Tag Archives: regulation

A Sense of Privacy

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Last week, the House voted, largely along party lines, to abolish the American Community Survey, the new version of the US Census Bureau’s long-form questionnaire, a survey that was supposed to be conducted annually, The Wall Street Journal reports.  Republicans claim the long form—asking about everything from demographics to income to commuting times—is prying into private life and is unconstitutional.  Oddly, the WSJ disputes this characterization.

That paper says,

[T]he ACS provides some of the most accurate, objective and granular data about the economy and the American people, in something approaching real time.  Ideally, Congress would use the information to make good decisions.  Or economists and social scientists draw on the resource to offer better suggestions.  Businesses also depend on the ACS’s county-by-county statistics to inform investment and hiring decisions.

But the WSJ is living in a fantasy world, as demonstrated by that adverb “Ideally.”  In the real world, we’ve seen the likelihood of “good decisions” (question for the WSJ: whose definition of “good?”) involving personal information emanating from Congress.  We’ve seen the quality of suggestions from the HSWIC* over in the government’s Energy Department.  As for the businesses, see below.

Leaving that aside, though, in the real world, stipulating the argument, the ACS still is an intrusion into my privacy.

The WSJ even shamelessly trades on its “authority” status:

National statistics are in some sense public goods, which is why the government has other data-gathering shops like the Bureaus of Economic Analysis and Labor Statistics.

In the first place, they’re not goods of any sort, much less this baldly asserted public version, until they’ve been collected and thereby gained existence.  Even then, no, they’re not “public goods,” solely because they’ve been collected from a broad public.  They’re still made up of personal—private—data; having been collected up into a common database in no way places them into the commons.  In the second place, the WSJ has just made an excellent argument for abolishing the Bureaus of Economic Analysis and Labor Statistics, also.

In the end, if these data have value for businesses, or any other entity, a market will develop for them (they’re not that hard to collect, and the barrier to entry into this market is, as my town puts it, speed cushions), and people can give up their personal data—or not—in accordance with their own decisions.  There’s no need to have these data confiscated by government fiat.

But the most amazing part of the WSJ‘s demurral is their rationale:

As for privacy, anyone not living in a Unabomber shack won’t be much inconvenienced by making this civic contribution.

Leaving aside the cynically Alinsky-esque claim that a confiscation is a “contribution,” when did individual privacy become something to be invaded at will, so long as it doesn’t “inconvenience” the victim?  Our privacy needs no justification from us to protect; we need no better reason to protect it—especially from a grasping government that’s supposed to be working for us—than that we don’t feel like being exposed.  The WSJ‘s logic is in line with the government’s logic of two centuries ago: the Indians aren’t using the land they’re on, anyway.  And we have a more important use for it than they do.

The inconvenience is the invasion of our privacy.  Full stop.

 

*HSWIC: Head…Scientist…What’s in Charge

Germany, the United States, and Mandatory National Healthcare

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Miriam Widman, writing last week in Spiegel Online, points up the fallacies of government-mandated national health insurance, although this wasn’t her intent.  Her lede:

In Germany, people are baffled by how hostile a country as religious as the United States can be to the principle of mandatory healthcare insurance.  Not even conservatives question the system, which businesspeople say gives Europe’s largest economy a competitive advantage.

Let’s look at her argument and German bafflement.

First, a minor point:

[Germans] also question the continued portrayal of US President Barack Obama and his health reform backers as socialists and communists, noting that healthcare was introduced in Germany in the 19th century by Otto von Bismarck, who was definitely not a leftist….

Terms like “Left” and “Right,” “Liberal” and “Conservative,” are terms whose meanings evolve over time—as they must.  No one would confuse today’s conservative, for instance, with the 18th century conservative who insisted on the supremacy of monarchist governments over the people they ruled; nor would anyone would confuse today’s liberal with that same century’s liberal, who demanded a limited government subordinate to, and responsible to, the Sovereign people who hired it.  Widman’s remark here is simply a non sequitur, borne of a sloppy conflation.

Moving on,

[M]andated coverage is something that is simply not questioned in Germany.  Furthermore, even the most pro-market politicians wouldn’t dare to dismantle the country’s health insurance system.

This is a trap into which Americans simply are loathe to fall, for the reasons outlined below.

The requirement that everyone buy health insurance is based on a simple concept, healthcare experts agree.  Allowing healthy people to opt out of having health insurance destroys the insurance community and leaves insurers covering only the sick.

Leaving aside the careful elision of who these “experts” are, this claim simply demonstrates a complete misunderstanding of what insurance is.  I’ve written here and here about the nature of insurance—a risk transfer industry—I won’t repeat that here.  I’ll just point out that what the Germans have, and what Obamacare is, are simply welfare programs.  Their connection to insurance exists only via a commonality of names.

America’s Health Insurance Plans…filed an amicus brief with the Supreme Court in January saying the required coverage mandate cannot be divorced from Obama’s healthcare reforms.  …it wrote: …

“A wide range of experts has consistently agreed that enacting guarantee issue and community rating has severe unintended consequences unless they are paired with a strong commitment to achieve universal coverage through an effective and enforced personal coverage requirement.”

In plain English, this means that if only sick people sign up for insurance it is impossible to insure people regardless of pre-conditions, or to limit insurance companies’ ability to set prices based on an individual’s history and risk.  Everyone has to take part—sick and healthy people—for the system to work.

AHIP is right on this.  However, with respect to “set[ting] prices based on an individual’s history and risk,” this is exactly what insurance is.  MOreover, as Milton Friedman showed in a 1991 Wall Street Journal article on the effects of federally inflating health care demand through government mandated participation in Medicaid, our first universal health care welfare program, such mandates simply inflate the cost of both health care and of the “insurance” that claims to cover those costs.

The right answer here is to allow free market forces to govern both a true risk transfer industry and the health care provision industry (an aside: these two industries too often are erroneously assumed to be one and the same).  Just as the breakup of the world’s best telephone system—Ma Bell—led to lower prices to consumers and an even better suite of communications services, so competition will lead to lower insurance—risk transfer—costs for the consumer, lower medical costs to the consumer, and an even better suite of services in both industries.

Widman cites a private business proprietor, who extolls the virtues of an employer providing at least some of her employees’ health insurance:

“As an employer I would never question hiring somebody and not insuring them,” says Seattle native-turned Berlin café owner Cynthia Barcomi. … The American entrepreneur said she’d offer health insurance to her employees even if she weren’t required to by law…because people are more productive if they think their employer cares about and believes in them.

Indeed.  This is one of many sound business solutions to a question of employee productivity.  For government to mandate that this particular solution must be used by all businesses, though, regardless of those business’ individual, unique circumstances is both immoral and inefficient.  It’s immoral because it takes away the responsibility of the business owner for the outcomes of her business decisions and arrogates that responsibility to government.  It’s inefficient because it mandates a one-size-fits-all solution whose costs of implementation—costs driven in part by the artificial demand created by the mandate—prevent that business owner from implementing other solutions that might be better in his business’ circumstance.

Then Widman plays the religion card.

“For me the US is a very religious country. It doesn’t matter which religion I look at—love thy neighbor is a very, very important point in religion,” [National Health Insurers Association spokeswoman, Ann] Marini says. … Wolfgang Zöller, a member of Bavaria’s conservative Christian Social Union party, argues that Christian principles support a national healthcare system and both are compatible with capitalism.

Here, too, the larger point is missed.  It’s certainly true that our Judeo-Christian ethos and morality levies on each of us individually a requirement to look out for the least among us.  But this is not a mandate on government to absolve us of that individual responsibility by arrogating the obligation to itself and applying a universal mandate to all of us.  That responsibility is levied by our Creator on each of us individually because each of us is unique and in unique circumstances.  The manner in which we satisfy our obligation must, therefore, be individual—even though many of us may adopt similar means.

Then, on what basis does government presume to dictate to each of us what our religious practice must be?  On what basis does government dictate to any of us how we must carry out our religious practice—or that an atheist or agnostic must carry one out at all (oh, wait—government has already made these arguments here and here)?

That larger point, though, is irrelevant to Marini, Zöller, and their ilk.  Zöller makes this clear:

The question of health insurance is a humane question.  I want every person—independent of age, independent of income or pre-existing conditions—to have the possibility to be helped when he is sick.

This is certainly a discussion we all should have.  But what Zöller is describing isn’t insurance at all—it’s welfare.

In the end, Americans and Germans must answer for themselves two questions.  First, we must answer definitively the question of whether we want insurance or welfare.

And then we must all answer the question of whether we want government to impose a one-size-fits-all solution (to a thus far misunderstood problem) on all of us, regardless of where our individual choices, our individual situations, might take our private businesses, or us.

Mind Sets

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One of President Obama’s jokes at the recent Correspondents’ Dinner was along the lines of

I want to thank all the members [of Congress] who took a break from their exhausting schedule of not passing any laws to be here tonight.

So, says the Progressive-in-Chief, Government’s role is to pass more laws, to be more intrusive and controlling.

Others have an alternative mind set.

[A] part-time Congress.  Cut their pay in half, cut their time in Washington in half, cut their staff in half, send them home.  Let them get a job like everybody else back home has.

Then they could have a productively busy schedule.

Big Government and Economic Recovery

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Via UCLA comes an analysis of the Great Depression and the failures of Big Government policies in alleviating what began as a sharp recession.  Harold L. Cole and Lee E. Ohanian, after studying Franklin Roosevelt’s performance, have reached a conclusion about the New Deal.

Why the Great Depression lasted so long has always been a great mystery, and because we never really knew the reason, we have always worried whether we would have another 10- to 15-year economic slump.  We found that a relapse isn’t likely unless lawmakers gum up a recovery with ill-conceived stimulus policies.

These two lay the responsibility for the failure, in particular, on the anti-competition and pro-labor measures FDR signed into law in 1933.  Even though much of that first New Deal round was found unconstitutional, that outcome took a couple of years to reach, during which the damage was being done, and it was replaced by similar New Deal laws that a later, more submissive Supreme Court upheld.

Cole added

President Roosevelt believed that excessive competition was responsible for the Depression by reducing prices and wages, and by extension reducing employment and demand for goods and services.  So he came up with a recovery package that would be unimaginable today, allowing businesses in every industry to collude without the threat of antitrust prosecution and workers to demand salaries about 25 percent above where they ought to have been, given market forces. The economy was poised for a beautiful recovery, but that recovery was stalled by these misguided policies.

The Cole and Ohanian study went on:

Using data collected in 1929 by the Conference Board and the Bureau of Labor Statistics, Cole and Ohanian were able to establish average wages and prices across a range of industries just prior to the Depression.  By adjusting for annual increases in productivity, they were able to use the 1929 benchmark to figure out what prices and wages would have been during every year of the Depression had Roosevelt’s policies not gone into effect.  They then compared those figures with actual prices and wages as reflected in the Conference Board data.

In the three years following the implementation of Roosevelt’s policies, wages in 11 key industries averaged 25 percent higher than they otherwise would have done, the economists calculate.  But unemployment was also 25 percent higher than it should have been, given gains in productivity.

Meanwhile, prices across 19 industries averaged 23 percent above where they should have been, given the state of the economy.  With goods and services that much harder for consumers to afford, demand stalled and the gross national product floundered at 27 percent below where it otherwise might have been.

And with those carefully elevated prices—deliberately elevated through mandated price floors and, with agriculture, government-controlled production rates—food was so expensive that FDR forced food stamps—and the taxes to support them—through the Congress.

Ohanian added this, too:

High wages and high prices in an economic slump run contrary to everything we know about market forces in economic downturns.  As we’ve seen in the past several years, salaries and prices fall when unemployment is high.  By artificially inflating both, the New Deal policies short-circuited the market’s self-correcting forces.

Does any of this sound familiar?  Under the present administration, with its Patient Protection and Affordable Care Act, its Dodd-Frank Act, its wholly unaccountable Consumer Financial Protection Bureau, it’s really not so unimaginable.  Under the present administration, that singles out private citizens and publicly castigates them for political donations to the wrong candidates, with its picking and choosing individual business—and whole industry—winners and losers, it’s entirely understandable.

Cole concludes,

The fact that the Depression dragged on for years convinced generations of economists and policy-makers that capitalism could not be trusted to recover from depressions and that significant government intervention was required to achieve good outcomes.  Ironically, our work shows that the recovery would have been very rapid had the government not intervened.

RTWT.

 

With a h/t to GayPatriot, who actually were writing about a different matter.

A Partial Victory

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And from the 9th Circuit Court of Appeals, yet.  From an Associated Press article carried by Fox News, we learn that Arizona’s voter identification law has been upheld in important parts; although another important part has been struck down.

A 12-judge panel, rehearing an appeal from a 3-judge panel, upheld that prior panel’s ruling: that Arizona can, indeed, require identification from prospective voters at the polling stations before they are allowed to vote, but that the state cannot hold out for proof of American citizenship before registering to vote and getting that voter ID document.  On the latter, the Court held that the Federal government’s National Voter Registration Act, which does not require proof of American citizenship, overrides Arizona’s attempt to do so.

Arizona’s Attorney General Tom Horne expects that the US Supreme Court ultimately will have to resolve the question of whether Arizona can require proof of citizenship as a condition of voter registration.

The people of Arizona have a right to request that people registering to vote show some evidence they are citizens, and we fully expect the US Supreme Court to uphold that.

Indeed.  Critics argue that the voter ID law violates the rights of those denied registration to Constitutionally guaranteed equal protection.  However, those critics ignore, and the Supremes will have to consider in order to put this question finally to rest, that the equal protection rights of American citizens are violated by allowing non-citizens to vote and thereby dilute—and even override—the votes of those citizens.

Plainly, a state can allow non-citizens to vote in state and local elections, if it wishes.  However, they also can insist that only American citizens be allowed to vote in Federal elections conducted within the state.  They also can insist that only citizens of the state be allowed to vote in state and local elections.  Beyond the 14th Amendment’s equal protections guarantee (which, just by the way, carries its own requirement for voters for “electors for President and Vice-President of the United States, Representatives in Congress, the Executive and Judicial officers of a State, or the members of the Legislature thereof” to be “citizens of the United States”), the state and local choice questions are matters covered under the Constitution’s Article I, Section 10, which is carefully silent on this matter, and under the 10th Amendment.