Health Care in America: It?s Big Business Vs. Joe the Plumber

Businesses go into a high dudgeon anytime politicians attempt a serious discussion about America's dysfunctional health care "system." Jeff Koopersmith says it's time for pet store owner Dave Ratner and media hog Joe the Plumber to learn the basics – including the fact moving to Ireland is not an option.

October 272, 2008 – Geneva ( – I read two pieces about health care in newspapers this morning. The first appears in the Wall Street Journal, where Robert Carroll of American University argued that John McCain’s health care plan would be a better choice than what Americans can today rely on.  He didn’t have the courage to compare McCain’s plan – which might help 10% of the 50 million uninsured in our country  – to Senator Obama’s plan, which might help almost all if business does not pervert it by lobbying the House and Senate in another outburst of greed similar to that foisted on Hillary Clinton so long ago.

Because Mrs. Clinton’s universal health care program was stormed by Washington’s “K” Street hooligan lobbyists and defeated before it had a chance, I estimate to date that 3.5 million Americans have died earlier than they should have, and more than 8 million suffered needlessly as business interests demonstrated far more concerned about their bottom lines (and hooked-in bonuses and golden parachutes) than about the poorest of us who could only afford the poorest of health care – if any at all.

The second piece I read was Kevin Sack’s article for The New York Times, “Businesses Wary of Details in Obama Health Plan”

Wary isn’t the word.  How about “furious,” Kevin?

Sack picked what I feel is a wonderful example of a small businessman who might “suffer” under federal or state laws that will force business to contribute to health care benefits for their workers.

Sack’s choice – aptly named Dave Ratner – is thinking that he will not contribute under a new Massachusetts law which forces him to contribute to health care costs or pay a $295 fine per employee penalty.  Mr. Sack does not make it clear whether this is an annual fine, or a daily one – as it should be.

Mr. Ratner is one of America’s prosperous elite who owns what John McCain calls “a small business.”  On its face, Ratner’s pet store chain does seem rather small – just four pet stores in western Massachusetts.  However, when you look closer, you see that Ratner has 90 employees, 29 of whom are full time, with 61 working part time.  

Ninety employees?  That’s a small business?  Gee, I would have thought that maybe a coffee shop with 4 employees could be considered small.

Ratner’s 29 full timees and 61 part time employees have to cost him close to a million dollars a year in payroll alone.  To pay them his stores should have to gross 8-10 million a year.  If so, then Ratner’s gross profits should be near to $2 million, at least.  That’s not a small business, to my mind.

Mr. Ratner whines about supposedly “getting whacked” under the Massachusetts law, or a potential Obama-sponsored health insurance contribution law.  Today Ratner’s 29 employee’s health insurance premiums might cost a total of $130,000 a year at most.  Sack does not tell us how much of this group premium Ratner pays – but it seems certain he does not pay it all.  If he does, kudos to him.

“To all of a sudden whack 6 to 7 percent of payroll costs, forget it,” Ratner said.  “If they do that, prices go up and employment goes down because nobody can absorb that.”

What befuddles is just what does Ratner mean by “nobody can absorb that.”

Whatever Ratner’s store is grossing, he could certainly allow for 6 or 7 percent in added payroll costs.  In this example, the most it would cost him would be $60,000-$70,000 a year in additional payroll costs – much of which would be “whacked” off his income tax bill.

Yes, prices might go up – but not by 6-7% – they would go up in a ratio equal to the percentage of payroll against current gross profits.  If Ratner spends 20% of his gross on employees, prices would go up only 1-2%.  The average can of dog food might increase in price by 2 cents.  Of course, that 2 cents now goes into Ratner’s pocket – his reward for being an entrepreneur – but Ratner will not have to bear most or any of these additional costs because they will be spread among his customers, his suppliers, his landlords etc.  It works that way – especially if all business is required to provide the same level of health care to its employees.  In short Ratner will raise his prices a bit, his landlord may forgo a rent hike, and his suppliers might lower their wholesale costs.  If none of this happens, Ratner can certainly afford to pay more for health care.

The truth is that Ratner and most other business owners – but not all – believe that all the money that hits the till is their money – their entire gross – and that whatever they have to part with is a “gift” to society.  Those gifts include, mostly, payments made to landlords, banks, manufacturers, shippers, and other “businesses”.  The ‘gifts’ are not made to customers.

Every employee that Ratner has contributes hundreds of percent more money to Ratner’s pocket than he or she earns in pay.  Thus he can’t consider that his employees are getting a “gift” of a job as well – they are actually being very well used and underpaid – see any Judeo-Christian ethical formula.

I do believe that Mr. Ratner probably does far better than “big business” in this regard since smaller employers tend to have more personal relationships with employees than do the Microsofts and GEs of this world.  However, I can’t feel sorry for Ratner.  He can certainly afford to absorb even a 2% increase in actual costs over gross.  Period.

This, readers, is the BIG LIE from business, large or small.  It’s a lie invented and pushed by the Business Industry Political Action Committee (BIPAC) and most notably Bernadette Budde, the invisible black hole of greed behind the group.  Not only is this rap about health care a lie, but it is evidence of little or no conscience.

I suggest that Mr. Ratner should be allowed to become as wealthy as he can by exploring expansion opportunities.  I also suggest however that every penny he has, he has obtained from someone else’s pocketbook.  This is a foundational tenet of economic law.

Not that one can trust economists.  Remember, few of us hire our own economists do we?  It’s business that pays their bills and economists are generally incredibly loyal to big business and small.  They lie too.  Not only do they lie, but they have no idea what they are doing.  That’s become obvious at least eight times in the last hundred years – and is especially apparent in today’s world economy – whatever is left of it.

Mr. Ratner might and probably would argue that he “created” 90 jobs in Massachusetts.  This is another morsel of nonsense.  It is his customers that “created” those jobs through their demand for pet products, decent service, and convenience.

Ratner did not sit in his den thinking, “Gee, I am going to create 90 jobs”.  He created his first pet store which he probably manned alone.    His customer base grew quickly and he needed help so he hired someone – at far less than he earned, and so forth until his pet stores were four and his employees were 90.  He could have just as well gone bankrupt, but he didn’t – his luck and intelligence paid off.

That’s a good thing – but it’s not a good thing if Ratner worries that he might not be able to afford 4 luxury vacations or four Ivy League tuitions for his kids if he decides to provide health care for his employees, all of whom have far less than he.  He is being greedy.

Ratner himself might admit that he was lucky as well as smart.  He was certainly luckier and smarter than then people who work for him.  However, the providential element must be considered by businesses of all size.  Believe me, businesses didn’t become big or bigger because they are run geniuses.  In fact, the opposite is sadly apparent.  Lady Luck plays a large role here – and most very wealthy people readily admit this.  Read their auto-biographies and you’ll see.

I cannot feel sorry for Mr. Ratner should he have to pay the entire bill for his employee’s health care.  It won’t change the competition for him at all.  Why?  Because al the other pet stores will have to do the same if we end up with fair laws that insist on it.  An equal playing field is therefore provided.  The same is true for the biggest businesses because they compete worldwide only against businesses of similar size and maturity.  Besides, Ratner’s employees will be happier and more important, healthier as a result. They’ll produce more for him – and more of them will show up at his funeral one day.  There is always a trade off – but this one would be good for all involved.

Are things so much more expensive in Europe or industrialized Asia?  No. In fact many things are cheaper.  Some things are more expensive but that has little to do with universal health care. Yes, German, British, Italian, French, Japanese and even Chinese businesses provide universal access to health care.  They are in fact at a disadvantage – not an advantage as the moron McCain today charges.

To listen to Mr. McCain and his manicurist partner Mrs. Palin you would think that small businesses could move to Ireland and only pay 11% income tax.  First, Mr. Ratner for instance, could not move his pet stores to the European Union or Ireland as McCain suggests – and if he did he would have far more payroll expenses than he does now, including the full cost of health care for his employees and four weeks mandated paid vacation.

“Joe” the idiot plumber couldn’t move to Ireland either.  First, Joe he is not a plumber, and second he has no idea of Irish plumbing and how it works.  The entire discussion from the McCain camp is a scam pure and simple.

Senator Obama also deserves at least a little whack here.  He should be peddling full and universal health care for all Americans while keeping the same standards (not the same huge profit margins) as we find today, this might cost the nation $1 to 1.4 trillion dollars a year paid to various health insurers and perhaps far less.

The adjusted gross domestic product of the United States is approximately $14 Trillion.  Why we cannot decide to spend about 7-10% of that for superior health care for all 330 million of us is beyond me.  The GDP represents about $45,000 per human living in America – including newborn babies, elementary school kids, and housekeepers.  All of us.  Surely we can afford to make 10% of that payable to high-level and “the best” medical care on earth.  Only about half of us work – but very few of us earn $90 thousand per capita.  What happens to the other $45,000?  Ask yourself that.

Business will lie to you and say that it will cost far more than what I say, but look to the soaring prices for health care to solve that one.  Health care costs have zoomed 400% higher than most everything else available for sale in America.  Something is wrong there as well – and the “what’s wrong” is greed among insurers and providers.  Don’t believe the fools who think you’ll fall for the excuse that medical care is so much better and therefore more expensive. That’s malarkey.  We are still dying at the same rates from the same things.  We have spent tens of billions on cancer research and come up with relatively nothing.  People still die mostly from heart attacks and strokes.  They still from pneumonia and half a million of us commit suicide in the “civilized” world every year because we treat people who suffer from depression – rightfully or not – like lepers.

Let’s cap the greed at current levels rather than punishing the greedy for over-charging us all this time.  I’m game for that.  It was, after all, the “American Way”.

Now we need a slightly different American Way.  The wealthiest among us will have to get a bit less wealthy – but not much.

Again, ask yourself: “How much is too much?”

Jeff Koopersmith is an internationally renowned political consultant, opinion research authority and policy analyst. He has lobbied for causes including the alternative fuel sector and women's health, and is an expert on the international real estate market. He lives in Philadelphia, Washington and Geneva.

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