Uh oh. Can you say “unintended consequences”?

http://www.google.com/hostednews/ap/article/ALeqM5gmzNv5LYXOA6UM_XmUHdOe9augtQD9ELVL3G1

So the new health care law is supposed to reduce costs, right? It won’t. Basic economics teaches that companies pass on their extra costs to others. So all the new regulations and mandates are going to get passed onto you and me in higher premiums.

But as the article above notes, even the health care coverage you get at work is going to change:

“In the first two days after the law was signed, three major companies — Deere & Co., Caterpillar Inc. and Valero Energy — said they expect to take a total hit of $265 million to account for smaller tax deductions in the future. With more than 3,500 companies now getting the tax break as an incentive to keep providing coverage, others are almost certain to announce similar cost increases in the weeks ahead as they sort out the impact of the change.”

By reducing the health care tax deductions companies can file, the federal government has inadvertently reduced the health care coverage these companies will offer.

Did anyone not think this through before passing this new law?

When I read about the automakers’ plea for more money and the president’s response to them, my first thought was: a plague on both your houses.

http://www.cnbc.com/id/29956752

No one looks good in this. First, here are the automakers begging for more taxdollars so that they can pay outrageous labor contracts that make them uncompetitive with foreign carmakers. Second, here is the president agreeing to give over the money if one of the automakers will fire its CEO.

What is going on here? Why are we giving automakers all this money and why is the government firing a private company’s CEO? This is why it’s a bad idea for government to be in the middle of business. The cold, hard fact is: companies that can’t make it on their own shouldn’t make it. Their failure will open the door for another company. It will be painful in the short term, but beneficial in the long term. This is market economics 101.

Sadly, that seems to be a class that the president and the automaker executives never took in college.