America! For more than two hundred years the word has represented hope, opportunity, a second chance, and freedom. In America the accident of a man’s birth did not serve as an inescapable weight that dictated a person’s fate or that of his family. The individual owned his own life and was free to shape it as his own mind guided him.
Once a newcomer stepped on American soil he left the political tyrannies and economic barriers of the “old world” behind. A willingness to work hard and to bear the risks of one’s own decisions, the possession of a spirit of enterprise, and a little bit of luck were the keys to the doors of success in their “new world” home.
American Spirit of Independence, Innovation and Benevolence
Visitors from Europe traveling to America in the 19th century, Frenchmen like Alexis de Tocqueville and Michel Chevalier, marveled at the energy and adaptability of the ordinary American. An American paid his own way, took responsibility for his actions, and showed versatility in the face of change, often switching his occupation, profession, or trade several times during his life, and frequently moving about from one part of the country to another.
What’s more, individual Americans demonstrated a generous spirit of benevolence and voluntary effort to assist those who had fallen upon hard times, as well as to deal with a wide variety of common community services in their cities, towns, and villages.
Those foreign observers of American life noted that no man bowed to another because of the hereditary accident of birth. Each man viewed himself as good as any other, to be judged on the basis of his talents and abilities as well as his character and conduct as an individual human being.
Even the scar of slavery that blemished the American landscape through more than half of the 19th century stood out as something inherently inconsistent and untrue to the vision and conception of a society of free men laid down by the Founding Fathers. The logic of liberty meant that slavery would eventually have to end, in one way or another, if the claim of freedom for all was not to remain confronted with a cruel hypocrisy to the ideal.
A Land of Free, Self-Made Citizens
What a glorious country this America was. Here was a land of free men who were able to pursue their dreams and fulfill their peaceful desires. They were free men who could put their own labor to work, acquire property, accumulate wealth, and fashion their own lives. They associated on the basis of freedom of exchange, and benefited each other by trading their talents through a network of division of labor that was kept in order through the competitive processes of market-guided supply and demand.
In this competitive marketplace, the creative entrepreneurial spirit was set free. Every American was at liberty to try his hand, if he chose, to start his own business and devise innovative ways to offer new and better products to others in the market, through which he hoped to earn his living. No man was bond to the soil upon which he was born or tied to an occupation or profession inherited from his ancestors. Every individual had an opportunity to be the master of his own fate, with the freedom to move where inclination led him and choose the work that seemed most profitable and attractive.
The Turn Toward Collectivism
Then something began to happen in America. The socialist and collectivist ideas that were growing in influence in Europe during the last decades of the 19th century began to spread over to the United States. Two generations of young American scholars went off to study in Europe, particularly in Imperial Germany, in the 1880s, 1890s, and early 1900s. They became imbued with socialist and state paternalistic conceptions, especially the interventionist and welfare statist ideas that were being taught at the universities in Bismarck’s Germany.
These scholars came back to the United States enthusiastic about their newly learned ideas, convinced that the “negative” idea of freedom dominant in America – an idea of freedom that argued that government’s role was only to secure each person in his individual right to life, liberty, and property – needed to be replaced by a more “positive” notion of freedom.
Government should not merely protect citizens from violence and fraud. It should guarantee their health care and retirement pensions; it should regulate their industry and trade, including their wages and conditions of work. The government needed to secure the members of society from all the uncertainties of life, “from cradle to grave” – a phrase that was first popularized during this time.
These European-trained students and academics soon filled the teaching positions in the colleges and universities around the country; they occupied a growing number of jobs in the federal and state bureaucracies; they became the fashionable and “progressive” forward- looking authors of books and magazine articles; they came to dominate the culture of ideas in America.
The Rationale of Relativist Change
How did they sway an increasing number of Americans? They asked people to look around them and observe the radical changes in technologies and styles of life. They pointed to the rapid shift from the countryside to growing urban areas. And they asked, how could such a transformed and transforming society remain wedded to the ideas of men who had lived so long ago, in the 18th century? How could a great and growing country be tied down to a Constitution written for a bygone era?
The Constitution, these “progressives” argued, had to reflect the changing times – it had to be a “living” and “evolving” document. Progress, for these proselytizers of Prussian paternalism, required a new political elite who would guide and lead the nation into a more collectivist future.
The Fruits of Collectivism in America
The fruits of their work are, now, after well over a century, all around us. At the beginning of the 20th century all levels of government in the United States took in taxes around 8 percent of the people’s wealth and income. Now all levels of government extract in many cases over fifty percent of our earnings, in one way or another.
One hundred years ago, government hardly regulated and controlled any of the personal and commercial affairs of the American citizenry. Now, government’s hand intrudes into every corner of our private, business, and social affairs. Indeed, it is hard to find one area of our daily lives that does not pass through the interventionist sieve of state management, oversight, restriction, and command.
Perhaps worst of all, too many of our fellow Americans have become accustomed to and, indeed, demanding of government protection or subsidy of their personal and economic affairs. We are increasingly no longer free, self-supporting individuals who solely make our own ways through the peaceful transactions and exchanges of the marketplace.
We have become collective “interest groups” who lobby and pressure those in political office for favors and privileges at the expense of our neighbors. And the political officeholders are only too happy to grant these political gifts to those who supply campaign contributions and votes as the avenue to their own desires for power and control over those whom they claim to serve.
It is sometimes said, “But we are still the freest country in the world. Our wealth and standard of living are the envy of tens of millions all around the globe. We should be proud of what and who we are.”
The Standard for Judging America
Our present greatness in terms of these things, however, is only relative to how much farther other countries have gone down the path of government paternalism and regulation during these past one hundred years.
The benchmark of comparison should not be America in relation to other countries in the contemporary world. The standard by which we should judge our freedom should be how much freer the American people were from the stranglehold of government more than one hundred years ago, before those proselytizers of paternalism began to change the political and cultural character of the United States.
By this standard, today’s American people are extremely unfree in many aspects of their life. Of course, there have been important, valuable and even essential economic, social and cultural improvements for many individuals and groups in American society, who one hundred years ago still suffered from various degrees of racial, social or ethic bigotry and politically enforced discrimination. Many of these wrongs are now gone, or at least far less than in that earlier time.
But the fact remains that over many areas of our personal, social and especially economic activities we have all become increasingly wards of the state. And like the convict who has spent so many years in prison that he is afraid of being released and no longer having his jail keepers to tell him what to do and how to live, we are fearful of even the thought of a life without government caring for us, protecting us, subsidizing us, guiding us, and educating us.
Loss of Understanding Liberty
Too many in the older generation in America have lost their understanding of what freedom means and why constitutionally limited government is both necessary and desirable. And the vast majority of the young have never been taught in our government-run schools the ideas, ideals, and political institutional foundations upon which this country of ours was created. They have been taught to think that there are no absolute truths or any important insights from long human experience concerning why individual freedom is a valuable and precious thing.
What those earlier German-trained political and cultural relativists set out to do in America at the beginning of the 20th century has been to a great extent accomplished. We are threatened with becoming a people who have no sense of an invariant nature of man, and who possess no idea of those values and attitudes in the human character so necessary for preserving freedom and prosperity.
Most especially, there has been lost among too many any understanding or appreciation of the concept of individual rights, without which a free society is not sustainable in the long run. The collectivist mind-sets of our time have weakened the most fundamental concept underlying the idea of individual rights:
That the individual has a right to live for himself, guided by his own reasoning and judgment, and that he should not be considered and treated as a physical or financial beast of burden expected to sacrifice his life and its potentials for a tribe, whether it is called “the nation,” the “social class,” the “race,” the “democratic majority,” or “mankind.”
Individual Rights are Changeless in a Changing World
The Founding Fathers were not unaware that “times change.” But in the whirlwind of life they saw that reason and experience could and had demonstrated that there were unchanging qualities to the human condition, grounded in the fundamental political idea of individual rights.
They understood the various mantles that tyranny could take on – including the cloak of false benevolence in the form of compulsory redistribution of wealth. They established a constitutional order that was meant to guard us from the plunder of violent and greedy men, while leaving each of us that wide latitude of personal and economic freedom in which we could find our own meanings for life, and adapt to new circumstances consistent with our conscience and concerns.
This is what made America great. This is what made a country in which individuals could say without embarrassment or conceit that they were “proud to be Americans.”
The task for those of us who have not yet lost that true sense of the meaning of freedom is to dedicate ourselves to restoring and refining that noble American ideal of individual rights and liberty. Let us work together to be the stewards of liberty so that freedom may, once again, rekindle its consistent and bright torch in the America of the 21st century.
[Originally published at EpicTimes]
When it comes to energy, climate change, justice and transparency, the Obama Administration and its Environmental Protection Agency want it every possible way. Their only consistency is their double standards and their determination to slash hydrocarbon use, ensure that electricity prices “necessarily skyrocket,” expand federal government command and control, and “fundamentally transform” America.
The president was thus eager to give away Seal Team secrets in bragging about “he” got Osama bin Laden. But in sharp contrast, there has been no transparency on Benghazi, Fast and Furious, the IRS scandal – or the data and analyses that supposedly support Environmental Protection Agency claims that “dangerous manmade climate change” is “not just a future threat; it is happening right now.”
That rhetoric made it sound like EPA’s Clean Power Plan was designed to reduce greenhouse gas emissions. However, in July EPA Administrator Gina McCarthy made it clear that her initiative “is not about pollution control.” Rather, it is an “investment strategy” designed to spur renewable energy.
Senator Jeff Sessions (R-AL) opined that the agency does not have “explicit statutory authority” to steer investments toward “green” energy. Perhaps so, McCarthy replied, but her actions are legal under the Clean Air Act and within the agency’s ever broadening purview – as are EPA’s attempts to expand its mission and oversight authority by emphasizing “sustainable development” and “environmental justice.”
The ironies abound. Wind, solar and ethanol power were intended to address “imminent oil and gas depletion” that ended with the hydraulic fracturing revolution, and prevent “global warming” that ended some 18 years ago. Now “investment” in these “alternative” energy technologies primarily involves greenback dollars taken from hard-working taxpayers and delivered to crony corporatists and campaign contributors who want to earn fat profits from climate scares, renewable energy mandates and subsidies.
A 2010 report suggested that EPA should begin to examine how it might “encourage the development of sustainable communities, biodiversity protection, clean energy, environmentally sustainable economic development and climate change.” Talk about an open-ended invitation to control our lives. A few weeks ago, EPA proclaimed “environmental justice” as yet another newcause celebre. The agency claims low-income groups are “disproportionately affected” by airborne pollution, and therefore it must tighten air quality standards yet again. The results will likely be a perverse opposite of true justice.
The agency’s own Urban Air Toxics report chronicles a 66% reduction in benzene levels, 84% in outdoor airborne lead, 84% in mercury from coal-fueled power plants, and huge reductions in particulates (soot). “But we know our work is not done yet,” McCarthy said. “At the core of EPA’s mission is the pursuit of environmental justice – striving for clean air, water and healthy land for every American; and we are committed to reducing remaining pollution, especially in low-income neighborhoods.”
Most air quality and health experts say America’s air is completely safe. That’s why EPA pays its Clean Air Scientific Advisory Committee and the American Lung Association millions of dollars a year to say otherwise. It’s why the EPA, CASAC and ALA refuse to discuss the $353 billion in annual regulatory compliance costs that EPA alone imposes on U.S. businesses and families (out of a total federal regulatory bill of $1.9 trillion), according to Competitive Enterprise Institute studies.
Those costs mean too many people lose their jobs. Their hopes, dreams, pride and work ethic are replaced by despair and dependency. If they can find new work, they are forced to work multiple jobs, commute longer distances, and spend greater portions of their incomes on gasoline and electricity. They suffer greater sleep deprivation, stress, depression, drug and alcohol abuse, spousal and child abuse, and poorer nutrition and medical care. More people have strokes and heart attacks; more die prematurely.
EPA’s new 54.5-mile-per-gallon standards mean cars are lighter and less safe in accidents. That means more people suffer severe injuries or get killed. Minority and other poor families are especially at risk.
Every one of these impacts is also a matter of environmental justice. But EPA chooses to ignore them.
Moreover, nothing in the law says EPA has a right to declare that it intends to seek “justice” by drawing a line between poor people and other Americans, all of whom have a stake in clean air. McCarthy’s language is more befitting a rabble-rouser than an agency administrator who is supposed make decisions based on science – not on emotions, politics, or racial and class divisiveness.
EPA’s climate and environmental policies appear destined to become even more insane. Just two months after calling climate change “the world’s most fearsome weapon of mass destruction” – and amid radical Islamist chaos and conflagrations across the Arab world – on September 3, Secretary of State John Kerry actually said “Muslim-majority countries are among the most vulnerable” to climate change. “Scriptures,” he claimed, make it clear that Americans have a “responsibility” to prevent this calamity.
McCarthy’s environmental justice claims also appear to be based on an ugly premise that undergirds many Obama Administration policies: that low-income people are victims and businesspeople are guilty of doing irreparable harm to their health and communities. (At least business people who are not aligned with Obama and don’t support liberal/Democrat agendas and candidates are guilty.)
Such sentiments pit low-income and working-class Americans against businesses. They are a divisive throwback to the 99% versus 1% protests. They ignore the fact that Mr. Kerry, climate politics bankroller Tom Steyer, and President Obama and his fundraiser dinner companions are all part of the 0.1 percent.
These sentiments also ignore the fact that businesspeople create jobs, give workers opportunities to earn a living for themselves and their families, and develop the employment and life skills to successfully climb the socio-economic ladder. Any company that violates environmental, health, safety, tax and other laws is penalized civilly or criminally – whereas all too often the regulators themselves escape any accountability or liability for accidental, incompetent and even deliberate actions that hurt their fellow citizens.
Ms. McCarthy’s statements also reflect the lengths to which EPA will go to continue expanding its reach and grow its bureaucracy. The agency cannot admit that it has nearly won the battle against dirty air, because thousands of government regulators could lose their jobs. (Never mind the millions of Americans who lose their jobs because of EPA regulators and regulations.) To protect its legions of workers, justify its massive taxpayer-provided budget, and expand it many times over, EPA continues to move the goal posts, by invoking environmental justice, climate change and sustainability – for which there can never be objective goals and achievements, but only political considerations and subjective “feelings.”
Apparently Ms. McCarthy embraces the ideology that ignores the benefits of affordable energy and of a robust economy that creates jobs and opportunities. In her view, government controls are paramount, even when they stifle self-reliance, creativity and entrepreneurship, destroy jobs, harm human health and welfare, and cast low-income Americans as perpetual victims.
As Congress of Racial Equality national chairman Roy Innis emphasizes in his book, Energy Keepers / Energy Killers: The new civil rights battle: access to abundant, reliable, affordable energy is essential for individuals, families and communities that want to improve their lives and living standards.
Jason Riley puts it just as forcefully in his new book, Please Stop Helping Us: How liberals make it harder for blacks to succeed. Blacks must “develop the habits and attitudes that other groups had to develop” to improve their lives, he writes. The real secret to rolling back black unemployment and poverty is to change a culture that has allowed too many black children to grow up without the benefit of a father in the home, and that scorns black intellectual achievement as “acting white.”
Environmental protection should never be an “us vs. them” mentality. Such attitudes divide us, rather than bringing us together to improve our nation and world for everyone’s benefit. Ms. McCarthy should base environmental policy on sound science – and check her phony justice rhetoric at the door.
The organic food movement grows every year. Many people are attracted to its acclaimed health benefits and superior produce compared to more ordinary foods. Organically grown food is particularly favored over genetically modified foods (GMOs). Indeed, it is hard to find an upscale restaurant or grocery store that does not loudly proclaim its non-GMO status.
Yet, is there any real health benefit to organic and non-GMO foods? The answer (perhaps shockingly to foodies,) is no. The media and internet have been alive for years with the supposed horrific side effects of eating GMOs, with so-called experts claiming that they cause all kinds of disease, including cancer. But these “experts” rarely, if ever, have any data to back up their claims. In fact, the one major study that offered some credible evidence of negative health effects from GMOs was ultimately discreditedand has since been retracted.
If there is so little serious evidence of the negative side effects of GMOs, why is there so much news about it? The answer is simple: there is profit to be made. The individuals marketing organic and non-GMO items have a real financial incentive to keep the fear alive. Without it, their whole business collapses. Not many people would pay extra for food that offers no meaningful health benefits. A study by the Food Standards Agency of the United Kingdom has demonstrated this fact, showing that there is no meaningful health benefit accrued from the additional cost of organically grown food.
This is not to say that organic food promoters are charlatans, or in any way dishonest. No doubt the vast majority of them believe in what they are selling as much as consumers believe in what they are buying: better, healthier food. But good intentions are wasted when the actions rising from them do no good.
The problem really isn’t that people like to eat organic or non-GMO products. In the developed world, many people can easily afford such luxuries. The real problem is when unjustified prejudices toward GMOs spread into the public sphere and cause real harm in places where they are needed. In Africa and parts of Asia, food is a scarce resource. We have seven billion people on this planet, most of whom live in poverty. For many, GMOs are not a matter of choice, but of necessity. In India, a genetically modified strain of wheat called dwarf wheat, (which allowed for much higher crop yields) prevented a massive food crisis that would have killed millions of people. Another grain, golden wheat, has been enriched with nutrients that have reduced child mortality and improved public health in numerous countries.
When people in America start scares about GMOs, it does more than change what people buy. It can cost lives. A few African countries, responding to hysterical claims by faux experts, have banned GMOs. The result has been needless death and deprivation.
A court ruling this month in Hawaii has overturned a ban on GMO research passed earlier this year. This is a positive step, but it has done little to alter public perceptions about GMOs. That will require a much more concentrated push on the part of the agriculture industry and public health officials. More must be done to dispel irrational and erroneous beliefs.
It is easy to understand why people are susceptible to scares about GMOs. It is strange and Frankensteinesque for scientists to manipulate the genetic code of the things we eat. Of course we should be mindful of what we put in our bodies. But we should also be aware of (and act in accord with) the evidence, and the evidence continuously shows no meaningful harm from GMOs.
So don’t be too concerned about buying organic. It’s no better for the health of your body and whole lot worse for the health of your bank account!
[Originally published at IOnTheScene]
Comedienne Joan Rivers has passed away last week at the age of 81, shortly after going into cardiac and respiratory arrest during a procedure on her throat. The evening before the terrible event, Ms. Rivers joked about her age and that she could die “at any second.” State health officials are investigating the clinic at which the procedure took place.
Joan Rivers was basically “discovered” by Johnny Carson and was a frequent guest and guest-host of the Tonight Show in the early 1980s.Recently, Ms. Rivers, never a stranger to controversy, made a bit of news when suggesting that Barack Obama was America’s first gay president and calling Michelle Obama a “tranny.” In typical Rivers style, no apology was forthcoming for the not-particularly-humorous comment.
OK, not every joke hits its target, but for decades of sometimes-shocking entertainment and breaking the glass ceiling for female comedians, Joan Rivers deserves our appreciation.
Our thoughts are with her family and friends.
[First published at the American Spectator.][Editor: Here's a bit of Joan from Jimmy Fallon's first day hosting the Tonight Show. Let's just say that having Joan on that night was no accident]:
Newt Gingrich’s recent article on CNN asks “What Would Reagan Do About ISIS?” Writing a “speech” from the perspective of Ronald Reagan as if he was still president, Gingrich seeks to show a more assertive, commanding response to the massive unrest in Iraq and Syria. The relative merits of Gingrich’s Reagan’s speech are not worth all that much consideration (In a nutshell, it calls for swift action against the militants, and generally damns the present policy). What is of interest is the strange phenomenon the article reveals about a large section of the American right wing today: dogmatic Ronald Reagan worship.
Don’t get me wrong; I am a big fan of Reagan and I believe he led America as well as anyone could from a time of fearful uncertainty into one of triumphal prosperity. But he was not a god and he did not have the right answer every time on every issue in his own time. It is really strange that conservative commentators trot out the “What would Reagan do?” line so regularly. Sure, we can reflect on the qualities of a president and the character they reveal through their actions. We can express our desires for more forceful and decisive leadership in the mold of Reagan. But to ask his opinion on how to address ISIS? That is a bit of a stretch.
Reagan left the White House in 1989, 25 years. That is a long time for things to change. The world is a radically different place from the one in which Reagan lived and governed. His whole political career was spent as a Cold Warrior. No doubt a man of his skills and leadership quality could make a mark on any era, but to try to envision his exact strategy, or even his general feelings, on specific issues facing us now is not particularly nourishing to intellect or beneficial to the formulation of policy.
This tendency to call up the ghost of Ronald Reagan at the drop of a hat has become a running joke in the liberal media. And if you think about it, it is rather funny. It is, after all, tough to make the case to the public that you have new solutions when you keep dredging up the image of a man who has not governed in two and half decades (and been dead for ten of those years). And that is a really serious problem facing the political right.
When Reagan rose to prominence and won the presidency, he did so by looking forward. He inspired people to believe in a future for America that was bright. He called on many of the timeless words and principles of the American political canon, but he was at his heart an independent animal. He never tried to be a mouthpiece for a preceding generation’s standard-bearer. Reagan’s message was his own, and that is why it resonated so thoroughly with the public.
Trying to be the heir to Reagan’s political legacy, as so many Republican contenders seem to be doing, misses the whole point of what made Reagan special. If the timeless message of individual liberty, of which Reagan was a true champion, is to be carried to another generation, it needs a new voice, not just an echo of an old one.
Most of Congress agrees that the Internet access tax ban should continue, at least for now; even the House passed the Internet Tax Freedom Act (ITFA) with merely a voice vote. It seems like it would be almost unanimous in the Senate, too, but one hot topic attached to access taxes is causing controversy: the Internet sales tax. The four-page ITFA bill also contains a provision that protects against discriminatory taxes on electronic commerce. While brick-and-mortar stores have a definitive sales tax they pay based on where they’re located, e-retailers do not. Without sales tax protection, e-retailers could have to pay up to 9,600 different state and local taxing bodies, an administrative expense that the average small business owner could not handle (24 million Americans, where 29% make less than $10,000/year in sales). On top of that, if a taxing body charges the wrong tax or makes a mistake and an e-retailer needs to take legal action, they would incur further costs for lawyers and litigation that would diminish the incentive to sell anything online in the first place.
A group of senators is planning to hold Internet access taxes hostage (the ban expires November 1st, 2014) in an attempt to force the Internet sales tax question. They created their own version of an Internet tax freedom act, but with many perversions that cater to the retail industry giants who could easily soak up the administrative costs and send their armies of lawyers to court for them. This new fourteen-page bill, the Marketplace and Internet Tax Freedom Act (MITFA), only extends the Internet access tax ban by 10 years instead of permanently, and it would open up the 9,600 different state and local tax collecting agencies—many of whom are in debt—to enforcing burdensome regulation and taxation on e-retailers.
Imagine someone who makes homemade trinkets and sells them online, perhaps something they started doing while on unemployment or just as a hobby. If they get orders from many people across the country, they would have to calculate each tax rate in each location of each customer. What if they fail to do so? Many state and local authorities charge high fines if a seller does not pay sales taxes, and you can even go to jail. Suppose they find a charge that shouldn’t be there, but the taxing body disputes it. Where would this person find the money to fight the legal battle this would cause? They might just settle, even if they were never in the wrong. This is what the legal language of the current law banning Internet sales tax means by discrimination.
There is even legal precedent set by the SCOTUS in the case Quill Corp. vs. North Dakota. In this case, North Dakota was trying to make Quill Corp., an office supplier based out of Delaware, pay taxes for advertising and selling its products in the state. The Supreme Court ruled that a business has to have a physical presence in a state in order to be subjected to its sales taxes. In 1992, Justice Stevens delivered the opinion of the Court in which he said “…because the State had not shown that it had spent tax revenues for the benefit of the mail order business, there was no ‘nexus to allow the state to define retailer in the manner it chose.’”
Quill has three warehouses in three separate states, so it is paying sales taxes in those states that it runs its operations out of. States that foster poor business conditions should not be allowed to tax businesses in other states just because customers order items from them online. This would defeat basic competition between states and would be unfair to states that are responsible. States that have ruined their economies can’t be allowed to suck out money from successful companies in other states whose business conditions are better. Some states don’t even have general sales taxes, and their companies would be forced to pay an extra expense that they never needed to before.
E-retailers are not dodging taxes because they do have a physical location somewhere. If anything, banning Internet sales taxes would force states to rethink their economic policy. Challenges and tough times can often spark amazing motivation for real growth and change. Opening another source of revenue for states that have proven time and again mismanagement of funds would be a disaster for everyone involved. Successful companies that have harnessed the equalizing powers of technology would be penalized, and American consumers would be left with less choice and less in their wallets.
The ITFA bill that has passed the House is now in the Senate’s hands; the bill is concise at only four pages, and most people would be able to easily understand it. It would permanently ban Internet access taxes and multiple and discriminatory taxes on electronic commerce. The proposed MIFTA bill, masquerading as a better alternative, would only ban access taxes for 10 years, but allow almost 10,000 tax collecting agencies a chance at a massive money grab, convoluting competition and reducing economic freedom. Contact your senators today and tell them to take up a vote on IFTA, not MIFTA, before November 1st. We only have 59 days left.
The ongoing conflict in Ukraine has laid bare the woeful state of European defense. For decades Europe has been reliant on an American security blanket, one that has put Europe’s various defense departments to sleep. Putin’s recent belligerence has given them a loud wake-up call. What they will do about the aggression on their frontier remains to be seen.
Hopefully, Europe’s leaders will finally begin to pull their weight on providing for their own defense and fro the maintenance of NATO. Currently America makes up the lion’s share of NATO forces and spends a vastly disproportionate amount of its GDP on the task. The United Kingdom is the only major EU power that spends more than 2 percent of its GDP on defense. The rest have seemed happy to spend their cash on unaffordable social programs in the hope that America will always be there to protect them.
It’s about time that America made a stand on defense spending in Europe. It is ludicrous to expect the United States to spend more on defending Europe than the Europeans are willing to. Now that Putin has increased his warmongering, many of Europe’s leaders have finally started to agree. While it is still far too early to declare that Europe is definitely going to shoulder the task of ensuring its own security, we are now seeing positive steps, taken through the NATO alliance, to meaningfully increase the share of Europe’s burden on the maintenance of its defense. Member countries in Europe have agreed to increase their defense spending to more adequately address security concerns.
This is a good sign for America. We have spent a vast fortune trying to maintain peace and security in the world, to mixed success. We cannot afford to be the sole guarantor of international order forever. What we need is other responsible, democratic nations to shoulder a larger part of that burden. It will benefit the US taxpayer and add legitimacy to a global order that favors free markets and the rule of law. Europe, America’s partner in liberal-democratic values, must be ready to share in the effort of sustaining peace on its borders, and in the world.
One of the biggest drags on economic growth under President Obama has been Obamacare, enacted on a strictly partisan basis in 2010. That drag has come primarily from the sweeping overregulation of Obamacare.
The biggest culprit has been the employer mandate, which requires all employers of 50 or more full time workers to buy them health insurance with the terms and benefits as specified by the federal government. That is effectively a tax on employment of well over $10,000 a year per worker for family coverage.
Even for employers that already provide health insurance, the employer mandate will likely be a big tax increase on employment. That is because the mandated health insurance will most likely cost more than what the employer is already providing. That results first because the government responds to political pressure to require generous benefits most people will think the employer is paying for, to be include in the mandated health insurance. That drives up the cost of the mandatory health insurance.
Secondly, the mandated health insurance is subjected to costly overregulation involving guaranteed issue and community rating. Guaranteed issue requires insurers to sell their health insurance to everyone that applies, regardless of how sick and costly they are when they first apply, such as those who already have cancer or heart disease. That is like requiring fire insurance companies to sell their fire insurance to buyers who call up after their house has already caught on fire.
Community rating requires health insurers to sell that insurance at the same standard rates as for everyone else, regardless of how sick and costly the buyers are when they first apply for the insurance. That is like requiring fire insurers to sell fire insurance at the same standard rates as for anyone else, to buyers after their houses have already caught on fire.
Of course, the standard rates for such fire insurance are going to be very high. The same will be true for health insurance subject to such regulation. There are better, far less costly ways of assuring that health insurance is available to everyone, including those with costly preconditions.
This employer mandate employment tax is reducing job and wage growth. Moreover, to further avoid that costly tax on employment, millions of workers across the country have been reduced to part time work of 29 hours a week or less, because the definition of a full time worker in the Obamacare legislation is 30 hours a week or more. That is driving down the net wages and incomes of middle class and working people, and increasing inequality as a result. Small companies around the 50 worker threshold are also restraining growth and employment for the same reasons. All of this has been killing economic growth, stunting the recovery, and greatly extending the misery of the recession well beyond previous recessions.
The individual mandate is increasing costs of health insurance in the individual health insurance market as well, for the same reasons. President Obama was quick to claim credit for Obamacare for supposedly restraining the growth of health costs. But that health cost slowdown he cited actually started back in 2003, when Health Savings Accounts (HSAs) were adopted by the then GOP Congress, as I will explain below. Barack Obama was an Illinois State Senator back then, and Obamacare was just a gleam in his eye.
So both the employer mandate and the individual mandate are effective tax increases, which are a drag on economic growth. Obamacare is financed by another half trillion in tax increases, which are also anti-growth.
How to Repeal and Replace Obamacare
But Obamacare can be replaced by free market, Patient Power, health care reforms based on sharply expanding patient power, control and choice over their own health care, which would assure health care for all (unlike Obamacare), with no employer mandate, no individual mandate, and sharply reduced taxes, federal spending and regulation. That would reverse the above anti-growth effects of Obamacare, and contribute to booming economic growth and recovery. Such Patient Power reforms have long been advocated by John Goodman, long time President of the National Center for Policy Analysis in Dallas.
The centerpiece of such Patient Power reforms would be to extend the same tax preference for employer provided health insurance to everyone, in the form of a refundable, universal, health insurance tax credit for all of roughly $2,500 per year ($8,000 for family coverage) for the purchase of private health insurance. The credit would not be meant to pay for the entire cost of such insurance, but only to help pay for it, just as the tax preference for employer provided insurance does not pay the entire cost of such insurance, but only helps pay for it.
There would be no government mandate of any sort to use the credit to buy any particular insurance with any particular terms or benefits. Each worker would be free to use the credit to buy the health insurance of the worker’s own choice, such as Health Savings Accounts (HSAs), discussed further below.
Workers would even be free to choose to use the credit to buy into coverage through Medicaid if they desired. The credit amount is equal to the CBO estimated average cost of adding one additional person to Medicaid coverage. This one feature assures coverage for all those with any pre-existing condition, because they could always choose Medicaid coverage, which includes anyone regardless of any pre-existing condition. But few would be expected to choose Medicaid, because of the fundamental problems of Medicaid as discussed below. Indeed, people would also be free to choose to use the credit to leave Medicaid for the purchase of any private health insurance of their choice, including HSAs.
The $2,500 credit would effectively operate as a reverse penalty in terms of lost opportunity cost for failing to use it. The taxpayer would effectively then leave $2,500 on the table in terms of his personal finances.
But socially, the amount of any unused credits would be sent to local safety net hospitals and clinics serving the poor in the local area. For example, if 1000 people in Dallas did not use the credit to buy any health insurance, $2,500,000 would be sent to safety net hospitals and clinics in Dallas specializing in serving the poor.
The second component of the Patient Power reforms would be to transfer control over Medicaid to the states, with the federal financing of the program provided through fixed, finite, block grants to each state, as under the enormously successful 1996 welfare reforms of the old, New Deal, Aid to Families with Dependent Children (AFDC) program. Currently, the federal financing for Medicaid is provided under a matching federal financing formula, paying more to each state the more the state spends on Medicaid. That is like the federal government paying the states to spend more on Medicaid.
Under the fixed, finite, block grant formula, the state knows that if its redesigned, state, Medicaid program costs more, it is going to pay 100% of the difference. But if the program costs less, it would keep 100% of the savings. These are ideal incentives for each state to weigh the costs against the benefits for Medicaid spending, and only pursue the spending that was worthwhile.
Preferably, each state would use its power under the Medicaid block grants to provide assistance to the poor through health insurance vouchers that could be used by the poor to supplement the universal health insurance tax credit to help the beneficiary to purchase the private health insurance of his or her choice, including HSAs. The voters of each state would then be free to determine how much assistance at what income levels would be necessary to assure that the state’s poor could buy essential health insurance, which would be very different for Mississippi and Louisiana than for New York and California, given their widely varying health cost structures, and income distributions.
Such Medicaid reform would be enormously beneficial for the poor. Medicaid currently pays so little to the doctors and hospitals to provide essential health care to the poor that they often face grave difficulties in finding timely, essential health care under the program. But with private health insurance purchased with the help of the universal health insurance tax credit, supplemented for the poor with Medicaid health insurance vouchers, the poor would enjoy the same health care as the middle class, because they would have the same health insurance as the middle class, which is forced by competitive market pressures to pay enough to the doctors and hospitals to ensure that those covered by the insurance can get timely, essential health care. This would mean an enormous gain for the poor as compared to the current Medicaid program.
As another safety net component of the Obamacare replacement plan, states would also be free to use a limited part of the Medicaid block grant funds to set up Uninsurable Risk Pools for those uninsured who had contracted costly preexisting conditions such as cancer or heart disease while uninsured. Any uninsured who could not obtain health insurance in the market for this reason would be able to obtain full coverage from the Uninsurable Risk Pool for an affordable fee based on the applicant’s ability to pay, which is necessary for the pool to serve as a safety net program. State taxpayers and part of the Medicaid block grant funds would subsidize the pool to cover all costs not covered by the fees charged to those covered by the pool.
Over 30 states have set up similar Uninsurable Risk Pools, and they have proven by experience to be a low cost means of covering those who could not obtain coverage in the market because of costly pre-existing conditions. That is because only a very small percentage of the population ever becomes truly uninsurable in the private market.
These reforms would assure universal health care for all. Everyone would have the universal health insurance tax credit, the poor would receive additional assistance to purchase private coverage, and everyone would continue to be backed up by Medicaid and the Uninsurable Risk Pools as safety nets. By contrast, Obamacare fails to achieve universal coverage, as CBO projects that even after 10 years, Obamacare would still leave 30 million Americans uninsured, and without any assured access to health care.
Health Savings Accounts
The health cost control functions of Obamacare would also be achieved far more effectively through HSAs and market competition. With an HSA, instead of all the money going to an insurance company, the insured pays only enough to purchase coverage with a high deductible, around the range of $5,000 to $6,000 a year or more. The health insurance then pays for all health care costs above that annual deductible.
The substantial cost savings from purchasing such high deductible insurance is then saved in the HSA to pay for health costs below the deductible. Whatever is not spent from the HSA can be withdrawn after a year and spent on anything, or saved tax free for health care in future years, and for retirement. Consequently, whatever the worker spends on health care from his HSA is effectively his own money.
That will leave him with full market incentives to control costs. He will question what health care is necessary, seek second opinions, and explore less costly alternatives. Moreover, since the patients now have full market incentives to control costs, doctors and hospitals will compete to control costs, the more patients in the marketplace have HSAs.
These HSA incentives have proven very effective in controlling costs in the real world. The Republican Congress passed modern HSAs in 2003. Since then, HSA coverage has been exploding, doubling year after year. Today, 30 million Americans have HSAs. And the slowdown in the growth of health costs first buds after HSAs were passed, and builds along with that growth in HSA coverage.
These HSAs are the classic Patient Power reform, because the patient has maximum power, choice and control over the HSA funds. The Patient Power alternative to Obamacare would expand the HSA option throughout the entire health care system. Workers even with employer provided coverage could use the universal health insurance tax credit to purchase preferred health insurance of their choice, which would include HSAs. This gives workers a market check on the power of employers over their health insurance, as the incentive of employers is to choose the coverage that works best for them rather than their employees. The universal credit could also be used to opt out of Medicaid for HSAs.
Also under the Medicaid block grants, the poor could use the health insurance vouchers to purchase HSAs if they prefer. Retirees should also be assured of the freedom to choose HSAs under Medicare Part C. Through these reforms, virtually everyone would enjoy the freedom to choose HSAs if they prefer. That, and the market competition between the alternative choices among the different insurers in all these markets would restrain the growth in health costs far more effectively than Obamacare, which only works to increase health costs.
Booming Economic Growth Through Health Care Reform
Repealing and replacing Obamacare with the above Patient Power reforms would further contribute to booming economic growth, in addition to previous reforms I have advocated in recent weeks in this column. Repealing Obamacare would automatically involve a tax cut of 16% in the capital gains tax, and in the taxation of corporate dividends. That would promote the capital investment that creates jobs and increases wages. It would also cut the top rate of the Medicare payroll tax by roughly one fourth, which would also create jobs and increase wages.
It would also end the effective taxation involved in the employer mandate and the individual mandate, again increasing jobs and wages. The millions of Americans now reduced to part time work would be liberated to find full time jobs again, restoring millions of middle class incomes. The restrained growth of health costs would also liberate businesses to invest more in job creation, and directly increase wages. That would result both from repealing the cost increasing effects of Obamacare, as well as from the cost restraining features of the replacement reforms.
[First published at Forbes.]
An anthropological look at this curious, intelligent, frededom-loving tribe.1. But I’m not even done with last year’s math book! homeschoolers whose parents have just a high school diploma still do better than the average public schooler. 4. And the four-pack of pianos. 5. School? What school? Allan Henderson Photo By: Eric Gelinas Photo By: tony puyol Photo By: dr_tr Photo By: David Goodman Photo By: Ingo Bernhardt Photo By: Liz Photo By: M 93 Photo By: anthony kelly Photo By: ShelahD [First published at The Federalist.]