Did FDR Actually Prolong the Great Depression?

The liberal media are all over themselves anointing Barack Obama as not only the second FDR but also the second Abraham Lincoln (which Obama seems to be vainly promoting himself).

Since for every action there is an equal and opposite reaction, the blogosphere is already debunking FDR (I don’t think anyone would take on Lincoln). Some sites, including Motley Fool and Michelle Malkin, have dredged up a four-year-old research finding that attempted to show how FDR actually prolonged the depression by seven years, thus making it forever remembered as the Great Depression.

UCLA economists Harold L. Cole and Lee E. Ohanian, using a unique argument, claim that the National Industrial Recovery Act (NIRA) allowed companies to avoid collusion charges so long as they let wages be determined by collective bargaining. Thus, both wages and prices rose by about 25 percent, choking off both new hiring and new spending. In other words, companies acceded to collective bargaining and then colluded with one another to fix prices.

“High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns,” Ohanian said. “As we’ve seen in the past several years, salaries and prices fall when unemployment is high. By artificially inflating both, the New Deal policies short-circuited the market’s self-correcting forces.”

It’s a fun argument, but there’s a big problem with their basic thesis. The NIRA was implemented in 1933 and ruled unconstitutional two years later.

Read “FDR’s policies prolonged Depression by 7 years” and see what you think.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Are New Minimum Wages Fueling Layoffs?

Many have argued that minimum wage laws price certain people out of the job market skill-wise and also lead to layoffs as small businesses cope with their finances and the added burden of higher wages.

In this light, it’s notable that fully 40 percent of the 693,000 who lost their jobs in the latest ADP report (November-December 2008) were from small businesses.

Arthur Bruzzone, a former California state commissioner, frequent columnist and native of the city, writes that San Francisco is really courting disaster with its minimum wage of $9.79 (one of two cities with minimum wages above $9). Team that new rate with mandates to provide health care, paid sick days and transportation assistance, and you can see that City by the Bay small businesses are headhunting–counting heads to chop off the payroll, that is.

In “City Hall’s ‘progressive’ small business mandates will now exact pain,” Bruzzone writes:

City Hall is responsible for bleeding San Francisco’s small businesses. Now the City Hall’s progressive initiatives will bring real pain to thousands of San Franciscans. Of course, those who keep their jobs will have sick leave, health care, higher hourly wages. But what of those who have no job?

Another in a series on the unintended (but foreseeable) consequences of good intentions.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

AHRQ: The (Scary) Little Agency That Thinks It Can

Can do the impossible, that is, which to prescribe which medicines and medical procedures are both most efficacious and most cost-effective. So far, I can find little proof of AHRQ’s accomplishing anything near this goal on the site of the Agency for Healthcare Research and Quality.

AHRQ is in the news since it just got a whole new set of fangs in the Obama stimulus plan (aka the Tom Daschle stealth strategy for health care reform). Rush Limbaugh and the Washington Times have equated the new powers of AHRQ to Hitler’s program of euthansia for the old, infirm and disabled of any age. These people are not productive, so why treat them and waste resources? Get rid of ’em.

Daschle, of course, is not prescribing euthansia per se, but he wants a federal agency (which is now the AHRQ, ironically started under Dubya in 2004) to determine, among other things, when someone in the last stages of life should be denied services and asked to give up the ghost. Daschle says that seniors should gladly accept “hopeless diagnoses” and “forgo experimental treatments,” except when it comes to pols like himself who will get the gold standard of cradle-to-grave health care. (Can you imagine Ted Kennedy’s being denied brain-tumor surgery last year even when a majority of doctors proclaimed it a waste of time and money, which they actually did?)

I keep bringing up Daschle’s name because it was his prescriptions for a federal agency to determine most cost-effective treatments and to track everyone’s health care through electronic records that was slipped into the stimulus bill under the innocuous-sounding name of the Health Information Technology for Economic and Clinical Health (HITECH) Act–and then rushed into law before anyone had a chance to thoroughly read it.

Except Betsy McCaughey, former lieutenant governor of New York who’s been tracking health care matters, when she did read it and warned that you can “Ruin Your Health With the Obama Stimulus Plan,” especially if you’re a senior citizen.

Is the AHRQ really that scary and powerful? Not yet. I read through some of its Web site pages and found nothing revolutionary. In fact, it looks to be an impossible task for any person or agency to make valid health care cost-containing assessments. The best AHRQ could do was to compare findings of 61 studies on treating hypertension and to conclude that both angiotensin-converting enzyme inhibitors (ACEIs) and angiotensin receptor blockers (ARBs) are equally effective, though the former have generic brands available while the latter don’t, yet.

Which means that the best anyone is going to do in measuring effectiveness in health care is to rule out quackery–and then just to rule out high-cost medicine, with a few rare exceptions (Daschle and company). Which is where it all really gets scary–down the line in the future when Obama and others call it a “health care crisis” and “we have to act now.” Wham, bam, no more angioplasties (fill in the blank) after age 62 (fill in the blank) and so on.

What really got me scared came when MSNBC’s Keith Olbermann, who’s never gotten any fact or issue correct in his life (except baseball arcana), felt compelled to devote a whole show to “debunking” the charges by Limbaugh and McCaughey.

McCaughey’s response? “Let’s hold a debate.”

Problem is, people like Olbermann don’t won’t a debate–they want a crisis, real or imagined.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Unions, Schmunions–What, Me Worry?

For all the celestial disturbance over the proposed Employee Free Choice Act (EFCA), you wouldn’t know it from a poll I just discovered at the Manpower Employment Blawg.

The blog posted this question:

What is the #1 most frightening employment law issue you’re facing right now?

And got these results:

1. Terminations (26%)
2. Discrimination (13%)
3. Medical issues (10%)
4. Harassment (9%)
5. (Tie) Wage and hour (8%) and Benefits (8%)
7. Hiring (7%)
8. RIFs (6%)
9. Unions (3%)

So, unions are at the bottom of the list, are they? That being the case (in a very unscientific survey), why all the hubbub over EFCA?


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Egads, Our Medical Records Are an Open Book!

Well, not quite. They can’t legally be published online or in a print publication, but they can be shared with too many groups without our consent.

Most people have never heard of HIPAA, the Health Insurance Portability and Accountability Act of 1996, but that law is the source of what privacy rights we have and don’t have. HIPAA directed the federal government to establish privacy rules for personal health records, which it did twice, once under Clinton and once under Bush.

As a result, these following named groups have the right to share, view, discuss and whatever else your so-called private health records:

  • Data-processing companies
  • Insurers
  • Researchers (in some instances)
  • Hospitals
  • Doctors (even those not treating you)
  • Law enforcement officials
  • Public health officials
  • Federal government

The issue is now magnified because one of Barack Obama’s plans for socializing, I mean streamlining (government can streamline?) the health care system is to put everyone’s medical record on a nationwide electronic database.

Can you imagine the abuse the aforementioned entities could inflict on unsuspecting Americans if they had instant computer access to everyone’s medical history?

The history of the HIPAA privacy rules is fairly fascinating, so take a trip to find out more at The Institute for Health Freedom.

(If you’re a businessowner, you’ll need to master and implement your responsibilities under HIPAA, and there’s no better way to do that than to purchase a copy of Personnel Concepts’ HIPAA Compliance Kit.)


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

COBRA Is Aptly Named; It Bites Its Victims

The Consolidated Omnibus Budget Reconciliation Act of 1985, now known as COBRA, contains a clause allowing employees to keep their company’s health insurance for up to 18 months after they leave their jobs, provided they pay the premiums.

With people being laid off right and left and the ranks of the unemployed rapidly swelling, many Americans are getting their first introduction to COBRA–and they don’t like it. It ain’t cheap; it’s the whole enchilada, not just the small portion of the premium they may have paid at work.

In nine states, monthly unemployment benefits barely cover or don’t cover the premium for COBRA. They are Alabama, Alaska, Arizona, Delaware, Florida, Louisiana, Mississippi, South Carolina and West Virginia.

Nationally, COBRA costs on average gobble up 84 percent of monthly unemployment checks for families (more than 30 percent for individuals). Factor out the nine states already mentioned, and the average is still 75 percent for the remaining 41 states for family coverage.

Now, I know what many people are going to conclude from these stats–nationalize health care! Granted, that would start to alleviate the situation, but under none of the proposals now floating in Washington, D.C., would the individual or his or her employer not have to pay (substantially) for the “right” to health insurance.

And if the system works anything like the health care delivery platforms in Canada and France, for instance, you’d have to buy supplemental insurance to cover things like, well, operations beyond the tonsil removal variety–to say nothing of enduring long waits for doctor visits, tests and hospitalization, sometimes stretching out to months and even years in Canada.

“We’ve got to cut your tumor out immediately, Bob, or you’ll not make it another six months,” the Canadian doctor explains.

“Great, let’s get it done,” Bob replies quite naturally.

Doctor: “Unfortunately, there are no hospital openings for 18 months.”

That kind of thing.

The one time I got laid off, I received the COBRA notice in the mail and immediately knew I couldn’t pay the premium. It was just under $2,000 a month for my family. I could pay the premium and lose my house or stay in my house and worry about everyone’s health needs. I stayed in the house, and fortunately nothing happened. (However, I did learn how to buy my medications from Canada, which in many cases is still cheaper than paying the co-pay here!)

That’s why I compare COBRA to the snake of the same name–it’ll bite you.

Maybe those long lines and waits are better, but I’m hoping there’s a still better solution.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Lilly Ledbetter Triumps Over (In) Congress

A week ago I wrote that the Lilly Ledbetter Fair Pay Act was being put on fast track for passage by the 111th Congress. With a snap of their fingers (actually, pushing their “yes” buttons), members of Congress did just that and sent Lilly over to the Senate, where Harry Reid and other leaders are confident of having the necessary votes to choke off a Republican filibuster.

(To recount, the Fair Pay Act reverses a Supreme Court decision regarding when the statute of limitations begins on pay discrimination complaints. The court said it begins once the pay-discrimination decision is made; the new law says it begins anew each time a paycheck is issued.)

Meanwhile, this opening salvo in the pro-employee, pro-union, pro-trial-lawyer assault on Bush’s eight pro-business years is already drawing criticism and producing warnings.

So far, I haven’t heard the word “Armageddon” used in connection with the Fair Pay Act (as it was used toward the Employee Free Choice Act), but here’s one dire warning from Forbes.com:

Libertarian Richard A. Epstein calls the passage “Democratic Death Wish On Labor Relations.”

Interesting stuff. Epstein is a libertarian and a professor of law at the University of Chicago. He predicts that companies will now have to spend more time preparing for legal action and more time defending themselves in court in cases involving lots of “stale evidence.”

He writes that “every dollar that is spent in litigating the past is one less dollar for hiring new workers.”

Everytime a new labor law comes up for a vote, just remember who contributed the most to the Democrats and Barack Obama in the November 2008 election–unions and trial lawyers. Then you can see who’s really going to benefit from any laws or economic stimulus packages coming out of D.C.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Businesses Fear His Very Sight

Tom Mundy earns a princely income in California by going around to various business establishments with an eye to finding violations of the ADA (Americans With Disabilities Act), usually related to accessibility issues. In one instance, the condiments counter at a fast food joint was one inch too high to be properly accessible. So what did Mundy, who himself is disabled and in a wheelchair, do?

Like any good, red-blooded American, he sued, of course. In cahoots–oops, I meant in concert–with his lawyer, Mundy is chalking up enough settlements each year to fill his pockets at the six-figure pace. He calls what he does advocacy; others say it’s nothing but extortion.

HERE’S HIS FULL STORY

Meanwhile, I strongly advise any of you owning businesses to keep abreast of ADA requirements (recently affirmed and expanded by the ADA Amendments Act) by procuring a copy of Personnel Concepts’ ADA Compliance Kit.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

New Perspectives on the Unemployed

I ran across a blog posting today by someone named Chef Sheila, but it appears as if the article itself was done by someone else judging by the first paragraph that praises “this journalist’s informative piece” (unless she’s vainly referring to and complimenting herself).

Be that as it may, the piece is called “Meltdown 101: Unemployment by the numbers,” and it starts off by factoring in categories of unemployed and underemployed that the “official” figures excludes and comes up with a total unemployment rate for December 2008 of 21 million people, or 13.5 percent unemployed. That’s compared to the official rate of 7.2 percent, or 11.1 million.

If you want more details on how that figure was pieced together, just hit the hot link above, but what I personally found most interesting was a breakdown of unemployment by category, to wit:

DECEMBER UNEMPLOYMENT RATE BY GROUP:

7.2 percent: Adult men
5.9 percent: Adult women
9.5 percent: Female heads of households
5.1 percent: Asians
6.6 percent: Whites
9.2 percent: Hispanics
11.9 percent: Blacks
20.8 percent: Teenagers
15.3 percent: Construction workers
17 percent: Agriculture workers
2.3 percent: Government workers

There is a wealth of other statistics and information available, so hit the ol’ hot link above. When I finally read to the end of the article, I realized that it had been taken from AP (without permission?) and was written by AP Business Writer Ellen Simon.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top

Republic Windows and Doors Offers WARN Test Case

The WARN Act (Worker Adjustment and Retraining Notification Act) specifies that 60 days’ notice must be given in firms with more than 100 full-time employees when large-scale layoffs are going to take place. The act kicks in when 50 employees at one location are laid off within a 30-day period, or when 33 percent of the workfoce is laid off, or when 500 employees are laid off (regardless of the percentage of the workforce).

However–and there are a lot of howevers in WARN–the window extends to 90 days when the layoffs are staggered but reach those same thresholds in combination. (“Caught you trying to cheat!” is the emphasis here.)

Here’s another however: WARN defines full-time employees as those who have averaged at least 20 hours per week in six of the past 12 months, or another definition–if the entire workforce averages 4,000 hours per week excluding overtime.

I bring this up for a couple of reasons. One is that the incoming Obama administration has been loud about extending the 60-day notification to 90 days. The other is that just this week one union at Republic Windows and Doors in Chicago (remember the showdown over WARN during that factory shutdown?) filed suit to force the owners to return equipment to the Chicago site that was reportedly relocated before closing.

Now, here’s the interesting part: The union alleges that Republic’s owners ferreted away the machinery in the middle of the night to a location in Indiana, where they intended to set up new, non-union operations, and then told the workers that the Chicago firm was shutting down because Bank of America wouldn’t extend them a line of credit.

If this is true, it brings to light a fascinating new wrinkle and shows that Republic did indeed scheme to avoid WARN.

In the end, to avoid a public relations nightmare, BofA forked over about $1.5 million to Republic, and the workers received 60 days of pay and benefits.

Which brings up the final point: There’s no way an employer would want dozens of laid-off workers sitting around the workplace for 60 days while knowing they’re getting the axe. It’s doubtful they’d do much constructive work, and it’s likely that pilferage and sabotage would take place. Pay them 60 days’ worth and see them off.

So, if the Obama team manages to up the WARN stakes, many companies will face paying three months of wages and benefits just to downsize in an effort to survive in tough economic times.

Better to gid rid of them now! LOL Just kidding, of course.


NOTE: The details in this blog are provided for informational purposes only. All answers are general in nature and do not constitute legal advice. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The author specifically disclaims any and all liability arising directly or indirectly from the reliance on or use of this blog.
GoTo top Top