Big brother takes aim at Big Business

Over the last week many companies have announced significant charges to earnings due to the increased cost of healthcare following the passage of Obamacare. From Byron York at the Washington Examiner:

Rep. Henry Waxman, chairman of the House Committee on Energy and Commerce, has summoned some of the nation's top executives to Capitol Hill to defend their assessment that the new national health care reform law will cost their companies hundreds of millions of dollars in health insurance expenses. Waxman is also demanding that the executives give lawmakers internal company documents related to health care finances.

On Thursday and Friday, the companies -- so far, they include AT&T, Verizon, Caterpillar, Deere, Valero Energy, AK Steel and 3M -- said a tax provision in the new health care law will make it far more expensive to provide prescription drug coverage to their retired employees.

Now where does Henry Waxman get the authority to haul CEO’s into Washington to explain business decisions? This is insane! And it is going to put all US companies between a rock and a hard place: disclose to shareholders new expenses as required by the SEC, and risk getting grilled by Democrat congressmen, or DON’T disclose the expected new costs, appease Democrat congressmen, and get run over by shareholder lawsuits (and the SEC) when such costs show up unexpectedly in the earnings reports.

Of all the absolute garbage I have seen the Democrats pull over the last several months in the name of socialized medicine, this last move has truly elevated the war between the private sector and the public sector to unprecedented levels. If the private sector does not wake up, and if voters in the private sector do not wake up, the country is heading for years and years of poor economic activity, entirely consistent with a general socialist attitude towards economic policy.

Will the private sector wake up? I hope so, but I can assure you it is asleep right now. In my ‘real’ job, I analyze companies for a living. I called up two large ones I know quite well, and asked “what is the effect of Obamacare on your bottom line – are you going to restate earnings like so many others?”. Both companies told me it was too early to tell the effect. TOO EARLY?! You mean these companies did not work out the math ahead of time? Did not insist from their congressman the details of how this new law would effect them? Did not lobby for or against the law? One of these companies is one of the largest employers in Massachusetts – and YOU DON’T HAVE ANY IDEA? BECAUSE IT’S TOO EARLY? My god man – IT’S TOO LATE!

So we have two issues here – Congressmen intimidating companies for admitting Obamacare is going to cost them a lot of money, and some companies that failed to do the homework on these costs ahead of time. It almost seems the companies that did not do the homework deserve what they get, however those companies are employing a lot of people. It is not right that employees are going to suffer because management dropped the ball in opposing Obamacare. Wall Street and Silicon Valley were big backers of the Democrats the last go round – elections have consequences, as many in the private sector are now finding out with dismay.

November is looking a long way off right now.

Author: Mark