They're Kin: Jobs and Health Care

Some commentators have seized on the notion that health care and jobs are competing priorities, and that the president made a big mistake in putting health care ahead of jobs. In a nutshell, they are saying, "It’s jobs, stupid". They might have had a point had the president made such a choice during his first year and a half in office, but he did not.
 
He didn’t have the luxury. No sooner had Mr. Obama won the election, than the global recession took hold. It was a result, in no small part, of former President Bush’s eight years of deregulation. During Mr. Bush’s two terms, Wall St. made so much money on repackaging subprime mortgages that not one well known economist predicted the end of the party. But property values dropped, joblessness rose, and a rash of mortgage and credit card holders defaulted—all at once. The unexpected happened, and it gripped the economy like a boa constrictor. With the largest banks unwilling to lend, Mr. Obama and his team worked overtime even before the inauguration to erect a series of emergency rescue operations: to save Wall St. banks and investment houses, the auto industry, homeowners about to default on their mortgages and credit cards, the unemployed in need of benefits, and those without health insurance--for whatever reason. Then with President Obama’s federal stimulus package government propped up the economy until it could correct itself. The patient still needs assistance.
 
President Obama started with a health care overhaul largely for economic reasons. Health care costs as a percentage of GDP threaten to sink the economy. Even with the reform legislation, major cuts in health care costs must still be made. Otherwise workers will barely be able to pay for their insurance and the government could be forced to borrow to meet its other obligations when tax revenues fall short. The reform may have pushed back the stroke for nine years or so.
 
Jobs and health care are not competitors. Rather they are intertwined and overlapping, connected in ways that the health care reform left largely intact. Most Americans with health insurance—some 80 percent—for example, have employer-sponsored policies. They did before the reform and they do now. That’s why the charges of “socialism” are so patently absurd. Does socialism insure people through private corporations? (The millions with Medicare, Medicaid, Veterans benefits, and children with S-CHIP coverage, can thank the government for their coverage. Too few government dependents are willing to do so.)
 
Before health care reform, keeping one’s coverage depended on keeping one’s job. Policies were not very portable. One could purchase an interim policy through COBRA at a rate higher than the employer-sponsored rate, but lower than insurers charge private customers. But COBRA coverage doesn’t last long. Before the reform, insurers could refuse to cover workers whose employers would have enrolled them: the sickest people: workers or their family members who had pre-existing conditions, chronic conditions, and those whose health care had already reached an annual or lifetime cap.

For a majority of workers, employer-sponsored insurance worked—at least until they fell chronically ill. Other workers, however, like the self-employed, those who work in small businesses, seasonal or migrant workers and part-time workers, seldom enjoyed the discounts given to big employers. Although they worked, such workers often could not afford insurance. Only the young and healthy could take their chances and forgo paying the high premiums for health coverage.
 
The jobs-health connection never worked for millions of other Americans, either. Take the long-term unemployed, left without any affordable insurance at all. Emergency room care was an option, but it is the most expensive care of all. And the cost of “free emergency care” has always been paid by those who worked. Health care reform will extend coverage to some 30 million Americans and will rectify most of these ills eventually.
   
Now the president has said he has put job creation at the top of his list. Yet the stimulus itself and the federal budget both set aside money for states and localities, gave breaks to employers who hired, and targeted infrastructure projects to create jobs. More jobs must be created. They must be if—and here’s that link again—the nation is to regain its health.

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Karen Sue Smith

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8 years ago
There is so much nonsense in this opinion piece it is hard to know where to begin.  The author cannot have any experience with economics or business to know what affects employer decisions or else this drivel would not appear.  The knee jerk criticism of President Bush is a giveaway to the rest of partisan rhetoric.  There are four main causes for the financial crisis and Bush had little to do with any of them.  In fact Obama is tied closely to one of them.
 
The health care regulations will add cost, make it less desirable for businesses to hire and does nothing to reduce the main cost drivers of the rising health care.  What creates jobs is new businesses and the uncertainty and expected increases in taxes and other expenses will inhibit new business creation and hence job creation.  By making new business ventures extremely profitiable you encourage them and this is what happened in the 1980's when President Reagan reduced taxes and lessened regulations.  What this author is recommending is unemployment ad infinitum.  Hardly social justice.
 
This opinion is a poster child for why liberal policies have killed by the tens of millions and destroyed cultures and people all around the world.  Now they want to take their mis-guided social experiments and destroy this country.  As I said there is not social justice ever in liberal ideas.  Why because they are counter to human nature and require continual readjustment to cover over the problems they create.

 
Beth Cioffoletti
8 years ago
JR Cosgrove, what planet do you live on?
2 1/2 years ago, the last year of the Bush administration, my husband was laid off from his job.  We are both 59 years old and I have had breast cancer.  We had to pay $1200 a month for Cobra health insurance.  Not easy when you have no income.  In the last year my husband has been intermittently employed, and we have been bouncing between Cobra and private health insurance.  We are now looking for private insurance, and the cheapest rate we can come up with is $1500, per month.  Needless to say, we are anxiously awaiting the day when government health insurance policies are available.
Since Obama has come into office that economy has already started to turn around and we are starting to see a lot more economic confidence in the companies that hire, and thus opportunities for employment.  But during that last year of the Bush administration everyone was scared and no one was hiring.
Your theories about lowering taxes and lessening regulation are what got us into this mess.  Wake up and listen to those of us who are struggling to survive in this country.  By the way, who pays for your medical insurance?
Beth Cioffoletti
8 years ago
JR Cosgrove, what planet do you live on?
2 1/2 years ago, the last year of the Bush administration, my husband was laid off from his job.  We are both 59 years old and I have had breast cancer.  We had to pay $1200 a month for Cobra health insurance.  Not easy when you have no income.  In the last year my husband has been intermittently employed, and we have been bouncing between Cobra and private health insurance.  We are now looking for private insurance, and the cheapest rate we can come up with is $1500, per month.  Needless to say, we are anxiously awaiting the day when government health insurance policies are available.
Since Obama has come into office that economy has already started to turn around and we are starting to see a lot more economic confidence in the companies that hire, and thus opportunities for employment.  But during that last year of the Bush administration everyone was scared and no one was hiring.
Your theories about lowering taxes and lessening regulation are what got us into this mess.  Wake up and listen to those of us who are struggling to survive in this country.  By the way, who pays for your medical insurance?
8 years ago
Ms. Cioffoletti,
 
Your personal hardships are not one that I would like to experience.  But to place the blame on the Bush administration for policies that have affected you directly is probably not appropriate.  Also the changes in the health care system that has affected you has nothing to do with what people are objecting to.  All the problems you have could have been taken care of by proposals that Republicans wanted but were not even considered.
 
I live on the planet Earth and my experiences are in line with what works.  Since 1980, 40 million new jobs were created, all in small businesses and none in established businesses.  So my beliefs are tied to what works here on earth not some pie in the sky promises that sounds good.  And by the way if you want to blame something on timing, all the problems occurred after the Democrats took over Congress in 2006.  They created the budgets in 2007 and 2008, not Bush.  And Obama voted for each one of them.  But that would be somewhat unfair because the problems were the result of four main forces that were set in motion not by Bush.  Some of Bush's appointees encouraged the housing boom but the main impetus of the bad lending practices which caused the bad bonds were elsewhere.  And the current president is closely tied to one of these forces.  
 
So you are letting your emotions getting the better of reason.
Beth Cioffoletti
8 years ago
What are people objecting to?
Tom Maher
8 years ago
Mr. Cosgrove is right. The economic analysis contained in this article is nonsense.

The basic problem with this article is the article's wishful thinking that a health care free lunch can be had by all without mentioning the impact on the rest of the economy. But there is no free lunch. Someone will have to pay all of the costs.

Trillions of dollars are about to be shifted by government fiat into health care and out of the rest of the economy annually. Health care jobs will increase but job creation in the larger rest of the economy will sag as jobs already have.

In the new global economy job creation has been lagging. American jobs are being out-sourced at a very high rate. Labor rate are so much cheaper abraod. Now with employers facing yet larger per employee costs required by health care manadates, employers will more actively than ever out-source jobs abroad.

Otherwise the mandated increase health care cost burden will lessen job creation in the U.S. because employers will have less investment captial to spend on new projects that create jobs in the U.S.

The governemnt planned economy directed from Washington always forgets that the U.S. economy like any economy only has a finite amount of investment capital (money) to spend on expanding or creating new jobs by private industry. When governemnt controls a larger portion of investment capital, job in the private sector do not get created. This happened in the Carter adminsitration where government spending on governemnt projects went out of control. The result was stagflation - increase consumer prices for all and little or no job creation. The whole economy sagged. A depressed economy due to goverment hogging of investment capital will again prove politically unacceptable to most Americans.
Stanley Kopacz
8 years ago
Nobody burped when trillions of dollars were channeled into the two ill-conceived and poorly planned wars. Wars are subject to cost/benefit analyses, too. Will it attain it's purposes? What are the immediate and long term costs? Is their a cheaper or more effective way to to accomplish the same goals? But also, are their hidden agendas and who is benefitting?

Anyway, here we are, like brainless Elmer Fudd swinging a pitchfork at a swarm of bees. Or was it Donald Duck?

Thank you Republicans and spineless Democrats.
Stanley Kopacz
8 years ago
Mr. Maher,

Didn't the energy crises of the seventies have anything to do with stagflation? Without cheap energy, the economy, in its present configuration, is impossible. You blame everything on government spending. Redo your analysis and factor in the Big Fact.
8 years ago
Apparently America has decided it needs another cheerleader for the Obama administration & its policies.  Cue Ms. Smith's piece, which covers all the marks: Bush is bad & facilitated the greed and avarice (which only exists on Wall St. not the liberal Democrats who pushed the lenders to lend to unsuitable customers & who blocked efforts at reforming Freddie & Fannie), Obama & his teams are the brilliant, hard-working superheroes required to save the country from this disaster, whose rescue efforts are being frustrated by an impatient commentariat and fat cat Republicans (never mind the Democrats have a sizeable House majority & a slim majority in the Senate).  This recipe is so well-worn by now, even I can write this piece.  Unfortunately that wouldn't make it any more convincing.
 
Sen. McCain and the GOP advocated a radical health care reform that would lead to both lower health care costs (which the President's bill DOES NOT DO NO MATTER HOW MANY TIMES YOU SAY IT) and lessened the burdens on small businesses who create jobs: eliminate the tax-credit for employers who provide health insurance.  Unfortunatley, despite giving lip service to this during the Health Care Summit, Candidate Obama demagogued the idea so much in service to his fat cat union members (whose benefits at GM alone are catastrophically high-but again pay no attention to that matter) that he couldn't come near it.
 
I can already write the posts that will fill this space come nov. 5: ''The rich fat cats have bought themselves an election and a new Congress, so we much support the President to oppose these policies!  Stupid Americans don't know what's good for them!  we must show them!''
8 years ago
Ms. Smith should know that the Democrat Party and Wall Street have been in bed with each other for almost 20 years.  The reason, mortgage bonds.  People associate Wall Street with business because of the Stock Market which lists businesses and corporate bonds which they have underwritten.  However, that all changed about 30 years ago when mortgage bonds became a big business on Wall Street and then accelerated under the Clinton administration when first Henry Cisneros and then Andrew Cuomo pushed the banks and Fannie Mae and Freddie Mac to aggressively give mortgages to poorer Americans.
 
Wall Street was the receptor of this largess in two ways.  First it underwrote most of the bonds for these transactions for Fannie Mae and Freddie Mac and this generated huge fees for the investment bankers and it also issued some of the bonds themselves and thus made even more money.  And the people pushing for this were Democrats so Wall Street became huge donors to the Democrat party as their primary source for money was not investing in business but in facilitating social engineering.
 
But this post is about health care and jobs and the naiveté of the author is on full display.  There are no cost reductions in this bill.  Some will benefit that is true but on the whole the total health care outlay will skyrocket and that total cost will be shared by the rest of us with higher taxes and higher premiums and other costs buried in some arcane ways.  Higher costs will make businesses less profitable and make it less likely that they can higher more people.  So the health care reform, if that is what you can call it, will make some people feel better inside because they will say what good guys they are but in essence will screw the poor and less educated because they will less able to compete in such a world.
 
Way to go, Ms Smith.  You feel better inside but you have made a lot of others much more miserable.  But hey that is what liberals have been doing for over a century.  And it is apparently what the Jesuits are now endorsing by supporting such drek as enlightened analysis.
Stanley Kopacz
8 years ago
To Mr. Cosgrove and the conservatives:

The corruption of both parties is rather obvious. There is no reform in sight that will rein in the power of money. Would that we could replace both parties or at least throw some fear into them. I'm seriously going to challenge one of my conservative (and honorable) friends to make a pact, in which I will vote Green if they will vote Libertarian, when both alternative parties are on the ballot. Then the purer philosophies, whether right or wrong, can battle it out in the open, with less interference from the powers and principalities.

Although I trust my friends, such a pact could also be done on a "trust but verify" basis by going behind the voting booth curtain with each other.

Beth Cioffoletti
8 years ago
You're absolutely right, Stanley.  In order to get to the bottom of this, we have to get beyond politics.  This is where America magazine, and the Catholic Church, come in, with a prophetic witness to the power that money holds over us.
As one Catholic Worker put it, “Evil in the U.S. is riding high in the stirrups”!

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