Category Archives: ethics

Wrong Answer

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House and auto insurers’ profits and the rate increases they charge policy holders are coming under political scrutiny, but politicians’ proposed solutions are badly counterproductive.

New York Governor Kathy Hochul (D) this month became the latest state lawmaker to advocate profits caps on insurers, to tackle escalating home- and “crushingly expensive” auto-insurance rates.
Her plan would require home insurers with “outsized profit margins” to lower or justify their rates, and review the profits threshold at which auto-insurers are required to refund customers.
Also this month, lawmakers in states including Oklahoma proposed profit caps targeting insurance.

No.

Government definitions of “outsized profit margins” have nothing to do with business imperatives or what happens in a free market. Those definitions serve only the personal political ambitions of the politicians doing the defining, and they’ll vary across politicians and their political parties.

Beyond that, all price caps do is limit the availability of the product being capped—whether oil and natural gas and gasoline, rental housing availability and quality…or insurance policies. The limit on supply, too, hurts those on the lower economic rungs of our economy first and hardest.

Requiring insurers to justify their rates and the profit levels at which policy holder refunds are paid is a good idea, but government is the wrong crowd that must be satisfied.

Better simply to require insurers to disclose their profit margins and the basis on which they arrive at their definitions of profit. Their policy rates already are publicly available; making both sides of that process public would let the public more effectively shop for policies that suit their individual needs.

Doing that within an increasingly deregulated (not unregulated) insurance market environment would move the industry closer to a truly competitive market within which insurers would reap fair profits and insurees would pay fair premium amounts for the policies they want. And the Critical Item: “fair” would be defined within that competitive market by those market participants, not by any government.

“That’s Unconstitutional”

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Many politicians, primarily but not exclusively of the Progressive-Democratic Party, when they decry the actions of President Donald Trump (R) loudly declaim that whatever it is that he’s doing is “unconstitutional.”

It’s instructive that these worthies usually omit to cite the clause of our Constitution that’s supposedly being violated, but when they do cite something, they center their claim on the 10th Amendment.

Here is what that Amendment says:

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

Article I, Section 10, lays out specific powers prohibited to the States:

No State shall enter into any Treaty, Alliance, or Confederation; grant Letters of Marque and Reprisal; coin Money; emit Bills of Credit; make any Thing but gold and silver Coin a Tender in Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law impairing the Obligation of Contracts, or grant any Title of Nobility.
No State shall, without the Consent of the Congress, lay any Imposts or Duties on Imports or Exports, except what may be absolutely necessary for executing it’s inspection Laws: and the net Produce of all Duties and Imposts, laid by any State on Imports or Exports, shall be for the Use of the Treasury of the United States; and all such Laws shall be subject to the Revision and Controul of the Congress.
No State shall, without the Consent of Congress, lay any duty of Tonnage, keep Troops, or Ships of War in time of Peace, enter into any Agreement or Compact with another State, or with a foreign Power, or engage in War, unless actually invaded, or in such imminent Danger as will not admit of delay.

Included in the powers not delegated is this one from Article II, Section 3:

…he shall take Care that the Laws be faithfully executed….

Here is what the Supremacy Clause of our Constitution says, from Article VI:

This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.

There is nothing in the supreme Law of the Land  that has been delegated to the States or to the people. That supremacy has been retained by the Federal government, and that supremacy includes actions of Federal law enforcement agencies and their personnel in the course of their enforcement of Federal laws in Progressive-Democrat-run “sanctuary” jurisdictions; the latter’s protestations to the contrary are irrelevant.

No part of a President’s authority or obligation to enforce the Laws are reserved to the States. Nor does the 10th Amendment’s delegations include any State-level authority to block or otherwise interfere with Federal law enforcement actions.

An Overstated Case

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A couple of Wall Street Journal news writers have laid out the concerns in the Supreme Court’s consideration of whether President Donald Trump (R) can fire Lisa Cook, a Federal Reserve Bank governor.

It will test whether the court’s conservative majority, which has spent years eroding the independence of regulatory agencies, is willing to make an exception for the institution that controls interest rates, inflation, and the stability of the global financial system.

One out of three isn’t all that terribly bad, but the first and third items are of critical importance.

[E]roding the independence of regulatory agencies…. What independence? They were created as instruments of the Executive Branch. As such, under our Constitution, they cannot be independent, for all that Congress averred it so. That would be a violation of our Constitution’s carefully constructed separation of powers. Those agencies are entirely under the authority of the President as the Chief Executive of the Executive Branch. Far from years of eroding the independence, the Court has been glacially slow in recognizing the agencies’ lack of independence.

The stability of the global financial system? Really?

It’s certainly true that the US, with our enormous economy and the size of our market for the global economy, even in today’s tariff regime, exerts outsize influence on the global economy.

However, it exerts influence only, not control.

The impact of our central bank on the global economy is as much—at least—the outcome of other nations’ government decisions as it is that of our own decisions. They don’t get to hide behind us or our central bank in their decision-making, nor do they get to blame us or our central bank for the poor outcomes of their decision-making. The stability of the global financial system is an affair of collective responsibility, not one of unilaterality.

Ellison Returned some Money

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Minnesota’s Attorney General Keith Ellison (D), who seems deeply connected with his State’s multi-billion dollar welfare fraud via his lack of action on when advised years prior to the current public exposure, returned some $2,500 in illegally donated money. When called on all the donations from welfare fraudsters, Ellison answered the call.

Ellison had already returned a $2,500 campaign contribution to a donor who was indicted in September 2022 for the food aid fraud. The donor, Liban Alishire, later pleaded guilty to wire fraud and money laundering and awaits sentencing, court records show.

Never mind that that’s not all the money that folks who had defrauded the State or are charged with defrauding the State but whose trials have not yet begun that Ellison has not yet given up. The larger question here concerns these $2,500, which were returned to the fraudster. Those dollars could easily have supported the fraudster’s benefit, his defense bills or his potential restitution bill, for instance.

There are alternatives for what could have been done with Ellison’s illegally funded donations; he still can use those alternatives for the rest of his…donations.

State Senator John Hoffman [D], who received eight questionable donations that totaled about $3,300, sent all of the money to the US Marshals Service because the donated money might have been obtained through fraud.
“It was the right thing to do,” he told The Center Square.

But not Ellison. He still put it to his own and his donor’s good use.

Lost in the Reporting

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Or, perhaps carefully ignored in the reporting. The Free Press has its collective panties in a wedgy over an FBI raid on Washington Post news writer Hannah Natanson. It seems that, pursuant to the FBI’s investigation into the leak by a defense contractor of classified information, the FBI executed a warrant on Natanson and seized two of her laptops, her phone, and a smartwatch.

Of course that raid, part of what should be a thorough investigation of the leak and the defense contractor’s role in it (if any), has the “fourth estate” in a tizzy. The Committee to Protect Journalists issued a statement:

Without assurances that journalists can protect their reporting materials, accountability journalism will suffer a major setback, eroding yet another mechanism for government accountability.

That’s true up to a point. However, “accountability journalism” doesn’t place those news writers outside our laws. Were that so, that self-appointed title would be laughably hypocritical. If news writers are going to traffic in stolen goods—as leaked classified information most assuredly is—than of course those news writers must be held accountable: they must be arrested, brought to trial, and if convicted, jailed.

Of course, the FBI has not said Natanson was directly involved (or involved at all) in the leak, but that is beside the point of press accountability—a point the press is busily ignoring at the top of its collective lungs.