When the president changes the law by fiat a funny thing happens. The marketplace is undermined. Nobody knows what the rules actually are. No one can plan. No one has any idea what sort of profit or loss to expect. As such no one invests.
One of the reasons so called “banana republics” fail year after year is because their rule of law is typically lacking. The law is subject to the whim of whatever despot controls the presidential palace at the time. Businesses can’t plan and in order to ensure any kind of stability at all they have to buy off the powers that be in some fashion. They have to engage in crony capitalism.
That’s where we are now. This is the infection we’ve allowed to creep into the United States. An infection in our healthcare system. (And sadly nearly every other sector of the economy.)
My bet is more downgrades are on the way.
(From The Washington Times)
“While all of these issues had been on our radar screen as we approached 2014, a new development and a key factor for the change in outlook is the unstable and evolving regulatory environment under which the sector is operating,” Moody’s said. “Notably, new regulations and presidential announcements over the last several months with respect to the ACA have imposed operational changes well after product and pricing decisions had been finalized.”