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This Is The End

Obamacare and the end of upward mobility.

by
Stephen Green

Bio

May 12, 2014 - 12:01 am

This is the end
My only friend, the end
Of our elaborate plans, the end
Of everything that stands, the end
No safety or surprise, the end

—The Doors

You know it’s bad when I begin by quoting The Doors, but “The End” has been stuck in my head since I started collecting stories for this week’s column.

The first was Erik Sherman’s Inc. writeup of a recent Brookings Institution report on the decline of American entrepreneurship. According to Brookings, “entrepreneurship has reached at least a three-decade low across virtually all of the country.” Three decades also happens to be as long as Brookings has been tracking such things. Sherman adds:

For decades, the entrance of firms outpaced their exit, meaning a net increase in new businesses. The authors see that–reasonably, it seems–as a proxy to an inclination toward entrepreneurism. But since at least 1978, the lines have converged, albeit slowly. In 2008, they reached a watershed moment and crossed.

The math is simple: More firms leaving than arriving means a shrinking percentage of business is being controlled by entrepreneurs. And notice that the exits were relatively steady. It is the creation of new firms that has sagged.

steve_green_chart_5-11-14-1
The trend line has never been good, but it accelerated sharply downward in 2010, the year Obamacare was signed into law. While that ought to be the big economic story of the week, as Jean Card writes for US News & World Report, “Riddle me this:”

A Google News search for this week’s alarming study from the Brookings Institution on the decline of business dynamism in the U.S. yields a mere half-dozen results, making it like the proverbial tree falling in the forest. The study is a big deal. It should make a huge amount of noise. Its economic implications are staggering. But no one appears to be listening.

Maybe that’s because the mainstream media was busy touting the ACA’s reputed successes. A Google News search for “Obamacare Success” yields thousands of results from just the last week. The “success” being touted was President Obama’s claim that eight million Americans had signed up for insurance on the various federal and state exchanges, despite earlier claims that the law would cover nearly twice that many. Of course, the original rationale for Obamacare was that 46 million Americans lacked health insurance — but anything can be construed as a success provided you have a compliant media helping to move the goalposts ever closer.

But as we’ll explore right after the page break, we’re just getting started.

Sean Hackbarth reported late last week at the U.S. Chamber of Commerce that we could suffer the loss of up to a quarter of a million jobs, due to the ACA’s Health Insurance Tax:

Small businesses should brace for big health plan premium increases. Some are already seeing this happen. Rod Winter, a Wisconsin business owner told the Wall Street Journal:

Our 440-employee business just received its initial premium from United Healthcare for our July 1 renewal. The renewal premium represents a 29% increase over the current premium. UHC indicated that our premiums are going up 11% to bring our deductibles and out of pocket maximums in line with the provisions of the ACA. In other words, without the ACA, our premiums would be going up approximately 18%, not 29%.

New research finds that the added costs of one of Obamacare’s taxes will be brutal on employment.

More than half the expected job losses will come from small business — the once-vibrant heart of American entrepreneurship. Big business doesn’t exactly have it easy, either. General Electric, UPS, Dollar General, and Cognizant all reported lower-than-expected earnings last quarter, in part due to the “Affordable” Care Act. That means fewer opportunities for people looking to move up the corporate ladder, and fewer opportunities for entrepreneurs looking to build their own ladders, so to speak. The sound you hear is millions of doors being slammed shut by those who already have theirs — which is something you should keep in mind the next time you hear President Obama or any Democrat complaining about income inequality.

Also keep this in mind, courtesy of Jay Cost at the Weekly Standard:

Liberals claim the law is “working.” This omits the dozens of provisions that the president has suspended or delayed because they were not working—for budgetary or political reasons. The suspended or postponed provisions include the mandate that businesses cover full-time employees, the cancellation of noncompliant plans, and cuts to Medicare Advantage.

One can assume that, absent a Republican in the White House come 2017, the ACA’s suspended strictures will eventually come into force, denying us even more jobs and lost opportunities to live out our own American dreams.

As I said, we’re just getting started.

Stephen Green began blogging at VodkaPundit.com in early 2002, and has served as PJMedia's Denver editor since 2008. He's one of the hosts on PJTV, and one-third of PJTV's Trifecta team with Scott Ott and Bill Whittle. Steve lives with his wife and sons in the hills and woods of Monument, Colorado, where he enjoys the occasional lovely adult beverage.
Top Rated Comments   
75% of people with a gun to their heads, traded in their insurance for The Extortionist Coverage.

The other 25% are being subsidized by the 2/3 of those who bothered to pay the first month's ransom.

(Don't blame them, though...even the criminals didn't read their own 2300 page ransom note)

When the criminals start breaking the windows of employers, 50 million more people will feel the pinch of ExtortionCare.

270 million people will be robbed in order to give the Woodstock Totalitarians their Robin Hood merit badges.

ExtortionCare...where Woodstock Tyranny robs you blind and Silk Robe Republicans say once the extortion takes hold it's too big to fail.
10 weeks ago
10 weeks ago Link To Comment
just an anecdote but a common set of headwinds that don't even begin to address industry specific or agency specific meddling in business:

I helped a friend attending a pet expo to test a product prototype. No business set up yet but a promising idea. Here were a few of the things we learned:

- You better get a patent or someone will steal your idea (min $3000).
- You better incorporate or form an LLC ($300 plus $800 per year just for the privilege) or someone will sue you personally for something.
- Every product must have a government approved tag on it.
- You have to set up to become a State sales tax collector before you do anything else.

On the last point, her booth was visited on the very first day by a representative of the State. A smarmy threatening conversation ensued followed by a letter - believe it or not - threatening fines and incarceration if a sales tax collection license wasn't applied for in 10 days.

Yea - let's all get that entrepreneurial spirit!
10 weeks ago
10 weeks ago Link To Comment
So the question is which party should people support.

A) The party that brought in Obamacare
B) The party that has given up opposing Obamacare

Ah, the wonder of the two party system.
10 weeks ago
10 weeks ago Link To Comment
All Comments   (35)
All Comments   (35)
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Those of us who have been self employed, and have been purchasing our own medical insurance all along, started seeing the rates increase in 2011. Little by little, as compliance costs were calculated, and the law came into effect in dribs and drabs, the premiums increased. Most people had no idea that it was even happening yet. Most people were not paying attention. Pity. Our rates have gone up by 70% in 4 years.
Thanks, Mr. President.
9 weeks ago
9 weeks ago Link To Comment
Your taxes will be assigned to support illegal alien’s health insurance when Amnesty is the law. If you don’t believe that surprise is buried in Obamacare, see
http://www.kaiserhealthnews.org/stories/2012/october/11/health-care-immigrants.aspx/.
This is your money being given away. Please get out and VOTE in the Primary elections and in the 2014 November mid-term election.
10 weeks ago
10 weeks ago Link To Comment
Now all we have to do is have a meeting or some type of mass ESP broadcast to stop any Republican candidate from talking about rape, vaginas, birth control, slavery or Jesus, and to focus on the BS that this administration has dumped on the economy. Good luck with that.
10 weeks ago
10 weeks ago Link To Comment
Do you mean because we get so many votes when we don't talk about those things, or because you just want us to be demonrats light ?

Oh wait ... I get it ... It's because Republicans do so well running campaigns not talking about issues that conservatives care about ... Not.
9 weeks ago
9 weeks ago Link To Comment
It is not just the Obama/Biden creature that has destroyed a previously great country but it is also those over fifty percent Americans who installed this abomination. This includes the soccer moms, the narcissist school teachers and professors, the naïve milquetoast clergy, the sports industry big wigs, the TV and Hollywood perverts, the military careerists, etc we have faced the enemy and he is us. Head to the life boats ; it is over and it is every man or whatever for himself or whatever.
10 weeks ago
10 weeks ago Link To Comment
"Socialized medicine is the keystone to the arch of the Socialist State.” Vladimir Lenin
10 weeks ago
10 weeks ago Link To Comment
We all know that O-care is essentially unworkable and that it will cost trillions to make it ‘work’ according to the lame definition of success the left and their boy-king employs these days to fool LIVs. Once Comrade is out of office, though, it will be repealed because it will have to be.

An interesting lesson we’ve learned from Comrade’s misrule is that previous presidents, while they probably were tempted on occasion to go into tyrant mode, remained pretty much within the boundaries set by their predecessors. It just goes to show how much of an unmitigated misfire O has been.
10 weeks ago
10 weeks ago Link To Comment
75% of people with a gun to their heads, traded in their insurance for The Extortionist Coverage.

The other 25% are being subsidized by the 2/3 of those who bothered to pay the first month's ransom.

(Don't blame them, though...even the criminals didn't read their own 2300 page ransom note)

When the criminals start breaking the windows of employers, 50 million more people will feel the pinch of ExtortionCare.

270 million people will be robbed in order to give the Woodstock Totalitarians their Robin Hood merit badges.

ExtortionCare...where Woodstock Tyranny robs you blind and Silk Robe Republicans say once the extortion takes hold it's too big to fail.
10 weeks ago
10 weeks ago Link To Comment
"270 million people will be robbed in order to give the Woodstock Totalitarians their Robin Hood merit badges." I like that phrase!
10 weeks ago
10 weeks ago Link To Comment
Not to worry at all. The moment we have a Republican president again, all of the above will hit the news like a ton of bricks. And guess who will be held responsible for the parlous condition of the economy? Yup.
10 weeks ago
10 weeks ago Link To Comment
It is not the end of upward mobility, just the end of upward mobility through hard work and sacrifice.
In the fascist future, upward mobility will be through government jobs, and government connections and nobody will be able get ahead without these things.
10 weeks ago
10 weeks ago Link To Comment
THIS is why we had to pass it to find out whats in it. Obamacare is Corporate Welfare on a massive scale:

ACA Will Save Corporations $3.2 Trillion by 2020

Democrats/Republicans = No Difference

To investigate the potential intermediate to long-term ramifications of the ACA, GMI Research constructed a proprietary model to evaluate how companies might, over time, move away from the traditional health care insurance relationship with employees. This model assesses the impact on both employees and corporate America, benchmarked by S&P 500 member companies. This study also evaluates a more general impact on the economy by including a review of companies that have more than 50 employees.

Modeled results suggest that companies have much to gain from moving employees to exchanges enabled by the passage of the ACA. As companies come to grips with the potential impact on employee morale as well as the potential use of health care coverage as a recruitment tool for skilled workers, the financial impact of limiting or eliminating its role in employee health care coverage will be a significant boost to corporate earnings, especially over the long term if health care costs continue to escalate. For S&P 500 companies alone, hundreds of billions of dollars of expenses could be transferred to employees and to the Federal government and to some extent the tax payer over a 10-year period, despite government-imposed penalties incurred by corporations (detailed later in this study)……

Other factors could contribute to greater savings, such as corporations altering their benefits relationship with retirees.

As part of the transition, corporate America will likely alter the relationships it held with retirees. For its retirement plans, a company may see an opportunity to limit its future risks and obligations and rid itself of the health-care-related costs of retired employees that have grown to levels likely not foreseen when the retirement plans were created…..

• Using its model, S&P Capital IQ estimates S&P 500 companies would save about $700 billion through 2025.
• Total savings to U.S. businesses with 50 or more employees could amount to $3.25 trillion.
• Factor in businesses with less than 50 employees and the savings would be even greater

Here is your own, personal LINK to the report:

Please consider The Affordable Care Act Could Shift Health Care Benefit Responsibility Away From Employers, Potentially Saving S&P 500 Companies $700 Billion by S&P Capital IQ


10 weeks ago
10 weeks ago Link To Comment
This may very well be true. The fact of the matter is that someone is going to have to pay the healthcare. That is & will continue to be the American taxpayer. As is healthcare expenses will eventually bounce back to the corporations because right now most people are having a difficult time paying the dramatically increased premiums. Unless all corporations leave the USA, they are going to have to raise the salaries tremendously to compensate for the out-of-pocket expenses in order to attract & keep talent.

These last 30+ yrs or so have taught the American worker not to place their loyalty in employers. Many workers esp professionals have no qualms to jump ship for other companies including moving outside the country.

My husband is a entrepreneur who has an excellent finance background where only a handful in this country can do what he does. He keeps telling me about opportunities in other countries; I keep telling him that I'm ready to pack my bags!

It pains me to see so many good, hardworking people suffering under the Obama administration--- unnecessarily!!!!!
10 weeks ago
10 weeks ago Link To Comment
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