Monthly Archives: July 2012

Dependency

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Let’s review some Federal government policy history.

During the Great Depression, the Roosevelt administration instituted wage floors on labor and price floors on farm produce, which priced men out of an already depressed labor market and priced food out of reach of much of that unemployed population.  As a result, the same administration instituted food stamps to “help” the disadvantaged to obtain food.  This combination of policies made millions of Americans dependent on government for food help.  It also reduced farmers’ independence from government farm supports.

During the same Depression, the same administration instituted Social Security.  The Social Security Act was intended provide supplemental income for America’s retired, who were expected to continue to rely on their own resources and family for the rest of their income, and all Americans were (and are) required to participate.  The Act also  “encouraged” the states to institute unemployment insurance programs, which would be partially funded by the Federal government.

The Social Security side was quickly morphed by subsequent administrations into full income payments to our retired, and for increasingly longer periods of retirement.  An effect of this was to reduce the reliance of millions of Americans on their family for their retired life and to make them dependent instead on government for their subsistence.

The unemployment insurance programs increased state dependence on government for state funding, and it increased individual Americans’ dependence on government for subsistence while between jobs, at the same time commensurately reducing the ties to family local community for support.  Today, unemployment insurance is payable for 99 weeks of being unemployed, greatly extending the dependency of both individual Americans and the states.

The Johnson administration instituted Medicare and Medicaid programs to “help” Americans obtain health care services.  The effect, though, was to contribute sharply to inflation in the cost of health care by artificially expanding demand for the services: Americans are required to participate in the programs, whether we wish to or not.  From this, Medicare and Medicaid transfer payments—the former directly to participants, and the latter to the states, who are strongly “encouraged” to have Medicaid programs—were greatly increased, at taxpayer cost—and at increased dependency of individual Americans and the states on the Federal government for our health needs.

In this context, it’s useful to think about Health Savings Accounts.  HSAs were instituted during the Bush the Younger administration, ostensibly to help Americans to save before-tax money for medical expenses—those rapidly rising expenses just mentioned.  However, HSAs have annual contribution limits, so Americans cannot save overmuch, and Americans must have high deductible insurance policies in order to be eligible for the HSAs.  But those deductibles are out-of-pocket payments, so disadvantaged Americans are priced out of the accounts—they’re still dependent on government for their health care support.

The Obama administration has passed Dodd-Frank (I’ll elide Obamacare in this post; enough has been written elsewhere that the dependency created here is well understood).  This Act creates businesses as dependents on the Federal government for support should they run into market trouble and as dependents on the Federal government for management decisions they will be permitted to make.

Oil and gas company subsidies have been paid by the Federal government since shortly after WWI.  I include them here because of the oil and gas companies’ perceived dependence on them; in fact, the dependence is purely management psychology: these companies do not need the subsidies.  Green energy subsidies have been paid by the Federal government since the early ’80s for biofuels and since the mid -90s for renewables generally and for wind and solar energy in particular.  These companies truly are dependent on the government supports, since they do not have a marketable product and cannot survive in the energy industry without them.

Some illustrations of Americans’ growing dependency on government for their own welfare are these.  Nicholas Eberstadt has noted that the percentage of US households receiving means tested public benefits in general has risen from 7% in 1979 to slightly more than 30% in 2009.  It’s important to note that from 1979 until 1992, the percentage of households receiving means tested public benefits generally paralleled the unemployment rate (except the recession of 1982-83 when the unemployment rate was the slightly higher of the two).  However, by 2003 the percentage of households receiving means tested benefits had jumped to 24%, compared to the then 6% unemployment rate.  This ratio is essentially unchanged today, with the unemployment rate now above 8%.

Moreover, according to Eberstadt, the actual poverty rate fluctuated in the 9%-12+% range during the period to ’92, and since then the mismatch between means tested benefit recipients rates and poverty rates have mirrored the mismatch with unemployment rates.

Moreover, the number of people receiving federal disability benefits (vis., under the Social Security program) grew from 0.05 per person in the 18-64 age band in 1960 (pre-Medicare/Medicaid), to 0.17 in 1970, to 4.6 in 2006. This occurred despite an ever-healthier American workforce over those same 46 years—two generations of Americans.

These are clear indications of Americans’ growing dependency on government and increasing loss of personal responsibility, self-reliance, and reliance on local community resources.

Yet, the politicians in the Federal government are enormously smart people, entirely capable of clear, rational thought.  They were 80 years ago, and are today, fully capable of foreseeing the outcomes of their policies.  What are we to make of the motives of politicians who push them anyway?

The Administration’s Monthly Jobs Report Interpretations

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Don’t let the fact that the following are from a political campaign presser bother you.  The data are straight from the horse’s mouth—the White House’s own The White House Blog.  Thus, these are President Obama’s words, albeit posted by his Council of Economic Advisers Chairman, Alan Krueger.  It’s a long, repetitive list; feel free to skip to the bottom of my post when you get bored.

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/07/06/employment-situation-june)

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/06/01/employment-situation-may)

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/05/04/employment-situation-april)

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/04/06/employment-situation-march)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/03/09/employment-situation-february)

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/02/03/employment-situation-january)

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2012/01/06/employment-situation-december)

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/12/02/employment-situation-november)

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/11/04/employment-situation-october)

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/10/07/employment-situation-september)

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/09/02/employment-situation-august)

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/08/05/employment-situation-july)

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/07/08/employment-situation-june)

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/06/03/employment-situation-may)

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/05/06/employment-situation-april)

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/04/01/employment-situation-march)

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/03/04/employment-situation-february)

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/02/04/employment-situation-january)

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/01/07/employment-situation-december)

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/12/03/employment-situation-november)

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/11/05/employment-situation-october)

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/10/08/employment-situation-september)

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.  It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.” (LINK: http://www.whitehouse.gov/blog/2010/08/06/employment-situation-july)

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/09/03/employment-situation-august)

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/07/02/employment-situation-june)

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/06/04/employment-situation-may)

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/05/07/employment-situation-april)

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/04/02/employment-situation-march)

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/02/05/employment-situation-january)

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2009/12/04/employment-situation-november)

Hmm….  Apparently all Obama has to say about his dismal unemployment record for all of these three and-a-half years is either, “Therefore, it is important not to read too much into any one monthly report,” or “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.”  Oh, and the “Administration always stresses” this importance.

The problem, though, is that not only are Obama’s words about those dismal reports repetitive, the reports themselves are repetitive—with bad news for unemployed Americans.  So—should we also “not read too much into” all those unemployed Americans?

 

h/t Power Line

Employment Numbers

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Here are some employment and other economic numbers, as we see the continued level of success of President Obama’s policies, more than three years into his term.  Meanwhile all those jobs-related bills the House has passed since the start of 2011 continue to languish in the Do-Nothing Senate.

  • [T]he economy added an average of 226,000 jobs a month in the first quarter
  • [[T]he economy added an average of] 75,000 in the second quarter
  • The unemployment rate remained 8.2%
  • [T]he manufacturing sector contracted in June for the first time since July, 2009.
  • [F]actory hiring average[d] 10,000 a month in the second quarter
  • [[F]actory hiring average[d]] 41,000 a month in the first.

 

Another Pause for Commercial

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My book, A Conservative’s Treatise on American Government: A Brief Discussion of what a Government, Subordinate to the Sovereign People, Must Do, has been published, and it can be found, among other places, at Amazon.com and at Barnes & Noble.  Links also can be found nearby in the column to the right and on the Books page.

In this book, I first offer analyses of our Declaration of Independence and of our Constitution, centering the latter on the Enumerated Powers generally and four specific clauses: Taxing and Spending, general Welfare, Commerce, and Necessary and Proper.  Then I provide a summary of our movement away from the principles contained in those founding social compact documents, which drift gained especial impetus during the FDR administration and continues through the present Obama administration.  I conclude with some specific suggestions for corrections to each branch of our Federal government and to our Constitution in order to restore us to our founding principles and to strengthen our nation and Constitution against future drift.

I hope you find this, like Conservative’s Manifesto, enjoyable and useful.

Update: Corrected the title.  Can’t even get my own ad copy right….  [sigh]

Amending

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In last week’s NFIB v Sebelius Obamacare ruling, it looks a lot like the Supreme Court’s opinion rewrote the law in order to uphold it by calling the Individual Mandate’s exaction for not buying appropriate health insurance a tax.  Indeed, this was a central view of the major dissenting opinion.  Moreover, this ruling, whether it constitutes a rewrite of the law or not, seems to amend the Constitution by injecting a taxing power into the Taxing Clause that had heretofore not existed: the capacity for the Federal government to tax the inactivity of private citizens.  As a result, I thought I’d write a bit, in my hubris, about the permissible mechanisms for amending the Constitution.

The Constitution’s Article V is quite clear on this; the essentials are these (I’ve elided a couple of items that, today, are unlikely to come into question; read the whole Article to see them):

The Congress, whenever two thirds of both Houses shall deem it necessary, shall propose Amendments to this Constitution, or, on the Application of the Legislatures of two thirds of the several States, shall call a Convention for proposing Amendments, which, in either Case, shall be valid to all Intents and Purposes, as part of this Constitution, when ratified by the Legislatures of three fourths of the several States, or by Conventions in three fourths thereof, as the one or the other Mode of Ratification may be proposed by the Congress….

Notice that.  The people’s elected representatives in the Congress of the Federal government can propose amendments, but they can do no more than that.  The President cannot even do that much, except in his capacity as a private citizen.  None of the members of the Judicial Branch—the Supreme Court Justices, for instance—cannot even do that much, except in their capacities as private citizens.

The people of the United States, through their elected representatives in their State legislatures, or through their conventions in each of the several States, also can propose amendments to the Constitution.

Only the people of the United States, though, through their elected representatives in their State legislatures, or through their conventions in each of the several States, can ratify an amendment to the Constitution.

Amendment by the Federal Congress is not permissible.  Amendment from the judicial bench is not permissible.  The men and women who occupy Congressional and judicial positions, moreover, are sworn to uphold the Constitution as it exists, not as they might wish it to be.

Chief Justice John Roberts cited extensively from prior cases (as did Justice Ruth Bader Ginsburg in her opinion and the Four Dissenters in theirs).  Justice David Josiah Brewer wrote in prior case not cited by any of them, South Carolina v United States:

The Constitution is a written instrument.  As such its meaning does not alter.  That which it meant when adopted, it means now.

From the Supreme Court’s perspective, the Constitution is what it says it is.  Nothing else.  Convenient reinterpretations of the plain language to achieve a convenient end is amendment from the bench: rule by law.