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Entries in FDR Programs (1)

Monday
Oct142013

FDR Wage & Price Controls Hangover for Obamacare

1933 Natioal Recovery AdministrationThe liberal FDR programs are still meddling in our national economy today, believe it or not, and resurfaced again in Obamacare. Starting with FDR's 1933 NRA - National Recovery Administration which was a big failure, it all worked against the free marketplace system's supply and demand dictating prices to control labor costs and prices with substantially greater unintended consequences for our country's future.

Under the NRA Act, a majority of firms in any industry had government approval backed by force to determine how much a factory could expand, what wages had to be paid, the number of hours to be worked, and the prices of products. Whether or not a businessman helped write the code for his industry, he was bound by the terms and subject to a fine or jail term if he violated them. It eventually succumbed in the 1935 to the Supreme Court vote of 9-0 against its over 400 unconstitutional laws in FDR's NRA program.

However, price and wage controls reemerged in other plans along the way as we entered into World War II. All the fights in World War II were not just on the battlefields of Europe. They were also fought right here within all the companies who faced the pressure of the Federal Government's laws and mandates to control businesses throughout the war years under the Franklin D. Roosevelt Administration.

The Federal government and business hammered out a deal so wages were allowed to be raised, but without the "wages" increased, thereby satisfying the government's edict for wage controls. A deduction for an 'untaxable benefit' for employers who provided health insurance to employees allowed businesses to write the cost off as an expense while the employees did not pay anything extra to receive a costly benefit tax-free. It has been in force ever since World War II.

The buzz-word these days in government is 'transparancy', but when it comes to 'see-through', it is not so 'clear' at all any more. Our field of vision was clouded over by Federal government regulations which created unintended barriers to consumers today in the health care industry since World War II, over 75 years. Employees have been insulated from the costs of healthcare which are due to:

  • Employer Health Insurance Paid Programs which allow large employers to bid down overhead costs to gain volume medical discounts. 
  • Employees have little incentive to inquire about competitive costs since they are largely covered in a comprehensive group plans.
  • Standard Pricing Lists are relatively non-existent since pricing can change widely depending on the insurer and health care provider contracts.
  • Uninsured pricing fluctuates wildly based on the deals cut with providers and therefore have no standard across-the-board reference base. 
  • Doctors, hospitals, medical services, device mfgs or drugstores normally do not post or advertise fee schedules or price lists which further discourage keeping professionals from competing publically or offering price comparisons.  

So, our current Healthcare Industry accounts for 18% of our Gross Domestic Product. Americans want to control costs, but they have almost no information to let them compare prices. Now with Obamacare the race to competition for business is dwindling because healthcare practitioners and facilities are consolidating to manage the massive regulation and costs of hospitalization.  

The government insurance monopolies have replaced the marketplace choices for healthcare competition - Check with your own 'Navigators" to look at all your 'personal' IRS returns, IRA investment portfolios, checking and savings accts and health records to determine where you qualify for Obamacare. Note: All 'Navigators" have attended a 20 hr.  'Certification' course and will not tell anybody about your secret stuff either. Many are ex-Acorn 'Community Organizers.'

The important question now is how do the patients become better consumers as patients? The honest answer under Obamacare is nothing, it will fail due to the management costs, dismal subscriber sign-ups, unbearable premium hikes, poor healthcare services and under coverage of benefits.