A debate over Obamacare between me, Cal-Irvine law professor (and dean) Erwin Chemerinsky, and Demos’s Anthony Kammer is currently ongoing at PolicyMic.com. Below is my initial post, but the debate continues in the comments section. If anyone is so disposed, I invite you to join the conversation.

Congress has limited, enumerated powers under the Constitution. One of those is to regulate interstate commerce, which means ensuring that commerce flows easily between the states. Although the Supreme Court has expanded that regulatory authority to reach local economic activity that, in the aggregate, has a “substantial effect on interstate commerce,” Congress still lacks the power to compel citizens to enter into commerce for the purposes of regulating them—which is what the Affordable Care Act’s “individual mandate” does. Moreover, the penalty for not complying with the mandate is not a tax and, if it is, it is an unconstitutional one because it is not apportioned by population. That point is especially noteworthy because the individual mandate was passed in part to avoid the political accountability that raising taxes would have brought.

Those are my claims. But I’m going to concentrate my initial thoughts in the clouds, so to speak, rather than the weeds. I begin with a crucial point: enforcing limits on governmental power—especially Congress’s commerce power—is not and never has been about discovering limits to the power. Instead, it is about defining and enforcing those limits. Since the landmark commerce power cases of the late ’30s and early ’40s, however, the Supreme Court has largely treated the limits on federal power as detectable rather than definable. Those cases looked at our system of commerce as a pond and Congress’s power as extending over the ripples caused by disturbances on the surface. And if the effects of a single water bug or pebble were not detectable enough, we were told to imagine the combined effects of all those water bugs or pebbles.

That theory differs from how the Court looked at the commerce power before the New Deal, when Congress’s power was limited by type rather than degree. In other words, activities such as “manufacturing” were deemed off-limits to Congress not by virtue of the effects they had on interstate commerce—the ripples in the pond—but by virtue of the type of thing it was. Even though it produced items for commerce, manufacturing was local in nature, so Congress had no power to regulate it. Thus limits were articulated, rather than discovered.

Although many people thought that the Supreme Court abandoned this line of thinking during the New Deal, the Court reaffirmed that type-versus-degree distinction in the 1995 case of United States v. Lopez (followed in 2000 by another similar case). In Lopez, the Court struck down the Gun-Free School Zone Act not because guns in school zones don’t cause sufficient ripples in the national commercial pond, but because a gun law is fundamentally different from a commercial regulation. Indeed, the Framers knew that, if conceived broadly enough, everything has an effect on commerce. The ripples in the pond can affect the sand on the shore and even the animals on the land. Unless a distinction is drawn between the sand and the water—or, to leave that analogy, between buying something and not buying something—Congress’s power is unlimited.

With the individual mandate, we also distinguish power by kind rather than degree. Not only is the decision not to buy insurance not commerce, the idea that such a decision falls under Congress’s regulatory authority because it affects commerce is dangerous precisely because it is correct: of course decisions not to buy something affect commerce (indeed, any decision, action, or inaction ultimately affects commerce). Giving the government the power to regulate those decisions removes all limits on federal power.

The White House doubtlessly is happy that the unemployment rate has dropped to 8.5 percent, in part because the President is much more likely to get reelected if voters think the economy is heading in the right direction.

But the latest drop in the unemployment is not unambiguous good news for the Obama Administration.

Before explaining why, let’s take a brief detour and look at how the unemployment rate is calculated. The key thing to understand is that there are two moving parts. First, the government estimates the number of unemployed people. That’s the obvious part of the calculation.

But in order to calculate the unemployment rate, the government has to estimate the size of the labor force. But this is not a simple number to calculate because many people who could work – such as women with young children, students, people approaching retirement age – sometimes decide that their time could be better spent doing other things.

So the government has to look at all the people who don’t have jobs and guess how many of them would like to work.

With this in mind, let’s look at the unemployment rate. The simple way to think about unemployment numbers is that the joblessness rate can rise or fall for good reasons and bad reasons.

If the unemployment rate drops because hundreds of thousands of jobs are being created each month, that’s obviously good news.

But if the jobless rate falls because the government estimates that lots of people have become discouraged and dropped out of the labor force, then that’s not good news.

In other words, sometimes the unemployment rate, by itself, doesn’t tell the full story.

That’s why one of the best statistics to look at is the employment-population ratio, which measures the number of people who have jobs and compares it to the number of people who could have jobs.

And by this measure, the Obama White House can’t be very happy. As illustrated in the chart, the job numbers have barely begun to recover.

This is a woefully under-reported piece of data. A few news outlets do mention the phenomenon of “discouraged workers” dropping out of the labor market, but only policy geeks like me seem to pay attention.

But the employment-population ratio does have real-world implications. The economy’s overall level of output (i.e., national income, gross domestic product, etc) depends on how many people are working. And that is what determines whether living standards are rising, falling, or stagnating.

This is why the Obama Administration can’t rely of a falling unemployment rate. As I’ve explained elsewhere, the American economy appears to have suffered a permanent loss of output in recent years.

So what does this mean, for those of you who care about political implications of economic statistics? The honest answer is that I have no idea. But since living standards are still stagnant, a falling joblessness rate won’t necessarily translate into a victory for the incumbent party.

 ”When I use a word,”  Humpty Dumpty said, in a rather scornful tone, “it means just what I choose it to mean - neither more nor less.”

“The question is,” said Alice, “whether you can make words mean so many different things.”

“The question is,” said Humpty Dumpty, “which is to be master - that’s alls.”           - Lewis Carroll

Apparently some took issue with my concern, expressed yesterday, that President Obama’s “recess” appointment of Richard Cordray to head the Consumer Financial Protection Bureau, might have some legal and constitutional issues.  One of the concerned was my friend Mike Konczal at the Roosevelt Institute.

I’ve always been impressed with Mike Konczal’s ability to say so little in so many words.  His basic claim is that this is no different than any other recess appointment because Section 1011 of Dodd-Frank states the appointment is subject to the “advice and consent of the Senate” which he sees as meaningless boilerplate.  He cites a Congressional Research Service report as saying that a recess appointee has the same powers as a regular appointee.  On its face, that is correct.  Had there already been a Senate confirmed Director in place, with the additional powers over non-banks in place, then any future recess appointee would have those same powers.

The problem with that line of thought is that these powers are not already in place, something not addressed in the CRS report.  This is very real issue (not a “zombie” as Konczal would claim).  During my service on the Senate Banking Committee, when we were drafting language to create the new regulator for Fannie and Freddie, we were very aware of this danger, as it had been a problem when the OTS and FHFB were created out of the FHLBB.  We didn’t wish to have a similar problem, so we crafted language to avoid it (see Section 1101 of HERA).  The problem is that Dodd-Frank did not include such language (one of many drafting errors in the bill).

Now it’s never enough for Konczal to just disagree, he also has to be disagreeable when doing so (I assume it plays well to the nasty echo-chamber that is New York Liberalism).  He snidely says, ”I like how libertarians at Cato are all about the Constitution, with grants the President the power to fill up vacancies, until they aren’t.”  Well to help  him out, I am all about the Constitution as it is written.  And the Constitution’s Article 2, Section 2 clearly says “President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate”.  Did the vacancy of the CFPB director happen during a recess?  Not under the clear language of the Constitution (Mike, I’d be happy to send you a Pocket Copy).

So there you have it.  Konczal’s argument boils down to two issues, that in Konczalian Newspeak “advice and consent of the Senate” really means “unilateral action by the President” and that “may happen during the Recess” actually means “whenever the President decides.”  Now one has to remember that Konczalian Newspeak changes when the President is a Republican.