The Day the Dog Didn’t Bark in the Night

What doesn’t happen is sometimes what matters. Sherlock Holmes did solve that case of the missing race horse primarily because that dog didn’t bark in the night. And each November the Brits celebrate that day in 1605 when Parliament didn’t blow up – even if every single day before and since it doesn’t blow up. It just sits there. But it’s probably okay to celebrate dodging the bullet. Guy Fawkes did intend to blow up Parliament, with the gunpowder in place and all. It was a close call. Terrorists driven by uncompromising religious zeal are always a problem, as we know all too well now. We just don’t celebrate national holidays based on drone strikes in Afghanistan. What could have happened is far more ambiguous these days.

But the third week in June opened with the good news of what didn’t happen. Greece had their election, or one in an ongoing series, and voted for the guys who would keep Greece in the European Union and using the Euro, even if it meant that to get the funding to keep the country running they’d have to agree to a draconian austerity program, laying off all sorts of government employees and just about end all social services and support for those already out of work, now topping thirty percent of the population or so. That should bring the country to a standstill and then plunge them into a real depression. But the alternative was them voting for the guys who wanted to say just screw it – let’s default on all the debt we’ve accumulated and leave the damned union and start all over. That would have been a disaster for the world’s economy, as every major European bank holds billions of their bonds, and so do major governments. And American banks hold billions of dollars of investments in and with those major European banks. And there are all the insurers who have guaranteed everyone against loss with credit default swaps and other such totally unregulated private arrangements. If Greece had gone big for the screw-it-all parties it would have all collapsed – with a run on all the banks to get one’s money out early Monday, before there was no more money to get out. And Spain and Italy – in similar straights – would see the same bank runs. There would be panic, and then disaster.

But it didn’t happen. The Greeks voted the right way, for the sensible moderate centrist folks, and there was joy in all the world’s financial centers – until the markets here opened and spent the day essentially flat. That nothing happened was not a cause for celebration, as the Nobel economist Paul Krugman noted:

Establishment types should actually be dismayed by this outcome: if current policies fail completely, which seems almost a given, and Greece exits the euro anyway, which seems highly likely, the entire Greek center will end up discredited; better, in a way, to be able to blame the radicals.

And there was Zachary Karabell with this:

Greece was not the final straw, or at least not today. All may go to hell quite soon, but given that the amen-chorus is singing notes of doom, a contrarian would be advised to consider the risks that everything doesn’t fall apart, that world leaders continue to show a remarkable ability to muddle through at the last moment, and that while the tail risks are shudderingly fearsome, the stability of the system as a whole is far greater than most imagine. Now, markets will turn to Spain, Italy, debt – who knows – and affix the same anxieties that have been so indelibly attached to Greece.

There was no decisive anything here. And that perpetually gloomy economist, who always seems to be right, Nouriel Roubini, argues in this item that in six months or so this latest Greek government will fall, because Greece will be in a deep depression, and they’ll default and exit the Eurozone anyway. And all hell will break loose – just later. There’s no real solution here.

The markets know that. Yes, Greece didn’t blow up. But there was no reason to celebrate.

But it was also a Monday when something else didn’t happen, as Jonathan Bernstein explains:

Here’s the story. First of all, the whole political world is, basically, in hurry-up-and-wait mode right now. One huge story, at least, will break soon; the Supreme Court decision on the Affordable Care Act will show up sometime in the next couple of weeks, although two weeks is still an eternity of time on the cable news networks. … All of this creates a whole lot of reporters with little to report on – and a whole lot of empty time on the cable news networks, the newspapers, the blogs, the new talk radio shows and the rest of it.

And what academic research tells us is that slow news days create scandals. So it’s no surprise that mid-summer, when lots of newsmakers are on vacation (and when little is happening even in the sports world), is when stories such as the “ground zero mosque” or Shirley Sherrod’s supposed racism took off. Not just those; any kind of meaningless hype, whether it’s a supposed gaffe or some meaningless polling random variation, is going to get far more attention than it deserves.

Yes, the Supreme Court began issuing their final end-of-term rulings, and the news was filled with how there was nothing on the constitutionality of the Affordable Care Act – maybe Thursday – maybe next week – but nothing right now. But Bernstein can rest easy. There weren’t enough scandals to go around. Mitt Romney is too careful – and after Obama pulled a fast one on him, deciding to end the process of deporting young illegal immigrants who were brought here as little kids and have since been good citizens, even if they’re not citizens, the right is fuming, and Romney is kind of trapped between his base and needing at least some of the Hispanic voters to pull the lever for him in November. So he’s saying nothing about that or about anything else – so move along folks, nothing to see here. And Obama is just boring. He’s no hound dog like Bill Clinton, or paranoid schemer like Nixon, and he doesn’t mangle language, and policy, like Bush. There hasn’t been one good scandal in three and a half years. The Republicans had to pretend there were, and the nation yawned. So the day that there was no news on the fate of the Affordable Care Act from the Supreme Court, and no one was building a new mosque in Lower Manhattan, the media turned to what could possibly be going on here.

And Avik Roy in Forbes covered the buzz:

Two of the High Court’s justices, Antonin Scalia and Ruth Bader Ginsburg, dropped hints this weekend as to what the Court might do. Between what they said, and the scuttlebutt I’ve been hearing, we can start to think about what the Court may do – and when.

On Friday, Associate Justice Ruth Bader Ginsburg spoke at the annual Court review of the American Constitution Society, a group “dedicated to countering the activist conservative legal movement.” Ginsburg said that she was quite aware of the controversy surrounding the Obamacare case. “Some have described the controversy as unprecedented and they may be right if they mean the number of press conferences, prayer circles, protests, counter protests, going on outside the court while oral argument was under way inside.”

And that was interesting:

Ginsburg suggested that she might be on the dissenting side of the case. “I have spoken on more than one occasion about the utility of dissenting opinions, noting in particular that they can reach audiences outside the court and can propel legislative or executive change,” said Ginsburg, in the context of a 2007 pay discrimination case. Most tellingly, she touched upon the key question that I believe the Court is still working through: what to do with the law if the individual mandate is indeed found to be unconstitutional.

My sources (which I freely admit to be third-hand) suggest that Kennedy will side with the conservatives and strike down the Affordable Care Act’s requirement that nearly every American must buy health insurance. The key question is: how much of the rest of the law should be struck down along with it?

Ginsburg wittily put it this way: “If the individual mandate, requiring the purchase of insurance or the payment of a penalty, if that is unconstitutional, must the entire act fall? Or, may the mandate be chopped, like a head of broccoli, from the rest of the act?”

So the question is still severability:

It’s entirely unclear whether the Court will strike down the mandate and two related provisions – what I’ve called the “strike three” scenario; or take down the entirety of Title I, where the law’s restructuring of the private insurance market resides; or overturn the whole law. Indeed, it is probable that the Court has not yet decided how it will rule on this question.

But there’s the other side and the 1942 Supreme Court case Wickard v. Filburn – the Court decided that Roscoe Filburn couldn’t grow wheat on his own land to feed his own animals, because this somehow constituted interstate commerce:

Wickard remains the core justification for 70 years of federal intrusion into the activities of individuals and localities.

Surprisingly, Antonin Scalia writes in a new book, “Reading Law: The Interpretation of Legal Texts,” that he agrees. Wickard, he writes, “expanded the Commerce Clause beyond all reason” by opining that “a farmer’s cultivation of wheat for his own consumption affected interstate commerce and thus could be regulated under the Commerce Clause.”

It’s surprising because Scalia’s concurrence in Gonzales v. Raich, the most recent major Commerce Clause case, is justly seen as an endorsement of Wickard. “Congress may regulate even noneconomic local activity if that regulation is a necessary part of a more general regulation of interstate commerce,” he wrote in that 2005 case.

It seems the man changed his mind:

Scalia acknowledges this contradiction in the preface to his new book, as reviewed by Adam Liptak of the New York Times. Scalia writes that he “knows that there are some, and fears that there be many, opinions that he has joined or written over the past 30 years that contradict what is written here.” While some of those contradictions can be justified by Scalia’s desire to adhere to prior Court precedent, even where distasteful, in some cases it’s “because wisdom has come late.”

The bottom line is that if Scalia thinks Wickard was wrongly decided, he’s almost certain to vote to overturn the mandate.

And Adam Serwer adds context:

Conservatives were so fearful that the precedent set by Raich would prove insurmountable to their effort to kill Obamacare that Republican-appointed judges developed an argument that would allow the court to avoid overturning Raich, and allow Scalia to avoid contradicting his concurrence. That argument was the much touted “activity/inactivity” distinction, the idea that by taxing Americans who avoid purchasing health insurance Congress was trying to regulate commercial “inactivity” rather than activity. The argument makes little sense, both because the plaintiffs in Raich were not engaging in commercial activity and because health care is something all humans eventually require. But the reasoning nonetheless seemed carefully tailored to allow the court to rule against Obamacare without engaging in a potentially embarrassing reversal of their prior rulings. Georgetown University law professor Randy Barnett, one of the most influential legal minds among Affordable Care Act opponents, predicted Scalia would adopt this rationale back in December 2010.

Scalia’s explanation of his current views on Wickard shows that the lower court judges needn’t have bothered providing Scalia with an escape hatch. Instead of wisdom “coming late” to Scalia, it may have arrived just in time to justify a vote to overturn the Affordable Care Act.

And there’s Kevin Drum:

Two years ago, when President Obama signed the Affordable Care Act into law, the idea that its individual mandate provision was unconstitutional was laughable. There was no case law, no precedent, and frankly, no serious argument that the federal government’s Commerce Clause power didn’t give it the authority to mandate purchase of health insurance if it wanted to. That’s why Democrats didn’t bother looking for a clever alternative – many of which were available – in order to avoid including an explicit mandate in the law. They didn’t think they needed to. Of course it was constitutional. Even Randy Barnett, the law professor who popularized the activity/inactivity distinction that opponents latched onto as their best bet against the mandate, initially didn’t really think it was anything but a long shot.

But something happened, and Drum cites this:

Orin Kerr says that, in the two years since he gave the individual mandate only a one-percent chance of being overturned, three key things have happened. First, congressional Republicans made the argument against the mandate a Republican position. Then it became a standard conservative-media position. “That legitimized the argument in a way we haven’t really seen before,” Kerr said. “We haven’t seen the media pick up a legal argument and make the argument mainstream, by virtue of media coverage.” Finally, he says, “there were two conservative district judges who agreed with the argument, largely echoing the Republican position and the media coverage. And, once you had all that, it really became a ballgame.”

Drum:

This is, needless to say, a powerfully depressing analysis. For all practical purposes, Kerr is agreeing that conservative judges don’t even bother pretending to be neutral anymore. They listen to Fox News, and if something becomes a conservative talking point then they’re on board. And that goes all the way up to the Supreme Court.

Or maybe not:

The Supremes haven’t handed down their ruling yet, and they could still surprise us. Because the truth is still the same as it was two years ago: the distinction between activity and inactivity – i.e., whether the federal government can mandate specific activity in addition to prohibiting it – has no historical basis at all. It was invented out of whole cloth. There’s no precedent, no language in the Constitution, and for the most part, not even any discussion about it in the legal literature prior to 2009. It’s simply not something that anyone ever took seriously until it became the only plausible attack line against a piece of liberal legislation that conservatives wanted to overturn.

But this is puzzling:

If the court does overturn the mandate, it’s going to be hard to know how to react. It’s been more than 75 years since the Supreme Court overturned a piece of legislation as big as ACA, and I can’t think of any example of the court overturning landmark legislation this big based on a principle as flimsy and manufactured as activity vs. inactivity. When the court overturned the NRA in 1935, it was a shock – but it was also a unanimous decision and, despite FDR’s pique, not really a surprising ruling given existing precedent. Overturning ACA would be a whole different kind of game changer. It would mean that the Supreme Court had officially entered an era where they were frankly willing to overturn liberal legislation just because they don’t like it. Pile that on top of Bush v. Gore and Citizens United and you have a Supreme Court that’s pretty explicitly chosen up sides in American electoral politics. This would be, in no uncertain terms, no longer business as usual.

If you want a scandal, that would be it. Or they may kick the can down the road, like the Greeks just did.

But say they don’t. BooMan had some interesting things to say about that:

Pretend you’re an insurance agent. Someone comes to you and wants to buy fire insurance for their home. Upon questioning, you realize that their home is actually on fire as you speak. Do you sell that individual fire insurance at any price? Of course not. He has a pre-existing condition (his house is on fire), and there is no rate you could set that would possibly be profitable to your company unless that rate were more than what it would cost to repair the home. And, in that case, it would be cheaper for your customer to repair his home himself than to ask you to do it for him. You don’t sell insurance against things that have already happened.

But what if the government came along, as it did in Washington state in 1993, and said that your insurance company must provide health insurance to everyone who applies for it even if they have diabetes or cancer or Lou Gehrig’s disease? Wouldn’t that just put your company out of business? The answer is, yes, that would put your company out of business unless it refused to sell any more health insurance policies in that state. And that’s what happened in Washington state, where by 1999 it was no longer possible to buy an individual policy.

There are the bare facts of the matter and BooMan offers the obvious:

Was the Washington state legislature really that stupid and short-sighted? The original plan was to have an individual mandate, just like the one in the president’s Affordable Care Act. But when the Republicans took control of the state legislature after the 1994 elections, they got rid of the mandate without getting rid of the provision that the insurance companies must accept all applicants. Why did spiking the mandate wind up destroying the individual market for insurance in the whole state? Because the mandate assured that the insurance companies would have hundreds of thousands of new healthy customers who would cost so little to insure that it would make it possible to cover cancer and diabetes patients and still be profitable. In fact, this is the only way anyone has been able to come with that we can cover everyone with private insurance without bankrupting the insurance industry or having everyone pay impossibly high rates.

And it is pretty clear that the Supreme Court, if it doesn’t strike down the whole law will strike down the individual mandate, which BooMan argues leaves no option but to create a Medicare-for-All plan:

If the SCOTUS rules that the individual mandate is unconstitutional, it will destroy the only private means anyone has come up with to make sure that everyone can have access to medical care. Even if the subsides for the poor remain in place, meaning that no one will be denied care because they can’t afford it, the insurance companies can’t remain profitable if they are required to cover people with pre-existing conditions – unless those costs are offset by tens of millions of relatively healthy customers. … This isn’t a matter of choice on the insurance industry’s part. It is just the nature of underwriting.

It is not possible to have a private health insurance industry that covers people with pre-existing conditions unless there is also an individual mandate requirement. Under those circumstances, the government would be forced to do away with its insistence that people with pre-existing conditions get coverage. And if the health care reforms don’t cover people with pre-existing conditions then not only will people with cancer and diabetes and other chronic diseases go bankrupt or go without treatment, but we won’t see any downward trend in the cost of health care. Without the mandate, people will wait until they get sick to seek insurance (which they will be denied) and treatment (which the insured will have to pay for with higher premiums). And we’ll go back to a system where getting sick while uninsured lands you in bankruptcy court. …

If only the mandate is struck down, or if the whole bill is struck down, we’ll have no other way forward but a single-payer system like Medicare. Without the mandate, private health insurance that covers everyone is impossible.

But a Medicare-for-All system simply bypasses private insurance companies:

To be sure, they could still offer supplemental plans for those who want bells and whistles, but if people pay for their health care through taxes or tax withholdings, then we avoid any constitutional problem. We avoid any underwriting problem. People are covered regardless of whether or not they are employed or they’re sick.

But the most important thing is that, without the individual mandate, the left will have no other mechanism or avenue to push for – if we want to make sure people get adequate health care. The Democrats will become the single-payer party.

Is that what the conservative Justices on the Supreme Court want?

Who knows what they want? They haven’t said. We’re waiting. But the Greeks kicked the can down the road for another six months, or maybe a year. The Supreme Court could do that too – deciding that since the full law doesn’t come into effect until 2014, any decision now would be premature. But that’s unlikely – and we had another day dominated by the news of what didn’t happen. But at least no one blew up Parliament.

About Alan

The editor is a former systems manager for a large California-based HMO, and a former senior systems manager for Northrop, Hughes-Raytheon, Computer Sciences Corporation, Perot Systems and other such organizations. One position was managing the financial and payroll systems for a large hospital chain. And somewhere in there was a two-year stint in Canada running the systems shop at a General Motors locomotive factory - in London, Ontario. That explains Canadian matters scattered through these pages. Otherwise, think large-scale HR, payroll, financial and manufacturing systems. A résumé is available if you wish. The editor has a graduate degree in Eighteenth-Century British Literature from Duke University where he was a National Woodrow Wilson Fellow, and taught English and music in upstate New York in the seventies, and then in the early eighties moved to California and left teaching. The editor currently resides in Hollywood California, a block north of the Sunset Strip.
This entry was posted in Affordable Care Act of 2010, Constitutionality of Obamacare, European Debt Crisis, Greek Economic Crisis, Individual Mandate and tagged , , , , , , , , , , , , , , , . Bookmark the permalink.

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