Conservative Political Philosophy

Public Option Cheaper?

Obamacare wins; but would the ‘Public Option’ have been cheaper, asks this reporter from Pacific Standard magazine?.

Although the Supreme Court has largely upheld the Affordable Care Act, one new study–by the country’s largest private health insurance provider–concludes that a public option like the one Obama rejected could save states and families money.

June 28, 2012 • By No Comments and 0 Reactions

Even though public debate over American health care policy has been trapped in legal limbo, research into the nuts and bolts of fixing American health care has never gone away—and, in fact, has evolved in strange new directions. In at least one case, a major health care provider has concluded that a single payer system was viable at the state level.

In late March, a study by the Lewin Group, a research subsidiary of UnitedHealthcare, the country’s biggest health insurance provider, found that a broad single-payer plan would save the state of Minnesota $189.5 billion from 2014 to 2023, and lower annual health care costs for families by over $1,300. But it would also cost the state’s insurance industry more than 42,000 jobs, as health care moved from a paid service to a public benefit.

UnitedHealthcare is based in Minnesota. A liberal Minneapolis think tank, Growth and Justice, commissioned the study. It supposes a publically funded and administered program, with far greater public involvement than the federal Obamacare plan approved today by the Supreme Court. The researchers claimed the modeled program would “cover a broad range of health services for all Minnesota residents, including those now covered by federal and state programs and undocumented immigrants.” It would eliminate insurance premiums for employers and workers. The investigation—of a system that could have been rendered all but illegal had today’s ruling gone against the Obamacare plan—imagined a system funded from “current funding for government health programs” and several tax increases: alcohol, cigarettes, a bump in a state payroll tax, or an increase in Minnesota’s income tax.

The study is here.  The possible future it describes is controversial. As of today, though, it also appears to be legal. Let the shouting resume.

About Marc Herman
Marc Herman is a writer in Barcelona. He is the author of The Shores of Tripoli.
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The OctoGov That Swallowed Washington

The OctoGov That Swallowed Washington

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Supporting Conservative Solutions

From Wikipedia

Crowd Funding

Crowd funding or crowdfunding (alternately crowd financing, equity crowdfunding, or hyper funding) describes the collective cooperation, attention and trust by people who network and pool their money and other resources together, usually via the internet, to support efforts initiated by other people or organizations.[citation needed] Crowd funding occurs for any variety of purposes,[1] from disaster relief to citizen journalism to artists seeking support from fans, to political campaigns, to funding a startup company, movie [2] or small business[3] or creating free software.

Another aspect of crowd funding is tied into the United States of America JOBS Act which allows for a wider pool of smaller investors with fewer restrictions. The Act was signed into law by President Obama on April 5, 2012. The U.S. Securities and Exchange Commission is going to have approximately 270 days from the enactment date to set forth specific rules and methods to ensure that funding will actually take place.[citation needed]


In 1997, fans underwrote an entire U.S. tour for the British rock group Marillion,[4] raising $60,000 in donations by means of a fan-based internet campaign.[citation needed] The idea was conceived and managed by fans without any involvement by the band, although Marillion has since used this method with great success as a way to fund the recording and marketing of its albums[citation needed] Anoraknophobia,[5] Marbles,[6] and Happiness Is the Road.[7]

The United States based company ArtistShare (2000/2001) is documented as being the first crowdfunding website for music followed later by sites such as Sellaband (2006), IndieGoGo (2008), Pledge Music (2009), Kickstarter (2009), RocketHub (2009), GoFundMe (2010), Rock The Post (2011) and in the UK Sponsume (2010) and PleaseFund.Us (2011)and Peerbackers (2008).

Electric Eel Shock (EES) the Japanese rock band who have toured the world became one of the first bands without previous significant record sales to fully embrace Crowd Funding. In 2004 as an unsigned band they raised £10,000 from 100 fans (the Samurai 100) by offering them guestlist for life [8]. Two years later they became the fastest band to raise a 50,000 budget through SellaBand [9]. They licensed the album internationally including to Universal in their native Japan.

Franny Armstrong was a pioneer of crowdfunding in the production of the eco-movie The Age of Stupid starring Pete Postlethwaite. The film was crowd-funded by a £450,000 budget being raised by selling “shares” to 223 individuals and groups who donated between £500 and £35,000.[10]

Morton Valence are an early example of a relatively obscure band to independently enter into crowd funding without using a third party website such as sellaband.[11] In 2007 Franny Armstrong discussed her project with bandleader Robert “Hacker” Jessett[12] who adapted it to work for the independent music business raising £20 000 to record and promote the concept album Bob & Veronica Ride Again. [13] [14]

The Professional Contractors Group, a trade association for freelancer workers in the UK, was founded on the internet in 1999 when Andy White put out a call for 2,000 contractors to pledge £50 to raise £100,000 so he could start the organisation. 5 days later 2002 people had pledged the money and so the organisation was born. Today it has over 14,000 members and is a thriving trade association.[citation needed]

Crowd funding’s earliest known citation[15] was by Michael Sullivan in fundavlog on August 12, 2006.

Related definitions

There are questions about the legality of taking money from “investors” without offering any of the security demanded by legitimate investment schemes. Sites such as ArtistShare, Pledgemusic, PleaseFund.Us and Funding4Learning have a failsafe. They hold funds in an escrow account.[citation needed] If the nominated target isn’t reached, all funds are returned to contributors. While sites such as IndieGoGo, GoFundMe, RocketHub, Fondomat, Rock The Post, Peerbackers and Sponsume allow projects to keep all the funds raised.[citation needed]

Investors are given something for their money – so in a legal sense, they have paid for and received something.[citation needed] The Tunnel is selling frames of film for one dollar each. Pioneer One gives you the theme music or a special edition download.[citation needed]

Micropatronage is a system in which the public directly supports the work of others by making donations through the Internet. In use as early as 2001,[citation needed] the term was popularized in 2005[citation needed] by blogger Jason Kottke when he quit his day job as a web designer and spent a year blogging full time, living off the voluntary donations of his readership. Micropatronage differs from traditional patronage systems by allowing many “patrons” to donate small amounts, rather than a small number of patrons making larger contributions.

Contemporary applications

Crowd funding is being experimented with as a funding mechanism for creative work such as blogging and journalism,[16] music, and independent film,[17][18] for funding a startup company[19][20][21] and even for funding public projects.[22] Community music labels are usually for-profit organizations where “fans assume the traditional financier role of a record label for artists they believe in by funding the recording process”.[23]

Since pioneering crowd funding in the film industry Spanner films have published a useful ‘how to’ guide.[24] Innovative new platforms, such as RocketHub, have emerged that combine traditional funding for creative work with branded crowdsourcing – helping artists and entrepreneurs unite with brands “without the need for a middle man.” [25]

New peer-to-peer companies such as Prosper Marketplace, Zopa and Lending Club seek to match lenders directly to borrowers. Crowd lending from non-banks is gaining momentum globally as banks have increased interest rates or pulled back from lending to consumers and small businesses; however, as of early 2012, the non-bank sector of crowd lending is yet to be considered a threat to the big consumer lending businesses of the largest global banks.[26]

Crowd funding philanthropy

A variety of crowd funding platforms has emerged to allow ordinary web users to support specific philanthropic projects without the need for large amounts of money. Global Giving allows individuals to browse through a selection of small projects proposed by nonprofit organizations worldwide, donating funds to projects of their choice. Microcredit crowd funding platforms such as Kiva (organization) and Wokai facilitate crowd funding of loans managed by microcredit organizations in developing countries. The US-based nonprofit Zidisha offers a new twist on these themes, applying a direct person-to-person lending model to microcredit lending for low-income small business owners in developing countries. Zidisha borrowers who pass a background check may post microloan applications directly on the Zidisha website, specifying proposed credit terms and interest rates. Individual web users in the US and Europe can lend as little as one US dollar, and Zidisha’s crowd funding platform allows lenders and borrowers to engage in direct dialogue. Repaid principal and interest is returned to the lenders, who may withdraw the cash or use it to fund new loans.[27]

Intellectual property exposure

One of the challenges of posting new ideas on crowd funding sites is there may be little or no intellectual property (IP) protection provided by the sites themselves. Once an idea is posted, it can be copied. As Slava Rubin, founder of IndieGoGo said: “We get asked that all the time, ‘How do you protect me from someone stealing my idea?’ We’re not liable for any of that stuff.” [28] Inventor advocates, such as Simon Brown, founder to the UK based United Innovation Association, counsel that ideas can be protected on crowd funding sites through early filing of patent applications, use of copyright and trademark protection as well as a new form of idea protection supported by the World Intellectual Property Organization called Creative Barcode.[29]

Patent disputes

On September 30, 2011, the crowdfunding site Kickstarter filed a request for declaratory judgment against Fan Funded who owns U.S. patent US 7885887, “Methods and apparatuses for financing and marketing a creative work”. Brian Camelio, founder of ArtistShare, is the inventor on the patent. KickStarter says it believes it is under threat of a patent infringement lawsuit. KickStarter has asked that the patent be invalidated, or, at the very least, that the court find that Kickstarter is not liable of infringement.[30][31]

In February 2012, Fan Funded responded to Kickstarter’s complaint notably claiming that patent infringement litigation was never threatened, that “ArtistShare merely approached KickStarter about licensing their platform, including patent rights”, and that “rather than responding to ArtistShare’s request for a counter-proposal, Kickstarter filed this lawsuit.”[32]

Pros and cons

Proponents of the crowd funding approach argue that it allows good ideas which do not fit the pattern required by conventional financiers to break through and attract cash through the wisdom of the crowd. If it does achieve “traction” in this way, not only can the enterprise secure seed funding to begin its project, but it may also secure evidence of backing from potential customers and benefit from word of mouth promotion.[citation needed]

Against these advantages is the requirement to disclose the idea for which funding is sought in public when it is at a very early stage. This exposes the promoter of the idea to the risk of the idea being copied and developed ahead of them by better-financed competitors.[citation needed]. In addition, there is substantial research in social psychology that demonstrates that the crowd is not always so wise. [33]

Legal restrictions

Another significant disadvantage to crowd funding is the possibility of getting ensnared in various securities laws, since soliciting investments from the general public is most often illegal unless the opportunity has been filed with an appropriate securities regulatory authority, such as the Securities and Exchange Commission in the U.S., the Ontario Securities Commission in Ontario, Canada, the Autorité des marchés financiers in France and Quebec, Canada, or the Financial Services Authority in the U.K. These regulators can have different ways of determining what is and what is not a security but a general rule one can rely on (at least in the U.S.) is the Howey Test. The Howey Test says that a transaction constitutes an investment contract (therefore a security) if there is (1) an exchange of money (2) with an expectation of profits arising (3) from a common enterprise (4) which depends solely on the efforts of a promoter or third party. Clearly, under this standard, any crowd sourcing arrangement in which people are asked to contribute money in exchange for potential profits based on the work of others would be considered a security. As such, the applicable investment contract would have to be registered with a regulatory agency (such as the S.E.C.) unless it qualified for one of several rule-laden exemptions (e.g., Regulation A or Rule 506 of Regulation D of the Securities Act of 1933, or the California Limited Offering Exemption – Rule 1001 (also known as S.E.C. Rule 1001)). The penalties for a securities violation can vary greatly and depend in large part on the amount of profit obtained by the “promoter,” the damage done to the investors, and whether a violation is a first time offense. However, a violation may result in both civil and criminal penalties, a return of any profit made and sometimes a lifetime ban from work in the securities industry. According to Section 5 of the Securities Act, it is illegal to sell any security unless such a sale is accompanied or preceded by a prospectus that meets the requirements of the Securities Act.[34][citation needed]


In February 2011, a group of entrepreneurs banded together and formed ‘The Startup Exemption’ with the goal to lobby Washington, D.C. to update the U.S. Federal Security Laws and make it legal for entrepreneurs to use crowdfunding to raise a limited amount of early-stage equity-based financing. With the assistance of the Small Business and Entrepreneurship Council (SBEC) they partook in two hearings on Capitol Hill. Their framework was the basis for the Entrepreneur Access to Capital Act (H.R. 2930) introduced by Rep. Patrick McHenry (R-NC) on September 14, 2011. It proposed to greatly reduce restrictions on equity crowdfunding of for-profit businesses then present in state and federal securities laws. On November 3, 2011 the U.S. House of Representatives passed H.R 2930 with a vote 407-17. H.R.2930 was subsequently introduced on the Senate Floor and referred to the United States Senate Committee on Banking, Housing, and Urban Affairs (the “Banking Committee”) for further consideration.[citation needed]

Meanwhile, members of the Senate had also been drafting similar legislation with an eye towards adding further investor protections in their proposed equity crowdfunding legislation, as evidenced in the language of the bills that Senators proposed. To that end, the Democratizing Access to Capital Act (S.1791) was sponsored by Senator Scott Brown (R-MA) and introduced in the US Senate on November 2, 2011. S.1791 was substantially the same as H.R.2930, though it lowered caps on the both amount of capital a small business could raise and how much an investor could invest, as compared to the House bill. Shortly thereafter, the Capital Raising Online While Deterring Fraud and Unethical Non-Disclosure of 2011, or the CROWDFUND Act (S. 1790) was sponsored by Senator Jeff Merkley (D-OR) and introduced in the U.S. Senate on December 8, 2011. Both bills were referred to the Banking Committee.

This committee held hearings on December 1 and 14 [35] to gather information and testimony on the matter of capital formation for small and mid-size businesses. The hearings related to many bills on the issue that had been raised in the House and Senate that fall. Both hearings, through primarily the December 1st hearing, addressed the matter of equity crowdfunding in detail. Concerns at the time focused primarily on providing the right level of investor protections in the bills to discourage fraud and bad actors. Another concern was the role of state securities regulators in the proposed equity crowdfunding market. On the fraud point advocates for crowdfunding highlighted the transparent nature of the Internet and the regulatory affect of the platforms that would be hosting the stock offerings. Further, they noted the importance of a national standard to govern the industry, as opposed to a patchwork of state by state standards.

Debate continued in the Senate and within the Senate Banking Committee for a few months. Congress’ Christmas recess and then other issues arising in the Senate pushed Crowdfunding and small capital formation bills down in the priority list. In February 2012 equity crowdfunding advocates mobilized again to re-energize the movement and push the Senate to act. This got the Senate’s attention and a further hearing was held on March 6, 2012[35] by the Senate Banking Committee to review crowdfunding and other capital formation measures. Around the same time the House packaged 7 of its earlier small business capital formation bills into a single bill (H.R.3606 or the JOBS Act). This package contained the original language from H.R.2930 regarding equity crowdfunding. H.R.3606 passed the House on March 8, 2012. As H.R.3606 primarily just reiterated bills already passed in the House and under consideration in the Senate, its purpose was to reiterate to the Senate that these bills were important and to force them all the be passed or voted down as one.

In mid-March Senator Merkley’s office released a heavily revised version[36] of its earlier CROWDFUND Act that took parts from S.1791 and S.1970 and issued the bill as S.2190. This bill had been negotiated with Senator Scott Brown’s office and was sponsored with bipartisan support by Senators Merkley, S. Brown, Bennet, and Landrieu.[36] This bill was later added as an amendment to the JOBS Act on March 22, 2012[37] and the full JOBS Act passed the Senate the same day.[37] The JOBS Act went back to the House for a final vote. President Barack Obama stated in early March that he would sign the JOBS Act as soon as he received it from Congress. On April 5, 2012 he signed the JOBS Act into law.[38]

It may be some time, given the 270 days the SEC has to begin interpreting and administering the new law, before we begin to see the CROWDFUND Act implemented via the Internet. There are several groups competing to become the regulatory authority under the SEC, all doing heavy lobbying in Washington DC.[citation needed]

See also


  1. ^ Ordanini, A.; Miceli, L.; Pizzetti, M.; Parasuraman, A. (2011). “Crowd-funding: Transforming customers into investors through innovative service platforms”. Journal of Service Management 22 (4): 443. DOI:10.1108/09564231111155079. (also available as Scribd document)
  2. ^ “url=“.
  3. ^ “1st paragraph — Crowd funding Pbworks”. Michael Sullivan and pbworks consensus group. Retrieved 2010-01-15.
  4. ^ “BBC article, May 11, 2001”.
  5. ^ “”.
  6. ^ “OHM Review”.
  7. ^ “Calling the faithful for Album 15”.
  8. ^ “ “Wanna Go VIP? Electric Eel Shock’ll show you the way…”, Dec 2nd, 2004″.
  9. ^ “itsallhappening, June 24th, 2008”.
  10. ^ Dell, Kristina (4 September 2008). “Time Magazine article on Crowd Funding the ‘Age of Stupid'”. Retrieved 2009-09-09.
  11. ^ “blog entry by Morton Valence “Nothing Like Sellaband”, May 22, 2008″.
  12. ^ Age of Stupid music page”.
  13. ^ “BBC review, cites MV crowd funding, May 22, 2009”.
  14. ^ “Aesthetica Magazine interview”.
  15. ^ “Crowdfundings earliest citation”.
  16. ^ funding-journalism/ “Crowdfunding journalism”. idio. 2009-05-19. Retrieved 2009-05-15.
  17. ^ Teenagers’ credit note approach to fund £1m film of Clovis Dardentor
  18. ^ TIME article on Crowd Funding the ‘Age of Stupid’
  19. ^ TechCrunch“Sponsume lets projects get off the ground with Groupon-style group funding model”
  20. ^ TechCrunch ‘Grow VC launches, aiming to become the Kiva for tech startups’
  21. ^ BBC News ‘Cash-strapped entrepreneurs get creative’
  22. ^ CivicSponsor helps citizens crowdfund their public spaces
  23. ^ Kappel, Tim, “Ex Ante Crowdfunding and the Recording Industry: A Model for the U.S.?” in Loyola of Los Angeles Entertainment Law Review, Vol.29, Issue 3, p.376
  24. ^ Spanner Films : How to crowd fund your film
  25. ^ Bell, Melissa. “Crowd-sourcing a brand”, The Washington Post, March 12, 2011, accessed September 3, 2011.
  26. ^ “Crowdfunding: John Mack backs non-bank with board role “, Euromoney, April 12, 2012.
  27. ^ “Is Microfinance for You?”, SecondAct, April 17, 2012.
  28. ^ Mike Drummond, “Making it Rain: Seeking Seed Money from the Crowd”, Inventors Digest, August 2011
  29. ^ Simon Brown, “Follow the Crowd”, Intellectual Property Magazine, July 2011
  30. ^ Sarah Jacobsson Purewal, Kickstarter Faces Patent Suit Over Funding Idea, PCWorld, October 5, 2011. Consulted on October 6, 2011.
  31. ^ Eriq Gardner, KickStarter Seeks To Protect Fan-Funding Model From Patent Threat, The Hollywood Reporter, October 4, 2011. Consulted on October 15, 2011.
  32. ^ Eriq Gardner (February 16, 2012). “Hollywood Docket: Comedy Club Documentary Lawsuit; Michael Jordan vs. 1st Amendment”. The Hollywood Reporter. Retrieved March 23, 2012.
  33. ^
  34. ^ “Section 5 — Prohibitions Relating to Interstate Commerce and the Mails”. University of Cincinnati College of Law. Retrieved 2010-01-15.
  35. ^ a b
  36. ^ a b
  37. ^ a b
  38. ^ Landler, Mark (5 April 2012). “Obama Signs Bill to Promote Start-Up Investments”. New York Times. Retrieved 6 April 2012.

Further reading

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ObamaCares. Oh…Yeah. Right!

Assembly Line Medicine

Cleveland Plain Dealer reporter Kevin O’Brien discusses the 4 month to defuse the ObamaCare time bomb.  He says:

In the wake of the Supreme Court decision upholding the Patient Protection and Affordable Care Act, political conservatives have been debating among themselves whether they’ve been handed a ghastly defeat or a golden opportunity.

There’s truth in both assessments.

In voting with the court’s leftists, Chief Justice John Roberts ruled that Obamacare met the letter of enough law to stand, strongly implied that he didn’t much care for it as policy and tossed back into the political arena the question of whether America should live by it.

The ruling was a ghastly short-term defeat for the cause of individual liberty and limited government.

Whether it actually establishes a limit for the elasticity of the Commerce Clause, only time and future court decisions will tell.

It certainly confirmed conservatives’ dire suspicions that Congress has unlimited power to affect the behavior of individuals through the use of coercive tax laws.

Coercive tax policy is what modern government does. That’s why the federal tax code is 75,000 pages long. Take out all of the rewards for government-approved behavior and the punishments for things the government discourages, and you could fit the whole thing on the back of an envelope.

But thanks to Roberts’ clarification, at least those who favor limited activity by a limited government know what they’re up against — and know that help won’t be coming from the judiciary.

There will be no Supreme Court shortcuts to fixing the tax code, just as there will be none to ridding the nation of Obamacare.

The two intersect, of course. Obamacare is a tax — actually, a very large, very coercive series of taxes that will grow only more coercive as federal bureaucrats and successive Congresses spin a denser, wider web of federal control.

Obamacare is also a lie — a series of cynical cons: Obamacare will reduce health care costs; it’s doing the opposite and will continue to. It will cover everyone; not until it inevitably morphs into single-payer. You can keep your doctor; oops, never mind. There won’t be rationing; yeah, right — a government that ran out of money $15.7 trillion ago will buy you whatever medical care you need.

But the judiciary is concerned with legalities, not lies.

And assuming Roberts actually believes his own ruling, all he could do was to tell us that the Constitution permits what Congress has done and leave it for us to decide whether to undo it.

The people’s decision on repeal will be indirect — this is a republic, not a democracy — but at least the issue as voters judge those running to represent them will be clear and the choice will be stark: No politician should be allowed to leave any doubt in the minds of voters about which way he or she will jump.

Important though health care policy may be, deeper issues are afoot, too.

One of those issues is purely political: If Obamacare is not repealed, the left’s dream comes true. Their political party gains a hold on the federal government that, until catastrophe strikes, could well prove unbreakable.

On the one hand, the Republicans can never be returned to power, the Democrats will say, because “they will take your health care away.”

On the other hand, if you want to keep your health care, you’ll have to live within the rules of personal behavior established by the state. And you will be monitored for compliance.

Another underlying issue speaks to the national character itself: Should we exchange our birthright of liberty for a promise of health care security that government cannot possibly keep?

Even assuming Republicans bent on repeal of Obamacare sweep November’s federal elections, the Democrats, who used every trick in the book to pass the law, will use every trick in the book to keep it in place.

There are no guarantees.

Obamacare is a time bomb. We have four months to elect people who are fully committed to defusing it.

What Roberts has handed the American people is no less than the mastery of their own fate, and that is a golden opportunity. If we blow it — if we fail to enact a change in the White House and in the control of the Senate — we will condemn future generations to an America sickly in body and spirit.

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“Fee Fo’ High Sum’, The Health-Tax Giant Said

“Fee Fo’ High Sums”, the big government president said.

[caption added]



What would replacing Obamacare look like?

July 02, 2012|Kevin Ferris

Thursday was the easy part for conservatives — well, except for learning that the chief justice who once talked about calling balls and strikes also has a wicked curveball.

But cranking out the press releases from think tanks, candidates, House and Senate offices, and one presumptive presidential nominee obviously wasn’t difficult. And two words shared top billing in almost all of them: Repeal and Replace.

Now comes the hard part, assuming opponents of the Affordable Care Act are ever actually in a position to pull off repeal. Replace Obamacare with what?

Strict constructionists might argue that there’s no reason to go beyond repeal, that this is just a matter of getting the government out of the business of health care. But unless they also repeal Medicaid, Medicare, the Department of Veterans Affairs, and a host of other programs, government is in health care to stay. Therefore what needs addressing is the government’s business model for health care, which is exacerbating the problems, especially the spiraling costs.

Reforms in the nation’s health-care system have been desperately needed for a long time, but conservatives refused to recognize this and act, according to the article “How to Replace Obamacare” in the spring edition of the journal National Affairs.

“If the problems that are today obvious to the public had been addressed by market-oriented policies over the last few decades, there would have been no political opening through which to ram Obamacare,” write James C. Capretta and Robert E. Moffit, fellows at, respectively, the American Enterprise Institute and the Heritage Foundation.

To do away with the costly, intrusive, tax-increasing Obamacare, now blessed by the Supreme Court, means dealing with the issues — among them costs, the uninsured, covering preexisting conditions — that inspired the push for reform.

The authors note that scores of plans offer a market-based approach to health care — the only way to control costs and make coverage both affordable and accessible — but they all share seven core “pillars.” (I’ll give highlights, but read the whole article at; look under “archives” for either author’s name.)

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ObamaCare and Conservativism – Two

Diagram of the Federal Government and American...

Diagram of the Federal Government and American Union

—   continued   —

In his concluding argument, Solicitor General Donald Verrilli made clear what is at stake in that case, and in the upcoming presidential election—a choice between two fundamentally different visions of the relationship between government and the individual. In what appeared to be the central emphasis of his summation of the government’s case, Verrilli told the Court that the Obama Administration’s conception of liberty stands in stark contrast to that which has guided our constitutional jurisprudence for over two centuries

Verilli told the justices, “There is an important connection, a profound connection between [the problem of 40 million uninsured] . . . and liberty.” If the law is upheld, argued Verilli, “people with chronic conditions . . . will be unshackled from the disabilities that those diseases put on them and have the opportunity to enjoy the blessings of liberty.”

Speaking on behalf of the 26 plaintiff states, Paul Clement said “it’s a very funny conception of liberty that forces somebody to purchase an insurance policy whether they want it or not.” True enough, but not really responsive to Verilli’s assertion that, for many, liberty depends on a public system of guaranteed health insurance. It was a missed opportunity to articulate and defend the true liberty interests at stake in the case.

Generally, the challenge of protecting liberty lies in limiting the abuse of government power—of protecting individual rights from government interference. Verrilli’s argument is founded on a very different conception of liberty. By his view, liberty consists of positive rights guaranteed by the redistribution of wealth through government programs and subsidies. In other words, liberty depends on the grace and generosity of government.

This runs directly counter to the deeply held natural rights philosophy of the American founders. The Declaration of Independence left no doubt about the source of liberty and the relationship between individual rights and government authority:

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness.—That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed.

Consenting to be governed is both an exercise of liberty and an agreement to limit some natural rights so that government may perform the functions consented to—functions that inevitably limit liberty. This reciprocal relationship between rights and government power is recognized in the Tenth Amendment’s guarantee that “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or the people.”

Federalism protects the liberty of the individual from arbitrary power.
obamacare liberty and federalismIllustration by Barbara Kelley

Accepting that the protection of liberty requires limitations on liberty in the form of government powers did not blind the American founders to the reality that government power is, at the same time, the greatest threat to liberty. To address that threat, they enumerated the powers of the federal government and they agreed to a Bill of Rights with the express reminder in the Ninth Amendment that “the enumeration in the Constitution, of certain rights, shall not be construed to deny or disparage others retained by the people.” They also created structural obstacles to the abuse of authority by dividing power horizontally among the three branches of government and vertically in the federal system.

This relationship between federalism and liberty, between the security of individual rights and the allocation of powers in the state and federal governments, was recognized by the Supreme Court less than a year ago in Bond v. United States. Writing for a unanimous court in Bond, Justice Kennedy said that “by denying any one government complete jurisdiction over all the concerns of public life, federalism protects the liberty of the individual from arbitrary power. When government acts in excess of its lawful powers, that liberty is at stake.”

Yet Obamacare’s transparent impositions on liberty were given scant attention in the oral arguments over the law’s constitutionality, notwithstanding the fact that the reason the health-care law has been consistently opposed by a majority of voters is their objection to the individual mandate. People understand when their basic liberties are being compromised.

Except for his dismissal of Verrilli’s “funny conception of liberty,” Clement regrettably had nothing to say about the liberty protecting features of divided government. Michael Carvin, arguing on behalf of the National Federation for Independent Business, did state that “the Framers consciously gave Congress the ability to regulate commerce, because that’s not a particularly threatening activity that deprives you of individual freedom.” Carvin misses the point. As history has demonstrated, there is nothing inherently non-threatening to liberty about the regulation of commerce, unless commerce is narrowly defined in the context of a division of powers between the national and state governments.

Members of the court were somewhat more attentive to the Constitution’s core value of liberty. Justice Kennedy suggested that the usual presumption of constitutionality should give way to a “heavy burden of justification” on government “when you are changing the relation of the individual to the government.” And Justice Scalia reminded Verrilli of the Tenth Amendment’s recognition that “the powers not given to the Federal Government are reserved, not just to the States, but to the States and the people.”

Does the 14th Amendment guarantee positive rights, like access to food and health care?

“The argument here,” said Scalia, “is that the people were left to decide whether they want to buy insurance or not.”

Solicitor General Verilli argued that “to embark on the kind of analysis that my friends on the other side suggest . . . is to import Lochner-style substantive due process.” Lochner v. New York is the much disparaged 1905 case in which the Supreme Court invalidated as a violation of due process a New York State limitation on hours of work in bakeries. Verilli’s comment is of a piece with President Obama’s subsequent invocation of social Darwinism in reference to Congressman Paul Ryan’s budget proposal. Still, the constitutional doctrine of substantive due process has nothing to do with the argument that the division of powers in the federal system serves to protect liberty from the excesses of government.

The Court made clear in the Bond decision that it understands this connection between federalism and liberty—that individuals, as well as states and the federal government, have a stake in the outcome of federalism cases. Though the states and the federal government likely view the Obamacare case as a struggle for power, the Supreme Court’s central concern should be with establishing the division of powers best suited to preserve liberty.

Solicitor General Verrilli’s suggestion that liberty will be denied if the Court fails to uphold Obamacare—thereby withholding affirmative benefits to millions of Americans—is not novel. In the era of Presidents Kennedy and Johnson, many on the left sought to establish constitutional rights to welfare. In 1969, Frank Michelman, writing in the Harvard Law Review, argued that the Fourteenth Amendment’s equal protection clause should be interpreted to guarantee affirmative rights in the form of access to basic necessities like food, shelter, and health care. Two years later, philosopher John Rawls offered a detailed philosophical argument for such welfare rights in his A Theory of Justice.

But that was then. Nearly 30 years later, Jack Balkin argued in the Fordham Law Review that welfare rights are no longer part of anyone’s “ideal Constitution.” He could not have anticipated the Obama administration’s revival of Michelman’s idea in its defense of Obamacare.

Like so many ideas from the political left, and particularly from the academic political left, the claim to affirmative rights has political appeal but lacks for realpolitik. In theory, at least, government can comply with negative rights guarantees that require only restraint and inaction. Affirmative rights, on the other hand, require government action and, more importantly, resources. Politicians have long promised more than taxpayers are willing or able to pay for. Asserting those promises as constitutional rights will not make the necessary resources magically appear.

Verilli probably did not mean to suggest that the Supreme Court declare a constitutional right to health care in the Obamacare case—that would be truly unprecedented. But there is no escaping the fact that he did seek to persuade the Court that it should affirm yet another expansion of government power in service to the asserted liberties of 40 million Americans. In his argument, Verilli has turned the relationship between federalism and liberty on its head. Liberty is rarely the fruit of expanded government power, particularly where it involves the redistribution of wealth. Rather, liberty survives only through constant vigilance in the restraint of power, whether vested in the federal or state governments.

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ObamaCare and Conservatism

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With its distinct intellectual assets and ongoing programs of policy-oriented research, the Hoover Institution at Stanford University is a uniquely distinguished contributor to the marketplace of ideas.

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June 7, 2012

Obamacare vs. Federalism

Does liberty depend on the grace and generosity of government power?

by James Huffman (member of the Property Rights, Freedom, and Prosperity Task Force)

Given the controversy arising from President Obama’s preemptive strike against the U.S. Supreme Court—the President said he was confident the court would uphold the Patient Protection and Affordable Care Act (Obamacare) because it would be “ a unprecedented, extraordinary step” to overturn a law “passed by a strong majority of a democratically elected Congress”—most people overlooked a revealing statement made by the President’s lawyer.

James Huffman is the Erskine Wood Sr. Professor of Law at Lewis and Clark Law School in Oregon. He served as dean of the law school from 1993 to 2006. Huffman serves on the boards of the National Crime Victims Law Institute, the Foundation for Research on Economics and the Environment, the Classroom Law Project, and the Rocky Mountain Mineral Law Foundation. He is a member and former chair of the Executive Committee of the Environment and Property Rights Practice Group of the Federalist Society. His research interests include natural resource, property, environmental, and constitutional law.

The tomorrow’s post, the Hoover Institution discusses ObamaCare as a constitutional and political issue.


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Don’t End Entitlements; Modify Them – Rep’s Say


“Programs Need Complete Rebuilt or Undergo Major Changes”

Released: July 7, 2011

Public Wants Changes in Entitlements, Not Changes in Benefits

GOP Divided Over Benefit Reductions


As policymakers at the state and national level struggle with rising entitlement costs, overwhelming numbers of Americans agree that, over the years, Social Security, Medicare and Medicaid have been good for the country.

  • But these cherished programs receive negative marks for current performance, and their finances are widely viewed as troubled. Reflecting these concerns, most Americans say all three programs either need to be completely rebuilt or undergo major changes. However, smaller majorities express this view than did so five years ago.

The public’s desire for fundamental change does not mean it supports reductions in the benefits provided by Social Security, Medicare or Medicaid. Relatively few are willing to see benefit cuts as part of the solution, regardless of whether the problem being addressed is the federal budget deficit, state budget shortfalls or the financial viability of the entitlement programs.

  • The latest national survey by the Pew Research Center for the People & the Press, conducted June 15-19 among 1,502 adults, finds that Republicans face far more serious internal divisions over entitlement reforms than do Democrats. Lower income Republicans are consistently more likely to oppose reductions in benefits – from Medicare, Social Security or Medicaid – than are more affluent Republicans.

On the broad question of whether it is more important to reduce the budget deficit or to maintain current Medicare and Social Security benefits, the public decisively supports maintaining the status quo. Six-in-ten (60%) say it is more important to keep Social Security and Medicare benefits as they are; only about half as many (32%) say it is more important to take steps to reduce the budget deficit.

Half (50%) of Republicans say that maintaining benefits is more important than deficit reduction; about as many (42%) say it is more important to reduce the budget deficit. More independents prioritize maintaining benefits over reducing the deficit (by 53% to 38%). Democrats overwhelmingly view preserving current Social Security and Medicare benefits as more important (by 72% to 21%).

The public also opposes making Medicare recipients more responsible for their health care costs and allowing states to limit Medicaid eligibility. About six-in-ten (61%) say people on Medicare already pay enough of their own health care costs, while only 31% think recipients need to be responsible for more of the costs of their health care in order to make the system financially secure.

When it comes to Medicaid, just 37% want to allow states to cut back on who is eligible for Medicaid in order to deal with budget problems, while 58% say low-income people should not have their Medicaid benefits taken away. And most say it is more important to avoid future cuts in Social Security benefits than future increases in Social Security taxes (56% vs. 33%).

On Social Security and Medicare, there are substantial differences of opinion by age. People age 65 and older are the only age group in which majorities say these programs work well; seniors also overwhelmingly say it is more important to maintain Social Security and Medicare benefits than to reduce the budget deficit. Those 50 to 64 also broadly favor keeping benefits as they are. Younger Americans support maintaining Social Security and Medicare benefits, but by smaller margins than older age groups.

Lower income people are more committed to maintaining benefits across all three major entitlement programs. This income gap is particularly wide when it comes to allowing states to cut back on Medicaid eligibility: 72% of those with family incomes of less than $30,000 oppose allowing states to limit Medicaid eligibility to deal with budget problems, compared with 53% of those with higher incomes.

GOP Base Divided over Entitlement Changes

The GOP’s internal divisions over entitlement changes are seen particularly in views of whether it is more important to maintain Social Security and Medicare benefits or to take steps to bring down the deficit.

Among Republicans and Republican-leaning independents, 63% of those with family incomes of $75,000 or more say it is more important to take steps to reduce the budget deficit; a nearly identical percentage (62%) of Republicans with incomes of $30,000 or less say it is more important to maintain Social Security and Medicare benefits as they are.

The income gap among Republicans and Republican leaners is about as large as the difference between GOP supporters of the Tea Party and non-supporters. Among Republicans and Republican leaners who agree with the Tea Party, 57% view deficit reduction as more important than preserving Social Security and Medicare benefits as they are. Among Republicans and leaners who do not agree with the Tea Party, just 36% say that reducing the deficit is more important than maintaining benefits.

Democrats face no such internal divisions, as both high- and low-income Democrats prioritize maintaining benefits over deficit reduction; there also are no ideological differences among Democrats over this issue. Notably, the balance of opinion among low-income Republicans is similar to how Democrats view the issue.

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If Romney Wins, He Can Repeal Health Reform. And He Should

Re-posted from The Washington Post

Ezra Klein on June 29, 2012 at 1:20 pm

If elected, will Mit Romney really be able to repeal “Obamacare”? Ryan Lizza and David Frum say no.

“I’d say yes”. posts Ezra Klein of the WashPo.

It won’t be easy, of course. Which is why Romney is often careful in his language on this. ““What the Court did not do on its last day in session,” he said on Thursday, “I will do on my first day if elected President of the United States. And that is I will act to repeal Obamacare.”

romney immigration

(Getty Images)

You catch that? I will “act to repeal Obamacare” is not the same as “I will repeal Obamacare.” Nevertheless, if Romney has a Congress willing to act with him, he can do quite a lot, quite quickly.

Romney won’t have 60 votes in the Senate. But if he has 51, he can use the budget reconciliation process, which is filibuster-proof, to get rid of the law’s spending. One objection to that is that budget reconciliation is supposed to be used for laws that reduce the deficit, and the Congressional Budget Office would score repeal of the Affordable Care Act as increasing the deficit by about $300 billion.

But so what? This is a rule Republicans have already shown themselves perfectly willing to break. The Bush administration passed both rounds of its deficit-busting tax cuts through reconciliation, using the novel interpretation that the reconciliation process simply prohibited laws from increasing the deficit after the first 10 years — that’s why Bush’s tax cuts had a sunset date of 2010.

When Democrats returned to power in 2006, they reasserted that reconciliation had to be used for real deficit reduction — a move, by the way, that they got no credit for, and that served to make their life harder over the next few years — but nothing about their decision is permanent. Republicans can, and likely will, reverse it in order to repeal the Affordable Care Act.

Getting rid of the law’s spending does not get rid of the law. As Lizza writes:

The process can only be used for policies that have budgetary effects and a C.B.O. score. Much of the A.C.A., such as the insurance exchanges and subsidies, would fall under these categories. But a lot of it, including the hated individual mandate, does not. Repealing the exchanges and subsides without repealing the mandate and the other regulations and cost controls in the law would create a health-care Frankenstein that a President Romney would be rather nuts to support.

Sure, but Romney wouldn’t be the one supporting this health-care Frankenstein. He and other Republicans would be working to repeal it. And are Democrats really going to stand together on the floor of the United States Senate and filibuster in order to keep the individual mandate in place, which will now be forcing people to buy insurance they can’t afford without the subsidies that made the whole thing work? They’d have to be suicidal to do that.

And to go even a bit further, if Mitt Romney wins the election and Republicans take control of the Senate, they should repeal the Affordable Care Act. At that point, they will have won two straight elections atop a platform in which repealing the ACA was a central, explicit promise. The American people will have spoken with unusual clarity, and part of what they will have said, whether they meant to say it or not, is repeal the ACA. If Republicans failed to follow through, they would be breaking a central campaign promise.

The interesting question, to my mind, is whether Romney would, in that circumstance, feel compelled to replace the Affordable Care Act, and if he did, what sort of policy he would come up with. A variant of that is what sort of compromise Romney would negotiate if he enters office and is facing a Democratic Senate or House. So far, I don’t think we have enough information to answer either question with any real certainty.

Tomorrow:  Alternatives.  From The Hoover Institution.


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And, in American politics….

The  “Elephants” are in a rut:

[- a “Musth” see -]


the “Donkeys” are over leveraged!

And in all, a beastly situation!!

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