The Supremes and Us

You could have knocked me over with a feather when the Supremes upheld the Affordable Care Act this morning.  When I learned that Chief Justice John Roberts was the deciding vote, I was just plain stunned by disbelief.  What happened here?  How did Roberts end up on this end of a law he clearly dislikes?

The Supreme Court demonstrated its outside the fray quirkiness yet again.  In 1803, cast your minds back, Chief Justice John Marshall first used judicial review in a Federal court.  The Constitution doesn't grant that power to the courts, Marshall just took it.  Judicial review had been used in a very limited way in state courts prior to that, but Marshall's application of the principle to Federal law was new.  There was no legal objection from the United States, so judicial review became part of the law of the land.  Over the 200 plus years since Marbury v Madison, judicial review has become the most significant responsibility of the court.  Left and right have railed against judicial activism when the courts haven't seen things their way, but the principle has stood firm.

So how does this factor into today's decision beyond the usual prerogatives of the Supreme Court?  When the Justice Department mounted its defense against suits aimed at overturning the law, there was a debate about how to defend the individual mandate.  One side wanted to use the constitutional  power of the U.S. to regulate interstate commerce to justify the individual mandate.  The other side wanted to use the constitutional power of the U.S. to levy and collect taxes to justify the mandate.  Personally, based on my extensive experience in constitutional law (OK, so I don't have actual experience in constitutional law but I was a history major in college and have read a bunch of stuff), I favored using the taxing power because I believe there are adequate precedents already.  We are all compelled to pay into Social Security and Medicare as well as unemployment insurance and withholding.  The Administration opted to use the commerce clause because opponents would find the concept of a tax a ripe, juicy target for political attack in these days of the reign of King Grover of Norquist, the most powerful person in the country.

Turns out that the Chief Justice agreed with me (so there!).  The Court's majority ruled that using the commerce clause was unconstitutional.  While Roberts agreed with that, he said that it was constitutional under the taxing power and, therefore, joined the minority, who still felt that the commerce clause was OK, to uphold the law.  Pretty neat, huh?  I'll bet Scalia and Alito wet themselves when Roberts told them.  As usual Thomas displayed his desire to get out of all this and get back to the copy of "Long Dong Silver" he keeps in his office, and the one at his home.

Before the Tea Party types get their panties all in a knot, here are a few things that the law does.

1. Allows children to stay on their parent's plan until they turn 26. (currently 18 million families are using this benefit that is already in place).
2. Children cannot be denied coverage because of prior existing conditions. (in effect now)
3. Closes the Medicare Part C donut hole. (The donut hole is already 25% less thanks to the law.)
4. Provides Medicare recipients with free preventative screenings to reduce costs.
5. Removes lifetime caps on insurance benefits.
6. Prohibits insurance cancellation for people who get sick while covered.
7. Regulates what percentage of premium dollars insurers may use for non-medical costs such as CEO salaries, advertising and administration, and requires that consumers get rebates if those ceilings are exceeded. (this went in effect last November, and you may be getting a check from your insurance company in August if they were guilty)
8. Gives tax credits to small businesses (less than 50 employees) who agree to offer insurance to their employees.
9. Prevents insurers from charging more for women than men (2014).
10. Insurers are not allowed to decline coverage for adults with prior existing conditions (2014).
11. Requires insurers to allow free mammograms and other preventive services.

There are lots of additional things too but you get the idea.  Typically, pollsters have found that people who say they oppose the law approve the things it does.  Go figure. 

So while this SCOTUS has pissed me off plenty, I'm happy with today's ruling.  While the best performance by the Supremes I've ever seen was during the annual Motown Review from the balcony of the Apollo Theatre in New York at a midnight Saturday show back in 1964, this performance was pretty satisfying, although I do miss Diana Ross. 

Government Should Be Run Like A Business

Over the years, we have all heard folks from candidates, to pundits, to personal contacts put forth the idea that government would function better if it were run like a business.  This year that concept is a significant part of Mitt Romney's appeal to voters as he seeks the Presidency.  Having spent more time in business than Mitt Romney, I feel that I have some experience upon which I can draw to evaluate this oft repeated claim.

Any business has but one goal, to make money for its owner or owners, be it a privately held company or a public company.  There may be a formal mission statement or just an informal mission statement, as in the case of smaller enterprises.  These statements generally talk about the products and/or services the company sells and includes a commitment to serve customers at the highest level.  In fact, the reason to fulfill the mission statement is to make money.  This isn't a bad thing.  I would say that it's a good thing.  Setting a positive tone for customers and employees does have an effect upon the ability to earn the income necessary to keep the business going and workers gainfully employed. 

When a business decides to chart a course of action, management needs to formulate a plan, evaluate the positives and negatives of the plan, muster the resources and move forward.  The plan may involve hiring or firing employees at various levels.  Any plan includes some level of risk.  It is the responsibility of management to minimize and manage risk, but the company is in control of the actions it takes.  If plans fail and the enterprise can't survive, it ceases to exist.  While such an occurrence is devastating to employees and, in the case of smaller companies, the owner(s), the impact doesn't extend beyond the local realm, unless it's a large organization that is geographically diverse, in which case the suffering is more widespread, but more about that later.  

Government is fundamentally different.  It isn't narrowly focused on making money, in fact, historically it has demonstrated its greatest effectiveness when it runs short term deficits.  Stakeholders are not limited to those who have chosen to invest in it.  It does not have the option to settle on a course of action and then pursue it, making quick course corrections as required.  Those who oppose management do not have the option to withdraw from its operations.  Its reach is pervasive.  Not only that, but management includes divergent opinions as to what actions to pursue and how to pursue them.  Today, parts of management are diametrically opposed to each other.

They key to business success is being right more often than being wrong.  The key to government success is addressing the needs and desires of wildly different interest groups while special interest groups snipe at those governing from all sides.

To posit that it is either possible or beneficial to apply the principles of private enterprise to governing is either naïve or manipulative.  Government is frequently called to act when private enterprise won't or can't.  Government has to step in to stop secession in the 19th century. No one else would or could.  This is true of all wars.  Government is the only entity with the resources or ability to muster the resources necessary to further the nation's priorities.  Even mercenaries require the support of nation-states to pursue actions.

Closer to the point, government must make priority decisions involving levels of risk that no sane private enterprise would make.  When GM and Chrysler teetered on the brink of failure, there was no private financial resource willing or able to step in.  Mitt Romney publicly opted to let them fail, assuming that some relic would emerge from the collapse at some point.  President Obama made the tough call to put the resources of the public into the industry to protect millions of jobs.  Was it a gamble?  Yes.  But the government officials who oversaw the application of the funds managed them well and the companies have come back, protecting American workers.  Even the failure of Solyndra is an example of what government can and should do.  Solyndra was developing a new approach to harnessing solar power.  The results were promising but success was by no means a given.  The Administration stepped in to underwrite this start up in part because the risk was unacceptable to private sources of capital.  The bet was lost because the process didn't pan out and the people running Solyndra were unethical, to put it nicely.

Today the Republicans point to Solyndra as a failure but are happy to excuse Jamie Dimon, of JP Morgan Chase, whose eyes closed mismanagement caused the company to lose $2 billion and still counting.  Hundreds of billions of taxpayer dollars were poured into Chase, Bank of America, Wells Fargo, Goldman Sachs, PNC and the rest under the Bush Administration's TARP program and no one gave it a second thought when they failed to use the money to lend to small and medium sized businesses as they had been asked to do by Treasury Secretary Hank Paulson.  Instead, they used it to pay bonuses, buy competitors (PNC bought National City Bank while its middle market clients sucked wind).

Republicans accuse the Obama Administration of "picking winners and losers," but that is what every administration does.  The Bush 41 Administration picked the wealthy, financial sectors, defense industries, oil industry and the like to be the winners.  The incumbent administration has opted to focus attention on small and mid-sized businesses, middle and lower income earners, alternative energy producers and so forth.  These are decisions based upon the philosophical points of view of those in government.  Our job, as voters, is to decide what view of our society coincides most with our own, and vote accordingly.

We need to call the "run government like a business" thing what it is, misguided.  Government is not a business even though corporate interests are investing massive amounts of capital to gain sway over those who are in the government to push them to make it easier for those interests to make money.