The Insurance Mandate and the U.S. Constitution - Unpacked

 Yale Law Professor Akhil Reed Amar








Ezra Klein interviews Yale law professor and constitutional scholar, Akhil Reed Amar, who explains his view on the constitutionality of the Affordable Care Act's insurance mandate in layman's terms:

At any given nanosecond, millions of Americans are out of state. Most of my students at Yale are out of state. Three days a week, I am out of my home state. And if I or my students or any of these Americans fall sick, we go to a local ER. That’s an interstate issue. Similarly, if we don’t cover preexisting conditions, we have a lock-in for labor mobility — many workers will be unable to take better jobs out-of-state and thereby contribute more to their families and to the economy. And that’s what the Interstate Commerce Clause was all about: Getting rid of the impediments to genuine interstate commerce, to the free movement of goods and labor.

. . . 

My friend Justice Kennedy seems to be worried we’re crossing some rubicon if the government can force me to buy from a private person. And I say, gee, the government takes my money all the time. They took my money and gave it to Detroit. If they can do that, how is it any different in the Constitution or in logic if they tell me to do it on my own.

. . .

The most important limit, the one we fought the Revolutionary War for, is that the people doing this to you are the people you elect. That’s the main check. The broccoli argument is like something they said when we were debating the income tax: If they can tax me, they can tax me at 100 percent! And yes, they can. But they won’t. Because you could vote them out of office. They have the power to do all sorts of ridiculous things that they won’t do because you’d vote them out of office. If they can prevent me from growing pot, can they prevent me from buying broccoli? Perhaps, but why would they if they want to be reelected? So if you ask me what the limits are, I’d say read McCulloch vs. Maryland. And reread it. And keep reading it till you understand it. The Constitution is a practical document,. it’s designed to work. And the powers are designed to be flexible in order to achieve the aims of the document.

In paragraph 28 of McCulloch, Chief Justice John Marshall writes:

A constitution [is] intended to endure for ages to come, and consequently, to be adapted to the various crises of human affairs. To have prescribed the means by which government should, in all future time, execute its powers, would have been to change, entirely, the character of the instrument, and give it the properties of a legal code. It would have been an unwise attempt to provide, by immutable rules, for exigencies which, if foreseen at all, must have been seen dimly, and which can be best provided for as they occur. [It is wrong] to deprive the legislature of the capacity to avail itself of experience, to exercise its reason, and to accommodate its legislation to circumstances.

And in paragraph 55 he says that the main security against an abusive legislature “is found in the structure of government itself. In imposing a tax” — or, I would add, a mandate — “the legislature acts upon its constituents. This is in general a sufficient security against erroneous and oppressive taxation.” And against bad mandates and bad broccoli laws.

Taking Some Time Off

Family business takes me down to South Carolina for awhile so posting will be suspended.

Best Headline of the Week Award

Goes to the New Richmond News for its Op Ed piece: 

"Concussion Protection a No-Brainer":

The News:

"The common-sense measure, which was authored by Wisconsin Rep. Dean Knudson (R-Hudson), was a no-brainer in the end. But one has to wonder why this state waited to be the 32nd state to adopt such protections."

"I Wish I Could Buy What Some of These Guys Are Smoking."

Bruce Bartlett, former domestic policy adviser to President Reagan and a Treasury official under President Bush, weighs in on the tax policy aspect of the Paul Ryan 2.0 budget released Tuesday..  He calls it a publicity stunt, not a serious document for discussion.

Bartlett's conclusion:

In short, looking only at the tax side of Ryan’s plan, he is anticipating enactment of an extraordinarily ambitious tax reform on top of the most ambitious budget cutting effort ever enacted. He would sharply cut outlays for every major program except Social Security and national defense. Every governmental function one can think of would be virtually abolished except for Medicare, Social Security and defense. A key reason for the severity of these cuts, of course, is that Ryan would cut taxes at the same time he is cutting spending. To achieve balance with lower than projected revenues requires even larger cuts in spending.

I do not believe any of this will ever happen or could ever happen. I think Ryan has an undeserved reputation for seriousness in budget matters. The word “fantasy” would better apply. As Prof. Calvin Johnson of the University of Texas law school told me, the tax side of Ryan’s plan “is floating in the clouds without any connection to earth or reality.” And of course accomplishing what he hopes to do on the spending side is even more fanciful.

In my opinion, the Ryan budget should be seen as nothing more than a PR document for Republicans so they can say they have a plan to balance the budget, cut taxes, and cure the common cold. It may serve that narrow purpose, although many Republicans are saying that it doesn’t go far enough in slashing spending. I wish I could buy some of the stuff these guys are drinking or smoking.

Wisconsin May Not Be a Firewall for Santorum - Rasmussen Poll Shows Trouble for Santorum and Maybe Walker

Santorum

Wisconsin is a modified "winner-take-all" presidential primary for the Republicans, and only Rick Santorum really needs a win here.  It was thought that Wisconsin could serve as a firewall for him from the pair of blowout losses he has endured since the Mississippi and Alabama primaries. 15 of the states committed delegates will be handed to the overall winner in Wisconsin based on state-wide polling, and 24 more will be apportioned so that the winner in each congressional district gets that district's three delegates.

The firewall plan for Santorum now looks improbable.

The latest polling in Wisconsin ahead of the April 3 presidential primary has shown a marked shift in voter preference.  Less than a month ago Public Policy Polling (PPP) had Santorum ahead of Romney among likely Republican voters in Wisconsin 43% to 27%, with Gingrich polling just 10% of the voters polled.  Yesterday Rasmussen released a poll showing Romney leading Santorum 46%-33%, a 29% swing in three and a half weeks.  This probably has resulted from the blow-out win by Romney in our neighbor, Illinois, which occurred the day before the polling by Rasmussen took place here in the Badger State.

Rasmussen has been on the high side in its projections for Romney support in many past.primaries and caucuses, but the new poll seems like Santorum has too high a hill to climb now.  If Santorum doesn't end up taking a majority of the Wisconsin delegates, he will be tilting at windmills to continue his campaign.  Eleven days after Wisconsin comes a five state northeast primary Saturday, where the only state he is likely to carry is Pennsylvania.  After a loss in Wisconsin, where Santorum had been well ahead so recently, look for the pressure to ramp up on his money sources and supporters to encourage him to do what is best for the party and withdraw.

Two weeks ago I had painted a picture for how Gingrich could support Santorum's chances by staying in the race until immediately before the California primary.  That analysis had been premised on the polls at the time, including Santorum walking away fro Wisconsin with almost all its delegates.  Based on the polling today, Santorum's only hope for a convention fight is for Gingrich to pull out of the race almost immediately.

Walker

The Rasmussen poll also asked the likely Wisconsin Republican voters to weigh in on how they felt Governor Walker had been doing as governor.  79% approved, 9% somewhat approved, 2% somewhat disapproved and 9% strongly disapproved.  On the face of it, this seems like a problem for the governor in June.  I suppose if a large component of the nine percent that strongly disapprove of his service feels that he has been too moderate and accommodating to state and local workers, and hasn't cut their taxes enough, he will not lose that many of their votes in June.  On the other hand, if the majority of that nine percent feel he blew up the state in February 2011, made a dumb decision on high-speed rail, and generally has had a wretched performance in job creation, the 9% number may be a big problem for him.  Regardless, the negative ads from the Kochs and Americans for Prosperity are yet to come, since there really isn't a candidate on the Democratic side yet to waste time and money pummeling.  

The telephone survey of 1,000 likely Republican primary voters was conducted March 21 with a sampling error of plus or minus 3 percentage points.

Etch-a-Sketch Manufacturer, Ohio Art, Sees Stock Rise

Ezra Klein reports that the over-the-counter sales of Ohio Art's stock rose 200% yesterday after the political gaffe by Romney's campaign aide lead to a perfect storm of publicity for the toy.



The Wall Street Journal covered the reaction of the company's president, Larry Killgallon, to the day's events:

The toy's presence in movies like Toy Story and Elf have led to sale boosts in the past--in 1995, the year of the first Toy Story release, Etch A Sketch sales were up 22%.

But Killgallon was quick to point out that those movies had a bit more appeal to a consumer group of four- to eight-year olds than primary political campaigns do.
Toy Story, also, was released in November of that year, just in time for Ohio Art's holiday selling period, when it makes nearly 60% of its sales. Killgallon said he would have preferred the campaigns to launch into this tactic for November's general election instead.

He said Ohio Art, though, doesn't endorse any candidate as it's a politically neutral company.

"Etch A Sketch does have a left knob and right knob," he said. "And if they work together, they can make a circle."

A good lesson for politicians of both parties.

Exit 142A Recap for March 22, 2012

Today at Exit 142A:

The GOP redistricting Plan was largely upheld but labelled a clearly partisan exercise, as the federal judges waxed nostalgically for the type of civil and open government Wisconsin was once famous for.

An artful look at female pulchritude through the ages.

EPA regs on CFC based inhalers lined the pockets of big Pharma.

Today's job report from Wisconsin DWD seems kind of fishy.

Mitt Romney was for high gas prices before he was against them.

Karl Rove lies, but what do you expect.

Remember the Etch-a-sketch?  It's now Rick Santorum's favorite prop.

New jobless claims dropped as the economy continues to improve.

Federal Court Upholds Redistricting But Calls It Clearly Partisan

The three Federal Judge Panel in Milwaukee hearing the redistricting lawsuit upheld the GOP legislature's work with one small requirement that two contiguous assembly districts in Milwaukee County be tweaked to avoid creation of districts that served to disenfranchise Hispanic voters.  The three Federal Judges, two appointed by Republican presidents and one appointed by a Democratic president, did not let the overtly partisan aspect of the redistricting go unnoticed however, beginning their opinion with the following statement:  "There was once a time when Wisconsin was famous for its courtesy and its tradition of good government."   The court made clear it felt the GOP actions in the redistricting process were a little douchey (which as used here means contrary to reasonable notions of democracy).

Other comments by the court:

The new governor and legislators were sworn in on January 3, 2011, and the very next day the Republican legislative leadership announced to members of the Democratic minority that the Republicans would be provided unlimited funds to hire counsel and consultants for the purposes of legislative redistricting. They informed the Democrats that they would not receive any funding for this process.

 . . .

We find that although the drafting of Act 43 was needlessly secret, regrettably excluding input from the overwhelming majority of Wisconsin citizens, and although the final product needlessly moved more than a million Wisconsinites and disrupted their long-standing political relationships, the resulting population deviations are not large enough to permit judicial intervention under the Supreme Court's precedents.

. . .

While we share Dr. Mayer’s [the Plaintiff's expert] concerns in many respects and find ourselves largely unpersuaded by Professor Grofman’s [the GOP expert] incomplete testimony to the contrary, we return to the degree of the deviations, which were nowhere close to the 10% number that the Supreme Court mentioned in 1983. The maximum deviation for assembly districts is 0.76% and 0.62% for senate districts. Numbers like these place a very heavy burden on the plaintiffs to show a constitutional violation. In the final analysis, they have failed to surmount that burden. We come to that conclusion not because we credit the testimony of Foltz, Ottman, and the other drafters to the effect that they were not influenced by partisan factors; indeed, we find those statements to be almost laughable. But the partisan motivation that, in our view, clearly lay behind Act 43 is not enough to overcome the de minimis population deviations that the drafters achieved, at least under this theory. We therefore find no merit in Claims One or Eight and conclude that they must be dismissed.  (Emphasis supplied.)

Stay tuned to see how the two Milwaukee districts that heed to be realigned will get done before the recall election.  The legislature's legislative session wrapped up last week.

500 Years of Women in Art

Paying to Breathe. EPA Regs on Asthma Inhalers Drove Up Their Costs.

Nick Baumann at Mother Jones reports on an EPA regulation that was a huge boon to the pharmaceutical industry and will cost billions in unnecessary medical expenses:

 In 2009, at the urging of the drug lobby, the EPA started banning asthma inhalers that run on ozone-depleting CFC aerosols. As a result, inhaler prices jumped from as little as $5 to as much as $60. The drug companies were thrilled—they got a new round of patent protection (and got to charge higher prices) for non-CFC inhalers that dispense exactly the same medicine as their CFC-based predecessors. But everyone else got screwed. By 2017, the switch to the new inhalers will cost consumers, taxpayers, and the government some $8 billion, according to the EPA's own estimates, just to avoid a tiny amount of CFC emissions.

Baumann explains that killing the regulation may take renegotiation of the Montreal Protocol on ozone-depleting CFC, and presumably a tussle with lobbyists for Big Pharma.

Where did 4,300 New State Government Jobs Come From? A Suspect February Jobs Report From Secretary Newson

 Did Wisconsin Add 4,300 Public Enemies in February?



DWD released the Wisconsin job numbers for February, 2012 today at noon.

Secretary Newson reported that private jobs increased by 4,000 compared to the previous month.  That is an OK number.  But from February 2011 to February 2012, the figures show the creation of only 500 private sector jobs in the past year.  So to date the Governor has fulfilled two-tenths of one percent (.002) of his campaign promise.

Better looking yet was the Secretary's report of the total of non-farm jobs created over the past month:  8,300.   But this number seems pretty suspect.  The difference between 8,300 new total non-farm jobs and 4.000 private sector jobs is 4,300, which is exactly the number of new government jobs being reported as created in Wisconsin since last month.  Wow!  Did the U.S. Army open a secret new training base in northern Wisconsin in February?  Did school districts hire back in mid-term some of the 3,400 teacher positions cut in the wake of the budget reforms?  If you look at the report, it says all 4,300 of the government jobs are State of Wisconsin employees.  Did somebody go behind the governor's back and increase the state's workforce by 5 percent in one month?

This is, of course, an anomaly in the report.  Presumably the Department of Administration with a few keystrokes on someone's computer can come up with the net number of state employees added or lost over February to within a dozen or two.  Does Secretary Newson point out the clear anomaly in his press release, in order to temper his assertion that the state added 8,300 non-farm jobs?  Here is all he says:

Seasonally adjusted data also show that, compared to January, total non-farm employment increased 8,300, including the private sector and a 4,300 increase in government jobs. Compared to February 2011 data, government employment was down 17,400.

But simply saying "total non-farm employment increased 8,300" sounds much better than "total non-farm employment increased 8,300, but this includes a total of 4,300 new state government jobs, the creation of which, as  everyone knows, goes against every fiber of this administration's body and is totally illusionary."

Maybe a media type will ask the Secretary how this huge number came about. 

Climb Aboard the Time Machine!

Back in 2006, Mitt Romney thought the  high cost of gas was a good thing.   But guess who was in the White House and running the show on Capitol Hill then?

Karl Rove's Mendacity; Is It The Wall Street Journal's As Well?

Greg Sargent at The Plum Line exposes it.

Is Rupert's Wall Street Journal giving up the pretext of responsible journalism?

The Etch-a-Sketch Controversy

Just in case you missed it:


The New York Times reports on Eric Fehrnstrom, at the center of the spin firestorm.

The Dems have jumped all over it:



As has Santorum:

Initial Jobless Claims Drop

New filings for jobless claims nationwide hit a four year low.

Exit 142A Recap for March 21, 2012

Today at Exit 142A:

The Gov went down the wrong path in touting Philly Fed data to prove his reforms are working.

Len Burman said there is no demonstrable relationship between capital gains tax rates and growth.

The Saints get hammered.

Robert Kelly says Russian mail order brides show Russia is devolving into a second world country.

Messi sets Barca  scoring record.

Ouch! Governor Walker Touts Fed Data. He Shouldn't Have Gone There.

 

Alert:  You may need to be a little wonkish to enjoy this post.  Unless you really dislike Governor Walker.

Yesterday the Philadelphia Federal Reserve Bank issued its monthly report on the coincident index for each state, and its forecast for the next six months of coincident index growth for each of the fifty states, a forecast index known as the "leading index."  The Philly Fed explains in technical papers available on its website that both these indices are intended to permit a state-to-state comparison of the economic health of each state.  For example, one of these papers says, in sum and substance, the indices are intended to allow workers or companies or entrepreneurs to compare the health of the economies as between individual states in order to make decisions about job relocation or establishing a new business in a more vibrant state economy.

What the indices are not intended to be are a reliable method of comparing the performance of two political administrations in charge of the same state at different periods of time.  But, desperate for good news on the state of the Wisconsin economy, any good news, Governor Walker issued a press release today citing the latest Philadelphia Fed data as proof that his policies are showing progress for Wisconsin, especially compared to the Doyle administration.

He should not have gone there.  It exposes him to ridicule.  It is as if some junior intern for the governor looked up from her computer screen and announced: "Hey, here is a really dope map from the Fed, we can use this to show success from our budget reforms!" All this done without bothering to read the fine print available on the Fed website.

Here is the text of Governor Walker's press release, available at the Wheeler Report, and on his website:

The Philadelphia Federal Reserve Bank released a new economic growth forecast for states yesterday.  The report forecasts Wisconsin to grow 1.95 percent over the next six months.  It is the best economic forecast for the state since 2003.  Wisconsin also experienced the most improved forecast in the nation.  Wisconsin’s three-month change was 2.36 percentage points, moving to a forecast of solid gains.  

Governor Scott Walker today released the following statement on the Federal Reserve Bank of Philadelphia’s forecast of solid growth in Wisconsin over the next six months:
“Strong signals suggest we are turning things around for Wisconsin’s economy, and the Federal Reserve Bank of Philadelphia’s newest report of state leading economic indexes provides yet one more indication that our pro-jobs policies are moving us in the right direction.  Although there is much work left to be done, the forecast along with additional economic indicators such as our state’s lowest unemployment rate since 2008 indicate we are heading in the right direction.”  

Democrats previously touted the now outdated Philadelphia Fed forecast as evidence that the Governor’s policies were hurting job growth in Wisconsin.   (Emphasis supplied.)

The reference to "2003" is important because that is when Jim Doyle took office as governor.  "Hurray, we're outpacing the Doyle administration!"  Except this isn't true.  At least under the Fed data.  Let's break it down;  a little propaganda exegesis.

1.       The Fed is projecting that the state's coincident index will grow by 1.95% over the next six months.  This is felt to be consistent with GDP growth in the state, as the coincident index is generally scaled to the state's GDP.  The coincident index compares one state to another based on four very finite metrics: nonfarm payroll employment, average hours worked in manufacturing, the unemployment rate, and wage and salary disbursements deflated by the consumer price index (U.S. city average). The trend for each state’s index is set to the trend of its gross domestic product (GDP), so long-term growth in the state’s index matches long-term growth in its GDP.

2.       The method involves a system of five major equations: one equation for each input variable and one equation for an underlying (latent) factor that is reflected in each of the indicator (input) variables. The underlying factor represents the state coincident index. The model and the input variables are consistent across the 50 states, so the state indexes are comparable to one another.

3.       Thus the coincident indices permit you to compare one state to another in terms of economic health.  For example, let's say you are a software developer who has a nice software package for managing inventory and you want to locate near manufacturing customers to whom you can sell the package.  You want to be in the Midwest near product manufacturers and in a state that is on the rise.  You know about the Fed indices, so you go to the recent coincident indices for the Midwest states and here is what you find from the Philadelphia Fed data (assuming you are compulsive in crunching the data):

 

You find that as of this past January (the most current data) Wisconsin ranks near the bottom of the pack of Midwestern states.  You've heard that the Governor of Wisconsin has done a little throw down to Governor Quinn in Illinois about how Wisconsin is going to be eating Illinois lunch in terms of business development and new jobs, but you see that Illinois, and everybody else other than Michigan, is ranked ahead of Wisconsin on the index.  Moreover, you see that the Midwest is doing so-so compared to the nation as a whole, but Wisconsin is doing much worse that the U.S. average.

4.    So you ask yourself, what is the trend line for Wisconsin compared to the other six Midwestern states?  The answer is "not so good."  This is where the effort by the Walker folks to contrast their  score in just one month against the Doyle administration's past record on this same index should leave them a tad red-faced.   If you look at just the first column of data for January of 2012, Wisconsin under-performs the United States average by 9.52 points (155.77 minus 136.25).   Now look at Illinois during this same time frame.  Wisconsin under-performs on the index by 5.95 points.  Score: Illinois 1, Wisconsin nil.

5.     Now let's look at the average performance of the state during the twelve months of the Walker administration from February 2011 to January 2012 (on the assumption that even the Walkerites aren't prepared to claim they did anything in January that took immediate effect on the economy).  Let's compare with Ohio and Illinois.  Wisconsin outpaced Ohio in that twelve month period by .07 points and fell short of Illinois by 3.7 points.  Illinois 2, Wisconsin nil.

6.    OK, but how did Wisconsin fare under Doyle's last year?  The answer is "better" than during the twelve months of Walker's administration.   We outpaced Ohio by 2.82 points on the index (compared to Walker's .07 points, and we fell short of Illinois by a much smaller amount, 2.3 points under Doyle and again 3.7 points under Walker. 

7.  You can do this same kind of exercise for all the Midwestern states and the United States, comparing Wisconsin's performance under a year of Doyle, or under his last four years, with Walker's first year, and the same result attains:  Wisconsin compared more favorably with the other states in terms of the Fed's coincident index under Doyle, usually by a lot.

So now let's go back to the "leading index" that the Walker administration was crowing about, the 1.95 percent expected increase for the state's coincident index for the next six months.  The Walker administration's press release conceded that this number represents the predicted growth rate in the state economy, its gross domestic product (GDP).  Does 1.95% represent a good annual rate of growth for a state economy during a national climb out of recession?  It does represent substantial improvement when the previous twelve months of coincident index for the Badger State under Governor Walker showed economic contraction rather than growth. 

The 1.95% projection puts us pretty low on the totem pole nationally.  Here is a chart showing how we fared on the Fed's leading index in January compared to the other 50 states:



Wisconsin is eighteenth from the bottom, sitting immediately ahead of Mississippi.  (Whew!)  And if you look at the last twelve month averages of the index for each state, on the assumption that this smooths out a few one month bumps, we do extremely poorly,  coming out ahead of only two states, Alaska and Montana, a couple of extraction states.  (All the Republicans other than Dale Schultz want to turn us into an extraction state by luring mining companies into northern Wisconsin by the promise of letting them write their own rules.)

So the exciting news in the Governor's press release turns out to be neither exciting nor accurate when you mine the data.  But maybe we will get some good news tomorrow when the February job numbers get released by the DWD.

At least one good thing has come from the Governor's press release.  He has acknowledged the Philly Fed indices as useful metrics for measuring delivery of his growth promise.








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