Tag Archives: regulation

President Obama’s Obamacare Tax Increase on the Middle Class

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Straight from the horse’s mouth.  Chief Justice John Robert’s Majority Opinion includes this [emphasis added]:

The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause.  That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it.  In this case, however, it is reasonable to con­strue what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance.  Such legislation is within Con­gress’s power to tax.

The whole opinion, and the two dissents, can be read here.

Europe’s Labor Problems

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Aside from the debt and profligate spending problem, Europe’s labor laws are large contributors.  The Wall Street Journal recently described Italian labor law.  And Italy is not atypical for Europe.

  • Business pays 2/3 of each employee’s social security costs (I won’t go into how cheap we Americans are compared to the Europeans when it comes to social security).
  • Businesses with more than 10 employees (quoting the WSJ)

must submit an annual self-assessment to the national authorities outlining every possible health and safety hazard to which your employees might be subject.  These include stress that is work-related or caused by age, gender and racial differences.  You must also note all precautionary and individual measures to prevent risks, procedures to carry them out, the names of employees in charge of safety, as well as the physician whose presence is required for the assessment.

  • Businesses with more than 15 employees encounter very onerous limits on the ability to fire an employee, for any reason.
  • Businesses with more than 15 employees also must explicitly hire disabled—qualified or not—and must have at least 14 disabled employees when they go above 50 employees.  The businesses must maintain that 7% ratio at all larger sizes.
  • Businesses with more than 100 employees must submit to the government a biennial report on the gender dynamics within the company.  This report must include a tabulation of the men and women employed in each production unit, their functions and level within the company, details of compensation and benefits, and dates and reasons for recruitments, promotions and transfers, as well as the estimated revenue impact.

The WSJ cites the OECD as noting that

All of these protections and assurances, along with the bureaucracies that oversee them, subtract 47.6% from the average Italian wage….  Two-thirds of that bite comes before payroll, meaning many Italian workers are unaware of their gross cost to employers.

I mean, really.  YGTBSM.

Another Out of Control Regulation

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This regulation began as a Bush the Younger administration’s EPA attempt to work on an environmental problem now known to be non-existent.  Unfortunately, it’s being continued under an Obama administration EPA for no reason other than a cynical exercise in governmental power for the sake of that power.

The regulation in question is the EPA’s requirement that oil refiners mix into their refined fuels millions of gallons of a cellulosic ethanol, even though that additive does not exist.  This has the refiners in a quandary because the EPA is intent on fining them heavily for their failure to use this ghost chemical.

Tom Pyle of the Institute of Energy Research points out that

None, not one drop of cellulosic ethanol has been produced commercially. It’s a phantom fuel.  It doesn’t exist in the market place.

He goes on

Why would [the EPA] ask them to blend any at all if it doesn’t exist?  Because they know that they can squeeze some extra dollars out of them.

On the other hand, the EPA does have the authority to relax the requirement, and apparently they’re in the process of that.  The cellulosic ethanol blending requirement is, supposedly, being reduced by 98%.  Thus, in the end, the refiners only need to use 2% of this non-existent additive compared to their original requirement.  There’s a break.  Charles Drevna, representing refiners, has the right of this.

[The EPA is] forcing us to use a product that doesn’t exist; they might as well tell us to use unicorns.

He added

We’ve had to go to the courts and litigate this thing is because [the EPA] just turned a blind eye to us[.]

They have to because that mandate, the potential per centage reduction notwithstanding, just gets larger and larger: 500 million gallons of cellulosic ethanol this year, 3 billion in 2015, and 16 billion in 2022.  Never mind that nobody is making this stuff.

It shouldn’t have come to this.

Federal Overreach

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As C Boyden Gray and Jim R Purcell note in a recent Wall Street Journal op-ed, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 is an especially egregious example, an Act that arrogates vast power to the Federal government and then concentrates it in the Executive Branch.

As they note,

Dodd-Frank created both the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, giving each agency effectively unlimited power. The FSOC can declare a financial firm “systemically important”—that is, too big to fail—based on “any” “risk-related factors” that it “deems appropriate.” And the CFPB can punish even responsible lenders who in good faith offer loans that the bureau later deems to be “unfair,” “deceptive” or “abusive.”

Demonstrating just how far this overreach is intended to go, the illegally appointed head of the CFPB, Richard Cordray, has instructed Congress that it is “probably not useful” to define in advance what an “abusive” lending practice is.  No, he’s just going to use his enormous, and unconstrained, his enforcement powers to retroactively punish lenders based on his carefully ex post definition of the “facts and circumstances” of each of their cases.  Nice company you got there.  Be too bad if something was to happen to it.

That this overreach is deliberate is demonstrated by the Act’s cynical elimination of any pretense of control by any branch of the government over these two Executive Branch bureaucracies, and the Act’s cancelation of even the most ephemeral separation of the three branch’s powers.

The CFPB is not subject to Congress’s “power of the purse,” which James Madison knew to be Congress’s “most complete and effectual weapon.”  Instead, Dodd-Frank lets the CFPB claim more than $400 million from the Federal Reserve each year and prohibits Congress from even reviewing that budget.  The president’s control over the CFPB is limited because by law he can remove the agency’s director only under strictly limited circumstances.  Finally, Dodd-Frank limits the courts’ review of CFPB’s legal interpretations.

And

The FSOC is similarly free from checks and balances.  For example, when the Council—a working group of the Treasury secretary, Federal Reserve chairman, comptroller of the currency, and other unelected regulators—anoints a financial institution as too big to fail, the courts are prohibited from even reviewing whether the regulators properly interpreted the applicable laws.

And that illegal appointment?  Cordray was given a recess appointment while the Senate was in session.

So much for the Constitution, that document that’s more than 100 years old and hard to understand.  So much for the Rule of Law.

RTWT.

But It’s the Wrong Problem

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Ron Williams, a former Chairman and CEO of Aetna Inc, in a recent Wall Street Journal op-ed, described his evolution toward opposition of Obamacare’s Individual Mandate, which he had supported initially.  He then offered a couple of alternatives to the Individual Mandate; however his alternative solutions are as erroneous as the Individual Mandate is an overreach of Federal government power.  The reason for his error is that he’s pursuing the wrong problem.

Williams says

As a society, we have a moral obligation to ensure everyone has access to affordable health care.  We must find a way to cover those who are no longer healthy but need care.

No.  There is a difference between health care and health insurance; the two are conflated far too often—sometimes cynically and deliberately, sometimes out of genuine ignorance, and sometimes just out of careless thought.  People who are no longer healthy do not need health insurance; they need health care.  We must find a way to help them to get that care.  Moreover, this social obligation is not at all a government obligation, or even a legitimate government task.  Society is not our government—it is us.

When government butts out of our affairs, when it leaves our money in our hands, it becomes a lot easier for us as individuals to see to our obligations ourselves, and in our own way.  Then we can do more of what we need to do—directly, or through our local communities, or through our churches and private charities, or some combination of these.  Government legitimately comes into play only as a last resort, not the first resort—or only resort, as some would have it—and the Federal government must be last among these.  New York’s tax funds, to the extent they’re involved at all, should go first to New York’s poor, not first into a general national pile from which, for instance, Illinois or California might draw ad lib.

On top of that, competitively sold health insurances policies, sold nationwide rather than within 50 different state jurisdictions, would be a powerful market solution that would potentiate our ability as a society to act on this imperative.