January 2012

If Obamacare Is Repealed, Conventional Wisdom is Defeated

by Lee Doren on January 31, 2011

in Legal

After Obamacare was passed into law, those who articulated conventional wisdom argued that “repeal” would be impossible. Instead, we heard that the best anyone could hope for is that sections the law would be reformed. We also were told that the public would totally reject “taking away” healthcare benefits from those who just received them after the law’s passage. A clear warning was sent to Obamacare opponents to move slowly.

Originally, the pragmatists seemed to have history on their side. There is little precedent for an enormous government entitlement being scrapped, and George W. Bush learned how difficult it was to reform an entitlement like Social Security. Overall, politicians prefer to buy votes with other people’s money.

However, a federal judge in Florida today struck down Obamacare, and according to Senator Jim DeMint, all Republican Senators have cosponsored a bill to repeal Obamacare S.192. This comes just a few weeks after the House of Representatives voted to repeal the law, placing the momentum clearly on the side of repeal.

If repeal is ultimately successful, it will not just be a temporary win for small government libertarians. Instead, it will likely galvanize many proponents of limited government to throw conventional wisdom out the window and fight together.

Moreover, if Obamacare is repealed, its ramifications will likely extend beyond Obamacare itself. It would mean that all entitlements are on the table when future budget cuts are proposed, and it will create the precedent necessary to give confidence to those who want to reject the conventional wisdom.

Afternoon Links: January 31, 2011

by Nicole Ciandella on January 31, 2011 · 1 comment

in Zeitgeist

1. Bad news for Rudolph: “Reindeer Castration Seen As Climate Change Aid.”

2. Baylen Linneken’s recently-released paper looks at the “birthplace” of the First Amendment’s Assembly Clause: Colonial America’s taverns.

3. Ugandan woman Brenda Namigadde faces deportation from Britain—despite the fact that she’ll almost certainly be arrested in Uganda for being openly gay.

4. Coming soon in women’s fashion: invisible shoes.

5. Internet Hero of the Day: This Brazilian cabbie does an excellent Michael Jackson impersonation.

Obamacare Struck Down by Florida Judge; Properly Applies Severability Principles to Invalidate Whole Law

by Hans Bader on January 31, 2011 · 9 comments

in Health and Illness, Healthcare, Insurance, Legal, Nanny State, Personal Liberty, Regulation

A judge in Florida just declared the health care law known as “Obamacare” unconstitutional, ruling it void in its entirety. Judge Vinson rightly declared the health care law’s individual mandate unconstitutional, since the inactivity of not buying health insurance is not an “economic activity” that Congress has the power to regulate under the Interstate Commerce Clause. (Under the Supreme Court’s decision in United States v. Morrison (2000), which I helped litigate, only “economic activity” can be regulated under the Commerce Clause, with the possible exception of those non-economic activities that harm instrumentalities of interstate commerce or cross state lines.)

Judge Vinson also rightly declared the law as a whole unconstitutional. The health care law lacks a severability clause. So if a major provision like the individual mandate is unconstitutional — as it indeed was — then the whole law must be struck down.

The absence of a severability clause meant that, at a minimum, the burden of proof shifted to the government to prove (among other things) that the law would have passed even without the individual-mandate provision later held unconstitutional. The government could not, and did not, meet that burden of proof, given the incredibly narrow margin by which the health care law passed in the House, and the fact that it circumvented a filibuster with no votes to spare in the Senate.

Earlier, a judge in Virginia declared Obamacare’s individual mandate unconstitutional, but declined to strike down the rest of the law.

As I noted earlier in The Washington Examiner, “To justify preserving the rest of the law, the judge” in the earlier Virginia case “cited a 2010 Supreme Court ruling [Free Enterprise Fund v. PCAOB] that invalidated part of a law — but kept the rest of it in force. But that case involved a law passed almost unanimously by Congress, which would have passed it even without the challenged provision. Obamacare is totally different. It was barely passed by a divided Congress, but only as a package. Supporters admitted that the unconstitutional part of it — the insurance mandate — was the law’s heart. Obamacare’s legion of special-interest giveaways that are ‘extraneous to health care’ does not alter that.” In short, Obamacare’s individual mandate is not “volitionally severable,” as case law requires.

The individual mandate provision also was not “functionally” severable from the rest of the law, since the very Congress that passed Obamacare deemed the individual absolutely “essential” to the Act’s overarching goals (as Judge Vinson in Florida correctly noted).

(In our amicus brief in the Florida case for Governors Tim Pawlenty and Donald L. Carcieri, we also argue that Obamacare violates the Tenth Amendment by exceeding Congress’s power under the Spending Clause, a so-called Pennhurst argument.)

Cato legal scholar Ilya Shapiro, who filed briefs against the law in Virginia, comments on today’s decision here, calling it a “victory for federalism and individual liberty.”

In footnote 27, the judge cited with approval the thoughtful brief of legal scholar Ken Klukowski explaining why Obamacare should be struck down in its entirety under settled principles of severability.

New EPA Report Confirms Biofuel Policy Harms Environment

by Brian McGraw on January 31, 2011 · 2 comments

in Energy, Ethanol

A draft EPA report released a few days ago largely confirms what we already know, that conventional biofuels produced on a large scale in the United States (corn ethanol), offer slight GHG reductions but come with a host of other, more troublesome,  problems. As the report is still a draft, the EPA has asked that it not be cited or quoted from. The report is available here. If you navigate to page 116 you can find their preliminary conclusions and recommendations. The report offers a visual summary of potential consequences or benefits from various technologies (ethanol, bio-diesel, algae-based fuels, etc.). Under corn ethanol, there are 6 listed categories of environmental effects: water quality, water quantity, soil quality, air quality, biodiversity, and invasiveness. Ethanol’s score offers a “relatively large”, “negative”, and “most certain” for 5 of the 6 categories, scoring a negligible effect on invasiveness. The ethanol groups responded immediately, attacking the EPA report:

“EPA’s failure to provide this report in any context with the environmental degradation done by fossil fuel exploitation and use is irresponsibly misleading. Energy and environmental decisions do not exist in a vacuum,” the Renewable Fuels Association, an ethanol industry trade group, wrote in a statement. “The use of biofuels, when all things are equally considered, is a far better energy choice than Canadian tar sands, oil shale, and other increasing sources of petroleum,” the group added.

and

Another ethanol trade group, Growth Energy, also attacked the EPA study. “Clearly this draft report needs a considerable amount of work. There is no consensus on several issues the report authors use as assumptions,” the group said.

Remember, the U.S. is mandating that U.S. consumers purchase corn ethanol which is harming the environment (one of its many negatives), while paying the corn ethanol industry to produce these fuels and keeping a cleaner competitor (sugarcane ethanol) from entering the country via a protective tariff. Environmental policy gone wild.

Regulation of the Day 162: Breaking Wind

by Ryan Young on January 31, 2011 · 3 comments

in Nanny State, Personal Liberty, Regulation, Regulation of the Day

The southeast African country of Malawi is about to make farting illegal. The government there is trying to “mould responsible and disciplined citizens.” Enforcement will be a problem. Even in places where the law allows gas to pass, fouling the air still violates social norms. People routinely shift blame, making claims such as “He who smelt it, dealt it.”

A Malawian woman told the Daily Mail, “Children will openly deny having passed bad air and point at an elder. Culturally, this is very embarrassing.” It also makes it difficult for a court to determine guilt.

While this particular regulation is quite humorous, it is a symptom of a serious problem in Malawi. The rule of law is weak there, and this has human consequences. Malawi ranks 106th out of 141 countries in the most recent edition of James Gwartney’s Economic Freedom of the World Index. Countries ranked that low usually suffer from predatory governments and arbitrary justice systems. They also tend to have crushing poverty rates.

It is easy to imagine officials using this ordinance against political opponents, or even people they simply don’t like. Nor is breaking wind the only new offense in the government’s new morality initiative. The Daily Mail hints at the potential consequences:

The crime will be enforceable in a new “Local Court” system which will also have powers to punish a range of other crimes in the bill set to be debated in the country’s parliament.

These include insulting the modesty of a woman, challenging to fight a duel, and trespassing on a burial place.

It also outlaws pretending to be a fortune teller, according to local press in the country.

Opposition leaders complain the new courts will be “kangaroo courts.”

Image credit: al_green’s flickr photostream.

Morning Media Summary

by Lee Doren on January 31, 2011

in Economy, Energy, Environment, International, Legal, Regulation, Trade

Tech:

Without Internet, Egyptians find new ways to get online:
“”When countries block, we evolve,” an activist with the group We Rebuild wrote in a Twitter message Friday.”

Google won’t be taken to court over data gather:
“The US state of Connecticut said Friday it would hold negotiations with Google over the collection of private wireless data by its Street View mapping cars and not take the Internet giant to court.”

Egypt shutdown worst in Internet history: experts:
“The scale of Egypt’s crackdown on the Internet and mobile phones amid deadly protests against the rule of President Hosni Mubarak is unprecedented in the history of the web, experts said.”

FCC Asks Court to Dismiss MetroPCS, Verizon Net Neutrality Suits:
“The Federal Communications Commission on Friday moved to dismiss the net neutraliy challenges filed by MetroPCS and Verizon, claiming they were “filed prematurely.”"

China blocks ‘Egypt’ on Twitter-like site:
“CHINA has blocked the word “Egypt” from the country’s wildly popular Twitter-like service, while coverage of the political turmoil has been tightly restricted in state media.”

Global Warming / Environment / Energy:

Video: Robert Redford, environmental hypocrite?:
Ann McIlhenny and Phelim McAleer, the producers of the feature-length documentary Not Evil Just Wrong that exposed many false global-warming claims of environmentalists — and the damage done by them — have decided to focus on short films that look at the individual hypocrisies of environmental activists. In their latest edition, they feature Robert Redford, who used the earnings from his film career to buy a large preserve in Utah, a vineyard in Napa Valley, and a reputation for environmental activism. Only McIlhenney and McAleer note that the activism seems to be the do-as-I-say variety:

Save the environment or save the economy? The brewing batting over bottled water could kill jobs:

For more than a few years environmentalists have fueled a movement to ban or significantly reduce consumer use of bottled water. Dozens of universities and municipalities have already taken action to curb bottle water use.

Insurance / Gambling:

Commission Clarifies Changes in U.K. Online Gambling Regulations:
“The threat that the United Kingdom would change its taxation and compliance laws for online gambling operators that were not registered in the U.K. has been lessened to a certain degree by a recent announcement by Jenny Williams, the head of the U.K.’s Gambling Commission.”

Health / Safety:

Six cases of cholera suspected in Massachusetts:
“A second Massachusetts resident has been diagnosed with cholera and four others are suspected of having the intestinal ailment, state disease trackers reported today.”

Future cars to decide if driver is drunk:
“Future technology may put the brakes on drunk drivers and save many lives as researchers in Massachusetts are developing a system that will prevent a car from starting if the driver’s blood alcohol level is higher than the legal limit.”

Economics:

Credit card rates at record highs near 15%:
“Interest rates are now hovering near record highs, at an average rate of 14.72%. And if your credit is bad enough, you could even end up with a rate as high as 59.9% APR.”

Legal:

Do You Want Me To Throw It on the Ground?:
“This was first posted to YouTube last summer, but has gone viral in the last 24 hours after someone posted it to Reddit. The Reddit post says it’s set in Wildwood, New Jersey, and begins as police are writing a guy a ticket for wearing a t-shirt with profanity. I can’t find a news account of the incident to verify that.”

Labor:

Most Catholic Health Partners workers reject SEIU:
“Given the chance to cast votes in a union election without electioneering from either side, most of the 6,600 workers at fifteen facilities owned by Catholic Health Partners decided this week not to join organized labor.”

Transportation/ Land Use:

Republicans embrace Obama rail initiative:
“Key Republicans are embracing a major spending initiative outlined in President Obama’s State of the Union address.”

TSA Shuts Door on Private Airport Screening Program That Exposed TSA’s Inefficiency

by Hans Bader on January 30, 2011 · 7 comments

in Labor, Mobility, Precaution & Risk, Regulation

The Transportation Security Administration has shut the door on a private airport screening program that was making the inefficient agency look bad by outperforming it in safety, innovation, and customer satisfaction. The TSA’s action was praised by a liberal union that expects to unionize the TSA, the American Federation of Government Employees. Its head, John Gage, applauded the Obama administration for requiring a “federalized” government “work force.”

The exemption allowing outsourcing to private screeners was originally created in the aftermath of the September 11 terror attacks, when Congress and the Bush administration foolishly nationalized American airport security and created the TSA. While the screeners would be provided by private contractors, they would still be paid for by the TSA and be required to follow the same procedures as TSA-employed screeners.

Previously, the Screening Partnership Program allowed airports to replace government screeners with private contractors. 16 airports did so. “But on Friday, the TSA denied an application by Springfield-Branson Airport in Missouri to privatize its checkpoint workforce, and in a statement,” TSA head John “Pistole indicated other applications likewise will be denied.” The TSA’s head said he did not see any “clear or substantial advantage” to the TSA in allowing additional airports to use private screeners, although he said that the few other airports that already use private screeners will be allowed to continue to do so.

Florida Congressman John Mica (R), chairman of the House Transportation and Infrastructure Committee, criticized the TSA’s decision. “It’s unimaginable that TSA would suspend the most successfully performing passenger screening program we’ve had over the last decade,”Mica said Friday night. “Nearly every positive security innovation since the beginning of TSA has come from the contractor screening program,” Mica said.  Supporters of private screening say it is easier to discipline and replace under-performing private screeners than government ones.

Earlier, the TSA retaliated against a veteran pilot who exposed the TSA’s security failures, taking away whistleblower Chris Liu’s credentials and firearm.

The Obama administration is now seeking to unionize the TSA, even though the TSA was originally forbidden to unionize due to security concerns. Unlike the TSA’s current head, all past TSA administrators have recognized that collective bargaining and union work rules are inconsistent with the flexibility needed to protect public safety and adapt quickly to changes in terrorist tactics. (Undercover agents have managed to slip bombs past TSA screeners, and the TSA is even less effective at detecting them than the private security firms it replaced after 9/11). The AFGE union predicted on January 21 that voting to unionize the TSA will begin by mid-March.

The Obama administration is also undermining the security of railroad passengers by gutting an expert, highly-rated, anti-terror agency at Amtrak, which Amtrak’s unions hate, despite its efficiency, because it is not unionized.

Fannie Mae Backers Unrepentant Despite Its Fraud and Colossal Bailout

by Hans Bader on January 29, 2011 · 4 comments

in Bailout Watch, Economy, Politics as Usual, Sanctimony, Zeitgeist

Fannie Mae and Freddie Mac were bailed out at a cost to taxpayers of between $148 billion and $363 billion. Their recklessness and wrongdoing was so obvious that even Treasury Secretary Geithner admits that “Fannie and Freddie were a core part of what went wrong” in the financial crisis. The two government-sponsored mortgage giants engaged in massive accounting fraud, and their allies in the Obama administration have now spent $160 million in taxpayer money defending them against various charges.

Yet, their longtime defenders, like the Washington Post’s Steven Pearlstein, are completely unrepentant. They continue to suggest that only right-wing ideologues could want to eliminate scandal-plagued Fannie and Freddie. Pearlstein long dismissed warnings from conservatives like the Wall Street Journal’s Paul Gigot about the dangers these mortgage giants posed to our financial system.

Incredibly, Pearlstein still believes that what’s good for Fannie and Freddie is good for America. In the January 23 Washington Post, Pearlstein showed he has learned nothing from the financial crisis.  Pearlstein called House Republicans “free-market ideologues” for wanting to rein in the two companies. He praised “low-income-housing advocates and the Obama administration” for opposing this reform effort.  He suggested that access to mortgages (and thus, homeownership) would suffer without Fannie and Freddie, ignoring the fact that homeownership rates are higher in countries like Chile and Italy that have nothing like Fannie or Freddie.

The last thing America needs is to keep Fannie and Freddie around to help spawn the next financial crisis. Fannie and Freddie helped spawn the current mortgage crisis by buying up risky mortgages and repackaging them as prime mortgages, thus creating an artificial market for junk: “From the time Fannie and Freddie began buying risky loans as early as 1993, they routinely misrepresented the mortgages they were acquiring, reporting them as prime when they had characteristics that made them clearly subprime.” As Government-Sponsored Enterprises, they were not subject to the sort of capital requirements that apply to private entities, so they did not have enough reserves to cover their losses when their mortgages started defaulting.

Congressional Democrats last year blocked a GOP amendment that would have reformed the  government-sponsored mortgage giants, Fannie Mae and Freddie Mac.  The Obama administration lifted a $400 billion limit on bailing them out and showered their executives with $42 million in pay.

At the direction of the Obama administration, Freddie Mac ran up more than $30 billion in losses to bail out mortgage borrowers, some of whom had high incomes. Federal regulators sought to make Freddie Mac hide the resulting losses from the SEC and the public.

Obama received $125,000 in contributions from Fannie Mae and Freddie Mac executives as a senator, second only to the Senator Chris Dodd, who was forced to retire last year over financial improprieties (such as his real estate gift from a lobbyist and “sweetheart mortgage from Countrywide Financial“), yet was the chief drafter of the Dodd-Frank financial “reform” law.  (Dodd-Frank harms the economy, and violates both the Constitution’s separation of powers, and private property and equal-protection rights).

Despite the devastating financial impact of Fannie Mae and Freddie Mac’s mistakes, their defenders are as unrepentant, and perhaps as influential, as ever.  Don’t expect their allies in the Obama administration to endorse any meaningful reforms.

California Businesses Vote With Their Feet

by Brian McGraw on January 28, 2011 · 1 comment

in Bailout Watch, Economy

According to this report, 204 businesses left California for greener less green pastures in 2010. That is up from the 51 businesses which left in 2009. This certainly won’t help tax revenues that California so desperately wants (though not enough to tax marijuana sales).

Mark this down as one of the many reasons why it isn’t a good idea to dig your state into a nearly inescapable fiscal hole. Their budget deficit is projected to be $19 billion dollars, with annual unfunded pension liabilities potentially reaching $80 billion by 2012, and a lawattempting to curb greenhouse gas emissions.

This will almost certainly result in reduced state spending but also some form of tax increases, as we’ve seen in Illinois. Given this mess that California has gotten itself into, its not a surprise that companies are fleeing California. Unfortunately, as companies leave the situation only gets worse, and its unlikely that any of these companies have said, “I’ll be back.”

The Tax Foundation lists California as having the 6th highest individual tax burden of all states, but the business tax climate ranks 49th out of the 50 states.

Regulation of the Day 161: Crossing the Street

by Ryan Young on January 28, 2011 · 1 comment

in Nanny State, Personal Liberty, Regulation, Regulation of the Day

Three states are proposing to make it illegal to listen to your iPod while crossing the street. Legislators in California, New York, and Oregon are leading the charge, citing increasing pedestrian deaths. A similar proposal in Arkansas was retracted after constituents mobbed the state legislator who wrote the bill with hate mail.

Pedestrian deaths did go slightly up last year. But pedestrian deaths have been trending down for two decades, despite the rise of iPods and smartphones. Turns out that most people have enough common sense to pay more attention to traffic than their phone while crossing the street.

Legislating common sense is at best redundant. But in this case, it’s actually harmful. Police departments only have so many resources to go around. All the time and manpower they spend watching people cross the street is time and manpower not spent on more serious crimes. This is a solution without a problem.

Caroline May has more over at the Daily Caller (I am also quoted).

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