Tag Archives: Road to Serfdom

Treasury Department threatens private companies for responding to Obamacare incentives

Investors Business Daily reports on how the Treasury Department is threatening private companies who lay off employees because of the costs imposed on them by Obamacare.


In what may be considered an ObamaCare loyalty oath, the Treasury Department orders employers to attest that any employee layoffs are not due to its imposed costs under penalty of perjury.

The first rule of business is to stay in business, something which is accomplished by doing what government is incapable of doing — controlling costs and making a profit by giving customers a product or service they need or want.

ObamaCare is obviously a product neither business nor the individual wants, so coercion is necessary under penalty of law.

Enforced by the Internal Revenue Service, individuals must enroll in government-approved plans or be fined.

Individuals are not allowed, despite presidential promises, to keep the plans and doctors they like and can afford.

Instead, they must accept plans they don’t like and can’t afford, some getting subsidies extracted from other taxpayers or China. They must grin and bear their reduced health care choices and higher costs.

Even though ObamaCare’s employer mandate has once again been illegally and unconstitutionally extended by the president who would be king, business still faces ObamaCare’s punitive cost increases down the road and its own form of government coercion.

Layoffs are an unfortunate but sometimes necessary means for a business to control costs and stay in business.

On Monday, a Treasury Department unconcerned with the necessities of the free market said that businesses will need to “certify” that they are not shedding full-time workers simply to avoid the mandate and its costs.

Officials said employers will be told to sign a “self-attestation” on their tax forms affirming this, under penalty of perjury.

What happens when a government passes regulations that make it harder for employers to lay off workers if they are forced to? Well, companies stop hiring workers, and expand their operations elsewhere. That’s exactly what has happened in countries like France, where the government makes it nearly impossible to get rid of workers, even when circumstances warrant it. So the net effect of policies that reduce the freedom to hire/fire as needed is to raise unemployment.

Here’s the economist Aparna Mathur of the American Enterprise Institute to explain.


Labor market regulations often take the form of employment protection rules that govern the hiring and firing of workers. These were originally introduced to enhance workers’ welfare; for instance, by reducing unfair dismissals. The same provisions that protect employees, however, translate into cost for employers, leading an employer to think twice (at least) before hiring a new employee.

Theoretical economic models have shown that, in general, the effect of such laws is to reduce job flows (broadly, the sum of jobs created and jobs destroyed). In my paper, I show that these reduced job flows could have negative effects on investments in education because they reduce the expected returns on a job search; and they lower the value of education as a signaling device.

Under rigid labor market regulations, employers have a stronger disincentive to create new jobs, so there are fewer available jobs on the market. As a result, one’s likelihood of earning a productive wage is reduced. Moreover, firings under a system of strong labor market regulations are less frequent than they would be otherwise, so even workers with jobs expect to face fewer opportunities to search for re-employment. As a result, they will have less use of education as a signaling device to secure their next job.

With flexible labor markets and higher job mobility, these conditions are reversed. Job flows are higher, leading to more vacancies per unemployed worker. This yields a higher expected return on a job search for educated workers since the likelihood of finding a job is higher. Further, workers are either fired or they quit more frequently (i.e., job destruction is higher), leading to a greater use (or need) of education as a signaling device.

Put simply, imagine a developing country with rigid labor markets leading to few vacancies. For a low-income worker, the cost of getting educated may outweigh the prospective benefits since the likelihood of finding a job in this scenario is fairly low. On the other hand, for the same worker, if the likelihood of finding a job goes up when labor market restrictions are removed, the incentive to invest in education may be higher since the returns to investing in this costly activity are higher. Countries such as France, Germany, and Italy, which consistently have strict labor regulations, would do well to heed these results (see figure). It is also true in general that developing countries have stricter labor regulations than the OECD economies.

All these regulations sound so good, but we have to think beyond stage one in order to see the real results of the happy-sounding speeches. These things are understood by economists, but we didn’t elect an economist.

Cancer victim who alerted media about dropped health plan draws IRS audit

Mark Steyn at National Review reports.

Excerpt: (links removed)

A couple of weeks back, cancer patient Bill Elliot, in a defiant appearance on Fox News, discussed the cancelation of his insurance and what he intended to do about it. He’s now being audited.

Insurance agent C Steven Tucker, who quaintly insists that the whimsies of the hyper-regulatory bureaucracy do not trump your legal rights, saw the interview and reached out to Mr Elliot to help him. And he’s now being audited.

As the Instapundit likes to remind us, Barack Obama has “joked” publicly about siccing the IRS on his enemies. With all this coincidence about, we should be grateful the President is not (yet) doing prison-rape gags.

Meanwhile, IRS chief counsel William Wilkins, in his testimony to the House Oversight Committee over the agency’s systemic corruption, answers “I don’t recall” no fewer than 80 times. Try giving that answer to Wilkins’ colleagues and see where it gets you. Few persons are fond of their tax collectors, but, from my experience, America is the only developed nation in which the mass of the population is fearful of its revenue agency. This is unbecoming to a supposedly free people.

Elliot is being audited back to 2009. Tucker is being audited all the way back to 2003.

More from The Blaze.


Appearing this week on “Rocky D” on Charleston, S.C.’s WQSC, Elliott said that after a media frenzy, his insurance company worked it out with him to allow him to keep his coverage — but there’s a new hitch.

“Monday I got a certified letter, I went down and got it and it’s from the IRS and they are auditing my books from 2009,” Elliott said.

He said he didn’t own a business at that time, and in fact was working for the government. He said he’s paid his taxes every year and is not any kind of a tax evader.

There was one more part of the notice — Elliott said that “due to federal budget cuts,” the meeting between him and the IRS won’t take place until April 2014.

“It doesn’t matter. It could’ve been today if they wanted it to,” he said.

The radio host said, “you stood up and spoke out about how Obamacare screwed over your insurance and probably would kill you and what’s the next thing that happened? You get audited by the IRS. That is not a coincidence.”

“No it’s not,” Elliott said.

And it might not just be Elliott: C. Steven Tucker, an insurance broker who contacted Elliott after his Fox News appearance, said that after he helped assist Elliott with his coverage, the IRS “are now coming after ME all the way back to 2003.”

Elliott told Kelly that he actually voted for Obama over Mitt Romney last year specifically because he liked what Obama had promised about being able to keep your doctors and your insurance plans.

People sometimes complain at me for using the word fascism, but I don’t know what else to call this. What do you call it when your government goes after you for speaking out against them? I call that fascism. It’s government stepping in to impose their views on individuals by force.

Look, if you want big government to make everyone “equal” by redistributing wealth and nationalizing private industry, then you’re a fascist. That’s where your view leads. Fascism is the normal endpoint of destroying the free enterprise system under the guise of pursuing “equality”. When government takes over industries from the private sector, you are going down the road to fascism. If you don’t like private property, you’re a fascist. If you don’t like the rule of law, you’re a fascist. If you don’t like free trade, you’re a fascist.

Which political party should Christians vote for?

Mary sent me this disturbing story from Citizen Link, which shows how secular leftist special interests want to restrict religious liberty.


A “who’s who” of Leftist, humanist, abortion and gay organizations submitted a stern letter to President Obama on Tuesday, demanding that he rescind part of the 2002 Executive Order protecting religious hiring rights.

More specifically, the coalition wants Obama to prohibit contractors who do business with the government from using religious-based hiring criteria.

The letter, signed by 52 organizations, comes days before the 70thanniversary of President Franklin D. Roosevelt’s Executive Order that barred discrimination by federal contractors. His directive was then codified into law in Title VII of the 1964 Civil Rights Act, which prohibited employers from hiring and firing based on religious beliefs. In 1972, it was slightly amended to exempt churches and religious associations.

The timing of the letter also coincides with the federal government’s stepped-up efforts to codify into law special protections for gay, lesbian, bi-sexual and transgender people.

Bruce Hausknecht, judicial analyst for CitizenLink, noted the biased news coverage of the weighty issue. “The liberal news media has given Americans the impression that faith-based charitable groups are pushing to rescind these protections,” Hausknecht said. “Not true. A closer look at the list of cosigners reveals the true motive: to silence people of faith and push them out of the public square.”

Cosigners include: American Civil Liberties Union, Americans for the Separation of Church and State, Catholics for Choice, Center for American Progress Action Fund, Gay & Lesbian Advocates & Defenders, National Education Association, National Gay and Lesbian Task Force, National Organization for Women, People for the American Way, Religious Coalition for Reproductive Choice and the Transgender Law Center.

When you elect a Democrat, you’re electing someone who wants to use the power of the state to marginalize and censor Christianity. In fact, if you read classical works on economics like “The Road to Serfdom”, you’ll learn that socialism necessarily leads to the destruction of all other liberties, including religious liberty. That is because the bigger that a secular government becomes, the less they are willing to allow individuals to make their own decisions based on their own personal morality and religion. Obama is one of the worst offenders in this regard – we have never had a more pro-abortion and pro-same-sex marriage President. We have never had a President who was more allied with pro-abortion lobbyists and pro-gay-rights lobbyists. And he is also in favor of paying welfare to women who freely choose to raise children without fathers. This man is anti-life, anti-family and anti-marriage. No Christian could vote for such a man.

Should Christians vote for Democrats who want to “tax the rich”?

Let’s make it clear, because a lot of Christians don’t understand this. In order for you to exercise your freedom as a Christian, you need to have money. With money, you can afford charity, private Christian schools, Bibles, apologetics books, marriages, children, homeschooling, and so forth. How do you get that money? You work for it. And how do you make it grow? You invest it.

Now let’s see how the secular left and their agenda of redistribution at wealth hurts that plan.

  1. They get you fired, like Frank Turek was fired by Cisco Systems, because you are a Christian
  2. They tax your income and give it to anti-Christian groups, like Planned Parenthood
  3. They tax your investments to fund public schools which undermine Christian truth claims (evolution) and Christian morality (sex education)
  4. They confiscate money from your employer and redistribute it to government workers and unions, which makes it harder for you to stay employed
  5. They restrict your choices for educating your children, by sending more money to public schools and legislating against private schools and homeschooling
  6. They take over health care, forcing you to subsidize secular leftist causes like abortions, sex changes, in vitro fertilization, etc.
  7. They take over health care, forcing Christian doctors and nurses to perform procedures that violate their consciences
  8. They halt military spending and pro-democracy initiatives, and coddle captured terrorists, encouraging terrorist attacks, like 9/11
  9. They spend enormous amounts of money, increasing government dependence and discouraging families from having children

And so forth. Basically, the more you vote for free market conservatism, the more small businesses there will be. The more small businesses there are, the better your chance of finding an employer who will not discriminate against your Christian faith. (Contrary to popular beliefs, conservatives DO NOT like big corporations – because they are almost ALWAYS liberal, seeking to use the government to block younger companies from challenging them with better quality and lower prices). The more employers there are to choose from, the more likely you can find a higher salary. The higher your salary, the more you have to spend on charity, as well as your family and your community. The more money you make in investments, the more you can buy apologetics books and sponsor apologetics web sites and conferences and debates. The more the government stays out of the free market, the more choice you have to buy goods and services that are in line with your Christian values – e.g. – SCHOOL CHOICE. The more the government stays out of health care, the less you will pay for health care since you don’t need coverage for abortions, sex changes, in vitro fertilization, etc. The less government regulates business, the less opportunity there will be for these secular leftist special interest groups to lobby government to discriminate against Christians.

Indian economist distinguishes between rights and entitlements

From the Times of India, a good economics article from Swaminathan S Anklesaria Aiyar. (H/T Shalini)


Politicians and activists constantly propose new rights — the right to work, to education, and now to food. The word “rights” is being twisted to mean entitlements, and there is a big difference.

Rights are freedoms from oppression by the state or by society (through ethnicity, religion and gender). These rights do not entail government handouts.  Entitlements, however, are welfare measures entailing government handouts. Rights are not limited by budget constraints, but entitlements are. So, rights are universal but entitlements are not.

[…]US economists calculate that three welfare measures — social security (for the aged), Medicare (for the aged) and Medicaid (for the poor)—will triple from 7% of GDP to 20% in the next decade, swallowing up virtually all federal tax revenue. Jagadeesh Gokhale of the Cato Institute calculates that, including social security, the US is headed for a national debt that’s 500% of GDP, and Europe of 434%.

Some much for entitlement spending. He then explains the origin of human rights in Britain, America and France, and then says this:

These three countries spearheaded the concept of fundamental rights. In all three, rights were about freedoms, not entitlements

In subsequent centuries, people said this was not enough, and proposed entitlements — which some called second-generation rights. Marxists declared that rights to free speech, elections and personal freedom were bourgeois illusions that did not empower the poor. So Lenin proposed a dictatorship of the proletariat that took away all basic freedoms, and instead offered the right to food, shelter and work. Mind you, nobody could sue Lenin for poor provision. Nobody could throw out Mao for the Great Leap Forward that killed 30 million people. Nobody could topple Stalin for murdering four to six million peasants in the Ukraine.

The communist experience shows that giving welfare rights priority over basic freedoms is the road to serfdom. And the capitalist welfare state now shows that entitlements, although desirable and inevitable in democracies, must be limited and targeted at the needy, so that they do not hog all spending or bankrupt governments.

It’s amazing. He’s more American than the Democrats, because he actually understands America. Thanks so much for finding this article, Shalini!

By the way, if you want to learn what the end-game is for the Democrats, you can read “The Road to Serfdom” by the Nobel Prize-winning economist F.A. Hayek, which Swami alluded to in his article.

Intel CEO blames Democrats for destroying the economy

Article from CNET News by someone who understands job creation. (H/T Neil Simpson’s latest round-up)


Intel Chief Executive Officer Paul Otellini offered a depressing set of observations about the economy and the Obama administration Monday evening, coupled with a dark commentary on the future of the technology industry if nothing changes.

Otellini’s remarks during dinner at the Technology Policy Institute’s Aspen Forum here amounted to a warning to the administration officials and assorted Capitol Hill aides in the audience: unless government policies are altered, he predicted, “the next big thing will not be invented here. Jobs will not be created here.”

The U.S. legal environment has become so hostile to business, Otellini said, that there is likely to be “an inevitable erosion and shift of wealth, much like we’re seeing today in Europe–this is the bitter truth.”

[…]Otellini singled out the political state of affairs in Democrat-dominated Washington, saying: “I think this group does not understand what it takes to create jobs. And I think they’re flummoxed by their experiment in Keynesian economics not working.”

Here’s Republican Senate candidate Carly Fiorina, from the same article:

The comments from Intel’s chief executive echoed statements made a day earlier by Carly Fiorina, the former HP CEO turned Republican Senate candidate.

America’s skilled-worker visa system is so badly broken and anti-immigration that “we have to start from scratch,” Fiorina said, adding that too many government policies push jobs overseas instead of making U.S. companies competitive against international rivals.

“Our corporate tax rates are the second highest in the world,” and Congress has repeatedly failed to make an R&D tax credit permanent, Fiorina told the Aspen audience. It’s time to start “acknowledging the reality that companies go where they’re welcome,” she said. (The effective U.S. corporate income tax is 35 percent, far over the industrialized-nation average of 18.2 percent.)

Here’s a recent IBD article with more from Otellini, and other CEOs

First Otellini:

“I can tell you definitively that it costs $1 billion more per factory for me to build, equip and operate a semiconductor manufacturing facility in the U.S.,” he said. And 90% of that added cost, he said, is due to taxes and regulations that other countries don’t have.

Then other CEOs:

Earlier in the week, Illinois Tool Works CEO David Speer, whose company employs 60,000 worldwide, laid out his dilemma — and that of hundreds of other CEOs: “I could borrow $2 billion tomorrow for 3 1/2%,” Speer said. “But what am I going to do with it?”

[…]In June, Ivan Seidenberg, CEO of Verizon Communications and head of the Business Roundtable, warned of a growing anti-business slant in both Congress and the White House. Tax hikes, regulations and constant policy shifts, he said, “harm our ability … to grow private-sector jobs in the U.S.”

And don’t forget the costs that Obamacare imposed on companies, causing all medical premiums to go through the roof because of the new health care mandates and taxes on things like medical devices.

Red State explains what the Obammunists should be doing:

As our government continues to make it more difficult to do business in the US, companies must increasingly look to more favorable climates abroad. If Washington really wants to spur job creation here in the US, they should repeal the health care overhaul, reduce spending, cut the corporate tax rate, give up on cap and trade, and reform litigation. Instead we have been treated to an extended experiment in government control – one that is obviously not producing new wealth, new jobs, or any real hope for the emergence of the industries of the future.

It takes a lot of courage for a CEO like Otellini to come out against the Obama administration, and the neo-Keynesian oligarchy in Washington. Taking a billion dollars from Intel to study Chinese prostitutes and to build turtle tunnels is not a good thing to do if you want to have more jobs. But the thing is – Obama thinks it is a good thing to do, because he is totally ignorant of how the economy works. So, don’t vote for him or any of his silver-spoon limousine liberal friends who were born with rich parents. Democrats don’t know how jobs are created.