The Energy Speech I Wish the President would Make.
It's as predictable as the tides. Every time the price of gas goes up, three things happen. First, people complain about how much it costs to fill up their tanks. Reporters are dispatched to gas stations and show people putting 20 or 25 gallons into the tanks of their large vehicles (only vehicles that get poor gas mileage have 20 + gallon tanks, as tank size is calibrated to roughly get us 300 miles between fillups), and to listen to them claim poverty about how they can't afford to spend that much money on gas, how it's taking food out of the mouths of their children, etc. Second, politicians call press conferences and say that the price of gas is too high, ordinary Americans are suffering, and if they are from the opposition party, something must be done. If they are from the majority party, they claim that they will do something.
The third thing of course is that people use less gas.
What I really wish our President would do is let his brainiac of an Energy Secretary write his speech. I imagine it would go something like this:
My fellow Americans, I'm going to tell you something that you already know. The price of gas has gone through the roof. It's causing you pain at the pump. Some of you are suffering because of it. You're spending an increasing amount of your paychecks not on good food for your kids, or education, or healthcare, or even vacations, but simply on getting to and from work. You drive by the gas station and the price seems higher each time you go by. You're not sure if you should top up today at $4.50 per gallon or drive until your tank is empty and hope that it will be back down to $4.25. Its frustrating and to be quite frank, scary.
It's also dangerous to our economy. The price of fuel is a part of the price of almost everything we buy. When fuel costs, or more specifically, transportation costs, go up, the price of any good that has to be transported will go up.
And it gets worse than that. Since we currently import most of our oil, the benefit of that higher gas price flows primarily out of the country. It increases our trade deficit, and does nothing but harm to our economy. We have to find a better way.
And that's actually where the good news is. There is no resource mightier than the ingenuity of the American spirit. We might not have enough oil to to fuel our current transportation energy needs, but the American entrepreneur, the American Engineer, the American innovator and the American people in general can fix pretty much any problem that is thrown their way. If.... If they are given the proper incentives and if the government does not try to solve the problem for them.
I am going to put a plan forth today that meets the following criteria:
- First - it will provide immediate assistance to all Americans, especially those who are having difficulty making ends meet.
- Second - it will not add a single penny to the deficit. Nor will it create a new source of government revenue
- Third - it will provide the proper incentives to encourage us to innovate our way out of our dependence on imported oil
I know that these three criteria sound almost impossible to meet in one program. Presidents have been promising to do something about the high price of oil since the first oil crisis in 1973. The truth is that we have always known how to address the problem, we just haven't mustered the political will.
American individuals and businesses are fundamentally intelligent. We respond appropriately to situations that we can predict and understand. If you knew today that the price of gasoline would never come down, ever, and in fact, you knew that it would continue to rise at a rate faster than that of inflation, it would affect your decisions, wouldn't it? You might go and immediately check the inflation on your tires. You might call your co worker who lives a few blocks away and see about arranging a car pool. You might look at your old gas guzzler and decide that it was time to trade it in for a more efficient car. If you were looking longer term, you might even consider moving closer to where you work or getting a job closer to where you live.
If you owned a business that spent a lot of money on transportation, you'd be even more likely to look into how you use energy. You'd find ways to spend less money of gasoline, whether that was using more efficient routes for your delivery trucks, buying new trucks or even changing how you get products to market.
If you ran a company that makes cars, trucks, generators and other things that burn gas, you'd likely spend more getting more efficient products to market. But only if you were absolutely sure that gas prices weren't going to come back down. Because if they did come down, you know from history that as soon as they do, consumers stop caring about efficiency, and all of that money that you spent creating more efficient cars, trucks or generators would have been wasted.
Hopefully by now, I've been able to convince you that there is an opportunity in high gas prices, that we can use these high prices, as long as they stay high, to make some changes in the way our economy works, so that we can become more efficient and use less gasoline. But even if I have convinced you that it might be a good idea, some of you are going to point out, rightfully so, that high gas prices cause real Americans real pain, right now. And if the prices go any higher, that pain is going to get worse.
You're absolutely right, and my plan will address that.
I propose to give every American a subsidy to help them pay for the high price of gas. The amount of that subsidy will start fairly small, but will increase over time. This will ensure that the people who are barely making ends meet right now won't be pushed over the edge by increased gas prices.
I see that you are looking at me like I'm crazy. After all, with a large budget deficit and and huge debt, how can we afford to increase government outlays. Here's how - the subsidy, I'm going to call it a royalty payment, is going to be paid for by implementing a new fee on oil. In other words, this royalty will cost the government not one penny, nor will it be used to raise government revenue. It will be a straight pass through - we will pay out in royalties all of the money that we collect. The only difference will be the cost to administer the program. But since that will be done using the existing tax collection infrastructure, even that amount should be small.
Here's how it will work: the royalty will be a refundable tax credit. We will immediately apply that to the way withholding is computed, so that you will see more money in your paycheck as soon as the plan is passed.
But let's be clear, you will all also see an immediate increase in the price of gas. For those of you who use the average amount of gasoline, the net effect will be that you will have a larger paycheck and will spending more at the pump. If you make no changes in how and what you drive, there is no net effect on your wallet.
But, if history is any guide, you will see that high price of gasoline at the pump, and will decide that you'd like the benefit of the bigger paycheck without having to pay the cost of the higher gas prices, and that will motivate you to act. Some of you may decide to stop driving altogether, and ride a bike to work. Or take public transportation. Or walk. Those might be good outcomes for you and your family, but you won't do it because you can't afford to drive, you'll do it because you would rather use your royalty payment for something other than buying gasoline.
The whole point of the plan is to unleash the energy of the American spirit to solve this problem. But if we want to kick our addiction to foreign oil, the only way to make sure that we will do that is to increase the price that we pay. And if we don't kick our addiction to foreign oil, we can be pretty sure that the price will go up anyway, there just won't be any royalty payment to offset it.
Friday, April 29, 2011
Monday, April 4, 2011
Grant Hill comments from privlege
You may have already read Grant Hill's response to the Fab 5 documentary on HBO. You may have, like I did, read Hill's New York Times Op-Ed, and felt that Hill had a great point. I mean if we are going to say that the children of stable middle class families are Uncle Toms (probably one of the worst things one black person can call another), then we, as a community, are doomed.
But I urge you to not make the mistake of coming to a conclusion without seeing the documentary. And not just the part where Jalen Rose explained why he disliked Duke and its players. Watch the whole thing. Understand where the players involved were coming from (interestingly, Chris Weber did not participate). If you do that, I think you'll come to the conclusion that the documentary was not about Hill or Duke.
Lots of words have been written about the documentary. I'm not going to add to that. I am focused on Hill's response.
I've been learning a lot about anti-racism work. In doing so, we focus a lot on what is called white privilege. It's basically the pass, the benefit, that white folks get just from being white. Generally, I think that we make too much of the racial element of privilege and too little of class element. But that's splitting hairs.
What's not splitting hairs is when someone from privilege watches someone talk about the hurt and pain and alienation that comes from being ignored or marginalized. and thinks that somehow it's about them. It's like when, as a black man, you talk about the pain of not being able to hail a cab, and a white person feels hurt because you bothered to mention it. Or minimizes what you say by mentioning the one time a dark skinned cab driver drove past him to pick up the black man 20 yards further down the street (who may or may not have been there first in any case). It's infuriating.
And it sounds a whole lot like the self indulgent piece that Hill wrote in the NYT.
I agree with the idea that we should celebrate families that manage to give their kids the best of all possible opportunities. We should celebrate those couples who manage to stay together and provide a stable platform for their kids. That's the ideal, and when it works, it's best for everyone involved. But we should also celebrate those single moms and dads and nanas and pop-pops who manage to provide against all of the odds. And we should work hard to make sure that their work is easier not harder. Ignoring or minimizing their pain to focus in the fact that sometimes, when someone is in the position where they can clearly see that their life is harder than yours, they might think ill of you. Especially if their a teenager. And especially if you, or your college, don't do anything to help them out.
And another thing... why did Grant put that piece in the NYT? If he was interested in reaching out to black folks so we could work, together, on some of our issues, then wouldn't The Root, or Ebony or Jet, or or or, have been better? Maybe he was reaching for a different audience, one that was perhaps less black? Is he planning to run for office? Or perhaps he feels that the NYT readership would be a more hospitable audience for his whining, I mean opinion. I don't want to give away anything from the documentary, but one thing it points out is that in America, you can get pretty far exploiting or demonizing black folks. Especially young, black men from the hood.
But I urge you to not make the mistake of coming to a conclusion without seeing the documentary. And not just the part where Jalen Rose explained why he disliked Duke and its players. Watch the whole thing. Understand where the players involved were coming from (interestingly, Chris Weber did not participate). If you do that, I think you'll come to the conclusion that the documentary was not about Hill or Duke.
Lots of words have been written about the documentary. I'm not going to add to that. I am focused on Hill's response.
I've been learning a lot about anti-racism work. In doing so, we focus a lot on what is called white privilege. It's basically the pass, the benefit, that white folks get just from being white. Generally, I think that we make too much of the racial element of privilege and too little of class element. But that's splitting hairs.
What's not splitting hairs is when someone from privilege watches someone talk about the hurt and pain and alienation that comes from being ignored or marginalized. and thinks that somehow it's about them. It's like when, as a black man, you talk about the pain of not being able to hail a cab, and a white person feels hurt because you bothered to mention it. Or minimizes what you say by mentioning the one time a dark skinned cab driver drove past him to pick up the black man 20 yards further down the street (who may or may not have been there first in any case). It's infuriating.
And it sounds a whole lot like the self indulgent piece that Hill wrote in the NYT.
I agree with the idea that we should celebrate families that manage to give their kids the best of all possible opportunities. We should celebrate those couples who manage to stay together and provide a stable platform for their kids. That's the ideal, and when it works, it's best for everyone involved. But we should also celebrate those single moms and dads and nanas and pop-pops who manage to provide against all of the odds. And we should work hard to make sure that their work is easier not harder. Ignoring or minimizing their pain to focus in the fact that sometimes, when someone is in the position where they can clearly see that their life is harder than yours, they might think ill of you. Especially if their a teenager. And especially if you, or your college, don't do anything to help them out.
And another thing... why did Grant put that piece in the NYT? If he was interested in reaching out to black folks so we could work, together, on some of our issues, then wouldn't The Root, or Ebony or Jet, or or or, have been better? Maybe he was reaching for a different audience, one that was perhaps less black? Is he planning to run for office? Or perhaps he feels that the NYT readership would be a more hospitable audience for his whining, I mean opinion. I don't want to give away anything from the documentary, but one thing it points out is that in America, you can get pretty far exploiting or demonizing black folks. Especially young, black men from the hood.
Wednesday, October 6, 2010
Meg Whitman's Mexican Problem
By now we've all heard poor little rich girl Meg Whitman complaining about how mean old Jerry Brown is making her look bad. "I didn't know that my house keeper was not legally allowed to be in the states. How could I know? I'm not ICE.I used a service, the maid had a social security number..."
Nonsense.
But let's take Ms. Whitman at face value. Let's assume that 1). she believed that her housekeeper, Nicky Santillan, was here legally, 2). that Whitman, a billionaire with political ambitions, didn't do a background check on a person who would have unfettered access to her home on a regular basis, and 3). both she and her husband managed to miss the letters from the feds telling them that Ms. Santillan's documents weren't right. If all of that is true, we still get to see how Whitman deals a slightly tricky problem.
While planning to run for governor, her employee confesses to being here illegally. What should she do? First, make damn sure that this employee is made to feel happy. Make sure that she is properly taken are of so that there is nothing even close to a legitimate claim of underpaying her or treating her badly. Then pay her a small severance, have her sign a document that says that she has been fully paid for all of her services, make sure that all of the taxes are paid and then send her on her way. If Whitman had done that, she'd have been able to "confess" that she too, like so many California employers, was stung by our dysfunctional immigration policy. But that she had treated this person well and complied with the law.
If she had done that, she'd have shown herself to be, at minimum, politically astute, and possibly even honest. But that's not what she did. She basically stick her fingers in her ears and said lalalalalala and hoped the problem would go away.
Let's be clear here, I don't buy for a second that Whitman thought Santillan was here legally. She knew better. She knew better because legal employees (especially of billionaires with political ambitions) demand to get paid for every minute that they work. They know that the employer has more to lose than the employee. But people working illegally have to put up with whatever abusive nonsense their employee dishes out. Make me work 45 hours but "forget" to pay my overtime? Have you ever met a legal employee who wouldn't deal with that issue on the day their pay check comes up short? In other words, not only did Whitman know Santillan was here illegally, she used that fact to steal from her (remember, that is the allegation here).
Whitman is just like most business people. They want cheap labor. Like some, she is willing to ignore the law to get it. In fact, Whitman and her ilk prefer illegal labor because those employees will not enforce their own rights and can generally be paid less than what they are worth.
Whitman is lying. And she doesn't even respect the voters enough to tell us a lie that we could believe without feeling disrespected.
Nonsense.
But let's take Ms. Whitman at face value. Let's assume that 1). she believed that her housekeeper, Nicky Santillan, was here legally, 2). that Whitman, a billionaire with political ambitions, didn't do a background check on a person who would have unfettered access to her home on a regular basis, and 3). both she and her husband managed to miss the letters from the feds telling them that Ms. Santillan's documents weren't right. If all of that is true, we still get to see how Whitman deals a slightly tricky problem.
While planning to run for governor, her employee confesses to being here illegally. What should she do? First, make damn sure that this employee is made to feel happy. Make sure that she is properly taken are of so that there is nothing even close to a legitimate claim of underpaying her or treating her badly. Then pay her a small severance, have her sign a document that says that she has been fully paid for all of her services, make sure that all of the taxes are paid and then send her on her way. If Whitman had done that, she'd have been able to "confess" that she too, like so many California employers, was stung by our dysfunctional immigration policy. But that she had treated this person well and complied with the law.
If she had done that, she'd have shown herself to be, at minimum, politically astute, and possibly even honest. But that's not what she did. She basically stick her fingers in her ears and said lalalalalala and hoped the problem would go away.
Let's be clear here, I don't buy for a second that Whitman thought Santillan was here legally. She knew better. She knew better because legal employees (especially of billionaires with political ambitions) demand to get paid for every minute that they work. They know that the employer has more to lose than the employee. But people working illegally have to put up with whatever abusive nonsense their employee dishes out. Make me work 45 hours but "forget" to pay my overtime? Have you ever met a legal employee who wouldn't deal with that issue on the day their pay check comes up short? In other words, not only did Whitman know Santillan was here illegally, she used that fact to steal from her (remember, that is the allegation here).
Whitman is just like most business people. They want cheap labor. Like some, she is willing to ignore the law to get it. In fact, Whitman and her ilk prefer illegal labor because those employees will not enforce their own rights and can generally be paid less than what they are worth.
Whitman is lying. And she doesn't even respect the voters enough to tell us a lie that we could believe without feeling disrespected.
Wednesday, September 1, 2010
In Case it Wasn't Clear that the Prison Population Has Exploded
In case the graphic isn't clear, that's bouncing around between between 0.15% 0.2% from 1925 to and 1973, then 0.2% of the male population to 0.9% by 2000. And with the prison population being 44% black, what do you think the effect on the black community has been? How many fatherless families has this created? How does a community survive with almost 10% of its young men in prison? How does it survive when those men, after they get out, will face legal discrimination and disenfranchisement for the rest of their lives?
Why Are So Many Americans in Prison?
I read this post by Michelle Alexander:
How the War on Drugs gave Birth to a New Permanent American Undercaste
Then I remembered this passage from Atlas Shrugged (Dr. Ferris is basically Dick Cheney explaining the system to an honest but naive industrialist)
The imprisoning of poor black men is not some unplanned byproduct of prison profiteering. It is intentional. We have to deal with this latest, and quite successful, attempt to enslave us. But we also need to address, head on, the fact that "they" are using our inability to connect with poor and working class folk who aren't black (e.g. white, Latino, Asian), to harm us. We are outnumbered and outgunned (we're trending to 10% of the population and have much less than a proportional share of wealth). We always will be. We need to form alliances or we face permanent slavery.
One place to start is in the effort to overturn the prohibition on cannabis. It is the first step to dismantling the war on drugs. It's a great step. It will help us disproportionately and it's the right thing to do.
Put 5 (50, 500 or 5000 works too) on it. Do it today. Do it again tomorrow.
http://yeson19.com/
How the War on Drugs gave Birth to a New Permanent American Undercaste
Then I remembered this passage from Atlas Shrugged (Dr. Ferris is basically Dick Cheney explaining the system to an honest but naive industrialist)
I'm no Ayn rand fan. There is much wrong with her writing and ranting. But she's positively prophetic when it comes to the means by which those who control the government will extend that control to specific populations of people. She also nailed the reasons: the love of money and power.
"Did you really think we want those laws observed?" said Dr. Ferris. "We want them to be broken. You'd better get it straight that it's not a bunch of boy scouts you're up against... We're after power and we mean it... There's no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren't enough criminals one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What's there in that for anyone? But just pass the kind of laws that can neither be observed nor enforced or objectively interpreted – and you create a nation of law-breakers – and then you cash in on guilt."
The imprisoning of poor black men is not some unplanned byproduct of prison profiteering. It is intentional. We have to deal with this latest, and quite successful, attempt to enslave us. But we also need to address, head on, the fact that "they" are using our inability to connect with poor and working class folk who aren't black (e.g. white, Latino, Asian), to harm us. We are outnumbered and outgunned (we're trending to 10% of the population and have much less than a proportional share of wealth). We always will be. We need to form alliances or we face permanent slavery.
One place to start is in the effort to overturn the prohibition on cannabis. It is the first step to dismantling the war on drugs. It's a great step. It will help us disproportionately and it's the right thing to do.
Put 5 (50, 500 or 5000 works too) on it. Do it today. Do it again tomorrow.
http://yeson19.com/
Thursday, November 5, 2009
Congressional bonuses
This goes into the category of "another stupid idea from Brian."
After hearing about yet another example of corrupt politicians accepting cash to give away government money, I started thinking about corruption in general. In developing countries, when the police aren't paid well by their government, they resort to petty corruption (or worse) to fill the gap. One of the suggestions that the developed world makes it that these countries pay their police and other civil servants much better, so that they don't have solicit bribes in order to survive.
I also listened to the amounts of money that many of the better paid employees of corporations (especially banks) make. Compensation packages well into the millions are not exactly uncommon. And $200k is considered in most of America to be on the upper end of middle class, and certainly not what you'd call setting the world on fire.
So I can't quite figure out how to consider $174,000 per year as a congressional salary. This is an amount of money that is certainly very attractive for most people, but not nearly what you'd expect to pay someone who had to put in the kind of commitment that we expect from our elected officials. In other words, it creates a great deal of temptation for them to enrich themselves.
So here's my idea. Let's let the magic of the internet and micro payments create a situation where we, the bosses of our elected officials, give them bonuses. Directly. Each rep would have a web site. Each of their constituents would be allowed to voluntarily contribute some small amount of money (up to say... $5 per year). Since each congressional rep has roughly 600,000 constituents, they'd have a potential bonus that could put them in the same league as well paid executives. That alone would create a situation where we would attract better talent to the role. In doing so, we'd also be able to hold them to higher standards because there are others waiting in the wings. Finally, it would make the representatives more directly accountable to the people.
Please tell me why this is a silly idea. Because I'm sure I'm missing some critical issue.
After hearing about yet another example of corrupt politicians accepting cash to give away government money, I started thinking about corruption in general. In developing countries, when the police aren't paid well by their government, they resort to petty corruption (or worse) to fill the gap. One of the suggestions that the developed world makes it that these countries pay their police and other civil servants much better, so that they don't have solicit bribes in order to survive.
I also listened to the amounts of money that many of the better paid employees of corporations (especially banks) make. Compensation packages well into the millions are not exactly uncommon. And $200k is considered in most of America to be on the upper end of middle class, and certainly not what you'd call setting the world on fire.
So I can't quite figure out how to consider $174,000 per year as a congressional salary. This is an amount of money that is certainly very attractive for most people, but not nearly what you'd expect to pay someone who had to put in the kind of commitment that we expect from our elected officials. In other words, it creates a great deal of temptation for them to enrich themselves.
So here's my idea. Let's let the magic of the internet and micro payments create a situation where we, the bosses of our elected officials, give them bonuses. Directly. Each rep would have a web site. Each of their constituents would be allowed to voluntarily contribute some small amount of money (up to say... $5 per year). Since each congressional rep has roughly 600,000 constituents, they'd have a potential bonus that could put them in the same league as well paid executives. That alone would create a situation where we would attract better talent to the role. In doing so, we'd also be able to hold them to higher standards because there are others waiting in the wings. Finally, it would make the representatives more directly accountable to the people.
Please tell me why this is a silly idea. Because I'm sure I'm missing some critical issue.
Thursday, August 20, 2009
Employer Paid Health Care is Bad for You
The "debate" on health care has been really disenheartening lately. Between the Death Panels on one hand and gun toting knuckleheads lately, it seems that intelligent debate about the actual economics of the issues have been lost on most people. One idea that keeps coming up is that most people are happy with their employee provided health care coverage.
Nonsense. Most people aren't really thinking about what "employer paid" really means.
Employers do not pay for anything of yours. Employers (I say this as a former small business owner and employer) look at the total cost of the employee and balance that against their value. We seek to find ways to minimize our cost while simultaneously "giving" the employee something that they will highly value. If you're worth $100, we'll pay you $100; but we'd rather pay you $70, and buy you something that costs us $20 but you think is worth $40. In that example, you then cost us $90 but you feel like you're getting $110.
In other words, the money that employers pay for your health coverage is just part of your overall compensation. It's your money. You'd be better off with the cash, if you had the ability to purchase that same coverage via a large group plan. If that were the case, you could very easily compare the economics of different job offers, without having to guess at the value of different health care coverage plans. You'd also be able to switch jobs or start a new business without worrying about losing your coverage because it would be yours.
This is basically the argument that McCain made during the campaign. He wanted to transfer the tax benefit from the employer to the employee through a refundable tax credit. If he had added a mandate for coverage, some strong regulation about the coverage and subsidies for those who couldn't afford coverage, he'd have had a great idea.
But back to why Employer Paid is bad for you. It's bad because it gives power to the employer at the expense of the employee. If you like your coverage and that coverage is not available to you on the individual market (basically because you might actually need it), then you're stuck. Not surprisingly, this is one reason why many employers do like it. Also, it favors large employers (who have bargaining power and therefore get better pricing) over small businesses (which are basically treated like individuals). Unless of course those large employers made health care based promises that they can't meet (e.g. the auto companies).
Also, it's bad because it creates a disincentive to hiring any but the youngest and healthiest employees. Now before you go saying something like "that's illegal" consider yourself in the following situation. You own a small business. You have 10 employees, one of whom has given notice so you have to replace him. You have narrowed your search down to two candidates: a young healthy looking guy and a guy who looks healthy but also seems to be about 50 and mentioned something about diabetes. The two guys are asking for the same salary, and are both equally qualified for the job.
Some additional facts: you know that your insurance policy does an annual "census" where they ask you the ages and zip codes of your employees. That determines the rates for the entire company. So if you hire a bunch of 50 somethings, your rates go way up, twentysomethings, your rates go down (or don't go up as fast). Also remember that as the owner of this business, your "pay" is simply what is left over after everything else is paid. So every dollar in extra expense is a dollar that you don't have in your pocket. Also, it is possible that your rates could go up far enough that you can't afford to cover any employees, including yourself (and your family).
So tell me... which employee do you pick?
Nonsense. Most people aren't really thinking about what "employer paid" really means.
Employers do not pay for anything of yours. Employers (I say this as a former small business owner and employer) look at the total cost of the employee and balance that against their value. We seek to find ways to minimize our cost while simultaneously "giving" the employee something that they will highly value. If you're worth $100, we'll pay you $100; but we'd rather pay you $70, and buy you something that costs us $20 but you think is worth $40. In that example, you then cost us $90 but you feel like you're getting $110.
In other words, the money that employers pay for your health coverage is just part of your overall compensation. It's your money. You'd be better off with the cash, if you had the ability to purchase that same coverage via a large group plan. If that were the case, you could very easily compare the economics of different job offers, without having to guess at the value of different health care coverage plans. You'd also be able to switch jobs or start a new business without worrying about losing your coverage because it would be yours.
This is basically the argument that McCain made during the campaign. He wanted to transfer the tax benefit from the employer to the employee through a refundable tax credit. If he had added a mandate for coverage, some strong regulation about the coverage and subsidies for those who couldn't afford coverage, he'd have had a great idea.
But back to why Employer Paid is bad for you. It's bad because it gives power to the employer at the expense of the employee. If you like your coverage and that coverage is not available to you on the individual market (basically because you might actually need it), then you're stuck. Not surprisingly, this is one reason why many employers do like it. Also, it favors large employers (who have bargaining power and therefore get better pricing) over small businesses (which are basically treated like individuals). Unless of course those large employers made health care based promises that they can't meet (e.g. the auto companies).
Also, it's bad because it creates a disincentive to hiring any but the youngest and healthiest employees. Now before you go saying something like "that's illegal" consider yourself in the following situation. You own a small business. You have 10 employees, one of whom has given notice so you have to replace him. You have narrowed your search down to two candidates: a young healthy looking guy and a guy who looks healthy but also seems to be about 50 and mentioned something about diabetes. The two guys are asking for the same salary, and are both equally qualified for the job.
Some additional facts: you know that your insurance policy does an annual "census" where they ask you the ages and zip codes of your employees. That determines the rates for the entire company. So if you hire a bunch of 50 somethings, your rates go way up, twentysomethings, your rates go down (or don't go up as fast). Also remember that as the owner of this business, your "pay" is simply what is left over after everything else is paid. So every dollar in extra expense is a dollar that you don't have in your pocket. Also, it is possible that your rates could go up far enough that you can't afford to cover any employees, including yourself (and your family).
So tell me... which employee do you pick?
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