You heard all of the noise right before the election – “If Obama wins another term, our prices will have to go up” (among other things that will go up or down, like employee numbers, hours, unemployment rates, etc.). There have been a few brave souls that announced that, indeed, the prices for their products will increase – Kentucky Fried Chicken and Papa John’s being two of the loudest thus far. But the real reason for this renewed interest of mine is that Five Guys just alerted the media that they would likely raise prices in the face of Obamacare. Now THAT is a national tragedy.
On many message boards, I see the same twisted economic logic at play that Obama and Obamacare apologists used throughout the elections. A vast majority out there are of two opinions on this increased price nonsense. First, they look at it as a vast conspiracy by those who just want to keep the people down. There’s no need to raise prices – Obama’s re-election is just giving the companies the perfect cover to do so, and only because they want to make more money.
Second, it is a knee-jerk reaction from those who have no idea how economics, and additionally, business, works. They don’t have to raise prices. They can just take less profit, these sweet, naive people believe. Which is exactly how most businesses, especially small business owners, look at the situation.
Why should we let these excess taxes bother us? We should just take less money, and sell our product cheaper than what we would have sold it for had Obamacare not come into the picture. That idea sounds like a real winner. I think I’m going to teach a course on that sort of nonsense at a local grade school – but even those students would be able to tell that I'm full of it.
Which leads me to provide another couple of fallacies I’ve heard from the Obama Administration regarding prices and economics. The first is that the only way to grow the economy is by broadening the middle class. All economic growth, according to the President and his ilk, comes from that specific segment of the population.
What? The middle class works hard, earns their money, and then spends it on food, housing and cars. Occasionally, they’ll make a big purchase – a large TV or a pretty nice vacation – but that’s only once every few years. It’s true the middle class keeps the economy chugging along – if they stop buying things the economy does slow down – but to say that they’re the engine for economic growth is just plain false.
The upper class, the one-percenters, is the pony to bet on when it comes to making the economy soar. How many jobs has Bill Gates created? Hundreds of thousands? And all those workers buy things. They pay their taxes, property, income and sales. Chuck Lunchbox down the street? The only job he’ll create is when he retires. Even then, that’s no sure thing. His employer may not replace him.
The second fallacy is that on the date of Obama’s first inauguration, unemployment was at 7.8 percent. On the date of Obama’s second inauguration, the unemployment rate was at — wait for it — 7.8 percent.
The administration’s spin on this hope but no change moment? Due to W’s policies, unemployment was increasing in 2008. After four years of Obama, it’s now just beginning to decrease. Again, not buying it.
The second 7.8 doesn’t begin to account for those states that “forget” to report their figures or those people that have stopped receiving unemployment benefits and those that have dropped out of the workforce altogether. If we were truly interested in the true number, it would be a staggering one.
Finally, it is about time the current administration and its apologists stop discussing and blaming the issues on W. It’s been four years. Most of us can clean up some substantial stuff in four years. Obama’s administration has done very little to clean up anything – they’ve just made more messes.
Which leads us back to Obamacare. Prices will rise, the middle class will be squeezed and the economy will begin to further collapse. Brilliant. Who wants to type up my name on the next Nobel Prize for economics?
Chris Markham writes a regular column for fredericknewspost.com.