The Economics of Leviticus

Culture war conversations often end with a verse from Leviticus, the old testament book of laws. After the verse has been quoted, it does no good to point out that the implied solution is impractical or unfair or causes needless suffering. God has given his command and we should be carrying it out, whether it makes sense to us or not.

Strangely, though, the economic parts of Leviticus aren’t quoted with the same air of ultimate authority. If they were, Biblical literalists might have to become radicals rather than reactionaries.

For example, when vulture capitalists ruin towns by closing factories and shipping jobs overseas, someone might quote Leviticus 19:9-10, which clearly denounces business practices that wring out every last dime of profit.

When you reap the harvest of your land, do not reap to the very edges of your field or gather the gleanings of your harvest. Do not go over your vineyard a second time or pick up the grapes that have fallen. Leave them for the poor and the foreigner.

The foreigner? You mean, like, illegal aliens? Could be. Leviticus 19:33-34 says:

When a foreigner resides among you in your land, do not mistreat them. The foreigner residing among you must be treated as your native-born. Love them as yourself, for you were foreigners in Egypt.

It doesn’t say anything about a green card, it just says “resides among you in your land”. (Don’t argue with me, argue with God. I’m just reading literally.)

But by far the most radical part of the book is Leviticus 25, the chapter that institutes the Jubilee Year.

Consecrate the fiftieth year and proclaim liberty throughout the land to all its inhabitants. It shall be a jubilee for you; each of you is to return to your family property and to your own clan. The fiftieth year shall be a jubilee for you; do not sow and do not reap what grows of itself or harvest the untended vines. For it is a jubilee and is to be holy for you; eat only what is taken directly from the fields. In this Year of Jubilee everyone is to return to their own property.

“Their own property” includes anything that has been sold or repossessed:

If one of your fellow Israelites becomes poor and sells some of their property … [and] if they do not acquire the means to repay, what was sold will remain in the possession of the buyer until the Year of Jubilee. It will be returned in the Jubilee, and they can then go back to their property.

Basically, every 50th year all mortgages and foreclosures are cancelled and land goes back to its original owners. Anybody whose debts forced them into slavery is freed.

I know what you’re thinking: “That would never work.” And you’re absolutely right: It would never work with our modern capitalist notion of private property. But guess what? Leviticus has a completely different understanding of property:

The land must not be sold permanently, because the land is mine and you reside in my land as foreigners and strangers. Throughout the land that you hold as a possession, you must provide for the redemption of the land.

So the Earth itself belongs to God, while human deed-holders only own what the land produces.

If you sell land to any of your own people or buy land from them, do not take advantage of each other. You are to buy from your own people on the basis of the number of years since the Jubilee. And they are to sell to you on the basis of the number of years left for harvesting crops. When the years are many, you are to increase the price, and when the years are few, you are to decrease the price, because what is really being sold to you is the number of crops.

Leviticus was talking about an agrarian economy. If you wanted to apply this today, you might generalize to something like this: The Bible does not support private ownership of the means of production. The owner owns the product, not the means of production.

Taking Leviticus 25 seriously would force a sweeping re-visioning of the economic system. That would be a lot of work, and cause a certain amount of distress for the people who own property under our more free-trading definition. Why go to all that trouble? Unless you think this the Word of God or something.

The Monday Morning Teaser

The big article this week started out as a review of Chris Hayes’ The Twilight of the Elites, but turned into a more general piece on institutional failure that I’m calling “In Search of a Universal F***-Up Theory”. Every place where our institutions are failing or disappointing us — in the government, the economy, or even seemingly unconnected areas like religion or sports — you can find a specific explanation that sort of makes sense. But what explains why they’re all failing at once? Hayes’ book is such an across-the-board explanation, but whether you agree with his theory or not, we need a UFT.

It’s still iffy what else I’ll have room for, but I’m working on two other things, one of which will run this week and probably the other next week: a defense of food stamps against the charge that they must be unnecessary because so many of the poor are fat, and the chapter of Leviticus I wish the fundamentalists would quote: Leviticus 25, which establishes the Jubilee Year, cancels debts, and implies a very non-capitalist definition of property. What if people were taking that as seriously as the Leviticus verse that denounces homosexuality?

What was everybody talking about this week? The heat, the Higgs boson, and the political fallout from the ObamaCare decision. And just because you need some cuteness in your life, I’ll link to a video of pandas playing on a slide.

Necessary Measures

Let the national Government be armed with a positive & compleat authority in all cases where uniform measures are necessary. 

James Madison
letter to  Edmund Randolph (1787)

Where we find that the legislators, in the light of the testimony and facts before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end.

Justice Thomas Clark
writing for the unanimous Supreme Court in Katzenbach v. McClung (1964)

This week I’m continuing to experiment with the format of the Sift. In particular, I’m combining the weekly summary with the Nuggets (which used to be called Short Notes).

This week everybody was talking about … the Supreme Court

Some days the Court seemed like the only thing to talk about. (Not true. Even on Thursday, ObamaCare decision day, I clearly remember my wife saying, “What should we do about lunch?”)

I look on the Sift as serving two purposes for its readers. Most weeks, it makes you aware of facts and ideas that you might have missed while you were busy living your life or doing some other silly thing. But it also sometimes covers issues that you hear too much about. This week, that’s the Court, whose decisions have been good/bad up/down right/left … who can keep track?

Here’s the short version: The end-of-term flurry of decisions were mostly OK. Yes, the Court missed an opportunity to reconsider Citizens United. But these two articles explain why the ObamaCare and Arizona decisions were as good as I could have reasonably expected.

  • What the Court Decided About ObamaCare. If the Court had just followed its own precedents, the constitutionality of the Affordable Care Act would have been a non-issue. But politics got into it, so the decision was 5-4, and the decision was more strained and nuanced than it needed to be. Still, in the end ObamaCare gets to go forward and 30 million people are going to get health insurance who wouldn’t otherwise have it.
  • What the Court Decided About Immigration. Flacks and fund-raisers tried to spin this in a variety of directions, but when you read the decision it’s clear that the Arizona immigration law went down. The immigrant-haters lost.

… but I also wrote about

  • I Was Undocumented in Arizona. As luck would have it, I happened to be in Phoenix when the Arizona decision came out. Part of the reason I was there was to protest S. B. 1070 and the treatment of undocumented immigrants in general. But it was ironic that (because I had left my driver’s license back home in a laundry hamper) I was undocumented myself for a whole week. Fortunately, I had the foresight to be born white.

… and you might also find this stuff interesting

Right-wingers are now vowing to stop eating Oreos. I wonder why.

Mississippi came within hours of legislating out of business the last abortion clinic in the state, but yesterday a federal injunction stopped the new law from taking effect.

After a 6-month investigation, Fortune magazine tells a very different version of the Fast & Furious gun-walking story:

the ATF never intentionally allowed guns to fall into the hands of Mexican drug cartels. How the world came to believe just the opposite is a tale of rivalry, murder, and political bloodlust.

Exxon’s CEO now admits global warming is happening, but doesn’t think it’s a big deal. We’ll “adapt” to changing temperatures, just like the dinosaurs did. The article does not include any comments from polar bears.

Surprising no one, Anderson Cooper announced that he’s gay.

Cracked.com continues to do useful journalism: The 6 Creepiest Lies the Food Industry is Feeding You.

I love whiteboard animations. This one gives a powerful Marxist critique of what’s been going on in the world economy.

What the Court Decided About ObamaCare

Thursday, the Supreme Court announced its decision that the individual healthcare mandate, and hence the Affordable Care Act as a whole, is constitutional. It was a 5-4 decision, with Chief Justice Roberts siding with the Court’s four liberals and Justice Kennedy (the usual swing vote) joining the other three conservatives.

I was thrilled. Yes, Roberts got to that decision in an odd way (more on that later), and states were given the option to opt out of the Medicaid expansion. (I expect Republican governors to posture a lot about this, but I have a hard time believing they’ll actually refuse.) But the alternative was stark: We’d be back to square one on health care, stuck with 50 million uninsured Americans, spiraling healthcare costs that are already the highest in the world, and no plan on the table to fix any of it.

So we should all take a moment to do a happy dance.

Done? OK, now let’s look at this in a wider perspective.

History. Democrats have been trying to get some form of national health insurance since Truman. LBJ got Medicare and Medicaid passed in the 60s. Clinton tried and failed to get universal health care in the 90s.

Fear that Democrats might someday succeed in passing a Medicare-for-everybody plan that put private health insurance companies out of business caused the conservative Heritage Foundation to propose an individual mandate in the 1989 report Assuring Affordable Health Care for All Americans. The Republican alternatives to HillaryCare in the 90s usually claimed not to have mandates, but tax credits were jiggered to produce the same result: If you chose not to have insurance, you paid more to the federal government.

And of course, an individual mandate is a key and necessary provision of RomneyCare in Massachusetts, which Mitt explained here:

The interesting detail in all of this conservative campaigning for an individual mandate was that its constitutionality was never addressed as a problem. As long as it was a conservative alternative to Democratic proposals, no one challenged the mandate’s constitutionality.

In May, Salon’s Andrew Koppelman asked the question: When did the individual mandate become a constitutional issue?

The first exploration of Congress’s authority to enact a mandate was a paper by Mark Hall, which he posted on SSRN in February, 2009. (I have not been able to find even a hint of the constitutional objection before Obama’s election, even though mandates have been proposed, mainly by Republicans, since the early 1990s.) He concluded that the mandate easily followed from existing commerce clause jurisprudence. … The first published claim of unconstitutionality that I have been able to find is a July 10, 2009, Federalist Society paper by Peter Urbanowicz and Dennis G. Smith. They created the now notorious action/inaction distinction, declaring that “Congress would have to explain how not doing something – not buying insurance and not seeking health care services – implicated interstate commerce.”

Before that, nothing. Crickets.

What Roberts Said. So this is where we are: I did a happy dance because the Court’s partisan Republican majority only managed four votes to shoot down a Republican healthcare idea that Democrats finally managed to pass. Their constitutional objection was based on an ad hoc legal theory that simply did not exist until a few months before Congress passed the law.

Worse, in giving his OK to ObamaCare, Roberts still signed off on the ad hoc action/inaction theory and rejected the Commerce Clause justification that seemed obvious to everybody only two years ago. Instead, he re-interpreted the mandate as a tax and found justification for it in Congress’ constitutional power to tax:

The Federal Government does not have the power to order people to buy health insurance. Section 5000A  would therefore be unconstitutional if read as a command.  The Federal Government does have the power to impose a tax on those without health insurance. Section 5000A is therefore constitutional, because it can reasonably be read as a tax.

Now, I can’t complain too much about this, because I’ve been lamenting for months that the mandate would obviously be constitutional if Congress had just replaced the word penalty with tax. Of course, if they had done that, it’s possible that conservatives would have trumped up some novel legal theory that limited the Taxing Clause. Who knows? If you want to throw out a law badly enough, you can always come up with something.

The Ginsburg Dissent. If you want to see what would have been a 9-0 decision in the 1990s, and probably even an 8-1 or 7-2 decision two years ago, scroll past the 59 pages of Roberts’ decision and read the dissent by Justice Ginsburg. (She dissents from Roberts’ reasoning, but not his conclusion that ObamaCare is constitutional. So she is also technically part of the majority that Roberts is writing for.)

There is a very striking difference in tone between Ginsburg’s opinion and both Roberts’ opinion and the joint dissent by the four conservative justices. Ginsburg consistently talks about reality, giving examples and statistics about what is happening here and now in the healthcare market. Meanwhile, Roberts and the conservative bloc mainly discuss bizarre fantasies in which Congress might force everybody to buy broccoli.

At the root of the conservative rejection of the Commerce Clause justification is the idea that Congress’ power to regulate commerce does not include the ability to “create” commerce by forcing people to buy a product (health insurance) they otherwise would not. The objection rests on two points:

  • Individuals should be able to escape Congress’ commerce-regulating power by not participating in the regulated markets.
  • Individuals can choose not to participate in the healthcare market by not buying insurance, not going to the doctor, etc.

The first point sounds reasonable, but has no real basis in legal precedent. And Ginsburg correctly observes that because accident and illness strike even young and apparently healthy people without warning, and because emergency rooms are obligated to treat first and ask for payment later, the second point is just false. Individuals actually cannot avoid adding risk to the health-care system.

Insurance companies and health-care providers know that some percentage of healthy, uninsured people will suffer sickness or injury each year and will receive medical care despite their ina­bility to pay. In anticipation of this uncompensated care, health-care companies raise their prices, and insurers their premiums. In other words, because any uninsured person may need medical care at any moment and because health-care companies must account for that risk, every uninsured person impacts the market price of medical care and medical insurance.

This is also inherently a national problem, precisely the kind of thing that the Founders wanted Congress to have the power to solve.

States cannot resolve the problem of the uninsured on their own. Like Social Security benefits, a universal health-care system, if adopted by an individual State, would be “bait to the needy and dependent elsewhere, encouraging them to migrate and seek a haven of repose.” Helvering v. Davis, 301 U. S. 619, 644 (1937).

In normal times, that would be that. As a unanimous Court wrote in Katzenbach v. McClung (1964)

Where we find that the legislators, in the light of the testimony and facts before them, have a rational basis for finding a chosen regulatory scheme necessary to the protection of commerce, our investigation is at an end.

But these aren’t normal times, so Ginsburg has to attack Roberts’ examples directly.

An individual “is not ‘active in the car market,’” the Chief Justice observes, simply because he or she may someday buy a car. The analogy is inapt. The inevitable yet unpredictable need for medi­cal care and the guarantee that emergency care will be provided when required are conditions nonexistent in other markets. That is so of the market for cars, and of the market for broccoli as well. Although an individual might buy a car or a crown of broccoli one day, there is no certainty she will ever do so. And if she eventually wants a car or has a craving for broccoli, she will be obliged to pay at the counter before receiving the vehicle or nour­ishment. She will get no free ride or food, at the expense of another consumer forced to pay an inflated price.

So no, it doesn’t follow that Congress can make us eat broccoli if the Commerce Clause allows an individual mandate.

The Medicaid expansion. One of the ways ObamaCare increases the number of people with coverage is that it expands eligibility for Medicaid. Everybody under 65 with a household income less than 133% of the poverty line becomes eligible.

Medicaid is a federal/state partnership, so the expansion can only happen if the states go along. The ACA tries to make it painless for the states to cooperate by covering 100% of the cost of the expansion for the first two years, and 90% thereafter. It tries to make the expansion painful to turn down by saying that Medicaid is a take-it-or-leave-it deal. States can go along or lose the Medicaid funding they already get.

Roberts found that this was too coercive, though he didn’t specify what makes a non-cooperation penalty too high. Ginsburg finds that the Medicaid expansion is within the normal power of Congress to offer funding with conditions, and does not see the take-it-or-leave-it part as a penalty at all, since each year is a new appropriation, subject to its own conditions.

Future Congresses are not bound by their predecessors’ dispositions; they have authority to spend federal revenue as they see fit. The Federal Gov­ernment, therefore, is not, as the Chief Justice charges, threatening States with the loss of “existing” funds from one spending program in order to induce them to opt into another program. Congress is simply requiring States to do what States have long been required to do to receive Medicaid funding: comply with the conditions Congress prescribes for participation.

As I said above, I doubt the states will opt out anyway. If they do, then ObamaCare will cover somewhat less than 30 million new people, and the opting-out victims will be poor and near-poor people.

The conservative dissent. Justices Scalia, Thomas, Alito and Kennedy combine in a dissent that is both radical and polemic, full of scary quotes about the Commerce Clause turning into “a font of unlimited power” or “a general authority to direct the economy”.

Its conclusion is that the ACA must be thrown out in its entirety.

Think about that: Based on a legal theory that did not exist two years ago, and whose advocates are almost entirely in conservative think tanks, the Court came within one vote of striking down the biggest piece of social legislation in half a century.

Salon’s Paul Campo has an even scarier theory: Looking at internal evidence in the text, Campo speculates that the conservative dissent was originally written to be the majority opinion, and that Roberts changed his mind late in the game.

So we dodged a bullet, and the country gets to have RomneyCare. Unless it elects Romney. Then the Happy Dance will be over.

What the Court Decided About Immigration

Last Monday, the Supreme Court struck down three of the four challenged sections of Arizona’s anti-immigrant law, S.B. 1070. As usual, the media covered the event as if it were nothing but a pivotal game in a partisan play-off series, and went back and forth on whether this was victory or defeat for the Obama administration.

Don’t be distracted or confused. If you read the decision, the outcome is pretty clear: It’s a victory for people who want to see immigrants (documented or undocumented) treated fairly. It’s a defeat for anybody who wants the police to hound Hispanics out of Arizona.

S. B. 1070 was passed by the Arizona legislature and signed by Governor Jan Brewer in April, 2010. The Obama administration challenged the law in court before it could take effect, and a federal injunction has prevented Arizona from enforcing it until the case was settled.

Well, now it’s settled. Three of the four challenged provisions were struck down immediately:

  • Section 3 made it a state crime for a non-citizen to fail to carry documentation authorizing their presence in the country.
  • Section 5C made it a state crime for an undocumented alien to seek or accept employment.
  • Section 6 authorizes Arizona state police to arrest without a warrant any non-citizen who they have reason to believe has committed an offense that would make them deportable.

Justice Kennedy wrote the majority opinion, with Chief Justice Roberts and three justices from the Court’s liberal wing (Breyer, Ginsburg, and Sotomayor) concurring. Justice Kagan recused herself because she was in the Obama administration when the case was being prepared, and so might appear to have a conflict of interest. (Recusal decisions are up to the justices themselves. Liberal justices take these decisions seriously. Conservatives like Thomas and Scalia do not, even when money is involved.)

The reason Governor Brewer claimed victory and some liberals complained of defeat was that the Court did not strike down the fourth provision, 2B, which Justice Kennedy summarized like this:

Section 2(B) of S. B. 1070 requires state officers to make a “reasonable attempt . . . to determine the immigration status” of any person they stop, detain, or arrest on some other legitimate basis if “reasonable suspicion exists that the person is an alien and is unlawfully present in the United States.” Ariz. Rev. Stat. Ann. §11–1051(B) (West 2012). The law also provides that “[a]ny person who is arrested shall have the person’s immigration status de­termined before the person is released.”

This section is why S.B. 1070 became known as the “papers please” law. It conjures up visions of police harassing anybody with brown skin or an accent, and locking them up until they can prove they’re in the country legally. (You always go swimming with your passport, don’t you?) Such behavior is certainly in line with the expressed purpose of the law, which is to pressure undocumented immigrants until they “self-deport”. And I’m projecting here, but I’d guess that many S.B. 1070 supporters will consider it a bonus if legal Hispanic immigrants leave the state too.

So why didn’t the Court strike 2B down? Justice Kennedy’s reasoning shouldn’t give any comfort to the people who want to harass Mexicans. It all hangs on the timing of the case and on that phrase “reasonable attempt”.

The administration sued before the law went into effect, before Arizona police came up with enforcement guidelines, and before the state courts had a chance to rule on whether those guidelines follow the state constitution. Kennedy doesn’t want to assume that those people won’t do their jobs properly.

At this stage, without the benefit of a definitive interpretation from the state courts, it would be inappropriate to assume §2(B) will be construed in a way that creates a conflict with federal law.

Justice Kennedy could imagine state courts toning 2B’s interpretation down to something like this: As long as we’re holding you for something else already, we might as well check with ICE to see if you’re in the country legally, and if not, see what they want us to do with you.

However, Kennedy also envisioned an interpretation where police would hold brown-skinned jaywalkers (rather than just ticketing them as usual) or extend the detention of other suspects while waiting for immigration information, which (since the rest of the ruling established that immigration is federal territory) is none of their business anyway. Kennedy left little doubt that this would be seen as an unreasonable attempt to determine a person’s immigration status.

So the Court didn’t endorse 2B, it just let Arizona off with a warning. If 2B comes back to the Court as a racial profiling case with actual victims, it will get struck down then.

If you doubt that reading of the Court’s decision, think about this: None of the liberal justices felt the need to write a dissenting opinion. That should tell you who won.

I Was Undocumented in Arizona

Real Americans carry ID

When I turned 50 a few years ago, I started doing something sort of paranoid: I always jog with my driver’s license and medical card, in case I have a heart attack. So far it’s never come in handy, but I keep doing it.

Paranoia has its costs, though. Almost two weeks ago, I was at Logan Airport in Boston when I flipped my wallet open and stared at an empty plastic window. My driver’s license was in a t-shirt pocket in my laundry hamper. I had no other photo ID.

My first thought was to change my flight and come back tomorrow, but that would mean missing a whole day of the conference I was going to – the Unitarian Universalist General Assembly in Phoenix – so I went with my second thought: See what happens.

I got a boarding pass from a machine that didn’t care what I looked like, then waited in line with everybody else and apologetically told my story to the TSA guy. He called over a supervisor, who looked at what I did have: two credit cards and prescription bottle. Making no promises about what would happen when I tried to come home, he let me through.

Eight days later, TSA in Phoenix was more thorough. They scoffed at my credit cards and pill bottle, as well as at my business card (which has a photo), and the ID the conference had given me. They asked about my health-insurance card, which of course was keeping my driver’s license company in the laundry hamper. They would have liked to have seen some mail with my address on it or maybe a utility bill, which I might have packed if I had known I was going to forget all my other ID.

So they called up a government database and started asking me questions about myself: my address and phone number, my wife’s maiden name, other towns I had lived in, and so on. Some of the stuff I didn’t know, like the names of the neighbors in my apartment building. Eventually they did an explosives-residue test on my hands, and then let me through.

At no time was I treated with anything other than respect. No one implied that I was a criminal or that I was trying to get away with something.

While I was undocumented, I learned two things of political significance:

First, those advocates of voter-ID laws who claim it’s no big deal because you already need a photo ID to do absolutely everything else in this society – they’re just wrong. A lot of people will ask for a photo ID, but if you don’t have one they work around it. For example, some places took my credit card without asking. When someone did ask, nobody batted an eye when I said, “Oh, never mind, I’ll pay cash” or called my wife over to charge it on her card. They may have had other work-arounds, but I didn’t ask.

TSA definitely will work with what you have, because they’re just trying to verify your identity, not stop you from traveling. On the other hand, when you try to vote in a Republican state, you run into a process that absolutely won’t work if you don’t have an official state-issued photo ID, and even a state-university ID isn’t good enough. That’s unusual, and you have to wonder if that’s because the purpose is to stop you from voting.

Second, it was ironic that I was on my way to Phoenix, and that one of the things I would do there was protest the Arizona immigration law, S.B. 1070, which is sometimes known as the papers-please law.

I wandered around Arizona for a week with no proof that I’m a US citizen other than my white skin, my Illinois accent, and a nice pair of khakis. Nobody cared. I never had to explain myself and I never had cause to be afraid.

Everybody who heard my license-in-the-hamper anecdote thought it was funny and wanted to know how I got through TSA. But if I’d been brown, poor, and speaking with a heavy Hispanic accent, the story might not have been so entertaining.

So I was undocumented in Arizona and nothing happened. No drama, no excitement.

That’s how white privilege usually shows up: Nothing happens. Think about that the next time you’re out in public and nothing is happening.

The Monday Morning Teaser

The Supreme Court is kind of like a college student: It procrastinates, and then in the last few days of the term it comes out with an amazing barrage of papers.

This year, they even allowed themselves a temporary incomplete. The term was supposed to end last Monday, but they extended it to Thursday. Sure enough, that’s when they announced their most important decision, the one saying that ObamaCare is constitutional.

Usually, I focus the Sift on issues that I don’t think are getting enough attention, figuring that you already hear more than enough about whatever the media has fixated on. But sometimes the media over-coverage of the Issue of the Day is so confusing and full of spin that I feel like I need to straighten it out. So this week, two of the three articles are about the Court: one about the ObamaCare decision and one about the Arizona immigration decision.

The third article is my own story of accidentally traveling without ID: “I Was Undocumented in Arizona”. (Yes, you can get through TSA without a driver’s license or passport.) That will be the first story that shows up.

I’m also trying something different this week: I’m combining the weekly summary with the Nuggets or Short Notes. I still haven’t decided whether I like the idea or not, but we’ll see how it goes.

Making the Day

NO SIFT NEXT WEEK. THE WEEKLY SIFT RETURNS JULY 1.

There will not be a magic day when we wake up and it’s now OK to express ourselves publicly. We make that day by doing things publicly until it’s simply the way things are.

– Tammy Baldwin, Wisconsin senate candidate, on being gay in politics

In this week’s sift:

  • Nuggets of the Week. Greece, Jamie Dimon, disrespecting the president, saying “vagina” in Michigan, the end of judicial restraint, an example of American exceptionalism, and President Bush’s head on a pike.
  • If not ObamaCare, what? Either through the courts or the ballot box, Republicans mean to get rid of ObamaCare. But Mitt Romney’s plans to replace it are surprisingly thin, and the vague plans he has only look good if you’re an insurance company.
  • What senate candidates deserve your support? You can only vote for candidates in your state, but you can volunteer and give money to anybody you like. Which campaigns are the best investment of your time or money?

Nuggets of the Week

Everybody was talking about …

Whether the Greek elections will lead to the end of the euro. But the conservatives won, so a lot of Chicken Littling went to waste. Background here. Krugman’s take here. Most insightful conversation I heard here:

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Jamie Dimon’s “grilling” by the Senate Banking Committee, where all the senators other than Merkley and Menendez fawned over a bankster who learned nothing from the financial collapse other than how to do it again. As Rolling Stone’s Matt Taibbi wrote:

This was an opportunity to show Americans how a too-big-to-fail commercial bank like Chase – supported by vast amounts of public treasure, from Fed loans to bailouts to less obvious subsidies like GSE purchases of mortgages and implicit guarantees of bank debt – uses the crutch of government support to gamble recklessly in search of huge profits, with the public on the hook for any potential downside.

That opportunity was missed. Only Jon Stewart fully captured the absurdity.

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Why they call the genre “fantasy”

Disrespecting the president. Daily Caller reporter Neil Munro wouldn’t let President Obama make an uninterrupted announcement Friday in the Rose Garden. Like Congressman Joe Wilson shouting “You lie!” during a presidential speech to Congress, this is an example of President Obama getting less respect from the Right than President Bush got from the Left. (Well, there was the shoe-throwing incident, but that was an Iraqi reporter in Baghdad, not a member of the White House press corps. That guy went to prison for nine months and came out missing a tooth. And W’s head briefly appeared on a pike in Game of Thrones, but I regard being just two pikes down from Ned Stark’s head more as an honor than an insult.)

Gawker’s Emma Carmichael commented:

Press conferences have a very simple etiquette that is only heightened when the speaker in question is the leader of the free world. You listen to someone speak, you roll your eyes in the back row, you check your email and play Tetris on your smart phone, and as soon as the speaking is over someone says “time for questions,” and you raise your hand and ask a question that will lead directly into your column the next day.

What you can’t say in the Michigan legislature. The Michigan legislature is considering a bill that would severely restrict abortion. (The House passed the first part of it Wednesday.) Democratic Rep. Lisa Brown from West Bloomfield spoke briefly against the bill, making two main points: The regulations in the bill would cause clinics to close and people to lose their jobs; and not allowing abortions to save the life of the mother would force Jews to violate Jewish law. She closed by saying:

Finally, Mr. Speaker, I’m flattered that you’re all so interested in my vagina, but “no” means “no”.

That got her banned from speaking on the floor of the House.

… but this also was worth your attention

Judicial restraint was a useful concept for conservatives when the Supreme Court was liberal. But now that the Court is conservative, George Will wants to “unleash” it.

Conservatives, however, cannot coherently make the case for Romney as a shaper of the judicial branch until they wean themselves, and perhaps him, from excessive respect for judicial “restraint” and condemnation of “activism.”



The journal Democracy held a round table on “Politics in 2024“. This deserves more than a line, which maybe I’ll give it in a future Sift.


American exceptionalism? Here’s an example:

If Not ObamaCare, What?

One way or another — either by decree of an activist Supreme Court or by winning in November and repealing the Affordable Care Act — Republicans are aiming for a post-ObamaCare world. What would they do then?

Despite the rhetoric against it, ObamaCare has never been just an extension of federal power for its own sake. It is an attempt to solve a serious problem: When President Obama took office, something like 50 million Americans did not have health insurance. Millions more had hollow health insurance: Their most likely health problems were labeled “pre-existing conditions” and not covered. Also, yearly or lifetime caps on what the insurance company had to spend meant that people were only covered if they didn’t get too sick. In short, millions of Americans with some kind of insurance still faced bankruptcy if they had major health problems.

The ACA is not a perfect solution. Some people will still fall through its cracks, but ObamaCare imposes federal standards that do away with hollow insurance, and (when it fully takes effect in 2014) it will considerably shrink the pool of uninsured Americans.

Reasonable people can disagree about whether this was the best we could do, or whether the same or better results might have been achieved more efficiently with either more or less government intervention. But reasonable people can’t argue with this: If ObamaCare gets repealed, we’ll then face the same serious health-care problem that President Obama faced when he took office.

What would President Romney do about it?

The Romney campaign web site has a page about that. At first glance, it looks like a serious plan: It has 15 bullet points, each of which looks like a link to some detailed position paper. However, they aren’t links; they’re just bullet points formatted in blue.

That’s all you get.

Blanks, not bullets. A few of the 15 are standard conservative talking points that sound good but are basically empty, like capping malpractice awards. (I’ve explained before why I think this will accomplish very little. Short version: Malpractice awards themselves are a trivial part of the overall healthcare budget, and claims about “defensive medicine” don’t hold up when put to the test. States that cap malpractice awards don’t suddenly see their healthcare costs drop.)

Another empty bullet: “Prevent discrimination against individuals with pre-existing conditions who maintain continuous coverage.” Good as that sounds, it just restates what the HIPA Act established in 1996. People who spend their 20s in some Starbucks-barista type job could still be out in the cold when they finally do try to get insurance later on.

And yes, it would be nice to have “IT interoperability”, “non-litigation alternatives to dispute resolution”, and “Consumer Reports-type ratings of alternative insurance plans”, but none of that is going to help you much if you get cancer. And actually guaranteeing such stuff would be too much government intervention anyway, so Romney just pledges to “encourage” and “facilitate” these changes.

States and individuals lose power to corporations. Romney’s website highlights this quote:

I believe the better course is to empower the states to determine their own health care futures.

And yes, the substantive parts of the Romney plan do appear to move responsibility and decision-making from the federal government to states and individuals. However, when you assemble the bigger picture the bullet-points paint, the real story is that power moves to the insurance companies.

Here’s how: The federal government gets out of the standards-making business, apparently returning that power to the states. However, the bullet “Allow consumers to purchase insurance across state lines” undoes all that state power. If consumers can purchase insurance in any state, then states can’t regulate the health insurance sold to their citizens. If Vermont has high consumer-protection standards and New Hampshire low ones, then health insurance companies will only offer Vermonters policies written in New Hampshire.

You could argue that the market will provide whatever consumers demand, but we’ve seen this scenario play out before, when interstate banking was deregulated in 1999. If you have a Citicorp credit card, you send your payments to South Dakota. Bank of America payments go to Texas. That’s because those states have low consumer-protection standards. Would you like to have a Visa protected by the more consumer-friendly laws of, say, Massachusetts? Good luck with that; you won’t find one.

The same thing happened 100 years ago with corporate charters. Half of all U.S. corporations are chartered in Delaware, because Delaware won the race to the bottom.

So we know pretty well what will happen to health insurance if there are no federal standards and insurance companies can sell across state lines: States will race to the bottom until a few states say that health-insurance companies can do whatever they want. Then all policies will be written in those states. There won’t be anything you can do about it, because nobody you can vote for will have any control.

Block grants. Romney’s first bullet reads “Block grant Medicaid and other payments to states”. The cost of Medicaid is currently shared between the states and the federal government. (This article says the feds pay 60% in Texas.) For its contribution, the federal government gets to establish standards.

A block-grant approach would have the federal government say, “Here’s some money for Medicaid; spend it however you want.” By writing that check, the federal government would completely discharge its responsibility for providing health care to poor people.

The assumption behind this approach is that federal standards are inefficient. Left to its own devices, a state might get more out of the money than it does with the feds looking its shoulder. That may or may not be true, and it can work in either a conservative or a liberal direction. (Vermont is hoping for some kind of no-strings arrangement as it moves towards a single-payer system.)

But something else happens when you move the federal government out of the picture: You break the link between poor people’s health care and the Federal Reserve.

As we have seen since 2007, the federal government can borrow money in large quantities even during a financial crisis. And since dollars are created by the Federal Reserve, it is literally impossible for the federal government to go bankrupt as long as it owes dollars.

But states can go bankrupt, and the threat of bankruptcy can force them to do otherwise unthinkable things. Since 2007, states have been canceling projects and laying people off in droves — not because they wanted to destroy jobs and not because they suddenly discovered they didn’t really need teachers or firefighters or highways. But tax receipts were down, needs were up, and something had to give.

If there were no federal standards and federal money involved, Medicaid would be the obvious place to cut during a  crisis. (Texas keeps looking at abandoning the Medicaid system anyway,  even if it means losing the federal money.) Sure, some people would die, but they’re poor and don’t have press agents, so who would notice? (When did you last see a headline like “Sick homeless man dies in alley”? Do you think it never happens?) And if the poor decided to move to a more compassionate state, so much the better. Win/win.

In short, a state Medicaid program can’t provide the same security as the current system. States can promise whatever they want, but in a crisis those benefits would vanish.

And even in good times, states would feel pressure to race to the bottom. Be hard on poor people and maybe they’ll go somewhere else.

Responsibility. Everybody looks with horror at the upward-sloping trend in healthcare spending. But there are two ways to deal that trend: Figure out how to deliver care to everyone more efficiently, as most European countries do. Or push the responsibility off on somebody else, with the ultimate result that federal government won’t be held responsible when there’s no money to take care of people.

Romney wants to go in the second direction. Under President Romney, we could expect more and more people to have hollow insurance policies (written in whichever state allows the hollowest insurance). More and more people will either go bankrupt when they get sick, or will depend on state programs that go unfunded in hard times.

Stacked up against that future, ObamaCare looks pretty good.