Austan Goolsbee Tells a Tale

Earlier today on CNBC commentator Erin Burnett's "Street Signs," the hostess had the privilege of sparring with Obama administrations Presidents Economic Recovery Advisory Board member Austan Goolsbee about the alleged Obama Healthcare Option. Goolsbee did his best with the always sharp Burnett, but for this episode, the gloves came off and Burnett really scored a serious body blow. The bottom line came down to taxes. As I've written about for Associated Content with some regularity, this Obama Health Care Crisis is a problem for my generation and for generations to come. I swear no allegiance to any pundits (Rush, Hannity, Blitzer, Olbermann, Matthews) on either side of the isle; all I care about is 1) my family, 2) myself, 3) my country, 4) my friends. I would be remiss to exclude my country; even without friends, America is still the best place to live in the world, so far as I've studied and seen. The American model has been copied and used rather successfully in a variety of places. Still, for my bottom dollar, America is where it's at.

Bottom dollar is the problem here. Austan Goolsbee got on the air with Burnett and she right away dug into him. Burnett asked pointed questions of the Obama board member to which he gave vague responses. The main event: how will this plan be paid for? Burnett gave the answer: taxes.

"Well, it's not a tax on the people; it's a tax on the corporations."

Follow me now (I know this is not revolutionary stuff here). The marketplace sets prices; consumers drive demand, and costs are decided by a number of factors; availability of product, access to distribution, costs of production...and taxes among many others. So if company X...let's call them something anonymous. Say...Aetna/BlueCrossBlueShield/UnitedHealthcare/Humana/Anthem...whatever. And this company provides a product or service in a highly competitive market like shoe insoles. And say this small company and all their immediate competition in the public market get a huge tariff slapped on them for every shoe insole they sell. Are they going to eat tax that and make less money? Or might they incrementally-ever-so-slowly-all-at-once raise their rates on these wildly popular insoles?

Goolesbee scoffed at that notion.

But here's one which Burnett's next guests brought up. While, yes, the company shareholders could take a hit (no one seems to care about John Q. Public investor much these days...even in an essiental market like shoe insoles) that isn't as likely to have as big a dent. Preferred shareholders of these shoe insole companies are going to keep their stake in the company and common stock shareholders will probably be fine too.

But what about Loraine? The single-mom secretary at the main office in Buffalo? Or Roberta? The mid-level manager taking care of her ailing father and working at the company's regional office in Seattle? Or Bob? The new copy boy that's graduated with his BFA but has still signed on with this very huge shoe insole company as a career move and because his girlfriend just got pregnant? What about these people? Is this huge shoe insole company going to continue to pay the same competitive wages and charge a constant amount for their product when their profit shrunk 30%? Of course not!

The Obama budget plan was to be cut in half by 2013. Now? That projection is far off into the future with no end to spending in sight. So Austan Goolsbee, Barack Obama, and the rest of America so hungry for this healthcare reform need to get real. Think about this outside of the scope of your own individual world view and think for a second about everybody's future and your own.