September 2, 2014

Obamacare before the Supreme Court: “The Emperor Has No Clothes!”

Courtroom illustration shows Deputy Solicitor General Edwin Kneedler speaking to Justice Antonin Scalia and Chief Justice John Roberts of the U.S. Supreme Court in Washington

In a case of “the Emperor has no clothes,” the justices played the part of the skeptic to the Obama Administration’s protestations of Obamacare’s constitutionality.  With the oral arguments on constitutionality of the Affordable Care Act over, let’s take a look back at the reactions to the arguments:

First, the crux of the argument? That the government cannot regulate “inactivity,” an angle that has been pushed by Georgetown professor Randy Barnett:

On Monday, as the court began three days of arguments, questioning by the nine justices suggested they were ready to review the law now rather than wait until it has fully kicked in. That lays the groundwork for arguments for the challenge championed by Professor Barnett: that Congress’s power to set rules for commerce does not extend to regulating “inactivity,” like choosing not to be insured.

Apparently, the Supreme Court is buying the argument, much to the Obama Administration’s dismay.

In “Obama’s Supreme Court Disaster,” Adam Serwer says that the government’s lawyer Donald Verilli should be glad that the Supreme Court doesn’t allow cameras in the court room; his performance was that bad.

Stepping up to the podium, Verrilli stammered as he began his argument. He coughed, he cleared his throat, he took a drink of water. And that was before he even finished the first part of his argument. Sounding less like a world-class lawyer and more like a teenager giving an oral presentation for the first time, Verrilli delivered a rambling, apprehensive legal defense of liberalism’s biggest domestic accomplishment since the 1960s—and one that may well have doubled as its eulogy.

Investors Business Daily feels bad for Verilli, but doesn’t blame him. The Affordable Care Act just isn’t constitutional, the editorials says.

We almost felt sorry for Donald Verrilli, the solicitor general who had to defend the constitutionally indefensible. Over three days of intense interrogation by nine Supreme Court justices, Verrilli failed to muster a single coherent, reasonable argument in support of the ObamaCare law’s constitutionality.

Instead, his shambling, unfocused talking points left the government case in disarray — underscoring what a poorly conceived, badly designed law this was in the first place, and why it must be overturned.

Some think that the disasterous arguments have put the Obama Administration on the defensive over the heart of Obamacare, the individual mandate on Americans to buy healthcare insurance.

That’s a purely political argument to a constitutional question. [White House Press deputy press secretary] Earnest  offered no defense along the lines of the precedential history of Congress and the commerce clause. It is the reach and scope of commerce-clause authority that is at the heart of the high court’s scrutiny of the health care law.

A week ago, ACA supporters were looking forward to a triumph. Now, they’re counting their losses. What happened?

Perhaps the most telling moment was during a question from Justice Kennedy. Ilya Shapiro describes it:

By this point the government’s head appellate advocate was on his heels, dodging increasingly skeptical queries, until Justice Kennedy delivered what in poker would be seen as the key “tell”:

JUSTICE KENNEDY: I understand that we must presume laws are constitutional, but, even so, when you are changing the relation of the individual to the government in this, what we can stipulate is, I think, a unique way, do you not have a heavy burden of justification to show authorization under the Constitution?

Although you can’t hear it on the audio recording, the audience gasped.

Just like that, the headlines started changing.

The law isn’t dead, yet though, say supporters.

As Mark Twain might say, reports of Obamacare’s demise are greatly exaggerated. While the conservative justices expressed considerable reservations about the law’s scope, Justice Kennedy, the key swing vote, also noted, near the very end of the argument, that the unique context of the healthcare market may be sufficient to validate the “individual mandate.” The biggest challenge the government has faced in defending the law has been the articulation of a limiting principle, and by argument’s end it seemed that Justice Kennedy might have heard one that he could sign on to. If he does vote to uphold the law, it’s possible that Chief Justice Roberts will join him, in the interest of not having the case decided by a single vote, in which case the vote would be 6-3.

On the other hand, Dr. Milton Wolf in the Washington Times is more than sanguine about the demise of Obamacare. He’s predicting complete overturn, and, if not, the downfall of America.

The die is cast: Obamacare will not survive. This is not a prediction of how the Supreme Court will rule on President Obama’s health care takeover, mind you. It’s the harsh reality that if Obamacare does not die a judicial or political death – or better yet, both – it will die an economic death, and if it does, it will take America down with it.

Obamacare’s costs are exploding in the land where budgets already have burst. The $900 billion bargain-basement 10-year cost estimate that Mr. Obama promised for his overhaul recently ballooned to $1.8 trillion. Of course, these are still just estimates, and considering that the government underestimatedMedicare’s cost by a factor of 10, who really knows how massive the final price tag will be?

Welcome to the United States of Greece, where our $15.6 trillion national debt has surpassed the size of our total economy.

Which begs the question: if not Obamacare, what? Healthcare reform is clearly necessary. In the Chicago Tribune,

“One way or another, Congress will have to revisit it in toto,” Justice Antonin Scalia said of the health law.

One way or another.

That should be a clarion call in Washington. The prospect that the court will strike down all or part of the law known as Obamacare hands political leaders of both parties a formidable challenge — and a vast opportunity: a second chance to get health care reform right.

On that point, James Pethokoukis asks “What will Republicans do if the Supreme Court kills healthcare” reform and suggests that perhaps combining Rep. Paul Ryan’s plan (block grants to states for Medicare0 with future president Mitt Romney’s plan (known as the “Hubbard Plan“) might be workable.

The Hubbard Plan has five elements: 1) allow all Americans to deduct from income taxes all their healthcare expenditures—premiums, employee contributions, out-of-pocket costs, etc.; 2) deregulate insurance markets to foster nationwide, portable health insurance; c) making health information more available; d) control anti-competitive behavior such as hospital mergers; e) malpractice reform.

In the meantime, stay tuned. The law hasn’t been overturned, yet, and still may stand. While you’re waiting, jog on over to the Sweaty Federalist for his snark on some of the arguments being made to uphold the law.

[AEI] [Glenn Hubbard] [Mother Jones] [Washington Times] [Investors Business Daily] [National Journal] [The Nation] [Chicago Tribune] [New York Times]

Huffington Predicts the Demise of Obamacare

[h/t Aaron Bludworth]

 

 

 

 

 

 

 

 

 

Obamacare Proponents Brace for Supreme Court Smackdown

 Jason Kane is a recovering rock star and an attorney in Salt Lake County. He is an occasional contributor to Publius Online.

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In the days leading up to the Supreme Court oral arguments on the constitutionality of President’s Obama’s signature health care law, there was no end to the media speculation about which conservative leaning justice(s) would leave the dark-side and vote to uphold Obamacare. We were treated to a barrage of statistics touting the popularity of Obamacare, reminders that Republicans had supported mandates in the past and other specious arguments that have no bearing on the constitutionality of the law. Self-assured Progressives, it seemed, had little concern that socialized medicine was in any danger.

After one day of arguments that didn’t go particularly well for the government, the Obamacare cheerleaders seem to be in full back-peddle mode. One blog post at the Daily Beast is especially entertaining, arguing that if the individual health insurance mandate is struck down, it will actually be a boon to Obama’s reelection. Obama would no longer have to defend the controversial law and be free to run on his other spectacular achievements, like killing Bin Laden and… killing Bin Laden. This line of thinking, of course, flies in the face of common sense and everything we know about politics. Losing is bad for business and tends to embolden the opposition. In this particular election year, it also happens to help rid Romney of much of the health care baggage that continues to poison the well with many Republicans.

To be sure, I think it is premature to start dancing on the grave of Obamacare. But the tough skepticism exhibited by Justice Kennedy, the left’s only hope in a 5-4 decision, gives Obamacare proponents good reason for concern. We cannot foretell the outcome based on oral arguments alone, though they do seem to hold particular weight in this case. At the very least though, the seeds of self-doubt have been sewn among the Progressives. We should allow ourselves savor this rare phenomenon while it lasts.

Economics simplified…a lot.

Brought to you by NPR, three minimalist posters designed by economists.

Catch the article here.

McNaughton’s “One Nation Under Socialism” Harms Political Discourse

I’m embarrassed that the likes of Jon McNaughton are helping raise Utah‘s profile nationally.  Depicting Barack Obama in terms that are just short of demonic, McNaughton is harming more than hurting. Perhaps the purpose of art is to shock and persuade, but subtlety is lost on McNaughton as he uses art like a 2×4 to hit his viewers over the head with his opinions.  Playing on fears and anxieties that are real, McNaughton distracts from the important educational process that is necessary to create an informed public.  From the Washington Post.

McNaughton, who is described by Salon as “the right’s Shepard Fairey”and who also creates Thomas Kinkade-esque landscapes and holiday paintings, has gained notoriety for some of his previous anti-Obama paintings: He has depicted the president trampling the Constitution andenslaving Americans in chains. In response to an article on the Blazeasking whether his work was free speech or offensive, McNaughton replied on his Facebook page, “I for one am deeply offended. I can’t believe I had to paint this in our own country. Stand up and be heard America!!”

Simply put, he creates a straw man out of Barack Obama and sets the straw man on fire.  What a way to put Utah on the map. Where Shepard Fairey channeled the hope  of  America (however misplaced those hopes were), McNaughton slaps people in the face with dark, ominous images of Barack Obama stomping on or burning the Constitution.  You might as well just depict the President in a mug shot wearing an orange jumpsuit. It couldn’t be a more damning depiction.

It does little to educate or inform. It appeals to our lowest, and least informed, qualities, pandering without raising our level of discourse. It obstructs any opportunity to form reasoned and educated opinions. And it makes it hard to meet our opponents on grounds where we can make a persuasive argument.

There’s a lot at stake. Our country is facing serious issue. We grapple with a health system that is expensive and wasteful, a government that costs more than it can afford, and an economy that is struggling to recover. Boiling that all down to the fault of one man, painting him in the most demonic of shades, and calling it “socialism” does little to move the American public to the qualities our country must readopt if we are to change.  As Charles Murray argued in last week’s Wall Street Journal, our country is facing a multitude of problems, none of which can be solved by a government program. Just as the solution cannot be the government, neither can the fault be laid solely at one man’s feet. Instead, we should be focused on shifting how Americans view government, understand their government, and the level to which they participate in government. If it matters, it merits the time to understand and learn how it works.

[Washington Post] [Salt Lake Tribune] [Wall Street Journal]

Manufacturing Bad Ideas

 [Benjamin Lusty is a lawyer and an occasional contributor to Publius Online]

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Presidential elections invariably turn out half-thought economic proposals.  One current hot policy ticket is lavish tax advantages for manufacturers, presumably in hope of priming employment growth (and votes).  President Obama, for example, proposes to reward manufacturing companies with a mix of tax credits and subsidized loans (i.e., politically directed credit).  On the other side, Rick Santorum would absolve manufacturers from federal income tax altogether (i.e., politically directed credit, but through the US Treasury’s back door).  Mitt Romney vows that “getting tough” on China will bring more work back to the shop floor (i.e., diplomatic bluster punctuated by a few WTO arbitrations).  Slick stuff.  But none of the contenders bother to articulate why singling out manufacturing for special treatment makes economic sense, especially for the rest of us.

Most of the political class uncritically assumes that jolting manufacturing is an unquestionable good.  But inconvenient questions arise:   Why does manufacturing merit the “remedial education” of protective tax advantages?  Why should tax policy favor a company that builds airplanes over a company that sells bird seed?  Does Boeing really need a leg up on the local pet shop?

Sweater subsidies under a Santorum Administration?

Some argue that manufacturing deserves special attention because it is in crisis, as evidenced by historical decline in assembly-line employment.  The pro-manufacturing faction asserts that the mere fact that fewer people work in factories than in the past proves that the sector is failing.  This argument has intuitive political appeal, but it confuses the overall health of manufacturing with the raw number of only one of its inputs—labor.

In truth, American manufacturing is not in crisis.  America is still the largest manufacturer in the world, out-producing China (yes, China) by some 40%, a major gulf considering the massive disparity between China’s and America’s respective working populations.  Further, American manufacturing output soared over the recent decades, more than doubling since 1975—even as employment in manufacturing fell.  Contrary to signaling decline, the fact that American manufacturers can make far more with far less is a sign of underlying strength, leading both to lower consumer prices (which expand the breadth of potential demand) and better investment of labor and capital.

Besides, in our modern innovative economy, manufacturing isn’t even where the money is anymore.  Indeed, it’s relatively worthless.  Consider the iPhone and iPad—among two of the most in-demand products on the market.  Research indicates that final assembly only accounts for 1.8% and 1.6% of the retail prices of these “iProducts,” respectively.  The value of design, marketing, and distribution, by contrast, equates to roughly 58% and 30% of their retail prices.  In other words, an iPhone’s design and marketing is 33 times more valuable than its assembly (at least as measured by the input cost).

Manufacturing is becoming even less valuable for more traditional and less technologically intensive products, such as automobiles.  French carmaker Renault posits that assembly only accounts for 15% of the value of their cars.  The money then, isn’t in twisting the steel that constructs these products, but in shaping the concepts that design them.  If that’s the case, why subsidize the worthless stuff?

In truth, blue-collar boosting—touting plans to prop up manufacturing jobs–is better politics than it is sound economics.  Americans love manufacturing jobs, or at least the idea of manufacturing jobs.

But frankly, politicians need to lead past it.  Irrational attachment to factories, whether cynical or sentimental, only holds the country, and innovation, back.  Complicating the tax code to the marginal benefit of a few companies that happen to have Washington’s temporary approval is a shoddy excuse for an economic policy.  America needs manufacturing jobs no more than it needs any other job, and bending the economy to subsidize manufacturing will only cause real, long-term damage.

 

 

Book Review: “Grand Strategies: Literature, Statecraft, and World Order” by Charles Hill

Grand Strategies: Literature, Statecraft, And World Order

I’m always on the look out for new books to read (but what I really need is more time). Suggestions from friends, mentors, reviewers, blogs, and references in other books send me off on an endless cycle: hear about a book, find it on Amazon (or the library), purchase (or check out) said book, bring it home, put it on my bed-stand with great anticipation, read ten pages to a reference of another book, and…repeat. The result is a two-stack, five books per stack, “pile up” next to my bed that has resulted in a reading bottle neck. And, believe me you, it’s a bottleneck that affords me more enjoyable hours than I’ve ever passed in traffic.

That’s all really just a long way of saying that in reading Charles Hill’s “Grand Strategies: Literature, Statecraft, and World Order” I constantly found myself adding new books to some real or imagined book list that I may, or may not, ever get a chance to read. Every chapter of Grand Strategies was full of new books that sounded interesting and fascinating. Some–like Mark Twain‘s “Adventures of Huckleberry Finn,” Salmon Rushdie‘s “Satanic Verses,” or Thucydides’s “The Peloponnesian War”–I had read and could quickly relate. Others–Xenophon’s “The Persian Expedition” or Marcel Proust‘s “In Search of Lost Time“–were new, at least to me. Worse, especially for my book list, Hill manages to craft his dialogue about each in such a way as to bestow meaning and insight beyond a cursory reading of the text.

For example, though I’ve often heard it referenced and cited as powerful piece of poetry, never had I seen John Milton’s “Paradise Lost” as a commentary on war and the modern polity. And yet, perhaps it is.

But far beyond the politics of the day ‘Paradise Lost’ is Milton’s comprehensive commentary on modern warfare, revolution, founding a polity; on strategy, leadership, intelligence, individual choice under conditions of modern statecraft; and on the justification of God’s ways to men.

Suddenly, the war in heaven, through Milton’s eyes, becomes a proxy for competing views of the world worked out during the Oliver Cromwell English Civil War.

In Hill’s eye, fiction is more than just a story. In literature, we see the great ideas and forces that move history worked out, argued, and recorded. The “international world of states and their modern system is a literary realm,” he argues. “[I]t is where the greatest issues of the human condition are played out.” Nothing may come closer to a thesis for his opus. He continues:

A sacral nature must infuse world order if it is to be legitimate. that order is not to be identified with a particular social system, but to legitimate, the system must hint at the underlying divinely founded order. The modern Westphalian system was conceived when such was the case, but with the Enlightenment’s addition of secularism, science, reason, and democracy, the system increasingly spurned , then forgot, its legitimizing sources of authority.[...] Revolutionary ideology radicalized secularism, science and reason into the task of erasing original sin, o perfecting humanity–all requiring terror to create “the New Man.” Modern efforts to create a sovereignty potent enough to fill the void produced the statist monstrosities of Stalin and Hitler. America became an empire but never gained the understanding to go with it. China is now on its own misguided course.

Thought provoking, insightful, and, of course, full of literature to read when you finish it (including a bibliography of primary and secondary sources that will keep you busy for several years), and reread, Hill’s “Grand Strategies” is a worthy addition to your bed-stand stack. Just make sure you put it on top.

(My rating: 5 of 5 stars)

View all my reviews