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Rational Irrationality

Obamacare Supreme Court Case is a Bad Joke

Forgive me if a wry tone eludes me when it comes to today’s proceedings in the Supreme Court. As far as I am concerned the whole thing is absurd—yet another example of how America’s antiquated system of government, and its determined refusal to accept the economic realities of the modern world, is undermining its future.

Early on in this morning’s session, Justice Anthony Kennedy, the swing vote on the court, said that the U. S. government had a “very heavy burden of justification” to show that an individual mandate to purchase health-care insurance was constitutional. Really? Only if Kennedy and his Republican-appointed colleagues are willing to throw out economic logic as well as seventy years of legal precedent, which, judging by their harsh questioning of Solicitor General Donald Verrilli, Jr., they may well be.

The economics isn’t very complicated. The health-care industry, which makes up about a sixth of the economy, is rife with inefficiency, waste, and coverage gaps. In seeking to remedy some of these problems, the Obama Administration made a deal with the private-insurance industry—the same deal Mitt Romney made when he was governor of Massachusetts. On the one hand, the federal government barred the insurers from discriminating against the sick and the elderly, thereby raising the industry’s costs.

On the other hand, the feds obliged uninsured individuals to purchase coverage, thereby expanding the insurers’ revenues. We can argue whether this was the best way to proceed. (At the time the bill was passed, I raised some doubts about how much it would cost.) But it was a straightforward instance of the central government seeking to redress the failures of the private market—something akin to imposing fuel standards on auto manufacturers, providing state pensions, and forcing banks to hold adequate capital reserves.

In a modern, interconnected economy, activist government policies to remedy market failures are essential. Rather than confronting this argument head-on, which would involve publicly defending the actions of the banks, the insurers, and the industrial polluters, the right has settled on a strategy of trying to undermine the government through the courts, where its pro-corporate agenda can be repackaged as a defense of ancient freedoms.

But, of course, this case isn’t ultimately about the law—it is about politics. The four ultra-conservative justices on the court—Alito, Roberts, Scalia, and Thomas—are in the vanguard of a movement to roll back the federal government and undermine its authority to tackle market failures. The movement began in the nineteen-eighties, when the Federalist Society got its start and Ronald Reagan appointed one of its members, Scalia, to the court—and for thirty years it has been gathering strength.

Thus the creation of a new legal theory to sink Obamacare: the idea that while the federal government might well have the authority to regulate economic activity, it doesn’t have the right to regulate inactivity—such as sitting around and refusing to buy health insurance. Now, it is as plain as the spectacles on Antonin Scalia’s nose that opting out of the health-care market is about as realistic as opting out of dying. But necessity is the mother of invention. And, judging by his questions this morning, it is this invention that Kennedy has fastened on.

As I said at the beginning, it’s a bad joke—upon us all.

 

Ohio Vote Shows Unions Still a Political Force

WASHINGTON (AP) — Labor unions are celebrating one of their biggest victories in decades after turning back an Ohio law that curbed collective bargaining rights for the state’s public workers. The vote showed unions are still a potent political force that can’t be ignored.

The question for many is whether to interpret Tuesday’s Ohio referendum as simply a rejection of Republican overreach in a heavily unionized state or more broadly as a barometer of a battleground state that could resonate with voters nationwide.

Union leaders say they hope it brings about a resurgence for a labor movement long in decline and sends a strong message to other states where lawmakers are thinking about restricting union rights. But they also want to use the outcome as a spark to help re-elect President Barack Obama and put more Democrats in office next year.

“I think the outcome is an absolute momentum-shifting victory for the labor movement,” said Harold Schaitberger, president of the International Association of Firefighters.

If unions succeed next year in recalling Wisconsin Gov. Scott Walker, a top target after he pushed through similar legislation limiting union rights in his state, Schaitberger predicted “tremendous impact across the country.”

By a nearly 2-1 margin, Ohio voters repealed a new law that would have severely limited the bargaining rights of more than 350,000 teachers, firefighters, police officers and other state employees.

The law signed in late March by Republican Gov. John Kasich would have banned public employee strikes, scrapped binding arbitration, and denied public workers the ability to negotiate pensions and health care benefits.

Drug War: What Prohibition Costs Us

Drug prohibitionists like former White House drug czar staffer Kevin A. Sabet seem to be in a panic over Ken Burns’ PBS documentary broadcast “Prohibition” because of its clear and convincing parallel to today’s equally disastrous war on drugs. The earlier experiment lasted less than 14 years, but today’s failed prohibition was declared by President Nixon 40 years ago and has cost our country more than $1 trillion  in cash and much more in immeasurable social harm.

As a student of history and a retired deputy chief of police with the Los Angeles Police Department, I can attest that the damage that came from the prohibition of alcohol pales in comparison to the harm wrought by drug prohibition. In the last 40 years drug money has fueled the growth of violent street gangs in Los Angeles, from two (Bloods and Crips) with a membership of less than 50 people before the drug war to 20,000 gangs with a membership of about 1 million across the U.S., according to the U.S. Department of Justice.

These gangs serve as the distributors, collection agents and enforcers for the Mexican cartels that the Justice Department says occupy more than 1,000 U.S. cities. Sabet, a former advisor to the White House drug policy advisor, ignores these prohibition-created harms, making no mention of the nearly 50,000 people killed in Mexico over the last five years as cartels have battled it out to control drug routes, territories and enforce collections. When one cartel leader is arrested or killed, it makes no impact on the drug trade and only serves to create more violence, as lower-level traffickers fight for the newly open top spot.

U.S. law enforcement officials report that as much as 70% of cartel profits come from marijuana alone.  There’s no question that ending today’s prohibition on drugs — starting with marijuana — would do more to hurt the cartels than any level of law enforcement skill or dedication ever can.

Worse than being ineffective, though, the war on drugs creates dangerous distractions for police officers who would rather focus on improving public safety. For example, the LAPD announced this week that it will take 150 police officers off the streets to accommodate the state’s shuffling of prisoners to the county level. The state must do this to comply with the U.S. Supreme Court’s order to cut our drug-war-induced overcrowded prison population by 30,000 — and our state has already laid off thousands of teachers thanks in part to funding diverted to building more prisons and hiring more guards.

This follows on the heels of another reallocation of police resources in Los Angeles when the LAPD and the L.A. Sheriff’s Department woke up to a three-year backlog of rape kits. Police labs have only a finite amount of resources, and drug testing often takes priority over other cases that demand attention. Detectives (and victims) waiting for lab results related to rape and other serious crimes stood in line for months while tests for custody-related possession of pot and other drugs took precedence.

There’s no doubt that the violence, the growth of cartels and gangs, the overpopulation of our prisons and the squandering of our police resources would not occur if we eliminated illegal drug profits and implemented a non-criminal approach to regulating drugs. We did this once with alcohol, and there’s no reason we can’t do it with other drugs today. 

– Stephen Downing

Stop Coddling the Super Rich

By Warren Buffett

OUR leaders have asked for “shared sacrifice.” But when they did the asking, they spared me. I checked with my mega-rich friends to learn what pain they were expecting. They, too, were left untouched.

While the poor and middle class fight for us in Afghanistan, and while most Americans struggle to make ends meet, we mega-rich continue to get our extraordinary tax breaks. Some of us are investment managers who earn billions from our daily labors but are allowed to classify our income as “carried interest,” thereby getting a bargain 15 percent tax rate. Others own stock index futures for 10 minutes and have 60 percent of their gain taxed at 15 percent, as if they’d been long-term investors.

These and other blessings are showered upon us by legislators in Washington who feel compelled to protect us, much as if we were spotted owls or some other endangered species. It’s nice to have friends in high places.

Last year my federal tax bill — the income tax I paid, as well as payroll taxes paid by me and on my behalf — was $6,938,744. That sounds like a lot of money. But what I paid was only 17.4 percent of my taxable income — and that’s actually a lower percentage than was paid by any of the other 20 people in our office. Their tax burdens ranged from 33 percent to 41 percent and averaged 36 percent.

If you make money with money, as some of my super-rich friends do, your percentage may be a bit lower than mine. But if you earn money from a job, your percentage will surely exceed mine — most likely by a lot.

Back in the 1980s and 1990s, tax rates for the rich were far higher, and my percentage rate was in the middle of the pack. According to a theory I sometimes hear, I should have thrown a fit and refused to invest because of the elevated tax rates on capital gains and dividends.

I didn’t refuse, nor did others. I have worked with investors for 60 years and I have yet to see anyone — not even when capital gains rates were 39.9 percent in 1976-77 — shy away from a sensible investment because of the tax rate on the potential gain. People invest to make money, and potential taxes have never scared them off. And to those who argue that higher rates hurt job creation, I would note that a net of nearly 40 million jobs were added between 1980 and 2000. You know what’s happened since then: lower tax rates and far lower job creation.

My friends and I have been coddled long enough by a billionaire-friendly Congress. It’s time for our government to get serious about shared sacrifice.

Former Seattle U.S. Attorney Pushes Marijuana Legalization

SEATTLE (AP) — A man who once served as the Justice Department’s top official in Seattle said Tuesday that he is sponsoring an initiative to legalize possession of up to an ounce of dried marijuana in Washington state, a measure he hopes will help “shame Congress” into ending pot prohibition.

John McKay spent five years enforcing federal drug laws as the U.S. attorney in Seattle before he was fired by the Bush administration in early 2007. He told The Associated Press on Tuesday that laws criminalizing marijuana are wrongheaded because they create an enormous black market exploited by international cartels and crime rings.

“That’s what drives my concern: The black market fuels the cartels, and that’s what allows them to buy the guns they use to kill people,” McKay said. “A lot of Americans smoke pot and they’re willing to pay for it. I think prohibition is a dumb policy, and there are a lot of line federal prosecutors who share the view that the policy is suspect.”

Wisconsin Union Bill Passes State Assembly

MADISON, Wis. — Wisconsin lawmakers voted Thursday to strip nearly all collective bargaining rights from the state’s public workers, ending a heated standoff over labor rights and delivering a key victory to Republicans who have targeted unions in efforts to slash government spending nationwide.

The state’s Assembly passed Gov. Scott Walker’s explosive proposal 53-42 without any Democratic support and four no votes from the GOP. Protesters in the gallery erupted into screams of “Shame! Shame! Shame!” as Republican lawmakers filed out of the chamber and into the speaker’s office.

The state’s Senate used a procedural move to bypass missing Democrats and move the measure forward Wednesday night, meaning the plan that delivers one of the strongest blows to union power in years now requires only Walker’s signature to take effect.

He says he’ll sign the measure as quickly as possible, which could be as early as Thursday.

Walker’s plan has touched off a national debate over labor rights for public employees and its implementation would be a key victory for Republicans, many of whom have targeted unions amid efforts to slash government spending. Similar bargaining restrictions are making their way through Ohio’s Legislature and several other states are debating measures to curb union rights in smaller doses.

In Wisconsin, the proposal has drawn tens of thousands of protesters to the state Capitol for weeks of demonstrations and led 14 Senate Democrats to flee to Illinois to prevent that chamber from having enough members present to pass a plan containing spending provisions.

But a special committee of lawmakers from the Senate and Assembly voted Wednesday to take all spending measures out of the legislation and the full Senate approved it minutes later, setting up Thursday’s vote in the Assembly.

The measure forbids most government workers from collectively bargaining for wage increases beyond the rate of inflation unless approved by referendum. It also requires public workers to pay more toward their pensions and double their health insurance contribution, a combination equivalent to an 8 percent pay cut for the average worker.

When Democracy Weakens

As the throngs celebrated in Cairo, I couldn’t help wondering about what is happening to democracy here in the United States. I think it’s on the ropes. We’re in serious danger of becoming a democracy in name only.

While millions of ordinary Americans are struggling with unemployment and declining standards of living, the levers of real power have been all but completely commandeered by the financial and corporate elite. It doesn’t really matter what ordinary people want. The wealthy call the tune, and the politicians dance.

So what we get in this democracy of ours are astounding and increasingly obscene tax breaks and other windfall benefits for the wealthiest, while the bought-and-paid-for politicians hack away at essential public services and the social safety net, saying we can’t afford them. One state after another is reporting that it cannot pay its bills. Public employees across the country are walking the plank by the tens of thousands. Camden, N.J., a stricken city with a serious crime problem, laid off nearly half of its police force. Medicaid, the program that provides health benefits to the poor, is under savage assault from nearly all quarters.

The poor, who are suffering from an all-out depression, are never heard from. In terms of their clout, they might as well not exist. The Obama forces reportedly want to raise a billion dollars or more for the president’s re-election bid. Politicians in search of that kind of cash won’t be talking much about the wants and needs of the poor. They’ll be genuflecting before the very rich.

As if the corporate stranglehold on American democracy were not tight enough, the Supreme Court strengthened it immeasurably with its Citizens United decision, which greatly enhanced the already overwhelming power of corporate money in politics. Ordinary Americans have no real access to the corridors of power, but you can bet your last Lotto ticket that your elected officials are listening when the corporate money speaks.

When the game is rigged in your favor, you win. So despite the worst economic downturn since the Depression, the big corporations are sitting on mountains of cash, the stock markets are up and all is well among the plutocrats. The endlessly egregious Koch brothers, David and Charles, are worth an estimated $35 billion. Yet they seem to feel as though society has treated them unfairly.

As Jane Mayer pointed out in her celebrated New Yorker article, “The Kochs are longtime libertarians who believe in drastically lower personal and corporate taxes, minimal social services for the needy, and much less oversight of industry — especially environmental regulation.” (A good hard look at their air-pollution record would make you sick.)

It’s a perversion of democracy, indeed, when individuals like the Kochs have so much clout while the many millions of ordinary Americans have so little. What the Kochs want is coming to pass. Extend the tax cuts for the rich? No problem. Cut services to the poor, the sick, the young and the disabled? Check. Can we get you anything else, gentlemen?