Free Markets, Free People
Are businesses sitting on their money in the hope of a change in the regulatory regime (i.e. an Obama loss in 2012)?
Marylin Geewax brings us the following story about the overall economic picture. And it isn’t pretty:
The latest surveys show that both business owners and consumers have been losing confidence in the U.S. economy. That pessimism is just the latest blow to hopes for a speedy recovery.
Last week, even Federal Reserve officials said they have grown more pessimistic about the economic outlook this year. The policy makers cut their forecast for 2011 to a growth rate of just 2.7 to 2.9 percent — down from their April estimate of 3.1 to 3.3 percent.
Economists say growing pessimism and a lack of confidence tends to depress spending. Chris Christopher, an economist with the forecasting firm IHS Global Insight, says the large cash reserves corporations are holding are evidence that our budding optimism is fading.
I’d only ask, “what budding optimism”? Most who’ve been following the so-called “recovery” have seen little, in terms of economic indicators to elicit “budding optimism”. As we discussed in yesterday’s podcast, part of the problem, in fact a big part of the problem is the unsettled regulatory regime. Businesses have no idea where the administration is going with regulations, but what they’ve seen thus far provides them with no incentive to expand and hire and every incentive not to do so. Consequently:
U.S. corporations have about $1.65 trillion in cash available to them, he noted. But managers are so wary about the near-term outlook that they are not spending that cash on hiring workers or expanding operations.
And that brings us to another factor one can’t help think is at least beginning to have an effect as well. As we approach the second half of 2011, the 2012 presidential election looms. Are businesses now factoring in the possibility of change in the White House (real change we could live with) and holding back until that’s settled? It is certainly something that would make sense. With the administration’s war on business these past two plus years, there’s no reason to commit to expanding a business or hiring new employees if doing so is going to end up being a net negative. So why not wait and see? Sit on the cash and have it ready to use if and when the current administration is shown the door and a less draconian regulatory regime is on the horizon?
That’s common sense business.
Of course that’s not the only reason business is hanging back. There are other factors:
Other concerns involve a spring slump in manufacturing activity and the ongoing problems in real estate. For example, last week, a report from the National Association of Realtors showed existing home sales fell again in May, down 3.8 percent to a seasonally adjusted annual rate of 4.81 million units, the lowest rate in six months. Even worse, the median price was down 4.6 percent from a year earlier.
Consumers, whose spending accounts for roughly 70 percent of all U.S. economic activity, also lost confidence this spring as gasoline prices rose to nearly $4 a gallon in early May and unemployment ticked back up last month. The unemployment rate had gotten down to 8.8 percent in March, but was back up to 9.1 percent by May.
All of that in combination have businesses reticent to do what is necessary to help the recovery. I just wanted to bring the other factor - unsettled regulatory regime – to the fore as it simply doesn’t get the coverage it deserves. Draconian regulations which cost businesses high compliance costs are a drag on economic expansion. The possibility of relief from such a regime is a legitimate reason to not expand or hire and incur those increased compliance costs. As I’ve said any number of times, the government can help the economy best by getting the hell out of the way. Instead it seems the inclination is to meddle and intrude even more and, as should come as no surprise, this sort of non-recovery “recovery” is the result.
One of the things many who have studied the problem of health care in the US have known for quite some time is that there is and will be a shortage of primary care doctors in the US. These doctors are the gatekeepers in the system in which health insurance providers require primary care doctors manage the health care of patients and be the ones to authorize referrals to specialists.
The shortage of these doctors isn’t news nor is it something new. Only 30% of practicing doctors are in primary care. 65 million Americans live in areas where a shortage of primary care doctors exists. And ObamaCare’s extension of insurance benefits will add another 30 million to the roles who will have to seek a primary care physician.
So, how does the administration plan to address this known problem? With incentives for such doctors to take Medicare and Medicaid patients whose reimbursement for services is known to be lower than that of private insurance? Announce a plan to incentivize incoming medical school students to become primary care doctors?
Nope. It’s to snoop on existing primary care doctors by enlisting “mystery shoppers” who will falsely identify themselves as potential patients with various types of insurance (Medicare, Medicaid and private) to determine whether the physicians called discriminate among who they’ll accept.
Alarmed by a shortage of primary care doctors, Obama administration officials are recruiting a team of “mystery shoppers” to pose as patients, call doctors’ offices and request appointments to see how difficult it is for people to get care when they need it.
The administration says the survey will address a “critical public policy problem”: the increasing shortage of primary care doctors, including specialists in internal medicine and family practice. It will also try to discover whether doctors are accepting patients with private insurance while turning away those in government health programs that pay lower reimbursement rates.
As you might imagine, doctors who’ve learned about this upcoming attempt are not at all happy with it:
Dr. George J. Petruncio, a family doctor in Turnersville, N.J., said: “This is not a way to build trust in government. Why should I trust someone who does not correctly identify himself?”
Dr. Stephen C. Albrecht, a family doctor in Olympia, Wash., said: “If federal officials are worried about access to care, they could help us. They don’t have to spy on us.”
Dr. Robert L. Hogue, a family physician in Brownwood, Tex., asked: “Is this a good use of tax money? Probably not. Everybody with a brain knows we do not have enough doctors.”
In response the administration says:
In response to the drumbeat of criticism, a federal health official said doctors need not worry because the data would be kept confidential. “Reports will present aggregate data, and individuals will not be identified,” said the official, who requested anonymity to discuss the plan before its final approval by the White House.
Christian J. Stenrud, a Health and Human Services spokesman, said: “Access to primary care is a priority for the administration. This study is an effort to better understand the problem and make sure we are doing everything we can to support primary care physicians, especially in communities where the need is greatest.”
Now, being the skeptic I am and having watched government operate for decades, I tend to see other possibilities in this sort of an effort. Remember, ObamaCare was passed by Democrats, most of whom see health care as a “right”. Thus, they feel they have the right to mandate that a) everyone have insurance and b) that everyone with insurance have access to a physician. They got the “a” done in ObamaCare. Left undone is the mandate that all insured have access to a doctor – without exception. That mandate would be perfectly in-line with their belief that they can demand the skills, assets and time of one to serve the pseudo-right of another.
Why else would this “stealth survey” involving people falsely identifying themselves to doctors to determine whether they discriminate against lower paying insurance programs be planned? The doctor shortage is known. The administration claims that ObamaCare “includes several provisions intended to increase the supply of primary care doctors” and that this survey is intended to “evaluate the effectiveness of those policies. “ Really? Considering that the law has been in effect only a short time and is not fully in effect, one might find it a bit hard to believe that bit of spin.
Instead it seems much more likely that this is a prelude to something else. This is information gathering to prove something – i.e. doctors are discriminating. And we all know that in our new, brave world, “discrimination” is a mortal political sin. Does anyone not believe the outcome of such a survey might be used to attempt to pass an anti-discrimination law or a law which requires primary care physicians to accept anyone with insurance who applies regardless of coverage?
Yeah, me too.