Thursday, December 6, 2012

Don't Let Me Be Misunderstood

As I'm sure everyone has noticed, after the elections there was a flurry of pronouncements by several corporate bigwigs, more in anger than in sorrow, that they were just going to have cut costs some more because of Obamacare.  Probably the most notorious was Papa John's CEO John Schnatter, but there were others.
Papa John's CEO John Schnatter says that Obamacare will result in a $0.11 to $0.14 price increase per pizza, or $0.15 to $0.20 cents per order, Pizza Marketplace, a trade publication, reports ...

“We're not supportive of Obamacare, like most businesses in our industry,” Schnatter was quoted as saying in Politico. “But our business model and unit economics are about as ideal as you can get for a food company to absorb Obamacare." 

Schnatter has thrown his weight behind Republican presidential candidate Mitt Romney this election season, even hosting a campaign fundraiser at his Louisville-area mansion in May. "Don’t you love this country?" Romney, who attended, asked during the event. "What a home this is, what grounds these are, the pool, the golf course."
Not too surprisingly, Schnatter backtracked almost immediately, and claimed he'd been misquoted and misunderstood.  Poor baby.  (It's hard for me to believe that a damn pizza-industry publication would misquote or misunderstand one of its own, but maybe some Communists infiltrated it.)

Today I stumbled on an interesting article, also from an industry source, which reported that
The brand perception of Papa John's, Applebee's and Denny's took a beating after high-ranking representatives of the companies said Obamacare would force them to stop building restaurants, cut worker hours and raise prices.
As the article reports, correlation doesn't equal cause, so it isn't certain that the lowered approval of these brands was a reaction to the announcements.  But it's noteworthy that people like Schnatter found it prudent to repudiate their earlier remarks, even to pretend that they hadn't made them, even before data like this turned up.  But there's something else that I take from this story.

Not all the Obamacare warnings came from the top dogs: some came from franchise owners who ran numerous restaurants, and some came from individual restaurant owners in the franchises.  We hear a lot about the practical common sense of those great job creators, the small businesspeople of America, no less than we do about the wisdom of the great entrepreneurs.  But I think that stories like this should make us all skeptical about what we hear on that score.  Schnatter, for example, claimed that Papa John's would have to raise pizza prices by 11 to 14 cents apiece to make up for increased costs entailed by providing insurance to their employees.  Those numbers have been disputed, but who knows?  Some will call me just a reflexive hater of rich people, but that's not true; I only reflexively hate rich people who are stupid, vicious, and dishonest.  Even from a shareholder's point of view, there'd be good reason to have doubts about a CEO who took advantage of his prominence to run to the media and make Scrooge-like pronouncements that made the company look bad.  Papa John's stocks took a dive right after he vented, which probably had something to do with his recantation.  (I took that information from the same Forbes article I just linked to -- again, a business-friendly source, not the Daily Worker.)  I suspect that Schnatter pulled the 11 to 14-cent numbers out of his ass, just because he felt like throwing a tantrum over Obama's survival and the very idea of having to provide health insurance to his employees.  Which is his right in a free society, just as the reactions he got were everybody else's right.  It's nice to be reminded, though, that it wasn't just the little people, the mob, who were put off by the hysteria of Schnatter and his ilk; even the real America, the 1 percent, turned against him.

Still, the next time you hear someone babbling about the wisdom of entrepreneurs, their competence, their practical common sense, remember that you're hearing about people like John Schnatter, and he's evidently not unrepresentative of the breed. Rich guys all over America are stamping their expensively-shod feet and screaming like two-year-olds at Obama's socialist agenda.  At the very least, this is imprudent of them, since he is all that stands between them and the pitchforks.  (O faithful servant! no matter how much they abuse him, still he offers himself as a human shield, again and again.  I trust he has his reward in the life to come, by which I mean after January 20, 2017.)

Speaking of Obama, he's still making it clear whose side he's on.  The other day he told the Business Roundtable:
We’ve seen some movement over the last several days among some Republicans. I think there’s a recognition that maybe they can accept some rate increases as long as it’s combined with serious entitlement reform and additional spending cuts. And if we can get the leadership on the Republican side to take that framework, to acknowledge that reality, then the numbers actually aren’t that far apart. Another way of putting this is, we can probably solve this in about a week; it’s not that tough.
The key word for my purpose here is "entitlement."  Several of my liberal friends have been throwing tantrums of their own over that word as used by Republicans, typically having hissyfits over words rather than what they refer to.  (This, for instance.)  But they're less attentive to their god-king's use of the word.  Bear in mind that part of what Obama means by "serious entitlement reform" is cutting Social Security benefits for new retirees by raising the age of eligibility -- again -- as part of his program to cut the deficit, though Social Security has nothing to do with the deficit.  The reason for making such cuts is to appease people -- mostly, but not all, Republicans -- who want to get rid of Social Security, Medicare, and other social programs for other, Scroogier reasons.