I was out of state in a trial all week and I just got back. The city I was visiting was hosting a large franchisee convention. Many of the comments I was posting this week came from a guy I met in the hotel bar, a consultant who teaches a seminar called “Creating the Benefit Free Workplace; Labor in the era of Mandated Government Benefits for Employees.” His seminar is so popular that he ran it seven times instead of his scheduled one event, as every franchisee was required to take the class. This guy is about business, not politics, but he told me a few things I didn’t know. First, I was not aware that many of the major chain stores and restaurants that you see around town are not “company stores” any more, but franchised stores. Some of our largest brand names are quickly becoming nothing but franchise management, as they outsource distribution, trucking and retail to other people. Second, the margin of profit for a franchisee has never been lower. Third, based on that narrow margin, complying with the Obamatax would simply put hundreds if not thousands of franchisees out of business, which would likely leave a substantial part of the United States without basic retail and food services. He was wondering out loud why it seems that no one in the White House seems to grasp the basic point that the Obamatax will fall most heavily not on the mom and pop small business, but rather on the small franchisee who plunked his or her entire life savings into a franchised big box store with a 2 percent profit margin. He was also pointing out a response to a comment someone made on the blog–that public companies have investors who won’t tolerate this kind of behavior–the de-employing of America. He was noting that two major public companies, Dell and Barnes & Noble, have already been encountering a buy out of the retail operations, which would separate those operations from other business modalities, getting rid of the pesky investor concern about the fate of the employees. He rattled off the name of a dozen other publicly traded operations that are also either trying to get delisted or who are moving to a franchise model to avoid Obamatax. Obama is reshaping insurance, this consultant said, by creating insurance exchanges which will still be out of the reach of most Americans, and which will eventually and ultimately put half the country below the poverty line and on to medicare. His last point is that the argument that Obamacare will work as well as Romneycare avoids a major problem in that reasoning. “Look around,” he said to me “does this place look like Massachusetts?” The answer is no. I am always struck by the growing disparity between Massachusetts and the rest of the United States, and how much it seems like a different country, and how absolutely clueless people here are about what is going on in the rest of America. This is happening at a time of supposed “reality television” which fails to point out that the non-coastal United States, the part that voted for Obama, is starting to look like Dust Bowl era Appalachia. One of the hottest selling items at the convention, and I saw a lot of these, were t-shirts that said “Miss your job? Thank Obama.” It will be interesting, if the trend holds, to watch how the Democrats will defend Obamatax to the poor and the minorities if Obamatax has the result of shoving nearly a majority of the country under the poverty line. Maybe the Republicans don’t have to do anything but wait, and maybe the Republican governors who are coming on board with insurance exchanges are doing so because they see the tsunami ahead. Obamatax is not going to create affordable insurance if your choice is between food for your kids and insurance. I wonder what percentage of this country will simply refused to buy insurance because they’ve got nothing to lose from non compliance. I looked around at the convention hall across the street, and there were an awful lot of people at that event, and every one of them was a major employer, and every one of them was lining up to take a course in cutting full time workers from their companies. That’s the hard and realistic consequence of Obamatax in the Other America.
Visiting the Other America
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