I Warned You -- Here Comes the Corporate State

In a European-style corporate state, very large corporations (and their unions) get special protections, privileges, and exemptions, to the detriment of consumers, entrepreneurs, small businesses, and taxpayers.  Here we go, via Russ Roberts:

Nearly a million workers won't get a consumer protection in the U.S. health reform law meant to cap insurance costs because the government exempted their employers.

Thirty companies and organizations, including McDonald's (MCD) and Jack in the Box (JACK), won't be required to raise the minimum annual benefit included in low-cost health plans, which are often used to cover part-time or low-wage employees.

The Department of Health and Human Services, which provided a list of exemptions, said it granted waivers in late September so workers with such plans wouldn't lose coverage from employers who might choose instead to drop health insurance altogether.

Without waivers, companies would have had to provide a minimum of $750,000 in coverage next year, increasing to $1.25 million in 2012, $2 million in 2013 and unlimited in 2014.

"The big political issue here is the president promised no one would lose the coverage they've got," says Robert Laszewski, chief executive officer of consulting company Health Policy and Strategy Associates. "Here we are a month before the election, and these companies represent 1 million people who would lose the coverage they've got."

Actually, the real political question is why McDonald's gets special treatment, but the folks who run the deli downstairs in my building, who effectively compete with McDonald's, does not get to operate under the same law, merely because they are not large enough to get the President's special attention.


  1. A Friend:

    The largest recipient of the waiver was the teacher's union.

  2. Dr. T:

    Again, I will argue against Warren Meyer's belief that Obama is a corporatist. If you're reading this, it means that Mr. Meyer didn't censor my comment as he did a few days ago.

    The federal government, with its ObamaCare legislation, adds new regulations and restrictions on how privately-owned businesses compensate their employees. The regulations effect how (or whether) health care insurance can be offered as an employee benefit. This is a clear-cut example of fascism. Corporations did not ask for ObamaCare and do not want ObamaCare. However, when some large corporations protest the costly ObamaCare regulations and receive partial exemptions, Mr. Meyer (and others) claim that this proves Obama is a corporatist. No, no, no. This is fascism with favoritism. It can only be stopped by fighting the power-hungry politicians and bureaucrats who love fascism. It can not be stopped by fighting CEOs and corporate board members, since they are just reacting to the fascist regulations and restrictions.

    Calling the situation corporatism aids Obama, since he is incorrectly classified as a tool of corporations instead of being classified as the primary promoter of federal fascism.

  3. Time:

    Must be a pretty big deli if they have enough employees to fall under the ACA.

  4. me:

    The only beef I have with this post is the term "European-style" corporate state. The kind of specific government favoritism that is going on in the States would be pretty unthinkable in Germany. The idea here seems more to be that the State ought to come up with good rules for all, whereas pork or regulation aimed at promoting the special interests of specific regions or industries is something of a US speciality.

    That said, the main point that such favoritism is highly counterproductive I couldn't agree more with.

  5. jeff:

    @Dr T, some select health care companies/corporations asked for obamacare. i believe there were 1541 lobbyists who submitted or contributed to the legislation in order to put their corrupt hands into the taxpayer's till.


  6. Dr. T:

    @jeff: Healthcare-related companies knew that Obama wanted to force federal health insurance regulations onto us all. Naturally, those companies lobbied for regulations that would most favor themselves. However, before the Obama presidency, only a handful of those companies had actively advocated federal involvement in what had historically (and constitutionally) been a state-regulated industry. And, even if some healthcare-related companies wanted federal involvement, their wishes should have been outweighed by the hundreds of thousands of businesses that would be adversely affected by ObamaCare. ObamaCare is fascism with a favored few healthcare-related companies doing well financially but still being subjected to more federal regulations and oversight than before. That is NOT corporatism.

    Another example: The federal government deemed that nine commercial banks were "too big to fail" during the mortgage security crisis. Two of the nine were in dire straits. The feds wanted to loan hundreds of billions to the nine commercial banks so that nobody would know which banks were in trouble. Bank of America's CEO Kenneth Lewis actively supported the federal plan. When the federal government later decided that the investment firm Merrill-Lynch was too big to fail, Lewis succumbed to federal pressure and ordered Bank of America Investment Services to buy and merge with Merrill-Lynch. What did Bank of America get for its suck-up efforts? Its stock price plunged more than most of the other commercial banks, Lewis was fired by the Board of Trustees, and the SEC ruled that BAIS had not dotted all the i's and crossed all the t's when acquiring Merrill-Lynch and imposed a two hundred and fifty million dollar fine. Commercial banks and investment firms now are more heavily regulated than ever before. Does this sound like corporatism or fascism? Anyone who believes the former is delusional.

  7. Iain:

    Um, another European calling you out here. This sort of thing is all good old US of A, and wouldn't last a second in the vast majority of EU countries.

  8. Mr. R:

    The point here is the coverage offered my McDonald's and other people had a fairly high premium with a cap on benefits. It is more reasonable for the people on these plans to seek coverage elsewhere, and hopefully someone tells these people this. If they choose to stick with the current plan they are choosing to overpay for bad coverage.

    Search some other blogs for details on the current plans and independent plans. It looks like the exemption was for pure political face-saving measures.

  9. Anthony:

    "In a European-style corporate state", what? I suggest you consult an atlas before you make such a bold statement.

  10. caseyboy:

    This was not a corporate favor. These waivers were granted to prevent the terrible publicity that would have resulted had 30 employers dropped insurance coverage for tens of thousands of employees 6-weeks before the mid-terms. These are 1-year waivers that will not be granted in an off year. "If you like your insurance plan and your doctor you can keep them, I guarantee it." The lies wrapped into Obamacare are too numerous to catalog here.

  11. me:

    And true to prediction, Microsoft dropped it's health insurance plan and replaced it with a rather inferior one. Thank you, Obama.

    Still thinking that "european-style" should be edited out, as Iain said, this the kind of BS you only get in the land of the free.

  12. Doug:

    Its crony capitalism. The feds like to see how many companies they can successfully merge together, because its easier to deal with a smaller number of larger companies than with many modest size ones.

  13. Curtis Rasmussen:

    It's fascism, pure and simple. With Obamacare, the administration can interfere in private business on an unprecedented level. Even if no new waivers are granted next year, following the labyrinthian edicts of this law will be a major task, and the state can negatively and arbitrarily interpret it for you if you don't hold any favored status. Don't believe it? Look at the select waivers granted to date for big, most(vociforous)favored companies. Could all companies be granted one? NO.

    The state continues, in effect, to choose the winners and losers in capitalism (also see the stimulus plan with payouts to unions and big banks). This is as close to fascist dictatorship as this country has come.

  14. Rick Caird:

    Those organizations were protected because it is close to the elections and Sebelius and Obama did not want to remind voters of all the ipending problems with ObamaCare. It does speak to how messed up the legislation really is if Sebelius can just wave her arms and exempt a huge swath of people from the program. I like to tell liberals that when I am President I am going to appoint Dick Cheney to oversee all this. They quiver.

  15. Barry:

    Caseyboy nailed it head on. This was political in nature. Nothing more.

  16. Mercy Vetsel:

    Thanks for the warning. Wait. What was the warning, exactly? I though our options were Coke or Pepsi. A warning implies that we could have done something about it -- say voting for Romney in the Republican primaries or voting for McCain over Obama.

    Since you have no preference between Dems and Repubs and seem to think political involvement pointless, maybe the word you are looking for is PROPHECY.

    A prophecy does not imply that we could have affected the outcome.


  17. Mercy Vetsel:

    Incidentally, I keep harping about Coyote's cowardly refusal to acknowledge that D vs. R is more than Coke and Pepsi because it's so destructive to the movement.

    In the type of Ivy League circles that Coyote likely haunts, voting D is a political fashion statement while voting R is a huge faux paus.

    Sensible, intelligent people who share coyote's view find it personally much more comfortable to pretend to be completely aloof and thus the nonsense about Coke v. Pepsi.

    Personally, I'm at the point in my life and the country is at a point in it's decline where I can no longer pretend to be aloof. For believers in individual liberty, limited government and economic sanity, the Republican Party is our obvious home and as we've seen with the Tea Party, it's possible to reinvigorate it from within.

    So to hell with all of those upper-middle class suburban social climbers and their political fashion statements. I'm a Republican and a libertarian, damn it, and any intelligent, socially-conscious person who really wants to improve the world will do as I do loudly and proudly -- vote responsibly for R.