ObamaCare: The Neutron Bomb That Will Decimate Employment
February 22, 2013
ObamaCare will act as a neutron bomb on employment in the U.S. for two basic reasons.
Longtime readers know I have repeatedly explained why healthcare, i.e. sickcare, will bankrupt the nation. Here are two of the dozens of entries I’ve written on sickcare:
America’s Hidden 8% VAT: Sickcare (May 10, 2012)
Can Chronic Ill-Health Bring Down Great Nations? Yes It Can, Yes It Will (November 23, 2011)
I have also explained why ObamaCare’s “fixes” are simulacra reforms that don’t even address the systemic costs arising from the cartel-fiefdom structure of sickcare:
Why “Healthcare Reform” Is Not Reform, Part I (December 28, 2009)
Why “Healthcare Reform” Is Not Reform, Part II (December 29, 2009)
Sickcare is unsustainable for a number of interlocking reasons: defensive medicine in response to a broken malpractice system; opaque pricing; quasi-monopolies/cartels; systemic disconnect of health from food, diet and fitness; fraud and paperwork consume at least 40% of all sickcare funds; fee-for-service in a cartel system; employers being responsible for healthcare, and a fundamental absence of competition and transparency.
Please glance at these charts to see how the U.S. healthcare costs are double those of competing nations on a per capita basis. Japan provides care for a mere 36% per person of what the U.S. spends–yet millions of Americans remain uninsured or underinsured.
If you set out to design a corrupt, inefficient, wasteful, unfair, deranged and unreformable system, you would arrive at U.S. healthcare.
Sickcare ignores the structural causes of our ill-health:
86% of Workers Are Obese or Have Other Health Issue Just 1 in 7 U.S. workers is of normal weight without a chronic health problem.
The Patient Protection and Affordable Care Act (PPACA), i.e. ObamaCare, is a neutron bomb for employment. A neutron bomb is an enhanced-radiation thermonuclear weapon that famously leaves buildings, autos, etc. intact but kills all the people, even those inside buildings. vehicles, etc.
ObamaCare will act as a neutron bomb on employment in the U.S. for two basic reasons:
1. It is immensely complex, and already-marginalized small business owners will shed employees or simply close rather than have to figure out what all those thousands of pages of regulations and statutes mean to the survival of their business.
2. ObamaCare’s primary mechanisms of lowering costs, insurance exchanges and technocratic selection of “best care practices,” do nothing to change the systemic flaws of sickcare.
Many other commentators have already outlined how ObamaCare is driving employers to replace fulltime workers with part-time workers to avoid having to pay outrageously expensive monthly healthcare insurance premiums. In this sense, the ObamaCare neutron bomb is already decimating fulltime employment.
I see this response as a Corporate-America strategy. Corporate America has the human resources infrastructure and financial heft to figure out compliance and exploit loopholes in the insanely complex law. Small business has neither the infrastructure nor the financial resources. Small business owners will rely on the same cartels that are currently providing insurance for guidance, and of course the ObamaCare offerings will suit the financial needs of sickcare cartels.
Once small business owners see the costs of their options, some may opt to pay the penalties and others may follow the corporate strategy of turning each fulltime job into two part-time jobs to avoid paying for coverage or penalties, but many will choose instead to call it quits: either downsize to a one-person/one-household business with no employees at all, or sell/close the enterprise and escape the burdens.
What the lobbyists and attorneys who wrote the Obamacare monstrosity do not understand (because they have no exposure to or experience in the real economy) is the fragility of most small businesses: costs keep rising but revenues are stagnant. The mental and financial stresses keep rising, and ObamaCare does nothing to mitigate either source of stress.
The inside-the-Beltway types who crafted this mess have no idea of the pressures facing legitimate (non-black-market) business in America, corporate and small business alike.
ObamaCare offers even more incentives for Corporate America to offshore operations, and it provides powerful incentives to millions of marginal small businesses to shut down or shed all employees.
I am not alone in simply not wanting to waste the time, money and energy required to understand the new law and its various impacts on my business. We will cling to our already insanely expensive private healthcare insurance, which by the way has been grandfathered in: new self-employed entrepreneurs won’t be able to buy the absurdly costly policy we have–they will be offered a range of even worse deals, with higher costs and less coverage.
The neutron bomb has gone off, unseen by politicos and the Elites who wrote the bill. It is already decimating fulltime employment, and it will soon add momentum to the free-fall erosion of small business growth and employment.
The strip malls and office parks will still be standing; there just won’t be many employees in them.
1. Debt and financialization
2. Crony capitalism and the elimination of accountability
3. Diminishing returns
4. Centralization
5. Technological, financial and demographic changes in our economy
We are not powerless. Not accepting responsibility and being powerless are two sides of the same coin: once we accept responsibility, we become powerful.
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JIMSKI says:
I love this article. Especially how 5 of 6 reasons I am a fat fuck are not my fault.
In my opinion this is going to decimate the automotive chain stores. Most auto chains employ low skilled parts changers that make about 12 bucks an hour. Most do have a low value heath plan but overall the type of people who work at a chain store are about the most unhealthy group of folks you could want in a medical pool. About 75% of techs smoke and they come into contact daily with evil chemicals and most have not been trained or do not care about safety.
Chain stores operate on about a 6-9% profit margin HISTORICALLY. I know several large chains that are scraping by at 2-3% total margins for the last 5 years. There is no extra money for healthcare.
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22nd February 2013 at 10:15 am
napari says:
Karl Denninger of the market ticker on “monetary policy.”
Congress is getting worried….
Specifically, they appear to be rather concerned as to whether The Fed can “unwind” its “extraordinary measures” without utterly destructive side effects.
Of course if you’re the POTUS whose primary objective is not to fix healthcare or the monetary system but whose primary objective is the fundamental transformation of the United States of America everything is going according to plan and it’s time to play golf!
Just think about ALL those votes that believed Obama was going to do something for them! The FSA is getting betrayed and it will serve the lazy no goods right! I cant wait to watch the government bus running over all of them! Were getting the government we voted for!
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22nd February 2013 at 10:55 am
KaD says:
“George Bush, Queen Elizabeth, and Vladimir Putin all die and go to hell.
While there, they spy a red phone and ask what the phone is for. The devil tells them it is for calling back to Earth.
Putin asks to call Russia and talks for 5 minutes. When he is finished the devil informs him that the cost is a million dollars, so Putin writes him a check.
Next Queen Elizabeth calls England and talks for 30 minutes. When she is finished the devil informs her that the cost is 6 million dollars, so she writes him a check.
Finally George Bush gets his turn and talks for 4 hours. When he is finished the devil informs him that the cost is $5.00.
When Putin hears this he goes ballistic and asks the devil why Bush got to call the USA so cheaply.
The devil smiles and replies, ” Since Obama took over , the country has gone to hell, so it’s a local call.”
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22nd February 2013 at 11:52 am
TeresaE says:
To anyone that couldn’t see this coming, I say, “no shit, Sherlock.”
Why do you think the Great and Powerful O slammed the great idea of raising minimum wage into the mix?
Because they already know that millions of full time jobs are being eliminated, so, now they will FORCE business to up their payroll costs to try and stay even.
Joke is on them. Everyone that doesn’t get canned to pay for the wage and benefit increase, is going to see another few years of non-existent raises along with increased costs for their insurance – which means less in their pockets.
The Ivory Tower academics and experts, along with their unholy cronies in big business and government, are intentionally decimating their competitors – the small biz.
Soon, we will have few choices and get to pay out the ass for it. Guess we should be hoping that China never decides that our dollars and government are worthless. Cause the day that happens the real shitstorm in costs will begin.
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22nd February 2013 at 11:54 am
AWD says:
I was talking with our local bank CEO. Great guy, runs our small town bank and is on the board at the hospital. Not your typical bankster. He was complaining about Obamacare, how he was probably going to have to dump all his employees health coverage and just pay the $2000 fine instead. He said health insurance premiums were going up 30% due to Obamacare, and it would be cheaper to just pay the fine. Another death blow to small businesses trying to survive, and big businesses cutting hours nationwide. Obamacare; God help us all.
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22nd February 2013 at 12:34 pm
card802 says:
My son just sold his business.
He’s getting out while he still can, while the business still has value, for a ex liberal he’s pretty smart.
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22nd February 2013 at 1:03 pm
underfire says:
Today I’m finally throwing up my hands and giving up on a project I’ve been working on for some time. In addition to about five years of my time I have about 100k sunk into this addition to my farm and ranch operation that would employ about ten people. I fought it as long as I could, even though the writing was on the wall last election day. Screw it all, they win.
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22nd February 2013 at 1:14 pm
Eddie says:
To those considering starting up a small business. I would try to work the following basic concepts into my business plan:
1. Make it a one man band. Hire NO employees. This alone will cut your tax burden (as well as your role as a free bookkeeper for the government ) more than anything else you could do. A partnership might also be a viable entity.
2. Make sure you collect most of your gross receipts in cash and coin. This makes it very hard for the government to track your real income. (If you don’t understand why this matters, ask me after class).
3. Provide a service or a good that is exempt from sales tax. (There are a few left.)
4.If your business uses electricity, consider investing in solar generating capacity.Although the cost of this might outweigh the benefits in the short run, the cost of power is going up significantly, and there is no end in sight.
5.If you borrow money, use it to buy real assets that hold some value.
6.If you market something, sell direct to the end consumer and stay local.
7. Think about products or services that will endure through the worst of times, because these aren’t the best of times, and the future is not looking bright either. Think local. Think small.
These are ideas that might sound obvious to some of you, but I’m hoping it might help some younger person brainstorm a way to make a living. I’m not sure any business could meet all these criteria, but you can probably name some that come very close.
When I decided to start a side business, these are the ideas I came up with. My boat storage business doesn’t meet all of the criteria above, but it does meet several, including “no employees”, “no sales tax” and “no debt liability without a real asset to balance it”.
Other businesses that might come close would include a self-service car wash, or a farm-to-table farming operation.
Some people do manage to prosper, are managing to prosper now, even in these terrible times.
Live long and prosper!
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22nd February 2013 at 1:20 pm
Eddie says:
underfire
Is there possibiy some way to do it without employees? Could you do it on shares of profit? I know you know your own business better than anyone, and I’m certainly not trying to give you advice from my armchair…but I urge you to think outside the box. We need farmers ( and their production)now more than ever before.
I wish I had a partner to grow something on my land. To me, the most difficult thing is to find good people and come up with some kind of win/win situation that works for all parties. It makes you understand why farming has traditionally been a business of large families.
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22nd February 2013 at 1:28 pm
Stucky says:
“I love this article. Especially how 5 of 6 reasons I am a fat fuck are not my fault.” —- Jimski
Amen, brother!! You made me laugh out loud. Literally.
Of the 6 reasons given, I am firmly convinced that the red circle (unhealthy food) is the biggest reason of them all. If I had to put a percentage to it, I’d say 75%.
Food and drink are the body’s fuel. Go ahead and put shit fuel in your automobile and see what happens. And our bodies are ten thousand times more complex than a combustion engine. Eat shit means get sick. Guaranteed. Case closed.
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22nd February 2013 at 2:16 pm
underfire says:
Eddie
I guess I’m getting too old to tackle the increasing challenges to doing business in the US today. And you’re right, very few are willing to put in an hard day in this kind of business, can’t compete with govt. free shit.
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22nd February 2013 at 9:04 pm