Thus goes Rule #12 of Saul Alinsky’s Rules for Radicals. And thus goes Sen. Morgan Carroll, chairman of the Interim Study Committee for issues related to Pinnacol Assurance, the state’s largest Worker’s Compensation insurer. Just moments ago, Sen. Carroll posted the following on her Facebook page:
There is no question in my mind that this is the beginning of an attempt to demonize the company, in order to gain public political support for confiscating its cash and subsidize the Democrats’ spending habits for another year.
This legislative session, the Democrats floated the idea of seizing $500 million of Pinnacol’s reserve in order to help meet the budget gap for this year and next. The idea was mercifully laid over in the House. But it passed the Senate 19-14, will Sen. Carroll voting in favor.
Pinnacol is more than capable of making its own case on the merits. But it needs to avoid the mistake that many companies make, and realize that this is a political fight, not a policy argument. There are far too many Democrats who see all that cash and immediately, their eyes fill with dollar signs like a character in a Warner Bros. cartoon.
Grabbing for the nearest pile of Scrooge McDuck’s gold may be viscerally satisfying to those who, well, don’t have it. But it’s a horrifying idea for at least three reasons:
- It feeds, rather than cures, the state’s spending addictions. No need here to recount the sorry story of Referendum C. If Ref C was a drunk running a tab, pillaging Pinnacol would be a smash-and-grab from the plate glass of the liquor store. It provides barely a year to hobble by. And at the end of that year, if it’s 1982 and not 1931, and if revenues, always a trailing economic measure, begin to recover and if we haven’t found those stimulus strings to be too onerous, then maybe we can survive through the next business cycle
- Argentina. This really is a smash-and-grab. It’s almost certainly illegal, and it will certainly discourage business from locating here. The money isn’t the state’s to take, and there’s no particularly good reason to stop at an insurance company. Pretty much any business with a large pile of cash lying around could find itself threatened.
- It could ruin the company. Oh, maybe not today. But the whole point of a Black Swan is that you never see it coming, because it’s never happened before. Unlike assembly lines, insurance companies like to have large pools of liquidity lying around the shop floor. It’s not as though they’ve converted it into gold and visit the vault every once in a while to stare at it a la Jack Benny. They’ve invested the money, so it’s out there working. But it’s also available in case there’s a large claim. Just suppose something more virulent than H1N1 infects a workplace. Suppose that Swift plant up in Weld County gets sick, and the workers get sick because they were at work; if they’re insured through Pinnacol, guess who’s on the hook.
So Sen. Carroll has decided to try to turn the heat up on Pinnacol. It’s dirty pool against a responsible company.