I have identified many reasons why the economy will be weak in the coming year.
Here is just the latest.
McDonald’s will be dropping health coverage for a group of its employees due to new health care regulations. They have a choice, cut their profits which will mean that they will have to reduce their staff and rewards to shareholders or they can drop the health plan for those employees.
Neither of those choices are good for the economy. But more importantly, they are an example of how the unknown future of the regulations will freeze a company. McDonald’s is stuck right now. They don’t know what to do in the future. Should they expand their company in the face of this uncertainty? The reality is that they will hold still right now.
The net effect of this “freezing” will be that McDonald’s will not expand as quickly as they could which means that corporate profits will be lower than expected and job growth will also be lower than expected.
In no way is this policy helpful for the economy.