Monday, June 08, 2015
Behind Those Self-Employment Numbers
AAR now has a graph widget on their site, updated weekly. I encourage anyone who's interested to play with it - you can sort bycomponents. Because of the early Memorial Day holiday, the YoY won't be directly comparable until we pass that down spike you see in the graph for previous years. Those downward spikes are Memorial Day, July 4th, Labor Day, Thanksgiving, and the Christmas/New Year holidays.
The bottom line is that you are comparing the last week to the next week in the graph, but it is evident that May traffic was substantially weaker YoY even with that adjustment.
ATA's truck tonnage index lags a month, but through April it looks worse than rail:
This does not necessarily imply that 2nd quarter GDP will be negative - after all, we are comparing YoY, and last year in March the economy picked up very strongly. But it does imply that if the government publishes a strong Q2 GDP number on the first pass, you should laugh and ignore it. Services trails manufacturing, and services can expand while manufacturing contracts a bit, although eventually they tend to correlate.
As of April, manufacturing was in contraction, with YoY shipments down solidly and New Orders down. Motor vehicles were still strong, which should not surprise anyone who has watched auto sales this year.
As you would expect, Industrial Production through April was showing contraction:
I have a hard time believing that it did very well in May after looking at rail.
Construction spending through April was fine and moving upwards. You don't get recession with motor vehicles holding AND construction spending increasing. However, in my experience construction can easily lag the start of recession - it is not a good forward indicator, and neither is employment. But here it is:
Services are harder to assess. A lot of the data is imputed; it tends to be substantially revised some months down the line. Growth on the bottom side, such as was clearly seen in the employment report from last week, may not show up very well. Because of this, most tend to inductively figure service trends from retail, because generally consumer spending on services will follow retail:
I know for a fact that small businesses are struggling to adapt. That doesn't necessarily mean they'll fail, but the success/failure curve has been shoved to the left somewhat due to the increased difficulty of paying employees enough to keep retention up. People either want to work for cash (which costs the business extra and increases risk), or they need to make quite a bit of money to compensate for being taken off of Medicaid.
I recently got put through the Obamacare wringer, so I went through the numbers in greater detail than I had done before. It varies from state to state and county to county, but apparently not as much as it did when the exchanges were first brought on line. The numbers seem to be similar between similar-sized cities. Our income the last few years has been up and down, but generally enough to get just a little subsidy on the exchange--not enough to compensate for the possibility of having to pay it back. So we would have bought directly from the insurance companies.
I was looking at premiums of about $9K, with a $12K deductible. Of course, that's in-network, and the network is pretty narrow when I checked it. If we're out of town, or need to see a specialist, it's pretty much out of network, a separate $25K deductible. It's possible to decrease the deductible, but only by paying a higher up-front premium, and it's phenomenally expensive to get the deductible down to $1000. In a normal year, we have about $3K in medical bills.
So, in a normal year, we're paying $9K up front (or $11K in 2016, judging from the requested increases) and then paying all of our expenses out of pocket anyway. The increase in costs would have eaten up our entire discretionary income, about $7K after tax. That means beans and rice for dinner, no savings, go back to one car, no soccer team for the kids, etc. It's difficult to make up for that with increased income, since our marginal tax load is greater than 50%, including state and self-employment taxes.
That means we could just barely pay for the insurance, but the first time we actually got sick, the deductible would kill us (since we wouldn't be able to save for it). From what I can tell, everybody with a family and between about $45K and $90K income will come up with the same answer.
So we chose to jump through a loophole. We're on one of the health-sharing ministries now. I'm skeptical that it will be much good, but at least they deal with the billing departments for us, and whatever they do pay will be more than we would have gotten from the insurance companies. And it's a little less expensive than our old grandfathered insurance plan.
I've known people who lost insurance and just gave up, and a lot who change their economic behavior so as to get below the line and get the subsidy. That's harder for business owners with episodic income. I have also known families in which the lower earner had to quit working, or go all-cash. Seems like this system is forcing many to become tax criminals. A lot of people want to work for cash now. I am watching gas because I suspect we have a large gray economy developing.
I wish we could get back to the cross-state business association plans, which generally offered a decent product that was at least somewhat affordable. But the removal of caps and limitations, and the imposition of drug treatment costs and so forth may mean that they don't qualify any more.
If you have to travel, the narrow networks are USELESS. There's no POINT in such a plan. And even if you stay local, there are hidden problems. You wind up at the hospital, and it turns out that the ER staff is contracted and not in the network, so you get a $2,000 bill with no insurance coverage and it doesn't even count against your standard deductible, and then it turns out that radiologist was out-of-network, so you get another uncovered bill for that. I think the narrow networks should be outlawed. It's fake insurance.
Yes, fake insurance. I think that's one of the reasons why they have so many people signing up, paying a few monthly premiums, and then failing to pay any more. The first time you get a bill and realize it went almost entirely to your out-of-network deductible...
And then next April they nab most of your tax refund to pay the penalty for being uninsured.
They tried to take every penny from us, but they over-reached. They took more than we had to give, so wealth is going underground.
So it is only logical that these dopes wouldn't be able to understand the quintile chart you show. How many more bad reports from WalMart and McDonald's is it going to take for people to understand the middle-class squeeze? Instead, the morons in the financial press think people are going to Chipotle instead of McDonalds. WRONG! The bottom 3 quintiles do not go to Chipotle, the top quintile and some of the second quintile go there.
My family members in the 3rd quintile only ever talked about the short-term low gas prices as a chance to pay down credit card debt. Some boobs like Paul Krugman consider this as "savings".
It costs me $243 to see this guy AFTER the insurance pays their part. The CT scan and breathing tests cost me $1500. I told his nurse that and that it was why I simply could not afford to go in for the tests he wanted. Doctors need to hear this more often.
As for taking every penny from us, the city treats me like a criminal for owning property. Today's crime? We have some old lumber outside that a tenant staked up. We told him not to put it there, but he did anyway. So we get to talk to Code Enforcement today, to get an actual list of what they want done. It is so easy for them to find things to charge you with.
However, the insurance cos are getting crafty to where they demand a very expensive test to document the need for many drugs, and then when the patient refuses the test, they refuse coverage for the treatment because the need is not proven.
So refusing the test doesn't always work.
What's even cooler and more special is that insurance for drugs is often in a different company than your hospital/clinician insurance, so whereas the insurance companies used to be moved by an appeal to the bottom line, now that frequently doesn't work. Patient access to care has dramatically worsened over the last year and a half.
You cannot give companies a monopoly and not expect customer treatment to worsen sharply, and that's what we are seeing.
The medical ministry networks function well because first they eliminate the people with really bad lifestyles, and second they eliminate the very expensive medical insurance ping-pong game.
In fact, I was able to tell him my O2 levels were low because I bought a tool to check them with. It is amazing to me to be able to get good quality medical diagnostic tools cheap. It would be different if we were dealing with a disease where you could use different treatments. Prednisone is it for bird fanciers. I will need to find another pulmonologist at some point. This one treated my husband and Lon's wife. I canceled the bronoscopy because if there is ever bad news, I am not going to let this doctor tell Lon. too many bad memories
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