June 10, 2012 · 0 Comments
By Dean Baker:
It may seem incredible, but there are occasions in politics where people sometimes don’t tell the truth. That is why newspapers are supposed to report what people say and do and not tell readers the motives behind their statements and actions, since they don’t know their motives.
The NYT blew it today in a piece on Republican efforts to repeal a tax on medical equipment that is part of the Affordable Care Act when it told readers:
“In anticipation of the tax, some manufacturers have announced plans to lay off workers or reorganize operations.”
The NYT does not know that manufacturers announced lay off plans “in anticipation of the tax.” An alternative explanation is that they announced lay offs in the hope of influencing the vote in Congress.
As a practical matter, it is unlikely that this tax will substantially reduce the demand for medical equipment. If the cost of MRIs and other such devices rise by 2 percent (90 percent of the size of the tax) it is unlikely that the demand for these products will fall by much. Therefore there would be little reason for layoffs and it is hardly likely that medical supply firms would feel the need to make their plans for adjusting the size of their workforce so far in advance and before they know how much demand will actually decline.
In short, it is far more plausible that the announcement of layoffs is a political stunt rather than a response to economic conditions. And, the NYT cooperated with the industry in promoting this stunt.