Category Archives: political economy

A Simple Enough Solution

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Even if it isn’t necessarily politically easy to implement. But the political impediment is merely a lack of political courage in the same politicians who natter on about how expensive and abused is the system in question. I’m writing here about our nation’s Medicaid system.

Medicaid is broken, and Republicans in Washington and in state capitals have an opportunity to fix it. President Trump has pledged to protect the program, in part by cutting waste, fraud and abuse. The House budget target would reduce the growth of federal Medicaid payments over the next decade from $2 trillion to $1.2 trillion. That is a good start. Medicaid wastes enormous amounts of taxpayer money as states use it to reward politically powerful healthcare providers.

Instead of making this sort of namby-pamby tweaks around the edges, and masquerading putative reductions in growth as cuts, the simple enough solution is this.

Take the Medicaid-centered Federal transfers to each State in the current year as the baseline, and convert that amount to a block grant with no strings attached, other than the State must spend the block money on its Medicaid program. Then, each subsequent year transfer the Medicaid block grant, similarly without strings, reduced further each year by 10% of that baseline amount. In a short few years (I’ll leave the third grade arithmetic to the reader, rather than insult his intelligence), the block grants will reach $0.00, and the Federal government will, quite properly, be out of this aspect of the State’s business.

Notice that this solution also does not touch the heart of our nation’s Medicaid system, which is each State’s responsibility. On the contrary, it moves the system entirely into the States’ individual purviews, giving each State complete control over its own Medicaid program, free of Federal touching.

Mistaken Emphasis

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Oil and gas companies are worried that, in the process of reducing the Federal employee work force, too many regulators who issue the permits these companies need to begin work on a project are being fired, and so the permits are being delayed.

Some companies are asking the administration not to lay off key personnel who deliver permits at federal agencies….
[C]ompanies receive permits to drill on US lands from Interior’s Bureau of Land Management, licenses to export liquefied natural gas from the Energy Department, and permits to build interstate natural gas pipelines from the Federal Energy Regulatory Commission.

This isn’t the problem the executives make it out to be. The regulators in those entities are not independent satraps who act entirely on their own recognizance. They do not issue the permits or reject them in their own name; they act in the name of their respective Department or agency heads, and those agency heads are not independent satraps, either; they act in the name of their respective Department Secretaries. As such, the agency heads are fully capable of issuing/rejecting permits, and ultimately the Secretaries are fully capable of overruling their subordinate agency heads and issuing/rejecting the permits themselves.

Of course the Leftists and a large collection of fee-seeking lawyers will jump on this with litigation, but ultimately the agency and Secretary actions should be upheld.

Still, they can’t act entirely alone. Matt Schatzman, NextDecade CEO wants those agencies to hire more workers and cut red tape so the industry can start more projects as quickly as possible. It’s not necessary to have both of those. More hires is not necessary in any event; legislation is: require permits to be issued or rejected withing 30 days of the initial application, or the permits are deemed issued. Require the regulators to defend in concrete, measurable, publicly accessible terms their rejection within two weeks of their rejection, or the permit is deemed issued.

More on Birthright Citizenship

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Jed Rubenfeld, Professor of Law at Yale Law School, had an op-ed in Sunday’s Wall Street Journal in support of the concept of birthright citizenship. In it, he hung his hat on the “visitor” aspect of our Constitution’s 14th Amendment jurisdiction phrasing.

The 14th Amendment guarantees citizenship to everyone “born or naturalized in the United States, and subject to the jurisdiction thereof.” The opacity of the “jurisdiction” language allows reasonable people to land on either side of this issue. But in 19th-century legal usage, being “subject to the jurisdiction” of the US had a long-settled, straightforward meaning. As Chief Justice John Marshall explained in Schooner Exchange v McFaddon (1812), it meant being subject to US law.
Could you be prosecuted in an American court and imprisoned in an American jail for violating American law? If so, you were subject to US jurisdiction.

That “vulnerable to prosecution and jail” means “subject to US law” is at the core of the misunderstanding here (I’m eliding the question of whether a then-56-yr-old “settled meaning” remained settled after the 14th Amendment was ratified), including to birth tourism—whereby a pregnant woman enters the US for the express and sole purpose of giving birth on US soil so as to garner citizenship for her baby, after which the now-mother leaves with her baby to return to her home nation. Such “visitors,” while so subject, are not subject to US jurisdiction, but only to US government power and authority.

Birth tourists subject themselves only to some of our laws—that small subset of them that lets them enter our nation legally and then avail themselves of our medical-related duty of care laws. They otherwise remain within the control of their home nation laws and so retain the jurisdiction of their home countries, to which they fully intend to return as soon as they’re able to travel after giving birth. They’re holding themselves apart from and outside of our nation’s full and complete jurisdiction—which is what our 14th Amendment requires, even for birth tourists.

Illegal aliens go even farther: they hold themselves completely outside our jurisdiction by holding themselves completely outside our laws: they’ve disregarded our laws from the outset by their entering illegally. They render themselves subject only to the power of our government even as they, too, are subject prosecution and jail—or deportation.

This misunderstanding by Rubenfeld (and others) expands on the matter:

When a foreign army invades and conquers another country’s territory, that land becomes subject to the conquering country’s laws.

Not at all. That conquered territory becomes subject only to the conquering country’s power and ability to impose its laws. Even as long ago as Emer de Vattel, in his The Law of Nations, this was well understood.

The Left’s repeated ignoring of these simple facts does not make those facts nonexistent.

Unfortunately (cynically?), Rubenfeld, like others pushing this argument, leave wholly unaddressed those last.

A Modest Proposal

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The Wall Street Journal editors (I seem to have been picking on them lately…) have a modest proposal regarding student debt and forgiveness.

Congress created the Public Service Loan Forgiveness Program in 2007. It lets borrowers who work for government or tax-exempt organizations get unpaid debt forgiven after 10 years of payments. Its supposed goal was to help government and nonprofit employers compete with private businesses that can pay more.

The editors correctly note that in the years since its inception, the program has become badly abused and used to reward[] a politically favored group of workers and can make it harder for private businesses to compete. Based on that, the editors recommend the Republican-majority houses of Congress repeal the program altogether.

They’re correct in that, but I’d go a ways farther. Congress should make student loan relief available through our existing bankruptcy laws. Additionally (critically additionally), Congress should take the Federal government out of the student loan business altogether: no more Federal government student loans and no more Federal government guarantees of other lenders’ student loans.

And one more step: require colleges (including junior and community colleges) and universities and trade schools to publish the regionally average salaries and wages for each major the school offers or each trade certification program the trade school offers at the five-years employed mark. Associated with that, those schools should be required to be the ones extending the student loans or be either co-signers or guarantors of other lenders’ loans to their students.

Without the ability to hide behind Other People’s Money in the form of purely third party or Government loans, the abuses likely would screech to a halt.

Why Would They Want To?

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The lede says it all, even if the article is a bit dated now.

The leader of Senate Democrats moved to take the threat of a government shutdown off the table, following a grueling intraparty fight in which lawmakers struggled with how best to resist President Trump’s fast-paced efforts to slim down federal agencies.

Why would the Progressive-Democratic Party object to slimming Federal agencies and making them more efficient?

Oh, wait—this is the Party that insists Government knows better than us poor, benighted and ignorant average Americans, and that the way to make Government more efficient is to grow it in both financial and physical size and give it more control over our lives.