The National Federation of Independent Businesses released a study this month called "Small Businesses and Health Insurance: One Year After Enactment of PPACA". It appears they have found that small business owners are a bit nervous...
Read the full report here.
A finding that stuck out to me was that businesses not currently offering health insurance have no incentive to start offering this benefit after the enactment of the Patient Protection and Affordable Care Act. Once again we see that government intervention in the marketplace discourages incentives for the individual and business and ends up costing everyone more money and fewer choices.
Generally when the government meddles in the private sector, it is bad news and results in limited choice. Say for instance, investing in electric cars or providing tax incentives to theme parks.
Tuesday, July 26, 2011
New study says healthcare reforms make business owners nervous
Saturday, July 23, 2011
Milton Friedman Quote of the Day
"All of these (entitlement) programs involve some people spending other people's money for objectives that are determined by still a third group of people. Nobody spends somebody else's money as carefully as he spends his own. Nobody has the same dedication to achieving somebody else's objectives that he displays when he pursues his own."
Monday, July 11, 2011
Milton Friedman would have a lot to say about Louisville's Metro Sewer District
The recent turmoil at Louisville’s Metropolitan Sewer District (MSD) and Mayor Greg Fischer’s ensuing outside audit of the agency’s management and governance should come as no surprise to Kentuckians, at least to those of us who understand the power of incentives.
And no one understood the power of incentives better than the late Milton Friedman.
As Milton and his wife Rose Friedman wrote in their best-selling work Free to Choose, “Experience shows that once government undertakes an activity, it is seldom terminated. The activity may not live up to its expectation but that is more likely to lead to its expansion, to its being granted a larger budget, than to its curtailment of abolition.”
The governmentally-privileged MSD in Louisville is a textbook example of this lesson.
Why should Kentuckians expect a business that is legally guaranteed a comfortable rate of return to lose much sleep over providing an efficient product through sound management? Barring front page headlines of corruption or political outcry, MSD faces virtually no incentives to lower costs or provide a quality product to consumers. Instead, MSD will soon raise rates by 6.5% per year.
Just think if business worked this way for the little guy… Hey small business owners! As long as you don’t infuriate customers to the point that they’re imploring local officials and rioting in the streets, you’re sure to enjoy a hefty profit!
If only life were this easy for the rest of us.
The Friedmans’ message will be heeded loud and clear at Freidman Day, July 29th, at the University of Louisville.
