16 Percent Unemployment or Worse, On Its Way
When President Obama took office, I set the over-under for reported unemployment at 16 percent. I have a few wagers on the over, which I would gladly forfeit should he resign and turn the reins over to somebody not hell-bent on destroying the American economy. But I fully expect to collect on my bets. So don’t be bothered by the new high of 10.2 percent the government admitted to this past week. There’s much worse to come.
And these stats mask the new, relatively unique reality of the Obama Recession: the huge number of those on the employed side of the ledger, but at incomes a fraction of previous years’ earnings; in lesser, lower paying jobs; working short hours. The $100,000-a-year real estate agent is now a sales clerk at Kohl’s. Four of her are the same as one more unemployed. That’s why next year’s income tax receipts will drop far below last year’s shocking low, guaranteeing further acceleration of deficits and desperate new tax and money-grab schemes.
Incidentally, that’s exactly what the humorously labeled Health Care Reform package (1,900 intentionally incomprehensible pages and climbing) actually is: a scheme of new taxes and a grab of money for government coffers. It has little to do with health. Much to do with confiscation, control and re-distribution of wealth.
The House’s passage of its behemoth is cheery news for my wagers on 16 percent unemployment. It alone might cause that much, on top of what already exists. It is the greatest job-killing monster ever birthed in
Fifty percent of our GDP comes from small business, which has gotten only rhetoric from Obama. He has paid more attention to his chief benefactor, the UAW – which creates zero jobs – and the carcass it feeds on, GM, than to the entire small business community.
His health care destruction, private enterprise takeover and tax scheme is, among other things, a new, savage, far-reaching attack on small business.
How? Two ways: first it will cripple them all financially, and inspire the survivors to cut staff, close marginally profitable locations, and out-source and export all work they can – cut, cut, cut and cut some more. Second, there are countless small insurance brokerages that include health insurance in their product mix and now service small to mid-sized companies. Plenty of other small businesses count those brokerages as customers – printers and copy shops, web design firms, accounting practices, etc., etc. With the impending takeover of the health insurance industry, all those little operations have their heads on the chopping block. Obama, Pelosi, et al are standing there grinning, with bloody axes behind their backs.
He presumably thinks he can replace all the jobs he destroys at private insurers and all their local offices, brokers, and vendors with government jobs in his new giant agency. I suppose nurses and file clerks may move. But it seems that 100,000 insurance sales agents will be unnecessary, as well as their assistants and underwriters. If there are but three choices and no competition – the clear intent of the House plan – there’s no need for hundreds of millions of dollars of newspaper, TV, radio advertising; direct-mail (providing life support revenue to the post office). A whole lot of agencies that create advertising, printers that produce millions of brochures and booklets, hotels providing meeting space, and sales executives, managers and trainers are going to take the hit. So will those in highly skilled people in doctors’ offices who are salespeople in fact if not in name, and handle incoming calls and spend hours answering patients’ questions.
Perhaps wiping all this cost out of health care, eliminating it as an industry and making it a government bureaucracy, seems like a way to improve care and make it more affordable to more people – but there’s zero evidence for such a supposition. Everything else government does costs more than when done by private enterprise, and the quality delivered is worse. The House Bill quietly forecasts that, with such admissions as a replacement of physicians with nurse practitioners in hospice and for a number of functions in hospitals. There will also be draconian cuts in Medicare. A very safe bet here is that we’ll get less access and poorer quality at higher costs – and at the expense of millions of jobs. There will be an economic ripple effect of massive unemployment plus downgrading of employment and wages for many who still have jobs to go to.
I believe it was Ross Perot who once referred to that “giant sucking sound you hear” of American jobs pulled into
Dan Kennedy is a serial entrepreneur, adviser to business owners, sought-after speaker and author of 13 books. More information about Dan can be found at www.NoBSBooks.com, and a free collection of his business resources including newsletters and webinars at www.DanKennedy.com.