From April 24, 2013, “Dear Regal theaters: It’s the customers, stupid“:
This is the kind of dumb move that comes, in part, from listening to accountants without also listening to economists. The myopic bean-counters in Regal’s corporate accounting department saw the basic health benefits in health care reform as a new expense for the company and only as a new expense for the company. Thus, for Regal, the Affordable Care Act came to be viewed as a law that has one and only one effect on Regal’s theater chains: A slightly higher cost per-employee for the thousands of non-management workers for whom the company had previously refused to provide those basic benefits.
Yes, yes of course, there’s also an obvious moral element here that Regal Entertainment Group is refusing to acknowledge. Only a company run by odious jackwagons would think that denying employees basic health care is an acceptable way to keep down costs — particularly when that company’s executives are also paying themselves lavish salaries and bonuses. But there seems to be little point in trying to reach the executives who run Regal Entertainment — or Hobby Lobby, or Darden restaurants, or any of the other chains opposing the “cost” of Obamacare — with an argument based on morality. These are morally stunted people for whom such arguments are meaningless. They attend morally stunted churches where they listen to sermons preached by morally stunted pastors and sing morally stunted praise songs to a morally stunted god.
… In this post, though, I’m not mainly concerned with the futile attempt at moral persuasion or with the obligation of moral coercion. Here I just want to suggest that Obamacare might just be the best thing that’s ever happened to the Regal Entertainment Group.
Right now, all that the Regal executives can see is what their accountants see: the slight additional cost per employee that Obamacare will mean for the company. Fine. Write that down in the company ledger. Health care reform will increase the company’s costs per employee.
But if Regal execs could look beyond what their accountants see, they might notice that this is not the only thing that health care reform will do. It will also result in tens of millions of otherwise uninsured Americans getting affordable health insurance. And tens of millions more will save lots of money every year in household health-care expenses.
That’s tens of millions of potentially movie-going Americans who will now be able to afford movie tickets they would not otherwise be able to afford.
It’s the customers, stupid. Obamacare is good for Regal’s customers. And therefore Obamacare is good for Regal.
Just consider one small piece of the health reform law that has already taken effect. Millions of young adults in America have taken advantage of the law’s provision that says they can keep their health coverage under their parents plans until the age of 26. That’s millions of 18-to-26-year-old Americans with more money in their pockets.
I’m not an expert on the movie business, but my impression is that young people aged 18-26 are kind of an important demographic when it comes to ticket sales.
How big a boost to Regal’s bottom line will health care reform provide? I’m guessing it will be large. Much larger, I think, than whatever new costs-per-employee the law entails for the company. That calculation is a job for the company’s economists.
Unfortunately, the company doesn’t have any economists, only accountants. That’s short-sighted, misleading and counter-productive. They need to hire some economists.
Regal Entertainment Group isn’t alone in this blindered approach of allowing accountants to pretend they provide the whole picture. Peter Bensen, the top accountant for McDonald’s, said that Obamacare will cost the company $120-$420 million a year to provide benefits previously denied to its workers. And since that is the only thing Bensen is looking at, that is the only thing Bensen sees. He hasn’t looked at — or even imagined the possibility of — the ways in which Obamacare will benefit McDonald’s customers. He is an accountant, not an economist, so he has forgotten that what’s good for McDonald’s customers is good for McDonald’s.
It’s the customers, stupid.
David Overton, the CEO of The Cheesecake Factory, is worried that health care reform will involve new costs for new benefits for his factory workers. But Overton — who is allegedly a business-man — hasn’t even glanced in the direction of considering what health reform will mean for the customers and potential customers of his business. Obamacare is good for the restaurant’s customers, and therefore it is good for the restaurant.
It’s the customers, stupid.
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