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The Policy and Commentary Blog of The Heartland Institute
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Will Insurers Ever Say Enough’s Enough To Obamacare?

December 28, 2013, 1:29 PM

I’ve been working professionally in health policy since 1979 when I was hired to write the consumer contracts and other communications in plain English for the Blue Cross Blue Shield plan in Maine. I neither knew nor cared anything about health care before that.

Rewriting contracts turned out to be a pretty good way to learn a whole lot about the business very quickly, I went from there to the research department and then to government relations. Before I left the Blues I was heading the state relations department for the national association in Washington. Then I went on to organize a trade association of health insurance companies that were interested in promoting free market solutions in health care.

I was surprised at how naïve the executives of these companies were when Clinton proposed his own health reforms. These were quiet, unassuming people who were happy to pool risks and pay claims and feel good about their work. They never expected to become the villains in Hillary’s ambitions, had never been political, and didn’t know how to cope with it.

So, understand that I am a man of the insurance industry. I am not a lawyer, have never worked for any government or politician, not an economist, don’t have an advanced degree in any field, and obviously have never cared for a patient. My sole qualifications are that I’m a good writer and a dogged researcher.

What has happened to the insurance industry has me stunned.

Now, I am no apologist for the industry. I have been one of its biggest critics. Its dalliance with Managed Care after the demise of ClintonCare was an enormous mistake that took its mission away from financial protection into health services management – something it was never qualified to do. The industry not only did a poor job of it, but it alienated and embittered the only people who really matter in health care – doctors and patients.

Granted, Managed Care pleased employers for a few years. It restrained their costs in the mid-1990s. But employers don’t really know anything about health care, either. What they do know is the morale of their workers, and Managed Care was the biggest morale-killer ever. Employees were furious that care was being denied by insurance company bureaucrats in Hartford, Connecticut, and they let company HR departments know it.

Employers started looking for other ways to restrain costs while preserving patient choice, and came to embrace “consumer-directed” health care (CDHC) in the early 2000s. This approach has been enormously successful and has exceeded the expectations of even its advocates like me. It has lowered costs and increased patient involvement in health care decision-making.

As an insurance guy, I liked that it was moving insurers away from their misguided notion of being the big boss in health care and back to the role of financial protection.

But the industry didn’t much like that aspect of it. Sure, they would sell the products because employers demanded it, but they were losing control as banks entered the market to manage the first few thousand dollars of expenses of a patient’s contract. The banks were still focused on financial protection and didn’t have ambitions to become health care managers.

So when Obama came along with an offer to require all Americans to buy their products, it was an offer they couldn’t refuse. Especially when the products he had in mind were comprehensive, cover-everything health plans. No more bank involvement. We’ll really be in the catbird seat now!

The naivety I had witnessed during the Clinton Wars was still in force. Many of us tried to warn the industry that they would regret this arrangement. Yes, they might be assured of modest profits, but the cost of sacrificing their autonomy would be far too high. They would become little more than public utilities. They would lose all control over benefit design, marketing practices, and rate setting. They would have no idea of the risks they were enrolling and would have to set premiums blindly.

It has become much, much worse than I ever imagined. Obamacare is not even fully in effect yet and already we are seeing the president playing with the carriers like a toddler plays with toy trucks –

  • Employers will be mandated to buy your policies for 2014
  • (Oops, employers are angry)
  • Employers won’t be mandated until 2015 – if then
  • Small employers will give workers a choice of health plans through the SHOP program in 2014
  • (Oops, we can’t get the web site ready in time)
  • Small employers won’t have to offer a choice of plan until – sometime later
  • You must cancel these individual policies
  • (Oops, public backlash)
  • You must reinstate these policies
  • (Oops, many insurance commissioners won’t allow it)
  • You must continue to cover providers and drugs even for cancelled policies
  • The deadline for enrollment will be December 15, 2013
  • (Oops, web site problems)
  • The deadline for enrollment will be December 23, 2013
  • (Oops, too much traffic)
  • The deadline for enrollment will be December 24, 2013
  • Never mind, there is no deadline
  • First month’s premium must be received by December 31, 2013
  • (Oops, back-end problems with the web site)
  • First month’s premium must be received by January 8, 2014
  • Make that January 10, 2014

How can anyone run a business this way? This is worse than being a federal agency. No federal agency would be expected to stop and start on a personal whim like this. These aren’t rules, they aren’t regulations, they are dictates based on nothing more than Kathleen Sebelius’ momentary feelings.

These are only the “glitches” that have been made public. God knows what orders and threats are being issued in closed-door meetings.

How long will the insurance industry abide being treated like shoe shine boys? Mr. Obama will not be in office forever. His regime is already coming to an end. What will these companies do then? He will no longer be around to grant or withhold bailout (“risk corridor”) money. No other president, Democrat or Republican, will ever be as arrogant or irrational.

It is well past time for the industry, supposed Titans of Wall Street, to grow some spine and start thinking about the best interests of their customers and shareholders.

[First published at The Federalist.]

Categories: On the Blog

Obama’s Slow Growth Policies Have Stacked The Deck Against American Workers

December 28, 2013, 7:36 AM

President Obama told us in his December 4 economic coming out speech on inequality, which the Huffington Post called the most important speech of his presidency:

But we know that people’s frustrations run deeper than these most recent political battles. Their frustration is rooted in their own daily battles – to make ends meet, to pay for college, buy a home, save for retirement. It’s rooted in the nagging sense that no matter how hard they work, the deck is stacked against them. And it is rooted in the fear that their kids won’t be better off than they were.

That fear is well justified. Because without economic growth, their kids will not be better off than they were. And without economic growth, no matter how hard they work, they won’t get ahead. The fundamental problem was shown in the rest of President Obama’s economic inequality speech.

He did not seriously advance one idea or measure that would do anything significant to increase economic growth anytime soon. Everything he promoted to address the problem was anti-growth – more taxes, government spending, and regulation. Just like everything he has done in his entire presidency. Which is why his economic growth record has been so poor, poverty has soared, middle class incomes have plummeted, and inequality has accelerated, under his policies. And that won’t change until his policies change. But instead he just keeps moving farther and farther left, as in this speech.

Obama added, in explaining where America went wrong:

Sstarting in the late 1970s, this social compact began to unravel. . . . As trickle down ideology became more prominent, taxes were slashed for the wealthiest, while investments in things that make us all richer, like schools and infrastructure, were allowed to wither.

So-called Progressives like to talk in code words, because they know if they told the American people what they were really thinking, they would never get elected. But the only economics that can accurately be called “trickle down” is the notion that increased government spending increases economic growth. Just the opposite is more nearly true.

A new report out this month from CBO addresses the very tired rant that “taxes were slashed for the wealthiest.” It shows that the top 1% of income earners produce 14.9% of before tax income, but pay 39% of federal income taxes. They also bear 49.5% of federal corporate income taxes.

Just the top 5% pay nearly two-thirds of all federal income taxes, at 63.6%, while producing just 27.4% of before tax income. And their share of corporate income taxes is virtually the same at 63.2%. The top 10% pay 77.4% of federal income taxes, over three fourths, while producing only 37.3% of before tax income, just over one-third. The top 20% carry virtually the whole load for the rest, paying 93% of total federal income taxes, almost twice the share of before tax income they produce, at 52%.

The middle 20%, who Obama is preaching to that the deck is stacked against them, pay just 2.9% of federal income taxes, while earning 14.2% of before tax income. The bottom 40% as a group on net pay less than nothing in federal income taxes, instead receiving cash payments from the IRS.

This is the most “progressive” income tax code in the world today, as befits the world’s now leading socialist country. Russia, by contrast, has a 13% flat tax, on the road to reverse places with the United States. America’s economy behaves now like it has a debilitating disease, which it does, called “Progressivism.”

CBO does not come out and say the rich pay more than their fair share, because CBO does not make “fairness” judgments. But the data CBO presents above shows precisely that. So President Obama, who has been telling us the opposite ever since he first showed up on the national stage, has got it wrong again, just as he got everything wrong in regard to Obamacare. No wonder the American economy is sick. You can call it the sick man of the global economy.

The Left will complain that the above data is only for federal income taxes, and does not include federal payroll taxes, for which the “wealthiest” pay a lesser share. But it is federal income taxes that Obama is complaining were “slashed for the wealthiest.” There were income tax cuts after the 1970s, where Obama said America went wrong, but not payroll tax cuts.

But even in regard to federal payroll taxes, the top 20% still pay 45%, the most of any other quintile by far. The middle 20% pay 15.4%, which is proportional to their share of income relative to the higher income earners. The bottom 20% pay just 5.6% of payroll taxes.

Moreover, the reason the highest income earners pay a smaller percentage of total payroll taxes is that the Social Security payroll tax is subject to a maximum annual taxable income limit every year, which is $117,000 for 2014. What the critics are missing is that the maximum annual taxable income limit is not a loophole. Social Security benefits are based on the amount of income that is subject to Social Security taxes. While higher income workers in 2014 will not pay Social Security payroll taxes on income above $117,000, income above that limit will also not be counted in calculating Social Security benefits.

That makes sense for a social insurance program like Social Security which is supposed to provide a floor for retirement income, not all retirement income. Once the “insurance” providing that floor is paid for, there is no sense in requiring anyone to pay more. When you go to the store to buy your Christmas turkey, you don’t pay more based on your income. Social Security is very much like that, because it does not provide a good return on dollar investment. So it is counterproductive to require taxpayers to pay for more above the safety net floor, when they can earn more retirement income from standard private sector investments, a lot more actually.

The CBO data also rebuts the Buffett/Obama Snow Job that the middle class pays higher tax rates than the rich. Buffett claimed that his Secretary pays a higher federal tax rate than he does. That is actually because in his case Buffett runs effectively the biggest tax shelter in the world in Berkshire Hathaway. And he would be in hog heaven for tax rates outside of his shelter to be increased. So he is in on the Snow Job.

But the CBO data shows that the average federal tax rate for the top 1% is 29.4%, while the average federal tax rate for the middle 20% is 11.5%, and the average federal tax rate for the bottom 20% is 1.5%. That is more than fair, except that the highest rates are cratering capital investment, which means fewer jobs and lower wages for the middle class and the poor. That is what is not fair for the middle class and the poor. But don’t expect Barack Obama to understand that. His Marxist mentors growing up never understood that themselves.

Obama was also wrong when he complained in his economic inequality whine, “The top 10% no longer takes in one-third of our income – it now takes half.” Actually they don’t “take” anything. “Take” is a government thing. People voluntarily pay the top 10% what they earn because those paying think what the top 10% do for it is worth it. And the CBO data shows that what the top 10% is voluntarily paid for their productive actions is 37.3% of before tax income, a lot lot closer to one third than to one half. All of Obama’s other statistics are equally dubious.

Because Barack Obama understands little about economics (when he steps to the podium to speak, it is time to cringe, because he often knows less about the subject than anyone in the room), the proposals he makes in his speech to address inequality, touted by the Huffington Post as the agenda for the rest of his second term, are pitiful as elixers to promote economic growth, and to reduce rather than further increase inequality.

He calls for more investment in education. But despite his false claim that education spending has withered since the 1970s, America spends more on education, and on education per child, than ever before, and more than just about every other nation on Earth. What is needed is not more taxes and spending, but education reform, involving choice and competition. But it is Obama’s union political allies standing in the schoolhouse door today preventing that from happening.

Increasing the minimum wage is ultimately not going to reduce inequality significantly either. It can’t, when it actually bars the most unskilled from working at all. That is just going to further increase inequality. Nor is the further regulation involved in a “strong application of anti-discrimination laws” going to create booming economic growth, or significantly reduce inequality across the economy.

Obama offers more pro-union regulation as a remedy. But more union power would not contribute to increased economic production. More likely it would force the opposite, as it so often has. Unions have not increased compensation to working people across the board. Rather, they have redistributed income from non-union workers to union workers, as they increase wages for their members by excluding competition from non-union workers.

Obama quite rightly says:

Wwe can’t tackle inequality if the economic pie is shrinking or stagnant. The fact is if you are a progressive and you want to help the middle class and the working poor, you’ve still got to be concerned about competitiveness and productivity and business confidence. And that’s why from day one we’ve worked to get the economy growing and help our businesses hire.

But you are not going to “get the economy growing and help our businesses hire” from increasing tax rates, especially on capital, increasing regulatory burdens, increasing government spending draining capital from the private sector, and wild-eyed monetary policy resulting in near zero compensation for lending, and constantly threatening to destabilize the currency. That is why the economic results Obama has gotten have been the opposite of what he says he wants.

While Obama complains about the sequester, that only seems to have accelerated economic growth, again exactly the opposite of what he said it would do. “High quality pre-school” would just be another bailout to Obama’s union political allies, not the progenitor of an economic boom. “Promise Zones” are also not going to stimulate growth if they are just going to involve more focused government in targeted local areas, rather than removal of government barriers to economic growth, like taxes, regulatory burdens and barriers, government spending, and debauched currency.

And noting Obamacare as another pro-growth initiative is just another snow job. For everything about Obamacare is anti-growth — increased taxes, increased regulation, increased government spending. Obamacare is why most new jobs this year have been part-time jobs, not the good, high paying jobs for the middle class that Obama’s sweet snow job rhetoric calls for. The only effect of Obamacare so far has been the opposite of universal coverage, increasing the number of uninsured. Instead of reducing costs, it has increased costs. I have personally done more to reduce health costs through helping the development and initiation of Health Savings Accounts, that have now grown to cover 30 million Americans, reducing the growth of health costs all along, just as we said it would. As the Bible says, by their fruits you shall know them.

What a pitiful gruel that Obama agenda is for producing economic growth and prosperity for all, like we got under Reagan, where incomes rose smartly for every quintile, from the poor to the rich, not just for Washington’s crony capitalists in the top 20%. As Henry R. Nau explained in the January 26, 2012 Wall Street Journal:

Tthe U.S. grew by more than 3% per year [in real terms] from 1980 to 2007, and created more than 50 million new jobs, massively expanding a middle class of working women, African-Americans and legal as well as illegal immigrants. Per capita income increased by 65%, and household income went up substantially in all income categories.

Obama did talk about some things in his speech that would work to promote economic growth and broad prosperity. Corporate tax reform that lowers rates while broadening the base would work powerfully. But Obama has done nothing to promote such reform beyond mere talk. Instead he has shown more interest in broadening the base to increase taxes, rather than reduce rates, which has been a barrier to the bipartisan tax reform that would be so readily achievable in Washington, if Obama would just get out of town. Freer trade that grows exports would also work, but Obama only squelches that as well with his rhetoric implying that free trade does not work for the middle class. “Streamlining regulations that are outdated or unnecessary or too costly” would work too. But Obama has consistently done just the opposite, imposing regulations that are precisely outdated, unnecessary or too costly. More Snow Job.

In this Christmas season, let us raise our voices to the Lord, and pray, dear God, please free us from Obama’s economic oppression, and restore to us the economic liberation of our heritage, and of the American Dream. Before the formerly world leading American economy ends up as just one big Hunger Game.

[First published at Forbes.]

Categories: On the Blog

Obama vs. the Constitution

December 27, 2013, 8:54 PM

“If you like your health plan, you can keep it,” is the Lie of the Year, according to PolitiFact. But Barack Obama has been operating under an even more momentous lie for his entire presidency, from the day he took the oath of office. With that oath, he swore to “faithfully execute the office of President of the United States, and will to the best of my ability, preserve, protect and defend the Constitution of the United States.”

The Constitution states the president “shall take Care that the Laws be faithfully executed.” This is a duty, not a discretionary power. The president must enforce the laws as written. He has no authority to rewrite, amend, suspend, grant waivers to, or decide not to enforce them, but Obama has done all these. John Yoo, a professor of law (U. of Calif., Berkeley), writes:

Obama has pursued a dangerous change in powers of his office that disregards the Constitution’s separation of powers between the branches of the federal government.

On December 3, 2013, Jonathan Turley, a law professor at George Washington University, presented a written testimony to the House Judiciary Committee stating:

When a president claims the inherent power of both legislation and enforcement, he becomes a virtual government unto himself. He is not simply posing a danger to the constitutional system; he becomes the very danger that the Constitution was designed to avoid.

One of Obama’s first acts as president—only a month since he took the oath of office—was to announce his elimination of the Yucca Mountain site in Nevada for storing highly radioactive nuclear waste. He flouted decades of scientific study and countermanded the explicit decisions of Congress set forth in duly-enacted laws over many years. In 1982 Congress directed the government to assume responsibility for commercial nuclear waste. In 1987 it singled out Yucca Mountain for evaluation as the repository because of its remote and dry location. After years of research, Congress in 2002 endorsed the Yucca Mountain site.

Between 1987 and 2009, when Obama put himself above the law by effectively revoking it, $13.5 billion was spent on the program; a five-mile tunnel was bored into the mountain, and hundreds of studies determined the safety of the site for thousands of years. The nuclear industry was also forced to pay $22 billion to the Energy Department for establishment of the repository. Obama is not a scientist, and his decision was not made from a review of the scientific research. But that is not the point, nor is the billions of dollars of taxpayer money that went down the drain.

The point is that Obama had no authority to violate the law rather than faithfully execute it. He called for more study of the issue, which he had no power to authorize. (More than 20 years of study already was not enough?) He said nuclear power still had a place in the U.S. and his administration would be quick to offer an alternative. With no alternative suggested after almost five years now, it is apparent he had no intention of providing any. In his 2008 presidential campaign, Obama told Nevadans that if elected he would not allow nuclear wastes to be stored in Nevada. End of story. So much for his oath of office and the constitutional requirement he “take care that the Laws be faithfully executed.”

That was only Obama’s opening shot against the Constitution. It was followed by a barrage of others.

The GM and Chrysler bankruptcies of 2009 were directed by a White House task force that upended established bankruptcy procedures. A major element of a bankruptcy is that debtors similarly situated get treated the same, but Obama violated this several ways, always to the benefit of unions. Under terms of the bailouts, Chrysler’s unsecured union benefit trust fund got paid instead of Chrysler’s secured creditors, and GM was required to pay parts manufacturer Delphi’s union retirees $1 billion while its non-union retirees got nothing. What legal authority did Obama have for rewriting almost of a century of bankruptcy law as payback for political support from the United Auto Workers? None.

In the case of the BP oil spill in the Gulf of Mexico, Obama bypassed the courts and himself decreed the fine for BP. He also unlawfully imposed a moratorium on oil drilling, which drew a rebuke by the court–in vain.

Obama decreed “recess” appointments to the National Labor Relations Board and the Consumer Financial Protection Bureau by claiming the Senate was not in session, meaning no Senate confirmation was required. However, the Senate was not in recess but merely taking a break within a session. Two federal courts subsequently held these Obama appointments were unconstitutional usurpations and voided them.

Professor Yoo writes: “Obama is the first chief executive since Richard Nixon to ignore a duly-enacted law simply because he disagrees with it.” Obama instructed his justice department to cease enforcement of immigration laws against certain illegal immigrants. By executive order he adopted the very conditions allowing immigrants to remain in the U.S. that Congress rejected by refusing to enact the Dream Act. Before Congress’ rejection, Obama himself had repeatedly stated the Constitution forbade him from taking these actions without Congress.

Under an executive order by Obama, attorney general Eric Holder ordered U.S. attorneys to stop prosecuting certain drug defendants for crimes that carry mandatory sentences. This is certainly contrary to the U.S. Supreme Court in Kendall v. United States1938, which said allowing the president to refuse to enforce laws “would be clothing the president with a power to control the legislation of Congress, and paralyze the administration of justice.”

The president replaced congressional requirements for state compliance with the No Child Left Behind Act with new ones crafted by his administration. His administration also provided waivers to 42 states, Washington D.C., and Puerto Rico even though the law contained no provision for waivers.

Though the 1996 Welfare Programs Act required people on welfare to work or prepare for a job in order to receive federal benefits, the Obama administration waived the requirement.

There is no constitutional authority to order private companies to provide free services, but Obama’s Department of Health and Human Services regulations require private insurers to provide free contraceptives to employees of objecting religious institutions.

According to our Constitution, only Congress can declare war. In a 2007 interview Obama said:

The president does not have power under the Constitution to unilaterally authorize a military attack in a situation that does not involve stopping an actual or imminent threat to the nation.

Yet he ordered airstrikes against Libya though that country had neither attacked nor threatened us. Similarly, he asserted he didn’t need Congressional approval for taking military action against Syria because it had used chemical weapons. But Syria neither attacked us nor threatened to do so. Obama claimed his proposed military action against Syria was authorized by the War Powers Resolution, passed in 1973 as a result of the Vietnam experience. But the WPR specifically states that it applies to cases where the U.S. is attacked or is threatened with attack.

Federal law requires the president every year to submit a budget to Congress by the first Monday in February in order to start the congressional budgeting process. In four years Obama failed to meet this requirement. Congress also failed to adopt a budget for four years, thereby allowing the president great leeway in allocating funds within each department of the executive branch. Before this year, the last thing Congress passed that resembled a budget was a 2009 spending bill that combined nine normal separate bills.

Obama violated the law in numerous ways regarding his signature act, the Affordable Care Act (Obamacare). That law specifically says it “shall apply to months beginning after December 31, 2013.” There is no provision for allowing the president to suspend or delay any part of it. Writing for the U.S. Supreme Court in 1998, Justice John Paul Stevens wrote:

There is no provision in the Constitution that authorizes a president to enact, to amend, or to repeal statutes.

So Obama was violating the law and the Constitution when he changed to 2015 the Obamacare requirement of 2014 as the year employers with 50 full-time workers must offer health-care coverage or pay fines. He also violated the law by suspending the requirement that individuals seeking subsidized health insurance prove their eligibility. He violated again when his Health and Human Services Secretary granted some 1,200 waivers from Obamacare requirements for hundreds of unions, companies and special interests.

In December 2013 syndicated columnist Charles Krauthammer wrote:

HHS . . . asked insurance providers to start covering people on January 1 even if they signed up as late as the day before and even if they hadn’t paid their premiums. And it is ‘strongly encouraging’ them to pay for the transition for doctor visits not covered in their current plans (if covered in the patient’s previous—canceled—plan). On what authority does a Cabinet secretary tell private companies to pay for services not in their plans and cover people not on their rolls?

Is this America? Krauthammer also notes that the phrase “strongly encouraging” is an offer the insurers can’t refuse:

Disappoint your federal master and he has the power to kick you off the exchanges, where the health insurance business of the future is supposed to be conducted.

Again, is this America?

Obama ignores the separation of powers and fails to respect Congress as an equal branch of government. At one point he famously even refused to negotiate with it. Rather than working with Congress, he told an audience in Denver that his administration will “look every single day to figure out what we can do, without Congress.”

He treats Congress like a second class department of which he is the superior to determine whether or not it is doing its job. “We can’t wait for Congress to do its job, so where they won’t act, I will,” he said regarding his Jobs Bill. “It is the belief of this administration . . . that we can’t wait for action on the Hill,” Obama said when signing an executive order regarding the FDA. “If Congress won’t act soon to protect future generations, I will,” Obama pledged. “I will direct my cabinet to come up with executive actions we can take . . . ”

He ought to know—but apparently doesn’t—that the executive branch must work with the Congress, not evade it, and it is not the president’s role to determine what Congress’ job is and whether or not it is doing that job. The Constitution determines what Congress’ job is, and the voters are the ones to determine whether or not their representatives are doing their job.

In 1868 the House impeached President Andrew Johnson for defying the Tenure of Office Act, which prohibited him from firing anyone in Lincoln’s cabinet. Johnson fired Secretary of War Edwin Stanton anyway. The Senate failed to convict him by a single vote.

Andrew Johnson committed a single violation of one law. Obama has committed multiple violations of multiple laws. Of course, with a Democratic majority in the Senate, Obama would never be convicted if impeached, and today there is far less concern about a president violating the law than when Johnson was president. It shows the pitiful, lawless, degradation of our once free country resulting from Obama “fundamentally transforming” America.

[First published at American Liberty.]

Categories: On the Blog

The World In Crisis

December 27, 2013, 4:53 PM

We close 2013 in a world that seems to be swiftly tilting toward ever-larger crises of government legitimacy, oncoming clashes of foreign powers, and an abiding sense of concern on the part of the American people that the economic realities of long-term unemployment, wage stagnation, and the working class squeeze of higher prices for health care, higher education, and basic goods and services are not a brief trend, but enduring problems for which Washington has no solutions.

On the foreign policy front, 2013 may well turn out to be the year in which offered a preface for the Next Big War. From Iran to Syria to China, the American position has collapsed with such rapidity that our understanding of these situations from just a year ago are dramatically altered. The era of the Monroe Doctrine may be over, but the lack of an American grand strategy has left our approach to foreign policy an extended drama of incoherence, and our inability to grapple with the unraveling of the Middle East in the wake of the Arab Spring is only one of many challenges which will present themselves in the coming year. Unrest is only likely to increase in a global economy where youth unemployment has actually increased to the same levels as during the economic crisis.

But the crisis closer to home may be the one which proves more troublesome in the long term: a crisis of legitimacy within Western democracy, one that has gripped the American system in the wake of the mismanagement of elections, disasters, wars, financial crises, stimulus packages, bailouts, and now health care overhauls. Americans are losing faith in the American Dream for themselves and for their children, and they are roughly evenly split on whether the solution to these problems is more government or more liberty – a question which is becoming the defining decision of our era.

This is about more than just who we elect or which party we trust in which arena. It represents a very real schism about first principles and the universe – a division between an approach to life which considers natural law, inherent rights and duties, the rule of law and more as important, and one which views as essential the ongoing actions of the collective to achieve a secular social justice. The shared underlying assumptions about life and the ordering of society, which had such a strong role in America’s early success, are largely gone or greatly diminished. They aren’t coming back.

The rise of the Nones – those who don’t believe in anything in particular, and aren’t interested in investigating faith – is only likely to increase. One in three Millennials profess no religious affiliation, and one of the underestimated aspects of their absence of participation in a faith community of any sort is their lack of interest in seeking one out. Perhaps there’s a silver lining here, from a secularist perspective: a less religious America may sound like a context for less religious strife – fewer people who care, fewer people to argue about it, right? But the reverse is true.

The culture wars haven’t ended – they’ve escalated, and they will continue to escalate in a society where people have fewer commonly held views, and less respect for those who disagree with them for any reason, least of all a religious one. The lack of a shared language of compromise and respect leads to ongoing and increasingly contentious clashes of faith, politics, and sexual rights, where lightning rods of courts and culture lead to flashpoints that strain social bonds, break friendships, and end the ability to have a healthy community where disagreement over law and politics does not lead to death threats on social media.

The next year will bring more flashpoints in the broken public square. In 2014, the highest courts in the land will rule on the ability of Christian business owners to practice their faith as they see fit, and the power of government to compel them to go against their beliefs. We might hope for a country where more people would lay down their arms and view those who disagree with their ideology with respect and impartiality. But for all the handwringing, history has shown us that this is the way things go when trust breaks down and respect vanishes. As G.K. Chesterton notes: “Why should they be impartial, what is being impartial, when the whole world is at war about whether one thing is a devouring superstition or a divine hope?”

Of course, there is still hope. The nation has survived incredible crises before, on the global scale and within our society. The path toward liberty is still a viable one. And perhaps we will find that even when things break down, when government fails and grand strategies fade, the American people can count on each other more than they thought. These are strange times for the country and the world. But we may find that, even as institutions fail us, the American people exceed expectations. They have done it so many times before. In the coming year, they will be called on to do so again.

[First published at The Federalist.]

Categories: On the Blog