Saturday, July 7, 2012
Small Business and Regulations
The GOP loves to talk about “crushing regulatory burdens” on small businesses and they claim their policies will make it easier for entrepreneurs to start businesses and “create jobs.”
"Crushing regulatory burden?" "Crushing?"
I have never heard a conservative mention (and possibly many don’t even know) that many, if not most, business regulations exempt small businesses.
And the GOP leaders ignore that many regulations protect small businesses from the giant businesses' practices. In fighting regulations, are they really on the side of small businesses? When is the last time a small business contributed enough to them to get their attention?
It seems to me that if the GOP and right wingers really wanted to unleash the pent-up entrepreneurial power in America and help them create jobs, they would support a national health care system - think of how many people with great ideas are unable to start businesses because the need health insurance and the cost of it for a new business is prohibitive.
Or maybe they'd fight against the tax schemes that allow huge mega-retailers to invade our towns and push small businesses out - aka "crushing" small business people.
(Regarding regulations: I practiced law doing regulatory compliance from the 70s to the 90s and I later lobbied on behalf of small businesses for a particular trade.)
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Very nice post. I think you may have been able to state things even more strongly, as virtually all of our the international competition provides some form of national health care to all of its citizens; some even provide it for visitors and foreign guests to their shores and borders. This gives those nations a huge competitive advantage.
ReplyDeleteExcellent point - although I'd quibble as to whether it gives those nations a competitive advantage or mainly does so for their corporations ... the costs have to be covered by someone.
ReplyDeleteI've wondered for awhile now why US corporations (not the int'l corps chartered in the US) don't push for national healthcare -- although I suspect it likely a matter that the senior management types to whom this has occurred are unwilling to bring it up for fear of how they will be jeered in the Men's Grill at their clubs.... (Not entirely a joke there....)
Sheesh, you guys slay me.
ReplyDeleteFirst of all, the cost of health insurance is not out of reach for small businesses. You know how I know that? I run several small businesses. Five employees and I buy health insurance for every one of them. Did 400k gross last year. If you seriously think that any entrepreneur who’s passionate about a great idea, and willing to work 8 days a week for it, that such a person would discard that idea merely because it might not provide him healthcare coverage, you have no understanding of entrepreneurs.
Second, if national health care gives countries such a great competitive advantage, why is it that of the 33 developed nations with universal healthcare, the US economy is Number 1, and is greater than the next five largest, combined? In fact, if you take the remaining 27 countries and combine them, the US economy alone beats them by nearly 45%. Seems like the competitive advantage lies with private insurance.
http://progressivewomencolorado.com/list-of-countries-with-universal-health-care/
http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)
SLC
SLC
ReplyDeleteInteresting points. And congratulations on your business success. That alone shows you are different from the vast majority of business startups: 75% will have failed within 10 years:http://www.smallbiztrends.com/wp-content/uploads/2008/04/businessfailure.jpg
BTW, a common error people make is assuming that their own experience represents that of most other people. As the data shows (assuming you've been in business for awhile) your experience is very different than the typical one.
>>If you seriously think that any entrepreneur who’s passionate about a great idea, and willing to work 8 days a week for it, that such a person would discard that idea merely because it might not provide him healthcare coverage, you have no understanding of entrepreneurs.
I am one myself, and I know many other entrepeneurs. I also know many people who would like to be but can't because existing health conditions within their families has (until ACA) prevented them from even changing jobs, much less starting a company with all the competing expenses.
>>why is it that of the 33 developed nations with universal healthcare, the US economy is Number 1, and is greater than the next five largest, combined? ... Seems like the competitive advantage lies with private insurance.
Without historic figures, that figure for one moment in time is meaningless. As a businessman yourself, surely you know that the any one balance sheet accounting statement alone is tells us relatively little.*
I agree that the US is still the most powerful economy in the world despite the chicken little squawking of the GOP about our going broke.
>>Seems like the competitive advantage lies with private insurance.
Its been 2 decades since I was involved in international personnel matters for a large company with offices in a dozen countries, and the personnel stuff was a minuscule part of what I did. I do recall that when we brought a new head of international in from Argentina, the added healthcare costs had been initially overlooked and significantly affected his compensation package negotiations
I don't know of any statistics which confirm the idea that our extremely costly private sector health insurance industry does anything to ad to the competitiveness of American businesses within the international setting.
In fact, just yesterday Romney mentioned the high cost of health care as a drag on American business.
= = = =
See, e.g.: http://www.jstor.org/discover/10.2307/4164795?uid=3739840&uid=2&uid=4&uid=3739256&sid=21100914247921
(Not an economic measure, but of some significance to the discussion, I believe:) http://www.nsf.gov/nsb/news/news_summ.jsp?cntn_id=122859&org=NSB&from=news
http://www.weforum.org/news/us-competitiveness-ranking-continues-fall-emerging-markets-are-closing-gap
It’s interesting watching your thought process on these issues.
ReplyDelete>>BTW, a common error people make is assuming that their own experience represents
>>that of most other people. As the data shows (assuming you've been in business for
>>awhile) your experience is very different than the typical one.
Yes, I’m aware of that. First of all, this has nothing to do with your original point that “the cost of [health insurance] for a new business is prohibitive.” I dispute that point, saying that health insurance is affordable for new business, and you respond by saying, “You know, a lot of businesses don’t succeed.” Second, you are guilty of that very thing—thinking that your experiences represent that of most people—and I let you know that last year.
>>I also know many people who would like to be [entrepreneurs]but can't because existing
>>health conditions within their families has (until ACA) prevented them from even
>>changing jobs, much less starting a company with all the competing expenses.
Sounds here like you are saying that your experiences represent that of most people. My experience is exactly the opposite of yours. But even if you are correct that many would-be entrepreneurs don’t start their own business because of health care costs are too high, that could be said about any of the major expenses of starting a business. Start-up costs are very high, even for a small business—a lot of money has to go out the door before any small business sees one dollar of revenue. Rent, equipment, inventory, supplies, insurance, taxes, and marketing—every single one of these costs at any time can be equal to or greater than health insurance. If it is costs that are preventing the great entrepreneurial spirit of America from being released, why not subsidize all these costs for everyone? The government is providing healthcare, why not provide rent and liability insurance and inventory, and labor—if it’s the cost of a new business that prevents people from being entrepreneurs? The truth is, it isn’t the cost. It’s the risk. Starting a new business is expensive and, as you pointed out, has only a 25% chance of success. Most people don’t like those odds, even if they have a wonderful million dollar idea.
>>I don't know of any statistics which confirm the idea that our extremely costly private
>>sector health insurance industry ...
>>businesses within the international setting.
Ummm, didn’t you read my post? But let me repeat it here: If national health care gives countries such a great competitive advantage, why is it that of the 33 developed nations with universal healthcare, the US economy is Number 1, and is greater than the next five largest, combined?
As far as your retort that, “Without historic figures, that figure for one moment in time is meaningless”, tells me first of all that you don’t understand balance sheets. True, they are a moment in time, but they’re hardly useless, any more than a newborn’s weight is useless. I didn’t think I’d have to explain that the US economy has been Number One, for a LONG time. So let me state that: Since World War 2, of the 33 developed countries, the US has been the largest economy, despite being the only one without some form of national healthcare. If national healthcare gave a competitive advantage, then there would be less of a gap between the US and the rest of the 33 countries, but in fact, the gap between the US and other countries is HUGE. The other 33 countries have combined economies of 24 trillion. The US economy ALONE is 15 trillion. And here, I’m not even mentioning the WHO rating the US healthcare system as Number One. So again, the competitive advantage lies with private insurance, not with nationalized healthcare.
SLC
>>As far as your retort that, “Without historic figures, that figure for one moment in time is meaningless”, tells me first of all that you don’t understand balance sheets.
ReplyDeleteLOL
>>As far as your retort that, “Without historic figures, that figure for one moment in time is meaningless”, tells me first of all that you don’t understand balance sheets. True, they are a moment in time, but they’re hardly useless, any more than a newborn’s weight is useless. I didn’t think I’d have to explain that the US economy has been Number One, for a LONG time
Gosh, who would have guessed. The fact is that as the international corporations have exported our technology and jobs overseas, our lead has fallen.
Today's conservatives worship Adam Smith, but they don't know what he actually taught us.
Among those things he taught us was that the wealth of nations depends on domestic manufacturing.
To maximize profits, the largest international corporation have stripped us of much our domestic manufacturing and thus of our power
>>. And here, I’m not even mentioning the WHO rating the US healthcare system as Number One. So again, the competitive advantage lies with private insurance, not with nationalized healthcare.
ReplyDeleteDamned good thing you didn't mention it, because it is wrong. About as wrong as one can imagine. (Sorry to hear that such a successful entrepreneur doesn't know how to use Google - or maybe you didn't have 0.27 seconds to spare...)
"The World Health Organization's ranking of the world's health systems was last produced in 2000, and the WHO no longer produces such a ranking table...."
And the last time they did, the US was ranked as 37th! (But good news, true believer, we beat out Slovenia.)
And the hated France, socialist pit that right wingers think it is, was 1st. Followed by that bastion of private sector health insurance, Italy.
http://www.photius.com/rankings/healthranks.html
http://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems
Agreed on your comments regarding WHO ranking. I didn't look it up previously, but I have now--thank you for the impetus. There are some problems with the ranking methodology, as shown here
ReplyDeletehttp://online.wsj.com/article/SB125608054324397621.html
but that’s outside our current discussion.
What we’re discussing is whether or not national health care provides a competitive advantage. I notice you didn’t address my comments on that at all—other than to LOL at one of my comments. But I stand by what I said—you don’t understand balance sheets.
And you haven’t made a credible case that national health care provides a competitive advantage. It doesn’t. If you’d like to address that, I’ll listen. If not, I’ll consider that you have conceded that I am correct.
SLC
>>But I stand by what I said—you don’t understand balance sheets.
ReplyDeleteThe point is that the position of the US viz a viz the rest of the world at one moment in time says nothing about whether our economy is stable, improving or deteriorating, just as one balance sheet doesn't indicate whether and how a company's position is changing. (I am not an accountant, but I was a banking attorney with a degree of experience with these matters. And if you read any definition of a balance sheet, you will see it is just one snapshot in time.)
>>And you haven’t made a credible case that national health care provides a competitive advantage. It doesn’t. If you’d like to address that, I’ll listen.
Let's start with common sense. For a private sector insurance company to provide insurance, it not only has to cover the costs of the covered claims, it has to pay taxes and it has to make profits and pay dividends - neither of which a public sector insurer has to do.
So for a private sector insurer to be better than public sector insurer, it has to be significantly more efficient.
So lets look at the facts - salaries are bloated in the insurance companies* and their overheads are typically much higher than the overhead of our two large public sector insurers: medicare and the VA. (Even conservatives admit that. See, e.g., http://voices.washingtonpost.com/ezra-klein/2009/07/administrative_costs_in_health.html (And note, he observes that Medicare outsources billing to the private sector - imagine the savings if they didn't.)
Also note: Care providers have to hire outside companies to do their billing because each insurance provider has different billing procedures - an expense that wouldn't exist with a single payer system.
See, also, http://www.pnhp.org/facts/single-payer-faq/#insurance-overhead
IF the private sector could compete with the public sector, why does the government have to subsidize the private sector Medicare Plan D programs?
And why did the private sector fight so fiercely against a public option in ACA - I think it is obvious that those who advocate most fiercely for the competition of the "free markets" couldn't stand the idea of the private sector competing against the public sector option.
In Plan D, why did the Bush administration adopt a program which prevents the government from negotiating for price with the drug companies?
And, finally, why does the US health system compare so badly with those of other developed countries with national health systems.
The Wall Street Journal didn't like the WHO methodology? And what was their lead argument? That the data was old.
So what - are you arguing that US health care used to suck and has suddenly jumped up in the ranks?
That WHO report is not the only one to find that the US healthcare system ranks poorly: see, e.g., http://www.commonwealthfund.org/News/News-Releases/2010/Jun/US-Ranks-Last-Among-Seven-Countries.aspx and http://www.reuters.com/article/2010/06/23/us-usa-healthcare-last-idUSTRE65M0SU20100623 (regarding the same study.)
Conservative like to argue that we shouldn't let government bureaucrats get between us and our doctors. What they conveniently overlook is that in our private sector system, an insurance company bureaucrat does exactly that, and that bureaucrats bonus depends on his or her cost savings.
= = = =
*(my former wife sold her health maintenance company to one of the big insurers and went to work for them. Here personal experience is she has never seen so little work done at such high cost)
No, I'm arguing that if what you say is true, that national health care provides a competitive advantage, countries with national health care should have an economy that rivals that of the US. But no other country even comes close. Experience belies your "common sense".
ReplyDeleteAnd I know all about balance sheets -- I am a certified public accountant. The reason that I didn't give the historical information that makes this particular balance sheet information useful is that such information consisted of one item--that the US economy has been #1 for a dang long time. I was actually paying you a compliment by assuming you knew that. In the future, I'll try not to assume.
>>No, I'm arguing that if what you say is true, that national health care provides a competitive advantage, countries with national health care should have an economy that rivals that of the US. But no other country even comes close. Experience belies your "common sense".
ReplyDeleteHow about when you adjust for, oh, say, population?
>>And I know all about balance sheets -- I am a certified public accountant. The reason that I didn't give the historical information that makes this particular balance sheet information useful is that such information consisted of one item--that the US economy has been #1 for a dang long time
You're a CPA and you don't know that a balance sheet is just one moment in time and for any meaningful measure you have to look at several?
ROAR!
I take it you don't follow baseball and thus don't understand that saying a team is "in first place" without saying how many games ahead they are and whether they're gaining or losing is next to meaningless.
With all due respect, I really don't think you're a CPA.