Tag Archives: economics

Relevance

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Some of you may recall that the Supreme Court is due to issue its ruling on the Obamacare case of whether the Federal government is allowed to pay health coverage plan premium subsidies to citizens who bought their health plans through ObamaMart instead of State-built and –run exchanges.

Health and Human Services Secretary Sylvia Mathews Burwell on Thursday defended the landmark 2010 US health law as sharply lowering the rate of uninsured Americans, improving health-care quality and making it more affordable.

The Wall Street Journal paraphrased her additional remarks:

Directly addressing the possibility that the US Supreme Court later this month will overturn a central provision of the law, she said such an event would mean “the number of uninsured would jump,” that “affordability goes away” and that a “death spiral” would ensue in the health insurance systems in some three dozen states.

Never mind that the law is quite explicit: it authorizes the subsidies only for those who bought their plans through exchanges established by the States and not through the Federal government’s ObamaMart. Obamacare also is completely silent about costs if the subsidies are, in fact, limited those State exchanges’ plans.

Burwell’s argument is a typical Democratic Party aargument: it’s a good idea, therefore ignore the law, do what we want.

It may be a good idea. If it is, change the law. In the meantime, do what the law says, not what you wish it to say. William Howard Taft, an earlier Chief Justice, had this to say on doing the “right” thing rather than obeying the law:

It is the high duty and function of this court…to decline to recognize or enforce seeming laws of Congress, dealing with subjects not entrusted to Congress, but left or committed by the supreme law of the land to the control of the States. We cannot avoid the duty even though it require us to refuse to give effect to legislation designed to promote the highest good. The good sought in unconstitutional legislation is an insidious feature because it leads citizens and legislators of good purpose to promote it without thought of the serious breach it will make in the ark of our covenant or the harm which will come from breaking down recognized standards.

Taft wrote that in finding a law unconstitutional, but it applies just as clearly to any regulation or procedure purported to be on the highest grounds but that contradicts a law.

I hope today’s Supremes still understand this and don’t fall for the irrelevant blandishments.

Update: An earlier iteration of this post said that Taft had found a law unconditional; in fact he had found unconstitutional.  A sharp-eyed reader caught that.

Another Argument for the UK to Leave the EU

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Under EU law, governments have some leeway in limiting access to welfare, but in most circumstances can’t discriminate between their own nationals and those of another EU country.

But those rude Brits disagree. They want to make scarce resources preferentially available to British citizens. How terrible is that? The British government, for instance, requires those who apply for child welfare payments actually to live in the UK and to do so legally.

And this effrontery:

The British government justifies this condition “to prevent a burden on the welfare system.”

Never mind that the Brits have no requirement to justify to foreign jurisdictions how they spend their resources. But it doesn’t matter:

…Mr [Michael, the European Commission’s lawyer in this matter] Wilderspin retorted that “an increase in the financial burden cannot justify a failure to comply with EU law.”

Pay up, Sucker. It doesn’t matter if you haven’t the money, or have other uses for what you do have. Your [dare I say it?] Betters Know Better.

Time to leave guys. The EU has gotten arrogantly dysfunctional.

Government Unions

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Elizabeth MacDonald had some thoughts in a three-parter for Fox Business.

Wouldn’t you like to have a job where you get paid to slack off, and no matter what, have a powerful authority to back you up, winning battles to preserve your salary, benefits, and your every demand if your boss tries to fire you?

It’s a fact of life for many government workers.

Here are some of the horror stories she’s discovered.

[F]ederal labor unions are winning fights against federal agencies who try to fire their union workers for letting mentally ill military veterans walk out the door of psychiatric units in Veterans Affairs hospitals, or for not catching things like a major rat infestation in a food factory. Instead, union lawyers are getting their members’ jobs, back-pay, and benefits reinstated, all at taxpayer expense.

Plainly, it’s not only the VA that doesn’t give a hoot about our veterans.

[D]espite the fact that cyber attacks on the government are on the rise, a federal union recently won a case that stopped Homeland Security and U.S. Immigration and Customs Enforcement from immediately blocking workers’ personal email accounts on government computers, like Hotmail or Gmail. Such accounts are often loaded with computer viruses or malware.

Instead, the union is forcing these security agencies to first enter into protracted collective bargaining over the use of personal webmail accounts, putting the government at risk of cyber-attacks at a time when security experts note cyber criminals, terrorists and nation states like China are increasingly trying to break in.

Just last week Russian cyber thieves were blamed for the hack into the IRS, where tax return data for 104,000 individuals was stolen in order to get fraudulent tax refunds, now estimated at $50 million. Hackers broke into the IRS’s Internet service that lets taxpayers access their past tax returns.

On top of that, the People’s Republic of China, it’s only just been discovered, has hacked into OPM to steal the personal data of 4 million Federal employees.

Then there’s this naked threat from a Federal union.

“We are a force to be reckoned with and we are a force that will open up the biggest can of whoop ass on anyone” who votes against the interests of federal unions, J David Cox Sr, national president of the American Federation of Government Employees (AFGE), recently said, adding, “every time the ‘fools’ in Congress try to hurt the federal workforce we get bigger. We get stronger, and we fight harder.”

RTWT. All three parts.

These are completely sufficient reasons to do two things. One is to generally shrink the physical and employee size of the Federal government along with its scope so as to make it far easier for We the People to monitor and control it. The other thing is to eliminate government unions. Their usefulness is long past, and they have become actively destructive of good government.

Energy Subsidies

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Mr [Congressman Dave, R, WA] Reichert is co-sponsoring legislation to extend the PTC [Production Tax Credit] because the subsidies “reduce electricity costs and create jobs.”

But what jobs? Lower costs for whom? Who do you think pays that subsidy? Three years later, there still aren’t any in significant number. Electricity costs aren’t lower for the producers, and Reichert still hasn’t explained who’s paying for those subsidies (answer: we taxpayers are).

Mr [Congressman Steve, R, IA] King, who likes to advertise himself as a principled conservative, his line is that “Iowa is a wind energy success story” that only needs the federal government to “provide stable, low tax rates.”

Three years later, again left unanswered: if it’s so successful, why does it need federal subsidies? Why does it need subsidies at all? Why does it need continuation of subsidies as old as 1992—now 23 years on?

Oh, wait:

One need not literally seize the assets of businesses and install gov’t bureaucrats into management position to effectively nationalize those businesses. All it takes is to make them dependent on gov’t and/or direct their activities through regulatory constraints.

Or government subsidies.

Artificial Markets

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The Car Battery and battery car industries are two, and the situation hasn’t gotten any better in the three years since Mike Ramsey’s piece in The Wall Street Journal.

Since 2009, the Obama administration has awarded more than $1 billion to American companies to make advanced batteries for electric vehicles. Halfway to a six-year goal of producing one million electric and plug-in hybrid vehicles, auto makers are barely at 50,000 cars.

Two of those companies, in fact, have since gone bankrupt: Fisker Automotive and A123 Systems now are wholly owned by People’s Republic of China’s Wanxiang Group Corporation. Without repaying us American taxpayers.

The underlying problem isn’t unique to the Obama administration; his has just been the most recent and most egregious. The plain fact is that government stinks at creating industries and at creating markets. Only free markets—only people acting voluntarily and freely in accordance with their own wishes and needs—can do that. Free markets won’t always succeed at that, either, but in that case, the only ones who suffer losses are those who (voluntarily) made the bet. On the other hand, if they succeed, everyone gains to some degree.

When governments fail at this, though, everyone loses to some degree. Worse, while the same universal gain results from a government success, even neglecting greater friction losses from government involvement, there will have been no choice in the matter.

If the thing can’t survive without government intervention, it’s not ready for market. If it’s not ready for market, it’s…inappropriate…for taxpayers to be forced to prop it up with their tax money.