Thursday, July 30, 2009

Wingfield Continues To Befuddle

I'll say it.

I disagree with nothing in Kyle Wingfield's latest piece. I think I've been clear over the years that I'm against minimum wage hikes. And to be honest, the ongoing "health care reform" debate makes me nervous as hell. I wish I could adopt Rusty's attitude of adopting the Chamber of Commerce mantra to "just fix it" but I confess I can't. I can't make myself trust government to fix something so complex and massive.

Tell me why I'm wrong, Democrats.


This is a great lede for a commentary piece.
When Washington mulls economic policies like raising the minimum wage or requiring small businesses to provide employee health insurance, the debate tends to have a theoretical, academic, even surreal feel to it.
He's really starting to annoy me.


Joeventures said...

I'll admit the employer mandate is not the right direction. In the recent interview of Krugman and Butler on Fresh Air, there seemed to be quite a bit of agreement on this point in particular.

In the course of the discussion, you'll hear Krugman have to correct Butler on several points of fact. But you'll also hear a remarkable amount of agreement between a conservative and a liberal. It's well worth a listen.

But on the lede, I have to say that I'll take a rational discussion over screaming nutjobs any day of the week. Wingfield is speaking as though the Democrats never heard or recounted (much less, were influenced by) any stories of people who would be impacted by reform. Nothing could be further from the truth.

griftdrift said...

What appeals to me about the lead is not that it's advocating outlandish rhetoric over reasoned debate, but points out that within the bubble of the congressional chambers, theory is at times bandied about as reality. Something I believe to be true.

Rusty said...

Libertarians (and often Republicans) drive me up the wall with the way they pretend everything happens in the vacuum of an Econ 101 class, which is how I came to my "just fix it" position.

None of the solutions are ever going to be perfect or fix everything, but if we end all the personal bankruptcies that come from health procedure debt, that would be a huge positive.

For every rationing horror story someone throws at me, I'll raise them one preexisting condition horror story. It'd be nice if we could skip the fear-mongering just once and get to whatever the concerns are really about.

Jmac said...

The reason there was agreement - and, at times, disagreement - between Krugman and Butler was because they both entered this thing as honest brokers. As a result, they relied on empirical evidence and statistical projections to make their cases. There was no underlying political agenda on either side, just an academic debate and ultimate search for truth.

That doesn't happen on your average cable pundit shows, which is sad (and the reason the only pundit show I'll watch is Maddow's since, you know, she doesn't yell at anyone).

Re: Wingfield

I'll agree it's not an unreasonable column, despite my disagreements with it.

For starters, we're all quick to criticize mainstream media organizations for taking on too much debt and, given that Singleton runs 11 Subways, I think it must be plausible to assume that, you know, perhaps he shouldn't be running that many stores because I would imagine those lines of credit are what's really crunching him, not incremental increases in the minimum wage.

Also, Wingfield assumes those 200 jobs are paying strong enough wages to support a family - or that Singleton is even employing folks who have families and not, say, teens who need some spending money. The majority of those living in poverty have part-time or full-time employment, meaning those low-paying jobs might actually put additional stresses and pressures on them, thus preventing them to break out of poverty's grip.

So, yes, I would rather Singleton employ 75 people with better wages and good benefits rather than employ 200 people with low wages and no benefits, thus merely keeping them in a stagnant economic environment.

Re: health care

Wingfield is mistaken, I feel, on the small business analysis in two areas. The first one is that, based on the recent compromises, small businesses with budgets of $500,000 or under will be exempt from mandates (this, I feel, is a good thing).

The second is that it dances around the reality that, without a mandate, there would be an incentive for businesses to drop coverage and force people into the proposed insurance exchange. That, of course, would result in an explosion of costs and a massive shift in coverage.

Now, while I personally feel we should have a single-payer system in place to address this need, I also think it's obvious we're not there yet (maybe 25 years down the road, who knows). As a result, the most viable option is establishing an alternative that is fair for all. Companies which shirk coverage won't, then, be given an artificial advantage - as they have now - by denying coverage, they'll have to pony up the cash to level that playing field.

griftdrift said...

But Rusty, Wingfield is not making the rationing argument (Wooten certainly would have). He's making the fiscal impact argument which is what is winning me over.

But the bottom line is he's generating reasonable conversation, as evidenced by JMac's rebuttal, and that makes it hard for a polemicist like me to really gig him.

Sara said...

There's also a unique wrinkle in the story of the Subway guy that wasn't really mentioned in the editorial. As the owner of franchise stores, he is handcuffed by the prices set by Subway corporate for his product. If he had 11 restaurants that were not part of a franchise network governed by complicated and strict contracts, he could raise the prices of his food incrementally to cover the additional wage and health care costs. (We can discuss potential inflationary fallout from a rise in the minimum wage and mandatory healthcare coverage another time.) Subway's franchise agreements presumably prohibit individual store owners from raising their prices, so unless they can be convinced to raise prices nationwide (unlikely, but possible), Subway guy will essentially be forced by his franchise agreement to keep flat revenue even with anticipated and fixed rising costs. That's a bad situation to be in, but it's one that the owners of many many franchises are about to find themselves in.

Perhaps we should be talking about whether franchised corporations should be required to provide a health insurance coverage benefit that their franchisees can buy into in order to provide coverage to their individual employees if they have payroll in excess of $500K. There must be hundreds of thousands of employees of Subway stores nationwide, so they should be able to negotiate a volume-based discount plan that their franchisees can use to comply with the health insurance rules once they come out.

Or, the more likely alternative is that Subway guy is going to split the LLC or Corporation that he has operating his 11 stores into two difference LLCs or Corporations operating half of the stores each, and both with just under $500K in payroll. This is one way that franchise owners can beat the system as presently proposed.

As Griftdrift is pretty fond of saying, people will find a way. This includes finding a way around the healthcare obligations if they have to.

griftdrift said...

It's my version of House's "everybody lies"

Joeventures said...

Yeah... come to think of it, the Laffer Curve is actually a very good example of how easy solutions (not necessarily academic -- just academic-sounding) tend to invade legislative bodies.

In the end, what many times sounds like some smart guy being academic too often turns out to be an excuse for debates to turn into screamfests.

Sara said...

difference = different. Dur.

And I prefer "maybe it's sarcoidosis," but that's just me.

Unknown said...

:::posse riding into the rescue:::

As much as we know the right would like to blame the recent minimum wage increase on President Obama... it was signed into law by President Bush. I'm sure President Obama would have done something similar, but GWB beat him to the punch.

I'm sorry Mr Subway guy didn't think of this potentiality when he signed his franchise agreement. And I'm sorry he and his fellow franchisees don't have more leverage to increase prices (maybe they need a union?). Perhaps someone should remind him that it might be nice if his employees could afford to eat at his restaurants? I don't agree with Henry Ford on much, but his policy to pay a high enough wage so that his workers could afford to buy his cars was a good one.

Onto health care. I certainly understand that many are fearful of the potential changes ahead. I think it's important to recognize that the plan is designed so that those folks who have insurance that they are happy with; that is affordable; or that is provided by a large corporate employer, will not see any change. In fact, many experts believe that a public option will help to lower prices for your employer; reduce tax payer contributions to public hospitals (like Grady) because people who have used public hospitals as their primary care will have access to real primary care.

Granted, these changes will take time, but we have to invest in the changes. Could it happen at a better time? Is there ever a good time to spend $1 Trillion over ten year? There was during the past 8 years - on two endless wars (oh that's another topic...)

Small businesses are getting totally screwed by the current system. We pay the highest premiums and have no bargaining power.

This is just the first step in a multi-step process. Let's embrace the idea of a healthier America. And, like Rusty said, let's end the bankruptcies tied to medical care - those numbers are astounding!

:::calling in the backup:::

Anonymous said...

What I want to know is, why is it so important for a Supreme Court nominee to be totally objective, disconnected from society, with no opinions or personal feelings, but for Congress, when they have to actually write the laws, can't discuss things in a theoretical manner? They have to consider every friggin' possible cardboard collector and yacht owner? How is that possible without being "theoretical"?

Aren't they both trying to find justice?

That whole Mr. Smith goes to Washington thing bugs me. I have no problem with career politicians. They SHOULD be somewhat disconnected from plebeian life. If we could make them MORE disconnected they wouldn't be so susceptible to evil lobbyist bribes.
The last thing I want to see is a bunch of rednecks up there all looking out for their own personal stake in the world. Congress is supposed to look out for ALL of us. They have to be able to see the bigger picture, and that takes the ability to think and talk about things in an "theoretical, academic" way.

2. I will submit that government is the only entity that CAN fix such a massive, complicated mess. That is why we have government. To handle things we can't handle otherwise. Things where we NEED some coordination and structure.

Besides, where is this "free market health care system" that we can use as a successful example to follow?

And besides again, from what I can tell, it's not a huge government involvement anyway. They are basically setting up standards of coverage that insurance companies can choose to participate in (or not) and consumers can choose to buy (or not), and the consumers make their choice by visiting The Portal or The Exchange or something, where- because of the set standards- you can compare apples to apples.

I know it's more complicated than that, but that is the essence of the government structure as I understand it.

3. The minimum wage argument is totally bogus. Every single company is subject to the same increase. He is not less competitive because of it. It is an issue between him and whoever sets his pricing.

It sucks when the law favors one group over another- like when KIA or NCR get giant tax breaks but little companies never do- but until our minimum wage law makes us uncompetitive with France or Germany, I wouldn't worry too much about it.

Dave Bearse said...

Let's see.....200 employees and a $800,000 payroll.....that's $4,000 annually per employee. If you assume eleven managers at $35,000 each, the remaing 190 earn less than $2,200 annually.

In simple terms, I disapprove of the customers of small businesses should be subsidized by taxpayers, which is exactly what occurs with many low-paying jobs.

Dave Bearse said...

Make that... "I disapprove of the customers of small businesses being subsidized by taxpayers,.."

I ought to know that preview button is there for a reason.