Archive for March, 2012

Constitutional debates swirling around the PPACA’s individual mandate have much to do with federalism. The core issue the Supreme Court is addressing is whether the federal government has essentially unlimited authority in economic policy, or whether they are yet some areas of economic policy-making (such as whether to compel commerce) exclusive to the states. As someone who believes that constitutions ought to be read according to – I don’t know – what their actual words say, I think the entire act is obviously unconstitutional. Article I, section 8 of the U.S. Constitution permits Congress to legislate in order to “regulate commerce…among the several states.” Thus, Congress has the authority to regulate interstate commerce. Not “anything that might be related somehow to interstate commerce,” plus “anything necessary and proper to any of those things.” Of course, no one on the Supreme Court, except perhaps Clarence Thomas on issues like this one, shares my judicial philosophy.

Putting the constitutional issues to one side, however, I want to address the desirability of the kind of federal system that classical liberals — and, perhaps, Justice Thomas — favor. We can summarize that federal system as follows:

  1. The primary regulatory authorities in the country are state and local governments.
  2. The economic role of the federal government is to ensure a common market: to prevent states from levying barriers to the free flow of goods, services, people, and capital, from tariffs to invidious regulations to local preferences in government procurement.
  3. The national court system protects basic human rights and civil liberties from infringement by federal, state, and local governments.
  4. State and local governments fund their activities almost exclusively out of their own resources. The federal government should not, in general, provide grants to state and local governments.
  5. State governments are politically autonomous, constitutionally sovereign, and independently elected. They may legislate freely within the bounds expressed above.
  6. State governments are permitted to form compacts to deal with externalities. For instance, states may choose to adopt uniform regulations on insurance so that companies can sell the same product in multiple states with a quicker approval process. Because states retain their sovereignty, they are free to enter and withdraw from such compacts at any time.

OK – so what are the arguments against this kind of system? (I go over some of the arguments and evidence in favor here.) One common objection to “states’ rights” is that state governments may violate the civil rights of some of their citizens. I share this concern, one reason I don’t think the term “states’ rights” is appropriate for my position; nevertheless, the concern is addressed with point 3 above. Another objection might be that problems like pollution and endangered species can cross state boundaries. Given a sufficiently small number of states, however, I do not see why they cannot contract with each other to solve their commons problems. What else?

There are two concerns about fiscal federalism that many progressives share that I take seriously: that inter-jurisdictional competition under federalism will undermine the welfare state, and that the system will lead to greater inequality among regions. The first concern (more…)

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How should we deal with the “uncompensated care” issue discussed in Tuesday’s Supreme Court oral argument on the Affordable Care Act?  One potential answer is a 2,700 page health care bill that imposes an individual mandate to buy health insurance or face stiff penalties.  

An alternative answer would be that these costs should be paid by the receiver of care or be the responsibility of individual hospitals and healthcare providers who treat those who show up to receive services but can’t or won’t pay.  Leaving aside the former, one could argue that the latter should have to internalize those costs if they are willing to treat the uninsured and those unable/unwilling to pay.  However, this really means that providers will charge higher costs for those who do pay and/or take a hit in the form of lower profits or reducing the costs of service (by lowering the quality of care and the pay/benefits of those who work at such institutions).   The “internalization of cost” answer is clearly not a great one.  

Yet those of us who would face a higher cost for going to providers who service uncompensated care patients could theoretically go to providers who do not and thus can offer less expensive care.  This would put market pressure on providers to stop servicing patients who won’t/can’t pay.  So now we’d have a lot less medical care for the “can’t/won’t pay” population (with some of these people making the trade-off to purchase insurance) – unless providers (such as non-profits) chose to provide care anyway and find a way to make it work in a market populated with both do-gooders and do-wellers.  Some individuals might even choose to pay more for care knowing that they would be subsidizing the charitable works of their do-gooder provider.  However, a lot of people would be far more price sensitive and abandon those providers – making it harder for those places to survive.  So I’m not sure this is a live option even in theory. 

More importantly, it isn’t an option in reality.  Indeed, such discussion is moot because Congress has essentially forced hospitals to provide uncompensated care – so one government intervention begets the rationale for another (the ACA)!

This brings us to the receiver of care and how providers ought to deal with those who can’t/won’t pay.  I would argue that part of the problem of uncompensated care could be handled by health care providers being more vigilant about collecting fees even if this means being a lot more stern (even “nasty”) with those who don’t/can’t pay.  For example, the hospital could be more serious at the point of service about discussing the social costs and immorality of not paying for services rendered.  Perhaps shame might push some people who probably could pay (but who don’t want to trade-off other goods in their lives) into the do pay category.  And there are a lot of folks out there who could pay if they were willing to allocate more resources to health care and less to other goods they enjoy.  Case in point: an acquaintance of mine in graduate school sought ER care and refused to pay.  He was neither truly poor nor unable to pay but simply took advantage of the system so as to avoid trading off other things in his life.  A pointed stare might have shamed him into taking his responsibilities more seriously.  Or…    

If moral suasion doesn’t work, it should be possible to garnish the future wages of uninsured patients or otherwise seek compensation for services rendered.  There is no free lunch in the world and this would serve to make those who receive care pay….eventually (and incentivize health insurance purchase before the need to seek care).  This won’t work for the homeless or those permanently out of work, but these people likely represent such a small part of the problem that it would be far less expensive to the rest of us to subsidize them through higher insurance premiums than to do so through the tax system as ObamaCare does. If there are some legal barriers to such efforts as wage garnishing, these should be eased. 

Wouldn’t such moves and others like them incentivize people to purchase health insurance without coercion or at least make them face the need to pay the costs of their decision?  And isn’t that what we ultimately want? 

Of course, the healthcare system would work a heck of a lot better if we actually had a relatively free market in which hospitals and other health care providers could compete freely on the basis of price and quality of service, advertise this, compete across state lines, and so forth — thus also making insurance less expensive. 

I’d rather try a freer market approach or the one we have with real teeth for failure to pay than successive attempts to rationalize a system with massive government intervention.  And yes, I do realize that there will be people who truly cannot provide for themselves and who are not simply making bad decisions or externalizing the costs of their choices re: trade-offs.  For these people, charity and even government assistance will probably be necessary.  But there is way too much moral hazard and disincentivizing proper behavior in this realm.

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Those of you who followed Grover’s link and read the transcript (or even better, heard the audio) of yesterday’s Supreme Court hearing may find the following quote entertaining (h/t Politico). The Source: White House Counsel Kathryn Ruemmler.

“Mr. Verrilli is an extraordinarily talented advocate who possesses a sharp mind, keen judgment, and unquestionable integrity. He ably and skillfully represented the United States before the Supreme Court yesterday, and we have every confidence that he will continue to do so.”

I know that this is a little outside of Ms Ruemmler’s portfolio, but I wonder if she could recommend a solar panel company that I might invest in? I’ve heard good things about this company named Solyndra.

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Audio of Day 2 of oral arguments in the ObamaCare case here

And I’m not the only one saying that the SG was having some trouble today.  Jeffrey Toobin – no libertarian or conservative – boldly stated that:  “This was a train wreck for the Obama administration.”

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The long war is hemorrhaging support among the public. As the NYT reports, a new NYT/CBS poll provides some rather striking evidence:

The survey found that more than two-thirds of those polled — 69 percent — thought that the United States should not be at war in Afghanistan. Just four months ago, 53 percent said that Americans should no longer be fighting in the conflict, more than a decade old.

Even National Review seems to be souring on the war, if a post from today’s Corner is any indication. As Michael Walsh observes:

This is not a Good War….It’s time to wrap up this decade-long farce, time for both civilian leaders and military brass to take a long, hard look at the demoralizing mess we’ve made in Afghanistan, and to ask how America can avoid such mistakes in the future.

Walsh goes on to derive several lessons (all of which were apparent to many of us long ago and were reinforced by our time in Iraq) and concludes:

There was nothing wrong with going into Afghanistan in the first place. The Taliban was sheltering Osama bin Laden, and it was there that the 9/11 plot was hatched. The U.S. was right to mount a punitive expedition and remove the Islamic radicals from power — a mission that was quickly accomplished, thanks to a daring, special-ops-led military strategy that quickly routed the fundamentalists.

And that should have been that. We should have declared mission accomplished, pulled out, and left the Afghans to their own devices. It never should have morphed — under both George W. Bush and Barack Obama — into a fruitless exercise in tea-brewing. Some backwaters will always be backwaters, and deservedly so.

I almost feel as if I just read a quote from a decade-old issue of the American Conservative or, for that matter, a Ron Paul speech circa 2002.

Returning to the poll results above, one might dismiss them as a short-term reaction to the recent events in Afghanistan. Or one might, following Michael E. O’Hanlon, (the Brookings Institution) and attribute the low levels of support to the ignorance of citizens. In his words (from the above cited NYT article):

“I honestly believe if more people understood that there is a strategy and intended sequence of events with an end in sight, they would be tolerant…The overall image of this war is of U.S. troops mired in quicksand and getting blown up and arbitrarily waiting until 2014 to come home. Of course you’d be against it.”

Perhaps. But it may also be the case that after more than a decade of war and nation-building, citizens have finally had enough.

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1.  We can now call it ObamaCare without sounding partisan or oppositional.

2.  A New York Times profile of “The Most Interesting Legal Scholar in the World.”

3.  Along the theme of liberal preparation of the information battlespace should ObamaCare lose in the courts.

4.  Public opinion shouldn’t matter a bit when it comes to the constitutionality of the law, but fyi, ObamaCare still unpopular.

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According to Nicholas Capaldi’s expansive biography of John Stuart Mill, the great British philosopher argued that “All lasting political reform is not accomplished directly, through partisan activity, but indirectly, through the reform of culture.” 

As someone who thinks political culture is an underrated variable (the possible result of Weber’s problematic “Protestant Ethic” argument), I find Mill’s claim compelling.  However, there are also key choice moments that deeply change the future as certain paths are followed or not and that themselves help structure the future nature of our political culture.  Like the New Deal, won’t ObamaCare change the nature of state-society relations in ways that will affect our institutions and our culture?  Isn’t that why its passage and likely ratification by the Supreme Court is so potentially dangerous?

And yet perhaps ObamaCare or something like it is the inevitable consequence of deeper changes in our political culture along the lines suggested by James Buchanan in his wonderful piece “Afraid to be Free.”

If Mill is right, places like TFAS and the Institute for Humane Studies are incredibly important since they attempt to educate the youth about a certain set of important ideas that contribute to a political culture supportive of liberal democracy.

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