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Below is a guest post from the Sound Money Defense League. CRI does not necessarily endorse or oppose the views expressed in the article below, but we do believe it’s important to understand the value of money and how currencies get debased.

We Americans no longer carry gold and silver money in our pockets and purses as our grandparents did during their lives. But we still carry the history, legacy and spirit of those gold and silver coins in our language – with more meaning than you might imagine.

“Sound money” has a clear message recognized for centuries around the world. It describes the musical, metallic ring of a gold, silver, or copper coin dropped on any hard surface of glass, stone, wood, or metal. Sound money literally refers to real wealth, with a natural, unmistakable signature of honesty and integrity, as opposed to the swishy paper and plastic debt used almost exclusively today.

The term “sound money” is believed to come from Ancient Rome, where small silver coins were standard in everyday commerce, for paying Roman soldiers to buying exotic goods from all corners of the known world. As Rome squandered its wealth, it found what seemed an easy shortcut to shore up the treasury. It gradually debased those silver coins with common metals, ultimately cutting the silver content to just 5 percent.

But that didn’t fool anyone for long, most of all disciplined Roman soldiers, who did not appreciate being paid with worthless mystery metal in return for risking their lives on Rome’s bloody battlefields.

Do You Want True Money or a Debased Dud?

Not every Roman soldier had room in his gear for a touchstone, usually fieldstone or slate, also used to test the purity of metals. But they quickly discovered the difference in the sound of true money and a debased dud.

They recognized that real silver had a distinctive melodious ring when bounced on a hard surface, such as the blade of a handy sword, a bronze breastplate, or an ornate marble floor. Sound money carried the ‘ring of truth,’ while debased coinage landed with a dull, disappointing thud.

The debasement of Rome’s silver currency unmasked the deceit of a bankrupt empire, which ended with the fall of Rome, a pattern repeated many times. Sound money’s “ring of truth” had found its place in the history of money and of nations.

As the United States grew westward to the Pacific Coast and north to Alaska, gold, silver and copper coins of all nations were legal tender in the young United States until the 1850’s, and were in use even long after that. Americans with no formal education in reading, writing and arithmetic relied on the sight, sound, and feel of the only money they knew. Learning the different musical ringing sounds of those coins could easily qualify even a prairie settler fresh off the wagon train as an economic expert.

In the Old West of the range roving American cowboy, the ring from that silver dollar tossed on the bar of polished oak told the saloon keeper he was pouring whiskey for sound money, and not for a counterfeit forgery.

The sound money test unmasked one of the most famous counterfeiting schemes in American coinage history. The Liberty Nickel (1883-1913) was originally struck without the words “Five Cents,” bearing instead only the Roman numeral “V.” Gold plated Liberty Nickels were passed off as a newly designed $5 gold piece, but the sound money test quickly identified the scandal. Within six months of issuing the first “V” nickels, the U.S. Mint added the words “Five Cents.” But for the next many years, every Liberty $5 Half Eagle in town was tested for its ring of truth.

Sound money means simplicity, honesty, and trustworthy recognition. It stands for strength and durability, which were also characteristics of those pioneering Americans who built our nation.

The ring of sound money for centuries has transcended borders and nationalities by singing its own melodic language. No matter what words were stamped into a precious metal coin, that ring of sound money certified its value, or exposed the deception.

Governments Have Distorted the Meaning of Money

“Sound money” carries such a powerful message there’s little wonder that governments issuing paper fiat currency have attempted to corrupt its meaning, with help from unimaginative and lazy educators and journalists.

“Hard currency” first referred to metal coins, not paper money, but the term over the years has come to mean that flimsy, paper, folding cash is more trustworthy than a handwritten check or IOU.

“Good as gold” is another aberration of “sound money,” usually referring to credit worthiness, even though there is no credit as good as gold.

When Washington and Wall Street began pushing plastic credit cards, which are nothing more than debt disguised as wealth, Americans were introduced to the gold card along with the credit rating and FICO score as a false measure of one’s financial worth. Today, the newest edition of the $100 Federal Reserve note carries a golden inkwell and feather pen, as if to sarcastically say money itself is a masquerade of paper script and not precious metal.

Americans today have no memory of those times when gold, silver, and copper coins were tossed across a store counter, or counted out by hand, to pay for everything from penny candies to Ford Model-T automobiles. That era began ending when President Roosevelt in 1933 outlawed the use of gold coins in everyday American commerce.

The separation of Americans from their Constitutional heritage to true money continued through 1964, with the end of small coinage containing 90% silver. The deception was complete by 1982 when copper quietly disappeared from the Lincoln penny.

But no government could remove the ringing echo of sound money from history, or from us. And government cannot camouflage its counterfeits with gold colored paint. You can experience sound money’s evident ring of truth for yourself. Toss any gold or silver coin on your kitchen table and you will hear the history of honest money ringing down through the centuries.

And perhaps, thanks to grassroots projects like the Sound Money Defense League, you will hear the trumpeting of better days to come.

Sound Money Defense League and MoneyMetals.com columnist Guy Christopher is a veteran writer living on the Gulf Coast. A retired investigative journalist, published author, and former stockbroker, Christopher has taught college as an adjunct professor and is a veteran of the 101st Airborne in Vietnam.

 

employeefreedom.org

August 16-22 is National Employee Freedom Week, an annual national campaign that informs union members about their workplace rights, specifically their right to decide if they want to be union members. NEFW consists of a record 101 organizations in 42 states. CRI is one of those 101 groups and Delaware is one of those 42 states.

This week brings a lot of hand-wringing from ardent union supporters and leaders, who are concerned about having as many union dues-payers as possible, even to the detriment of their own members. Within minutes of promoting #EmployeeFreedom on Twitter, we were bombarded with attacks such as:

  • “what a moronic statement they do decide if they want to unionize! They vote YES!”
  • “removes the right to unionize public employees. Get your facts in order before you advocate “.
  • And our favorite, “ = for oligarchy control over women”.

Let’s be clear about why CRI supports Right to Work. We have no interest in denying people who want to unionize the right to do so. We do not dispute the benefits unionization once brought to this country, in making work conditions better for millions of workers who were exploited by unscrupulous corporate bosses. If you want to know what we mean, visit a coal mine when you can and learn about the horrible manner in which employees were treated worse than animals, exploited to death. Their efforts led to changes in government law and nowadays treating employees like cattle is legally impossible, not to mention bad PR.

However, over time, unions became less about making the workplace safer and more about making money, both for workers and for union bosses, at the expense of business owners or the taxpayers. We will not even go into details about the money laundering for political purposes which offends a lot of union members, who don’t want any of their dues money going to political causes, especially ones they do not agree with. Do not be fooled by union talk about not giving money to candidates or causes. They do so, just often via PACs or other loopholes.

Over time, many union rank-and-file became dissatisfied with their union for one reason or another. Some didn’t like the union politics. Others did not feel as though they were receiving adequate benefits for the dues they pay. Some may simply have thought they could negotiate for themselves better and didn’t want to pay someone else to negotiate for them. Some others don’t like some of the union practices, such as unions which insist on promotions by seniority and not by merit, or “paying your dues first”.  Others may have seen the hurting economy around them, and realized that labor unions were becoming part of the problem (for proof, look at the auto industry.)

Meanwhile, private sector union membership is falling. In 1990, Delaware had about 49,000 private sector union members. Today that number is closer to 25,000 and going down. General Motors, Chrysler, DuPont, Georgia Pacific, and Evraz Steel have closed factories and left the state, leaving many blue collar workers without jobs.

Forced unionization is not the only reason businesses have left. A lot of it is due to a declining business climate created as a result of poor decisions made by the Executive and Legislative branches. The threat of union bosses coming to manufacturers and demanding exclusive bargaining rights, however, encourages businesses to just move to a state where no employee can be compelled to join a labor union if they do not want to. Some states have seen a decline in union membership, others have seen an increase due to the total number of jobs available. Those who want to be unionized, vote to do so. Those who do not, keep their money and eschew their benefits.

Rather than do right by their members and provide the rank-and-file with membership benefits that create happy union employees, union bosses instead attack the CRI’s of the world and complain we’re doing the Koch Brothers bidding, or something like that. They choose to go negative instead of going positive. Their actions do nothing to encourage their members to want to stay, which is the number one reason membership is declining. Rather than attack us for standing for employee’s rights, they ought to ask themselves WHY a large percentage of union members want to leave. No one should be surprised that Scott Walker got 38% of the union household votes in his 2012 recall election, according to Edison Research.

We all know there is a problem in this country when it comes to creating new job opportunities, and it’s heartbreaking to see so many decent-paying jobs leave our state. We know that so-called “Right to Work” and “Employee Freedom” laws will not solve our blue-collar jobs decline on their own. They are, however, important checkboxes employers look for before investing in a state.

We want more people to see that the solution to having better-paying jobs is to create an atmosphere which encourages businesses to come here and feel like they are wanted, not despised. We want employees to be able to have a say in who represents them and what benefits they receive. For these reasons, CRI proudly supports National Employee Freedom Week.

Union workers: Learn more about your rights here

photo credit to learnaboutancientrome.weebly.com.

Below is a guest post from Lawrence Reed, president of the Foundation for Economic Education. The Foundation for Economic Education, founded in 1946, is the leader in education, publishing, and the production of ideas related to the economic, ethical and legal principles of a free society. Republished with permission.

More than 2,000 years before America’s bailouts and entitlement programs, the ancient Romans experimented with similar schemes. The Roman government rescued failing institutions, canceled personal debts, and spent huge sums on welfare programs. The result wasn’t pretty.

Roman politicians picked winners and losers, generally favoring the politically well connected — a practice that’s central to the welfare state of modern times, too. As numerous writers have noted, these expensive rob-Peter-to-pay-Paul efforts were major factors in bankrupting Roman society. They inevitably led to even more destructive interventions. Rome wasn’t built in a day, as the old saying goes — and it took a while to tear it down as well. Eventually, when the republic faded into an imperial autocracy, the emperors attempted to control the entire economy.

Debt forgiveness in ancient Rome was a contentious issue that was enacted multiple times. One of the earliest Roman populist reformers, the tribune Licinius Stolo, passed a bill that was essentially a moratorium on debt around 367 BC, a time of economic uncertainty. The legislation enabled debtors to subtract the interest paid from the principal owed if the remainder was paid off within a three-year window. By 352 BC, the financial situation in Rome was still bleak, and the state treasury paid many defaulted private debts owed to the unfortunate lenders. It was assumed that the debtors would eventually repay the state, but if you think they did, then you probably think Greece is a good credit risk today.

In 357 BC, the maximum permissible interest rate on loans was roughly 8 percent. Ten years later, this was considered insufficient, so Roman administrators lowered the cap to 4 percent. By 342, the successive reductions apparently failed to mollify the debtors or satisfactorily ease economic tensions, so interest on loans was abolished altogether. To no one’s surprise, creditors began to refuse to loan money. The law banning interest became completely ignored in time.

By 133 BC, the up-and-coming politician Tiberius Gracchus decided that Licinius’s measures were not enough. Tiberius passed a bill granting free tracts of state-owned farmland to the poor. Additionally, the government funded the erection of their new homes and the purchase of their faming tools. It’s been estimated that 75,000 families received free land because of this legislation. This was a government program that provided complimentary land, housing, and even a small business, all likely charged to the taxpayers or plundered from newly conquered nations. However, as soon as it was permissible, many settlers thanklessly sold their farms and returned to the city. Tiberius didn’t live to see these beneficiaries reject Roman generosity, because a group of senators murdered him in 133 BC, but his younger brother Gaius Gracchus took up his populist mantle and furthered his reforms.

Tiberius, incidentally, also passed Rome’s first subsidized food program, which provided discounted grain to many citizens. Initially, Romans dedicated to the ideal of self-reliance were shocked at the concept of mandated welfare, but before long, tens of thousands were receiving subsidized food, and not just the needy. Any Roman citizen who stood in the grain lines was entitled to assistance. One rich consul named Piso, who opposed the grain dole, was spotted waiting for the discounted food. He stated that if his wealth was going to be redistributed, then he intended on getting his share of grain.

By the third century AD, the food program had been amended multiple times. Discounted grain was replaced with entirely free grain, and at its peak, a third of Rome took advantage of the program. It became a hereditary privilege, passed down from parent to child. Other foodstuffs, including olive oil, pork, and salt, were regularly incorporated into the dole. The program ballooned until it was the second-largest expenditure in the imperial budget, behind the military.It failed to serve as a temporary safety net; like many government programs, it became perpetual assistance for a permanent constituency who felt entitled to its benefits.

In 88 BC, Rome was reeling from the Social War, a debilitating conflict with its former allies in the Italian peninsula. One victorious commander was a man named Sulla, who that year became consul (the top political position in the days of the republic) and later ruled as a dictator. To ease the economic catastrophe, Sulla canceled portions of citizens’ private debt, perhaps up to 10 percent,leaving lenders in a difficult position. He also revived and enforced a maximum interest rate on loans, likely similar to the law of 357 BC. The crisis continually worsened, and to address the situation in 86 BC, a measure was passed that reduced private debts by another 75 percent under the consulships of Cinna and Marius.

Less than two decades after Sulla, Catiline, the infamous populist radical and foe of Cicero, campaigned for the consulship on a platform of total debt forgiveness. Somehow, he was defeated, likely with bankers and Romans who actually repaid their debts opposing his candidacy. His life ended shortly thereafter in a failed coup attempt.

In 60 BC, the rising patrician Julius Caesar was elected consul, and he continued the policies of many of his populist predecessors with a few innovations of his own. Once again, Rome was in the midst of a crisis. In this period, private contractors called tax farmers collected taxes owed to the state. These tax collectors would bid on tax-farming contracts and were permitted to keep any surplus over the contract price as payment. In 59 BC, the tax-farmer industry was on the brink of collapse. Caesar forgave as much as one-third of their debt to the state. The bailout of the tax-farming market must have greatly affected Roman budgets and perhaps even taxpayers, but the catalyst for the relief measure was that Caesar and his crony Crassus had heavily invested in the struggling sector.

In 33 AD, half a century after the collapse of the republic, Emperor Tiberius faced a panic in the banking industry. He responded by providing a massive bailout of interest-free loans to bankers in an attempt to stabilize the market. Over 80 years later, Emperor Hadrian unilaterally forgave 225 million denarii in back taxes for many Romans, fostering resentment among others who had painstakingly paid their tax burdens in full.

Emperor Trajan conquered Dacia (modern Romania) early in the second century AD, flooding state coffers with booty. With this treasure trove, he funded a social program, the alimenta, which competed with private banking institutions by providing low-interest loans to landowners while the interest benefited underprivileged children. Trajan’s successors continued this programuntil the devaluation of the denarius, the Roman currency, rendered the alimenta defunct.

By 301 AD, while Emperor Diocletian was restructuring the government, the military, and the economy, he issued the famous Edict of Maximum Prices. Rome had become a totalitarian state that blamed many of its economic woes on supposed greedy profiteers. The edict defined the maximum prices and wages for goods and services. Failure to obey was punishable by death. Again, to no one’s surprise, many vendors refused to sell their goods at the set prices, and within a few years, Romans were ignoring the edict.

Enormous entitlement programs also became the norm in old Rome. At its height, the largest state expenditure was an army of 300,000–600,000 legionaries. The soldiers realized their role and necessity in Roman politics, and consequently their demands increased. They required exorbitant retirement packages in the form of free tracts of farmland or large bonuses of gold equal to more than a decade’s worth of their salary. They also expected enormous and periodic bonuses in order to prevent uprisings.

The Roman experience teaches important lessons. As the 20th-century economist Howard Kershner put it, “When a self-governing people confer upon their government the power to take from some and give to others, the process will not stop until the last bone of the last taxpayer is picked bare.” Putting one’s livelihood in the hands of vote-buying politicians compromises not just one’s personal independence, but the financial integrity of society as well. The welfare state, once begun, is difficult to reverse and never ends well.

Rome fell to invaders in 476 AD, but who the real barbarians were is an open question. The Roman people who supported the welfare state and the politicians who administered it so weakened society that the Western Roman Empire fell like a ripe plum that year. Maybe the real barbarians were those Romans who had effectively committed a slow-motion financial suicide.

read the original post at the FEE website here

pictured: Milton and Rose Friedman. photo: Friedman Foundation for Educational Choice

Today CRI celebrates the 103rd birthday of Dr. Milton Friedman, a man who was ahead of his time in recognizing the need for school choice to be available to all children, so that more children would be able to obtain a quality education, suited to their needs, and not be forced to live in poverty merely because of how they were raised.

Dr. Friedman wrote about school choice in his book Free to Choose in 1980, and dedicated a full chapter to the idea that parents should be allowed to choose schools for their children. It was based on the market idea of economics- schools should not be seen as sacred government buildings dedicated to protecting adult’s jobs, but as forces which should strive to provide the best services to its “customers” (students), and if they fail to do this, then the school either needs to be reformed, or the students should be allowed to go to another school which better serves their needs. This choice should be allowed irregardless of the parents’ income, or residential zip code which too often constrains students, particularly poor students, in poorly performing schools with no way out.

Advocates of public education for all will insist that education should not be  “privatized” and left to the evils of “capitalism.” Yet notice how upper-middle class and upper-class families handle their children’s’ education- private schools, charter schools such as the Charter School of Wilmington, home school, boarding school (for the very wealthy), or top-performing public schools. Notice how wealthier families do not feel the need to be constrained by zip code? There is a reason for this. Despite bluster by opponents of parental choice about how “privatization” is evil, rich parents will choose that option because the school must compete for the parent’s tuition dollars. If the school performs poorly, or does not serve the child’s needs, the child will be removed from the school.

When a similar situation happens in public school, teacher’s union leaders, superintendents, and local politicians wax poetic about the need for more “investment.” Never mind that Delaware spends $23,000 a year per student. But, teachers in Delaware earn roughly $59,000 a year minus benefits. Clearly, most of the money spent per pupil doesn’t pay teachers, even as debates over raising teacher’s pay are played out in districts around the country. Where is this money going? Wherever it is, expect those getting this extra funding to fight back against any efforts to take their money away, no matter how weak their justification for more “investment” is.

The poor performance of too many public schools causes parents with the means to do so to pull their kids out of public school. The kids who are left are usually poor, come from dysfunctional homes or impoverished neighborhoods, and are not offered a clear pathway to success. Combined with the influx of new students coming from recently arriving immigrant families, many of whom live in homes where English is not the first language, and an endless number of “Visions”, mandates, and standardized tests, these schools are not going to be in position to best help the children.

The goal of school choice is not, as our opponents allege, to “dismantle” public education or somehow sell it to multinational corporations. The goal is to merely go back to basic principles of greed, ambition, and what motivates us. Monopolies, by definition (which is how a lot of public school districts are operated, especially in low-income areas), nearly always provide poor quality, high prices, and poor customer service, because the human need to do better falls flat when there is no reward for doing so. We do not suggest people intentionally fail or desire to see kids suffer, because we know the vast majority of teachers, counselors, principals, and other building staff sincerely want to see children do well. In fact, teachers and counselors, especially in private schools, make very little money because teaching is their passion. They know they will never get rich teaching or advising.

The problem is, there is a system in place which has made too many people too comfortable, too dependent on the system to continue, and too unwilling to consider alternatives out of fear of what might happen if there are serious changes to the status quo.

We point out that teens and young adults around the country choose colleges or learning institutions right for them. If the school is not a match, the student leaves and goes elsewhere, or goes to work or to the military. Federal student loans are offered to students who go to private colleges which compete with public ones. Yet public schools are still very much around. Clearly school choice for college has not destroyed public education, and it will not destroy public education in K-12. All that will happen is, some people who believe they have a guaranteed job might lose it unless they are pressured into the marketplace of ideas.

All this was Dr. Friedman’s vision: great schools for all, and a vision of the best, most competitive education system serving student’s needs, the way colleges compete. Today we honor a man whose foresight has inspired the rest of us to see nothing less than a great system of education, improving the economic opportunities of all students no matter their household income, neighborhood, or learning challenges.

Here’s to you, Dr. Friedman.

His quotes:

“Our goal is to have a system in which every family in the U.S. will be able to choose for itself the school to which its children go. We are far from that ultimate result. If we had that — a system of free choice — we would also have a system of competition, innovation, which would change the character of education.”
— CNBC Interview Transcript, March 2003

“It is only the tyranny of the status quo that leads us to take it for granted that in schooling, government monopoly is the best way for the government to achieve its objective.”
— “The School Choice Advocate,” January 2004

“Improved education is offering a hope of narrowing the gap between the less and more skilled workers, of fending off the prior prospect of a society divided between the “haves” and “have nots,” of a class society in which an educated elite provided welfare for a permanent class of unemployables.”
— “The School Choice Advocate,” July 1998

There are many things we’ve been critical of in regards to our state government, but here’s one area where the state earned high regards from one of our associates.

The Heartland Institute published their 2015 Welfare Reform Report Card  which shows a serious effort by the state to control need-based-aid, often referred to as “welfare”, and to get people who are able to work into jobs and not let them sit around collecting a check while they smoke Newport 100s while their left-wing Statist advocates claim we need to spend more “to help the poor”. There is no shame in providing a safety net for emergencies, such as homelessness, immediate unemployment, physical or mental disability (which prevents work or basic living functions), and hunger.

However, Statists from both major parties, but one in particular, have built a large web of government agencies which employ tens of thousands of public employees whose salaries and benefits drain the Treasury, and whose agencies continuously provide healthy individuals with a basic lifestyle that traps too many healthy, able-bodied people in a cycle of dependence, basically unable to get off the program to take care of themselves. They are then pressured to keep voting for those who redistribute the wealth, because those elected officials come into poor communities bearing horror stories of people dying in the streets, babies and pets going hungry, just before the world ends, if they vote for a candidate who wants to curb the perpetual welfare state. Have you noticed just how many able-bodied people who begin to receive these benefits keep earning them forever, unless encouraged to go find a job?

We at CRI believe human dignity and satisfaction best come from feeling a sense of worth to society as a whole, and being able to work a job which offers the ability to provide for oneself and one’s family, while also saving for future goals- a nice vacation, a house, a nice car, or whatever one desires and can earn through savings and interest. Even the argument over falling worker wages can be resolved using the principles of freedom- healthy market competition boosts worker’s wages by encouraging more hiring so there are more better-paying jobs than people, rather than what we have today, which is more people than better-paying jobs.

The Heartland Institute gave Delaware an overall grade of A- for welfare reform, going back to 2009 when Governor Markell was sworn in. We are ranked the 8th best state for welfare reform, dropping five places from 2008, largely because Delaware has done little to change its welfare reform policies while other states have improved theirs.

Some of their findings:

  • Delaware got top grades for work requirements and for “cash diversions”  (policies allowing case workers to give applicants lump sum cash payments to meet short-term needs), a B for service integration (organizing state human services in a way that allows coordinated, holistic, “one-stop” delivery of services and connects these services to the local community and employers), and C’s for aid limits and sanctions on those who don’t meet comply with eligibility requirements.
  • We spent $6,378 per recipient in 2013 (latest available data), and had just over 13,000 recipients of Temporary Assistance for Needy Families, which has declined 75% since 1996.
  • Where Delaware needs to improve is in anti-poverty measures. Close to 25% of Delawareans receive Medicaid, and sadly we have more children in poverty today than we had 20 years ago when the first set of welfare reforms was passed. Finding jobs for the unemployed poor has been an issue for Delaware, and Heartland ranked us 47th in finding jobs for those who are or were receiving TANF benefits. The only area where Delaware got strong ratings for anti-poverty was in having a low teen birthrate.

Heartland recommended Delaware adopt tougher time limits and do more to enforce them, and other eligibility requirements.

Overall, Delaware has done well in managing the welfare reform, in terms of having strong work requirements and helping people quickly and immediately, without losing control over monies disbursed. The state just needs to help people move off the bottom much faster than they are currently doing.

The photo of President Clinton is in the Public Domain and was taken from Wikipedia.

Earlier today, the Department of Labor published a new rule requiring overtime pay for workers who make up to $50,400 a year are eligible for overtime pay if they exceed 40 hours a week.

The idea, championed by President Obama, is this: If more employees are eligible for overtime pay (the average American worker makes less than 50 grad a year), then businesses will either pay their hardest-working employees more, or hire more workers to avoid paying the additional overtime penalty. The DOL estimates about 5 million people will benefit from this new ruling.

So this is wonderful, right? It’s well-known that for many people, employers can require more than 40 hours a week at no extra pay because employees are salaried and not hourly. The Cato Institute offers an opinion:

“In the very short run, employers affected by this expansion may have little choice but to pay their employees higher total compensation; in the very short run, employers have few ways to avoid this added cost.

But in the medium term, employers will invoke a host of methods to offset these costs: re-arranging employee work schedules so that fewer hit 40 hours; laying off employees who work more than 40 hours; or pushing such employees to work overtime hours off the books.

And in the longer term, employers can simply reduce the base wages they pay so that, even with overtime pay, total compensation for an employee working more than 40 hours is no different than before the overtime expansion.

So, expanded overtime regulation will benefit some employees in the very short term; cost others their jobs or lower their compensation in the medium term; and have no meaningful impact on anything in the long term.

Is that a victory for middle class economics?”

We at CRI agree with Cato. Just like with every other “well-intentioned” government law, those who are likeliest to “suffer” from it (in this case, employers), will find a way around it, especially in the long-haul. Employees who demonstrate clear value will likely not have to worry about their jobs, but anyone who doesn’t demonstrate clear value should be concerned. While many will benefit right away with the increases in pay, new hires may find their base pay is lower, so their potential overtime is lower. After all, time-and-a-half for a worker at $8.50 an hour is much less than at $15 an hour.

Plus, those who benefit now could see hours cut or, if the overtime pay began to turn business revenues from a profit to a loss, the businesses will lay off employees to stay in the black. This is what’s happened for many people as a result of the ACA: turning full-time workers into part-time in order to avoid the penalty, or simply paying the penalty and dumping people into the health exchanges, since that’s cheaper than offering health insurance. And with insurance companies asking for premiums increases, things are not looking up for American workers.

Last week’s Supreme Court ruling Continues IRS subsidies for 19,128 Delawareans, the beneficiaries of the Affordable Care Act.
  • Roughly 325 people with pre-existing conditions now have health insurance in Delaware.
  • There are 2,502 Delaware companies now subjected to the employer mandate and fines.
  • Since the subsidies have been upheld by the Supreme Court, 309,460 working employees in Delaware are now subject to taxes and fines, of which 32,064 are now mandated to buy insurance or pay 2% of their personal income as a penalty for not having “qualified” insurance.

So nothing has changed which means that small business will continue to be disinclined to grow into this hyper regulatory environment. We have greatly expanded our Medicaid population without expanding the network to care for them, with temporary Federal subsidies. Delaware’s budget liability has precipitously risen from an historic 17%, the national average for states, to well over 20%, much of which will soon be federally unfunded. The future of Delaware Medicaid is grim.

In Delaware, Aetna and BCBS have already asked for rate increases on top of rate increases already imposed. There has been no effort to control health care costs. There are plans now available through the Delaware exchange which have no doctors and no network. Many of the people who enrolled in Delaware’s exchange are now finding they can’t access any healthcare services because there is no network.  What is the point of offering these insurance services if costs are not controlled and doctors are not available?

The stock prices of health insurance industry and hospital networks are surging. Guess who really won last week?

The best hope of a free market correction of a very distorted market were dashed by an activist court that sided with big hospital, big insurance, and big government.

Chris Casscells,MD

Director, Center for Healthcare Policy

Chris Casscells,MD

Director, Center for Healthcare Policy

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