“Are corporations supposed to pretend that these costs do not exist? This is very strange business, scolding executives for stating the obvious”
Not only that, but I saw someone on the business chanel making the point that by the Sarbane-Oxley law, regulating reporting requirements for companies, the CEOs were required by law to do this, i.e. report on the impact. And they wouldn’t be over or understating it, because also per Sarbane-Oxley, the CEOs have to take personal responsibility for the accuracy, under penalty of law.
Dems are just upset that the truth comes out.
Sarbanes Oxley was put into place by Congress after the Enron collapse in order to ensure a company’s liabilities are properly reflected in the public financial statements and end the “off the books” accounting games employed by Enron. The Democrats were major players in putting these rules in place. The civil and criminal penalties for violating these laws are heavy. The company CEO, CFO, and board of directors have to sign a statement with every SEC filing acknowledging their personal liability if the statements to not adequately reflect reality. No doubt if these executives failed to report the financial implications of the new health care law, some tort lawyer would file a class action suit against the company officers and board of directors which would result in personal economic ruin. Having sat on the inside of public companies since Sarbanes was enacted, I can assure you the potential penalties are so onerous, management is extremely careful to err on the side of conservatism and over reporting when filing these reports.
What the Dems don’t (or perhaps do) understand, these companies are not trying to embarrass them, they are merely reporting facts about future cost projections to their shareholders as required by the laws the Dems passed. Corporations cannot play the accounting games of counting savings twice and ignoring costs such as Obama and Pelosi did to make the numbers work. They have to report the “truth”. If the health care bill eliminated tax breaks, the loss of those tax breaks represents a real cost increase.
We have now reached the stage with the imperial Congress and Presidency where our lawmakers are encouraging executives in the private sector to break the law when company actions might embarrass those lawmakers. This is not unlike the situation Ken Lewis of Bank of America found himself in at the height of the financial crisis when he realized the assets of Merrill Lynch, which the government was forcing BOA to acquire, were overstated on the books. The securities laws required he report the information publicly, yet he was told by Bernake and Paulson not to report because of the economic meltdown. Lewis knuckled under and is now being sued by Andrew Cuomo for failing to disclose.
The socialists are now so brazen they can demand private sector CEO’s break the laws of the nation or face consequences. When the government has no respect for the law, and when individuals leading companies are put in situations where no matter what action they take they face the wrath of the government, we have anarchy. Clearly this is part of the plan to destroy the private sector.