September 2009 - Posts
I've been listening to NPR's coverage of the national
debate over the supposed health care crisis in the United States.
This evening's report mentioned hearings that were held today by a
Senate committee that is trying to come up with a bill that will
garner enough votes to avoid a filibuster by opponents of the
measure. One of the items that was being discussed, and which seems
to be locked in to all versions of the reform bills under
consideration, is a mandate that all Americans purchase health
insurance or face fines and/or other punitive measures designed to
ensure compliance with the wishes of the State.
And it seems as though no one dares to point out what
an incredibly stupid thing such a mandate would be. Let's leave
aside for now the libertarian objections to such a provision and look
at this on its own merits for the time being. Bear in mind that one
of the goals the reformers are aiming for is to achieve a reduction
in the cost of health care. And one of the first things these
altruistic power-brokers want to do is put the coercive power of the
State to work ensuring that every person in the United States is
covered by health insurance; for their own good, of course.
Though arguing from analogy is, necessarily, a
difficult thing to do as no two situations are identical, there is
one area from which we may get a good idea of what lies ahead on the
path of mandating the purchase of health insurance. Auto insurance
is a field from which we can certainly get some idea of what will
happen when the State requires everyone to be covered by some form of
health insurance. If what has happened here in Michigan with
mandatory auto insurance coverage is any indication the results of a Federal health insurance mandate are
going to be anything but pretty. Michigan is one of several states
that bought into the argument that our court systems were being
overwhelmed by the numbers of auto accident suits being filed and that auto insurance was getting too expensive. So the state's legislators
enacted something known as “no fault” automobile accident
insurance. The idea is that a person's own auto insurance provider will
cover the costs of damages, health care, and so on. Whenever a policy
holder is involved in an accident the insurance provider simply pays
the bills and life goes on. Not only was this scheme supposed to
lessen the load of civil lawsuits working their way through the court
system, but auto insurance costs were supposed to go down because
insurance companies would no longer need to pay for expensive
lawyer's fees associated with all of those court cases: at least that
was the theory. To ensure that everyone benefited from this wonderful new idea the Michigan legislature mandated that everyone purchase auto insurance, at certain specified minimum levels.
The reality has, surprise, surprise, been considerably
different from the roseate picture that was painted by the proponents of the original measure. For one thing mandating the purchase of auto insurance
handed the insurance companies a captive group of customers;
customers who had to buy their product regardless of the cost.
Unsurprisingly, the cost of auto insurance in Michigan has done
nothing but increase since the “no fault” law was put in place
back in the 1970s. Among the conclusions reached in a 2005 study by
The Foundation for Taxpayer and Consumer Rights are these:
Premiums
are 19% higher in no-fault states than in personal responsibility states.
States
with some form of no-fault insurance are consistently the highest priced in the nation.
Auto
insurance premiums rose 92% faster in no-fault states than in personal responsibility states between 1998 and 2002.
(see:
http://www.consumerwatchdog.org/documents/1812.pdf
for more details)
According
to an item from the Mackinaw Center for Public Policy: “Even
when one disregards the high level of taxation to which the insurance
industry is subjected, the additional cost built into an auto
insurance policy in Michigan as a result of government's many other
intrusions in the market is staggering. For instance, laws force
insurance companies to sell drivers more insurance than even the
companies believe they need. Companies are prohibited by other laws
from assigning risk based entirely on where losses occur, forcing
those who live in low-risk areas to subsidize those who live in
high-risk areas. These edicts accomplish political goals that could
have been paid for out of general revenues, but the Legislature has
found it easier to hide them in the cost of insurance. “ (See:
https://www.educationreport.org/article.aspx?ID=94)
Other
studies of the field indicate that Michigan is not alone in
experiencing increases in the cost of auto insurance following the
passage of laws that mandate the purchase of it. The cost increases
come as no surprise and were predicted by opponents of the Michigan
law prior to its passage. After all, it's only natural for
businesses to raise the prices of their goods and services when they are
guaranteed sales by virtue of the police power of the State. There
is some limit to the cost of auto insurance as competition does still
exist within the insurance marketplace, but those limits are higher than would be the case in a marketplace in which
the customer is free to walk away from the market entirely if she
finds nothing that meets her needs or budgetary requirements.
Unless
the Federal government is going to place arbitrary limits on the
prices that may be charged for differing health insurance policies
there is no reason to believe that what has happened in Michigan and
other states which mandate the purchase of auto insurance will not
happen on a national scale with health insurance. Along with higher
insurance costs will come the need for higher levels of subsidy
payments to those whom the all-knowing State decides are too poor to
pay for the insurance themselves. That's one of the reasons that
President Obama and his close allies are pushing so hard for the
so-called “public option” for the purchase of health insurance.
They see such a provision as a means of ensuring that health
insurance companies do not take undue advantage of the consumers who
will be forced to purchase some product they may not want or need.
The public option is also a means of dressing up the wolf of a
single-payer insurance scheme in the guise of the sheep of consumer
protectionism. Of course, whether or not the “public option” is
included in the final law the costs of health insurance will continue
to rise. The proponents of the public option won't admit that, but
it is inevitable. The actual cost increase may be hidden within the
general tax increase which will be necessary to pay for the
President's brainchild but be there they certainly will be.
There
is much to dislike about any of the proposed “reforms” of the
health care system as all of those put forth by the politicians in
Washington result in an increase in the power of the State. However,
the idea of mandating the purchase of health insurance goes beyond
simply putting in place new regulations for doctors and other health
care providers to keep track of and hope not to transgress.
Mandating the purchase of health insurance not only increases the
intrusions the Federal government will make into all of our lives, it
will also directly add to the already high cost of health insurance.
This cost increase will “require” the State to further subsidize
the cost for low income households (which means raising taxes on
those in the middle class and above to pay for that “benefit”).
The result will be increased costs, heightened Federal government
intrusiveness into all of our lives, increased levels of taxation,
and most likely of all – no improvement in the overall health of
the American people; which is supposedly the object of this whole
exercise in futility. So long as the Federal government is not
forced to give up its role as regulator of the nation's health care
the situation will not improve – we'll simply end up back here
again in a few years listening to the familiar complaints of the
regulators (who will have failed in meeting any of their supposed
objectives) that they need ever more money and power to achieve their
goals.
The debate over health care reform is ongoing and no
one is sure what type of changes will be forced upon the people by
our guardians in Washington. With all of the smoke and noise that
has been generated around this issue there is still nothing which one
can point at and say, “This is what the Congress will be voting
on”. In a quick scan of the field of likely contenders one sees
the so-called “compromise” bill that has been put together by
Senator Max Baucas (D-MT), who spent many hours with Republican
Senators Olympia Snowe (R-ME), Chuck Grassley (R-IA), and Mike Enzi
(R-WY), in an attempt to craft a "bipartisan" bill, and HR 3200 – sponsored by Representatives John Dingell
(D-MI), Charlie Rangel (D-NY), and Harry Waxman (D-CA) among others (which gives the Statists everything they want, such as mandating the purchase of health insurance) –
together with any number of proposed amendments, and other possible
bills. Conspicuous by its absence in the debate is anything
resembling a libertarian alternative to the extension of Federal
power envisioned by all of the bills that are currently being
discussed. And that is a real shame because this type of legislation
is one in which a libertarian plan could be put forward.
A libertarian bill could use reducing the cost of
health care as its point of departure. The sponsors of the other
bills that are being considered all claim to reduce costs, but the
reality is that what they really control, if anything, is the
rate of increase in cost. For instance, President Obama's plan doesn't
actually lower the amount of money that will be spent by the Medicare
system, it merely slows the rate of growth of this voracious monster
of a Federal boondoggle. Yet, to hear the President and his
supporters tell the tale, one could be forgiven for thinking that the
amount of Federal money spent on Medicare will decline if the
President's plan is adopted.
A truly libertarian bill would lower the amount of
money the Federal government must allocate to Medicare by removing
the question from the Federal realm entirely. Now is the time when
we should be truly thinking “outside the box” as everyone seems
to be ready to discuss the supposed health care emergency (as some
Democrats are portraying it) and actually do something about it. So
here is my proposal for a libertarian alternative to the proposals
being put forth by the proponents of Big Government:
-
-
allow individuals to opt out of the Medicare
system entirely,
-
do not collect Medicare taxes from those who opt
out and reduce their Federal income taxes by the proportion that
Medicare represents of the entire Federal budget,
-
allow those who opt out to do whatever they wish
with their money; buy health insurance, go on a vacation, save it,
it doesn't matter as it's their money to start with,
-
eliminate the Federal government's power to
determine what equipment your local hospital can purchase, what
services it may provide, and how much it may charge for the service
thus interjecting an element of competition into the medical
marketplace,
-
remove the cap on the number of doctors which may
be graduated each year from the nation's medical schools. Making
more doctors available will also add to the marketplace competition
that serves to drive costs down in every other area of life in
which it is allowed to operate,
-
require doctors, hospitals, labs, etc. to post
their charges for common procedures. This could be done on-line, by mail, or via local newspapers, preferably all three.
If people can see how much it will cost them to have their MRI down
at Hospital “X” as opposed to Hospital “Y” they'll probably
choose whichever one is less,
-
jettison the idea that in order to be “adequate”
health insurance must cover every service, office visit, and lab
test that a person gets. When I was a young adult (more years ago
than I like to think about) the health policy I had covered major
surgery, truly unusual and expensive tests, and other
“catastrophic” costs. Other than that I had to pay for routine
office visits, lab tests, and so forth. This would have the effect
of lowering the costs of health insurance as companies would no
longer have to offer only policies that offer “soup to nuts”
coverage with the only difference in cost being the amount of the
yearly deductible.
Now, I'm not going to claim that this will save “X”
number of dollars from the Federal budget or that it will solve every
aspect of the supposed health care crisis. But guess what, neither
will any of the plans being put forth by the advocates of ever-larger
government. What it would do is set a precedent for reducing the
power of the Federal government, increasing the liberty of individual
citizens, and giving those citizens some of their own money back.
The idea here is to take a bite out of the power of the Federal
government and help reduce the cost of health care, while
demonstrating that people are capable of managing their own lives.
Taking steps to reintroduce competition into the
medical marketplace is long overdue. For too long the AMA and the
Federal government have had a cozy relationship which allows American
doctors to avoid having to really compete for patients while also
allowing the Federal government far too much regulatory power. It's
been convenient for the medical professionals to maintain that they
like the idea of competition, while regretting that they can't openly
compete because the nasty Federal government won't allow them to do
that. The above scheme would greatly reduce the Federal government's
involvement in the medical marketplace without reducing the safety of
the drugs, etc. that people rely on.
Would my plan be perfect? No, nothing involving people
is ever going to be. However, my scheme gets us moving back in the
direction of increasing the freedom of action of citizens, rather
than further circumscribing it as the plans but forth by the
politicians in Washington and the professional lobbyists hired by the
health care providers would do. In the long run that's more
important than coming up with a “perfect” plan which satisfies
no one except those with a vested interest in increasing their power
over others.
The Federal government has now grown so powerful that
some in this nation are taking its slightest wish to be a command.
The announcement on Monday by a group of major American corporation,
including Hewlett-Packard, AT&T, Tyco and others, that they will
be adopting new executive compensation guidelines is a sign of this.
The corporations have said that they will develop new rules regarding
the compensation of top executives based on a report from the
Conference Board that was also announced on Monday. Some will
maintain that this is nothing new, that businesses have many times
tried to get out in front of possible new regulations by adopting
some sort of voluntary self-regulatory scheme on their own. While
that is true, it's never been a good sign, but this move is much more
significant. To my knowledge American corporations have never
subscribed to the idea that the State has any power in the area of
setting the compensation that corporate employees, particularly those
at the upper end of management, may receive. To my way of thinking
this is yet another example of the expansion of the powers of the
Federal government far beyond anything allowed by the Constitution or
envisioned by the nation's Founding Fathers.
The companies are making this move in an obvious
attempt to head off yet more regulation by the anti-business Obama
regime. President Obama has repeatedly stated that he believes that
corporate executives' pay is too high and is not properly linked to
the actual performance of the executives or the companies. According
to the new guidelines executive pay is to be more transparently
linked to performance and the compensation packages are to be “more
affordable”, eliminate “golden parachutes”, and be subject to
more oversight by company boards of directors. None of these things
can be measured objectively: one man's excessive pay is another's
reasonable reward for effort made and results obtained. Likewise,
the amount of gold in one's parachute is a matter of interpretation,
not solid fact. That means that any regulations based on these ideas
will be open to interpretation and companies will be left to wonder
if they've overstepped the limits until they're reprimanded by some
Washington-based bureaucrat. About the only thing missing is a
requirement that the executives bow daily in the direction of
Washington and give thanks to President Obama that they have a job.
Given this administration's propensity for exacting arbitrary ex post
facto punishments for corporations and executives which it thinks
have crossed the boundary of what is “reasonable” (just look at
the recently announced prosecution of Bank of America for fulfilling
the contractual requirements that it inherited when it took over
Merrill Lynch – at the State's insistence it should be noted see:
http://www.ncbusinesslitigationreport.com/2009/04/articles/fiduciary-duty/threats-and-secret-promises-bank-of-americas-merger-with-merrill-lynch/).
How long will it be before executive pay is held in escrow until
the State determines whether or not it is “excessive”?
This is the sort of corporate kowtowing that
demonstrates how tight the link is between regulation by the State
and corporate well-being. Left unsaid in this announcement is the
realization that the socialists in Washington have it within their
power to simply regulate executive pay in any manner they may wish.
The fact that such regulations would be unconstitutional no longer
even comes up for discussion. It's as though American businesses
have lost their backbone. A generation ago the very idea that the
Federal government has the power to place limits on how much money
the top employees in a business may make would have been considered
laughable. Furthermore, businesses of yesteryear, faced with such an
extension of the power of the State would have stood up for their
rights and filed suit in court to prevent any such regulations from
being put into effect. How the mighty have fallen.
Some will argue that the new rules (a version of which
are already in effect for any financial institution that submitted to
the State's blackmail and accepted TARP money) aren't any different
than other Federal rules that corporations already abide by. What
they overlook is that the State has never before (except during WWII
and a short time during the Nixon years) set limits on how much money
a person is able to earn in the course of legal employment. What is
more troubling in some ways, than the restrictions themselves, is the
general reaction by the public that “those scoundrels had it coming
to them”. The Obama regime is deliberately making this change as a
populist act of class warfare. And Americans are falling for it
because they fail to realize two things: there is considerable
mobility between classes in the U.S. and those who are in the lower
ranks of earners today generally move up the ladder to higher paying
jobs in the future; and once the State is allowed to regulate
compensation in one area or for one class the precedent will be used
to gradually lower the limit at which such regulation kicks in.
President Obama has already defined $250 thousand dollars as the
amount of income which delimits the “wealthy” from everyone else.
By using class envy to drive his new regulations President Obama is
deliberately pandering to one of the worst emotions of man: envy.
This emotion has been considered to be a sin by many as it makes it
all too easy to justify shackling those of whom one is envious.
President Obama has been at pains to point out that racism has no
place in American society and he is to be applauded for that.
However, he is deliberately acting to substitute class-envy for
racism so as to set the stage for ever more onerous burdens to be
placed on the supposed “wealthy” of this nation. Not only is the
President introducing a darker, more vindictive tone into the debate
over compensation, but he is also greatly extending the
extra-constitutional reach of the Federal government. This is yet
another example of how little constitutional limitations on Federal
power matter to this man whom we are told is a “constitutional law
expert”. Once again the powers that be are able to act as they
please because they know that the vast majority of the American
populace has no idea what is actually written in the Constitution.
Because of this ignorance the Obama regime is able to more-or-less
make up the rules as it goes along and change the interpretation of
existing rules to fit its conception of how things should work.
There are many Americans who think that strict limits
should be placed on executive pay. They cite supposed gaps between
performance and compensation, a lack of oversight of pay packages by
corporate boards of directors, and how “unfair” it is that some
executives make millions of dollars a year while other employees work
for far less. According to the thinking of such people all of these
“problems” are best addressed by extending the power of the State
over business activities. What they overlook is that the
corporations themselves do not seem to view the situation with alarm
– something which would be happening if any of these businesses
felt endangered by the levels of executive compensation they are
dispensing.
It is entirely possible for boards of directors to
discuss in great detail the amount of money to be paid to a member of
upper management and reduce the amount if they feel that it is out of
line with the benefits that they anticipate the new employee will
bring to the company. The pay scales of upper management in American
businesses are high because the amounts of money which these people
can make for their employers is also high. It is not unreasonable to
pay a manager who brings in $700 million dollars of new business or
introduces similar operational savings to the bottom line of a
company $300 million. From the standpoint of the company they've
gotten a bargain and it should not be anyone else's view which
prevails in the setting of the wage – outsiders are not privy to
all of the information available to a corporate board, nor are they
affected by the amount of compensation given out. Once again
Americans are falling victim to the liberal credo that outside third
parties know what is the best course of action for other to take.
Once again the State is usurping power which rightfully belongs to
others. And once again Americans are being suckered into giving up
yet more liberty – this time by the promise that they'll get to
watch as greedy corporate executives “get theirs”. In the end
the only certainty is that the Federal government will have further
expanded its powers at the expense of the American public.
“We can mandate whatever we want to in America. We
can mandate that Coca-Cola®
come out of the cold water tap.” So said Senator Ron Wyden (D-OR)
in an interview on NPR's Weekend Edition on Sunday morning, September
20, 2009. This is but one example of the sort of hubris which has
seized the Democratic lawmakers in Washington, D.C. It is also
indicative of a dangerous trend in American politics; one which has
been going on for some time, unfortunately. If Senator Wyden's
comment is to be taken at face value, and I know of no reason why it
shouldn't be, he seems to feel that the Constitution and the rule of
law no longer to him and his fellow legislators. This applies to legislators of both parties, though with the Democrats in control of both the legislative and the executive branches of the government they seem to have a particularly virulent case of the condition right now.
This is a natural result of the rigging of American
national politics so that legislators are practically guaranteed a
seat for life unless they caught with their hand too deeply into the
cookie jar. The turnover in seats in both the House and Senate is
pathetically small in any given election cycle. Given the precision
with which Congressional districts can be drawn legislators know
that, except in roughly 10% of the districts across the nation, they
will hold their seat for as long as they want it. Even those which
are so-called “swing” districts tend to stay with one party or
the other for several years between swings. This is certainly not
the outcome that our Founding Fathers were expecting when they put
together the Constitution over two hundred years ago. It is one of
the results of the various election “reform” laws passed in the
last twenty years or so; rather than opening up the field to
newcomers the effect has been to rig elections so that incumbents
have nearly insurmountable advantages in an election. The tendency
has become more noticeable since the passage of the McCain/Feingold
election reforms that limited the speech of outside organizations by
denying them the ability to make direct reference to any candidate in
an election. This has effectively acted to muzzle opposition that is
not directly a part of either major party.
The Democratic wing of the “Big Government” party
which rules this country feels that it can ignore the growing Tea
Party movement simply because that movement is almost entirely
outside of the areas from which the they draw their support. The Tea
Party movement is strongest in the West and Midwest, areas dominated,
except around big cities like Chicago, by the Republicans. Unless
the dissatisfaction with the way things are currently done in
Washington grows to encompass areas that the Democratic party
controls nothing will change. The Democrats will continue to
belittle the Tea Party movement as the squawkings of a few
disaffected, and probably racist, middle-class white men: hardly a
group to which they feel the need to pay attention. The result will
be that our arguments will not be heard above the rantings of those
who dismiss us as members of a radical fringe movement that will go
away if simply ignored.
And that is one of the problems with the current Tea
Party movement, though I agree with their goal of rolling back
Federal power and forcing our elected officials to abide by the
Constitution as it is written, there is nothing in it to attract
those who get everything they want from the State. Unless the
recipients of Federal largess come to understand that they are simply
being used by the rich and powerful men in Washington this nation
will continue down the path to socialism and, eventually,
totalitarianism. To that end those of us who want to return this
nation to one which is ruled by law rather than executive fiat must
find some message which appeals to those who are the beneficiaries of
the Federal government's wealth redistribution schemes. Judging by
the response thus far, simply pointing out the evils of the current
system will not be enough. We must develop some sort of blueprint
for getting us from where we are – trodden under the heel of an
increasingly arrogant government – to where we want to be –
living in a land in which each individual is truly free to seek his
or her own destiny without the interference of government
bureaucrats.
What that blueprint looks like exactly, I don't know.
However, coming up with a way of getting this nation back on the
right track, without causing damaging upheavals in the economy or
simply tossing those who currently receive welfare and other types of
support from the State on the garbage heap – which will only lead
to damaging social disorder – is not going to be easy. Yet, I
think that the time has come for those of us who want to live the
life of freedom which the Founding Fathers bequeathed to us to
develop such a plan. As a friend of mine said, “We've got to come
up with a Giant Fricking Reset Button”, and convince people that we
need to collectively push that button and get rid of those in
Washington who think that they “can mandate whatever [they]
want...”. This will not be an easy task, yet we must undertake it
if we want to be taken seriously and force real change on our
government.
It has become common for supporters of President
Obama's plan to socialize medical care in this country to maintain
that those of us who oppose such a measure are motivated, partly or
wholly, by racism. Former President Jimmy Carter has signed onto
this school of thought, as have the usual suspects such as the
Reverends Al Sharpton and Jesse Jackson. Also climbing on board the
“Let's Smear the Opposition” bus have been any number of Senators
and Representatives, including Senate majority Leader Harry Reid and
Speaker of the House Nancy Pelosi. This is playing the “race card”
on a grand scale and for those who believe that the Federal
government should no longer be bound by the Constitution it is a
convenient charge to make.
Making the charge that one's opponents are motivated by
racial hatred is particularly easy to make in America right now, in
spite of considerable evidence, such as the man who currently
occupies the Oval Office, that racism is a shadow of what it used to
be. Is it all gone, no, and more's the pity as the fact that it
still exists gives the Democratic charges just that tinge of
legitimacy that makes people think there might be something to it.
What it also does is act to absolve the advocates of socialism of
having to make real arguments in favor of their position that health
care is a right and that those who support that school of thought
have the right to use the coercive power of the State to enforce
their desires. You see, making the charge of racism in America today
has the effect of immediately changing the focus of the debate from
the merits of each sides' arguments to one in which the opponents are
forced to spend the majority of their time defending themselves from
the despicable charge.
This is one of the results of the growth of the cult of
political correctness in this country. Even though they may not
agree with the philosophy that one must never say anything which
might be offensive to someone else, most Americans have
subconsciously adopted that mode of speech and argument. It is
interesting to note that in this particular instance the first
principle of politically correct speech - “Thou shalt not speak any
offensive epithet lest thou should injure thine opponent's
self-esteem” - does not apply when making the charge of racism.
Yes, it's permissible for the left to level such a charge at those
whom they have discovered are not willing to simply allow the
juggernaut of an ever-larger Federal government to roll over them
unchecked. It is not, however, permissible to point out that in
making such a charge, one which I and I dare say most Americans feel
is outrageous, the backers of the Obama regime are themselves acting
in racist manner. But, that's rather beside the point – it merely
illustrates how, by making this unfounded indictment, the supporters
of President Obama are able to deflect the debate from the true point
at issue – that the President's plan to “reform” health care is
nothing less than a plan to socialize the health care system by
slowly driving out any remnants of the free market in this sector of
the economy.
Making the charge of racism simply demonstrates the
emptiness of the case for supporting the President's proposals. As
time goes on more details of the President's proposals have emerged
and it becomes obvious why President Obama tried to keep them murky
early on. The simple fact is that the proposed changes cannot be
paid for without both drastically curtailing the services provided by
Medicare, particularly those for the elderly, and increasing the
taxes that most Americans will pay. Unless the Obama regime is
willing to curtail spending on other social programs and so-called
“entitlements” the money is not there. This nation faces
deficits from now until forever because none of our so-called
“leaders” in Washington has had the political will to call a halt
to the continual expansion of spending on social programs –
programs which, by and large, lack any constitutional support. Our
nation is bankrupt, or would be if anyone dared to actually face the
facts of the matter. Yet the President insists that we stick our
heads further into the sand and allow him and his cronies to saddle
the populace with still more taxes. The sad thing is that, if the
level of Federal taxes were reduced, as they could be if Americans
insisted the government live within the law, the vast majority of
people could pay for their own health insurance. Bat that's another
admission that those in power dare not make because they realize that
to do so would be to call into doubt most of their actions over the
last half century.
So we're stuck with the absurd situation in which the
President and his supporters cannot make a reasonable case for the
proposed changes, but they dare not admit that. So they lower
themselves to the level of making ad hominem attacks on those who are
pointing out the many fallacies of their position. By doing so they
not only continue to add to the level of rancor, discord, and
distrust that pervades American political discourse but they lessen
the chances that anything good can come out of this discussion of the
problems of our health care system; and a serious discussion badly
needs to take place. However, calling their opponents names will not
move the debate forward and it threatens to destroy what little
decorum and rationality exists in what passes for political debate in
America. Shame on them, and shame on those of us who oppose the
President's plan for allowing ourselves to be distracted from the
real matter at hand – will the United States make an irrevocable
move into outright socialism or will we move the other way – back
towards the freedoms that this country was founded upon?
The Federal Reserve has
announced a policy that, not too many years ago, would have been
widely denounced as a tyrannical usurpation of power. The Fed is in
the process of drawing up “guidelines” to set limits on the
amount of compensation that can be paid to the upper management of
the nation's banks. This is in keeping with a White House policy of
setting limits on the pay for executives of banks which have taken
advantage of the TARP funds made available under what amounts to an
emergency decree by former Treasury Secretary Hank Paulsen last
September. Yet, somehow, this direct interference with the workings
of the free market has not drawn the fire from so-called
conservatives that one would have expected. This strikes me as yet
another sign of just how little attention is paid to the Constitution
and the limits that it sets on the power of the Federal government
these days. Instead of vilifying this new assertion of unlawful
power on the part of the State the reaction seems to be, “Oh well,
this is merely a logical extension of the programs that have saved
our financial system from collapse”. There is also more than a
hint of class warfare in this move as the President seeks to further
establish himself as the savior of the poor and downtrodden.
This change in the Fed's regulatory scheme is a
continuation of the Obama regime's policy of punishing the wealthy by
capping the amount of money they may earn in the future. After all,
this is the same outfit that has placed caps on the amount of money
that may be earned by top management in the nationalized parts of the
U.S. auto industry known as General Motors and Chrysler. One of the
things that concerns me, besides the obvious unconstitutionality of
the moves to regulate the recompense of employees in the putatively
private sector of the economy, is the level of, there is no other
word for it, glee, which has met the Fed's announcement. This is but
one sign that the majority of the American people have bought into
the State's version of the causes of the events leading up to the
current economic crisis: the fault lies entirely with those greedy
bankers who were let loose to run amok by a Bush administration that
cared only for allowing its friends and supporters to make obscene
amounts of money. There seems to be little awareness that our
current financial problems were caused by a series of ill-considered
policies adopted by various agencies of the Federal government –
the same government which is now being trusted with
extra-constitutional powers to put things right.
What many Americans fail to realize is that, by
acquiescing in the imposition of wage caps for some they accept that
all may have their remuneration set by the State. Many will not
accept the truth of the last statement, preferring to believe in the
myth of a benevolent Federal government, a government which would
never act in such a way as to harm the people. However, history, if
it teaches us anything at all, teaches us that government power, once
established in an area of economic or social activity, continues to
expand. To take but one example, the Interstate Commerce Commission
was originally empowered only to regulate railroad freight rates.
Its powers eventually grew to encompass the trucking industry as well
as railroads and its field of activity grew to include such details
as what routes trucks could drive and what they were allowed to carry
on those routes. The railroads saw an even more drastic expansion of
the ICC's powers as it came to control the smallest details of the
freight rates the railroad could charge, how the roads were required
to do their accounting – though those methods failed to reflect the
actual costs incurred by the companies – and other details of
operations. The ICC grew so cumbersome and destructive of economic
activity that even the Congresscritters in Washington finally
realized that it was killing the freight industry, both trucks and
railroads, and its power were drastically cut in the early 1980s and
the commission itself eventually phased out, to be replaced by the
Surface Transportation Board. In a repeat of history Congress is now
considering expanding the powers of the STB to set railroad freight
rates. Representative James Oberstar (D-MN), chairman of the
Committee on
Transportation and Infrastructure has opened hearings about what he
calls the problem of freight railroads overcharging their customers.
Wherever one looks at government programs, particularly
those which regulate some sort of activity one sees the expansion of
those powers into areas that were not imagined in the original
legislation. Yet, the State's “education system” does a good job
of indoctrinating students with the idea that the Federal government
is the source of all goodness and wisdom. Thus, many people do not
acknowledge that the government is the source of a lot of their
problems, even in the face of considerable evidence that it is.
It doesn't take a genius to see the path that the
State will follow now that it has been allowed to establish wage caps
in a small section of the economy. At some time in the future the
Federal government will extend its new found powers and establish
wage limits for management in other sections of the economy, and the
workers will cheer because the “rich, fat cats” of management
will be seen as getting what is coming to them. Little will they
realize that they will be the next in line for having their incomes
limited. Anyone who has read Frederick Hayek's book The Road to
Serfdom will understand how this process is inevitable, unless
the people realize what is going on and act decisively to change the
course of their government. Forcing the Federal government back into
the constraints imposed on it by the Constitution will allow
Americans to recover their lost freedoms, including the freedom to
work for wages set by the free market, not by some bureaucrat in
Washington, D.C.