Opposing workers’ comp and SCE&G rate hikes

The workers’ compensation insurance industry and SCE&G both have hearings in the coming months regarding their requests for more revenue.  The South Carolina Small Business Chamber of Commerce (SCSBCC) and its president and CEO, Frank Knapp Jr., will intervene to oppose both rate hikes.

The SCSBCC is joining the S.C. Consumer Advocate’s Office in pushing back on a 7.3% average increase filed by the National Council on Compensation Insurance.  The Administrative Law Court is scheduled to hear the case starting October 8, 2012.  Representing SCSBCC from the Injured Workers Advocates will be Bill Smith of Chappell, Smith & Arden and Kevin Holmes of the Steinberg Law Firm.

“Since 2005 Bill Smith and Kevin Holmes have formed an effective team with Elliott Elam, the state Consumer Advocate, to successfully fight against proposed increases in workers’ compensation insurance costs to businesses,” said Mr. Knapp.  “Because of our efforts, Administrative Law Judges have ordered up to 44% decreases from the insurance industry’s requests.”

On November 27 the S.C. Public Service Commission will begin hearing a 6.61% overall electricity rate hike being sought by SCE&G, which serves 668,000 residential and commercial customers in South Carolina.

Mr. Knapp will officially intervene in the hearing to oppose the hike as he has done effectively since 2004.  He has worked closely with the S.C. Office of Regulatory Staff in these rate cases resulting in proposed hikes being reduced by up to 50%.  Mr. Knapp does not need legal representation in these hearings because he is intervening personally as a residential and commercial customer of SCE&G. 

“SCE&G’s parent company, SCANA, saw its earnings increase by 29% in the second quarter of this year,” said Mr. Knapp.  “In addition the company is justifying its request by saying it needs a return on equity almost 0.5% higher than the current rate for Duke Energy.  Small businesses simply want to tell SCE&G “NO”.  Fortunately I will have that opportunity.”

Protecting cancer-causing chemicals is not good for small business

Since when is protecting cancer-causing chemicals good for small businesses?

That is one of the arguments Congressional supporters of an effort to defund the annual “Report on Carcinogens” (ROC) are making.

The ROC is produced by the National Institutes for Environmental Health Science. The NIEHS does not test the chemicals.  It reviews scientific literature from academic, government and some industry studies to produce the ROC for information only. The ROC can be used by industry as a guideline for choosing safe chemicals in their consumer products and by the public to know what chemicals to stay away from. The ROC does not stop a business from using any chemicals.

The major push to defund the ROC seems to be coming from the formaldehyde chemical producers.

You might be asking, “Who would put formaldehyde or other toxic chemicals in consumer products?” 

Apparently a lot of companies.  They just don’t usually list them on their products because they aren’t technically “ingredients”.  But they are in the products.

The ROC has specifically listed formaldehyde as a carcinogen and the corporations producing the chemical, like Koch Industries and its subsidiary Georgia Pacific, have struck back with PAC campaign contributions to Congressmen like Representative Denny Rehberg who sponsored the budget amendment to defund the ROC for two years.

The corporate carcinogen-chemical-producing companies should be concerned about the ROC.  Environmental and consumer groups have put pressure on companies like Johnson & Johnson, Estee Lauder Companies, Procter & Gamble, Avon and L’Oreal to stop using toxic chemicals in their products.

This week, Johnson & Johnson became the first of such companies to declare that it would stop using formaldehyde in all its products by 2015.  The company had previously promised to remove other toxic chemicals in baby products by 2013.

Without the government’s ROC, the public would be left in the dark in these matters.  Even better than this transparency would be actual regulations prohibiting cancer-causing and other toxic chemicals from all consumer products.  But in today’s political environment, this kind of common sense won’t fly.

This is why the ROC is so important.  While public pressure might cause chemical manufacturers some money to develop safer chemicals, the ROC is certainly not hurting small businesses.   No small business-owner wants to put the health of customers, workers and his/her own family at risk.  We sell the products that are available and we want them to be safe. 

In addition the ROC also is a guide to small businesses that don’t want to use toxic chemicals in the products they make.   Letters from small chemical and consumer product manufacturers and the American Sustainable Business Council have been sent to Congress in support of funding of the ROC. 

Below are the addresses and fax number of the appropriate members of Commerce if you would like to weigh in on this issue.  Hurry!

The Honorable Daniel Inouye Chairman Senate Appropriations Committee S-128 Capitol Building Washington, DC 20510 (fax 202-224-6747)	The Honorable Thad Cochran Ranking Member Senate Appropriations Committee S-146A Capitol Building Washington, DC 20510 (fax 202-224-9450)
The Honorable Tom Harkin Chairman Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 131 Dirksen SOB United States Senate Washington, DC 20510 (fax 202-224-9369)	The Honorable Richard Shelby Ranking Member Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 156 Dirksen SOB United States Senate Washington, DC 20510 (fax 202-224-3416)
The Honorable Harold Rogers Chairman House Appropriations Committee H-307 Capitol Building Washington, DC 20515 (fax 202-225-0940)	The Honorable Norm Dicks Ranking Member House Appropriations Committee 1016 Longworth House Office Building Washington, DC 20515 (fax 202-225-9476)
The Honorable Denny Rehberg Chairman Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 2358 Rayburn HOB U. S. House of Representatives Washington, DC 20515 (fax 202-225-5687)	The Honorable Rosa DeLauro Ranking Member Subcommittee on Labor, Health & Human Services, Education & Related Agencies Appropriations Room 1016 Longworth HOB U. S. House of Representatives Washington, DC 20515 (fax 202-225-4890)

Euro zone austerity shrinks economy

Count your blessing that the United States did not put deficit reduction over stimulating jobs as our solution to the Great Recession.  Europe’s austerity approach has given them no blessings to count.

 “The euro zone's…economy shrank in the second quarter, having flatlined in the first, despite continued German growth which economists said could soon be snuffed out,” read the first line of a Reuters story yesterday.  “The 17-nation currency bloc contracted by 0.2 percent on the quarter data showed on Tuesday.” 

Economists say it is likely to get worse.

While there was anemic growth of 0.3 percent or less in Germany, Austria and the Netherlands and France had zero growth for the third consecutive quarter, the news was very bad for the other European countries.

How much did some of these national economies drop.

Cyprus down 0.8 percent.

Finland down 0.7 percent.

Greece down 6.2 percent.

Italy down 0.7 percent.

Portugal down 1.2 percent.

Spain down 0.4 percent.

"Overall it confirms the idea that the euro zone is in a recession phase," Aline Schuiling, economist at ABN AMRO, said.  "What we see is a vicious circle of budget cuts, high interest rates in the periphery and sovereign debt rising…We expect another contraction in Q3."

According to the Reuter’s story there is a “growing debate inside and outside Europe about the sense of austerity drives.”

What definitely doesn’t make any sense is for there to be any debate about the U.S. following the austerity, cut-the-deficit-priority European model.

NFIB exposed…again

The first time I mentioned Bill Dunkelberg in my blog was two years ago.  Mr. Dunkelberg is the chief economist of the National Federation of Independent Business (NFIB), Professor Emeritus of economics at Temple University and chairman of Liberty Bell Bank in New Jersey. 

Unfortunately, in spite of all those distinguished positions, Mr. Dunkelberg is not a very good prognosticator and certainly not a friend of the nation’s 30 million small businesses.

In 2010 he led the NFIB’s PR campaign against the Small Business Lending Fund the Obama Administration wanted to create in order to encourage community banks to start making small business loans.  Mr. Dunkelberg said that passage of the Lending Fund would lead to “bad loans” that would result in the same kind of financial collapse that resulted from the housing bubble.

Well, the Lending Fund was established and while it has not been a great success in getting banks to meet the demand for small business loans, we also haven’t heard about bad loans threatening the entire financial industry. 

Last week Mr. Dunkelberg’s credentials as a small business advocate for the NFIB were again on display in an interview on WHYY, a Philadelphia public radio station, along with John Arensmeyer, founder and CEO of the Small Business Majority.

Mr. Dunkelberg made it painfully clear who he and the NFIB consider worthy small businesses.  Although there are 30 million small businesses in the country, only 6 million have employees other than the owner according to Mr. Dunkelberg and “those are the ones we worry about” he said.  The other 24 million sole proprietors he dismissed as “little businesses”. 

In Mr. Dunkelberg’s ivory-tower world, almost all the 6 million small-business owners that the NFIB “worries” about would pay higher personal income taxes if the Bush tax cuts end as scheduled for individuals making over $200,000 or joint taxpayers making over $250,000 a year.  Amazingly Mr. Dunkelberg proclaimed, “200-thousand.  250-thousand.  It’s hard to make a lot less than that.”

What?

In a national survey conducted by Lake Research last December for the American Sustainable Business Council, Main Street Alliance and Small Business Majority, only 3% of small businesses with employees other than the owner self-reported family incomes of over $250,000.  That is right in line with all other polling on this issue. 

If Mr. Dunkelberg is so wrong about the incomes of the vast majority of small-business owners, what else is he and the NFIB wrong about?

How about the demand for small business loans?  Since Mr. Dunkelberg is the CEO of a bank he should be an expert on this?

In the radio interview, Mr. Dunkelberg said, “When I talk to all these bankers across the country and also at our bank we find that for the most part that nobody wants more money.  The reason is we have more firms that think the economy will be worse 6 months from now than think it will be better.  We have more firms that think that their real sales will be lower six months from now than it is today.  And we have virtually nobody who thinks it is a good time to expand.”

No small business wants to expand?  No small business needs a loan?  Sounds like a typical bank CEO who listens only to other bankers and wants to sit on his money waiting for the perfect, no-risk small-business loan application.

But at least NFIB’s own survey of its members backs up Mr. Dunkelberg’s opinion.  In May 91% of NFIB members self-reported that they had all the credit they needed.  Only 3% said that financing was their biggest problem. 

However another survey in May by the National Small Business Association found that 43% of its members have wanted loans in recent years but couldn’t get financing.  In June Sam Graves, Republican Chairman of the U.S. House Committee on Small Business wrote, “One of the biggest issues faced by small businesses today is the inability to access sufficient credit and capital.” 

Not only is there demand for small business loans, contrary to Mr. Dunkelberg’s assertion, some small businesses are actually getting the credit they need.  A Gallup poll back in February found that 15% of small businesses were hiring primarily because of the need to expand their business operations and increased consumer demand.  But still not all of even these businesses were getting as much financing as they wanted.  The poll found that one third of the small businesses hiring were adding fewer employees than they needed.

Additionally, the Gallup poll disagrees with Mr. Dunkelberg’s portrayal of small business pessimism.  “Right now, economic confidence is approaching its highest levels in the last four years.  U.S. small-business owners are also about as optimistic about their business and their future hiring as they’ve been at any point during that time,” said Gallup’s chief economist. 

So small businesses are looking for financing, some are expanding and optimism is returning.

All of this means one thing.  Mr. Dunkelberg and the NFIB do not represent most small businesses in this country. 

Maybe the 300 to 350 thousand small businesses the NFIB claims as members consist of all the 3% of small-small business owners that take home over $250,000 a year.  And maybe these NFIB small-business owners don’t need any financing and maybe they are terrible pessimistic. 

But one thing is certain.  They and the NFIB don’t represent the rest of us.  

Romney-Ryan's promise of austerity for small businesses

With Congressman Paul Ryan on the ticket with Mitt Romney, it is clear that a Romney-Ryan administration would choose eliminating the federal deficit over creating jobs as their economic plan. 

So what does this mean for small businesses if $6 trillion was cut from federal spending over the next 10 years as proposed by Mr. Ryan and supported by Mr. Romney? 

I’ve warned about such an austerity approach.  It is the road Europe chose during the Great Recession and the economic results have been disastrous.  Last Friday I told you about the dramatic rise in abandoned babies and children by families in Europe that can’t afford to feed and clothe them.

In today’s editorial the New York Times writes,

More than three-fifths of the cuts proposed by Mr. Ryan come from programs for low-income Americans. These cuts are so severe that the nation’s Catholic bishops protested the proposal as failing to meet society’s moral obligations, saying the plans “will hurt hungry children, poor families, vulnerable seniors.”

But aside from our concern for the less fortunate, what happens when government stops supporting the vulnerable in our society or helping states and local governments with education and first responder financing or investing in roads and bridges?  The answer is a dramatic drop in money on Main Street. 

The funds for these programs aren’t being spent on European vacations or the buying of more stocks or paying for big bonuses for corporate executives.  That is what the wealthy and big corporations will do with their $4 trillion in tax cuts if the Romney-Ryan plan is enacted. 

The money targeted for the austerity budget is being spent today in your local communities.

Main Street will suffer as it has in Europe and especially in Greece and Italy.  And for what?  Even the Ryan budget plan wouldn’t balance the federal budget for 30 years. 

Government austerity is a failed model.  While there will be no austerity for the wealthy and multinational corporations, there will be plenty for small businesses.

Austerity's other failure—babies abandoned in a box

The rallying cry of government budget cutters in the austerity vs. stimulus debate is that they don’t want to burden our children and grandchildren with the country’s debt. 

That certainly is a more appealing argument than the “austerity leads to a healthier economy” baloney.  The evidence is all too clear that while the U.S. economy is only slowly improving thanks to our mediocre stimulus efforts, Europe’s austerity experiment has countries still in a deep recession or worse. 

But what about those children the “shrink the government down to the size where we can drown it in the bathtub” crowd is so concerned about?

According to a CNBC report entitled "Austerity's Cost: Abandoned Children in Europe", the number of abandoned babies and young children across Europe is increasing.  In the last year in Italy child abandonment has gone up over 87% from a year ago and Greece has seen a tenfold rise in abandoned children since 2003.  Many of the babies are left anonymously in a monitored box where it is legal to do so in many European countries.

The National Director of SOS Villages said that because parents are struggling to even feed and clothe their children and the number of these economic orphans is expected to grow.  Data shows that 27.7 percent in Greece are facing extreme poverty. 

Stergios Sifnios of SOS villages told CNBC, “We are really afraid that in the future we will have a big number of families that cannot manage to keep their own children because of these problems. We are trying to be ready for this.”

The other price of the failed economic austerity model—abandoned children. 

Looking for an "oops"

July was officially the hottest month for the United State’s 48 contiguous states—3.3 degrees above the average.  Those high temperatures also contributed to the country’s warmest 12-month period every recorded.

Jake Crouch of the National Climatic Data Center says that it’s more than just daytime highs that scientists are looking at.  He says that “we have also seen very warm nighttime temperatures, and that is part of a long-term trend we’ve seen across the contiguous U.S. over the past several decades.  The hotter days increase the amount of moisture the lower atmosphere can hold, and this means it doesn’t cool off as much at night anymore.”

Republican U.S. Senator Roy Blunt of Missouri wrote in the Springfield News-Leader:

At the end of July, all of Missouri’s counties were designated a state of “severe” to “exceptional” drought — representing the worst level of drought possible. The U.S. Department of Agriculture recently added 218 counties from 12 drought-stricken states to its list of natural disaster areas, bringing the overall total to 1,584 counties in 32 states — more than half of all the counties nationwide.   

According to the USDA’s crop report, half of the nation’s corn crop is now in rated in the worst condition, of “poor” to “very poor,” with Missouri topping the list as one of the hardest hit states.  Meanwhile, approximately 73 percent of the domestic cattle inventory nationwide is located in an area that has been impacted by this drought, and 59 percent of America’s and 99 percent of Missouri’s pasture and rangeland is in “poor” to “very poor” condition, compared to 38 percent a year ago.



We all know what’s going on.  Scientists like James Hansen of NASA have been warning us about extreme weather events as a result of the increased levels of carbon dioxide humans are pumping into the atmosphere.  Climate change has been going on for some time and it is getting worse. 

South Carolina U.S. Senator Jim DeMint, infamous for his resistance to Congress taking measures to address climate change, is notorious for his 2010 tweet that ridiculed the notion of a warming planet.  When Washington was hit with a severe snowstorm that February causing the House to cancel all votes for a week, Mr. DeMint tweeted:

 “It’s going to keep snowing in DC until Al Gore cries ‘uncle’.”

Mr. DeMint was seen earlier today with his cell phone in hand asking a page how to spell “oops”.  (Just wishful thinking.)