Cato has now posted my remarks from last week’s “Obamacare in the Supreme Court” conference:
The full conference will be available here soon.
Sign up to have blog posts delivered straight to your inbox!
Cato has now posted my remarks from last week’s “Obamacare in the Supreme Court” conference:
The full conference will be available here soon.
My latest podcast, “IPAB: ObamaCare’s Next Constitutional Hurdle.”
Last week, I appeared on NPR’s Tell Me More program. My discussion with host Michel Martin gives a good synopsis of why ObamaCare is both harmful to consumers and unconstitutional. Listen to the segment here.
For a contrary perspective, listen to former Obama administration acting solicitor general Neal Katyal, who appeared on the program the next day. If you do listen to both programs, let me know what you think about Katyal’s comments, specifically this part:
MARTIN: First, I want to play a short clip from Michael Cannon of the Cato Institute who spoke to us yesterday as we said. This is a little of what he told us. Here it is.
MICHAEL CANNON: If the Supreme Court were to uphold this unprecedented and really breathtaking assertion of government power, there would be nothing to stop the Congress from forcing Americans to purchase any private product that Congress chose to favor. That could be a gym membership. That could be stock in Exxon Mobil. That could be broccoli if Congress decided that any of these products move in interstate commerce and that forcing you to buy it was essential to the regulatory scheme they wanted to enact.
MARTIN: What is your response to that?
KATYAL: Well, I mean, that’s a lot of rhetoric and not really a legal argument because it’s not responsive to what the government is asking for here. What the government is saying is, look, everyone consumes healthcare in this country, you and I. And, you know, even if I might say to myself, I don’t need health insurance. I won’t get sick. The fact is, as human beings with mortality, we are going to get sick and it’s unpredictable when.
You could get struck by a heart attack or cancer or hit by a bus and wind up in the emergency room and then it’s average Americans who have to pick up the tab for that. And so the government is not saying here we have the power to force people to buy goods. They’re saying, look, you’re going to already buy the goods. You’re going to use it. And the only question is, are you going to have the financing now to pay for it.
And so the government is regulating financing. It’s kind of like a government law that says you’ve got to pay cash or credit. It’s not the government coming in and saying, oh, consume this product you wouldn’t otherwise consume. And as for the kind of, you know, ludicrous suggestion that this would somehow lead to the government forcing people to eat broccoli or the like, I mean, I would think that someone from the Cato Institute would know that the Bill of Rights and the privacy protections in the constitution would protect against such drastic hypotheticals.
Now, I’ve been at this for a while. I’ve seen people evade uncomfortable questions and mischaracterize things I’ve said. But for some reason, this instance really surprised me. Maybe Katyal was nervous.
As most readers are no doubt aware, the Supreme Court this week takes up six hours of argument in the Obamacare litigation. Constitutional claims that were originally dismissed as “frivolous” and “easy” are now getting three days of hearings — unprecedented in the modern era. The Court has thus signaled what the American people have known all along, that the government’s breathtaking assertion of power goes beyond anything attempted in the history of the Republic.
Rather than repeat my previous writings on the subject, here’s a sketch of each of the four issues the Court will examine, along with a link to my recent op-ed on the subject (this month I’ve written on three of the four) and the relevant Cato amicus brief:
Are there any constitutional limits on what the federal government can do in the name of regulating interstate commerce? The government hasn’t offered any and we’ll see this week whether that’s good enough for the Supreme Court.
Here further is an analytical point-counterpoint I did with University of California-Irvine Law School dean Erwin Chemerinsky previewing the arguments, and here are a series of blogposts by Cato adjunct scholar Tim Sandefur doing the same. Finally, you can view Cato’s recent conference on the subject here (individual mandate panel) and here (Medicaid expansion panel).
Let’s hope that the Court says that we have a government of laws rather than men, allowing Congress then to get back to the hard work of crafting a true national health reform that both improves the system and stays within constitutional bounds.
May the odds be ever in liberty’s favor!
Today POLITICO Arena asks:
Was ObamaCare doomed from the start, an unpopular proposal that was unlikely to ever catch on with the public?
My response:
Let’s remember how ObamaCare was passed — without a single Republican vote, and after the “Cornhusker Kickback,” the “Louisiana Purchase,” the Florida Flim-Flam,” and countless other shenanigans, including a phony 10-year price tag of $938 billion that the CBO now tells us will be $1.76 trillion. And remember too that ObamaCare’s passage was followed by the massive repudiation of the 2010 elections. Is it any wonder that it continues to be unpopular?
But the Supreme Court next week will be looking not at ObamaCare’s unpopularity but at its unconstitutionality — or so 26 states and others have claimed, and for good reason. The Act, if upheld, would effectively end constitutionally limited government in America. A government that can order individuals to engage in commerce is limited only by politics, not law. A federal government that can compel states to expand their Medicaid roles on pain of losing the federal tax dollars the state’s citizens must continue to pay is no longer a government subject to checks by the states.
The American people aren’t stupid. They know a massive power-grab when they see it. What makes this power-grab special is that it concerns not retirement or education, or the many other areas in which the federal government has usurped constitutionally unauthorized power over the years but that most intimate of human concerns, health care. Bad as our health care system is today, due to government meddling in the past, ObamaCare will transform it into one massive bureaucracy — high costs, poor service — and the American people know it. That’s why it continues to be so unpopular.
Newt Gingrich’s presidential campaign has responded to my post, “Gingrich Adviser Urges States to Implement ObamaCare,” in which I responded to David Merritt’s Daily Caller op-ed calling on states to create ObamaCare’s health insurance Exchanges. According to Gingrich campaign spokesman Joe DeSantis:
Mr. Merritt is still an advisor to Speaker Gingrich, but he was not writing this article as a representative of the campaign. Newt receives advice from a large number of people. That does not mean he always agrees with the advice he is given. In this case of states implementing ObamaCare as a precaution, he explicitly disagrees with Mr. Merritt. He believes states need to resist the implementation of the law because it is a threat to our freedom.
That’s welcome news. There’s probably nothing that would give a bigger boost to the repeal effort than for states to refuse to create health insurance Exchanges.
Now that we’ve got the Heritage Foundation and Newt Gingrich on board, perhaps Mitt Romney, Rick Santorum, and Ron Paul could emphasize to state officials the importance of not implementing ObamaCare.
A number of people have asked me what is causing the current shortages in certain types of drugs. Here’s what I’ve been able to discern so far:
divIn general, there are two reasons why shortages might appear in a market. The first is high fixed costs. These include regulatory costs, the costs of converting a manufacturing plant to a new use, or the costs of creating a new factory. Industries with high fixed costs will see temporary shortages after either supply shocks (e.g., a factory goes offline) or demand shocks (e.g., an increase in the population needing a drug). The price mechanism eventually resolves such shortages. The duration of the shortage is related to the size of the fixed costs.
Shortages also appear when something interferes with the price mechanism’s ability to resolve a shortage. The classic example is government price controls (i.e., a binding price ceiling). Such shortages persist as long as the price controls (e.g., rent control) remain in place and binding.
From my study of the current spate of drug shortages, the best accounting for these shortages appears in this publication by the U.S. Department of Health and Human Services: “Economic Analysis of the Causes of Drug Shortages,” Issue Brief, October 2011.
I initially suspected these drug shortages were caused by Medicare’s Part B drug-payment system. Others, including Scott Gottleib and the Wall Street Journal, have made that claim. However, this study and a lengthy discussion with the U.S. Department of Health and Human Services’ assistant secretary for planning and evaluation have persuaded me that not only is Medicare’s Part B drug-payment system not the cause, that system doesn’t even impose binding price controls. Rather, it controls the margins that physicians earn for administering a drug. (If Medicare did impose binding price controls, would we see mark-ups of 650 percent or more for the shortage drugs?)
Rather, the shortages appear to be the result of a number of dynamics in the market for rare drugs: