Topic: Political Philosophy

King v. Burwell: How the Supreme Court Helped President Obama Disenfranchise His Political Opponents

Criticizing my recent post-mortem on King v. Burwell, Scott Lemieux kindly calls me “ObamaCare’s fiercest critic” for my role in that ObamaCare case. Other words he associates with my role include “defiant,” “ludicrous,” “farcical,” “dumber,” “snake oil,” “ludicrous” (again), “irrational,” “aggressive,” “comically transparent,” and “dishonest.”

Somewhere amid the deluge, Lemieux reaches his main claim, which is that (somehow) I admitted: “the King lawsuit wasn’t designed to uphold the statute passed by Congress in 2010. It was intended to ‘enfranchise’ the people who voted against the bill.” I’m not quite sure what Lemieux means. But perhaps Lemieux doesn’t understand my point about how the Supreme Court helped President Obama disenfranchise his political opponents.

As all nine Supreme Court justices acknowledged in King, “the most natural reading of the pertinent statutory phrase” is that Congress authorized the Affordable Care Act’s premium subsidies, employer mandate, and (to a large extent) individual mandate only in states that agreed to establish a health-insurance “Exchange.” That is, all nine justices agreed that the plain meaning of the operative statutory language allows states to veto key provisions of the ACA—sort of like the Medicaid veto that has existed for 50 years and lets states destroy health insurance for millions of poor Americans. The Exchange veto includes the power to shield millions of state residents from the ACA’s least-popular provisions: the individual mandate and the employer mandate.

The French Revolution and Modern Liberty

Today the French celebrate the 226th anniversary of the storming of the Bastille on July 14, 1789, the date usually recognized as the beginning of the French Revolution. What should libertarians (or classical liberals) think of the French Revolution?

The Chinese premier Zhou Enlai is famously (but apparently inaccurately) quoted as saying, “It is too soon to tell.” I like to draw on the wisdom of another mid-20th-century thinker, Henny Youngman, who when asked “How’s your wife?” answered, “Compared to what?” Compared to the American Revolution, the French Revolution is very disappointing to libertarians. Compared to the Russian Revolution, it looks pretty good. And it also looks good, at least in the long view, compared to the ancien regime that preceded it.

Conservatives typically follow Edmund Burke’s critical view in his Reflections on the Revolution in France. They may even quote John Adams: “Helvetius and Rousseau preached to the French nation liberty, till they made them the most mechanical slaves; equality, till they destroyed all equity; humanity, till they became weasels and African panthers; and fraternity, till they cut one another’s throats like Roman gladiators.”

Key to the Bastille at Mount Vernon

But there’s another view. And visitors to Mount Vernon, the home of George Washington, get a glimpse of it when they see a key hanging in a place of honor. It’s one of the keys to the Bastille, sent to Washington by Lafayette by way of Thomas Paine. They understood, as the great historian A.V. Dicey put it, that “The Bastille was the outward visible sign of lawless power.” And thus keys to the Bastille were symbols of liberation from tyranny.

Traditionalist conservatives sometimes long for “the world we have lost” before liberalism and capitalism upended the natural order of the world. The diplomat Talleyrand said, “Those who haven’t lived in the eighteenth century before the Revolution do not know the sweetness of living.” But not everyone found it so sweet. Lord Acton wrote that for decades before the revolution “the Church was oppressed, the Protestants persecuted or exiled, … the people exhausted by taxes and wars.” The rise of absolutism had centralized power and led to the growth of administrative bureaucracies on top of the feudal land monopolies and restrictive guilds.

The economic causes of the French Revolution are sometimes insufficiently appreciated. In his book The French Revolution: An Economic Interpretation, Florin Aftalion outlines some of those causes. The French state engaged in wars throughout the 17th and 18th centuries. To pay for the wars, it employed complex and burdensome taxation, tax farming, borrowing, debt repudiation and forced “disgorgement” from the financiers, and debasement of the currency. Lord Acton wrote that people had been anticipating revolution in France for a century. And revolution came.

Liberals and libertarians admired the fundamental values it represented. Ludwig von Mises and F. A. Hayek both hailed “the ideas of 1789” and contrasted them with “the ideas of 1914” — that is, liberty versus state-directed organization.

The Declaration of the Rights of Man, issued a month after the fall of the Bastille, enunciated libertarian principles similar to those of the Declaration of Independence:

1. Men are born and remain free and equal in rights… .

2. The aim of all political association is the preservation of the natural and imprescriptible rights of man. These rights are liberty, property, security, and resistance to oppression… .

4. Liberty consists in the freedom to do everything which injures no one else; hence the exercise of the natural rights of each man has no limits except those which assure to the other members of the society the enjoyment of the same rights… .

17. [P]roperty is an inviolable and sacred right.

Leon Trotsky on the Weapon of Taxation

“You ought not to forget that the credit system and the tax apparatus remain in the hands of the workers’ state and that this is a very important weapon in the struggle between state industry and private industry….

The pruning knife of taxation is a very important instrument.  With it the workers’ state will be able to clip the young plant of capitalism, lest it thrive too luxuriously.”

–Leon Trotsky, The First 5 Years of the Comintern, Vol 2 (London, New Park, 1945) p. 341

Do You or Someone You Love Suffer from PLDD?

I cannot tell you how many loved ones I have lost to this totally preventable illness

I would like to tell you about a serious condition afflicting thousands of policy analysts.  It’s called Petty Little Dictator Disorder, or PLDD, and you or someone you love could be suffering from this epidemic sweeping through our think tanks, advocacy groups, and government offices.  According to the description pending for inclusion in the DSM V, here are the warning signs of PLDD:

  • Do you spend a fair amount of your time imagining how the government could be used to shape people’s behavior for their own good?
  • Do you tell yourself and others that you believe in liberty and stuff but there are negative externalities, information costs, and children who need protecting from their parents, so we need to step in?
  • Do you use the word “we” a lot to refer to government action by which you really mean you and your friends?
  • Do you consider yourself an expert despite having never really done anything or rigorously studied anything in your life?
  • Do you feel the need to communicate your expert opinions in no more than 140 characters more than 1,000 times a year because you need constant reinforcement in the belief that you are changing the world?
  • Do you sit in cafes or bars with your colleagues and have conversations that resemble dorm room pot-smoking bull sessions about how it would be best for families to live in apartments above bodegas with the sound of light rail roaring just outside their window because, after all, the life you currently have and enjoy is the same thing that families with three children and a dog should want?
  • Do you think science or a panel of experts can identify the right way to do almost anything?

The ACA Is Dead — Long Live ObamaCare

My first, but not remotely my last, oped on the Supreme Court’s ruling in King v. Burwell appears in today’s Washington Examiner. Excerpt:

Obamacare supporters are mistaken if they think the Supreme Court’s King v. Burwell ruling settles the issue. Even in defeat, King threatens Obamacare’s survival, because it exposes Obamacare as an illegitimate law…

By overriding the operative language of the statute, the Supreme Court colluded with the president to impose taxes and entitlements that no Congress ever approved; to deprive states of powers Congress granted them to block parts of the ACA; and to disenfranchise Republican and independent voters who swept ACA opponents into state office in 2009, 2010 and 2011 for the purpose of blocking the ACA.

The Supreme Court did not lose its legitimacy with King v. Burwell — it has made worse mistakes. Obamacare did. Having been rewritten over and over by the president and the Supreme Court rather than Congress, Obamacare cannot claim to be a legitimate law.

Read the whole thing.

Happy Second of July

Americans are preparing for the Fourth of July holiday. I hope we take a few minutes during the long weekend to remember what the Fourth of July is: America’s Independence Day, celebrating our Declaration of Independence, in which we declared ourselves, in Lincoln’s words, “a new nation, conceived in Liberty, and dedicated to the proposition that all men are created equal.”

The holiday weekend would start today if John Adams had his way. It was on July 2, 1776, that the Continental Congress voted to declare independence from Great Britain. On July 4 Congress approved the final text of the Declaration. As Adams predicted in a letter to his wife Abigail:

The second day of July, 1776, will be the most memorable epoch in the history of America. I am apt to believe that it will be celebrated by succeeding generations as the great anniversary festival. It ought to be commemorated as the day of deliverance, by solemn acts of devotion to God Almighty. It ought to be solemnized with pomp and parade, with shows, games, sports, guns, bells, bonfires, and illuminations, from one end of this continent to the other, from this time forward forever more.

The Declaration of Independence, written by Thomas Jefferson, is the most eloquent libertarian essay in history, especially its philosophical core:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

Jefferson moved smoothly from our natural rights to the right of revolution:

Overtime Regulation

President Obama plans to raise the salary threshold at which employers must pay time-and-half for overtime hours (normally defined as those above 40 hours per week). Currently these rules apply to workers with annual salaries up to $23,660; the President’s proposal raises this threshold to $50,400.  The new rules will affect about 5 milllion workers according to administration estimates.

What impact will this expanded regulation have on the labor market?

In the very short run, employers affected by this expansion may have little choice but to pay their employees higher total compensation; in the very short run, employers have few ways to avoid this added cost.

But in the medium term, employers will invoke a host of methods to offset these costs: re-arranging employee work schedules so that fewer hit 40 hours; laying off employees who work more than 40 hours; or pushing such employees to work overtime hours off the books.

And in the longer term, employers can simply reduce the base wages they pay so that, even with overtime pay, total compensation for an employee working more than 40 hours is no different than before the overtime expansion.  

So, expanded overtime regulation will benefit some employees in the very short term; cost others their jobs or lower their compensation in the medium term; and have no meaningful impact on anything in the long term.

Is that a victory for middle class economics?