Tag Archives: regulation

The Progressive Socialist Goal Made Manifest

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In the context of Aetna’s decision to sharply curtail its participation in ObamaMart—because such participation was costing Aetna millions of dollars—Socialist Senator Bernie Sanders (I, VT) has said openly

The provision of health care cannot continue to be dependent upon the whims and market projections of large private insurance companies whose only goal is to make as much profit as possible.

Because making money—the engine of economic growth and the economic welfare of all Americans—is inappropriate when it’s done outside Government control.  American businesses and Americans can’t be allowed to earn more than Government deems fit.  President Barack Obama (D) has held this before Sanders became a public fixture:

I mean, I do think at a certain point you’ve made enough money. But, you know, part of the American way is, you know, you can just keep on making it if you’re providing a good product or providing good service.

Of course, the Progressive-Democrat Obama considered it to be Government’s role to determine the goodness of that product or service, not the private citizens choosing to buy, not to buy, that product or service.

Sanders’ disdain for private insurers’ market projections and their goal to make as much profit as possible are easily extensible to the economy as a whole.  That Progressives in the Democratic Party are demanding a government option to “compete” with private enterprise in ObamaMart is a clear demonstration of where that Party will take our economy the moment they gain control of our government.

You can bet Progressive-Democrat and Democratic Party Presidential candidate Hillary Clinton soon will be echoing Sanders’ call for government control of our economy in her effort to retain Sanders’ supporters and to extend Obama’s policies.

This will be the Progressive Socialist economy.

SEC and Boardroom Diversity

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The Securities and Exchange Commission is looking to reach inside corporate governance some more because it Knows Better how to run a company than do the leaders and managers of that company.  The latest travesty is a new rule requiring disclosure of the diversity—by which the SEC means ethnic and gender diversity—of a public company’s board of directors.  This would be an expansion of the SEC’s existing 2009 rule requiring companies to disclose their plans for diversity.

Berkshire Hathaway took the correct position in its SEC disclosure regarding those plans:

Berkshire does not have a policy regarding the consideration of diversity in identifying nominees for director. In identifying director nominees, the Governance Committee does not seek diversity, however defined. Instead, as previously discussed, the Governance Committee looks for individuals who have very high integrity, business savvy, an owner-oriented attitude and a deep genuine interest in the Company.

This, though, isn’t politically correct enough to suit the SEC; hence the new rule under consideration.  It isn’t enough that a company should seek actual talent and skill, it must seek the government-directed correct balance of gender and ethnicity.

This raises a question in my mind: would that be biological ethnicity and gender or self-identified ethnicity and gender?

For the record, I self-identify my ethnicity as American, and I self-identify my gender as The US Male.

What’s in Store

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…for the rest of us.  Kate Vershov Downing is a Liberal who has been mugged by reality.  She is—or was until she resigned—a member of the Palo Alto, CA, Planning and Transportation Commission, the city’s central planning facility for all things a private citizen might want to do.  Here’s an excerpt from her letter of resignation from that Commission, via PJMedia‘s Tom Knighton.  (Unfortunately, she’s not completely learned the mugging lesson; she and her husband are moving to another California city.)

After many years of trying to make it work in Palo Alto, my husband and I cannot see a way to stay in Palo Alto and raise a family here. We rent our current home with another couple for $6200 a month; if we wanted to buy the same home and share it with children and not roommates, it would cost $2.7M and our monthly payment would be $12,177 a month in mortgage, taxes, and insurance. That’s $146,127 per year—an entire professional’s income before taxes. This is unaffordable even for an attorney and a software engineer.

There’s more—much more—in her letter of resignation.

It’s clear that if professionals like me cannot raise a family here, then all of our teachers, first responders, and service workers are in dire straits. We already see openings at our police department that we can’t fill and numerous teacher contracts that we can’t renew because the cost of housing is astronomical not just in Palo Alto but many miles in each direction.

But Palo Alto’s fellow commission members, Liberal Planners all, either don’t care, don’t understand, or perhaps worst of all: they got theirs, and the rest can go hang.

Small steps like allowing 2 floors of housing instead of 1 in mixed use developments, enforcing minimum density requirements so that developers build apartments instead of penthouses, legalizing duplexes, easing restrictions on granny units, leveraging the residential parking permit program to experiment with housing for people who don’t want or need two cars, and allowing single-use areas like the Stanford shopping center to add housing on top of shops (or offices), would go a long way in adding desperately needed housing units while maintaining the character of our neighborhoods and preserving historic structures throughout.

But the P&T Commission as a whole Knows Better and has steadfastly refused to allow private citizens, private enterprises, to do these simple things.

This Council has…charted a course for the next 15 years of this city’s development….

Because the Commission members are fortune tellers and seers; they Know what’s going to happen before it happens.

Downing closed with this bit of irony:

We should take care to remember that Palo Alto is famous the world over for its residents’ accomplishments, but none of those people would be able to live in Palo Alto were they starting out today.

This Know Better attitude is what we can look forward to nation-wide if the Progressive-Democrat Party wins the White House this year and with it the Senate.

If You Like Your Plan

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Aetna Inc will withdraw from 11 of the 15 states where it currently offers plans through the Affordable Care Act exchanges, becoming the latest of the major national health insurers to pull back sharply from the law’s signature marketplaces after steep financial losses.

This is playing out exactly as President Barack Obama (D) and his Democratic cronies knew it would ‘way back in 2010—they knew because health experts told them.  These experts advised the Democrats that mandating insurance purchases and paying the sick to get it (those Federal subsidies) while requiring plan providers (no longer can they be called insurers) to provide coverage to all at the same “low” price would emphasize the sick over the healthy getting coverage.  The experts also pointed out that this emphasis on sick customers relative to healthy ones would explode plan providers’ costs.  Obama and his, though, chose to disregard this advice and to go with what they wanted to hear: the self-serving huzzahs of the likes of AARP, who thought they could make money by fronting for the plan providers and collecting a piece of the resulting premium stream through referrals and reselling plans.

Recall, too, that Aetna has merger plans with Humana that Obama’s Department of Justice is suing to block on the speculative grounds that at some future date the new entity might engage in anti-competitive practices.  Never mind that the merger might also have allowed the combined insurers to be large enough to remain in Obamacare.

I wonder if anyone in the Obama administration might know of some beachfront property north of Santa Fe that they might be interested in selling us.

A Thought on Chevron Deference

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Chevron Deference is a Supreme Court-created doctrine flowing from an appeal by Chevron Corporation to NRDC v Gorsuch, in which the Natural Resources Defense Council, during the Reagan administration, sued the EPA over a then-newly enacted regulation that allowed manufacturing plants to get pollution emission permits for new equipment that didn’t meet EPA emission requirements so long as the plant’s total emissions didn’t increase following the new equipment’s installation.

The Supreme Court found for the NRDC in Chevron’s appeal (Chevron USA v NRDC) and in the process created their Chevron Deference doctrine.  The heart of the doctrine, as articulated by Justice John Paul Stevens in writing for the majority, is this two-part test [citation and footnotes omitted]:

When a court reviews an agency’s construction of the statute which it administers, it is confronted with two questions.  First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress. If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, as would be necessary in the absence of an administrative interpretation. Rather, if the statute is silent or ambiguous with respect to the specific issue, the question for the court is whether the agency’s answer is based on a permissible construction of the statute.

“The power of an administrative agency to administer a congressionally created…program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.”

Eliding the specifics of the case and appeal, what Chevron Deference says in essence is that the Court owes Executive Branch offices considerable deference in those offices’ interpretations of statutes and the regulations those offices implement to enact those statutes: the Courts’ opening position should be that those offices are correct in their interpretations and implementations.  The problem, though, is in Stevens’ last sentence and in the sentence he quotes:

…whether the agency’s answer is based on a permissible construction of the statute[,]

and

The power of an administrative agency to administer a congressionally created…program necessarily requires the formulation…of rules to fill any gap left, implicitly or explicitly, by Congress.

Here is what the Constitution has to say on…gaps:

All legislative Powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.

Legislative powers—every single one of them—are the sole province of our United States Congress, and not any other body.  That Congress, too, consists solely of a Senate and House of Representatives; it does not include Executive Branch offices or Cabinets…or Agencies, administrative or otherwise.

What about those gaps in legislation?  All legislation, of necessity, fills gaps, whether those gaps exist de nihilo or they exist, or develop, as the law is seen in operation and/or as society evolves—else there’d be no legislation.  That includes, naturally, gaps in legislation.

When an (administrative) agency creates a rule to fill a gap in legislation that agency is authorized to administer, it is doing far more than formulating policy, or setting out rules for carrying into effect aspects of the legislation.  It’s legislating into that gap, which only Congress can (not may) do.

There’s also a problem with the concept of deference.  Regulating agencies are subordinate entities of the Executive Branch, and as such they cannot have any status but a subordinate one to each of the three branches of our Federal government.  From the other side of this relationship, the judiciary is a coequal branch of our Federal government, equal in status, hierarchy, and power and authority to each of the other two.  As such, Courts owe no deference at all to either of the other two branches, much less to agencies subordinate to either of those branches.  The mindset that the Courts do owe deference is a dangerous one.

The Chevron Deference doctrine is wrong.  The right answer for a Court in adjudicating a regulation has a different second step:

First, always, is the question whether Congress has directly spoken to the precise question at issue. If the intent of Congress is clear, that is nearly the end of the matter; for the court, as well as the agency, must give effect to the unambiguously expressed intent of Congress—so long as that intent is implemented in a constitutionally permitted manner, for if it has not then regardless of intent, the statute cannot stand.  If, however, the court determines Congress has not directly addressed the precise question at issue, the court does not simply impose its own construction on the statute, or allow an administrative interpretation to stand. Rather, if the statute is silent or ambiguous with respect to the specific issue, the answer for the court is to return the matter to the legislative (political) branch of the government so it can address what is strictly a legislative and a political question.