ACA/Obamacare: No Cadillac Plan for You! Tax for You! Maybe Not So Much…..

“Reid and Pelosi have been talking since the spring with President Obama about repealing the “Cadillac tax” on employer healthcare benefits, a senior Democratic aide confirmed on Friday.”

“Both Reid and Pelosi have remained relatively quiet on the tax since the bill's passage in 2010. Even as dozens of Democrats signed onto bills in their respective chambers to repeal it, Reid and Pelosi stayed in the background, refraining from public statements on the efforts.

Powerful labor groups such as the AFL-CIO and the American Federation of Teachers vehemently opposed the Cadillac tax from the start. They say repeal needs to happen soon, before employers begin trimming back healthcare benefits.

Aside from the question of how to pay for repeal, the Democrats' biggest roadblock is the Obama administration.” - Reid, Pelosi pushing for repeal of ObamaCare's 'Cadillac tax', the hill.com, 11/06/2015

Link to the entire article appears below:

http://thehill.com/policy/healthcare/259429-reid-pelosi-pushing-repeal-of-cadillac-tax

Does history repeat itself, or does history repeat itself due to purposeful intervention?

Consider history repeating itself

Say one lived during the Great Depression and made a list, a check list as it were, of policy, politics, antics, regulation, etc. that occurred during the Great Depression under the FDR Administration. The check list would be a "tree" in that each point would have sub-points e.g. how a series of policies failed to improve unemployment, how certain policies were merely class warfare related, union thuggery, regulation and over regulation, general government mysticism, etc.. One then took the points and sub points and turned each item into puzzle pieces that when put together said: Great Depression - FDR Administration. Around 1946 the puzzle pieces were placed in a box and stored away.

Around the inauguration of Obama and the ensuing Obama Administation  one went to the closest shelf and removed the dusty old box from 1946. Each time a policy, politic, antic, regulation, etc. that occurred similar to an item in the Great Depression, you removed the corresponding puzzle piece from the box. As time went by the puzzle pieces would begin fitting together and would begin to shape the word picture: Great Depression - FDR Administration.

As the puzzle began to fit together some puzzle pieces remained in the box: protectionism, subsequent stimulus plans, and socialist marches. However, in short order the puzzle is finished: Senate China bashing bill, Obama jobs bill, and "occupy".

There you are, history repeated itself!


Consider history repeating itself due to purposeful intervention


Yes, history does have a nasty habit of repeating itself. Not only repeating itself, repeating itself in almost verbatim fashion. However, history may very well repeat itself because certain institutions, politicos, pundits, talking heads, social groups, etc. have revised history in such a way that the history is cloaked and doesn't seem to be actually repeating itself.

James and Jane Goodfellow might have great difficulty standing back and reflecting on events and seeing the common thread through the fog of revisionism. Which then begs the question: are the supposed astute, supposed educated, and supposed informed leaders of the revisionist movement merely insidious time bandits who purposely revise to cover up and distort so future generations can not benefit from the knowledge that history repeats itself ?

Stated alternatively, does history repeat itself, or does history repeat itself due to purposeful intervention?

Wall Street Occupation, Marching on Particular Homes of Particular Business Leaders, 1930’s “Unionization”, and “Occupy”

An item worthy of note in regards to the phenomena surrounding “occupy” is the unionization movements in the U.S. during the 1930’s.

[Paraphrasing] The majority of unionization that came about in the 1930’s did not come about due to labor actually voting for or against unionization. The majority of unionization came about by coercion by unions [including occupying the physical firm]. The majority of “unionization” in the 1930’s, was in fact, the firm merely accepting a particular union which exercised coercive means of varying nefarious nature. Hence the firm accepted the union as the representative of the current workers, not by vote, but by coercive means exogenous to open voting by labor. - FDR’s Folly, How Roosevelt and His New Deal Prolonged the Great Depression, Jim Powell, pages 187 - 206.

Argument with no Arguments: the quintessential textbook case.

"We got to keep an eye on the battle that we face: The war on workers. And you see it everywhere, it is the tea party. And you know, there is only one way to beat and win that war. The one thing about working people is we like a good fight. And you know what? They've got a war, they got a war with us and there's only going to be one winner. It's going to be the workers of Michigan, and America. We're going to win that war. . . . President Obama, this is your army. We are ready to march. Let's take these son of bitches out and give America back to an America where we belong" -- Teamsters President Jimmy Hoffa speaking at a rally for President Obama in Detroit on Sept. 5. (1)

In the above quote exactly what entails the “war on workers”? Exactly how does the tea party [a non existent political party] articulate a “war on workers”? The non-defined and example-less “war on workers” is going to be refuted by means of marching? Marching will “…take these son of bitches out…“? Hence we have an argument with no underlying the arguments.

It’s the quintessential textbook case of the argument with no arguments.

(1) Wall Street Journal Political Diary, 09/06/2011

Wisconsin is coming to a state capital near you!

Wisconsin. Ah, a picture of Wisconsin's state capital building in more tranquil times.


You might ask yourself: how does a nice monopoly such as state government go bankrupt? What do unionized state employees have to do with the bankruptcy of a nice monopoly such as state government?


State government as a monopoly, and monopoly pricing


Governments are monopolies over the services they render. Monopoly theory is vast and undetermined. However from monopoly theory we can surely state that: price can/could/may be influenced by a monopoly.


Conventional wisdom goes one step further and assumes that monopolies controlling prices is related to wages paid. That is, if a monopoly can influence price then surely a monopoly can influence input costs including wages paid.


This is where conventional wisdom comes to the fork in the road and creates a conventional fallacy.


Monopolies and unionized labor


Its intuitive to think that monopolies influence price and hence influence input costs including labor costs. That a monopoly would never deal with a unionized work force. That the monopoly would depress wages. Wrong. Its counter intuitive.


The classic example was the once telephone monopoly Atlantic Telephone and Telegraph (AT&T). Did AT&T have a well compensated work force? Yes. Were AT&T employees unionized? Yes.




Why do monopolies hire monopolies?


Why would one monopoly hire another monopoly i.e. unionize work force. Because the monopoly has pricing power in that: price can/could/may be influenced by a monopoly. Why bother fighting it out at the collective bargaining table when the monopoly can merely pass the cost of labor onto consumers through price.




What if a monopoly or quasi monopoly is regulated as a public utility?


If price increases are regulated by a public utility commission i.e. price controls, the monopoly will act as a "non profit" regarding compensation as compensation figures may well be a matter of public record. That compensation will be paid under a veil.


How so? You see, non profits such as rural electric co-op's know that their members (end users) will be very unhappy if the price paid for wages is high. The co-op members will think the co-op is functioning to enhance itself rather than functioning as a collective scheme to secure rural electric power. Hence the rural electric co-op keeps wages reasonable and skews compensation to benefits and retirement. They can then advertise to their co-op members that wages are very reasonable when in fact total compensation [wages, benefits, and retirement] is much, much, much higher than the pure "wage" they advertise to their co-op members.




Government Monopoly and collective bargaining schemes




One must examine the "both sides of the table" phenomena when considering collective bargaining regarding a government monopoly. What is the "both sides of the table" phenomena?


(1) if bureaucrat X is negotiating with collective bargaining public sector union Y, exactly what motivation does bureaucrat X have regarding negotiations? The problem goes back to Milton Friedman's fourth category of spending: other people (bureaucrat X), spending other people's money (tax payers money), on other people (recipient class which in this case is a public sector union). Therefore the bureaucrat has no motivation because he/she is spending other people's money not his/her own money,


(2) public sector unions have found that they can collect dues through members and funnel dues into political action funds. They then fund the campaigns of politicos that promise them [public sector unions] more compensation. They not only fund certain politicos but actively encourage their union members to campaign for the politico. Once they get their particular candidate elected they have now secured a politico who over sees bureaucrat X.



Wisconsin is coming to a state capital near you!


We know monopolies will hire monopolies. We know that if "wage" is a matter of public record compensation will be skewed toward benefits and retirement compensation. We also know that collective unionized bargaining in the public sector suffers from the "both sides of the table" phenomena. Finally we know that the monopoly through pricing power influence will pass on increased labor compensation costs to the end user. Finally, in the realm of government monopoly price is tax and tax is increased to the end user which is the tax payer aka YOU.


Therefore, unionized collective bargaining in the public sector is a collective bargaining scheme against the tax payer. The collective bargaining scheme has no incentive to reduce costs as cost can be merely passed onto the end user. Moreover, the collective bargaining scheme, in a government monopoly setting, actually has incentives to pass on larger and larger price increases to the end user in the form of price influence and in this case tax increases. Lastly, the end user, the tax payer aka YOU are not represented at the negotiating table due to the "both sides of the table" phenomena.




Update 02/27/2011: The Political Economy of Government Employee Unions - Thomas DiLorenzo
http://www.lewrockwell.com/dilorenzo/dilorenzo203.html
Update 03/01/2011: Katherine Kersten: The good life (for unions especially).
http://www.startribune.com/opinion/commentary/116956308.html
Update 03/02/2011: Dodging the Pension Disaster - Josh Barro
http://www.nationalaffairs.com/publications/page/dodging-the-pension-disaster-preview