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McCarthyism or Stupid Politician Trick?

I am not such a big fan of Keith Olbermann. He can be hilarious, but only when he is trying to be serious. But I think Henry Waxman may be a candidate for this week's "worst person in the world" this week. Olbermann won't think so, but that only puts him in the running for next week.)

Representative Waxman is upset because a couple - well actually a slew - of large publicly traded companies have looked at ObamaCare and decided that it is going to cost them money - lots money. So much money, in fact, that they have decided that they needed to take a charge to earnings and disclose it to the public - the SEC being rather sensitive about the accuracy of financial information relied upon by the investors.

This has made Waxman and that resolute defender of principle, Bart Stupak, apoplectic. Didn't AT&T and John Deere and Caterpillar and a growing list of others read the memo. Health care reform is going to expand coverage, reduce costs, cut the deficit and causeth the wolf to live with the lamb and the leopard to lie with the kid. Waxman cannot - cannot - understand how these companies could possibly disagree with selected analyses that claim that ObamaCare will cut costs. He wants them to explain.

Except they already have. The new legislation eliminates the deductibility of certain subsidies that these companies receive to provide prescription drug coverage to their retirees. This is a real cost. It will happen. The various "savings" are manna from heaven - something to be hoped (if not prayed) for. Generally accepted accounting principles require the disclosure of the former. They prohibit claiming the latter.

Now it could be that Representatives Waxman doesn't know that. It is, I suppose, possible that the Chairman of the House Energy and Commerce Committee could be that clueless. But I doubt it.

Waxman is, at best, engaged in a publicity stunt and, at worst, sending a message to others. Either way the rule of law is just a tad worse for it. These companies have a right to speak and a duty to disclose their financial condition. In the brave new world in which the government will be making us all better than we are, the company line had better not be resisted. If this means politicizing GAAP and misleading the public as to the financial condition of major publicly traded companies so be it. If it means that speaking out wins you a congressional grilling, no one ever said that revolution would be easy.

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Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.