Obama Admin: Mandate is a Tax

Obama and the Democratic Party establishment argued during legislative passage that the individual mandate in the “Health Care and Education Reconciliation Act of 2010(the final reconciliation version of the House’s “Affordable Health Care for America Act” and the Senate’s “Patient Protection and Affordable Care Act”) was not a “tax.” A laughable argument. The language in the final bill calls it a tax, specifically an “excise tax.”

Beginning in 2014, individuals who do not maintain certain minimal health insurance coverage for themselves and their dependents will be subject to an additional annual excise tax. The excise tax will be the greater of (i) $695 per failure, or (ii) 2.5% of household income in excess of the threshold amount of income required for income tax filing.

The legislative language is clear as day. It was the talking points that attempted to obfuscate the obvious.

Obama, in the Democratic primary, argued against the individual mandate. It was one of the key distinctions between himself and Clinton(It should be recalled that Obama, in the primary, ran “Harry and Louise” ads against the Clinton Health Care plan) . After he was elected, he immediately delegated the crafting of Health Care legislation to the congress, which immediately began fashioning something that resembled the Clinton plan, with mandates and all. When Obama was propagandizing the merits of the Health Care Reform Bill to the press, he bristled at suggestions that the mandate was a “tax.” For example, the famous exchange with George Stephanopoulos.

“For us to say that you’ve got to take a responsibility to get health insurance is absolutely not a tax increase”

Now that the individual mandate is being challenged in federal court by the attorney generals of various States, the Obama Admin has dispensed with the propaganda. As this New York Times article highlights, the Obama admin is very much arguing the constitutionality of the law based on the grounds that is indeed, a tax. From the New York Times:

In a brief defending the law, the Justice Department says the requirement for people to carry insurance or pay the penalty is “a valid exercise” of Congress’s power to impose taxes.

The law was passed exclusively by the Democrats and the final reconciliation bill was crafted by Democrats. Thus the language of the bill was specifically crafted to withstand a constitutional challenge; thus everything that could be construed as a mandate is cast as an excise tax or a fee.

Obama is often portrayed as a socialist, and apparently, based on polls, a plurality of Americans now share this opinion. But Obama is not arguing the case in court by making appeals to The Communist Manifesto or Das Kapital; rather he is merely relying on past American constitutional precedent. Quoting the Yale law professor in the article who supports the mandate:

Mr. Obama “has not been honest with the American people about the nature of this bill,” Mr. Balkin said last month at a meeting of the American Constitution Society, a progressive legal organization. “This bill is a tax. Because it’s a tax, it’s completely constitutional.”

Libertarians are often fond of the saying, “taxation is theft.” Well, there is a reason for that. Taxation lies at the root of class conflict. Yes you can force someone to buy a good from a politically connected monopoly. Just call it an excise tax.

Quoting from the New York Times article again:

The administration and its allies say that a person who goes without insurance is simply choosing to pay for health care out of pocket at a later date. In the aggregate, they say, these decisions have a substantial effect on the interstate market for health care and health insurance.

The Obama administration argues that the excise tax is an economic tax to ensure “the regularity” of the health insurance market. It then further invokes a New Deal era case, Wickard v. Filburn, in which the Supreme Court upheld penalties for farmers who exceeded their supply quotas, even if the agricultural product was for personal use.

I have to laugh because I think “Wickard v. Filburn” is a particularly appropriate metaphor for ObamaCare. And it’s as American as apple pie and excise taxes…

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Judge dismisses case against Stagliano

In a bit of a surprise, Judge Richard Leon has dismissed the government’s case against John Stagliano. Apparently, under cross-examination, the prosecution’s star witness, FBI Agent Daniel Bradley, claimed he had been instructed by the Judge to review the “offending” material, Milk Nymphos and Storm Squirters 2: Target Practice, before trial. This caused the Judge to clear the courtroom whereupon he then denied giving any instruction to the FBI agent. The prosecutor also denied relaying any such instruction from the judge to her witness. This,in effect, meant that the FBI agent was guilty of false testimony. With no evidence(it was thrown out the previous day because the prosecution botched the video transcoding) and a tainted star witness, there was no case. When the prosecution rested, the defense moved to dismiss and the judge concurred, in the process scolding the government for “woefully inadequate” preparation. Because the ruling to dismiss preceded the defense’s case and jury deliberations, double jeopardy applies, so it can’t be retried. The case is over.

This was supposed to be the case that would challenge the Miller Test, i.e., “community standards,” in the 21st century internet age. The ultimate outcome would have had serious implications for the 1st Amendment. However, because of prosecutorial incompetence, the “obscenity trial of the century” awaits another day. The simple fact is that the Bush War on Pornography, carried out by the Obscenity Prosecution Task Force, is government intimidation. The cases, like most federal cases, get plea bargained. When someone actually challenged the government, called their bluff, the government folded like a cheap tent. These things aren’t meant to be brought to a jury trial, as the laughable preparation of the prosecution indicates quite clearly.

It is unknown whether the Obama is going to prosecute “the War on Pornography” with the same vigor as Bush(the Stagliano case originates from the Bush Admin). But the Justice Department Task force remains nonetheless. In the event that Obama puts a low priority on prosecuting pornography, the Task Force will quietly bide it’s time waiting for the next Republican president.

As a side note, Wendy McElroy writes a scathing rebuke of the libertarian community regarding it’s lack of coverage of the Stagliano case. McElroy apparently knows Stagliano–who is well known as being a libertarian– personally, and given that this case had the potential to have a major impact on the 1st Amendment(in many ways, Free speech is about the only libertarian freedom in America), she rants about the media blackout, with a couple of exceptions, in the libertarian sphere. She blames it on a movement that has become gripped by “social conservatism.” So gripped that major libertarian publications that she typically writes for turned down her requests to cover the case, even when she offered her services for free, because the publications were afraid of offending readers.

I’m in agreement with McElroy. To me, libertarianism is infested with elements of social conservatism. I should point out that many of the leading figures of the radical libertarian movement probably do not view “Buttman” as a hero, either. On one side, there is an undue paleo, culturally conservative influence that views “libertinism” as an obstacle to building a cadre political movement of “anti-Federal Reserve” crusaders. On the left side, the left libertarians, some of the more prominent writers, in their quest for fusionism with certain elements of feminism, take positions that are not particularly sympathetic to pornography.

Stossel was one of the few “libertarian” outlets, along with Reason, that promoted his case. I think it’s a sad that fucking Fox had his back, while the radical libertarians were AWOL.

The beginning is the end is the beginning

Glenn Greenwald goes off on the revolving door in the Health Care Reform debacle. He includes a video embed of Bill Moyers ranting that this same shit has been going on since 1905 and that the progressive do-gooders haven’t been able to do a goddamn thing about it. I would only offer that this same shit has been going much longer than that, really since the beginning of liberal institutionalism itself. Class Theory is often mistakenly thought to have originated with the Marxists or the socialists, but, in fact, it originates from the liberals, in specific, the radical French liberal tradition. The line of thought, in terms of a solution, that came out of this analysis, from the radical liberal side, was the supplantation of the Political Economy with “The Industry,” i.e., the Catallaxy, or in more plain terms, “the market.” This is libertarianism. The original libertarians were split over whether “the Market” would be capitalist or anti-capitalist, a divide that can be historically characterized, for example, by the Bastiat-Proudhon debate. When we talk about about a capitalist/anti-capitalist divide in libertarianism, we are talking about the nature of rent and interest in a truly free market.

For the Marxists and the Socialists, who would adopt liberal class theory as an underpinning of their own socio-political theories, the solution was not to get rid of politics, but rather get rid of the market. But politics would have to be subsumed to the necessity of the one party state.

Two years ago, with the collapse of Neo-liberal Financial Institutional Capitalism, which in large part derived it’s theoretical underpinning from the Chicago School, many a progressive writer gleefully proclaimed the “Death of Libertarianism.” With the prospect of large majority control of the legislative branches, control of the executive branch, a discredited Republican party and demographic trends that boded well for long term control, these same writers announced that libertarians no longer served any useful political purpose and discarded them as if they were old laundry. We were on the verge of a glorious FDR 2.0.

In present time, of course, these same progressives are now reduced to sniping about what went wrong. Many are dangerously close, in dissecting the failure of “the Stimulus,” to blaming politics and the two-party state. If there was only a one-party state, specifically a one party that was purged of Blue Dogs like Ben Nelson, well then “the Stimulus” would have been properly enacted and administered. What they are really arguing, of course, is the need of a “Dictator.” The irony is not lost on me that these same people who mocked libertarianism because it is utopian, and that it subverts politics to the market(with the argument that politics is the only way to have accountability) are now engaging in their own utopian rationales about a world without politics, a strange thing for advocates of social democracy to be opining about.

Kevin Carson, at the Center for a Stateless Society, recently wrote a paper about progressives being the new reactionaries. It is an indictment of the failure of progressivism. However, it should be pointed out that progressives under the reign of Obama are not exactly unified. Just as Bush served to divorce and splinter libertarianism from a GOP fusionism, Obama is serving likewise to splinter progressives from the Dems. For those progressives who have not bought into the Obama kool-aid, their rhetoric these days often involves invoking Thoreau, Twain, or the need to construct alternative institutions outside of politics. In other words, it’s going libertarian, whether they realize or not.

To answer Bill Moyers, the US has indeed been under an institutional “progressive reign” for the last 100 years. It has given us permanent war, an IRS that is the collection arm of “private” insurance companies, a criminal justice system that is the envy of racists worldwide, and a corporate consolidation of corporate financial wealth that makes the “Robber Barron” era look like a Marxist egalitarian paradise. I could go on and on. You can blame it on politics, but then, again, social democracy without politics isn’t really social democracy, now is it?

The fact is, without libertarianism, there is no liberalism in America. It dies. Modern Politics has not obviated the historical libertarian critique, not by a long shot…

Buttman’s 1st Amendment Trial

People often ask me what was prison like? I tell them, you’ll find out, you’ll find out…
Tommy Chong

In 2005, the Bush Administration created the Obscenity Prosecution Task Force in the Justice Department. According to their website, the mission of this task force is “is dedicated exclusively to the protection of America’s children and families through the enforcement of our Nation’s obscenity laws.” And so they went to work, criminally prosecuting, at first, small fish in the more esoteric areas of mainstream porn. The small fish all plea bargained. Then the task force went after “Buttman,” aka John Stagliano. But Buttman is a libertarian who contributes big bucks to libertarian organizations, and he wasn’t too pleased to find out, out of the blue, that he was being indicted via a Justice Department Press Release. So Buttman declined to plea bargain, instead opting to have his case decided by a jury in federal court. He faces 32 years if convicted on all the various counts.

In early 2009, Bush was gone, Obama was in. The Obama Admin, of course, retained the Task force and took the reigns of the prosecution of Buttman. So Buttman now finds himself in federal court in DC with the start of his criminal trial this past Tuesday. In the opening statements, prosecutor Bonnie Hannan declared this trial was about crossing the lines and accused Buttman of peddling his wares to underage teens. Unfortunately, for the prosecution, part of the evidence gathered, in the 3 year preparation leading up to the case, appears to have been corrupted because a FBI agent apparently had one too many drinks while attempting to transcribe a key piece of offending video in a DC Bar.

The Judge in this case has instructed the jury to apply the “Miller Test,” from 1973’s Miller vs California(aka, the community standards test). Buttman has emphatically indicated that he loses, he will appeal his case to the Supreme Court on the basis of challenging the Miller Test. In this sense, the trial of Buttman is potentially shaping up to have far reaching 1st Amendment implications in the internet age. But you wouldn’t know this by perusing the mainstream media. They are too busy begging for subsidies and becoming wholly owned subsidiaries of WashCorp. The slack in the provision of the “public good” of the news of this trial is being taken up by an Adult Video News site who has sent out ” adult performers” to moonlight as journalists.

If this case does end up in the Supreme Court, I would feel better about the composition of the court before Obama. Sotomayor/Kagan for Stevens/Souter is bad trade. Kagan, as Solicitor General, argued the State had the right to act, by virtue of operating a prison system, as a legal detention regime in the case of “sex offenders.” She has indicated that ‘book burning” is a legitimate function of government, although adding tongue-in-cheek that it would never be really enforced. Well, if Buttman’s case ends up on the Supreme Court docket, consider it to be under a state of enforcement.

Napolitano and Nader

Interesting hour long discussion on CSPAN between Andrew Napolitano and Ralph Nader. The topic was Napolitano’s most recent book, “The Lies the Government Told You.” I actually caught the CSPAN broadcast on Sunday night by pure accident(channel surfing). However, I thought is was a re-run. Apparently not. Quite a bit of discussion has popped up in the blogosphere, particularly regarding Napolitano’s comments that Bush/Cheney should be criminally indicted for constitutional crimes. Is this news? He’s been saying that for years. I think this has only become of interest to partisan tards because he’s become Glenn Beck’s guest host. I don’t watch Glenn Beck, but I imagine Napolitano probably does behave himself there.

In terms of Napolitano’s TV show on Fox, Freedom Watch, when it was internet streaming only, I can say he openly expressed these opinions and had a plethora of libertarian guests who did as well. It was, in some sense, a libertarian debating society. Since moving to actual Cable TV, however, it’s not the same show. It’s become much more of a show of establishment guests and politicians, with a token libertarian or two, debating the “GOP Tea Party” agenda. It’s not particularly compelling; although, last week’s show, had a bit of interesting bit, when the Democratic Party round table strategist and pollster, in commenting on the short debate between Ron Paul and John Bolton over Afghanistan, announced that Obama and the Dem Party were in complete harmony with Bolton. And after praising Lindsey Graham’s patriotism, the Democrat expressed his glee over the hope the Democrats could politically exploit a war/anti-war division in the GOP. Not particularly surprising to me, but I suppose it probably should have made some news that a Dem strategist is openly articulating that Obama embraces John Bolton, whereas, in the case of Steele, a recorded off-the-record bullshit comment raised holy hell.

Returning to Napolitano and Nader, and disregarding all the partisan hackery commentary nonsense, if you watch the video, you will note that the primary thrust of the discussion between the two, progressive and libertarian, is that the Big Government Regulatory, National Security State has wiped out the court system as a means of legal redress of grievances against institutional power. If Roderick Long thinks this was a lovefest, that was what the lovefest was about. Both, despite, political differences, viewed the advocate lawyer class as the great line of defense for ensuring a liberal order, on a whole host of issues. Napolitano, in particular, articulated a case for Tort Law that goes against the grain against conservatives and Reason/Cato libertarians(Napolitano made the case that he was a true north libertarian, except on the issue of abortion. ). The Reason/Cato crowd wants a controlled tort system and an eviscerated regulatory system, which opens them up to legitimate criticism. The likes of Nader want a robust regulatory class along with a robust tort system. Of course, from class theory, the function of the regulatory class is to reduce exposure from tort. The BP Oil spill is a perfect example.

Both Napolitano and Nader agreed that law is what the political class says it is and argued the essential need for a heroic advocate attorney class to counter this. They also mourned that there is no such heroic class anymore. Nader, in particular, reveled in the lack of self-censorship on the part of Napolitano in documenting many of the despicable flaws of the likes of Washington and Lincoln.

Frankly, I watched two expert lawyers, progressive and libertarian, use the pretext of government lies to eviscerate the so-called rule of law. The real world of law doesn’t work like what is taught in law school. No shit…

Hayek, Social Insurance and Serfdom

Regarding this post at Ezra Klen’s blog by Dylan Matthews, I note, that, apparently, there are many being motivated these days by things partisan to actually read up on what the guy wrote. But Matthews misunderstands Hayek. Hayek, being a liberal, and not a libertarian, always viewed a role(albeit a limited one) for government planning(particularly in areas such as social insurance) in terms of “planning for competition,” but never in terms of “planning against competition.” To me, this is not a particularly subtle distinction, but for some, it apparently is. Most assuredly, Hayek would not have been a supporter of “The Health Care Affordability Act,” which, in effect, ossifies politically connected monopolies operating under the auspices of a Command Planning Board.

From a liberal perspective, it would have been far more preferable to have scrapped our perversely incentivized 3-tier model bloat and enact some sort of dual single-payer/free market(the free market component would operate outside the government model, without any insurance for the most part, where prices would be set according to supply and demand). From a libertarian perspective, the preferable model would be to junk government medicine altogether for free market medicine. Social Insurance would be replaced by mutual aid collectives.

Kenneth Arrow’s famous paper, “Uncertainty and the Welfare Economics of Medical Care,” which is the bible of market failure in health Care, argued that the institutional deviations from a “Free market” in health care in post WW II America were the result of socially organic processes naturally arising as a result of such things as “uncertainty” and “information asymmetry.” The rise, however, of international medical tourism markets empirically argues against the likes of Arrow, instead implying that institutional organization in medicine is far more rooted in Public Choice than market failure.

Returning to Hayek, it should be noted that as I have pointed out on numerous occasions, the Road to Serfdom was a critique of State Socialism, the Fabian Socialism advocated by the likes of George Bernard Shaw that was in intellectual favor at the time, and that this critique derived from the Socialist Calculation Debates. In a previous post, I noted that Shaw, when he was a much younger man, had gone toe to toe with the radical libertarians(in particular, Benjamin Tucker), considering them at the time to be the most articulate and coherent intellectual opposition to the State Socialist paradigm. Shaw made an economic argument against the libertarians, in particular an economic argument against classical economics. When classical economics was overthrown by Neoclassical economics–in particular with the rise of Walrasian Neoclassical equilibrium theory–the Socialists had a mathematical economic model paradigm to underlie their social theory. World War I was seen to have made the empirical case, with centrally planned European war economies able to maintain high employment without any business cycle. From this, a case was made that a Walrasian auctioneer(the central planner) of sorts could supplant or at least simulate the role of the market in terms of equilibrium analysis.

It should be pointed out that in academic economics at the time, in particular in the context of era of global war, this opinion held much sway. It was attacked, however, by notable adherents of a second generation of the Austrian School that proceeded the historical school(noting the historical school played a pivotal role in formulating the marginalist revolution that lay at the foundation of Neoclassical economics). In particular, I’m referring to Mises and Hayek. Mises’ contribution perhaps swayed the academic profession that the Walrasian auctioneer could not supplant the need for any function of the market, but not that the Walrasian auctioneer could not simulate the function of the market. From a historical perspective, Mises is said to have lost the Socialist Calculation debate. Hayek, in addressing why the market could not be simulated by a central planner, would eventually formulate the Knowledge Problem critique. The Knowledge Problem was a generation before it’s time, and really wouldn’t be appreciated until the birth of the information age, when economic scholars would conclude that Hayek, in the end, won the debate.

Hayek, meanwhile, at the end the WW II, when WWII central planning exuded overconfidence among the elites about the role of planning in the future, at a time when the role of knowledge and information in society was grasped by few outside of Hayek himself, wrote a political tract that articulated why a Walrasian auctioneer operating in any political institutional and cultural setting would lead to the same institutional result: serfdom. Hayek articulated why things like Fabian Socialism and National Socialism would lead to the same things. Hayek, however, did not view serfdom as the end game of liberalism. That, actually, was George Orwell’s point of view, that capitalism or socialism under liberalism led to the same thing: totalitarianism.

Hayek’s Road to Serfdom was a critique in a historical context aimed at the idea of a “liberal” Fabian Socialism. It was not a critique of the “mixed economies” that would actually emerge, nor did Hayek ever write that liberalism could not adjust. Hayek’s book, if not for Reader’s Digest publishing a condensed version it’s pages, likely would have ended up experiencing the same fate of relative obscurity his other political books suffered from. And it should be noted that Hayek, dismayed perhaps, for being considered an icon of the right, would reject that label with his essay, “Why I am not a Conservative.” All you have to do is read that essay to figure out why the likes of Glenn Beck, who attempt to integrate Hayek with a religious fundamentalist tradition to forge a partisan critique against Obama, is the very personification of the thing Hayek was condemning in his essay.

As a side note, I should probably point out that radical libertarians might side with Orwell to an extent over Hayek, that Capitalism and Socialism under liberal political institutions, in the end, result in the same thing, or at least something that is closely related. In the United States, it is not national Socialism that is the issue, it’s National Corporatism. One or two more internal terrorist attacks, and we are going to experience the full brunt of this. In this sense, I think a Hayekian analysis applies to our current context. But it’s not exactly the same argument Hayek made in The Road to Serfdom.

Paul and Frank on cutting Military Spending

I watched Ron Paul and Barney Frank argue for cutting military spending on CNN last night. From a radical libertarian perspective, there is an argument for politics to an extent the purpose is to break the legs, or at least crack a few bones, of monopolies, in particular the Military Industrial Complex. Of course, this is very rare when it actually happens, noting, of course, the State is the ultimate monopoly that incentivizes the formation and continuation of State Capitalist monopolies. The United States, in large part, has forged an economic model that depends on it being the “lynchpin” of global collective security. The Military Industrial Complex won’t even begin to be dismembered by the political class until the economic surplus runs dry, which is now beginning to happen to some degree. Hence, once marginal figures like Paul are no longer so marginal. However, the economy is going to have to get much worse before any effort like this has any hope of bearing fruit.

I have written my opinion of Ron Paul on many previous occasions. Concerning Frank, while there is some substantial disagreements I may have with him on a number of issues(noting, of course, that I am going to have a substantial number of disagreements with any politician), Frank is one of the few actual liberals in congress. I don’t get bogged down over debating “modern liberalism” vs “classical liberalism.” Whatever version of liberalism you may think is valid, a key aspect of any version of it is that there is no role in government or governance to “protect or defend” the individual from himself. If you don’t subscribe to that, then you are not a liberal, period. Most do not, so I actually think it’s a good thing that the term “liberal,” as a self-identification political term, has been superseded by the more accurate term, “Progressive.” Progressive and Liberal can be complimentary terms(just as Liberal and Libertarian can be), but they are not identical.

CNN Video