says. That’s right. All they care about is collecting their fee and that your description of your product conform to their narrow definition of a “proper” feed or fertilizer. Innovation and change? Sorry, not permitted. This is an unfortunate legacy of the fascist depression era agriculture policies that continue to interfere in commerce to this day. All these bureaucrats care about is what you SAY is in the product – and that you pay your fees every year. Of course before you can SAY anything about your own product you must humbly bow down before your overlords and request as meekly as possible that if they have the time could they perhaps deign to review your label so as to ensure it meets their standards for banality and mediocrity, thus ensuring its admission into the Great State of <insert state name here>.

So, if you have ever pondered why so many competing products all say and do the exact same thing, it’s more than likely because of regulations. When government sets the standards, nobody is permitted to step outside of the 3×5 card of approved product parameters. Everyone is forced sell to the same level of mediocrity stipulated by ignorant bureaucrats. Unless, of course, you are a mega huge business that helped to enact these regulations, in which case you can easily afford the hundreds of thousands of dollars to get your ingredient approved or the millions of dollars to buy political favor if you can’t. Unfortunately small time competitors can’t afford such hurdles even if their product is better. Regulation imposes costs only on those businesses that can already afford it. It ensures the consumer remains in the dark about what they’re missing from smaller competitors who are marginalized by lowest common denominator minded regulation. I know, because I make the innovative products you’re not permitted to know exist.