Can Chris Christie Fix New Jersey? Christie Confronts Union Parasite

Real Clear Politics is asking Can Chris Christie Fix New Jersey?

At a New Jersey town meeting, Gov. Chris Christie, the newest YouTube star for the limited government set, was reproached by an unhappy teacher. The governor, facing a budget shortfall of $11 billion, has proposed, among other economies, a one-year salary freeze for New Jersey teachers. Her voice raised in anger (that's a normal speaking voice in my home state), Rita Wilson protested that she should be paid $83,000, the only reasonable compensation in light of her "education and experience." Christie's reply got an ovation: "Well, you know what? Then you don't have to do it."

Meet the newest conservative hero: The Trenton Truth-Teller!

First, the problem: How can smaller-government Republicans win elections when more and more Americans are receiving government benefits while fewer and fewer are paying taxes? In 2010, 47 percent of Americans paid no income taxes at all. Among those who do pay taxes, most pay comparatively little.

But as Christie is demonstrating, voters are open to a new fairness argument. Whereas Barack Obama and his party invoke "fairness" as a license to take property from productive people and transfer it to the unproductive, Christie is inviting voters to consider the unfairness of our current arrangement in which government employees enjoy better salaries and benefits than private-sector employees.

Christie spelled it out:

A retired teacher paid $62,000 towards her pension and nothing -- yes, nothing -- for full family medical, dental, and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it 'fair' for all of us and our children to have to pay for this excess? (Is it) fair to have New Jersey taxpayers foot the bill for 100 percent of the health insurance costs of teachers and their families from the day they are hired until the day they die? Is it fair that teachers have a better, richer health plan than even state workers and pay absolutely nothing for it?

Christie's proposed economies -- in addition to the one-year salary freeze, he wants teachers and administrators to contribute 1.5 percent of their salaries to the cost of their medical coverage -- have provoked thousands of teachers to take to the streets, Athens style. They've started a Facebook page that excoriates the governor to the delight of its 68,000 fans. And the NJEA has spent $1.8 million on an anti-Christie ad campaign since January.

Still, when the question was submitted to voters in April, 60 percent backed Christie's reforms. His popularity ratings are in dispute (Rasmussen pegs him at 53 percent approval, whereas a Fairleigh Dickenson University poll has him at 43 percent), but he is gaining traction in a state with a 700,000 Democratic registration advantage.

This is one to watch.

There is more in the article. Inquiring minds will give it a look.
Cheers to Chris Christie for laying it on the line.

Governor Chris Christie Slams Teacher



Partial Transcript

Chris Christie: "We have put forward a constitutional amendment that I am urging the legislature be put on the ballot for you for you to vote on, for you to decide, this November. Do you want a constitutional cap of no more then 2.5% a year. If you want it, I am prepared to give it to you."

During a question and answer session teacher Rita Wilson proposed $3 per pupil which she says adds up to $83,000 per year.

Rita Wilson: "You are not compensating me for my education and you are not compensating me for my experience."

Chris Christie: "Well you know what, then you do not have to do it". [huge applause]

Rita Wilson: "Teachers do it because they love it"

Chris Christie: "Teachers go into it knowing what the pay scale is." [applause]

Quick Check of the Facts

Inquiring minds just might be wondering what Rita Wilson makes and are reading the Rutherford Schools Board Minutes.

24. BE IT RESOLVED BY THE RUTHERFORD BOARD OF EDUCATION to approve the following faculty salaries and locations effective 9/1/09 through 6/30/10:

Page 10. Rita O'Neill-Wilson: $86,389

Rita Wilson makes $86,389 "for the love of it" yet bitches about being undercompensated. Ironically, she asks for $3 per pupil which would pay her less.

Bear in mind that teachers get summers off plus enormous benefits. Medical benefits alone may be worth as much as $20,000 and pension benefits another $20,000 or so on top of that.

Far from being underpaid, she is way overpaid vs. what she would get in the private sector. The key, as governor Christie puts it "If you don't like it, do something else."

Rita Wilson and her ilk have the gall to oppose property tax caps of 2.5% just so she and her union parasite friends can unjustifiably make ever increasing sums of money while bankrupting everyone else in the state.

I commend you Rita Wilson for proving what a collective bunch of parasites your teachers' union is. Were it not for your union's thuggery, you just might see a 25-50% haircut in what you are making.

Public unions need to be abolished. It is the only way to get rid of the union termites.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Telephoto Lens in garden

Its been a while since I did this blog properly. I've been very remiss or is it just lazy, one of them.

Anyway I took delivery the other week of a new telephoto lens for my DSLR. It's a 500mm manual focus lens with a 2x converter option as well. I thought as the weather was nice yesterday I set it up on a tripod in the conservatory with both doors wide open. The theory was to get some good close up shots of the birds which frequent our garden. It was not to be though, I sat there for over an hour and not one bird came near the feeders. In the end I let the dog out into the garden and took a few shots of him. As you can see I need to practice more as the picture isn't the sharpest of shots, but at least its a start.

Much the same has happened with this picture of the hanging down branch. The background is nicely blurred, though maybe a bit too highlighted but the foreground leaves just don't have the sharpness I wanted.

And just a couple of other shots I took whilst I had the camera out...

Top of daughters swing-ball

Corky our dog and Garfield one of our cats saying hello, they have become very good friends.

Simmons Says Obama Should Detonate Nukes to Seal Oil Leak; Obama Suspends Deep Water Drilling Programs; Scientists Locate Another Vast Oil Plume

News in the gulf regarding BP's oil leak is grim. The "Top Kill" plan has reportedly failed although BP says it will continue efforts.

Worse yet, Matt Simmons says "Top Kill" is a sideshow, misses the big problem, and we might need nukes to seal the leak.

Let's take a look at those stories starting with BP Engineers Making Little Headway on Leaking Well.

BP engineers struggled Friday to plug a gushing oil well a mile under the sea, but as of late in the day they had made little headway in stemming the flow.

Amid mixed messages about problems and progress, the effort � called a �top kill� � continued for a third day, with engineers describing a painstaking process of trying to plug the hole, using different weights of mud and sizes of debris like golf balls and tires, and then watching and waiting. They cannot use brute force because they risk making the leak worse if they damage the pipes leading down to the well.

Despite an apparent lack of progress, officials said they would continue with the process for another 48 hours, into Sunday, before giving up and considering other options, including another containment dome to try to capture the oil.

Deep Water Drilling Grinds to Halt

Bloomberg reports Oil Industry Faces Its �1,000-Year Flood� as Drilling Is Halted

�The spill is like the 1,000-year flood: it�s the worst- case scenario,� said Brian Youngberg, an analyst with Edward Jones in St. Louis. �It�s hard to prepare for those extreme situations like that.�

Obama dropped plans to open waters off the coast of Virginia to drilling, canceled a lease sale in the Gulf, and suspended the permitting process for Royal Dutch Shell Plc�s planned wells off of Arctic Alaska. He said new safety rules will be imposed on offshore drilling.

U.S. oil output may be cut by 160,000 barrels a day next year as a result of the ban, according to Deutsche Bank AG. A one-year delay to deep-water projects would reduce global supplies by 500,000 barrels a day between 2013 and 2017, Sanford C. Bernstein said.

Shell has five wells affected by Obama�s call to halt drilling at 33 exploratory locations. Eni SpA, based in Rome, and Houston-based Marathon Oil Corp. and Anadarko Petroleum Corp. each are shown as having three, according to an official with the Minerals Management Service who asked not to be identified discussing the specific companies.

�The impact is most likely going to be a significant decrease in activity, and we just don�t know if it�s going to happen this week, next week, or over the course of a month,� said Ian Macpherson, a vice president at Simmons & Co. in London. �It looks like deep-water drilling is going to essentially grind to a halt.�

Scientist Locates Another Vast Oil Plume

Please consider La. scientist locates another vast oil plume in the gulf

A day after scientists reported finding a huge "plume" of oil extending miles east of the leaking BP well, on Friday a Louisiana scientist said his crew had located another vast plume of oily globs, miles in the opposite direction.

James H. Cowan Jr., a professor at Louisiana State University, said his crew on Wednesday found a plume of oil in a section of the gulf 75 miles northwest of the source of the leak.

Cowan said that his crew sent a remotely controlled submarine into the water, and found it full of oily globules, from the size of a thumbnail to the size of a golf ball. Unlike the plume found east of the leak -- in which the oil was so dissolved that contaminated water appeared clear -- Cowan said the oil at this site was so thick that it covered the lights on the submarine.

"It almost looks like big wet snowflakes, but they're brown and black and oily," Cowan said. The submarine returned to the surface entirely black, he said.

Cowan said that the submarine traveled about 400 feet down, close to the sea floor, and found oil all the way down. Trying to find the edges of the plume, he said the submarine traveled miles from side to side.

"We really never found either end of it," he said.

This discovery seems to confirm the fears of some scientists that -- because of the depth of the leak and the heavy use of chemical "dispersants" -- this spill was behaving differently than others. Instead of floating on top of the water, it may be moving beneath it.

Simmons Calls For Military to Nuke Oil Leak

Inquiring minds are reading Simmons Calls For Obama to Take Over BP; Military To Nuke Oil Leak

Today Matt Simmons, one of the largest investment bankers in the energy industry appeared on Bloomberg. The chairman of Simmons & Co. INTL went on to explain that there is much more to the oil leak than the news has been reporting. Last Sunday, NOAA confirmed reports of a second fissure about 5-7 miles from the original. This new fissure appears to be releasing a plume the size of Delaware and Maryland combined! He went on to state that �the plume from the riser is minor thing� the best estimate is about 120,000 barrels of oil per day�.

Simmons is quoted as saying, �Obama could remove BP today� tell BP it is time to leave�. Some questions were also brought up that pertained to a nuclear device and how the military could lower one 18,000 feet into the well bore.

Simmons went on to say � Such techniques have been used by the Russians on several different occasions�.

Matt Simmons Video on the Nuke Option



Mat Simmons "... From all of the best scientists who have thought about this in the past few days, probably the only thing we can do is create a weapons system and send it down 18,000 feet, detonate it and hopefully case in the oil."

That we would even have discussions about setting off nuclear explosions in "hope" they would accomplish something is certainly not encouraging to say the least.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

A (new!) kitchen sink

OK, if you are a connoisseur of kitchen sinks, you will LOVE this post. If not, well�ummmmm�you won�t need your sleeping pill tonight. Just read ahead. :)

I have to say�the installation of the kitchen sink has convinced me that this will be the last sink we ever own � at least in this house. It was a doozy.

Remember when I asked your advice on the double or single sink on this post? I had already bought a double bowl sink in the lovely black granite I had been coveting for years.

I read your comments and totally succumbed to the peer pressure suggestions and decided to return my double bowl and go back to get the single bowl sink:

A bit of panic set it when the display sink was GONE. And I didn�t see any on the shelves. What the what? I asked Home Depot Guy, and he found one on the floor � but the kicker was that the cutting board and strainer that come with the sink were missing � so it was on clearance and was marked down from $350 to $197.

Ding! Ding! Ding! I�ll take it, yes sir, right now, hurry up, put my name on it, place a guard in front of it, please and thank you.

Whoo hoo!

Well, I should have known better. That�s where the good luck ended.

My awesome, fantastic Dad had offered to help install the sink, so Wednesday he came bright and early (7:30 a.m. � which is very bright and very early for me) and we checked over the new sink, then started the removal of the old one.

Yessssss!! I was so happy to see it gone! Giddy!

There was one itty bitty issue with the new sink. There were no instructions in the box (it had been the display). So when we realized there was only one hole in the sink (for the faucet), we had to figure out how get a hole in there for the lovely soap dispenser that came with the new faucet I had purchased.

On the underside of the sink, there were what are called �knock-out� holes:

 (source)

They are slightly scored and there are a few, so you can pick where you want the dispenser. Since we had no directions, I looked online and found numerous sites saying you can just tap the knock-out with a hammer and the hole �just pops right out!�

Hmm. Sounds fishy. Dad wasn�t keen on the idea, but I read the directions to him and we tried it. Didn�t work. And it was stressful.

So Dad insisted on using a drill bit to create the hole instead.

But we didn�t have a drill bit just that size. I had bigger ones. Smaller. A lot smaller. A little bit smaller. Not that one.

So off to Home Depot went Dad. Came back, started drilling. And the drill started dying. It pooped out before we even got half way through the sink. We called it a day, and Dad planned on being here early and bright again on Thursday.

That evening, I went back to Home Depot (trip #614), and opened a sink to see if I could find directions. They said to use a ball peen hammer to knock out the hole. OK! We can do this!

The next morning, Dad tried said ball peen hammer. With a slight little tap, it broke off a (huge) corner of the sink.

Awesome.

I called Home Depot �- the single bowl sink is now only sold online. But I have a hole in my counter and I need a sink TODAY. No go. Nothing. Nada. I called another Home Depot and asked if I could buy their display.

Yes, yes I could, but I need to return the bad sink to the store I bought it at. So we drove to one HD, returned sink. Drove to another HD to buy a new (display) one.

But the display sink had the cutting board glued to it to show peeps what you get if you buy said sink. Glued with cement, as much as I could figure. It wasn�t budging.

The single bowl sink was not happening.

Then, I saw a lovely double bowl version with a very large and DEEP left side, and a small, shallow right side. Many of you had commented on that type of sink and loved it, so I was starting to realize I could fall in love with a different sink! Yes!

We asked HD Guy if the ball peen hammer was a good option � and there was a look of horror on his face. I think his words were, �Oh dear God, NO.�

He suggested the drill bit we were already using. NOT a hammer. NEVER a hammer.

Umkay.

One hundred extra bucks later (no clearance sink here!), we got it home, and started drilling the hole for the soap dispenser with a freshly charged drill. Two minutes into drilling, the bit was completely stripped.

We were almost there. And we had been home for approximately four minutes.

So I left, again, headed to Home Depot. Halfway to the store I realized I didn�t have my purse.

Oh. Dear. Lord.

I turn around, and we all go back to the hardware store.

We get home, start drilling again. And the drill dies. Again.

I was looking around for hidden cameras. Am I on TV?

Nope. :)

So I called a friend, went to his house and picked up two drills � one was corded. (Powerful.)

It worked!!

Houston, we had a hole!!!! 

I could have cried, really. It was such a beautiful hole and it only took ten hours!

So we start installing the lovely faucet and Dad asked which direction I want the knob for hot and cold � it can go on the right or the left. We�re right handed so of course, I want right, RIGHT?

But the hole for the soap dispenser that had taken ten hours to drill was in the way. It was too close to the faucet.

Are. you. kidding. me?

We tried it on the left, and I hated it. We flipped it to the front � and what the ?? I loved it! But wait, is it allowed on the front? Heck yeah Dad says!:

And I love it!! I�ve never seen in placed like that before but I LOVE IT! Hot to the left and cold to the right. LOVE.

We dry fitted it to the counter again, checking everything one more time before we siliconed around it. But when we went to pull out the sink, the brackets kept catching. Finally, we got them free, and when we pulled the sink out, there was an awful noise.

We checked the brackets and all were fine, but then looked that the sink and saw that one of them had caught the counter and pulled chunks of laminate off.

Really? REALLY?

Dad glues them down and it looks good as new (glorious laminate!) But then when we would try to adjust the sink with the silicon under it, the chipped pieces would move every. single. time. we even slightly moved the sink.

We spent ten minutes trying to fix silicone-covered, sticky laminate chips. If you would like to know what crazy feels like, this very well might be it.  :)

We gave up on perfectly placed chips, and just left it alone. After tightening the brackets under the sink, which took about 30 minutes because the screws would not turn, we had an installed sink!!

Almost!

Dad came back this morning (third day in a row � I love you Dad!!) and got the plumbing reconnected.

And now we have a gorgeous, beautiful, deep (TEN inches!) sink and faucet:

Sorry, I didn�t wipe it down and make it all perfect � I am just so unbelievably giddy to have a brand new sink and faucet with no cracks, leaks or additional holes. A working sink is highly underrated!!

I got a stainless faucet to go with our appliances (I was afraid an ORB finish may disappear into the sink). The pull out sprayer is SO FREAKIN� COOL!!!!:

We had a sprayer on our old sink, but once I get used to this I have a feeling I�m never going back to a separate sprayer!

Ignore the unfinished, dirty beadboard in the background peeps. I was just concentrating on running water.  ;)

I had to say goodbye to my lovely tip out trays, because they don�t fit with the new sink:

But I do. not. care. one teeny. tiny. bit. I have a sink! And a faucet!

Amen!!

I have a plan to attach the tip out trays on the insides of the cabinet doors under the sink, and I think that will work out great anyway.

So, are you asleep yet? Helloooooo?

My grand plan was to take pictures along the way and show you exactly how to install a new sink and faucet. But 90 percent of the pictures would have been us drilling a hole and at the check out line at Home Depot.

And that would have made this post even less exciting. :)

So what say you�isn�t it GORG?! I have to send out one more shout out to my DAD � love you so much!!

Our IKEA trip today was not without a bit of drama as well, but we had a BLAST!! I will tell you more about it next week! (That place is SO COOL!!)

Atlanta Fed asks: How "Discouraged" are Small Businesses?

The Federal Reserve Bank of Atlanta Asks How "Discouraged" are Small Businesses? Here are some Insights from an Atlanta Fed small business lending survey.

Roughly half of U.S. workers are employed at firms with fewer than 500 employees, and about 90 percent of U.S. firms have fewer than 20 employees. While estimates vary, small businesses are also credited with creating the lion's share of net new jobs. Small businesses are, in total, a big deal.

Many people have noted the decline in small business lending during the recession, and some have suggested proposals to give incentives to banks to increase their small business portfolios. But is a lack of willingness to lend to small businesses really what's behind the decline in small business lending? Or is it the lack of creditworthy demand resulting from the effects of the recession and housing market distress?

We at the Federal Reserve Bank of Atlanta have also noted the paucity of data in this area and have begun a series of small business credit surveys. Leveraging the contacts in our Regional Economic Information Network (REIN), we polled 311 small businesses in the states of the Sixth District (Alabama, Florida, Georgia, Louisiana, Mississippi and Tennessee) on their credit experiences and future plans. While the survey is not a stratified random sample and so should not be viewed as a statistical representation of small business firms in the Sixth District, we believe the results are informative.

Indeed, the results of our April 2010 survey suggest that demand-side factors may be the driving force behind lower levels of small business credit. To be sure, when asked about the recent obstacles to accessing credit, some firms (34 firms, or 11 percent of our sample) cited banks' unwillingness to lend, but many more firms cited factors that may reflect low credit quality on the part of prospective borrowers. For example, 32 percent of firms cited a decline in sales over the past two years as an obstacle, 19 percent cited a high level of outstanding business or personal debt, 10 percent cited a less than stellar credit score, and 112 firms (32 percent) report no recent obstacles to credit.

Perhaps not surprisingly, outside of the troubled construction and real estate industries, close to half the firms polled (46 percent) do not believe there are any obstacles while only 9 percent report unwillingness on the part of banks.

Banks Want To Lend

The report should bury the idea that banks do not want to lend.

Outside of the overbloated construction industry, businesses simply do not want to expand. With rising health care costs (Please see Double Digit Health Insurance Hikes Crush Small Businesses), and with excess capacity and tepid consumer spending why should businesses expand.

Now let's take a closer look at the Atlanta Fed Small Business Credit Report.

Reasons for Not Seeking Credit



Excluding construction and real estate only 5% of businesses thought credit terms were unfavorable, and only 13% thought lenders would deny the request. Bear in mind the numbers add up to greater than 100% because the survey allowed multiple responses.

28% said sales did not warrant expansion, and 26% said they simply did not need credit. A whopping 37% said they had sufficient cash and another 34% said existing credit lines were sufficient. There may not be much overlap in those last two categories.

Extent to Which Financing Needs Were Met: Applications



From the report: A total of 122 applications (40%) were denied, but only 22 of the 117 firms that sought credit were denied on all applications they attempted. Thus, 81% of firms seeking credit received credit at some level.

Obstacles to Accessing Credit



Excluding construction and real estate, of those denied credit, only 9% said the "bank was unwilling to lend". Across all industries the total was only 11%.

The moral of the story is as I have stated many times over the past two years. Banks are willing to lend but credit-worthy businesses do not want to borrow. Indeed businesses in general do not want to borrow.

Of the 9% of business owners who blame the banks, how many of those do you think need to look in a mirror and admit a failing business? I suspect all of them.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

ECRI Leading Indicators Dip Again; Is a Double-Dip Recession Coming?

Inquiring minds are investigating leading indicators of the Economic Cycle Research Institute (ECRI). Here are a couple of charts.

Weekly Indexes



Monthly Indicators



Recent Trend in WLI


Please click on the first link for WLI spreadsheet data all the way back to 1967 and other interesting charts.

My friend "BC" writes ...

The WLI is again below the 126 level where it was all the way back to spring '98, the point at which the growth of industrial production and private employment peaked.

The 126 level is below zero on a post-'00 trend rate basis as occurred when it dipped below zero in Apr.-Sept. '00 and July '08.

If the trend rate since Q3-Q4 '09 persists, the WLI growth rate could fall below zero and reach the negative 5-6% by as soon as July-Oct. This is an area consistent with ECRI "forecasting" a recession.

At present, the ECRI gang are talking just deceleration of "growth". But I suspect that by no later than mid-summer they will shift to urging more Keynesian stimulus to "avoid a double-dip recession" when a deceleration to 0% and imminent contraction will likely already be underway.

Then, in hindsight, the ECRI will "forecast" a recession after it had already started, attributing the "unexpected" contraction to "policy missteps", "exogenous shocks", or some such silliness.

Makeup of the WLI

I do not have the exact percentage makeup of the WLI but reportedly it includes the Mortgage Bankers Association's home purchase index, money supply, stock prices, initial jobless claims, corporate yield spreads (inverted), and corporate bond quality spreads.

It is debatable if any of those are signaling anything good. In fact, I suggest none of them are.

Moreover, it is also debatable if the stock market is a leading indicator. I suggest the stock market is a coincident indicator (if indeed it indicates anything at all).

The treasury yield curve is a leading indicator and the recent bullish flattening (long dated yields dropping) is certainly not a signal of economic recovery. Housing starts are also a leading indicator, and while "recovering" percentagewise, in absolute terms the number of housing starts is pathetic.

Housing Starts



Yield Curve March 2008 Through May 2010



click on chart for sharper image

Note: The above yield curve is from May 25. Yields have pushed back up slightly with the 10-year yield now at 3.29.

ECRI Track Record

Inquiring minds might be interested in A Look at ECRI's Recession Predicting Track Record.

The ECRI did not predict the last recession until it had already started and I highly doubt they predict the next one either. A double-dip recession is on the way, assuming of course you believe we still aren't in one.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List

Double Digit Health Insurance Hikes Crush Small Businesses

Small businesses across the country are getting hammered by rising medical insurance costs. Blue Shield of California is jacking up rates as much as 76%.

Is this what president Obama meant when he said "Change You Can Believe In"?

The LA Times reports Health insurance rate hikes hitting California small businesses could hurt state's economic recovery.

Small businesses in California are being hit this year with double-digit hikes in health insurance costs that could hurt the state's economic recovery as companies curtail plans for hiring and expansion to pay their insurance bills.

Five major insurers in California's small-business market are raising rates 12% to 23% for firms with fewer than 50 employees, according to a survey by The Times.

Similar increases are being felt by many small businesses across the nation, including those in Texas, Ohio and Florida � mainly the result of escalating costs for medical care and pharmaceuticals, insurers say.

In California, some small businesses say they are stunned by their latest insurance bills. Longtime customers of Blue Shield of California, for instance, are facing rate hikes as high as 76% after the insurer lost money on a handful of plans.

"We don't have that money," said Ann Terranova, a San Francisco financial planner who is dropping Blue Shield for herself and two employees after learning that their annual premium would jump to more than $19,000 a year from $11,000.

Financial pressures are also squeezing Tessier Cabinet Co., a 59-year-old family business in Montclair. Its president is reluctant to hire because of weak demand for his goods amid a 14% rate hike from Kaiser Permanente. "I'm ready to hang it up," Dan Tessier said.

Small firms nationwide are struggling with the problem as they worry about what the effect of the new national healthcare law. It will impose billions of dollars in taxes on insurance companies and require mid-sized firms to provide insurance for workers or pay fines.

"They are very concerned that their costs aren't going to go down. They're just going to go up," said Stephanie Cathcart, a spokeswoman for the National Federation of Independent Business in Washington. "They're going to be paying new taxes, new fees. It's kind of a double whammy on them."

Small businesses say 2010 is shaping up to be their most expensive year yet, leaving them with few good choices. They say they can pass charges along to employees, reduce benefits, cancel insurance programs or raise the price of goods � an option few are willing to entertain because of competitive pressures.

Blue Shield, for example, miscalculated the cost for three plans that pay all medical expenses once customers meet thresholds for out-of-pocket expenses. The San Francisco insurer is now raising premiums as much as 76% for some small businesses.

"It turns out that people used a lot more medical care than we had anticipated," said Tom Epstein, Blue Shield's vice president of public affairs. "We need to increase the rates to cover the medical costs. We can't lose money on these products."

Many small firms say they feel a duty to provide health insurance, or see it as a necessary cost to attract qualified job candidates. Either way, they predict that a continued rise in their healthcare bills will dampen their prospects for recovery.

"Our margins will dwindle to nothing," said Bill Thomas, chief executive of U.S. Technical, an engineering firm in Fullerton. "It's the beginning of the end."

There are lots more examples of rising costs in the article.

Sadly, the bill rammed through Congress does nothing about containing costs. All it did was force more people into the system and put more burden on small businesses and individuals to do so.

The health insurance bill has an alleged cost of a $trillion. It will be higher. No government program ever costs less than anticipated. Moreover, one needs to factor in unseen costs, such as driving small businesses out of business.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Click Here To Scroll Thru My Recent Post List