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May 02, 2010

First, Do No Harm

Does anyone really believe Congress is doing a good job of fixing what's wrong with America? If only Congress would confine themselves to passing massive bills none of them have read (that turn out not to solve any of the problems they were supposed to solve). Arguably, we can live with underfunded and ineffective bills.

It's the actively harmful ones that worry me (via Tigerhawk):

Most people know about the individual mandate in the new health care bill, but the bill contained another mandate that could be far more costly.

A few wording changes to the tax code’s section 6041 regarding 1099 reporting were slipped into the 2000-page health legislation. The changes will force millions of businesses to issue hundreds of millions, perhaps billions, of additional IRS Form 1099s every year. It appears to be a costly, anti-business nightmare.

...businesses will have to issue 1099s whenever they do more than $600 of business with another entity in a year. For the $14 trillion U.S. economy, that’s a hell of a lot of 1099s. When a business buys a $1,000 used car, it will have to gather information on the seller and mail 1099s to the seller and the IRS. When a small shop owner pays her rent, she will have to send a 1099 to the landlord and IRS. Recipients of the vast flood of these forms will have to match them with existing accounting records. There will be huge numbers of errors and mismatches, which will probably generate many costly battles with the IRS.

As if that weren't bad enough, Darleen (who appears to be willing to do the work Congress won't do) has been reading Sen. Dodd's bizarrely named "Restoring America's Financial Stability Act" and she's found another stunningly idiotic provision. Darleen comments:

One of the many tools that small businesses have in their arsenal to compete with big businesses is the willingness to offer their own terms of credit and payments. The music store that allows parents to buy their kid’s clarinet with monthly payments over a couple of years or the family-owned jewelry store that will negotiate a six-payment deal for an engagement ring — they carry the paper and the risk and base their offerings on the fact they do business in their immediate neighborhoods.

Small businesses like this had nothing to do with the recent Wall Street financial crisis, but why let a good crisis go to waste? Under the Dodd bill, the federal government wants to "fix" not just Wall Street, but Main Street:

The bill, sponsored by Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) and backed by the Obama administration, would "place new burdens on Main Street businesses that had nothing to do with the financial crisis," Donahue wrote. The authority given to a new Bureau of Consumer Financial Protection is far too broad, the Chamber chief said.

"The proposed new consumer protection regulator would be able to regulate a merchant, retailer, doctor, public utility, or any other business that permits payment in more than four installments or assesses late fees," Donahue wrote. "No wonder the first year's budget for this new regulator is $410 million."

A wide range of businesses and their lobbyists are busy this week trying to convince Congress and administration officials that regulatory authority written into the bill is so wide it will hamstring business activities far removed from the kind of financial trading done by Goldman Sachs, AIG, and other large Wall Street firms that Congress has targeted for increased regulation. Today's New York Times reports that auto dealers from 35 states are lobbying senators this week for exemptions from federal regulations in the bill that would otherwise cover them as lending institutions. Officials at Harley-Davidson are likewise worried that dealer-financed loans to buyers of the company's motorcycles will be covered by new federal regulations.

"I don't think the level of concern could be any higher," David Hyatt, vice president for the National Automobile Dealers Association, told the Times. "There's a sense of urgency. And we've got to raise awareness about why this doesn't make sense and why it's anticonsumer."

The current climate in Washington growing increasingly surreal. While our President lectures businesses about their "duty to grow the economy", he and his party appear to be doing everything in their power to drown American businesses in a sea of government red tape.

Posted by Cassandra at May 2, 2010 02:15 PM

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Comments

Why is it that the same people who *caused* the financial crisis through greed and stupidity are the same ones who think they can *fix* it through greed and stupidity?

Posted by: BillT at May 3, 2010 08:01 AM

Because they are teh Anointed Ones.

You don't get it. Therefore you are a hyphenated gerund adjective.

I don't know what, but give me time. I am working on it.

In other news, I find I have a sick talent for interpreting the IRC and applying it to 'new situations.'

I am slipping over to the Dark Side.

Posted by: Cricket at May 3, 2010 08:31 AM

I believe Congress is doing a great job

of helping Obamacans.

Posted by: Ymarsakar at May 3, 2010 08:43 AM

Why is it that the same people who *caused* the financial crisis through greed and stupidity are the same ones who think they can *fix* it through greed and stupidity?

Since they are the cause of the problem, they control whether it is fixed or not.

Posted by: Ymarsakar at May 3, 2010 08:45 AM

All of these things are united in raising the bar to small businesses: both to continue to compete, and to be able to enter the market at all.

The intent is probably to help out their donor base, as small businesses are not major Democratic donor. The effect is to reduce every American's ability to be genuinely free: to own their own means of production. It's the case that regulations already make small, family farming almost impossible to do in a way that would support a family; while massive subsidies go to corporate farms. Every one of these new regulations is an additional burden on the independent family business.

One might rationally believe that they don't want you to be able to provide for yourself. They want you either to work for a corporation, or to be provided for by state largess. I don't think that's true: but it would be rational to believe, based on their actions.

Posted by: Grim at May 3, 2010 08:51 AM

Well, they have lived up to their Hypocritical Oath.

Several years ago...as in before the house of cards fell, I took stock of what we had and did a 'worst case scenario.'

Aside from the usual drivel about being prepared, I wondered what would happen if businesses were so regulated that we could not get what we needed or others would be driven to form more conglomerates...strength in numbers, reduction of competition and higher prices. The antithesis of anti-trust.

I am in agreement with you Grim; I was just looking at another side of it.

So, based on what it is we *like* to do, and what we *want* to do, we have determined that self-sufficiency will soon be at the consumer or end user level.

Want to avoid Dell's higher costs because of government mandated expenses? Build your own computer.

Want to avoid health care? This one is tougher.
Don't get sick.

And so on.

Sigh.

Posted by: Cricket at May 3, 2010 09:14 AM

I don't think that's true

What do you believe to be true.

Posted by: Ymarsakar at May 3, 2010 10:38 AM

The Left will strip from you everything and give you back an IOU.

Posted by: Ymarsakar at May 3, 2010 11:44 AM

On the other hand, there's an Alinsky-like appeal in so exploding a bureaucratic structure that it will become impossible for the IRS even to sort through the massively increased paperwork, let alone do a credible job of using it to enforce laws. Of course, that does increase the likelihood that the new flood of paperwork will be used to enforce laws selectively.

Posted by: Texan99 at May 3, 2010 12:15 PM

Texan99, when that happens, I will be rejoicing and urging the 'storming of the Bastille.'

Anarchy from the chaos.

Posted by: Cricket at May 3, 2010 03:17 PM

...that does increase the likelihood that the new flood of paperwork will be used to enforce laws selectively.

That's already the case. The regulatory environment is so complex that we are probably all in violation of some regulation without ever knowing it. The question for those in power, then, becomes: "Whom shall we go after, and whom shall we leave alone?" That decision can be made on political grounds as easily as any other.

Ymar:

I think their confluence of interests is causing them to grab money and power without actually giving 'controlling the people' any thought. The destruction of small business, family farming, etc., is merely a side effect of their rapaciousness. It's not the intent; they don't care about us enough to intend to do it. They're just grabbing money and power with both hands, and not paying attention to the consequences.

Posted by: Grim at May 3, 2010 04:04 PM

Interesting, a sort of bull in the china shop syndrome. Or the natural functions of a virus.

Not intelligent enough to intentionally kill the host, but sustains that capability through doing what it can in the short term.

I still can't believe that the Left successfully demonized Bush, haliburton, and Dick Cheney while Soros, Moore's investments in Haliburton, and various other plutocratic clan leaders like Ted Kennedy were painted as saints.

Power of propaganda for ya, I suppose. And it's about time the Tea Parties turned the tables on The Mighty Foe.

Posted by: Ymarsakar at May 4, 2010 08:59 AM

Time to invest in paper mills, maybe?


Insane.

Posted by: htom at May 4, 2010 12:27 PM

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