Obamacare and the Fundamentals

by Kevin D. Williamson

The conspiracy theory about the woefully misnamed Affordable Care Act is that the architects of Obamacare intended their program to fail, thus creating an opening for a so-called public option which would then be expanded to a full-on British-style government health-care monopoly. That’s a fun story, though it isn’t true.

The truth is worse: These idiots thought this would work.

Well, not this — not exactly. Obamacare is what you get when the product is designed by a committee from the marketing department. It needed to have a certain balance of taxes and subsidies so that Barack Obama could go out and say that it would add not one dime to the deficit while Ezra Klein and the nonpartisan partisans at Politifact cheered along. Everybody knew that the specifics were going to change with the political winds — Hillary Rodham Clinton even campaigned against a key revenue provision of Obamacare, the “Cadillac tax,” in her quest for the Democratic nomination.

That the popular bits of the program would remain or be expanded while the unpopular bits that pay for it would be revised, delayed, or magicked away through exemptions and the like, was obvious, and not only to pointy-headed free-market types such as myself. (Although: I told you so. So did a bunch of other people.) The Congressional Budget Office all but rolled its eyes at the set of assumptions it was given to score the bill’s fiscal effects, and it warned that the bill was unlikely to be enacted to the letter. Which is to say: The CBO told you so, too.

The Democrats promised something very unlikely: That we’d provide more health-care coverage for more people and spend less money doing it — and that the typical annual health-insurance premium for an American family would decline substantially, by an average of $2,500 a year. The opposite is happening: Premium prices have gone up, and they are expected to go up by 25 percent in the coming year. That’s an average of 25 percent: Some places will see much steeper increases.

Is there another product you use the price of which increases at that rate, or anything like that rate?

The terrifying fact is that the architects of Obamacare thought they could brazen their way through this, that they were so smart that they could tell you rubes whatever it was you needed to hear to get the bill passed and then just fly by the seat of their pants, fixing everything on the fly in a grand display of enlightened technocratic adhocracy.


This all goes back to fundamentals: What drives down prices is abundance. Abundance comes from productivity. Productivity comes from investment. Investment requires stable market conditions for investors, entrepreneurs, workers, and firms to execute medium- and long-term plans. If you were the manager of a large investment fund, how much money would you put into a medical-devices startup, not knowing what the tax or regulatory environment is going to look like the day after tomorrow — or what the larger health-care ecosystem is going to look like in a year or two? If you were a top-performing student with a knack for science, why on Earth would you go to medical school when you could go make four times the money as an intellectual-property lawyer, six times the money on Wall Street, or, with a little luck, forty times the money in Silicon Valley? Given the current Democratic appetite for price controls and regulatory aggression, how much of your own money would you invest in an experimental pharmaceutical? If you were a top-performing manager being courted by a hospital consortium and a technology company, why would you go to work for the hospitals?

Obamacare was intended, in theory, to enhance competition. The Democrats were never quite clear on how that was going to work, but that’s what they said. In Philadelphia, the nation’s fifth-largest city, those shopping for health insurance have a grand total of two insurers to choose from. Until recently, the state of Pennsylvania had 13 insurers; today, it has eight.

It is worth keeping in mind that the people who brought you Obamacare want to apply the same model across the commanding heights of the U.S. economy. 

Signed Copies

by Jack Fowler

You can get your copy, with James Rosen’s flourished signature, of the New York Times bestseller (yeah, it is!) right here

Truth vs. Social Justice

by Jim Talent

I have in these pages sometimes referred to Heterodox Academy, an organization of scholars devoted to intellectual diversity in the social sciences.  Recently Jonathan Haidt — a prominent member of Heterodox  — lectured at Yale University on the ongoing transformation of universities from organizations devoted to Truth to organizations devoted to social justice.

Haidt is a social psychologist who has written extensively on how human beings reach conclusions, especially on issues of morality.  His book The Righteous Mind argued that people reach conclusions not primarily through reason but through moral intuition developed apart from reason; then they use their reason to rationalize the conclusions already reached.

Haidt’s Yale lecture explains what is happening on campuses today as thoroughly as anything I’ve seen. It’s long but moves quickly and covers a lot. Haidt explains why intellectual diversity is necessary to truth, why a “culture of victimhood” has developed on campus, the danger of trigger warnings, the new blasphemy in the higher academy, and why social justice is often so unjust.  I urge readers to watch it.  It will take a lot less time than a Presidential debate, and Haidt and his colleagues at Heterodox are breaking important ground.

Finally, a Poll of Idaho!

by Jim Geraghty

Over at Bloomberg, Leonid Bershidsky writes – at least according to the headline - ”I Saw the Future of Politics at an Evan McMullin Rally” and contends the independent candidate is offering “conservatism for Millennials.”

We know McMullin is in the neighborhood of winning Utah. If, as Bershidsky suggests, McMullin is going to have a shot at Idaho and Wyoming, it would be good to have a poll or two conducted out there. As noted in today’s Morning Jolt, we have almost no polling of the presidential race in Idaho, and most years, that wouldn’t be a big deal. It’s a deep red, heavily-Republican state. But this year, there’s at least an outside chance that the Gem State could be competitive.

McMullin’s appeal isn’t merely religious, but he’s Mormon, and 60 percent of Utah residents are Mormon. About 24 percent of Idaho residents are Mormon, as well. McMullin has made multiple visits to the state, and he’s on the ballot in Idaho. And Donald Trump got only 28 percent in the Idaho GOP presidential primary; Ted Cruz won with a bit more than 45 percent. So it’s at least possible that there are a significant number of anti-Trump Republicans out there.

A poll in early September had Trump ahead, 44 percent to Hillary Clinton’s 25 percent, with Gary Johnson at 19 percent and Jill Stein at 7 percent. McMullin wasn’t even listed as an option. Maybe he’s still in single digits. Or maybe he’s seeing a surge like in Utah. 

Could somebody call up a couple hundred likely voters in Utah check?

And while they’re at it, call a couple hundred Wyoming likely voters, too?

UPDATE: Ask, and you shall receive! “A new Emerson College poll finds Donald Trump far ahead of Hillary Clinton in Idaho, 52 percent to 23 percent.  Independent Evan McMullin is running a distant third, with 10 percent of the vote, and 9 percent are undecided.” 

Bureaucrats Threaten the Rule of Law

by Iain Murray

Donald Trump’s recent refusal to promise he’ll accept the presidential election’s result has raised much concern. Yet, there has been little outcry over Consumer Financial Protection Bureau (CFPB) Director Richard Cordray recent dismissal of a court verdict against him.

Last week, the U.S. Court of Appeals for the D.C. Circuit ruled in the case, PHH Corp. v. CFPB, that the Bureau’s structure was unconstitutional and ordered that Cordray should report to the President. Under the Dodd-Frank Act of 2010, which created the CFPB, the President has no power to remove the CFPB Director except for malfeasance, and Congress has no power to restrict the Bureau’s operations through the appropriations process, as the Bureau draws its budget from the Federal Reserve, itself an independent agency. The Court deems the CFPB’s unaccountable structure unconstitutional, saying that it posed a “risk of arbitrary decisionmaking [sic] and abuse of power” and “a threat to individual liberty.”

Sounds momentous. But you will find no mention of the judgment on the CFPB’s website, and so far the Bureau’s only action has been to file a brief in an unrelated case saying that the ruling “has no basis in the text of the Constitution or in Supreme Court case law,” and that, “The panel decision was wrongly decided and is not likely to withstand further review.”

The Bureau’s contempt for the rule of law should come as no surprise to anyone who has followed its actions during its short history. It was in full display in the facts of the case. The Bureau had fined PHH Corporation $109 million for what it alleged were illegal “kickbacks” in its mortgage reinsurance business. The Court found that the CFPB reversed longstanding policy from the Department of Housing and Urban Development, which administered the underlying law before the Bureau’s creation in the Dodd-Frank Act of 2010. It then proceeded to apply this new interpretation of the law retroactively back to 2008, violating PHH’s due process rights, while declaring there was no statute of limitations on its powers.

The CFPB’s actions towards PHH formed a long train of abuses and usurpations. When an agency acts in an out of control manner, as the Court found the Bureau to be doing, it is incumbent on elected officials to step in to protect the people against such overreach. As explained above, they could not do so. The Court’s remedy was to make the CFPB Director directly accountable to the President. This will mean Executive Orders, which the Bureau has previously ignored as an independent agency, will start to apply to it, as House Financial Services Chairman Jeb Hensarling pointed out in a letter to Director Cordray. Its cost-benefit analyses will now need to be submitted to the Office of Management and Budget for review (although OMB rarely reviews analyses properly). And the Bureau will need to comply with President Obama’s order that regulations use the least burdensome and best available techniques.

In addition, the Bureau will have to take federalism into account when proposing rules that may prove redundant. For example, its current proposed rule on short-term lending covers an industry that is already heavily regulated at the state level. It will also have to properly consult with tribal governments, many of which are concerned that the short-term loan rule may violate their sovereignty.

Yet, the ruling has wider ramifications. We now have a wholly novel situation where an executive branch agency gets its budget not from the appropriations process, but from an independent agency with its own sources of revenue. The Bureau justifies this funding structure as promoting the “full independence” of “funding outside the congressional appropriations process.” Yet as Madison underlined in Federalist 58, Congressional control of the purse strings represents “the most complete and effectual tool” with which Congress can check “all the overgrown prerogatives of the other branches of government.” The Court’s action has increased Presidential power without a corresponding increase in Congress’ power. That issue still needs to be addressed before the CFPB can be brought into proper constitutional order. CEI’s court case against the Bureau seeks to do that on these very grounds.

Cordray likely will fight this response to his overreach tooth and nail. His agency’s arrogant and contemptuous statement about the ruling confirms this. And his contempt for Congress was on full display when he responded to Rep. Ann Wagner (R-MO) when she asked why he had authorized $215 million of expenditure on the Bureau’s palatial headquarters, “Why does that matter to you?

Laws are supposed to protect people, not put people in jeopardy of abuse by government officials. If the rule of law is endangered in America, it is the actions of contemptuous bureaucrats like Richard Cordray that have allowed it.

A Pro-Lifer for Clinton

by Ramesh Ponnuru

Jenifer Sarver’s article at the Dallas Morning News is headlined, “How you can be a pro-life Christian and still support Hillary Clinton.” Based on the article, it seems to help if you put any specifics about Clinton’s position on abortion out of your mind.

Anti-Republican Vandals Deface Pat Toomey’s Neighborhood

by Mark Antonio Wright

Vandals have attacked several houses in Pennsylvania senator Pat Toomey’s neighborhood, scrawling anti-GOP screeds in red spray paint across the street from the Toomey residence in Zionsville, Pa.

Nazi, Slavers, Rapists, Cross Worshipers GOP,” read one message. “#Americans Against the Republican Party,” read the graffiti on another house.

Look Out Toomey and Your Neo Nazi Republicans,” read a third.

Toomey, currently locked in a tight race with Democrat Katie McGinty in his bid for reelection, has condemned the attack, calling the politically motivated vandalism “absolutely disgusting” when asked about the incident following the final U.S. Senate debate in Pennsylvania. McGinty’s campaign has also condemned the attack.

The vandalism is the second major incident of anti-Republican vandalism in the run-up to the 2016 election. Just two weeks ago, a North Carolina GOP office in Hillsborough was firebombed. Vandals there also accused Republicans of bigotry: spray painting “Nazi Republicans” on the property.

Steven Den Beste, RIP

by Jim Geraghty

Steven Den Beste, one of the early stars of the blogosphere, has passed away. His name may not be instantly recognized by the readers of 2016 because he stopped blogging regularly about politics in 2004, turning his attention towards animated films and shows. Every once in a while, Den Beste would pop up on Hot Air. In recent years, he had health problems and suffered a stroke.

His “USS Clueless” blog is gone, the servers storing the data are shut down. You can find some through the Wayback Machine; I found this 2002 assessment of the war on terror, and how it is largely driven by the fact the culture of the Islamist communities is failing so thoroughly compared to the West:

The nations and the peoples within the zone of our enemy’s culture are complete failures. Their economies are disasters. They make no contribution to the advance of science or engineering. They make no contribution to art or culture. They have no important diplomatic power. They are not respected. Most of their people are impoverished and miserable and filled with resentment, and those who are not impoverished are living a lie.

They hate us. They hate us because our culture is everything theirs is not. Our culture is vibrant and fecund; our economies are successful. Our achievements are magnificent. Our engineering and science are advancing at breathtaking speed. Our people are fat and happy (relatively speaking). We are influential, we are powerful, we are wealthy. “We” are the western democracies, but in particular “we” are the United States, which is the most successful of the western democracies by a long margin. America is the most successful nation in the history of the world, economically and technologically and militarily and even culturally.

I also found this 2004 piece on the joy of America’s gradual change:

Too many young people don’t recognize the virtue of the American perpetual revolution: the fact that it is slow but certain. There have been many revolutionary ideas which have been proposed which were utter crap whose adoption could have destroyed the system. The system as created can move, and can change radically, but it is particularly good at selecting good and useful changes while rejecting the bad ones, which is why it has only had to repeal a misguided Constitutional amendment once.

The system can change, and has changed, and will continue to change, but only when that change is broadly acknowledged as being a good thing. Those who advocate change must convince everyone else that it is a good thing, and sometimes that takes decades. It can even take centuries. But if change were too easy, there would be too great a chance of foolish or destructive change that could lead to destruction of the system and termination of the many benefits it already gives us despite the continued presence of deep flaws.

A software engineer by trade, exhibiting a precise logic in his thinking, Den Beste was acerbic, sharp and often charmingly irascible. I recall him writing at length about people who wrote in to correct him when they were actually wrong, and he would e-mail me with passive-aggressive appreciation when I would link to him but misspell his name.

I missed his  playful cantankerousness when he had merely stopped blogging. He’s missed even more now.