Up and at ‘em! Big Brother needs you to work!
George Will refuses to let go of the argument that health-care reform legislation needs to overcome a serious hurdle: the Constitution.
Supporters of the mandate say Congress can impose the legislation under the enumerated power to regulate interstate commerce. Since the New Deal, courts have made this power capacious enough to include regulating intrastate activity that “substantially affects” interstate commerce. Hence Congress could constitutionally ban racial discrimination in “public accommodations” — restaurants, motels, etc. — as an impediment to interstate commercial activity.
Opponents of the mandate say: Unless the commerce clause is infinitely elastic — in which case, Congress can do anything — it does not authorize Congress to forbid the inactivity of not making a commercial transaction, of not purchasing a product (health insurance) from a private provider.
“Congress can regulate commercial activities in which people choose to engage, but cannot require that they engage in those commercial activities.” So says Sen. Orrin Hatch, who also notes that if Congress can mandate particular purchases to help the economy, there was no need forCash for Clunkers: Congress could have ordered people to buy cars (with subsidies, if necessary). Why not the Anti-Couch Potato Act to Make Calisthenics Mandatory and to Impose a $50 Excise Tax on Cheeseburgers Because Unhealthy Lifestyles Affect Interstate Commerce?
Will didn’t take it this far, but if you grant Congress that power, here is the logical progression:
IF it is legal for Congress to ban specific forms of inactivity because there would be an economic consequence, THEN it would be legal for the government to force you to work, even at a job not of your choosing. Oh, did you retire? Too bad! Get your ass to the office, pronto!
(Which is a good thing, because once people start dropping out of medical professions, they’ll need a way to conscript doctors, nurses and therapists.)
FHA is the New Fannie
So it looks like the FHA, which guarantees lots and lots of home loans, is well on its way to needing a huge, Fannie-style bailout. From the WSJ:
…Federal Housing Administration, the nation’s insurer of nearly $750 billion in outstanding mortgages. The agency acknowledged this month that a new but still undisclosed HUD audit has found that FHA’s cash reserve fund is rapidly depleting and may drop below its Congressionally mandated 2% of insurance liabilities by the end of the year.
At a 50 to 1 leverage ratio, the FHA will soon have a smaller capital cushion than did investment bank Bear Stearns on the eve of its crash.
The basic problem is that the FHA guarantees every dollar of a loan, leaving neither the borrower nor the originator at risk in case of a default. Combine that with incredibly low down payment requirements for these loans and it’s a(nother) disaster waiting to happen.
One simple fix would be for the FHA guarantee to cover only 90% of the loan, in which case the lender would still have to care about the creditworthiness and default likelihood of the borrower, rather than dishing it all off to the taxpayers.
Whoopee – Raises for everyone!
So the US minimum wage was increased to $7.25, to the cheers and adulations of the nice, but economically-illiterate, multitudes. Of course, it’s never enough, so there are already calls for further significant increase; for example, a group of churches and religious leaders are calling for an increase to $10 an hour next year.
Look, I’m not a particularly mean guy, and I worked for less than $4 an hour at my first job back in the mid ’80’s — and I sure would have liked to have earned more! But, the thing is, in our still-slightly-market-based economy, wages, like any other prices, are set by the combination of supply and demand for a product; in this case, a particular set of skills, experience, and capabilities.
My first job was as a cashier at a grocery store; it was an entry level job, requiring no experience and no skills beyond the ability to type numbers on a 10-key keypad and smile nicely at the customers. There were lots of other high school kids who wanted — and were equally qualified for — the job, so the price (wage) was low.
At the other end of the scale, let’s think about neurosurgeons, the folks who do simple stuff like cut tumors out of your head, repair aneurysms, that sort of thing. After 4 years of college, 4 years of medical school, an internship, and 5 – 7 years of residency, the small number of people who can actually do this job well can expect to make base salaries of about $400,000 a year; many make total compensation well above half a million.
John Stossel has a good piece on this topic:
Politicians have tried to defy the market process with minimum-wage and living-wage laws for years. The consequences are never good for the people they claim to want to help. When will we learn what workers need is not meddling politicians but free and competitive markets?
While the math of supply and demand can get complicated, the logic is really very simple. If it’s worth it to me to pay the neighborhood kid $30 to mow my lawn, and he’s willing to do it for $20, then we’re going to be able to come to a mutually-beneficial deal. If the town government says passes an ordinance that the minimum price for mowing a lawn is $50, then I’m not going to pay the kid to do it. I’m worse off because I have to waste my Saturday afternoon, and he’s worse off because he doesn’t get to earn money. The townspeople are worse off because they now have an “unemployed” kid running around making trouble and needed some sort of benefits program — leading to increased taxes.
It’s the Market, Stupid
From Reason:
The New York Times calls it “possibly the most complex legislation in modern history.” The health care “reform” currently being hammered out by the Democratic leadership of the House of Representatives already clocks in at $1 trillion and 1,000 pages—and it’s nowhere near done. But one thing is clear: the legislation attempts to substitute top-down mandates from a centralized bureaucracy for the distributed decisions made by millions of consumers, physicians, and insurers acting in a marketplace. This will fail.
While I agree that the legislation will fail — in the sense that it will ultimately produce worse health outcomes at higher cost than our current system — I am quite concerned that the legislation will not fail to pass.
It’s embarrassing — and should be offensive to anyone who has ever taken a civics or US History class — that a piece of legislation this big and complex, that affects a huge portion of our economy, could be rushed through without being read, in an attempt to create yet another “entitlement” that will be nearly impossible to take away.
Read the article for a great summary of what a true market in healthcare might look like…
The Audacity of Nope
We need a leader with the guts to turn to the corporate welfare recipients, and give them the answer that will finally lead to economic growth.
It’s not bailouts.
It’s not stimulus.
It’s the notion that unmade beds remain the way they were slept in.
It’s the only way investors and consumers will proceed with confidence, knowing that financial activities have consequences that are predictable and visible.
Every act of propping up failed practices and businesses only prolongs the damage, passing it along to further generations. You can’t replace a bubble with another bubble, without getting a louder and bigger implosion down the road.
We don’t need a government that says the right things, we need a government that says nothing. Then does it.
We need a government that believes in the Audacity of Nope.
Cat’s Cradle
The Stimulus money being offered to the states is little more than a Cat’s Cradle: so many tangled strings it becomes a woven prison.
If there were no strings, states could simply accept the federal dollars, cut their own taxes the same amount, and enjoy the benefits of a stronger state economy.
However, states are now being lampooned for turning down “free money,” that comes with provisions that entail permanent and onerous conditions.
This Cat’s Cradle is so strangling that even the rats are staying away.
Government as Family
For Uncle Sam to become Big Brother and your Daddy, a lot of people have to get screwed.
Tale of the Tape
More of New Orleans has been rebuilt with duct tape than with red tape.