Megan McCardle, in a futile effort to explain GAAP to Henry Waxman and Bart Stupak.
…when a company experiences what accountants call “a material adverse impact” on its expected future earnings, and those changes affect an item that is already on the balance sheet, the company is required [by Federal law] to record the negative impact…
…now a bunch of companies with generous retiree drug benefits have announced that they are taking large charges to reflect the cost of the change in the tax law [occasioned by Obamacare].
Henry Waxman thinks that’s mean, and he’s summoning the heads of those companies to Washington to explain themselves. It’s not clear what they’re supposed to explain. What they did is required by GAAP. And I’ve watched congressional hearings. There’s no chance that four CEO’s are going to explain the accounting code to the fine folks in Congress; explaining how to boil water would challenge the format.
It is not the format that’s going to be challenged, it’s the formatees. They know how to turn up the heat, they just don’t comprehend that they are the ones sitting in the soup pot.
I would jump to be the first to say that there should be no subsidies from any government to any corporation; it just encourages the lobbyists, produces graft and corruption, wastes money, stifles innovation and competition, and reduces our freedom. However, when you eliminate a subsidy, you have to expect it will change the financial picture for the corporations that enjoyed the former tax regime. Getting all huffy about that would be beneath most folks. Not necessarily because most folks would be worried about public perception of their honesty, but because they wouldn’t want everyone to know they were morons.
Ask yourself why the Feds felt it incumbent upon them to subsidize benefits for retirees belonging to large unions in the first place. Ask yourself if the corporations would have granted such generous benefits without such federal subsidy. That is, ask yourself if corporations would take advantage of government interference intended to encourage opulent benefit programs at your expense.
AT&T and other companies following SEC rules in announcing that they expect Obamacare to raise their health insurance costs have received demands from Henry Waxman and Bart Stupak to justify the numbers. They’re going to hold a hearing to get to the bottom of this. I’d prefer they’d hold a listening, but they proven they can’t do that, either.
These congressmen write in part:
The new law is designed to expand coverage and bring down costs, so your assertions are a matter of concern. They also appear to conflict with independent analyses.
These are the people who gamed the CBO to get a false cost for Obamacare, a bill of which they didn’t even know the content. They are the people responsible for Fannie Mae and Freddie Mac. They are the people responsible for the decline in sales of US Treasuries. They are congenitally incapable of balancing a budget. They praise themselves for programs like “Cash for Clunkers.” They propose to raise energy costs dramatically through the Cap & Tax bill. These are the people who bribe each other with your money. They run Ponzi schemes known as Social Security and Medicare. They live in a fantasy world, where facts are subject to their intent: “The new law is designed…” They think all they need do is reference their putative intentions. Putative, because, as they demonstrate, it isn’t about health care.
As Democrats move toward violating the intent and purpose of Senate rules regarding ‘reconciliation’ in order to pass a health care bill a large majority of Americans reject, it is useful to see what they have said about it in the recent past:
Washington, D.C., February 23, 2009–Sales of Ayn Rand’s “Atlas Shrugged” have almost tripled over the first seven weeks of this year compared with sales for the same period in 2008. This continues a strong trend after bookstore sales reached an all-time annual high in 2008 of about 200,000 copies sold.
What I want to know is where’s Galt’s Gulch?
Seriously, I don’t know if I could read it again right now. You recognize too many of the looters she described: And you always regarded them as slightly exaggerated. Unfortunately, she probably understated it.
I will say you should read it if you haven’t, and I did suggest it as part of a reading list on November 6. See also this list from November 5.
Two interesting posts at Amy Ridenour’s National Center Blog.
Before you read this one, Egg on Faces of Al Gore and Ban Ki-Moon, see if you can think of any reason that there might be a problem with Al Gore and Ban Ki-Moon claiming that, “there are now more jobs in the wind industry than in the entire coal industry.” Reasonability check: Last November coal was used to generate 155,000 thousand megawatt-hours, wind produced 1,300 thousand megawatt hours.