Takers vs Doers

Nicholas Eberstadt has the call.

A growing body of empirical evidence points to increasing dependency on state largess.

Then he enumerates [emphasis his]:

  • Over the 50-plus years since 1960, according to the Bureau of Economic Analysis, entitlement transfers—government payments of cash, goods and services to citizens—have been growing twice as fast as overall personal income.  Government transfers now account for nearly 18% of all personal income in America—up from 6% in 1960.
  • According to the BEA, America’s myriad social-welfare programs (the federal bureaucracy apparently cannot determine exactly how many of these there are) currently dispense entitlement benefits of more than $2.3 trillion annually.  Since those entitlements must be paid for—either through taxes or borrowing—the burden of entitlement spending now amounts to over $7,400 per American man, woman and child.

To pay for this, every child is born with a $7,400 debt.  Including those who will be recipients of this welfare.  Which means, as a practical matter, the other children are born with an even greater debt.

  • In 1960, according to the Office of Management and Budget, social-welfare programs accounted for less than a third of all federal spending. Today, entitlement programs account for nearly two-thirds of federal spending.  In other words, welfare spending is nearly twice as much as defense, justice and everything else Washington does—combined.  In effect, the federal government has become an entitlements machine.

Yet President Barack Obama insists that entitlements don’t sap us, they strengthen us.  He’s partially right: they strengthen those who control the handouts from these entitlements.  Politically.

  • According to the latest data from the U.S. Census Bureau, nearly half (49%) of Americans today live in homes receiving one or more government transfer benefits.  That percentage is up almost 20 points from the early 1980s.  And contrary to what the Obama White House team suggested during the election campaign, this leap is not due to the aging of the population.  In fact, only about one-tenth of the increase is due to upticks in old-age pensions and health-care programs for seniors.
  • As entitlement outlays have risen, there has been flight of men from the work force.  According to the Bureau of Labor Statistics, the proportion of adult men 20 and older working or seeking work dropped by 13 percentage points between 1948 and 2008.
  • In recent years, the biggest increases in disability claims have been for “musculoskeletal” problems and mental disorders (including mood disorders).  But as a practical matter, it is impossible for a health professional to ascertain conclusively whether or not a patient is suffering from back pains or sad feelings.  The government’s disability-insurance programs were intended to address genuine need.  On the current trajectory, the Social Security disability fund is projected to run out of money during Mr Obama’s second term.
  • The president and others describe Social Security and Medicare as “social insurance” programs rather than transfer schemes.  True, the eventual beneficiaries of these programs contribute payroll taxes to the Social Security and Medicare trust funds during their working lives.  But “insurance” programs are meant to pay for themselves; Social Security and Medicare cannot do so.

Moreover, insurance programs pay the premium payer or the payer’s designated beneficiary later, not some stranger currently.

And who’s paying for all of this?  Slightly over half, and dwindling, of those Nancy Kress called mules in her Beggars novels.  And those of our children who are picking up the debt.

The Proper Role of Crime

From Atlas Shrugged:

“Did you really think that we want those laws to be observed?” said Dr Ferris.  “We want them broken.  You’d better get it straight that it’s not a bunch of boy scouts you’re up against—then you’ll know that this is not the age for beautiful gestures.  We’re after power and we mean it.  You fellows were pikers, but we know the real trick, and you’d better get wise to it.  There’s no way to rule innocent men.  The only power any government has is the power to crack down on criminals.  Well, when there aren’t enough criminals, one makes them.  One declares so many things to be a crime that it becomes impossible for men to live without breaking laws.  Who wants a nation of law-abiding citizens?  What’s there in that for anyone?  But just pass the kind of laws that can neither be observed nor enforced nor objectively interpreted—and you create a nation of law-breakers—and then you cash in on guilt.  Now, that’s the system, Mr Rearden, that’s the game, and once you understand it, you’ll be much easier to deal with.”

Hmm….

h/t Instapundit

An Out of Control CFPB?

But we knew that would be the case with a budget funded by on-demand calls to the Treasury and a deliberate lack of Congressional oversight.  Here are three examples, from Skadden Arps, the “second best global law firm,” according to Spirit of Enterprise.  In each case, the Consumer Financial Protection Bureau imposed enforcement orders that charged both restitution payments and civil penalties for the miscreancies that wanted restitution.  Those miscreancies generally centered on “deceptive marketing and sales practices” and “deceptive debt collection practices.”

Capital One: Required to pay $140 million in restitution and a $25 million civil penalty.  The penalty was nearly 18% of the restitution.

Discover Bank: Required to pay $200 million in restitution and a $14 million civil penalty.  The penalty was 7% of the restitution.

American Express: Required to pay $85 million in restitution and a $27.5 million civil penalty.  The penalty was 32% of the restitution.

Assuming the restitution amounts are reasonable assessments of the severity of the banks’ misbehaviors, those civil penalties seem to bear no relation at all to the…crimes.  They seem, in fact, to be capricious and out of control—just a grabbing of what an unaccountable bureaucrat felt like taking.

Skadden’s complete report (it’s long and wide-ranging) can be seen here.

More on Becoming a Dependent

The Wall Street Journal‘s Law Blog reports that a

federal appeals court [the First Circuit] on Thursday [last] ruled that insurance companies can be required to pay long-term disability benefits to a recovering drug addict if the person would face a significant risk of relapse by returning to work.

The Law Blog expands:

The case…involved an anesthesiologist from Massachusetts…who became heavily addicted to Fentanyl, a prescription opioid used in her practice.

[The anesthesiologist] spent about three months at a treatment center, according to her attorney.  After she was discharged, her employee benefit plan that was administered by Union Security Insurance Company cut off her long-term disability benefit payments, totaling $4,000 a month.  Her therapist and other doctors feared that she had a high risk of relapse and cautioned her not to return to work where it would be easy to access the drug, the opinion said.

The anesthesiologist justified her suit by claiming that she shouldn’t have to fall off the wagon for her claim to be accepted.  She shouldn’t have actually to be disabled in order to collect disability benefits.  Never mind that there was no certainty of relapse asserted, by her or the Court, only a likelihood.  Never mind that her condition was entirely self-inflicted.  Never mind that she could have found work—even in the medical field—other than as an anesthesiologist.

Indeed, as the Appellate Court said quite clearly, she had not relapsed, and so she wasn’t back in her disability condition.  She was, though, out those $4,000 per month, payable for an actual disability.

The Court then noted in its opinion (cynically, say I)

The plaintiff’s risk of relapse was not merely theoretical.  In perhaps the most striking actualization of this risk, the plaintiff was arrested in May of 2005—some six months after her departure from [the treatment center]—for driving under the influence of alcohol[.]

Notice that.  She was driving under the influence of alcohol, not Fentanyl.  Some risk of relapse onto the drug.

The Court also noted in justification of its ruling (again cynically, say I) that the insurance company could have inured itself from this sort of…suit…by  “writing into the plan an exclusion for risk of relapse.”

The insurer, though, hadn’t included such an explicit exclusion because at the time they sold the policy they had no reason to believe a Federal Appeals court would rule so capriciously.  After all, the Fourth Circuit already had ruled differently on an identical case:

[The] Fourth Circuit…said the denial of benefits to an anesthetist addicted to the same narcotic was “reasonable.”

Now we know better.  If there’s a possibility of a disability occurring in the future, that disability exists presently.

Another brick in the wall of manufactured dependency.

A PRC Takeover

Examiner.com has the tale.

Taiwan’s most popular and independent media organization, Next Media, is about to be sold to China-based tycoon Tsai Eng-Meng, in a deal which would give him and his company (Want Want China Times Group) control of 50% of Taiwan’s entire print news industry.

This would be an ordinary monopolist action by a Republic of China citizen, whose outcome would be subject to RoC law.

However.

The $600 million takeover is not so much a business deal as it is a proxy invasion of Taiwan’s independent press by the Chinese Communist Party.  Eng-Meng, who is Taiwanese himself and holds large financial stakes in China, has been a vocal supporter of unification between communist China and democratic Taiwan.  He is also an ally of Beijing’s communist government.

Objections are flowing, and they center on

the fact that Eng-Meng already has a record of using his existing media empire to promote pro-Beijing bias and censorship in [the RoC].

And

The free people of [the RoC] may be about to lose control over their own press to the Chinese Communist Party, without a shot even being fired.

If that sounds apocryphal, consider that the PRC has had a primary goal of conquering the island nation ever since the Communists won their civil war and the losing side escaped to Taiwan.  This is another step in reaching that goal.