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Tenther Judges “Radical Misreading Of The Constitution”: All Labor, Business Or Wall Street Regulation Is Unconstitutional

For more than two years, ThinkProgress has tracked “tentherism,” a radical misreading of the Constitution which claims that pretty much everything the federal government does is unconstitutional. Tenther lawmakers — who include members of Congress, senators, governors and at least one sitting Supreme Court justice — have claimed that child labor laws, Social Security, Medicare, Medicaid, clean air laws and the federal highway systemall violate the Constitution.

Even tentherism has a limit, however. While tenthers would all but eliminate our national leaders’ ability to solve national problems, they concede that state governments are still free to serve their citizens. Which is why a recent concurring opinion signed by U.S. Court of Appeals judges David Sentelle and Janice Rogers Brown is so disturbing. Under Sentelle and Brown’s vision, any attempt to protect workers, investors or consumers from unscrupulous businesses is in jeopardy:

America’s cowboy capitalism was long ago disarmed by a democratic process increasingly dominated by powerful groups with economic interests antithetical to competitors and consumers. And the courts, from which the victims of burdensome regulation sought protection, have been negotiating the terms of surrender since the 1930s.

First the Supreme Court allowed state and local jurisdictions to regulate property, pursuant to their police powers, in the public interest, and to “adopt whatever economic policy may reasonably be deemed to promote public welfare.” Then the Court relegated economic liberty to a lower echelon of constitutional protection than personal or political liberty, according restrictions on property rights only minimal review. . . . Thus the Supreme Court decided economic liberty was not a fundamental constitutional right, and decreed economic legislation must be upheld against an equal protection challenge “if there is any reasonably conceivable state of facts that could provide a rational basis” for it.

To translate this a bit, Sentelle and Brown disagree with the fact that representatives chosen by the American people, rather than unelected judges such as themselves, get to decide America’s economic policy. At best, their opinion calls for a return to a discredited era when judges could simply toss out laws protecting workers or consumers that the judges did not like.

Yet Sentelle and Brown also appear to be arguing for something even more radical than that. Their opinion complains that “economic liberty [is] not a fundamental constitutional right.” “Fundamental rights” are the very most protected rights under the Constitution. The right to be free from race discrimination is a fundamental right. As is the right to criticize the government. Sentelle and Brown’s opinion, however, concerns a law that removes a loophole exempting certain dairies from a 70 year-old system regulating the milk industry. In their apparent view, a law that regulates how dairy executives operate their business is exactly as offensive as a law that bans black people from voting.

Nor would their opinion stop there. The minimum wage regulates how dairy executives operate their business. As do child labor laws. Or workplace safety laws. Or laws that prevent dairies from selling spoiled or tainted milk. In Sentelle and Brown’s America, these laws likely would also be just as constitutionally suspect as a law that gives special rights to white people and not to black people.

Nor would their opinion stop there, for, indeed, their opinion laments that “economic legislation” as a whole is left to the people’s representatives and not to judges. The likely implication of Sentelle and Brown’s vision is any attempt to protect workers, or to regulate Wall Street, or to ensure that food and drugs sold in the marketplace are safe, or to enact any law protecting ordinary American consumers must be treated with exactly the same constitutional skepticism judges would bring to a law that tosses people who speak out against President Obama in jail.

Yet for all the many, many laws they would strike down, for all the anarchy they would create by sweeping away literally centuries of regulation in a single constitutional whirlwind, one thing is conspicuously absent from Sentelle and Brown’s opinion. At no point do they cite a single word of the Constitution which supports their sweeping assault on America’s power to govern itself.

This is not a coincidence. Those words do not exist.


By: Ian Millhiser, Think Progress, April 16, 2012

April 17, 2012 Posted by | Federal Courts | , , , , , , , | Leave a comment

Mitt Romney: The Corporate ‘Person’ And The One Percent

For Mitt Romney, the fundamental argument underpinning his presidential candidacy is his experience as a top executive at Bain Capital, the huge Boston-based private equity firm. That is especially true now because he must disown his most important achievement as Massachusetts governor — health care reform — in order to assuage the Tea Party extremists in his own party. But what does his business career tell us about the economic policies that might be pursued by the Republican front-runner — and about his worldview? Much could have been gleaned from the career history of George W. Bush, if only voters had paid closer attention to the unflattering reports of his experience as oilman and baseball team owner that accumulated in 1999 and 2000.

As the stories behind Romney’s success unfold in the coming campaign, the answer is likely to be that Bain Capital has prospered during the past quarter-century promoting a harsher brand of enterprise — one that ruins communities, impoverishes workers, and exports American jobs, all in the name of shareholder “value.”

In the current issue of New York Magazine, reporter Benjamin Wallace-Wells begins the process of unpacking what Romney and his colleagues in management consulting and private equity have wrought upon the U.S. economy. Wallace-Wells opens his narrative with a telling recent anecdote from the campaign trail in Iowa, where Romney lectured a disbelieving crowd on the issue of corporate personhood. When a heckler urged raising taxes on corporations, Romney replied with condescension: “Corporations are people too, my friend….”

Of course in the strictest sense he was right: The management, shareholders, and workers of every corporation are indeed human beings, and it is to those human beings that the money earned by corporations, after taxes, is paid. But as Wallace-Wells discovers, Romney and company have done much to change how those earnings are apportioned, encouraging massive increases in the amount appropriated by management and huge reductions in wages and benefits paid to workers. Creating incentives for managers to maximize stock prices — which would explode their own compensation — simultaneously undermined old-fashioned corporate responsibility toward employees, communities, and the nation as a whole. The deepest implication of the consultant creed that Romney represents is an ugly Darwinism — or so Wallace-Wells suggests.

But as consultants, there was only so much that Romney and the Bain crowd could do to change any corporation. Wanting to put their theories into practice, and sensing that big profits could ensue, they formed Bain Capital, whose record in corporate takeovers and turnarounds became the envy of the industry — and the ruin of thousands of workers and their families unlucky enough to become collateral damage.

The improved efficiency and productivity of private enterprise over the past two decades certainly were not without benefit to society, in lower prices, better technology and even, for a while, higher employment. But the perfect “alignment” of incentives between corporate managers and shareholders, without any regulatory brakes, led to worsening economic inequality, executive recklessness, stock manipulation, and a laser-like focus on the short term — in short, all of the ills that underlie American economic decline. Those same incentives have been trained on the political system to ensure decisions that benefit those same overpaid, seemingly sociopathic bankers and investors — now known as the “one percent.” They could scarcely hope for a more sympathetic candidate than the man from Bain.

By: Joe Conason, The National Memo, October 25, 2011

October 26, 2011 Posted by | Class Warfare, Conservatives, Consumers, Corporations, Economic Recovery, GOP, GOP Presidential Candidates, Health Reform, Ideologues, Middle Class | , , , , , , , , , | Leave a comment

Sharp Rise In Premiums Exposes Health Insurers’ Greed

According to a study released today by the Kaiser Family Foundation, 2011 health insurance premiums for employer-sponsored family healthcare benefits rose 9 percent over last year’s prices, leaving employees to pay, on average, $4,129 and employer contributions at $10,944. The number represents a surprising rise given that increases experienced in 2010 were just 3 percent.

So, why the sudden increase?

We know that Americans are using fewer medical services since the economy took a dive as people are staying away from the doctor and putting off non-life saving surgeries, such as knee and hip replacements, until they have more confidence that they will have the money required to pay deductibles and co-pays. We also know that fewer medical services are being utilized as a result of the increased popularity of Health Safety Accounts which require deductibles in excess of $2,000 per family, and employer provided policies that have increasingly large deductibles and co-pays.

As a result, can it possibly make sense that medical costs are increasing by the 9 percent reflected in the hefty premium hikes? In a word, no.

That will not stop the  anti-Obamacare forces, of course, from putting  the blame squarely on healthcare reform. In a sense, I suppose the Affordable Care Act does bear some of the responsibility—if you can consider motivating the  health insurers to falsely inflate their prices, by forcing them to do  the right thing, to be a blamable offense.

Beginning  next year, health insurers will be required to justify any increases in  premium rates above 10 percent. They will further be obligated to refund money to customers if an insurer is found to have spent less than  85 percent of their premium income on medical expenses. Thus, it is  hardly a stretch to conclude that the insurers are simply taking their  last chance to raise premium rates before they find themselves having to be more accountable to the government, particularly when they are pretty much admitting to as much.

As noted by Reed Ableson in The New York Times:

Throughout  this year, major health insurers have defended higher premiums—and  higher profits—saying that their expenses would rise once the economy  recovered and people believed they could again afford medical care. The struggling economy will probably keep suppressing demand for medical care, particularly as people pay a larger share of their own medical bills through higher deductibles and co-payments, according to benefits  consultants and others. About three-quarters of workers now pay part of  the bill when they go see a doctor, and nearly a third have a deductible  of at least $1,000 if they have single coverage, up from just one in 10  in 2006, according Kaiser.

So, the insurance  company defense is that they expect prices to rise sometime in the  future (clearly an undefined period) and they want to be ready. Somehow,  this justifies them to dramatically raise their premium prices now, at  time when their costs are actually less and their profits are through the roof.

Not only is such behavior astoundingly predatory, the insurers are playing a major role in keeping the economy in the dumps, as it is precisely this sort of unnecessary premium increase  that causes employers to avoid hiring more employees.

For those  who believe that we should leave it to the free market to establish the prices  in the medical system (of which insurance will always be a necessary  part), maybe they can explain how the system is working in this instance? In a time where patient control has risen dramatically as consumers decide if and how they will—or will not—spend on medical services now that they have greatly increased responsibility for the familiy medical bills as a result of much higher deductibles, and at a moment where there are substantially reduced claims coming  onto health insurers’ balance sheets due to diminished use of medical  services, exactly what is the free market concept that justifies an  insurance company raising their premium rates? What’s more, at a time when fewer people are using physician’s services, why would costs go up?

Free market principles would suggest that lower demand should produce lower  prices. But that is clearly not what is happening.

I know what some of you are thinking—but before you say it’s all the government’s fault, I would hasten to point out that, with an apples-to-apples comparison,  there are no substantial new regulations hitting physicians this year  that did not exist last year. And before you blame the president’s health care reform program for the  insurance companies’ usurious behavior, note that the two million young  people who have been added to the insurance roles as a result of  Obamacare’s permitting these people to stay on the family insurance  policy, would not increase an insurance company’s costs by 9% over last  year’s prices. Indeed, adding all of these healthy kids to the insurance pools  should help insurers spread risk more effectively while collecting  additional premium revenues.

The bottom line is that there is  absolutely no justification whatsoever for the health insurance industry hitting employers with a 9 percent increase. It is a simple matter of greed and it is  precisely that greed that has long made access to healthcare continuously more  difficult for middle class Americans.

By: Rick Ungar, Mother Jones, September 27, 2011

September 29, 2011 Posted by | Conservatives, Consumers, Economic Recovery, GOP, Government, Health Care Costs, Ideology, Insurance Companies, Middle Class, Politics, Republicans, Right Wing, Teaparty | , , , , , , , , | Leave a comment

GOP ‘Jobs Agenda’ Revives Ineffective Business Tax Giveaway

This week, House Majority Leader Eric Cantor (R-VA) released a memo outlining the House GOP’s supposed “jobs agenda.” In addition to being an assault on organized labor and recommending the elimination of environmental regulations that save tens of thousands of lives every year, the document proposes reviving some of the GOP’s favorite tax cuts, including the so-called “20% Small Business Tax Deduction.”

This particular idea made an appearance in both an “economic plan” that Cantor and House Speaker John Boehner (R-OH) presented to President Obama in 2009 and the GOP’s 2010 Pledge to America. The policy would allow businesses to deduct 20 percent of their income from their taxes, and in Cantor’s words, “immediately free up funds for small business people to retain and hire new employees, and reinvest in and grow their businesses.”

However, as Citizens for Tax Justice pointed out in 2009, there is little reason to think this tax break would be anything but a boondoggle:

The Republican plan proposes to allow a “small business” to take a tax deduction of 20 percent of its pretax income, whether the small business is a corporation or a sole proprietor. The plan defines a “small business” as one with 500 or fewer employees. It makes no distinction based on income. A “small business” making $100 million would get to deduct $20 million of its income right off the top. (Apparently, a company with slightly more than 500 employees would have an incentive to lay off staff to qualify for the tax break!) […]

A business tax cut is just about the least effective stimulus measure Congress could possibly enact. The tax cuts put more money in the hands of business. But there is very little correlation between a corporation’s cash position and its plans for investment—whether expanding capacity or hiring new employees. Businesses invest in expansion when they believe there will be an increase in the demand for the goods and services they provide. If they don’t anticipate a sales increase, they won’t expand no matter how many tax breaks the federal government gives them.

And the Center for American Progress’ Christian Weller noted in 2010 that, while the credit is restricted to business with fewer than 500 employees, it’s still “an ‘upside-down’ tax break that gives the largest benefits to those who already have the highest incomes” because the amount of the deduction is contingent on which tax bracket a business files in (the higher the tax bracket, the more the deduction is worth):

A deduction reduces the taxable income and thus the taxes that somebody has to pay. A business owner with lots of business and other income will thus get a government subsidy of 35 cents for each dollar in deduction, while a small business owner in the 15 percent tax bracket will get 15 cents for each dollar in deductions…Larger businesses could easily use this windfall to outcompete smaller businesses. A larger business owner with a 35 percent marginal tax rate will get a benefit that is 133 percent greater than the benefit that a smaller business owner with a 15 percent marginal tax rate gets for each dollar in tax deduction.

But for the GOP, this idea is so good that it’s worth bringing up over and over again.


By: Pat Garofalo, ThinkProgress, September 3, 2011

September 4, 2011 Posted by | Big Business, Businesses, Class Warfare, Congress, Conservatives, Corporations, Economy, Environment, GOP, Ideologues, Ideology, Jobs, Middle Class, Politics, Republicans, Right Wing, Small Businesses, Tax Increases, Tax Loopholes, Taxes, Teaparty, Unemployment | , , , | Leave a comment

Mark Pauly, Father of the Individual Mandate: “Either We Have To Have A Mandate Or Make Insurance Free For Everyone”

In 1991, economist Mark Pauly was the lead author of a Health Affairs paper attempting to persuade President George H.W. Bush and his administration to adopt a universal health-care proposal that would keep the government from eventually taking over the sector. “Our view is that excessive government intervention will make matters worse,” wrote Pauly and his co-authors. “Our strategy, therefore, is to design a scheme that limits governmental rules and incentives to the extent necessary to achieve the objectives.”At the heart of that strategy was the individual mandate, which would go on to be promoted by congressional Republicans, the Heritage Foundation, and Massachusetts Gov. Mitt Romney before being adopted by Democrats and becoming a bete noire of conservatives. I spoke to Pauly earlier this afternoon, and an edited transcript of our conversation follows.

Tell me about your involvement in the development of the individual mandate.

I was involved in developing a plan for the George H.W. Bush administration. I wasn’t a member of the administration, but part of a team of academics who believe the administration needed good proposals to look at. We did it because we were concerned about the specter of single payer insurance, which isn’t market-oriented, and we didn’t think was a good idea. One feature was the individual mandate. The purpose of it was to round up the stragglers who wouldn’t be brought in by subsidies. We weren’t focused on bringing in high risks, which is what they’re focused on now. We published the plan in Health Affairs in 1991. The Heritage Foundation was working on something similar at the time.

What was the reaction like after you released it?

There was some interest from Republicans. I don’t recall whether they formally wrote a bill or just floated it as an idea [It did make it into a bill — Ezra], but Democrats in Congress said it was “dead on arrival.” So that was the end of my 15 minutes.

Was the constitutionality of the provision a question, either in your deliberations or after it was released?

I don’t remember that being raised at all. The way it was viewed by the Congressional Budget Office in 1994 was, effectively, as a tax. You either paid the tax and got insurance that way or went and got it another way. So I’ve been surprised at that argument. But I’m not an expert on the Constitution. My fix would be to simply say raise everyone’s taxes by what a health insurance policy would cost — Congress definitely has the power to do that — and then tell people that if they obtain insurance, they’ll get a tax break of the same amount. So instead of a penalty, it’s a perfectly legal tax break. But this seems to me to angelic pinhead density arguments about whether it’s a payment to do something or not to do something.

That gets to one of the central questions in this argument, which is whether the individual mandate is a penalty for economic inactivity or whether it’s part of a broader system of regulations affecting a market for health care that we’re all participating in, whether we’re buying insurance that day or not.

I see it in the latter way. We thought it was a good idea to do everything possible to encourage people to get insurance. Subsidies will probably pick up the great bulk of the population. But the point of the mandate was that there are a few Evil Knievals who won’t buy it and this would bring them into the system. In our version, the penalty was effectively equal to the premium of a policy. You paid the penalty and you got the insurance. That’s one of my puzzlements here: In the new law, the actual level of the penalty is quite small compared to the price of a policy. It’s only about 20 percent of the cost of a policy.

Do you think the mandate is severable from the larger bill?

I think you could do that. I’d want to take some other things out of the bill, too. But the main part I favor and the part that deals with the uninsured are these subsidies for lower-middle-income people. The great bulk of them would take insurance with those breaks. That won’t go away. The mandate props up community rating, which I’m not a fan of. So I’d throw overboard both the mandate and the community rating. Then I’d add high-risk pools.

You say the mandate was developed as a way to avoid single-payer health care. As I see the evolution of this issue, Richard Nixon countered single-payer with an employer mandate, then Clinton co-opted the employer mandate and Republicans moved to an individual mandate, and then Obama co-opted the individual mandate. But there’s nowhere else to go, as far as I can tell. If the individual mandate dies, it seems to me that the eventual universal coverage solution will rely heavily on government programs — we’ll have single payer in fact even if we don’t have it in name.

I think there’s a slippery slope in that direction. I have mixed feelings about the mechanics of the current bill. Our idea was to have tax credits and very little additional government control over insurance markets, and the legislation has an awful lot of that. I believe you could achieve almost the same reduction of the uninsured with the subsidies and without the mandate. But CBO says that you leave about 40 percent of the uninsured population without coverage in that scenario. If we want to close that gap, then either we have to have a mandate or make insurance free for everyone and run by the government.

Interview By: Ezra Klein and posted in The Washington Post, February 1, 2011

February 2, 2011 Posted by | Affordable Care Act, Individual Mandate | , , , , , , , , , , , | Leave a comment

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