When Government Acts, Citizens React

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

You would think that during the past 237 years, those who run the U.S. government would have learned the simple principle that for every action, there is a reaction. Of course, if you thought that, you’d be wrong. That’s because it seems like government never learns that for just about every new tax, new law, or new regulation, there are citizens who find ways to either circumvent, mitigate or completely avoid attempts by the state to increase control over the people.

The latest example of citizens taking action in their own self-interest, and in reaction to more onerous laws, comes to us courtesy of firearms company HiViz Shooting Systems. According to a report in the Washington Times, last week the company announced that it was moving its core operations from gun-restrictive Colorado to gun-friendly Wyoming.
Interestingly, the company’s current headquarters are in Fort Collins, Colo., and their new home will be in Laramie, Wyo. “That is about an hour’s drive, but light-years away in terms of state gun policy,” as writer Valerie Richardson put it in the Washington Times piece.

In March, three new restrictive state gun control laws went into effect in Colorado, which were ostensibly designed to help protect citizens against gun violence. Unfortunately, these laws have driven firearms and related makers away from the state in search of more friendly ground. Firearms accessory firm Magpul Industries (makers of what this writer and shooting sport enthusiast considers to be the finest AR-15 accessories on the market today) announced in March that it would relocate to a new state in response to the legislation. Now, we have a similar decision by HiViz.

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Of course, the gun business is only one small example of how government actions lead citizens to react.

Perhaps the biggest and, potentially, most economically destructive reaction to a law is what businesses plan to do in reaction to the full implementation of the Affordable Care Act (ACA), otherwise known as ObamaCare. One of the many burdensome provisions of the ACA for small businesses is the requirement that companies with 50 or more employees provide insurance coverage to workers. There is, however, an exemption for part-time employees who work fewer than 30 hours per week. According to ObamaCare, there is no penalty imposed for not providing health insurance coverage to this class of employee.

Predictably, many companies have chosen simply not to hire more than 49 employees. I have a friend who owns a pool cleaning service in Florida, and he refuses to hire more people, even though the demand for his services is there. That’s because he doesn’t want to incur the estimated cost of an insurance policy that, on average, would be $9,562 per employee, according to employment services firm ADP.

Many other companies have decided just to cut employees’ hours from full-time to part-timers who work no more than 30 hours a week. Already, we’ve seen the nation’s largest movie theater chain, Regal Entertainment Group (RGC), move to do just that. What’s of particular note here is that the company flat-out blamed ObamaCare for the move.

A company memo obtained by Fox News stated the following, “To comply with the Affordable Care Act, Regal had to increase our health care budget to cover those newly deemed eligible based on the law’s definition of a full-time employee. To manage this budget, all other employees will be scheduled in accord with business needs and in a manner that will not negatively impact our health care budget.”

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Ouch!

Basically, employees at Regal are going to get their hours cut, and that means less money in their pocket to spend on all sorts of things they want. Now, it doesn’t take a Ph.D. in economics to figure out that this type of reaction to ObamaCare by companies throughout the United States is going to negatively impact the economy. But hey, so what, Washington doesn’t care. It finally got its long-desired government health care program, so damn the consequences for the rest of us.

Well, citizens throughout the land won’t just sit back and accept the consequences.
Individuals and business will act in their own self-interest, and that means we’ll take the necessary steps to insure that leviathan affects us as little as possible. If that means relocating to a more business-friendly state, or choosing not to expand our businesses or not to hire more full-time employees, then that’s what’s going to happen. In some cases, the results might not be positive for the economy or particular states or industries. In others cases, it could be very destructive.

The bottom line, however, is that when government acts, citizens react. This is a principle that lawmakers must realize, because the right actions can help foster more freedom and more economic prosperity. Unfortunately, the wrong decisions can lead to tyranny and economic implosion.

Here’s hoping the right decisions prevail.

Jim Woods is Editor-at-Large of TheWealthShield.com. You can follow him on Twitter: @Woodsish.

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