There is a warped Inside-the-Beltway fetish with “getting things done.” Warped – because of what many of those “things” consist. Most members of both political Parties (and the bulk of the Chattering Classes) want things – that most of We the People do not. So DC tries to distract from their terrible products – by obsessively fixating on the process.
Behold but one heinous example. Chattering Class-member The Washington Post on December 17, 2015 extruded Paul Ryan Notches a Big Victory, but the True Test May Come Next Year: “The House is expected to pass a $1.1 trillion spending bill Friday that will remove any threat of a government shutdown, keep the government funded into the fall of 2016, and notch a signature win for new House Speaker Paul D. Ryan (R-Wis.)”
This “big victory” blew up the “Sequester” spending caps – the only (tiny) such constraint placed on DC in decades. And it funded President Barack Obama for basically the rest of his administration – which means the illegal unilateral actions in which he has endlessly engaged will be from now on unimpeded by Congress’ power of the purse.
That’s a DC “signature win.” Remember this – and an endless cavalcade of similar “signature wins” – when you next hear how important it is for DC to “get things done.” (Remember it all – when you wonder how Donald Trump is doing what he’s doing.)
It is this Bizarro World fetishist definition of “getting things done” that is set to undermine our patent system – a fundamental, foundational component of our free market economy. How fundamental and foundational? President Abraham Lincoln“called the introduction of patent laws one of the three most important developments ‘in the world’s history,’ along with the discovery of America and the perfection of printing.”
What things patent does DC claim need getting done? Slaying the “patent troll.” But what exactly does that mean? Again, there’s the DC definition – and then the one we hold out here in Reality.
Here’s the Bizarro World definition – courtesy of (accidentally?) anti-patent Lee Cheng: “2015 was a huge year for trolls….(A)t one level are the ‘big game hunters’ that go after large corporations like Microsoft, Apple and Google using patents that are often technically valid….Then there are the ‘ankle biters’ or ‘nuisance’ trolls that file …lawsuits…with patents that are often pathetically weak. ”
Get that? Whatever Cheng may think of them, he begrudgingly admits the patents these people hold – are valid. But they’re “trolls” anyway. Bizarro. And incredibly dangerous.
If you want to undermine valid patents – you want to undermine the entire patent system. That, to me, is fairly patent “troll”-ish. In other words: When You Hear ‘Patent Trolls’ – Think ‘People Protecting Their Private Property’.
But DC, unfortunately, is looking to “get something done.” Behold the Innovation Act – Virginia House Republican Bob Goodlatte’s awful bipartisan effort. About which he anxiously says: “(T)he Congress must act to curb abusive patent litigation.” And the Senate has a just about equally terrible bill: “A bipartisan group of senators introduced the PATENT Act…an important step toward stopping abusive patent litigation.”
As usual, DC is in bipartisan fashion doing the wrong thing – and making matters worse, not better.
Again, the patents involved in these allegedly “troll” lawsuits – are valid. So if Congress undermines patent litigation – they undermine the ability of these valid patent holders to defend their valid patents.
Which undermines the entire patent system.
Which Abe Lincoln would loathe. As should anyone who ever wants any new idea ever to be transmogrified from thought – into something we can purchase.
Because before anyone with an idea can put together a plan, test market interest, garner investor interest, hire people, manufacture and then deliver their idea – they have to be able to protect it.
DC has to continue to allow them to do that. And, in this instance, nothing else.
So, DC: When it comes to terrible legislation like the Innovation and PATENT Acts – don’t just do something, stand there.
The Tomorrow’s Cures Today Foundation (TCTF) says FDA regulations deprive terminally ill patients and their family members of hope.
In a video posted February 6, TCTF tells the story of former U.S. Navy pilot Matt Bellina’s battle with amyotrophic lateral sclerosis (ALS), also called Lou Gehrig’s disease, which causes nerve cells in the brain and spinal cord to degenerate.
ALS is a terminal diagnosis. In 2015, Bellina and 800,000 supporters unsuccessfully petitioned FDA to approve experimental use of a drug reported to yield positive results for ALS patients, the video states.
TCTF’s website (TomorrowsCuresToday.com) calls for replacing FDA’s cumbersome regulations, which includes a long clinical trials process, with a market-based policy known as Free to Choose Medicine (FTCM).
FTCM “addresses the key constraint to improving the drugs-to-patients system: the lack of consumer choice and competition due to the FDA’s monopoly over access to new drugs,” the site states.
More information: FreeToChooseMedicine.com
In today’s edition of The Heartland Daily Podcast, we listen in as H. Sterling Burnett, Managing Editor of Environment & Climate News joins the nationally syndicated radio show, An Economy of One, with Host Gary Rathbun. Burnett joins the show to talk about the environmental agenda of President Obama’s last year in office.
It is Obama’s last year in office, so he is trying to ram through as many regulations as possible to secure his environmental legacy. Rathbun and Burnett talk about a discussed plan to regulate methane emissions, the recently imposed ban on offshore drilling on the Atlantic Coast, and Obama’s proposed $10 tax per barrel of oil.
This week, Heartland Institute President and CEO Joseph Bast joined the Unbiased America show to talk about the new book, Why Scientists Disagree About Global Warming. Unbiased America is a weekly video podcast featuring a panel of several liberty-minded individuals who strive to “create a platform for discussion and debate.” While talking with panel members Will Ricciardella, Kevin Ryan, Mike Lee, and Grant Phillips, Bast dismantles the claim that 97% or scientists have arrived at a consensus that man is causing catastrophic global warming.
Along with clearing up many of the false claims surrounding the climate change debate, Bast also addresses the frequently repeated accusations that The Heartland Institute is funded by the Koch brothers and works with the Phillip Morris tobacco company.
If you wish to get a clear view of the current state of the global warming debate, watch the video above.
In today’s edition of The Heartland Daily Podcast, we listen in as Research Fellow and Managing Editor of Budget & Tax News Jesse Hathaway joins AM Tampa Bay radio with Hosts Jack Harris and Tedd Webb. Hathaway joins the show to talk about the Apple vs. FBI encryption debate.
Hathaway explains that while people instinctually side with the FBI in this case, compromising encryption of the Iphone will set a dangerous precedent.
President Barack Obama’s nominee for the United States Supreme Court has a history in health care-related cases, Modern Healthcare reports.
Obama nominated Merrick Garland, chief justice of the U.S. Court of Appeals for the District of Columbia, on Wednesday, March 16.
A number of cases currently or recently before the Supreme Court have passed through Garland’s court in one form or another.
Among them is Zubik v. Burwell, more commonly known as the “Little Sisters” case, Modern Healthcare states:
“A majority of judges on that court recently denied a petition for rehearing in a case now before the U.S. Supreme Court over the Affordable Care Act’s contraception mandate. In that case, a three-judge panel of the court, that did not include Garland, ruled against religious not-for-profits’ assertion that they shouldn’t have to take any action to opt out of the Affordable Care Act’s mandate that employers provide birth control coverage to employees. The religious not-for-profit Priests for Life then asked the court to re-hear the matter before a full panel of judges, but a majority of the judges turned down their request.”
Health Care News (HCN) will cover the oral arguments for Zubik v. Burwell, scheduled to begin Wednesday, March 23. Multiple legal scholars have told HCN the petitioners in Little Sisters would likely receive a favorable ruling were Scalia still on the Court.
Garland has a connection to a more famous health care case, King v. Burwell, a landmark victory for Obama and the Affordable Care Act, Modern Healthcare states:
“Garland was also head of the court when a majority of its judges decided in September 2014 to re-hear Halbig v. Burwell, a case in which a three-judge panel of the court initially ruled that insurance premium tax subsidies under the Affordable Care Act should not be offered to Americans in states without their own exchanges. The court never actually re-heard the case, however, instead deferring to the Supreme Court’s decision in King v. Burwell last year. In King v. Burwell, the nation’s high court upheld the premium subsidies for Americans in all states.”
In his dissent in King v. Burwell, Scalia wrote, “We should start calling this law SCOTUScare.”
I discussed the far-reaching impact of King v. Burwell, and read from Scalia’s dissent, in this week’s podcast with Sally Pipes, executive director the Pacific Research Institute, who covers the case in the beginning of her new (and mercifully short) paperback The Way Out of Obamacare (Encounter Books, 2016).
Not all health care-related cases Garland has taken have gone all the way to the Supreme Court, Modern Healthcare reports:
“Garland was also part of a three-judge panel that partially sided with hospitals in a case over Medicare outlier payments. In that case, 186 hospitals alleged that Medicare underpaid them by more than $3 billion in outlier payments. Outlier payments are extra payments made to hospitals when the estimated cost of treating a patient exceeds the standard Medicare payment.”
For health care policy free and clear, visit news.heartland.org/health.
Simon Davis-Cohen of In These Times magazine authored an article last week claiming that “corporate America” is the source of the ongoing push for an Article V convention to amend the U.S. Constitution. The article was written days before West Virginia became the 28th state to enact a resolution calling for a convention that would require the national government to live under a balanced budget requirement.
Mr. Davis-Cohen says the American Legislative Exchange Council (ALEC) is the real mastermind behind the movement in favor of an Article V convention, but this is not the case. ALEC is not responsible for much of the lobbying efforts for an Article V convention. These endeavors have been taken on numerous organizations, including the Balanced Budget Amendment Task Force (BBATF), Compact for America (CFA), and Convention of States. These three organizations conduct completely separate lobbying efforts, although all are members of ALEC.
Mr. Davis-Cohen further accused ALEC of attempting to devastate the economy and preventing the national government from using Keynesian stimulus programs that he believes would improve the U.S. economy, despite a wealth of evidence that clearly shows these kinds of programs cost a great deal and produce very little.
The truth is many labor organizations, such as the American Federation of State, County, and Municipal Employees, have long been opposed to a balanced budget amendment. The BBATF’s recent victory in West Virginia has given AFSCME and its big-labor allies more reasons to fear an Article V convention. Congress can call a convention when they receive applications from at least 34 state legislatures on a particular amendment to the Constitution of the United States. The recent victory in West Virginia has given new hope to states such as Oklahoma, South Carolina, Virginia, and Wisconsin that are considering applications for a convention.
Another false assertion reported in the story is that a convention cannot be limited, a claim made by groups on both the right and left. While the thought of a “runaway convention” may make for a good novel, the reality is states can limit the conduct and scope of a constitutional convention through “faithful delegate” laws.
One example of such a law was recently offered in Indiana. State Sen. David Long (R-Fort Wayne) authored legislation that details delegate selection procedures, along with placing checks and balances on appointees to a convention. Seven states have already enacted the legislation, and an additional five states are considering the law this year. Some of the key limitations are that federal office holders and lobbyists are banned from being selected as delegates. Violators risk facing criminal penalties on any appointee who violates convention rules.
Despite much rhetoric, an Article V convention offers a powerful opportunity for the American people to rein in the out-of-control spending practices of the federal government, brining fiscal sanity back to the United States.
Researchers have found that some buyers are willing to pay for environmentally friendly products because those products are “status symbols.” A report in the Atlantic states: “Environmentally-friendly behaviors typically go unseen; there’s no public glory in shortened showers or diligent recycling. But when people can use their behavior to broadcast their own goodness, their incentives shift. The people who buy Priuses and solar panels still probably care about the environment—it’s just that researchers have found that a portion of their motivation might come from a place of self-promotion, much like community service does good and fits on a résumé.”
With “green” having become a status symbol, the affluent can afford it. Yet, their desire to “broadcast their own goodness” actually results in higher costs to those who can least afford it.
Solar power is a great example. On the website for SunRun, a solar panel leasing company, through the story of customer “Pat,” they even encourage the “green status symbol” as a sales feature. While Pat may be happy with her solar panels and “hopes that all her neighbors will go solar, too,” her “green status symbol” costs all the utility’s customers who mostly can’t afford to “go solar.”
As I’ve written on many times, the idea of solar leasing works because of tax incentives and a system called “net metering.” First, those tax incentives are paid for by all taxpayers. Anytime the government gives something away, everyone pays for it. Net metering is a little harder to understand. In short, the utility is required by state laws to purchase the extra electricity generated by rooftop solar panels at the full retail rate—even though they could purchase it at a fraction of the cost from the power plant. As more and more people sign up for these programs, it increases the overall cost of electricity. Remember, however, those with solar panels could have a zero dollar utility bill but they are still using electricity from the utility company at night and generate additional customer service costs such as transmission lines. Ultimately, the cost of electricity goes up on the bills of non-solar customers. Due to this “cost shifting,” many states are changing the net metering policies so solar customers cover the unpaid grid costs. However, as has happened recently in Nevada, the revised programs change the economics and make it unprofitable for companies to operate in the state.
This is clear to see in overall rising electric costs—about 3 percent per year according to the Institute for Energy Research—despite the main fuel costs (coal and natural gas) being at all-time lows.
Earlier this month, Investor’s Business Daily (IBD) addressed another interesting angle: “Green energy can’t compete with $30 oil.” The only way for “green” energy to survive, it says, is: “by the government forcing people to buy them and jacking up electricity and heating prices to families and businesses.”
A new study from the University of Chicago, referenced by IBD, concludes that for an electric vehicle to be cheaper to operate than the modern internal combustion engine, “the price of oil would need to exceed $350 a barrel.” The IBD states: “without massive additional taxpayer subsidies to companies such as Tesla, the price of oil would have to not just double or triple, but rocket more than 10-fold before battery-operated cars make financial sense.”
Yet, sales for the Tesla Model S, the International Business Times (IBT), reports: “actually rose 16 percent last year, in part because they serve as status symbols or appeal to the environmental concerns of well-to-do drivers.”
On March 11, in the Wall Street Journal, columnist Holman Jenkins writes: “Voters should be mad at electric cars.” Why? Because, as he explains: “how thoroughly Tesla’s business model depends on taxpayer largess.” Jenkins states: “Tesla’s cars have status cachet, yes. Even some middle-class customers might be attracted, notwithstanding low gas prices, as long as helped by an enormous dollop of taxpayer favoritism.” As he lays out for the reader the “absurdity of their subsidy regime,” Jenkins concludes: “And you wonder why, on some level voters sense that our political class has led America into a dead-end where the only people doing well are the ones who have subsidies, regulation and political influence stacked in their favor.”
Alternative fuels have also taken a hit with low oil prices. According to IBT: “corn ethanol and algae-based diesel need oil prices at around double today’s levels—or higher—to compete with fossil fuels.”
Another fixture of the “green” social movement that has taken a toll in the low oil-priced environment is, surprisingly, recycling. Calling recycling a “$100-billion-a-year business,” National Public Radio reporter Stacy Venek Smith, points out: “Plastic is made from oil, so when oil gets cheap, it gets really cheap to make fresh plastic. When the price of oil gets really low, using recycled plastic can actually be more expensive because it has to be sorted and cleaned.” In Salt Lake City, KUTV reported: “Many businesses are finding it cheaper to manufacture new plastic than to use recycled materials.” In Montana, according to the Philipsburg Mail, plastics are no longer being picked up for recycling “because the price per pound was so low, it didn’t cover the cost of gas and mileage to make the trip.”
The problem is international. Germany has a reputation as a recycling model with a goal of 36 percent of its plastic production coming from recycled materials and “German consumers finance recycling via licensing fees, which are added on to the price of the products they purchase,” says Deutsche Welle, Germany’s leading organization for international media development, in a report titled: “Low oil prices threaten Germany’s plastics recycling.” It states: “For manufacturers with eyes firmly fixed on costs, opting for cheaper new plastics would be the more economically attractive option.” However, many companies, wanting to appear “environmentally friendly” will still “pay up for recycled plastics, despite higher costs”—meaning higher consumer prices for the plastics they produce.
Addressing the recycling problem, The Guardian states: “Recycling only works when there’s someone on the other side of the equation, someone who wants to buy the recycled material.”
Fortunately for the recycling industry, but bad for consumers who pay higher prices for plastic products, the Philipsburg Mail concludes: “A lot of Fortune 500 Companies still want to purchase recyclables to meet sustainability goals.”
Despite claims of “green prosperity” that implies such policies can “fight poverty and raise living standards,” the opposite is true. Everyone pays more—even those who can least afford it—so the elites, seeking green status symbols, can feel good and appear to be community leaders.
The author of Energy Freedom, Marita Noon serves as the executive director for Energy Makes America Great Inc., and the companion educational organization, the Citizens’ Alliance for Responsible Energy (CARE). She hosts a weekly radio program: America’s Voice for Energy—which expands on the content of her weekly column. Follow her @EnergyRabbit.
Anything with “Big” in it means Big Money, whether it’s Big Pharma, Big Oil, or whatever. The Big industry will have skyscrapers, plush executive suites, and a battalion of managers with million-dollar compensation packages.
Big Healthcare is no exception, and it is important to understand just what healthcare is. The trillions of dollars of revenue sucked in by Big Healthcare are not just for medical care. “Healthcare” is mainly concerned with collecting and distributing the money. Perhaps half of the money gushing through the system pays nurses, doctors, orderlies, receptionists, or therapists, or buys medications, oxygen concentrators, wheelchairs, bandages, or x-ray machines. The rest is diverted to something else. It’s hard to figure out just how much because insurers may, in calculating the “medical loss ratio,” call a lot of things “healthcare” that you might call “administration.”
Big Healthcare makes money from the difference between insurance premiums, government payments, and other sources of revenue, and the outgo to workers and suppliers. This may be called a “profit” if distributed to shareholders such as your pension plan, or an “excess” if the enterprise is tax-exempt (“non-profit”). The non-profit can use it for self-promotion, executive pay, or a luxury condominium such as the one bought by the American Board of Internal Medicine for its dignitaries.
Big Data is an essential component of Big Healthcare. Most of Big Data, even if it is supposed to be about “quality,” is related to filing claims for payment. Big Healthcare has vast number-crunching and data-mining capacity, and is acquiring an excellent understanding of what is profitable what isn’t. This information is incorporated into “best practices,” “guidelines,” and the options that appear in the drop-down menus of the proprietary electronic health record.
Big Healthcare can identify low-risk enrollees and those likely to need expensive treatment. It knows which doctors are compliant about following the guidelines, and which care enough about their patients to think independently.
Big Data itself is a lucrative revenue source. It sells patients’ medical data to insurers, banks, government agencies, and enterprises of all types, to be used for scoring people—perhaps for targeted ads, perhaps for making employment decisions, perhaps for rationing or denying care. Do not imagine that the Health Insurance Portability and Accountability Act (HIPAA) prevents this. It in fact enables access by millions of “business associates,” researchers, law enforcers, planners, etc. HIPAA may prove an inconvenience to your family or doctor—but not to hackers.
Big Healthcare has one potential vulnerability: patients may figure out what is going on. They may ask themselves why they should pour thousands of dollars every year into “health plans,” where it is gone forever, instead of saving it to buy the medical care of their choice if and when they need it. Why should they see a “provider” owned by a health plan, who will plug their “protected” health information into the electronic health record and follow the health plan protocol? Why should they not see a doctor who is working for them, who cares about them, who will keep their data confidential, and who will prescribe according to his own best judgment?
Why not refuse to enroll? There is an ObamaCare penalty, but it might be much less expensive than the plan, and there are many ways to avoid it, including hardship waivers or joining a health-sharing ministry.
Big Healthcare is behaving like monopolies and cartels everywhere: trying to obliterate the competition, generally with the help of Big Government. The latest ploy, now being rammed through legislatures in more than a dozen states, is called the Interstate Medical Licensure Compact. The pretext is to solve the physician shortage and improve access to telemedicine. The effect is to create a special class of physicians, who meet the Compact’s nine criteria and will be licensed in multiple states. This will enable Big Healthcare to enforce narrow networks, forcing patients to accept telemedicine consultation from a remote specialist (who follows the plan’s protocol) instead of seeing a local physician face to face.
Once the independent physicians are gone, patients will have no choice. “The system will see you now”—or not.
I’ve heard the following quote ascribed to National Basketball Association (NBA) player, coach and executive Pat Riley – but the Internet is not giving up the ghost on provenance to him or anyone else. As I recall, the recitation is: “That player is drowning in Lake Me.”
Meaning a person who is totally self-absorbed. Transfixed by their own navel (which actually has a name – Omphaloskepsis). A person who finds himself endlessly fascinating – and utterly invaluable.
We are all this to some degree – it’s human nature. But some of us are less capable of tamping it down – or masking its all-encompassing nature. Some of us take the occasional dip in Lake Me – others are completely submerged and sinking therein.
Many, MANY of the latter – run for political office. It’s as if the Coast Guard began its Search and Rescue division – to save politicians from themselves.
Over the weekend I started listening to a podcast of the February 24 edition of C-Span’s “The Communicators.” I say I started – because Massachusetts Democrat Senator Ed Markey’s opening salvo was SO Drowning-in-Lake-Me obnoxious I couldn’t continue subjecting myself to it.
The topic of discussion was the 1996 Telecommunications Act. Which was the last time Congress addressed law pertaining to things communications and information – including the then-nascent Internet. The point of the law – and the subsequent policies of the Bill Clinton and George W. Bush Administrations – was to get and keep the government out of the way of the Web.
As nigh always happens when the government leaves something alone – the Internet exploded and proliferated into the free speech-free market Xanadu we all now enjoy. Government stepping aside made room for trillions of dollars of private sector investment – and the endless invention, innovation and reinvention that follows.
Anyone over the age of forty remembers the awful slowness of dial-up connection speeds (for Millennials – it was this). From which the private sector has delivered us – to ridiculously fast broadband speeds. So fast we can now seamlessly watch HD movies wirelessly – either on phone company networks or our own wi-fi set-ups.
This warp-speed increase has made possible a whole host of now-ubiquitous companies that ride these high-tech rails – Google, Netflix, Facebook, Amazon and on, and on, and….
These trillions in private investment have created a trillion-dollar-a-year economy. This amazing, all-time-in-human-history success story is the result of intentional government inaction – not government action.
Yet somehow Senator Markey has a bizarrely different perspective on what has transpired these last twenty years. Asked “What did you get right in 1996?” – Markey launched:
“Well, we reinvented the world we live in, for all intents and purposes.”
No, Senator – you and your government cohorts did no such thing. You got the heck out of the way – which allowed the private sector to reinvent the world. Because that’s what the private sector does. Government does – ObamaCare, the Post Office, the Veterans Administration, Benghazi,.…
“Not one house in America had broadband when that bill was signed by President Clinton. Today for a twelve-year-old boy or girl in America they believe it’s a Constitutional right to have a 50-inch HD screen in their living room and that they would be left behind.”
A bit of idea-and-thus-word-salad there. You aren’t left behind anything if you are bereft of a 50-inch HD screen. But “left behind” is a government-Internet talking point – so he in-artfully, inaccurately threw it in here. (Let’s leave aside the uber-government-school-failure that is 12-year-olds thinking a TV is a Constitutional right – and a United States Senator’s willingness to accommodate and pander to this inanity.)
“Before the Act passed we lived in an analog world, we lived in a dial-up world. We had to move. We had to move to broadband, we had to move to digital. So what we did was we created a digital free-for-all in that bill. Where every company could do everything.”
In the private sector, every company can do everything – unless and until government says they can’t. All the Act did was stay out of the company-limiting business. (A practice the Barack Obama Administration is most unfortunately, most violently reversing – in direct violation of the Act.)
“And that telescoped the timeframe that it took in order to deploy fiber all across our country – to create the capacity so that all of these new companies could be created. So that words like Google and Hulu and YouTube are part of the culture today. But they were impossible to be created before the Act.”
Yes, because the Act cleared out of the way most of the existing government impediments to the private sector. Government only accelerated the deployment of fiber and its capacity – by removing itself from the equation. And thereby allowing the private sector to accelerate the deployment of fiber and its capacity.
“So we got a lot right. Nothing is perfect.”
Correct – there is almost always more government you can make less.
“But one thing we did do was we moved not only our own country but the world from analog to digital. And if you’re living in India or China you’re now using the words that were created – including Twitter and Facebook – that would not be possible without that bill.”
No, Senator, the private sector that invested trillions here – invested trillions more everywhere else. Thereby exporting to the world the magic they themselves created here.
Senator Markey and his government ilk did nothing for the Internet – except leave it alone. But now wants to take all the credit – for doing absolutely nothing. And simply allowing the private sector to do what the private sector does.
In auto racing, there is a speed-limiting device placed on engines – called a governor. Government is little more than a speed-limiter of the private sector. The bigger the government – the bigger the governor, the slower the economy.
Limiting as much as possible the governor – is certainly important. Then taking near-complete credit for the cars and drivers subsequently winning the Daytona and Indianapolis 500s, and races all over the world – is delusional Drowning-in-Lake-Me bizarre-ness.
I would really like a piece of the concession on Capitol Hill life preservers.
In this edition of The Heartland Daily Podcast, Research Fellow and Health Care News Managing Editor Michael Hamilton interviews Sally Pipes, executive director and CEO of the Pacific Research Institute about her plan to repeal and replace the Affordable Care Act (ACA).
Pipes laid out her plan in her newest book, The Way Out of Obamacare (Encounter, 2016). Pipes’ mercifully slim, and crystal clear, paperback tells how the Unied States Supreme Court’s decision in the infamous King v. Burwell (2015) gave new life to the floundering ACA. Had the Court ruled differently, the federal health insurance exchange at Healthcare.gov would have folded, and the ACA with it.
After discussing the case’s impact on America’s health care system, Hamilton and Pipes look to the future. Pipes says Republicans’ problem is not lack of a replacement plan, but an overabundance of plans. Ultimately, the ones that work are like Pipes’ plan, which would enact a health care law that empowers consumers (patients) and doctors (providers) rather than the federal government.
Over the past 25 years, parents and children have won many hard-fought battles for the right to choose the best schools, public or private, to meet their educational needs. A majority of states now have programs providing some degree of access to K–12 private schools.
Political victories would not have come without the backing of the U.S. Supreme Court, and no justice was a greater stalwart for the school-choice cause over the past three decades than liberty-loving Antonin Scalia, who died in February at age 79.
Scalia’s eventual replacement could open the door wider for full-scale school choice programs by voting to uphold parents’ right to send their children to private secular or religious schools, or he or she could slam the door shut by narrowing choice options to secular, government-backed schools. The stakes for full-scale school choice are simply enormous.
The key constitutional issue currently being debated by choice advocates and opponents of choice is whether making publicly funded scholarships available for use at religiously affiliated schools violates the prohibition of an official “establishment of religion” contained within the First Amendment.
Scalia was part of the 5–4 majority in the landmark case Zelman v. Simmons-Harris (2002), which found Cleveland’s tuition voucher program to be constitutional, even though 82 percent of participating private schools had a religious affiliation. The voucher program provided parents with up to $2,250 a year for education-related expenses.
The Zelman majority created a five-part private choice test that programs facilitating access to religious schools must pass to be considered constitutional: (1) It must have a valid secular purpose; (2) send aid to parents, not to the schools; (3) cover a broad class of beneficiaries; (4) be neutral with regard to religion; and (5) provide ample non-religious options.
In regards to concerns about the large number of voucher students enrolling in parochial schools, the majority opinion stated, “The incidental advancement of a religious mission is reasonably attributable to the individual aid recipients not the government, whose role ends with the disbursement of benefits.”
The Court’s bench has changed quite a bit since 2002. With Scalia’s passing, only Justices Clarence Thomas and Anthony Kennedy remain from the pro-voucher majority. Current Justices Ruth Bader Ginsburg and Stephen Breyer were dissenters in Zelman.
Despite the Court’s changing faces, the 5–4 split in choice cases has been maintained over the past decade. In Arizona Christian School v. Winn (2011), Scalia, Thomas, and Kennedy joined with Chief Justice John Roberts and Justice Samuel Alito in defending an Arizona tax-credit scholarship program from the preposterous liberal assertion that all income belongs to the government, even if it never reaches a tax collector’s hands. The dissenters were Ginsburg and Breyer, joined by Justices Elena Kagan and Sonia Sotomayor, both of whom were appointed by President Barack Obama.
The Zelman precedent has thwarted many challenges to private school choice, often led by the American Civil Liberties Union (ACLU), over the past 14 years. For instance, in Oliver v. Hofmeister, decided on February 16, the Oklahoma Supreme Court cited Zelman in its unanimous decision to uphold a voucher program for disabled kids against the contention that a lopsided parental preference for religious schools rendered it unconstitutional. The enrollment pattern is “the sole result of the parent’s independent decision completely free from state influence,” the Court countered.
Oklahoma’s High Court batted down a cynical effort by choice foes to use a bigoted, anti-Catholic Blaine amendment, which still exists in three-dozen state constitutions, to deny families access to full-scale school choice. Blaine amendments are the rotten remnant of a 19th century political effort to go far beyond the U.S. Constitution in imposing barriers against any sort of aid helping “sectarian” schools, even indirectly.
Unfortunately, Blaine is still an insidious obstacle to choice in some state courthouses. In June 2015, the Colorado Supreme Court, in a 4–3 vote, sided with the ACLU’s lawyers, who argued the state’s Blaine amendment must prevail over a pilot voucher program started by the Douglas County School Board.
In December 2015, lawyers representing parents in Douglas County and the school board petitioned the U.S. Supreme Court for a review of the constitutionality of the religious discrimination inherent in the Blaine laws. A decision could come any day.
If Scalia were still alive, the passionate advocate for the First Amendment’s Free Exercise Clause would most assuredly vote in favor of the Douglas County parents and school board, making it very likely the Blaine amendments would finally be struck down, thereby enabling millions more schoolchildren to enjoy the benefits of school choice. Without Scalia, the pro-Blaine stance of the Colorado jurists will likely be affirmed in a 4–4 vote, or, even worse, it could be affirmed as a binding precedent in a 5–4 vote if Obama chooses an anti-choice nominee and successfully has him or her confirmed by the Senate.
Elections do have consequences. The question is which election should determine the future of school choice: 2012 or 2016?
In today’s edition of The Heartland Daily Podcast, Nick Loris, Herbert and Joyce Morgan Fellow in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation, joins managing editor of Environment & Climate News H. Sterling Burnett. Loris joins the podcast to talk about the good, the bad, and the ugly of the energy provisions proposed in President Obama’s final budget in the bipartisan energy bill being negotiated in the Senate.
Less is not more. That’s real “common sense.”
While the FCC obviously complied with President Obama’s call for regulating broadband as a Title II utility, the FCC obviously ignored President Obama’s 2011 call for a 21st century regulatory system, where he said we are “making it our mission to root out regulations that conflict, that are not worth the cost, or are just plain dumb.”
When the FCC reclassified broadband to be a Title II telephone utility last year in its Open Internet Order, the FCC trumpeted one of the great net benefits would be increased consumer privacy protection.
Well over a year later, the FCC is just getting around to proposing these new Title II privacy protections, and the evidence shows consumers’ privacy protection is worse off with the FCC’s Open Internet Order.
In their self-serving lust for Title II authority, the FCC cavalierly left American consumers with no ISP privacy protection, i.e. no FTC privacy protection and no “modern” FCC privacy protection. What! How could that nonsensical outcome happen?
When the FCC reclassified broadband as a telephone utility, the FCC willfully triggered the Title II FTC exemption which means that ISPs were not subject to FTC authority, and the FCC made clear that they understood they had to modernize the Title II section 222 CPNI rules because broadband networks are architected completely different than a telephone network and create different list of potential info that could be considered “proprietary.”
So American ISP consumers have no privacy protection now and still won’t until the FCC passes final rules over eighteen months after the FCC eliminated their FTC privacy protections.
It is telling that neither the FCC nor the FTC have done anything to notify consumers that they have no Internet service privacy protections at all because of their bureaucratic turf war. That’s because no consumer could understand such “regulations that conflict.”
The FCC also knows that their pending section 222 CPNI protections depend on the FCC’s Open Internet Order being upheld on appeal in the DC Circuit and the Supreme Court, overall and for wireless, which is the most at risk legally. If the FCC order is overturned overall, or in part, some or all ISP consumers would have gone without any ISP privacy protection for naught.
The FCC also did not do a cost-benefit analysis as the President’s 2011 Executive Order 13563 requires. The FCC was supposed to use “the least burdensome tools for achieving regulatory ends,” and to “adopt a regulation only upon a reasoned determination that its benefits justify its costs.” Simply, there is no cost-benefit analysis that these conflicting regulations “are worth the cost.”
One of the biggest problems with these ISP privacy rules is that are based on a “just plain dumb” FCC reclassification legal decision in the FCC’s Open Internet order that ensures that the FCC’s privacy rules arbitrarily can apply to only one half of the traffic an ISP handles.
That’s because at the last minute, and over the best judgment of the FCC’s legal team, the FCC ceded to a petition from Google, which wanted the FCC to legally split the Internet effectively into different two legal halves, upstream communications traffic and downstream communications traffic, where the FCC would be responsible for utility regulation of the upstream communications traffic half of Internet service coming from the consumer to “edge providers” (Google, Facebook, Amazon, etc.), while the FTC apparently would be responsible for the downstream communications traffic half coming from the edge providers to the consumer.
That’s “just plain dumb” in any analysis.
In short, these FCC ISP privacy regulations are neither additive, nor “common sense” as the FCC claims.
Sadly, they actually are subtractive, in that they violate the President’s regulatory “mission to root out regulations that conflict, that are not worth the cost, or are just plain dumb.”
Scott Cleland served as Deputy U.S. Coordinator for International Communications & Information Policy in the George H. W. Bush Administration. He is President of Precursor LLC, a research consultancy for Fortune 500 companies, and Chairman of NetCompetition, a pro-competition e-forum supported by broadband interests.
Every time a north wind blows hot air over Adelaide, some Chicken Little cries “Global Warming”. And when an El Nino predictably causes a hot year like 1998 or 2015/16, some sensation-seeker croaks “hottest year eevah”.
They are watching weather ripples and waves and ignoring the underlying climate tide. Daily, monthly and yearly temperature records will always be equalled or broken by extreme weather – that is what weather does. But to see what the climate is doing we must look long-term.
There are many signs that Earth’s climate is gradually cooling. Snow is accumulating. In the Antarctic, Mawson’s Hut and the Colbeck Hut are being progressively buried in ice. In Greenland, “The Lost Squadron”, which was forced to land on the Greenland Ice sheet in 1942, was rediscovered 50 years later buried under 268 feet of ice. Many glaciers are just a few thousand years old.
We live in the Holocene warm interval within the Pleistocene Ice Age – a time of recurring cycles of ice separated by brief warm interludes. Earth’s climate is driven by solar system cycles, and climate changes appear first in the Northern Hemisphere which has more land in the sensitive sub-polar regions. The GRIP ice core from Greenland shows the long-term average temperature there peaked 7,000 years ago and has trended down for 3,000 years.
We will still have hot days and heat waves but the climate mid-summer has passed and the temperature tide is going out. Spreading alarm about short-term temperature fluctuations of a fraction of a degree is a distraction.
And promoting damaging energy policies designed to prevent warming just as the next climate winter approaches will be seen by future generations as bizarre.
“Natural gas is a good, cheap alternative to fossil fuels,” former Speaker of the House Nancy Pelosi famously intoned. (Psssst. Ms. Nancy, natural gas is a fossil fuel.)
“If I thought there was any evidence that drilling could save people money, I would consider it. But it won’t,” President Obama said in 2008. “We can’t drill our way out of the problem” of high energy prices and disappearing supplies, he still insisted two years later. How shocked he must be now.
Horizontal drilling and hydraulic fracturing – aka, fracking – has unleashed a gusher of oil and natural gas, sent oil prices plunging $100 a barrel since 2008, dropped US oil imports to their lowest level in 45 years, and saved American families tens of billions of dollars annually in lower energy costs.
But if price and “peak oil” rationales fail, there is always “dangerous manmade global warming” to justify carbon-based energy and fracking bans, and renewable energy mandates and subsidies.
Bernie Sanders and Hillary Clinton contend that climate change is an “existential threat” to people and planet. Senator Sanders says bluntly, “I do not support fracking.” He also wants legislation that would keep America’s abundant oil, gas and coal “in the ground.”
Mrs. Clinton opposes all fossil fuel energy extraction on federal lands. She rejects fracking if “any locality or state is against it,” any methane is released or water contaminated, or companies don’t reveal “exactly what chemicals they are using.” Under her watch, there won’t be “many places in America where fracking will continue.” She will “stop fossil fuels” and ensure 50% renewable energy by 2030.
One senses that these folks inhabit a parallel universe, cling like limpets to anti-hydrocarbon ideologies, or perhaps embody Mark Twain’s admonition that “It is better to keep your mouth closed and let people think you’re a fool, than to open your mouth and remove all doubt.”
One also senses that as president the two Democrat candidates will continue Mr. Obama’s imperial practices. If Congress resists their policy initiatives, they will simply issue more Executive Branch diktats, and ignore their impacts on jobs and the economy, the absence of evidence that fracking harms human health or water quality, the reality that renewable energy “alternatives” also cause serious problems – and scientists’ continuing inability to separate human from natural influences on climate and weather events and trends that are essentially the same as during the twentieth century.
Officially, 7.8 million Americans are still unemployed. But add the long-term unemployed, those who looked for a job once in the past year but not in recent weeks, and those who are working involuntarily in low-pay, part-time positions – and the total swells to 16.8 million. Over 46 million are on food stamps.
The federal debt hit $19 trillion in February and is projected to reach $23 trillion by 2020. In FY2015, the US Treasury collected $3.2 trillion in taxes and other revenues, but spent $3.7 trillion. Profligate state and local spending has swollen these deficits by tens of billions more, for the same reason: politicians are in cahoots with unions, crony capitalist rent seekers, and assorted grievance, victim and welfare groups.
Mountains of federal regulations cost businesses and families $1.9 trillion annually – half of our national budget. They drag down investment, job creation and tax revenues. State and local rules add more pain.
To borrow the Greens and Democrats’ favorite term, this is unsustainable.
Oil, gas and coal account for 82% of all US energy and 78% of US electricity generation – reliably and affordably. Producing this abundant energy also generates positive cash-flow: fossil fuel bonuses, rents and royalties from federal lands totaled $126 billion between 2003 and 2013; corporate and personal taxes resulting from the jobs and activities powered by that energy added tens of billions more.
Wind, solar and biofuel programs, by contrast, are black holes for hard-earned taxpayer subsidies – and rarely work unless consumers are required to use that energy, and pay premium prices for doing so.
Even getting to 50% “carbon-free” energy fifteen years from now will require: vastly more subsidies and mandates; turning entire forests into fuel; blanketing croplands and habitats with enormous biofuel plantations, wind farms and solar installations; and killing millions of birds, bats and other wildlife in the process. However, biomass and biofuels are also carbon-based and also release carbon dioxide – and their energy per volume is paltry, their energy efficiency deplorable, compared to hydrocarbons.
A renewable energy future means scenic, wild and agricultural lands become industrial zones and high voltage transmission corridors – feeding urban centers where people will have lower living standards.
Environmentalists used to tell poor countries they could never have the lifestyles of people in developed nations, as it wouldn’t be sustainable. Now they say our living standards are unsustainable and aren’t fair to the world’s poor. Therefore, their lives should be improved a little via wind, solar and biofuel energy, while ours are knocked down a peg via climate and sustainability regulations (except for ruling elites).
Environmentalists and other liberals are also hardwired to be incapable of acknowledging the countless health, welfare and technological blessings that creative free enterprise capitalism has bestowed on humanity – or to recognize the dearth of innovation by repressive socialist regimes.
Liberals like to say Republicans want to control what you do in your bedroom. But Democrats want to control everything you do outside your bedroom – but for the noble, exalted purpose of changing genetically coded human behavior, to Save the Planet for future generations. That means unelected Earth Guardians must control the lives, livelihoods, living standards, liberties and life spans of commoners and peasants, especially in “flyover country.”
Fossil fuel and fracking bans are part of that “fundamental transformation.” They will force us to use less oil and gas, but they also mean we will import more petroleum from Saudi Arabia and Iran, though not from Canada via the Keystone pipeline. Energy prices will again climb into the stratosphere, more jobs will disappear, manufacturing will shrivel, and royalty and tax revenues will evaporate.
The billionaire bounties that Hillary, Bernie and their supporters also need to pay for all the free college, ObamaCare, renewable energy subsidies, income redistribution and other “entitlements” will likewise be devoured quickly, while millions more people end up on welfare and unemployment rolls. The bills will simply be forwarded to our children and grandchildren.
Meanwhile, despite any US bans, other countries will continue using fossil fuels to create jobs and grow their economies. So total atmospheric CO2 and greenhouse gas concentrations will continue to rise.
Of course, “climate deniers” and other members of The Resistance will have to be dealt with. Attorney General Loretta Lynch and Senator Sheldon Whitehouse will pave the way on that. In the process, as Obama and Clinton mentor Saul Alinsky put it in his Rules for Radicals, the ruling elites will pick, freeze, personalize and polarize their targets. They will repeat their allegations and maintain their pressure until all resistance crumbles. Facts will be irrelevant. Power and perceptions will rule.
Blue collar, middle class and minority families feel they are fighting for their very survival, against policies and regulations that profoundly impair their jobs, incomes and futures. Indeed, the governing classes are actively harming the very people they claim to care the most about – and actually killing people in the world’s poorest nations, by denying them access to energy and other modern technologies.
That’s why Trump, Cruz, Carson and other “outsider” candidates have resonates. People are fed up.
Perhaps it’s time to borrow a page from Alinsky – Rule Four, to be precise – and make “the enemy,” the ruling elites, live up to their own rules. Watching them scream and squeal would be most entertaining.
Political campaign years are filled with candidates’ promises to solve people’s problems. Government policies will “create jobs,” will reduce or even block the “unfair” competition of market rivals in foreign lands, will restore or create prosperity for all, and will assure “fairness” for everyone, even if it means imposing regulatory or special tax burdens on some to guarantee politically provided privileges and benefits for others who are deemed “deserving.”
All of these promises are premised on the fundamental idea that governments and, more precisely, those who hold political office and power can successfully redesign and “plan” aspects of society considered more “socially just” or economically “fair.”
These are old ideas, tried many times in many places. And everywhere they have created corruption, favoritism, and stagnation or at least slower growth and less material improvement than otherwise might have been the case.
What actually makes for a more just society experiencing greater opportunity, improved conditions and rising standards of living for virtually all over the long run? In a nutshell, three words: freedom, competition and trade. These are the “open sesame” to alleviate poverty, privilege, and inequity in society.
All of this was first explained with clarity, some times eloquence, and always logical and historical insight and wisdom by the Scottish moral philosopher and political economist, Adam Smith (1723-1790) in his great book, An Inquiry into the Nature and Causes of the Wealth of Nations, which was published 240 years ago on March 5, 1776.
Government Regulation and Crony Capitalism
The economic and political system then prevailing during Adam Smith’s lifetime was known as Mercantilism. Its underlying premise was that it was the duty, responsibility and, indeed, the right of governments to micro-manage the economic affairs of society through domestic regulations over prices, wages and production, and controls and restrictions on international trade through import taxes, export subsidies, and outright prohibitions on the importing or exporting of some goods or services. Virtually nothing was considered outside of the orbit of government oversight and command.
Adam Smith’s contention was that the greater the degree of such a government hand in social and economic affairs of society and people’s lives that less wealth and material betterment will follow. While he has often been mislabeled and disparaged as an “apologist” for businessmen there were few voices, then or since, who have been as vocal in warning of the dangers from what today we call “crony capitalism,” that is, the network of privileges and favors received by private enterprises at the cost of their existing or potential competitors and always at the expense of the consuming public.
Said Adam Smith in The Wealth of Nations:
“People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices.
“It is impossible indeed to prevent such meetings, by any law that either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies, much less to render them necessary.”
Government regulation and oversight of business, Adam Smith argued, ended up perversely and paradoxically serving as just such a vehicle for such manipulations by special business interests against the buying public as a whole. “It connects individuals who might never otherwise be known to one another, and gives every man of the trade a direction where to find every other man of it.”
The most effective control over the production and pricing decisions of private enterprisers, Smith, insisted, was free and open competition that gives ultimate control over the direction of business to the consumers of the society.
Adam Smith was born on June 5, 1723 in the small village of Kirkcaldy, Scotland, and died on July 17, 1790. He was as a professor of moral philosophy for over twelve years at the University of Glasgow. He left the university to serve as the tutor of a British nobleman’s son for three years, after which he was awarded a lifetime private pension that gave him the time and leisure to work on the book for which he is most famous, An Inquiry into the Nature and Causes of the Wealth of Nations.
A “System of Natural Liberty”
A primary motive for writing the book was to refute that then existing regime of pervasive government controls and regulations known as Mercantilism. Adam Smith stated that if government management of the marketplace were to be repealed there would arise in its place what he called a “system of natural liberty.”
Every individual, as long as he did not violate the “laws of justice” – a respect for every other person’s right to their life, liberty and honestly acquired property – would then be “left perfectly free to pursue his own interest his own way, and to bring his industry and capital into competition with those of any other man” or group of men.
What, then, are the functions of government in this “system of natural liberty”? Adam Smith assigned a small, but what he considered essential, set of responsibilities to the political authority:
First, national defense to protect against the aggressive attacks of other countries that would threaten the citizens’ freedom and security;
Second, police and courts to secure each citizens life, liberty and property from domestic thieves and bandits, and to adjudicate the disputes that might arise among men;
And, third, the provision of a small handful of “public works” such as roads, bridges, the dredging of harbors, and the like. Except for a few other limited and narrow activities, in Adam Smith’s view all other matters should be left up to the choices and decisions of individuals, either on their own or in voluntary association with others in society.
Smith’s system of natural liberty, therefore, came very close to the free market ideal of laissez-faire.
The Dangers from the Social Engineer
He was fearful of extending government’s control much beyond these narrow duties because political power easily was used and abused by the type of person that he called, “the man of system.” This is the individual who today we would refer to as the “social engineer” or the “paternalistic planner” who presumes to know better how men should live than those people, themselves.
The social engineer views the members of society as mere pawns on a “great chess board of society,” to be moved about with little thought or consideration that each of those “pawns” is a living, thinking, valuing and planning individual, who would much prefer to make his own decisions concerning how he will live and act.
As Adam Smith expressed it in his earlier book, The Theory of Moral Sentiments (1759):
“The man of system, on the contrary, is apt to be very wise in his own conceit, and is often so enamored with the supposed beauty of his own ideal plan of government that he cannot suffer the smallest deviation from any part of it.
“He goes on to establish it completely and in all its parts, without any regard either to the great interests or to the strong prejudices which may oppose it; he seems to imagine that he can arrange the different members of a great society with as much ease as the hand arranges the different pieces upon a chessboard;
“He does not consider that the pieces upon the chessboard have no other principle of motion besides that which the hand impresses upon them; but that, in the great chess board of human society, every single piece has a principle of motion of its own, altogether different from that which the legislature might choose to impress upon it.”
The “man of system” considers himself far above and superior to others, who are to be compelled to conform to his political design for them. As Smith observed:
“To insist upon establishing, and upon establishing all at once, and in spite of all opposition, every thing which that idea may require, must often be the highest degree of arrogance. It is to erect his own judgment into the supreme standard of right and wrong. It is to fancy himself the only wise and worthy man in the commonwealth, and that his fellow citizens should accommodate themselves to him, and not him to them.”
The Division of Labor and Human Association
But if governments and social engineers are not to plan and direct how and where people will go about the economic affairs of everyday life, how can it be assured that the goods and services that people both need and want for their survival and desires will be produced and supplied to meet their demands?
Adam Smith was insistent that the economic relationships in society need no guiding and commanding hand from government. They arise quite naturally and spontaneously among people, without political orders or directives.
Because of people’s inherent and acquired talents and abilities, there has emerged in every society a system of division of labor. People begin to specialize in what they discover they are comparatively better at producing than their neighbors and offer to sell their specialized wares to others who, in turn, can produce and supply something they want in a better quality or at a lower cost than if they attempted to produce it for themselves. Explained Adam Smith:
“It is the maxim of every prudent master of a family, never to attempt to make at home what it will cost him more to make than to buy. The tailor does not attempt to make his own shoes, but buys them of the shoemaker. The shoemaker does not attempt to make his own clothes, but employs a tailor. The farmer attempts to make neither the one nor the other, but employs those different artificers.
“All of them find it for their interest to employ their whole industry in a way in which they have some advantage over their neighbors, and to purchase with a part of its produce, or what is the same thing, with the price of a part of it, whatever else they have occasion for.
“What is prudence in the conduct of every private family can scarce be folly in that of a great kingdom. If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better to buy if of them with some part of the produce of our own industry, employed in a way in which we have some advantage.”
Rational Self-interest and the “Invisible Hand”
This division of labor creates an inescapable network of human interdependency in which each person specializes in producing one or a small handful of goods, and uses it as his means of payment to purchase from others in society all the other things that he wants, but which they are better at supplying than himself.
If this network of division of labor exists and operates within a “system of natural liberty,” each man will soon find that it is in his own self-interest to apply his own activities in ways that serve and improve the conditions of his fellow human beings as the surest means of attaining his own desired goals and ends.
Precisely because the “system of natural liberty” excludes violence, theft, or fraud, the only way any individual can acquire from others what he desires is by applying his own knowledge, abilities, and resources in a manner that enables him to produce and offer to others what they desire, so they will give in trade what that first individual wants to obtain.
Thus, though it is no part of their motivating intention to improve the conditions of life of others, in their own self-interest each individual must devote his efforts to serving the wants of those others as a means to achieving his own ends. And, thus, while it is no part of the individual’s intention, the cumulative effect for society, Adam Smith argued, was that those goods most valued by others in society were the ones produced and offered on the market.
These outcomes were far superior to any attempt by those in political power to consciously and purposely try to guide production into various directions. Those in political authority possess neither the knowledge nor wisdom nor ability to do so better than each man in his own corner of society, who is most familiar with the surrounding circumstances and opportunities.
Thus, as if by an “invisible hand,” each individual is led through pursuit of his own personal gain and betterment to simultaneously improve the conditions of others in society. Or as Adam Smith famously stated it:
“As every individual, therefore, endeavors as much as he can both to employ capital in support of domestic industry, and so to direct that industry that its produce may be of the greatest value; every individual necessarily labors to render the annual revenue of the society as great as he can.
“He generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it . . . By directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain, and he is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention.”
Government Lacks the Knowledge to Plan Society
Not only was this general betterment in the human condition the unintended result of each individual following his own self-interest in the market arena of voluntary and competitive exchange, Adam Smith considered it far superior to any attempt by government and those in political power to design and impose an order and coordination in the actions of the members of society.
Echoing his earlier warnings about the social engineer, that “man of system,” Smith said in The Wealth of Nations:
“By pursuing his own interest [the individual] frequently promotes that of the society more effectually than when he really intends to promote it. I have never known much good done by those who affected to trade for the public good . . .
“What is the specie of domestic industry which his capital can employ, and of which the produce is likely to be of the greatest value, every individual, it is evident, can, in his own situation, judge much better than any statesman or lawgiver can do for him.
“The statesman, who should attempt to direct private people in what manner they ought to employ their capitals, would not only load himself with a most unnecessary attention, but assume an authority which can safely be trusted, not only to no single person, but to no council or senate whatever, and which would nowhere be so dangerous as in the hands of a man who had folly and presumption enough to fancy himself fit to exercise it.”
It is not that Adam Smith believed that people always knew enough to never make a mistake, or that their speculative judgments about an uncertain future would always be correct so disappoints or losses would never be suffered.
He reasoned that each man, in his own corner of society, has a better understanding of his own circumstances and opportunities in the context of his own wants, desires and goals. And that each individual has the strongest motive and incentive to try to make his decisions wisely since failures experienced fell upon him. He who bears the costs and reaps the potential benefits has the greatest incentive to minimize the former and maximize the latter.
The same does not apply, Smith argued, when those in political power make the decisions. The “statesman” in a faraway capital can never know and understand things the way each individual can evaluate and judge them in their own unique surroundings. No legislator bears the cost of the wrong decisions he imposes on others; after all, he continues to live off compulsory taxes collected from those upon whom he has imposed harm.
Freedom of Trade at Home and Abroad
Adam Smith believed that international trade should be left to the free market as much as domestic economic activity.
For the same self-interested reasons, Adam Smith argued that it was superfluous and counterproductive for government to attempt to manage and direct the importing or exporting of goods and services to maintain a presumed “favorable” balance of trade, or to prevent a feared balance of trade “deficit.”
Each individual tries to minimize the costs that must be incurred in achieving his goals and ends. He only makes at home what is less expensive to make than to buy from others. And he buys desired goods from others only when those others can provide them at a lower cost in resources and labor and time, than if the individual attempted to produce that good through his own self-sufficient efforts.
Thus, goods are purchased from producers in other countries only when they can offer them at a lower cost than manufacturing them in one’s own country. And, in turn, one purchases those foreign produced goods by supplying the foreign seller with some good or service at a lower cost than if he tried to produce it in his own country.
When governments, through regulations and controls, force a product to be produced at home that could be less expensively purchased from abroad, it is misdirecting scarce resources and labor into wasteful and inefficient uses.
The result must be that the wealth of that nation – and the material wellbeing of its citizens — is reduced by the amount by which more resources and labor must be devoted to making wanted goods than could be obtained through a free system of international division of labor and peaceful, mutually beneficial exchange.
Hence, it is more prudent for the prosperity of one’s own nation to leave production and trade to the self-interested actions of the citizenry.
Commerce Fosters a Good and Civil Society
Finally, Adam Smith argued that the benefits from free and competitive commerce and trade were not only the material improvements in man’s condition. It also served as a method for civilizing men, if by civilization is meant, at least partly, courtesy, and respect for others, and an allegiance to honesty and fulfillment of promises.
When men deal with each other on a daily and regular basis, they soon learn that their own wellbeing requires of them sensitivity for those with whom they trade. Losing the confidence or the trust of one’s trading partners can result in social and economic injury to oneself.
The self-interest that guides a man to demonstrate courtesy and thoughtfulness for his customers, under the fear of losing their business to some rival with superior manners or etiquette to his own, tends over time to be internalized as habituated “proper behavior” to others in general and in most circumstances.
And through this social process, the otherorientedness that voluntary exchange requires of each individual in his own self-interest if he is to attain his own personal ends, fosters the institutionalization of interpersonal conduct that is usually considered essential to a well-mannered society and cultured civilization.
Again, in Adam Smith’s own words, from his Lectures on Jurisprudence:
“Whenever commerce is introduced into any country, probity and punctuality always accompany it . . . It is far more reducible to self-interest, that general principle which regulates the actions of every man, and which leads men to act in a certain manner from views of advantage, and is as deeply implanted in an Englishman as a Dutchman.
“A dealer is afraid of losing his character, and is scrupulous in observing every engagement. When a person makes perhaps 20 contracts in a day, he cannot gain so much by endeavoring to impose on his neighbors, as the very appearance of a cheat would make him lose.
“When people seldom deal with one another, we find that they are somewhat disposed to cheat, because they can gain more by a smart trick than they can lose by the injury that it does to their character . . .
“Wherever dealing are frequent, a man does not expect to gain so much by any one contract as by probity and punctuality in the whole, and a prudent dealer, who is sensible of his real interest, would rather choose to lose what he has a right to than give any ground for suspicion . . .
“When the greater part of people are merchants they always bring probity and punctuality into fashion, and these therefore are the principle virtues of a commercial nation.”
Difficulties in Establishing a System of Natural Liberty
Adam Smith was well aware that deregulating commerce and industry, and freeing domestic and foreign trade from government control was not an easy matter. In The Wealth of Nations he referred to two obstacles in the way of establishing that “system of natural liberty.”
First, what he called “the prejudices of the public,” by which he meant the often-difficult task of getting ordinary citizens to see and understand the beneficial workings of and the logic behind a free competitive market.
And, second, what he referred to as the “power of the interests,” that is, those special interest groups that lobby and pressure government to provide them with anticompetitive regulations and restrictions, protections for foreign rivals, and subsidies and tax funded redistributions to the harm of and the cost to consumers, taxpayers, and potential competitors locked out of the marketplace.
Indeed, when Adam Smith died in 1790 at the age of 67, it seemed highly unlikely that his idea and ideal of individual freedom and economic liberty would ever triumph. He believed it was utopian to ever expect the achievement of a regime of freedom of trade and enterprise.
The Power of Ideas for Freedom
Yet, in the equivalent of one lifetime after his death, by the middle of the nineteenth century, freedom of enterprise prevailed not only in the United States, but had been established in his own country of Great Britain, and soon was spreading in varying degrees to other parts of Europe and then other areas of the world.
The threats to economic freedom today are no greater than during Adam Smith’s own time 240 years ago. The same “prejudices of the public” and “power of the interests” stand in the way.
In spite of Adam Smith’s own pessimism, his arguments and their eventual triumph for a good part of the nineteenth and early twentieth centuries demonstrates the power of ideas.
If we take to heart and apply the logic of Adam Smith’s own explanation of the workings of a free market system to our own times, we, too, can triumph and establish a even better and more consistent “system of natural liberty” for ourselves and for the world that we will leave to our children and grandchildren.
It’s been an interesting couple of weeks on Capitol Hill from a climate policy perspective as Congress and the Obama administration traded body blows over the Presidents’ domestic and international climate initiatives.
In late February, more than 200 members of Congress filed a friend of the court brief with the U.S. Court of Appeals in Washington, DC backing a court challenge by 27 states and numerous businesses, trade, labor, and public interest groups against the Obama administration’s Clean Power Plan (CPP), the president’s signature regulation to reduce greenhouse gas emissions. The congressional brief argues the U.S. Environmental Protection Agency (EPA) overstepped its legal authority and defied the will of Congress by regulating carbon dioxide emissions. The brief states:
If Congress desired to give EPA sweeping authority to transform the nation’s electricity sector, Congress would have provided for that unprecedented power in detailed legislation. … [I]f anything can be inferred from Congress’ repeated rejection of proposed cap-and-trade legislation for [carbon dioxide] emissions, it is that Congress had no intention of conferring upon EPA the very authority that the agency now claims to wield as a central part of the [CPP].
While Congress was in court hoping to end the main policy President Obama has instituted to meet commitments his administration made in Paris to cut carbon dioxide emissions in the U.S. by more 26 to 28 percent below 2005 levels by 2025, the administration was defending its decision to fund another portion of Obama’s Paris Climate commitments over the objections of a skeptical congress in testimony in Senate hearings.
The State Department made a down payment of $500 million of U.S. taxpayers’ money to the United Nations’ Green Climate Fund (GCF) in support of his commitment to provide $3 billion to GCF by 2020. According to the U.K.’s Guardian, the State Department says the payment “shows the US stands squarely behind climate commitments.” The $500 million GCF payment was seen as critical to shoring up international confidence in Obama’s ability to deliver on the pledges made at the United Nations’ climate change conference in Paris in late 2015.
As reported on Watts Up With That, some members of Congress questioned whether the payment was legal or authorized by Congress.
When asked by Sen. Cory Gardner (R-CO) if Congress had approved diverting $500 million of State Department funds to GCF, Deputy Secretary for Management and Resources Heather Higgenbottom responded, “Did Congress authorize the Green Climate Fund? No … We’ve reviewed the authority and the process under which we can do it, and our lawyers and we have determined that we have the ability to do it.”
Fox news reported on this and it should be noted I warned of just this kind of surreptitious action by the administration when I wrote criticizing the end of year omnibus budget bill passed at the end of the year.
Though I would say Congress only has itself to blame for State Department funds being diverted to the Green Climate fund since it did not explicitly preclude such funding in the budget deal, stay tuned. I expect some fireworks over this in future Senate and House hearings.
If you don’t visit Somewhat Reasonable and the Heartlander digital magazine every day, you’re missing out on some of the best news and commentary on liberty and free markets you can find. But worry not, freedom lovers! The Heartland Weekly Email is here for you every Friday with a highlight show. Subscribe to the email today, and read this week’s edition below.Don’t Trust Wikipedia! Joseph L. Bast, Somewhat Reasonable In recent years, left-wing activists have rewritten hundreds of thousands of Wikipedia entries, adding their anti-technology, anti-corporation, and anti-free enterprise dogma and propaganda to the profiles of many individuals and organizations. The Heartland Institute’s profile has been the target of a major misinformation effort, with objective descriptions of our work removed and lies and unfounded leftist accusations put in their place. Can you help us fix Wikipedia? READ MORE AGW True Believers Debunk NOAA’s Pause-denying Research H. Sterling Burnett, Climate Change Weekly A study conducted by a team of researchers including the well-known Michael Mann, creator of the “hockey stick” graph, debunks NOAA’s claim that the pause in warming temperatures never happened. This noteworthy admission by Mann et al. supports the global data that show a 15- to 18-year hiatus in rising temperatures. READ MORE Heartland’s President Explains Why Scientists Disagree About Global Warming Are you tired of hearing over and over that scientists have arrived at a “consensus” regarding catastrophic, man-made global warming? Heartland President Joseph Bast will arm you with the facts you need to ensure you will never lose a debate with a climate alarmist. Bast demolishes the “97%” myth with his presentation based on Heartland’s newest book, Why Scientists Disagree About Global Warming. If you missed his presentation at CPAC or recent presentation at Heartland’s Andrew Breitbart Freedom Center, you can watch the latter on Heartland’s YouTube page. WATCH IT HERE Featured Podcast: Dustin Chambers: Regulations Act Like a Regressive Tax Dustin Chambers, associate professor of economics at Salisbury University, joins Budget & Tax News Managing Editor Jesse Hathaway on the Heartland Daily Podcast. They discuss how regulators and policymakers often claim regulations are intended to protect the poorest and most vulnerable consumers, but the effects of regulations are most harmful to the poor because regulations drive up the cost of doing business, resulting in higher prices. LISTEN TO MORE The Stars Come Out in Arlington Heights! If you love discussions about liberty, you will not want to miss the great series of events Heartland has lined up through the summer. Upcoming events include a discussion about carbon dioxide emissions and global warming with climate scientist Fred Goldberg; Heartland’s first “movie night” with a 30-minute documentary, The Drew Carey Project; and a discussion with the Ayn Rand Institute’s Yaron Brook on his new book Equal is Unfair. We hope to see you there – but if you are unable to attend in person, the events will be live-streamed and archived on Heartland’s YouTube page. SEE UPCOMING EVENTS HERE Small Banks, Credit Unions Hurt by Dodd-Frank Regulations Andy Torbett, The Heartlander Dodd-Frank has all but ended the days of the friendly, small-town neighborhood bank, says Mark Thornton, a senior fellow with the Mises Institute. Passed in the wake of the Great Recession, the Dodd-Frank regulations were intended to help prevent another financial crisis. A new study by the Government Accountability Office shows how the regulations reduce choices and lower the quality of services provided by smaller banks and financial institutions. READ MORE Government Regulations Reduce Access to Mental Health Services Justin Haskins, Consumer Power Report Many people support proposals intended to improve access to mental health care for those in need. But before we hear another proposal to increase federal spending to achieve this goal, perhaps we should do something about existing regulations that limit access to mental health care. New research shows certificate of need (CON) laws, which require medical facilities to obtain permission to purchase new equipment or build new facilities, reduce the availability of mental health care services. READ MORE
Promoting Health Care Price Transparency Matthew Glans, Heartland Research & Commentary Access to transparent health care prices remains elusive for most U.S. health care consumers, who are often insulated from price considerations by the third-party payment systems commonly used for medical billing. When consumers are able to actively shop and compare prices, market pressures encourage providers to produce a more affordable, high-quality product. If they don’t, they risk losing out to their competitors. READ MORE Bonus Podcast: Todd Myers: Green Schools Shown to Use More Energy In an effort to be more environmentally friendly, and supposedly save on energy costs, more and more public schools are “going green.” But is the hype backed up by performance? Todd Myers, director of the environment program at the Washington Policy Center, joinsEnvironment & Climate News Managing Editor H. Sterling Burnett on the Heartland Daily Podcast to discuss his new paper showing how “green” schools often use more energy than before. LISTEN TO MORE Who Will Protect Parental Choice in Post-Scalia Era? Robert Holland, The Hill The passing of Justice Antonin Scalia delivered a blow to conservative causes on many fronts. Over the past few weeks, many have wondered if Scalia’s replacement will continue to push for individual liberty and limited government. In this article, Senior Fellow Robert Holland examines the upcoming Supreme Court cases relating to school choice, and what the potential outcomes might be. READ MORE More Tests Track Children’s Emotions Joy Pullmann, School Choice Weekly A bizarre byproduct of the new Every Student Succeeds Act (ESSA) is turning heads. Government schools are beginning to track student emotions and behavior to be used in government ratings of school quality, even as researchers say these evaluations are not trustworthy. Some of those researchers have even resigned from advisory positions to protest the use of their work in this way. READ MORE Invest in the Future of Freedom! Are you considering 2016 gifts to your favorite charities? We hope The Heartland Institute is on your list. Preserving and expanding individual freedom is the surest way to advance many good and noble objectives, from feeding and clothing the poor to encouraging excellence and great achievement. Making charitable gifts to nonprofit organizations dedicated to individual freedom is the most highly leveraged investment a philanthropist can make. Click here to make a contribution online, or mail your gift to The Heartland Institute, One South Wacker Drive, Suite 2740, Chicago, IL 60606. To request a FREE wills guide or to get more information to plan your future please visit My Gift Legacy http://legacy.heartland.org/ or contact Gwen Carver at 312/377-4000 or by email at email@example.com.
by Justin Haskins and Michael Hamilton
While Republican presidential candidate Sen. Ted Cruz of Texas fights on the campaign trail, he and Sen. Mike Lee, R-Utah, are waging a battle in Washington, D.C., over potentially life-saving legislation that would radically transform the approval process for drugs and medical devices.
The Reciprocity Ensures Streamlined Use of Lifesaving Treatments Act of 2015 (RESULT Act) would fast-track drug and medical device applications through the Food and Drug Administration’s sluggish and costly approval process. The act would streamline new products already vetted by a government agency in another Organization for Economic Cooperation and Development nation with a proven record of providing safe medical devices and pharmaceutical products.
Under the current regulatory scheme, the FDA must approve drugs and medical devices before U.S. patients may use them, regardless of how widely those products are used in other advanced nations around the world. This process is typically long and costly. According to a 2013 study by Forbes, pharmaceutical companies spend about $350 million for a new drug to be developed and approved for sale in the United States. Worse, because many drugs fail to make it onto store shelves, Forbes estimates drug development costs pharmaceutical companies $5 billion per new medicine.
Drug companies pass these tremendous costs on to insurance companies, which pass them on to consumers. This is one reason many drug prices start out so high, and it’s a contributing factor to the rising prices of once-inexpensive generic drugs, such as the antibiotic tetracycline, which experienced a 7,567 percent price increase from 2013 to 2015. As regulatory costs for newly created pharmaceuticals rise, drug companies are forced to earn higher profits from their other products.
U.S. patients are often stuck waiting years for drugs and medical devices that could treat their illnesses, while patients in other nations have been safely using those same products for years.
The RESULT Act would help resolve these two problems — expensive development and long waits — by requiring the secretary of the Department of Health and Human Services to approve certain applications within 30 days. The bill fast-tracks approval for products that would help alleviate a public health need, are approved by a trusted government agency in one of the bill’s listed nations, and which current FDA regulations do not already ban. Congress also would have authority under the RESULT Act to approve with a majority vote any application the FDA rejects.
Opponents of the legislation say the FDA is the most trustworthy agency for drug and medical device approvals in the world, so it would be dangerous for Americans to rely on the approval of foreign agencies. Rachel Sachs, an academic fellow at the Petrie-Flom Center for Health Law Policy, Biotechnology, and Bioethics at Harvard Law School, wrote in December that the FDA’s slow-moving approval process is a “virtue, not a vice,” pointing to a decision by the FDA in the 1960s to reject the use of thalidomide, which turned out to be dangerous, despite the drug’s approval in many European countries.
Sachs is right to point out the FDA’s strong track record, but she and other opponents of the RESULT Act say nothing about the lives lost, ruined, or significantly harmed while sick Americans wait for drugs and medical devices that have already been tested countless times in other nations and are proven safe. Sachs and others have even acknowledged foreign nations’ regulatory agencies, including the European Medicines Agency and the Health Products and Food Branch in Canada, take longer on average to review new drugs than the FDA does. If moving slowly in the drug and medical device approval process is a “virtue,” then aren’t longer approval periods in EMA and HPFB evidence of the high quality of these agencies’ findings?
If FDA is concerned a product approved by another trusted government agency in a foreign nation is not safe, it should announce a warning and leave the trained medical community to decide for itself. Doctors, not bureaucratic agencies, should have the authority to decide which medical services, devices and drugs are safe to use, especially when governments in other advanced parts of the world have already approved them.
The RESULT Act would help reduce prices of new and existing drugs and medical devices, and lower the time required for FDA approval, allowing U.S. patients to have improved access to life-saving or life-improving medical products already enjoyed by people around the world.