Archive for category Constitution
Constitution’s First Amendment Is Nothing To Obama
Posted by Tom in Constitution, Freedom, Government Regulation, Law, Morality & Religion in the Public Square, Rule of Law on February 4, 2012
As an American Catholic, I am appalled at Obama and his “Catholic” minion, Sebelius, who ignore the Constitution. I shouldn’t be surprised, they have continually done that before. What follows is a statement read this weekend in Catholic churches throughout Nevada. Freedom of religion is at stake here:
Note the conclusion in the third to last paragraph: To abide by the law, leads to a violation of our moral teachings. To ignore the law makes us subject to fines and other consequences. To act within the “nonexemption” leads us to abandon our mission to serve people in need. None of these is acceptable to people of faith.
This is what lead to the founding of our great nation. Freedom from religious persecution.
And the critical last question posed by the Nevada bishops: “Where else will this regulation lead?”
Obama and his ilk must be stopped for the sake of our freedoms.
Europe’s Road to Serfdom
Posted by Tom in Constitution, Europe, Federalism, Government Regulation, Statism on November 24, 2011
Friedrich Hayek distrusted the central planners for the fatal conceit that they knew more than people working freely in society, in the marketplace, in the polity. This “rule by the few” has gained a major foothold, no, strangle hold, in Europe. The technocrats in Brussels rule by dictat!
Rany York sent the following video in which Nigel Farage, MEP and UKIP, describes the situation with some accurate historical perspective. He correctly points out the shaky assumptions on which the EU and European Monetary Union were based. His fiery indictment of the unelected technocrats should serve as a warning to us in America: our bureaucrats, agencies, commissions, and tzars are nothing other than unelected technocrats!
Witness the financial upheaval in European financial markets resulting in yesterday’s failed German bond auction, to see where socialism leads. Sadly our President and the leftist Democrats think we are somehow immune.
Obamacare’s Medicaid Crutch Is Bankrupting the States
Posted by Tom in Budgets, Centrally Managed Economy, Constitution, Entitlements, Federalism, Fiscal Policy, National Character, State Finances, Welfare on February 4, 2011
To buttress the shaky fiscal credentials of Obamacare Congress increased the eligibility for Medicaid to 133% of the poverty line adding 25% to the rolls; it sent the bill for this to the states. So those new Medicaid entitlees would not have their healthcare welfare charged against Obamacare. George Melloan exposes this neat little trick in his op-ed in today’s WSJ, The States Can’t Afford Obamacare.
States unlike the federal government are required to balance their budgets. One of the largest cost items in those budgets is Medicaid. This is a federal welfare program which requires state administration and state budgetary contribution. The fed dictates the program which like all fed handouts is rife with fraud and abuse.
In the recent Florida Obamacare case, the 26 states argued that Medicaid was unconstitutional as a coercive control over state budgets; in other words a violation of federalism which forces states to implement and pay for federal welfare. Judge Vinson did not buy the argument stating that the states could merely refuse to implement Medicaid. In short the federal government was not forcing the states to implement Medicaid, AT LEAST NOT IN THE LEGAL SENSE OF THE TERM.
And therein lies the rub! If a state withdraws from Medicaid, the federal government continues to tax its residents. Those taxes that would have otherwise gone in part to pay the state’s Medicaid bill will now go to pay the Medicaid bills for other states. In this hard economic sense, Medicaid is an unfunded federal mandate. This is economic compulsion at its best. And this is undoubtedly a breakdown of our federal system.
To review the bidding, the Obama-Reid-Pelosi triumvirate enacted a new, intrusive and unsustainable federal welfare program, Obamacare, by increasing the size of an existant unsustainable federal welfare program, Medicaid. In the process the three exploded the states budget obligations, exacerbating the states budget deficits. This case of robbing Peter to pay Paul has driven both closer to bankruptcy.
It is good to keep in mind that these federal farces, these piles of money, promote overuse, fraud and abuse. There is little justification for this welfare largess, other than to addict voters to their source, in this case the liberal, leftist Democrats.
Another Call for a State Bankruptcy Provision-Is Congress Listening?
Posted by Tom in Bankruptcy, California, Constitution, Federalism, State Finances on January 18, 2011
David Skeel has another WSJ op-ed today, A Bankruptcy Law–Not Bailouts–for the States. This is important because with the U.S. in dire financial shape, if the federal government can’t afford its own unsustainable entitlements, it certainly can’t afford to bail out the states.
By now we all know the problems: California looking at a $20-28 Billion deficit and has a looming $500 Billion unfunded liability with its public employee pension programs. Illinois has a $15 Billion deficit, 208 Billion in unfunded liabilities and has just raised taxes by 75%. Newly elected NY Governor Cuomo is going to an emergency agenda because “the state of New York spends too much money.” Duh, duh, duh!
“Is there anything states can do in bankruptcy that a well-motivated governor can’t do without it? You bet there is.”
“First, the governor and his state could immediately chop the fat out of its contracts with unionized public employees, as can be done in the case of municipal bankruptcies. In theory, the contracts could be renegotiated outside of bankruptcy, and many governors are doing their best, vowing to freeze wages and negotiate other adjustments. But the changes are usually small, for the simple reason that the unions can just say no. In bankruptcy, saying no isn’t an option. If the state were committed to cutting costs, and the unions balked, the state could ask the court to terminate the contracts.”
“Second, the state could reduce its bond debt, which is nearly impossible to restructure outside of bankruptcy. While some worry about the implications for bond markets, the alternative for the most highly indebted states—complete default—is far worse. Randall Kroszner, a former Federal Reserve governor now at the University of Chicago Booth School of Business, showed in a 2003 study that the price of corporate bonds went up during the New Deal when the Supreme Court upheld legislation that reduced payments to bondholders. The reduction increased the prospect that bondholders would get paid. The prospect of state bankruptcy could have a similar effect, and even if it didn’t a reasonable reduction in state bond debt is essential to restructuring their finances.”
“Third, state bankruptcy could even permit a restructuring of the Cadillac pension benefits that states have promised to public employees. These are often “vested” under state law, and in some states, like California, are protected by the state constitution. Under state law, little can be done to adjust them to more reasonable amounts.”
There is not a fiscally prudent governor who would not like to have a bankruptcy tool at his disposal to tackle the intractable state budget problems. Congress and the President should relish the political mileage they would get in passing such legislation.
I have and continue to further urge: (1) a statutory restriction prohibiting the Fed from bailing out any state or its political subdivision by buying or guaranteeing the obligations thereof, and (2) a constitutional amendment prohibiting the federal government from the same sort of thing. With a bankruptcy provision and these two in place, the states will solve their own financial problems.
Such a step in a return to federalism would be wonderful for this republic. Urge your congressmen and senators to heed this call.
Everyone’s Constitution
Posted by Tom in Congress, Constitution, Federalism, National Character on January 10, 2011
Democrats joked about the reading of the Constitution in the opening day of the 112rh Congress in the House. They chided Republicans that it is a meaningless sop to the tea party. Rep. Waxman of California bragged that he was taught in law school that the law (constitution) was what the judge says it is.
Frankly, the liberals don’t like the Constitution. When faced with it, it tends to restrain them. And they don’t like restraint. They don’t really admit of a higher law. They have become a law unto themselves. Something akin the the divine right of kings.
Neomi Rao treats this in today’s WSJ, The Constitution: Not Just for Courts. In years past presidents and legislators considered the constitutionality of actions that were proposed; they consciously considered whether those actions stood up to that higher law.
“So who, precisely, is supposed to protect the Constitution? Article VI provides that all of our elected and appointed officials in both federal and state government “shall be bound by Oath or Affirmation, to support this Constitution.” The president takes a special oath to preserve, protect and defend the Constitution. These oaths reaffirm the constitutional language and structure that require each branch to take seriously the constraints of the Constitution.”
“Contrary to popular belief, and the beliefs of some lawyer-congressmen, the Supreme Court does not maintain a monopoly on constitutional interpretation. The court has an important role to play in reviewing the constitutionality of legislation and executive branch action, of course. But it cannot and should not exercise this power alone.”
Speaker Boehner’s demand that new bills offered to the 112th Congress cite their Constitutional authority should help return the Republic to a government of laws and not one of men, not even elite men!
History Lesson in State Defaults
Posted by Tom in Bankruptcy, California, Constitution, Fed, Federalism, State Finances on January 4, 2011
Dennis Berman pens an excellent history lesson in today’s WSJ, When States Default: 2011, Meet 1841. Illinois one of today’s default candidates along with its neighbor Indiana and six others defaulted on their bonds. The consequences were severe and long lasting, bond yields skyrocketed and lending dried up. Taxes also skyrocketed.
Berman quotes Randall Kroszner a former Fed Governor and University of Chicago who in discussing today’s state default possibilities advocates “a clear legal framework, and a clear way in which people would be treated.” Of course, that is now lacking since there is no bankruptcy provision covering states.
I reiterate my calls: 1 For a voluntary bankruptcy provision allowing states access to the federal bankruptcy courts on a voluntary basis. This is politically appealing for governors and legislators alike as it gives them the leverage to negotiate with both public unions and bondholders. 2. For a statute precluding the Fed from making loans to or guaranteeing obligations of a sovereign state. And, 3. for a constitutional amendment prohibiting federal bailouts of any of the sovereign states either by way of grant, loan or guarantee. This latter bootstrap point, even though as Berman points out: “Congress, meanwhile, helped set a precedent that still holds: In 1843, it rejected an elaborate plan for a bailout, with one critic later observing it would “cause recklessness and extravagance” among the states. Surely, someone will dust off those ideas in 2011.” In my opinion, the reason it still holds, if it still holds, is that no one has tested it!
Health Care, Right or Entitlement?
Posted by Tom in Centrally Managed Economy, Constitution, Entitlements, National Character, Statism on January 2, 2011
Is health care a right? How about health insurance? What about car care! What is a right and how is it distinguished from an entitlement?
Ross Kaminsky in his American Spectator post, Is It a Right or Isn’t It?, treats the rights issue with respect to health care. If health care is a right as both Obama and McCain asserted, then it is a positive right, one that is provided by others without regard to its being earned or paid for. He distinguishes this from negative rights such as those in our constitution, the right to be free from interference by others.
“The problem with Obama’s positive right formulation — as with all positive rights — is that one never knows where such a right ends, if or when such a right might be curtailed when it conflicts with citizens’ other (usually negative) rights.” Thus if health care is a right, how can we cut it off at the point society can no longer afford it? “This leaves proponents of a “right” in the uncomfortable position of having to say that it’s only a right up to a certain age, a certain degree of sickness, or a certain cost.” Kaminsky comes down against health care being a right.
Steven Yates, a philosopher, distinguishes between Rights Versus Entitlements in the Freeman blog.
“If we consider the original rights expressed in the Declaration of Independence and enumerated in the U.S. Constitution, it should be clear that there are massive differences between those rights and these new ones. The original rights were rights to live by one’s personal efforts without the interference of others, and in particular, without interference by government. That is what the founders of the United States were declaring independence from, after all. The Declaration of Independence speaks of the right to pursue happiness; it does not offer a guarantee that one will achieve happiness. This makes all the difference in the world; for in a free society there can be no guarantee that effort will meet with success.”
“In other words, there is a hard and fast difference between rights and entitlements, a difference which the past seventy years of government policy has blurred to the point of indistinguishability. A free society must recognize the distinction. Otherwise, it has no way of knowing which claims of rights to acknowledge and which to reject as spurious. Legitimate rights are easy to recognize. They can be acted on by individuals without the assistance of government and without forcibly interfering with other individuals. Entitlements, on the other hand, cannot be fulfilled except through specific government actions which require forcible interference with others. Protecting rights is thus compatible with limited government. Granting entitlements requires an ever- expanding and increasingly meddlesome state. The more entitlements the state grants, the more it must extend itself to make good on its promises, and the greater its level of interference with people’s actions. Moreover, by interfering with successful actions, government becomes a drain on the individual’s energies. The individual must expend more and more effort to get the same personal benefits. This translates into a disincentive to produce, and when less is produced, there is less to seize and distribute. Soon, the state can no longer keep its promises.”
Since the dawn of the progressive era, we have seen the United States becoming more and more an entitlement dependent society. The recent passage of Obamacare on top of the bankrupt Medicare, Medicaid and Social Security systems is only the last example. To paraphrase Margaret Thatcher, the problem with entitlements, like socialism, is that eventually you run out of other peoples money to spend on them.
Shades of George Orwell
Posted by Tom in Centrally Managed Economy, Constitution, Federalism, Government Regulation, Individual Freedom, Law, Morality & Religion in the Public Square, National Character, Statism on December 28, 2010
Hopefully only a bad dream from which we shall awake!
Gaping Hole in Financial Regulation
Posted by Tom in Centrally Managed Economy, Constitution, Financial Policy, Housing, Welfare on December 27, 2010
Tom Cargill has an excellent article in today’s RGJ, Reforming Freddie and Fannie is No. 1 Priority. In it he sets the record straight as to the causes of our current financial mess, “Incredibly easy monetary policy, lax regulatory oversight and flawed government incentives to expand homeownership to moderate- and low-income households based on “junk” mortgages are the source” of the Great Recession.
He correctly points out that the Democrats would rather point fingers elsewhere, Wall Street greed and deregulation. But these same politicians are responsible for the Community Reinvestment Act and the Fannie/Freddie subprime engorgement. Barney Frank famously wanted to roll the dice with F&F, he later admitted his error, after the international financial damage was done!
Tom rightly points out that the recently passes financial regulation failed to touch F&F, the prime cause of the Great Recession and that failure of courage must be remedied. Why? because they will continue down the same blind path if left to their own devices.
Housing has been a major economic driver as the baby boomers aged. It has been a first step toward everything in those new houses from beds to babies! The industry is in the tank now and hasn’t reached botton, again because of federal efforts to keep deadbeats in homes and prevent foreclosures. The overhang of underwater home mortgages is a major drag on home values. And until the secondary market reaches market clearing pricing, no upturn can happen.
Another downer is the maturity of the babyboomers. As that demographic lump passes from house to home to grave, the demand for housing will be less, absent some dramatic increase in immigration or fertility rates. So, the future does not look good.
But for the health of what will be left of the industry, the health of the economy, and the sanity of the financial markets, Fannie and Freddie must be dealt a death blow. The mortgage market must be allowed to operate in the private sector.
I have a basic prejudice toward government interference in free markets. Thus, I wonder what today would be like without the Community Reinvestment Act and without Fannie and Freddie? They forced or incentivised a large build up in the housing industry, misallocating investments and creating the bubble that burst. My gut is that we, all of us, would be much better off if they had not been around. And, where in the Constitution is there an enumerated power to promote home ownership to low income families or high income families for that matter? Truly beyond the scope of those powers. Something to think about!
Christmas Surprise: FCC Expropriation & Internet Control
Posted by Tom in Centrally Managed Economy, Congress, Constitution, FCC, Free Speech, Government Regulation, Statism on December 20, 2010
It’s been long brewing but Obama’s unelected regulators at the FCC will tomorrow issue the order for “net neutrality” and internet regulation. As discussed in a prior post, net neutrality forces carriers to favor bandwidth hogs at no additional costs. Even though those carriers have invested significant dollars in their infrastructure, they will not be allowed to charge an appropriate return on their investment. This is a pure and simple a taking of property without just compensation, a confiscation of invested capital.
Worse, it is a first step to regulatory assertion of the right to regulate the internet without specific statutory authority to do so. It is legally an ultra vires action of government bureaucrats. Commissioner Robert McDowell tells the story in yesterday’s WSJ, The FCC’s Threat to Internet Freedom.
So why the Christmas surprise in this busy season as the infamous 111th Congress draws to a close? The usurpers of power, the Democratic dictators at the FCC know that the congress only has 60 days to review and potentially stop this illegal FCC action. If the holidays occupy 10 of those days, and organization of the new 112th Congress occupies another 10 or so days, then there will only be 40 days left for review. And as we all know there are more pressing national fiscal problems that will command higher congressional priority. Obama’s expropriators are hoping to float this usurpation under the radar.
Indeed it is the regulatory regime that will sustain this lame duck president during the next two years. And it is in this arena that major uncertainty will be created which will further damage the economy, indeed, the republic. The FCC will potentially damage our freedom of speech and freedom of the press, while the EPA can proceed to bankrupt our nation with cap and trade regulation of CO2!
Internet Freedom Coalition posted an excellent article on the subject, Silencing the voices of Internet dissent. It is a call to action to alert congressional representatives to review and reject the threat to free speech and free press. This is a critical effort.
Absent internet criticism of Obama and his ilk, we will become another Russia or China.