Changeover

JULY 6, 2012

One of the most basic lessons that you learn when studying economics is that there are unanticipated consequences to almost everything. We grow up with the cliché “for every action there is an equal and opposite reaction,” but I think a lot of us just don’t believe that. We become experts at rationalizing our own decisions. We downplay the negatives and focus on the positives – even if the negatives are real and the positives are only our optimistic predictions.

Economists don’t. In fact, economists are notorious for predicting that widespread problems will arise from seemingly innocuous bits of legislation. (And for hoping that very minor changes in monetary policy will save a faltering economy.)

I wouldn’t call myself “an economist” (because I don’t have my Ph.D.), but I did study economics in college and I was raised by an economist. That’s why I have trouble believing articles like this one, which claim that businesses in Maryland should be “minimally affected” by Obamacare, when they appear alongside articles like this one, which claim that Maryland will add thousands upon thousands of new healthcare jobs in the next 8 years.

Now, I realize that right now we’re experiencing very high unemployment. And that unemployment statistics are actually misleading because they don’t count people who are underemployed (part-time workers that would prefer full-time or college-educated workers busing tables) or people who got discouraged and stopped looking for work.

I’m not saying that I expect thousands of businesses to fold just so enough workers will be freed up to work in the healthcare industry. I don’t view the economy in this way: as a fixed quantity – that’s another basic economics lesson for you.

What I am saying is this: the healthcare industry is a major part of our national economy. And it’s only getting more and more important as our population ages, demographically-speaking. That alone would be enough to create thousands of new jobs over the next eight years.

But healthcare is also one of the most heavily regulated industries in the country. And we just passed a massive law that complicates things even further. That’s where those unintended consequences come from. From complications. The more ins and outs there are to a particular system, the more likely it is that there will be negative consequences that no one could have foreseen.

I’m not expecting Obamacare to be Armageddon for Maryland businesses. But I am expecting there to be a changeover that won’t be all peaches and cream for many, many everyday Americans.

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