Regulation kills jobs

Government policies are stifling young, hungry entrepreneurs,” says Andy Pudzer, CEO of CKE Restaurants. Worst among these is ObamaCare.

About 40% of Mr. Puzder’s employees are part-time and therefore exempt from ObamaCare’s coverage mandates. “That percentage of employees will probably go up. … Through attrition, three full-time employees go away and you hire four part-time employees who basically have the same hours.”

As government raises the price of hiring living workers, by raising the minimum wage and mandating higher benefits, companies find it more efficient to replace humans with machines.

Mr. Puzder also expects fast-food restaurants to deal with ObamaCare by replacing workers with kiosks. “You’re going to go into a fast-food restaurant and order on an iPad or tablet instead of talking to a person because we don’t have to pay benefits for any of those things.”

Pudzer’s company is expanding rapidly and now has “3,300 restaurants in 42 states and 28 foreign countries.” It plans 300 new restaurants in the “business-friendly” state of Texas.

One place it is not planning to expand is California because “California is not interested in having businesses grow.” Compare how long it takes his company to get a building permit. In Texas, it takes 60 days; in Los Angeles, 285 days.

California’s cumbersome labor regulations have forced the company to “fire managers who don’t report their work hours because they present a legal risk.” He tells the fired managers “to go to Tennessee or Texas, where we’ll rehire them and they’ll learn entrepreneurial skills.”

Corporations based in California are increasingly moving “where labor and the cost of doing business are cheaper. The ultimate victims are middle-class entrepreneurs, like restaurant managers, and the low-skill workers they employ.”

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Down in Concord

There are two kinds of people, those who do the work and those who take the credit. — Indira Gandhi

Just like high school or college kids making up for lost time, the House leaders (Democrats) finished the budget process with a late, late, late night session. After wasting most of Friday, Monday, and Tuesday, the budget conferees met Wednesday at 9 am and did not finish until Thursday in the wee hours of the morning, 3:42 am to be precise.

The short story is that the House is to be congratulated for persuading the Senate to agree to all of the Senate’s demands. That’s right, the final budget is pretty much the Senate (Republican-led), not the House (Democrat-led), budget.

Observers tell me that the Democrats opposed this budget up until the very end when they caved. Senior leaders, including representatives of the governor, were holed up behind locked doors for hours apparently searching for a way out. There was even talk that they would reject the budget and go for a Continuing Resolution (CR) while they tried to negotiate a better budget. In the end, “the House acceded to the Senate” on almost every issue.

House Democrats are trying to put the best spin on it. The Democrat chairman of the House Finance Committee wrote that they “… produced a balanced and fiscally responsible budget investing in the priorities of the people of New Hampshire without increasing taxes or fees. … there is a great deal for us to be proud of in this budget.” But the fact is that the budget is almost entirely what was passed by Senate Republicans, which every single Senate Democrat voted against.

The Governor “applauded the bipartisan budget agreement” even though it is virtually identical to the Senate Finance Committee budget, which three weeks ago she slammed for (so-called) “deep cuts”, “nothing short of devastating”, and a “fiscally irresponsible approach”. Now she labels that same budget as “fiscally responsible” (which it is) and praises the restored funding (added by Senate Republicans).

Why do so many politicians not tell the truth? Either they lied weeks ago when they decried the Senate budget as terrible, or they are lying now when they say it is great. Perhaps both. (How do you tell when a politician is lying? His lips are moving.)

I would have more respect for them if they admitted, “We don’t like this budget. We wanted to spend much more money; we wanted to eliminate some programs and create other programs. We agreed to the Senate plan because we didn’t have a good alternative. Our only fallback was a Continuing Resolution, which would have given us even less money to spend.”

But politicians like to take credit for everything – even if they had nothing to do with them. If they told the truth now and admitted they don’t like the budget they couldn’t take credit for it.

Democrats cannot be happy about this budget. Total spending is $400 million less than the Governor requested, $300 million under what the House Democrats approved.

This budget has zero tax or fee increases. Democrats had proposed numerous new taxes or fees. They voted overwhelmingly (155-35) for a beer tax; they didn’t get it. They really, really wanted a massive increase in the gas tax; they didn’t get it. Ditto an increase in cigarette taxes. They proposed to delay scheduled business tax decreases; the Senate nixed that idea. Democrats passed increases in the Salt Water Fishing license fee and the Marriage License fee; Senate Republicans removed them.

Democrats included a provision letting the Governor raid 400 dedicated funds to spend the money elsewhere. Senate Republicans said no.

Senate Republicans added funds for LCHIP (the Land Conservation and Heritage Improvement Program) and for the UNIQUE scholarship program. The Senate increased State Aid Grants for water treatment projects. Democrats now try to take credit for these increases.

Democrats reduced funding for Charter Schools and put in a moratorium. Senate Republicans fully funded them and removed the moratorium. House Democrats repealed the school choice scholarship program passed last year. Senate Republicans killed that bill and removed a parallel provision from the budget.

Democrats had been emphatic about expanding Medicaid as part of Obamacare. The Speaker of the House, Terie Norelli, had declared that without Medicaid expansion, “I do not know if I could get the votes in the House to support the budget.” As late as Wednesday afternoon, conference Chairwoman Wallner said there would not be a budget agreement unless the Senate budged. The Senate replied that this issue was too important to rush into without a thorough study, they called her bluff and the Democrats folded.

In addition to the budget bills, there were 22 other bills reported back by conference committees. The changes appear to be slight and the bills seem uninteresting. There were eight bills where House and Senate conferees could not reach agreement. These bill also seem uninteresting; few will mourn their loss.

On Wednesday, July 26, the House and Senate will each meet to vote on conference reports. It is very likely that all will be passed and go to the governor for signing.

Government stifles creativity, kills jobs

A mother has a good idea, starts a business out of her home, grows it to 22 states, then bureaucrats tell her it might be illegal.

A man develops cutting-technology to remake the taxicab experience. Customers like it, drivers like it. The company has expanded from San Francisco to 30 cities in 10 countries, and has provided hundreds of thousands of rides. Regulators keep trying to kill it.

These are just two examples of excessive regulations that kill jobs. (See also Regulations kill jobs and the economy and The cost of regulations)

Will Obama be a great salesman for small government?

It is often said that Obama has (unintentionally) been the greatest gun salesman in history as gun sales have skyrocketed in reaction to his policies.

Now a CNN poll suggests that he might be a great salesman against big government:

  • Fifty-seven percent of those questioned say they disagree with the president’s views on the size and power of the federal government.
  • 62 percent now believe that “government is so large and powerful that it threatens the rights and freedoms of ordinary Americans.”
  • 53 percent say they don’t believe Obama is capable of managing the government effectively.

Another poll shows a 49% – 37% margin of disapproval for ObamaCare.

Crowd sizes tell a story

“Audit the IRS” Tea Party rally in Washington – 10,000 to 12,000.

Obama speaks in Berlin – 4,500. Five years ago 200,000 came out to see him. One report labeled his speech a “disaster”:

Sweating profusely in front of a relatively small crowd as his teleprompter failed him, Barack Obama looked every bit the stumbling and mumbling individual some close to him have long whispered he truly is…

President Obama repeated lines, his voice wavered, he looked confused, the crowd’s response was tepid, and he was clearly sweating through his clothes.  It was among the worst public performances of his presidency.

Organizing for Action gathers a whopping three people for gun-control rally in California.

 

Down in Concord

Survival in politics requires denying mistakes and sticking with the policies you advocated, while blaming others for the bad results. — Thomas Sowell

Suppose that you have a term paper due June 20. You have known for months that it will be due that afternoon. Would you begin your research on June 17 and start writing it on June 18? Would any of us wait until the last minute to start work on the paper?

Well, that is what House Democrats are doing with the state budget. They have known to a certainty that the Senate would amend their budget. They have known officially since June 6, that the Senate did in fact amend the budget. They have known for literally years that a Committee of Conference is how the legislature resolves differences between the House version and the Senate version of a bill. Last Wednesday, June 12, the Senate formally agreed to a conference.

House leaders, knowing that there are major differences to resolve, could have scheduled an all day conference last Friday, the 14th. They could have met through the weekend. Instead, they have scheduled an informational meeting for Monday, June 17, and the first work session for June 18. The conferees will have two and a half days to reach an agreement on 800 pages of budget bills, and then a few hours to write their report.

The House leadership and the Governor know that the current state budget ends June 30. Without legislative action the state government will have no authority to spend a dime after June 30. In theory, the state government will shut down July 1 unless the House and Senate agree on a budget.

One wonders if the Democrat leaders of the House are deliberately trying to create a budget crisis. They had the option to schedule twice as much time for conference meetings. (The House controls scheduling of House bills, including the budget bills; the Senate controls scheduling of Senate bills.) Are they scheduling so little time because they plan simply to accede to the Senate’s recommendations? Somehow I doubt it. Do they expect the Senate to quickly give in? Bad idea.

If the House Democrats are not playing a game of chicken, knowing that a deadline is approaching and hoping that the Senate will blink first, then what are they doing?

Perhaps they are planning a government shutdown and they will blame it on Senate Republicans. But why would they think that would work? When two sides cannot agree, which side is at fault? The Senate is proposing a 7% increase in spending. That is hardly a cut. They offer a larger amount than the House proposed for HHS spending. Why would anyone think that the shutdown would be the fault of the Senate more than of the House?

There are only two ways to avoid a government shutdown July 1. The usual is to pass a budget and for the governor to sign it (or at least not veto it). The second is to pass what is called a Continuing Resolution (CR). In essence that is a short-term extension of the current budget. Spending would continue at the current rate for about a month. That gives the two sides time to negotiate a full two-year budget.

The current rate of spending is roughly 10% less than the House and the Governor have proposed. So one would think they would prefer the Senate budget, which would allow about 7% higher spending.

Perhaps the Governor plans to call a Special Session to pass a new budget. A CR would allow the government to operate until a new budget is passed. But why would the the Governor and House expect the Senate to pass a budget significantly higher than what they just passed?

To this short-term budget watcher and to other long-term watchers, the current budget process doesn’t make much sense on the House side. Given the June 20 deadline for the budget conference to file a report, we will know the budget plans in a few days.

*****

In the meantime, the House and Senate are in Conference on 40 bills other than the two budget bills. Some conferences started last week on June 10 and 11 and seven have already reached agreement. Others won’t start until this coming Monday, Tuesday, and even Wednesday. Since all reports are due by Thursday, I expect that the committees not meeting until Wednesday will deal with very small differences that can be resolved quickly.

By Thursday afternoon, we should know the story for all bills. Next Wednesday, June 26, the House will meet to vote on all conference committee reports.

 

Who said this?

“Many European countries are witnessing a rise of [the] dependency mentality when not working is often much more beneficial than working. This type of mentality endangers not only the economy but also the moral basics of the society. It is not a secret that many citizens of less developed countries come to Europe intentionally to live on social welfare.”

Post your guesses in the comments. I won’t answer for a while.

Second question: Is U.S. headed to a similar condition?