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View Poll Results: Did Obamacare Slow the Recovery?

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  • Yes

    4 26.67%
  • It's likely (>50% chance)

    2 13.33%
  • It's unlikely (<50% chance)

    2 13.33%
  • No

    7 46.67%
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  1. #1
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    Default Did Obamacare Slow the Recovery?

    The argument is pretty simple, really:

    1. Businesses are profit-maximizers, and, as such, they hire up until the point that marginal revenue from hiring an additional worker is equal to the marginal cost of hiring that additional worker (i.e., if the increased revenue you'd get from hiring someone is less than the cost of hiring that person, then you won't hire them; if the additional revenue is more than the cost of hiring that person, you'll hire them; if the increased revenue and the increased cost associated with hiring that worker are equal, then you're at equilibrium, and have no reason to hire that worker, either).

    2. Obamacare raised the marginal cost of hiring that additional worker, thus causing businesses, all other things being equal, to not only hire less, but possibly to even lay more people off, as the marginal revenue for workers they already had on payroll would likely be below the new marginal cost of keeping them on payroll under Obamacare (caveat: the increased costs associated with Obamacare were not necessarily going to take effect immediately, but the expectation of future cost increases, would still have a deleterious effect, for the same reasons mentioned).

    Additional arguments about general regulatory/fiscal uncertainty could be made as well, but I'll just leave it at that.

    This chart provides evidence that the above theoretical argument very well may have proven true.


  2. #2
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    Would you like to actually provide your argumentation @Beargryllz?

  3. #3
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    Hmmm.

  4. #4
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    think it was more panic of how they would have to adjust.
    "I'm not in this world to live up to your expectations and you're not in this world to live up to mine. "
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  5. #5
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    Three Five people don't understand basic economics, can't form a coherent counterargument, and/or more-or-less are partisan hacks.
    Last edited by Zarathustra; 09-22-2012 at 02:05 PM.

  6. #6

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    Quote Originally Posted by Zarathustra View Post
    The argument is pretty simple, really:

    1. Businesses are profit-maximizers, and, as such, they hire up until the point that marginal revenue from hiring an additional worker is equal to the marginal cost of hiring that additional worker (i.e., if the increased revenue you'd get from hiring someone is less than the cost of hiring that person, then you won't hire them; if the additional revenue is more than the cost of hiring that person, you'll hire them; if the increased revenue and the increased cost associated with hiring that worker are equal, then you're at equilibrium, and have no reason to hire that worker, either).

    2. Obamacare raised the marginal cost of hiring that additional worker, thus causing businesses, all other things being equal, to not only hire less, but possibly to even lay more people off, as the marginal revenue for workers they already had on payroll would likely be below the new marginal cost of keeping them on payroll under Obamacare (caveat: the increased costs associated with Obamacare were not necessarily going to take effect immediately, but the expectation of future cost increases, would still have a deleterious effect, for the same reasons mentioned).

    Additional arguments about general regulatory/fiscal uncertainty could be made as well, but I'll just leave it at that.

    This chart provides evidence that the above theoretical argument very well may have proven true.

    I thought the uncertainty aspect would have been paramount. As you alluded to, most of the provisions of the Affordable Care Act themselves will not go into effect till 2014. Were there specific provisions that went into effect that raised the marginal costs directly in April of 2010?

    Also, the graph cites the US Bureau of Labor Statistics as its source, and the numbers are supposed to refer to private sector jobs (as opposed to all non-farm jobs used in the other thread). I can usually find the data I am looking for on the bls website pretty quickly. But what I found doesn't match the numbers (perhaps you can point to the actual source).

    This is what I found: http://www.bls.gov/news.release/cewbd.t01.htm

    They are quarterly numbers, and the OP is quoting monthly numbers. Perhaps that accounts for the discrepancy, but I am not sure how.
    In 2010, the March line shows -254000 jobs (which I interpret to mean, -254000 jobs over January, February, and March in 2010).
    Also in 2010, the June line shows 721000 jobs (which I interpret to mean, 721000 jobs over April, May, and June).

    It is possible that I am misinterpreting things, but I would like to know exactly how (perhaps, its these "seasonal adjustments", or there is some time delay or something). The raw data I found does not match the data in the OP, based on my current interpretations.

    In fact, the raw data seems to be exactly the opposite in terms of trends.

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  7. #7
    pathwise dependent FDG's Avatar
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    Regardless, I doubt Obamacare was introduced as a measure to speed up the economy, right?
    ENTj 7-3-8 sx/sp

  8. #8
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    Quote Originally Posted by ygolo View Post
    I thought the uncertainty aspect would have been paramount. As you alluded to, most of the provisions of the Affordable Care Act themselves will not go into effect till 2014. Were there specific provisions that went into effect that raised the marginal costs directly in April of 2010?
    No, in my original construction I mentioned the uncertainty as a cause, but I took it out, as the expectation of impending cost increases, in and of itself, was really what that uncertainty was largely about, and would have been enough to cause the slowdown in hiring in the first place.

    Quote Originally Posted by ygolo View Post
    Also, the graph cites the US Bureau of Labor Statistics as its source, and the numbers are supposed to refer to private sector jobs (as opposed to all non-farm jobs used in the other thread). I can usually find the data I am looking for on the bls website pretty quickly. But what I found doesn't match the numbers (perhaps you can point to the actual source).

    This is what I found: http://www.bls.gov/news.release/cewbd.t01.htm

    They are quarterly numbers, and the OP is quoting monthly numbers. Perhaps that accounts for the discrepancy, but I am not sure how.
    In 2010, the March line shows -254000 jobs (which I interpret to mean, -254000 jobs over January, February, and March in 2010).
    Also in 2010, the June line shows 721000 jobs (which I interpret to mean, 721000 jobs over April, May, and June).

    It is possible that I am misinterpreting things, but I would like to know exactly how (perhaps, its these "seasonal adjustments", or there is some time delay or something). The raw data I found does not match the data in the OP, based on my current interpretations.

    In fact, the raw data seems to be exactly the opposite in terms of trends.
    I believe it's (temporary) census hiring heading into and during the summer of 2010 that is causing the majority of the discrepancy.

    Everything else seems relatively in line.




  9. #9

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    Recovery needs money to circulate in order to happen.

  10. #10
    Senior Member Beargryllz's Avatar
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    Quote Originally Posted by Zarathustra View Post
    Three people don't understand economics, can't form a coherent counterargument, and are more-or-less partisan hacks.
    You can't have an economy without a healthy workforce

    DJI in 2009 was 6-7k

    PPACA passes in 2010

    DJI today is 13.5k

    http://www.google.com/finance?client=ob&q=INDEXDJXJI

    Obamacare is LITERALLY like steroids for the economy. To say companies are worse off now is just dishonest, but I exist to sow truth and justice. I like what I do.

    Checkmate, Zarathustra

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