Friday, June 29, 2012

The Supreme Court, Obamacare, and the Economy


For the intelligentsia the Obamacare decision was the Super Bowl. It looked like the liberal team was headed for certain defeat. But then, with the clocking running down, liberal justices and their intellectual supporters threw a Hail Mary pass and Chief Justice Roberts caught it.

Since liberals prefer to be ruled by people who are just like them, that is, by a guardian class of philosopher-kings, they were thrilled beyond reason.

Politically, the court decision has now recast the presidential election campaign as a struggle over Obamacare, with the Republican charge being led by the architect of Romneycare… which happens to be the prototype for Obamacare.

For an excellent fact-based overview of the healthcare debate, and especially for the nonsense that has permeated it, I recommend and link an article by Cliff Asness: “The Healthcare Myths We Must Confront.”

But, how much does Obamacare really matter? Today, Gallup takes a look at the will of the people and finds that most of them are not very concerned about health care.

According to Gallup:

Although the Affordable Care Act of 2010 has dominated the news recently, with coverage exploding Thursday as the Supreme Court ruled to uphold the law, few Americans so far in 2012 mention healthcare when asked to identify the most important problem facing the country. Six percent say healthcare is the top problem in June, behind mentions of the economy, jobs, the deficit, and problems in government.

Of course, the poll was taken before the court ruled, but still… it’s useful to have some perspective.

Since I did not go to law school I am not qualified to guide anyone through the convoluted legal reasoning that informs the court decision.

Yet, I and many others were struck by this bit of moral teaching from the chief justice.

In his opinion, Roberts wrote:

It is not our job to protect the people from the consequences of their political choices. 

The statement implies that if the duly elected representatives of the people enact legislation that violates the Constitution the court has no responsibility to overturn it. If the people got duped or voted wrongly they should suffer the consequences.

In another sense, Roberts is raising an important philosophical issue. The American people made Barack Obama the president and gave him a Democratic Congress for the first two years of his presidency.

Everyone is paying the price.

Will voters now accept responsibility for the Obama failure and vote him out of office?

It isn’t all that obvious.

Consider that the people who are paying the greatest price, in unemployment and lost wealth are most likely to vote for Obama again.

Many people in this country now see themselves as members of a permanently dependent class. They despair of ever taking responsibility for their own lives and therefore can only hope for government largesse. They have become wards of the state and vote accordingly. Big government is them.

They ask what their country can do for them; not what they can do for their country. They believe that their country owes it to them; they never ask what they can do for themselves.

It represents a government-induced moral failing.

Others have changed their minds about Obama. Among them is Mort Zuckerman, whose commentaries on the Obama administration have been especially cogent and thoughtful. Zuckerman was among the first Obama supporters to recognize the error of his ways.

A few days ago Zuckerman wrote a column asserting that the election will be a referendum on the Obama economic record.

He analyzes it thusly:

People see that the administration has invested $5 trillion to reverse the recession and achieve growth again, and the Federal Reserve has pushed interest rates down to record lows. But it's like strenuously inflating a tire with a leaky valve. Whatever we do, it is soon soft again and now the air still seems to be hissing out, so we fear we will soon be riding on the rim. The only certain result is that we will be paying interest on this $5 trillion for decades to come.

Compared with other economic slowdowns, how bad is it?

Zuckerman writes:

As David Rosenberg of Gluskin Sheff has pointed out, it typically takes 25 months to close the employment gap from the employment peak near the start of the downturn. This time around, 52 months after employment peaked in January 2008, non-farm employment is still approximately 4 million below where it started.

He concludes:

In effect, we are living with the statistics that mark a modern-day depression, hardly befitting the third year of an alleged recovery. There is little to show for a government stimulus of over $1 trillion a year for more than three years, a zero percent Federal Reserve rate policy, and a dramatic expansion of the money supply. We might say it could have been worse, but we still face secular headwinds from debt-burdened household balance sheets, eroding household-related wealth, structural unemployment, and the retrenchment in state and local government.

Zuckerman faults President Obama and his health care reform:

Part of the explanation lies in the administration's hostile attitude toward business, symbolized by the political and regulatory uncertainties best captured by President Obama's rushed healthcare bill which, according to studies by researchers at Stanford and the University of Chicago, produced an estimated loss of 2 million to 2.5 million jobs.

Those who are cheering for the court decision about healthcare are cheering for lost jobs. The intelligentsia is crowing about its victory while the American people suffer. 

5 comments:

  1. I would like to understand how the two studies you quote (Stanford and the U of chicago) relate the loss of 2.5 million jobs to the wrangling over health care reform.
    Also the political uncertainties were in large part due to the hostilities from the opposition whose goal was not to govern but to deny the administration any successes. Plus, the problems in the euro zone ensured that our reliable overseas markets were severly squeezed. The US can not control what happens in the world economy.

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  2. Actually, Zuckerman quoted the studies which suggested that the political and regulatory uncertainties-- no one really knows how it will affect business-- has caused businesses to slow down their hiring plans. The same principle applies to the administration's regulatory policies in many other areas-- like energy. All of this is in the realm of the bureaucracy. None of it has anything to do with the opposition party, which, you may recall had no input in crafting Obamacare and has nothing to say about regulatory polices.

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  3. I hadn't read Roberts' statements about elections and their consequences. I know the statement is true, but the fact remains that it is his job to overturn any and all unconstitutional laws and he didn't do it.

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  4. I think that Mao said it best, "In advantage lie the seeds of disadvantage. In disadvantage lies the seeds of advantage." In what appears to be an advantage for Obama lie numerous disadvantages and the disadvantages created by this decision create huge advantages that can be used agains't it.
    It is debatable that it is a tax by any real definition and it most certainly was ruled that it does not come under the Commerce Clause, etc. The definition of it being a tax opens it up to the political process that can eventually remove it or so gut it as to make it impossible to enforce. Much of this now depends on the voter to actually have an input by voting out those who made this possible. At some point people have to stop fighting the last battle and prepare to win the war.
    Given that the citizens of this country really dislike Obamacare, with all its negative connotations, and do their job then the same process that those who foisted this disaster on us can be used to "reconcile" it. The tax that is to be used as a penalty can be set at $1.00. One just needs to cut off its life line, other people's money much as those who think removing medical care from those who they think should not be allowed to consume available resources.
    Obamacare can be made to suffer a "death of a thousand cuts. Since the Obama administration has decided that they do not have to enforce laws that they don't like the next administration can do the same and use the precedences set by them. The same logic used not to prosecute Holder.
    Those jobs were loss due to the uncertainty and the over riding cost associated with government taking over healthcare. Not due to wrangling. No one with half a brain is going to add people when they have to depend on the government, especially one like this who is hostile to businesses, to accomplish anything other than increasing "their rice bowl."
    Name one government program that actually did not cost more than it was projected/ Name one government program that accomplished what it was represented to result in? Social Security has only served to impoverish seniors and create the idea among their offspring that they do not need to care about them. Before I get angry about what I have seen government agencies to to those who serve in the military I will end.
    Suffice it to say that challenges are always there and one has to adapt and use those challenges to their benefit.

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  5. Interesting that some reporters are beginning to figure out how important this election can be if voter backlash removes much of the political structure and people supporting this Obamacare. They just figured out that Roberts handed Obama a "poison pill." Reporters are just figuring out a Republican Congress can just defund it being that it is a tax bill.
    Roberts comment I suspect was that voters cannot be protected from their own mistakes and they have the power to rectify it.

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