Paul C. "Chip" Knappenberger
Hmmm. A pounding blizzard hits the Northeast, followed by an Arctic cold blast. All the while, Florida is set to oust New York and join California and Texas as the top 3 most populous states in the U.S.
Here is the story according to the Associated Press:Florida to Surpass New York in Population
So while some folks yammer on about the perils of a warming climate (and try to force regulations upon us aimed at “doing something” about it), a great many others are actively seeking out warmer places to live. Perhaps not entirely for the climate, but that factor is almost assuredly not out of mind.
Maybe the public doesn’t think that its “health” is as “endangered” by a warmer climate as the U.S. Environmental Protection Agency contends.
The Senate is considering legislation to revive the emergency unemployment insurance program. These federally funded benefits were in place from mid-2008 to the end of 2013.
Federal policymakers like to spend money helping people in need, but there are large and less visible costs to such welfare legislation. Here are some reasons why new UI spending is not a good idea:
- The U.S. economy has been out of recession and growing for more than four years. The unemployment rate is down to 7 percent and jobs are being created. The time for “emergency” UI benefits has passed and it’s time for us to go back to the regular benefit structure of 26 weeks. We all want the economy to grow faster and create more jobs, but the way to do that is to enact free market policies, not more welfare spending.
- There is no free lunch. Extending UI benefits for another year would cost approximately $25 billion, which is money the federal government does not have. It would have to borrow every cent of the added spending, and thus impose those costs (plus interest) on working Americans in the future. Proponents of more UI spending point to sad stories of individuals out of work, but there will be far more pain inflicted on millions of Americans in coming years unless we get federal spending and debt under control.
- Large UI benefits are counterproductive because they push up unemployment, as discussed here. Long-term unemployment has been particularly high in recent years. Meanwhile, employers may have a bias against hiring people who have been unemployed a long time. The upshot is that if generous UI benefits discourage people from taking less-than-optimal job offers early on, it ends up hurting them later when it is harder to find any job. Government “help” often backfires.
- States can fund their own benefits. Nevada Sen. Dean Heller wants to “shrink the size” of the federal government, yet he is co-sponsoring legislation to revive emergency federal UI benefits because his state has high unemployment. But there is nothing stopping Nevada from funding its own extra UI benefits, and thus no need for Heller to try to impose the cost of his state’s problems on the other 49 states.
- From a political perspective, it would be a big mistake for Republican leaders to go along with the push to spend more on UI. GOP leaders already caved in with more spending on the recent Ryan-Murray budget deal. If they cave in on UI, cave in on the costly farm bill, and cave in on upcoming debt-limit legislation, there would be no reason for fiscal conservatives to show up and vote Republican in November.
Our current UI system is economically damaging, hugely complex, and fraud-ridden. Rather than adding to the system’s problems with higher benefits, policymakers should consider moving to a pro-growth savings-based UI system, as Chile has done.
Republican Senator Dean Heller of Nevada has co-sponsored a bill to revive the emergency unemployment insurance program. Senator Harry Reid is pleased as punch that Heller is breaking with the “tea party folks” on the issue.
What’s Heller justification for taking the big government side and jacking up welfare spending? He says: “Providing a safety net for those in need is one of the most important functions of the federal government. As Nevada’s unemployment rate continues to top the charts nationwide, many families and individuals back home do not know how they are going to meet their basic needs.”
Perhaps Heller should spend more time with the “tea party folks.” They would direct him to this document to see whether hand-outs are indeed “one of the most important functions of the federal government.” And they would explain to him the concept of federalism: If Nevadans want larger UI benefits, their own legislature could provide them without having to loot the national treasury.
Yet Heller styles himself as a staunch fiscal conservative—a tea partier—so he should know this. From Heller’s biography on his Senate website:
Since coming to Congress, Heller has fought for smaller government, the elimination of wasteful spending, and a balanced budget. He has been at the forefront of the fight for fiscal responsibility in Washington, voted against hundreds of billions in tax increases, and fought the expansion of government and out-of-control spending. Heller is also the only member of the Nevada delegation to vote against the Wall Street bailout. In addition, Heller has fought for fiscal policies that promote economic recovery and believes controlling government spending will create an environment where businesses can flourish and foster long-term economic growth.
Not only that, but Heller thinks that “big government is not the answer to fixing our economy. Congress needs to control wasteful spending and shrink the size of government … Capitalism is the foundation of America’s prosperity. We should embrace these principles, not run from them.”
Furthermore, Heller argues that “this government has been on a massive spending spree for too long, and it is time for this reckless behavior to end. As an opponent of the stimulus and the only member of the Nevada delegation to vote against the bailout, I believe it is critical to rein in spending, address the yearly deficits, and get government debt under control.”
These are all laudable goals. I couldn’t have said it better myself. But it is just empty rhetoric if one also goes around supporting borrow-and-spend welfare legislation.
Boost Worker Pay - and Make the United States More Competitive - by Gutting the Corporate Income Tax
Daniel J. Mitchell
The business pages are reporting that Chrysler will be fully owned by Fiat after that Italian company buys up remaining shares.
I don’t know what this means about the long-term viability of Chrysler, but we can say with great confidence that the company will be better off now that the parent company is headquartered outside the United States.
This is because Chrysler presumably no longer will be obliged to pay an extra layer of tax to the IRS on any foreign-source income.
Italy, unlike the United States, has a territorial tax system. This means companies are taxed only on income earned in Italy but there’s no effort to impose tax on income earned - and already subject to tax - in other nations.
Under America’s worldwide tax regime, by contrast, U.S.-domiciled companies must pay all applicable foreign taxes when earning money outside the United States - and then also put that income on their tax returns to the IRS!
And since the United States imposes the highest corporate income tax in the developed world and also ranks a dismal 94 out of 100 on a broader measure of corporate tax competitiveness, this obviously is not good for jobs and growth.
No wonder many American companies are re-domiciling in other countries!
Maybe the time has come to scrap the entire corporate income tax. That’s certainly a logical policy to follow based on a new study entitled, “Simulating the Elimination of the U.S. Corporate Income Tax.”
Written by Hans Fehr, Sabine Jokisch, Ashwin Kambhampati, Laurence J. Kotlikoff, the paper looks at whether it makes sense to have a burdensome tax that doesn’t even generate much revenue.
The U.S. Corporate Income Tax…produces remarkably little revenue - only 1.8 percent of GDP in 2013, but entails major compliance and collection costs. The IRS regulations detailing corporate tax provisions are tome length and occupy small armies of accountants and lawyers. …many economists…have suggested that the tax may actually fall on workers, not capitalists.
Regarding who pays the tax, shareholders bear the direct burden of the corporate tax, of course, but economists believe workers are the main victims
Statists would like us to believe that capitalists and workers are enemies, but that’s utter nonsense. Both prosper by cooperating. There’s a very strong correlation between a nation’s capital stock (the amount of investment) and the compensation of its workers.
So it’s no surprise to see that’s precisely what the authors found in their new research.
This paper posits, calibrates, and simulates a multi-region, life-cycle dynamic general equilibrium model to study the impact of U.S. and global corporate tax reforms. …when wage taxation is used as the substitute revenue source, eliminating the U.S. corporate income tax, holding other countries’ corporate tax rates fixed, engenders a rapid and sustained 23 to 37 percent higher capital stock… Higher capital per worker means higher labor productivity and, thus, higher real wages.
The impact is significant, both for worker compensation and overall economic output.
…real wages of unskilled workers wind up 12 percent higher and those of skilled workers 13 percent higher. …on balance, output rises - by 8 percent in the short term, 10 percent in the intermediate term, and 8 percent in the long term… The economy’s endogenous expansion expands existing tax bases, with the increased revenue making up for roughly one third the loss in revenue from the corporate income tax’s elimination.
By the way, the authors bizarrely then write that “we find no Laffer Curve,” but that’s presumably because they make the common mistake of assuming the Laffer Curve only exists if a tax cut fully pays for itself.
In other cases (such as found in this study), there is still substantial revenue feedback.
And I guess we shouldn’t be surprised that full repeal of the corporate income tax doesn’t raise revenue. The Tax Foundation, after all, estimates that the revenue-maximizing rate is about 14 percent.*
Now that I’m done nit-picking about the Laffer Curve, let’s now look at one additional set of results from this new study.
…each generation, including those initially alive, benefits from the reform, with those born after 2000 experiencing an 8 to 9 percent increase in welfare.
I should point out, incidentally, that economists mean changes in living standards when they write about changes in “welfare.” It’s a way of measuring the “well being” of society, sort of like what the Founders meant when they wrote about “the general welfare” in the Constitution.
But, once again, I’m digressing.
Let’s focus on the main lesson from the paper, which is that the corporate income tax imposes very high economic costs. Heck, even the Paris-based Organization for Economic Cooperation and Development (which is infamous for wanting higher tax burdens on companies) admitted that the levy undermines prosperity.
The study even finds that workers would be better off if the corporate income tax was replaced by higher wage taxes!
To learn more about the topic, here’s a video I narrated many years ago about cutting the corporate income tax. There was less gray in my hair back then, but my analysis still holds today.Cutting the U.S.’s Corporate Tax Rate
* For the umpteenth time, I want to emphasize that the goal should not be to maximize revenue for politicians. Instead, we should strive to be on the growth-maximizing point of the Laffer Curve.
From the Boston Globe, “Virtuoso’s flutes destroyed by U.S. Customs”:
…Flute virtuoso [Boujemaa Razgui], who performs regularly with The Boston Camerata[,] lost 13 handmade flutes over the holidays when a US Customs official at New York’s JFK Airport mistook the instruments for pieces of bamboo and destroyed them.
“They said this is an agriculture item,” said Razgui, who was not present when his bag was opened. “I fly with them in and out all the time and this is the first time there has been a problem. This is my life.” When his baggage arrived in Boston, the instruments were gone. He was instead given a number to call. “They told me they were destroyed,” he says.
One reader recalled the travel woes of distinguished Polish pianist Kristian Zimerman, as recounted by the L.A. Times:
Zimerman has had problems in the United States in recent years. He travels with his own Steinway piano, which he has altered himself. But shortly after 9/11, the instrument was confiscated at JFK Airport when he landed in New York to give a recital at Carnegie Hall. Thinking the glue smelled funny, the TSA decided to take no chances and destroyed the instrument.
Yes, by all means, let’s put federal agencies in charge of as many aspects of our lives as possible.
California’s S.B. 375 mandates that cities increase the population densities of targeted neighborhoods because everyone knows that people drive less and higher densities and transit-oriented developments relieve congestion. One problem, however, is that transportation models reveal that increased densities actually increase congestion, as measured by “level of service,” which measures traffic as a percent of a roadway’s capacity and which in turn can be used to estimate the hours of delay people suffer.
The California legislature has come up with a solution: S.B. 743, which exempts cities from having to calculate and disclose levels of service in their environmental impact reports for densification projects. Instead, the law requires planners to come up with alternative measures of the impacts of densification.
On Monday, December 30, the Governor’s Office of Planning and Research released a “preliminary evaluation of alternative methods of transportation analysis. The document notes that one problem with trying to measure levels of service is that it is “difficult and expensive to calculate.” Well, boo hoo. Life is complicated, and if you want to centrally plan society, you can either deal with difficult and expensive measurement problems, or you will botch things up even worse than if you do deal with those problems.
The paper also argues that measuring congestion leads people to want projects that might actually relieve congestion, such as increasing roadway capacities. This would be bad, says the paper, because increased capacities might simply “induce” more travel. The fact that such increased travel might actually produce some economic benefits for the state is ignored. Instead, suppressing travel (and therefore suppressing economic productivity) should be the goal.
The document suggests five alternative measures of the impacts of densfication on transportation:
- Vehicle miles traveled;
- Auto trips generated;
- Multi-model level of service;
- Auto fuel use; and
- Motor vehicle hours traveled.
There are many problems with these alternatives. First, they really aren’t any simpler to reliably calculate than levels of service. Second, they ignore the impact on people’s time and lives: if densification reduces per capita vehicle miles traveled by 1 percent, planners will regard it as a victory even if the other 99 percent of travel is slowed by millions of hours per year. Third, despite the “multi-modal” measure, these measures ignore the environmental impacts of transit. For example, they propose to estimate automotive fuel consumption, but ignore transit energy consumption.
Worst of all, the final “measure” proposed by state planners is to simply presume, without making any estimates, that there is no significant transportation impact from densification. After all, if you add one vehicle to a congested highway and traffic bogs down, can you blame that one vehicle, or is everyone else equally to blame? If the latter, then it seems ridiculous, at least to the planners, to blame densification for increased congestion when the existing residents contribute to the congestion as well. By the same token, if an airplane is full, and one more person wants to take that flight, then the airline should punish everyone who is already on board by simply delaying the plane until someone voluntarily gets off.
The real problem is that planners and planning enthusiasts in the legislature don’t like the results of their own plans, so they simply want to ignore them. What good is an environmental impact report process if the legislature mandates that any impacts it doesn’t like should simply not be evaluated in that process?
All of this is a predictable outcome of attempts to improve peoples’ lives through planning. Planners can’t deal with complexity, so they oversimplify. Planners can’t deal with letting people make their own decisions, so they try to constrict those decisions. Planners can’t imagine that anyone wants to live any way but the way planners think they should live, so they ignore the 80 to 90 percent who drive and want to live in single-family homes as they impose their lifestyle ideologies on as many people as possible. The result is the planning disaster known as California.
A second marriage, it is said, is the triumph of hope over experience. So is a European Union debate over defense. At the latest European Council meeting in late December, European leaders again promised to do more than free ride on the U.S.
It was hard enough to get the Europeans to divert cash from their generous welfare states during the Cold War when there was a plausible enemy. The financial crisis, enduring recession, and Eurozone imbroglio have sapped what little interest most Europeans had in maintaining real militaries. Earlier this year a top NATO official admitted at a private luncheon that “there is no chance for budget increases, not even for keeping spending levels as they are.”
The Europeans have been embarrassed when going to war. They ran out of missiles when fighting the grand legions of Libya’s Muammar Gaddafi. France’s Little Napoleon, Francois Hollande, had to turn to the U.S. for air “lift” to get his forces to Mali in 2012.
So European leaders have been issuing calls for better if not more spending—in fact, “smart defense” has become a NATO mantra. But it doesn’t matter how smart you spend if you don’t spend much.
The latest Council meeting delivered what we have come to expect from the European Union: grandiose promises and minimal expectations. Europe will grow only more dependent on America—at least if Americans allow it.
According to the Stockholm International Peace Research Institute, only Britain, France, Germany, Italy, and Spain fall within world’s top 20 military spenders. Even that sounds more impressive than it really is. London spends 8.9 percent of Washington’s outlays on the military. Madrid spends 1.7 percent.
Even the Central and Eastern Europeans, who claim to worry about Russia, are laggards. As I point out in the American Spectator:
Whatever their rhetoric, these countries either don’t feel threatened or don’t want to be bothered to create even a minimal deterrent capability. They all prefer that NATO, meaning America, prepare for a war which would be disastrous and would serve no conceivable U.S. interest.
The European Council admitted as much in its discussion of the Common Security and Defense Policy: “Defense budgets in Europe are constrained, limiting the ability to develop, deploy and sustain military capabilities.” Instead of urging more outlays, the Council called “on the Member States to deepen defense cooperation.” But what if even the continent’s “big” powers, Britain and France, are shrinking their militaries?
Indeed, Council members indicated they weren’t very serious even as they approved the latest communiqué. First, Great Britain sought to keep Europe dependent on America through NATO. Prime Minister David Cameron explained: “It isn’t right for the European Union to have capabilities, armies, air forces and the rest of it.”
Second, France found little support from its fellow EU members for French military operations in Mali and the Central African Republic. Paris did, however, win a Council call for a report on how the EU could address the “challenges and opportunities arising for the Union.”
Europe will almost certainly continue its downward military descent. The Europeans don’t believe they have to do anything, other than the bare minimum necessary to quiet U.S. complaints. Their only fear is that Washington might eventually tire of playing GloboCop for countries that prefer to devote their resources to economic development and social welfare.
However, the U.S. should start saying no to European dependency. The American military’s job is to most effectively and inexpensively defend America—its people, territory, liberty, and prosperity. Safeguarding the European welfare state should not be Washington’s objective.
The U.S. should turn responsibility for Europe’s defense over to Europe and bring America’s troops home. It’s time to dismantle the Cold War alliance and treaty structure. And for America to invite Europe to take up its proper military responsibilities in a new and changing world.
More than a few places in this world people are trying to better themselves by saving money. Many people without access to formal financial services (or awareness of their benefits) are trying to amass capital by squirreling away cash. If wariness and luck prevent that money from being stolen, their nest-eggs might provide life-saving health care, seed capital for businesses, the means to move, education for children, and numerous other enhancements to poor people’s well-being. I say good for them. But there are people out there who don’t care if government policy stands in the way.
Unknown to many cash-hoarders—unsophisticated investors who should have our sympathy—official government policy in many countries is to inflate the currency. Under stable conditions, such policies might reduce the value of the existing stock of money at a rate of about 2% per year.
That is a boon to governments, of course, which are typically debtors. The policy quietly reduces real government debt by 2% annually without need of raising official taxes. And whether they spend the money themselves or infuse their banking sectors with liquidity, governments use monetary policy to curry favor with important political constituencies, thus solidifying power.
Inflation is a mixed bag for the business sector. In some ways, it can make planning more difficult—the government’s willingness and ability to maintain inflation at a constant rate is often in doubt. But inflation can also help the business sector by spurring exports. (Nevermind that it raises the cost of imports. Those costs are mostly paid in small increments by the great mass of politically disorganized consumers.)
Inflation does a wonderful favor for business owners by awarding them the gains from increased productivity at the expense of workers. As George Selgin articulated in the pages of Cato Policy Report fifteen years ago, when the costs of inputs fall, competition should ordinarily cause prices to drop. This “good” deflation would cause a worker making the same wage year over year to enjoy increased purchasing power and a better life. But inflation deals workers whose wages remain constant a continuing real pay cut. That means employers don’t have to reduce the pay of stagnant workers in a deflationary environment. Workers have to get a raise from employers to keep up or get ahead.
All of us wealthy and well-educated—we, the “upwardly mobile”—seek and get raises or change jobs often enough to keep our salaries ahead of inflation. And we know enough to invest our savings in assets that will maintain value or increase in value relative to inflationary cash.
But not everyone is in a position to do this. Whether it’s lack of knowledge or lack of access, a person starting out to accumulate wealth by saving money will climb a slope made slippery by inflation. A person who saves $10 cash per month for 10 years at 2% inflation will lose more than $110 dollars-worth of value—nearly a year’s worth of savings—over that decade. That’s when inflation is steady and low.
More than once, I’ve come across commentators who are so interested in inflation as an economic matter that the existence of people seems to have come out of the equation. There are people in the world who are trying to better themselves in the best way they know how. Inflation is making that harder for them, and that’s wrong.
If government policy were to send armed personnel into the homes of the less-well-off to seize 2% of their wealth every year, or 10% every ten years, I have little doubt that our smart, thoughtful, and considerate commentator class would object to the rank unfairness of such a policy. But their green eyeshades seem to blind them to the fact that inflation is unjust.
There are parries to this argument. Inflation is not the greatest concern of many of the world’s poorest. That’s true, but nothing about that denies the injustice of taking wealth from poor people. A more subtle argument is that there is no guarantee that money will hold value. That’s also true, but when a government says things like “full faith and credit” about the money it is debasing, we are in the realm of fraud. We could at least let our sympathies lie with the poor and under-educated people who think they can store value by holding governments’ fiercely defended “legal tender.”
Last week, Ross Tilchin at Brookings asked whether a stronger appeal to libertarian voters could help Republicans win elections. He was skeptical:
First, according to the [Public Religion Research Institute] PRRI poll, libertarians represent only 12% of the Republican Party. This number is consistent with the findings of other studies by the Pew Research Center and the American National Election Study. This libertarian constituency is dwarfed by other key Republican groups, including white evangelicals (37%) and those who identify with the Tea Party (20%).
Tilchin’s use of the phrase “consistent with” to describe the findings of other studies is, well, interesting. In fact, other studies have found almost three times more libertarians in the Republican Party than PRRI’s poll.
As I blogged at Cato and found in a study for FreedomWorks, libertarian views in the Republican Party are the highest level in a decade. According to my analysis of American National Election Studies data, libertarians represent 35 percent of the Republican Party, an increase of 9 percentage points since 2000. Gallup’s own studies confirm this trend: libertarian views represent 34 percent of the Republican Party, a 19 percentage point increase since 2002. See chart below.
How exactly are 35 percent and 34 percent “consistent with” 12 percent? A better word to describe PRRI’s finding would be “outlier.”
As Karlyn Bowman pointed out at Brookings’ own forum on the subject, PRRI’s finding that libertarians are 7 percent of Americans is at the very low end of other estimates of libertarian voters. In 2011, Pew’s Typology Survey found 9 percent libertarians. In 2012, Gallup’s Governance Survey found 25 percent libertarians. Emily Ekins averaged seven Reason-Rupe polls from 2011 to 2012 and found libertarians represented 24 percent of Americans.
David Boaz and I, in our original study on the “Libertarian Vote,” took a conservative middle ground, estimating that libertarians were 15 percent of voters in 2004. Of course, even a conservative 15 percent is twice as many libertarians as the 7 percent PRRI choose to recognize. And, picking a smaller number, as PRRI does, makes it easier to question or dismiss libertarian’s importance.
Fortunately, there’s a simple way to make PRRI’s data “consistent with” other findings. PRRI’s methodology defines libertarians based on nine issue questions, ranking answers for their libertarian-ness on a 7-point scale, with 1 being the most libertarian, and 7 being the least. Robbie Jones and the other authors at PRRI defined “libertarians” as respondents who score between 9 and 25 points. Respondents who scored 26-33 were categorized as “lean libertarian.”
If we add PRRI’s two categories of “libertarian” and “lean libertarian,” the data find 23 percent of Americans are broadly libertarian. Using this definition, PRRI’s data are actually quite “consistent with” the findings from other studies:
- PRRI’s data show libertarians represent 36 percent of Republican Party in 2013, consistent with ANES and Gallup data;
- Libertarians are about the same size as other key constituencies in the Republican Party, such as white evangelicals;
- Libertarians represent 56 percent, or half, of the tea party, consistent with the finding in Emily Ekins and my Cato study, “Libertarian Roots of the Tea Party.”
Of course, how to define libertarians and who counts as a “real” libertarian is a favorite parlor game of libertarian intellectuals. Do you count only those “hard core” libertarians who have rigorously consistent beliefs? Or, do you count those who hold broadly libertarian views or instincts that are different than conservatives or liberals? If you think this is a simple question, just amuse yourself with GMU economist Bryan Caplan’s 64-question “Libertarian Purity Test.”
What is missing from the PRRI study is that it doesn’t deal with this past literature, or make an argument for its methodology, one way or the other. Particularly when your definition of libertarians is an outlier, your readers deserve to have the finding placed in context.
Regardless, the very fact that PRRI and Brookings did this study is an important milestone. For many years, libertarian voters were a research topic of interest to a small group of think tankers, writers, and contrarian political strategists, as well as a handful of curious academics. But when the Ford Foundation funds a major study on libertarian voters, and Brookings hosts a panel with scholars PRRI, AEI, Cato, and the Ethics & Public Policy Center, I take this as a sign that libertarians are no longer politically ignorable.
That’s a good thing.
K. William Watson
Some may consider 2013 to mark the beginning of an important new era in U.S. trade policy. The year began with President Obama proposing an ambitious U.S.–EU trade agreement in his state of the union address and ended with progress at the WTO after 12 years of stagnation. But if we look past the hype and grand expectations for the future, we can see that there was only one major change in U.S. trade policy that actually occurred in 2013.
When the Generalized System of Preferences program expired on July 31, U.S. tariffs increased on imports from more than 120 developing countries.
The program would have been extended but for the opposition of Republican Senator Tom Coburn of Oklahoma. You can read news accounts to learn about the saga in greater detail, but let me give you the annotated summary—a Republican senator put a hold on a bill that would prevent a tax increase because it didn’t include enough other tax increases to overcome the “expense” of Congress failing to raise taxes.
Yes, it defies logic.
Unfortunately, this bizarre incident is more than just a case study into the peculiar facets of American legislative politics, it also brought us the year’s only significant change in U.S. trade law.
But don’t worry. Most observers are confident that Congress will eventually extend the GSP program and retroactively refund all the duties collected since its expiration.
Just so we’re clear, the elected masters of our economy raised taxes on poor people in poor countries (and the Americans those people do business with), but they didn’t mean to and they’re going to fix it. When they get around to that is anyone’s guess.
The Affordable Care Act is like a big box of Christmas presents: you keep rummaging around in the peanuts and find hidden treasures. Or hidden costs, as it were. Here’s one I hadn’t heard of until today:
Office workers in search of snacks will be counting calories along with their change under new labeling regulations for vending machines included in President Barack Obama’s health care overhaul law.
Requiring calorie information to be displayed on roughly 5 million vending machines nationwide will help consumers make healthier choices, says the Food and Drug Administration, which is expected to release final rules early next year. It estimates the cost to the vending machine industry at $25.8 million initially and $24 million per year after that, but says if just .02 percent of obese adults ate 100 fewer calories a week, the savings to the health care system would be at least that great.
The rules will apply to about 10,800 companies that operate 20 or more machines. Nearly three quarters of those companies have three or fewer employees, and their profit margin is extremely low, according to the National Automatic Merchandising Association. An initial investment of $2,400 plus $2,200 in annual costs is a lot of money for a small company that only clears a few thousand dollars a year, said Eric Dell, the group’s vice president for government affairs.
“The money that would be spent to comply with this - there’s no return on the investment,” he said.
In my experience, vending machines shuffle their offerings fairly frequently. If the machine operators have to change the calorie information displayed every time they swap potato chips for corn chips, then $2,200 seems like a conservative estimate of costs. But then, as Hillary Clinton said when it was suggested that her own health care plan would bankrupt small businesses, “I can’t be responsible for every undercapitalized small business in America.”
Much of the world has just celebrated the most sacred Christian holiday, yet persecution of Christians has never been fiercer, especially in the Middle East. Other faiths also suffer varying degrees of persecution.
Nonbelievers also often are mistreated. The lack of religious belief is less likely to be punished by communist and former communist regimes. But such systems penalize almost all independent thought.
Moreover, atheists and other freethinkers are at special risk in theocratic and especially aggressively Muslim states. The International Humanist and Ethical Union recently published its second annual report, Freedom of Thought 2013: A Global Report on the Rights, Legal Status, and Discrimination Against Humanists, Atheists, and the Non-religious.
America’s Founders enshrined religious liberty in the U.S. Constitution because they understood the imperative of freedom of conscience and thought. If a state is unwilling to respect a person’s most fundamental and intimate views, it is unlikely to leave them free to act. Argued IHEU, “when thought is a crime, no other freedom can long survive.”
Freedom of Thought 2013 addresses the status of the non-religious. Unfortunately, governments routinely violate the liberty not to believe.
Concluded IHEU: “the overwhelming majority of countries fail to respect the rights of atheists and freethinkers. There are laws that deny atheists’ right to exist, revoke their right to citizenship, restrict their right to marry, obstruct their access to public education, prohibit them from holding public office, prevent them from working for the state, criminalize their criticism of religion, and execute them for leaving the religion of their parents.”
Restrictions are many. IHEU figured that “in effect you can be put to death for expressing atheism in 13 countries,” all Muslim.
Persecution often fades into less virulent but still offensive discrimination. Noted IHEU: “Other laws that severely affect those who reject religion include bans on atheists holding public office, and some governments require citizens to identify their religion—for example on state ID cards or passports—but make it illegal, or do not allow, for them to identify as an atheist or as non-religious.”
Moreover, “Religious privilege is one of the most common forms of discrimination against atheists.” More controversially the organization includes “religious discrimination, or religious privilege, in this report even when its supporters claim it is merely ceremonial or symbolic.” The latter is common in the U.S.
Not all persecution emanates from government. Extra-legal violence is common and governments often do little or nothing in response.
Some religiously faithful may be inclined to dismiss the freedom not to believe. However, Matt Cherry, the report’s lead author, emphasizes that “the fight for the rights of the non-religious [are] inextricable from the fight for the rights of the religious.” All possess a fundamental right of belief and conscience, and an equally fundamental right to act on belief and conscience.
Obviously, one can disagree over details, including IHEU’s individual assessments. Nevertheless, Freedom of Thought 2013 addresses a genuine and very serious threat to liberty. Governments the world limit the most basic freedoms of belief, thought, and expression. Moreover, it is easy to ignore the impact on individual lives if one shares the majority’s religious or other worldviews.
IHEU judges 46 countries (counting the Palestinian territories) as involving “severe discrimination.” The greatest problems come from the 29 nations categorized as guilty of “grave violations”: Afghanistan, Bangladesh, Brunei, China, Comoros, Egypt, Eritrea, Gambia, Indonesia, Iran, Iraq, Jordan, Kuwait, Libya, Malaysia, Maldives, Mauritania, Morocco, Nigeria, North Korea, Pakistan, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Swaziland, United Arab Emirates, and Yemen.
Americans should review their practices at home. Moreover, U.S. officials should include the liberty of non-believers in Washington’s human rights dialogue with other nations.
The rest of us also should promote freedom of conscience abroad. Not by coercing and invading other countries, but by convincing, encouraging, pestering, pushing, pressuring, and embarrassing. Everyone, from citizens to policymakers, has a stake in expanding liberty for those around us.
Washington offers many opportunities for schadenfreude, that wonderful German word which means to enjoy the misery of others. The realization of liberal professionals who voted for Barack Obama that they will be forced to spend more on health insurance was one of those moments.
Reported the New York Times: “Many in New York’s professional and cultural elite have long supported President Obama’s health care plan. But now, to their surprise, opera singers, music teachers, photographers, doctors, lawyers and others are learning that their health insurance plans are being canceled and they may have to pay more to get comparable coverage, if they can find it.”
It’s not that they didn’t have policies that they liked and wanted to keep. It seems that the policies were too good.
Explained the Times: “The rationale for disqualifying those policies, said Larry Levitt, a health expert at the Kaiser Family Foundation, was to prevent associations from selling insurance to healthy members who are needed to keep the new health exchanges financially viable.” Unfortunately for these privileged Obama supporters, most make too much money for even the generous subsidies available under the exchanges.
Admittedly, it takes a few moments to stop laughing after reading this article. If you believe in social justice and all that, you shouldn’t whine about the government running up your costs to fulfill its elaborate social engineering plan. After all, that’s the purpose of liberal government—create Rube Goldberg policy contraptions that promote some higher good. So what if you get run over in the process? Eggs and omelets as the old Communists liked to say.
Still, it is striking how government is destroying civil society institutions which meet real human needs. Even stranger is the possible federal attack on charities and hospitals which are paying the premiums for low-income patients.
For instance, the Los Angeles nonprofit A Better LA has begun to subsidize health insurance for low-income people through the California state exchange. Some hospitals are doing the same. Melinda Hatton of the American Hospital Association told the Journal: “We thought it was the kind of thing the Affordable Care Act would really support and encourage.”
Insurers are counting on covering well-off, and presumably healthier, professionals, not less well-off, and presumably less healthy, nonprofessionals. Reported the Journal: “Help from nonprofits or hospitals could speed the arrival of less healthy customers into the exchanges, outpacing the arrival of younger, healthier people.”
The administration has yet to state a clear position. But Health and Human Services has indicated its “concerns with this practice, because it could skew the insurance risk pool.”
Government is threatening civil society institutions, ranging from charitable to business, which are aiding the poor, disadvantaged, and uninsured! True, the aid process is disorganized, decentralized, uncertain, and uneven. But that is society.
This complex interplay is what makes community. Discerning and addressing needs, organizing diverse approaches, and responding to the people in front of you is what genuine compassion, which once meant “suffering with,” is all about. David Beito has detailed the once important role of mutual aid societies, and how they were replaced by “impersonal bureaucracies controlled by outsiders,” such as Obamacare health exchanges.
Ultimately, Barack Obama and his allies have the world backwards. They believe that government trumps society, and the solution to any problem should start in Washington. Individual choice and community relations are unimportant.
Professional associations and charities demonstrate that society should be the starting point. People should be not just allowed but encouraged to organize to solve problems. Not only are individual lives bettered, but the sinews of community are strengthened. Instead of supplanting other institutions, government should act as the ultimate backstop to help meet social needs which are not otherwise addressed.
As my colleague David Boaz observed, Obamacare is “another example of a big-government, left-liberal policy that is pushing people away from cooperation and community and toward atomistic individualism.” It’s quite an accomplishment. Who says President Obama is a failure!?
Those engaged in my line of work – explaining and defending the Constitution, the most liberty-friendly system of governance yet devised – have been kept busy by the current occupant of the White House and the executive agencies he controls. President Obama’s signature health care legislation alone provides endless “teachable moments” regarding our founding document. To paraphrase Nancy Pelosi, the more we find out about Obamacare and its implementation, the more constitutional violations we find.
But if Obamacare is the biggest constitutional – let alone policy – disaster that Barack Obama has inflicted on the nation, it alas is far from the only one. As I put it in a new Forbes.com op-ed:
One of Barack Obama’s chief accomplishments has been to return the Constitution to a central place in our public discourse.
Unfortunately, the president fomented this upswing in civic interest not by talking up the constitutional aspects of his policy agenda, but by blatantly violating the strictures of our founding document. And he’s been most frustrated with the separation of powers, which doesn’t allow him to “fundamentally transform” the country without congressional acquiescence.
But that hasn’t stopped him. In its first term, the administration launched a “We Can’t Wait” initiative, with senior aide Dan Pfeiffer explaining that “when Congress won’t act, this president will.” And earlier this year, President Obama said in announcing his new economic plans that “I will not allow gridlock, or inaction, or willful indifference to get in our way.”
And so, as we reach the end of another year of political strife that’s fundamentally based on clashing views on the role of government in society, I thought I’d update a list I made two years ago and hereby present President Obama’s top 10 constitutional violations of 2013.
Here’s the list (only half of which is Obamacare-related):
- Delay of Obamacare’s out-of-pocket caps.
- Delay of Obamacare’s employer mandate.
- Delay of Obamacare’s insurance requirements.
- Exemption of Congress from Obamacare.
- Expansion of the employer mandate penalty through IRS regulation.
- Political profiling by the IRS.
- Outlandish Supreme Court arguments.
- Recess appointments.
- Assault on free speech and due process on college campuses.
- Mini-DREAM Act.