Category Archives: rights

Misguided Conceptions

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Another example is “conservative” complaints that, with Obamacare here to stay (misconception number one; although its repeal has gotten harder), the states perforce must set up state health insurance exchanges, rather than leaving that to the Federal government.  One example is from Douglas Holtz-Eakin, Congressional Budget Office Director under President Bush the Younger, who has

repeatedly warned GOP officials that they will be “outfoxed and overrun” if they leave the exchanges to Obama administration officials.

He warned that the administration could impose too many regulations, ultimately ruining the exchanges and opening the door to a “Washington takeover of health care.”  He added, “If conservatives allow it to happen, they will be consenting to an unprecedented and potentially irreversible intrusion into states’ economies and health-care systems.”

Holtz-Eakin misunderstands, though.  With the Feds retaining the rules by which the exchanges will be allowed to operate—including what coverages must be offered and the rate bands within which they must be offered—and declining to discuss costs, a “Washington takeover of health care” is already in progress.  State-run exchanges, whose function is controlled by the Federal govenrment already represent “an unprecedented and potentially irreversible intrusion into states’ economies and health-care systems.”  That’s the primary misconception in this context: that the states have any useful control over “state-run” exchanges.

Moreover, any Federal funds allocated to state-run exchanges will be on the one hand, by design inadequate to cover the total cost of the exchanges and on the other hand are easily withheld or cancelled outright, leaving the whole of the expense to the states’ citizens to cover.  But this risk simply draws the states further into dependency on the Federal government.

The upshot is that these exchanges contribute to placing the states into the same relationship to the central government as counties are relative to their states: “merely as districts to facilitate the purposes of domestic order and good government,” in John Jay’s words.

The states are right to decline to share the costs, and they are right to decline voluntarily to participate in the continued derogation of their position vis-à-vis the Federal government.

Rule of Law and Prosperity

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House Majority Leader Eric Cantor (R, VA) has issued a report that discusses, among other things, the relationship between rule of law and national prosperity and freedom.  Some excerpts follow.

From

Less noticed, but perhaps even more important—especially to the over 20 million Americans currently out of work or underemployed—is the link between a breakdown in the rule of law and reduced economic growth and individual prosperity.

Property rights and rule of law are essential for the proper and efficient functioning of society and the economy.  Unambiguous laws and procedures provide a framework by which free people agree on the scope and reach of their government’s actions, whereas unclear laws or arbitrary enforcement undermine individual liberty and the notion of popular sovereignty.  Clear, transparent, predictable rules that are applied without preference or prejudice allow individuals to invest, build businesses, and create jobs.  When there is a breakdown in the rule of law, increased uncertainty leads to reduced investment and less growth.

Numerous economic studies have documented the relationship between a strong rule of law and economic growth. In 2008, The Economist published the following chart alongside a story entitled “Order in the Jungle.”

The chart aptly illustrates the strong relationship between adherence to the rule of law and economic growth.  As economist Hernando de Soto—a leader in the field of the impact of property rights and rule of law on economic growth succinctly stated: “So the origin of the rule of law— which will allow a modern nation to grow and so bring peace, stability, and prosperity to the world—is property rights.  And the rule of law will actually generate prosperity.”

And

In the United States, the ultimate law is the Constitution, which specifically provides how laws are to be enacted and requires the President to take care that the laws that are enacted are faithfully executed.  The laws of the United States establish the process whereby individuals can enforce their property rights and private contracts and provide the framework by which executive agencies are to conduct rulemakings and the other regulatory activities.

When “laws” are created without going through Congress; when laws are selectively executed; when an administration intervenes into the normal judicial process and diminishes an individual’s property rights; and when the normal regulatory process is circumvented, the rule of law is eroded.

All of this increases uncertainty.  Individuals, families, and businesses now not only face uncertainty with respect to the policy decisions made by government, but they face uncertainty as to how those decisions will even be made.  Numerous economic studies and surveys indicate that uncertainty itself (which is certainly increased with the breakdown in the rule of law) also hinders economic growth.

While Administrations of both political parties have been known to test the bounds of the limits of their power, the breadth of the breakdown in the rule of law in recent years has reached new levels.  In the Heritage Foundation and Wall Street Journal‘s annual Index of Economic Freedom, the United States scores lower today on the rule of law than it did in 2008.  As the 2012 report notes, “Corruption is a growing concern as the cronyism and economic rent-seeking associated with the growth of government have undermined institutional integrity.”  Individuals and businesses are increasingly forced to rely on the courts to enforce their most basic substantive and procedural rights.

To

There is no excuse for this continuous disregard of legislative authority and the Constitutionally-required separation of powers.  In some instances, President Obama attempted to garner legislative authority, failed and then acted unilaterally in defiance.  In other instances, the President never even sought to find consensus and instead ignored Congress and its authority from the outset.  In speeches, the President has proudly acknowledged that he has acted without Congress, contending that he has no other alternative.

This is no way to govern.  The President has set a precedent that even his supporters should find troubling.  After all, what would now prevent a subsequent President, with opposite policy predilections, from bypassing the checks on his own authority and enacting his own policies in this same manner?  The Founding Fathers wisely gave the President many powers, but making law was not one of them.  They understood that laws should not be made by one individual acting alone, but rather through elected representatives working to achieve consensus.

House Republicans have acted to prevent and overturn the President’s harmful actions in order to return economic growth, opportunity and certainty to the American people and American job creators.  However, the majority of the bills the House has passed are sitting idly in the Democrat-led Senate, without any action on the part of Democratic Leader Harry Reid or President Obama.

Throughout our nation’s history, presidents have sought common ground and achieved legislative success with opposing party leaders.  Many of the laws circumvented in this report were achieved in that manner.  Congressional authority must not be disregarded to suit political interests, create unpopular regulations and to avoid the hard work of bipartisan negotiation that has been a hallmark of our Republic since its inception.

Note that such measures as are required by the erosion/breakdown of the rule of law as bringing legal cases to court only adds to business’ and individual’s current costs and increases their uncertainty, since court outcomes are largely unpredictable.

RTWT.  It’s a long-ish read, but it also includes a list of current examples.

 

h/t Grim’s Hall

Opportunity Inequality and Outcome Inequality

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From The Federalist No 10:

There are two methods of curing the mischiefs of faction: the one, by removing its causes; the other, by controlling its effects.

There are again two methods of removing the causes of faction: the one, by destroying the liberty which is essential to its existence; the other, by giving to every citizen the same opinions, the same passions, and the same interests.

…

But it could not be less folly to abolish liberty, which is essential to political life, because it nourishes faction, than it would be to wish the annihilation of air, which is essential to animal life, because it imparts to fire its destructive agency.

The second expedient is as impracticable as the first would be unwise.  As long as the reason of man continues fallible, and he is at liberty to exercise it, different opinions will be formed.  As long as the connection subsists between his reason and his self-love, his opinions and his passions will have a reciprocal influence on each other….  The diversity in the faculties of men, from which the rights of property originate, is not less an insuperable obstacle to a uniformity of interests.  The protection of these faculties is the first object of government.

Whence the modern Liberals’ (in stark contrast to this view, typical of 18th Century Liberals) disdain for the equality of opportunity that allows each man to show the best that there is in him—and so necessarily leads to unequal outcomes?  Whence the drive of our modern Liberals to render unequal our access to opportunity that, aside from being at the foundation of our country are central to our society’s overall prosperity, by capping every man’s final success and driving us to equal (and impoverished) outcomes?

Hmm….

Government Regulator Abuse

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Described by John Stossel:

Today, Americans were told that they must close their Intrade.com accounts. That happened because the federal government agency known as the “Commodity Futures Trading Commission” (CFTC) today sued the prediction market, where people from all over the world bet about things like who will win elections.

Because

Intrade has…successfully predicted events like Saddam Hussein’s capture and the winner of the Oscars.  People with the best information trade about those events, and drive up the odds on Intrade.

After all, such things are against US financial regulations, don’t you know:

Section 4c(b) and 9(a)(3) of the [Commodity Exchange] Act, §§6c(b) and 13(a)(3) (2006); Section 2(e) of the Act, as amended by the Dodd-Frank Act, to be codified at 7 U.S.C. § 2(e); and Regulation 32, as amended, to be codified at 17 C.F.R. § 32 (2011)

The CFTC is, here, specifically and deliberately targeting “prediction markets:”

It is against the law to solicit US persons to buy and sell commodity options, even if they are called “prediction” contracts, unless they are…traded on a CFTC-registered exchange….  Today’s action should make it clear that we will intervene in the “prediction” markets, wherever they may be based.

Why does this matter?  Because if the government can “intervene” to destroy an obscure little idea and the free market business it generated, it can do so in the free market generally, and that market becomes a  government run market.

The CFTC argues that the regulation

is important for a number of reasons, including that it enables the CFTC to police market activity.

So the CFTC says it’s necessary to enforce so that it can enforce.  Nothing circular here.

One more thing.  The CFTC has, with this…position…placed your penny-ante poker game at risk, too.  After all, each of you, as you deal the next round, are soliciting options on the future—of your and your opponents’ hands.

Fairness

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Columbia College Chicago Professor of Philosophy Stephen T Asma is quoted in a recent Wall Street Journal:

Our contemporary hunger for equality can border on the comical.  When my six-year-old son came home from first grade with a fancy winner’s ribbon, I was filled with pride to discover that he had won a footrace.  … “No, it wasn’t just me,” he explained.  “We all won the race!” …. Everyone who ran the race was told that they had won, and they were all given the same ribbon.

More troubling than the institutional enforcement of this strange fairness is the fact that such protective “lessons” ill-equip kids for the realities of later life. … The focus on equality of outcome may produce a generation that is burdened with an indignant sense of entitlement.

Oh, wait….