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Ron Hart: Democrat dogma: Blame business for passing on inflation costs



Ron Hart

When you create inflation like Joe Biden has, that cost is always passed on to the consumer. Materials, regulatory and oil costs are up, along with interest rates.

The expense to do business naturally goes up; and for Biden to childishly chide business owners for raising prices, calling them “greedy and gouging” (even yelling that his Snickers bars have shrunk), aka shrinkflation, is pure political BS.

Old Joe should know about this. He is a few fries short of a Happy Meal himself. For a guy his age who does not speak very well and who called Laken Riley “Lincoln Riley,” Biden ran a lot of risk as a onetime anti-busing segregationist saying “Snickers” in his SOTU address.

In reality, as long as there are fair competition and free markets, consumers get a good shake. The businesses Biden does not want to talk about, which raise their prices because they have virtual oligopolies, all have one thing in common: They have cadres of lobbyists, essentially price fixers, who have their tentacles into Washington politicians for protection.

First, there is the insurance business. It is highly regulated, and they buy off corporate media by buying every other commercial on TV: Progressive, State Farm, Allstate, Farmers and, of course, GEICO (which has the gecko, the caveman etc.).

Just car insurance prices went up another 21 percent in the last couple of years. They all advertise and by switching to them they save you money each time. I did the math based on the commercials. If you switch to Allstate from Farmers, then back to GEICO, then to Progressive and back to GEICO, they should owe you about $1,129.

My Drunkle Mac may have had it right. He would hear commercials brag that you can save 20 percent on car insurance by switching. He said, “I save 100 percent by leaving the scene of the accident.”

I also figured out how State Farm saves all that money to pay Patrick Mahomes, Travis Kelce and that walrus-looking Kansas City coach Andy Reid: they do not pay claims. It seems that Taylor Swift is the only one on the Chiefs’ roster not in State Farm commercials.

The insurance model is simple. Your agent is a local, hardy, fellow-well-met. Who could not like him? He is a good golfer, “always there with a joke or to light up your smoke.” And he always says you are covered, which is the case right up until you have a claim.

Then a much less affable fellow shows up. He is called an adjuster, and he “adjusts” your claim down to the point that you are not covered.

Insurance companies have only two clients they need to please: politicians and their regulators. The market has not seen a new insurance company of consequence in decades. They do not have to compete on price and quality when they are a government-sanctioned oligopoly.

Doctors mean well and do a good job, but health insurance is a business where no one understands what he is paying, what he is getting, or what he will owe when he goes to a doctor. If you are healthy and honest with insurance, they take advantage of you.

You are paying more for ObamaCare. Health insurance is like a paper hospital gown that ties in the back. It is awkward, dehumanizing and cold, and you only THINK you are covered.

The other businesses in bed with government that are rip-offs are real estate brokers. They have somehow been able to avoid anti-trust issues on their fixed 6 percent commissions. They usually pay lobbyists the most in each state, and it is hard to get around them.

I pay 6 percent if they add value, but in my last eight deals I have done for sale by owner. It’s easy. Comps are readily available now online.

Closing is easy with the person who does the real work, an escrow agent/attorney. I do not buy title insurance; it is a rip off. Most of the money goes to commissions.

Agents are good folks, but their business model stinks. The document you sign to list a property for sale is 12 pages long. Eleven describe how they get paid and state that they have no liability. The only more coercive and one-sided documents are Google or Facebook user agreements and a marriage license.

A libertarian op-ed humorist and award-winning author, Ron Hart is ex-Goldman Sachs, and retired as a Managing Director of Morgan Stanley. He can be contacted at Ron@RonaldHart.com or @RonaldHart on Twitter.

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