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October 09, 2010

A Nation of Insurers

Frequent VC commenter Eric H. sent me this Peggy Noonan column in an email with the subject line, "An Interesting Moral Argument":

If you write a column, you get a lot of email. Sometimes, especially in a political season, it's possible to discern from it certain emerging themes—the comeback of old convictions, for instance, or the rise of new concerns. Let me tell you something I'm hearing, in different ways and different words. The coming rebellion in the voting booth is not only about the economic impact of spending, debt and deficits on America's future. It's also to some degree about the feared impact of all those things on the character of the American people. There is a real fear that government, with all its layers, its growth, its size, its imperviousness, is changing, or has changed, who we are. And that if we lose who we are, as Americans, we lose everything.

Noonan goes on to examine various ways in which public policy decisions create moral hazard. There is the salutory example of Greece, which for decades has voted its citizens an ever expanding smorgasboord of benefits financed by heavy borrowing and blissfully unencumbered by any serious attempt to reconcile revenue with expenditures. She goes on to point out the many ways big governments incent destructive and irresponsible behavior, erode our sense of right and wrong, and discourage risk taking and entrepreneurship. These things are all true, and I was with her right up until she revealed the widely quoted takeaway from all this woolgathering:

... this is another theme in my mailbox, the rebellion against what government increasingly forces us to become: a nation of accountants.

No matter what level of life in which you operate, you are likely overwhelmed by forms, by a blizzard of regulations, rules, new laws. This is not new, it's just always getting worse. Priests are forced to be accountants now, and army officers, and dentists. The single most onerous part of ObamaCare is the tax change whereby spending $600 on goods or services will require a 1099 form. Economists will tell you of the financial cost of this, but I would argue that Paperwork Nation is utterly at odds with the American character.

Because Americans weren't born to be accountants. It's not in our DNA! We're supposed to be building the Empire State Building. We were meant—to be romantic about it, and why not—to be a pioneer people, to push on, invent electricity, shoot the bear, bootleg the beer, write the novel, create, reform and modernize great industries. We weren't meant to be neat and tidy record keepers. We weren't meant to wear green eyeshades. We looked better in a coonskin cap!

"A nation of accountants". It's a powerful and emotionally attractive metaphor, but I'm not at all sure it's an accurate one.

No one likes accountants. They are nearly as unpopular as lawyers and for the same reasons: we go to them when we're in trouble and it's always easier to blame the messenger than to accept the message. All this talk of costs and trade offs is boooooooring. Everyone likes to think of earnings and benefits but few of us want to confront those troublesome costs.

And that's what accountants do. They faithfully record - "account for" - what we spend and what we earn. But their cardinal sin lies in the reconciliation of those two things, because the one immutable law of accounting is that there's always a bottom line. In the end, revenue and expenses must balance. That balance can be zero, in which case we are spending what we take in in earnings. It can be positive, in which case we are living within our means with something put aside as a contingency against a future we can't predict with any accuracy.

Or it can be negative, which means we are spending money we don't have. How rude of them to point that out!

Of course in the abstract world of financial statements, funds can be shifted around in such a way that these basic calculations are obscured. But the fact remains that America's current financial and moral crisis did not spring from too much attention to costs and revenues, but from too little.

Noonan makes some good points about the destructive nature of big government but she shies away from the reason democracies gravitate to larger, more intrusive, more bureaucratic governments over time: there is no limiting principle to the social contract. We freely bargain away freedom of action for protection against our fellow citizens and the real world. The problem is not that America has become a nation of accountants, but that we have become a nation of insurers. Under ordinary circumstances, insurers (or at least those who don't wish to become bankrupt) must - like accountants - reconcile income, risk, and expenditures. Under ordinary circumstances, insurers hire actuaries who constantly assess the natural risks associated with every day living against the willingness of their clients to insulate themselves from those risks.

Like natural costs, risks exist regardless of whether we acknowledge them - whether they are explicitly accounted for - or not. Risks and costs are painful. We don't like to think about them, and so we vote for politicians who tell us that we shouldn't have to face the consequences of our own decisions, of our failure to plan properly, to hold something in reserve against the real possibility of financial reverses or catastrophic downturns in the business cycle.
The financial meltdown provided a particularly painful object lesson in the consequences of risk spreading behavior.

It is no accident that the term moral hazard comes to us from the insurance industry. Insurers, if they mean to stay in business, must take all forms of risk into account - even the risk created by their own product. What insurers know is that in some ways, insurance heightens natural risk. Once insulated from natural risks, people behave differently from those who are fully exposed to it. This is important, because insurance does nothing to decrease natural risk. It merely spreads the pain to others who are willing to trade present income for future security. In addition to the natural risks that are already associated with various endeavors, insurance adds a new risk: the artificially induced complacency that occurs when the connection between action and consequence is obscured.

Co-pays and deductables are an attempt to allocate natural costs to those who incur them, but they tend to work better on those who can least afford risk (and who, therefore, are more likely to be cautious).

What happens to a society when government becomes the insurer of choice? We take bigger and bigger risks, spend more, save less, take on levels of debt that assume our present income stream won't suffer the cyclical up and downswings experience tells us are inevitable in a free market. Our moral intuitions also suffer. In a risk buffered world, we forget why certain behaviors were deemed vices by generation after generation. Insulated from the visible harm such behaviors used to produce, we can't quite put our finger on what is wrong. After all, no one is getting hurt.

Combine the insurance mentality with the uniquely western idea that inequality of outcome amounts to systemic social injustice and you have the South Fulton fire department story. It's a moral hazard cocktail of sorts, combining serial personal irresponsibility with our own misguided desire to shield ourselves from reality; to treat everyone the same even when they demonstrably don't make the same decisions or pay the same for various services.

What seems strange to me in Noonan's essay is her refusal to assign any responsibility to the governed. The sad truth about the social compact is that we, the governed voluntarily contract away some of our freedoms in exchange for what we perceive as security. That barter of freedom for security is fundamental to democratic governance - it is why it exists. That a wise barter depends on a responsible electorate is something we don't like to think about so much.

Governments do not elect themselves. Politicians make promises and we pick and choose from the menu they present to us. Representative government, unrestricted by some limiting principle, inevitably reflects the human failings of the governed. The problem is not government, nor too many bean counters, but our own desire to insulate ourselves from risk.

Where is this leading us? I think we are in a battle for soul of this nation, with those who understand moral hazard in a pitched battle against those who don't. There is an illusory security to be found in large numbers. Somehow we feel safer in a crowd. Making society more interconnected and interdependent doesn't eliminate risk - it expands it.

Greece and the nations of Western Europe preceded us down this road and it is no accident that they are getting the bill sooner than we. The question is, will we pay attention to their experience or wait until the folly of governmental risk spreading is driven home to us in a way even the most risk averse among us can no longer deny?

Posted by Cassandra at October 9, 2010 09:21 AM

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Comments

Good post. It strikes me that people adopt policies leading to moral hazard because they view things that are really *variables* as being *constants*. If I sell insurance policies that reward irresponsible behavior under the assumption that my loss ratio is a constant, I am going to be unpleasantly surprised. If I pay sales reps purely on revenue, under the assumption that *average* profit margin is high, I may be unpleasantly surprised when sales shift toward the less-profitable but easier-to-sell items and the average margin turns out to be a lot less constant than I thought it was. Liberal and "progressive" policies often involve the constant-vs-variable fallacy at the level of the level of the overall society.

Posted by: david foster at October 9, 2010 12:42 PM

One thing I've seen on both sides of the political aisle is the very human tendency to consider only the best case scenario when defending some policy or plan.

Therefore, conservatives defending the legalization of prostitution invariably highlight the best case scenario - the truly free agent who barters herself freely, or the high end Mustang-ranch brothel - and completely ignores the fact that neither of these cases are typical.

Or liberals defending health care reform will say, "But they've been doing this in Europe for decades" but ignore the fact that all the G7 nations are facing an impending debt crisis and that pretty much everyone agrees that large scale entitlement programs are unsustainable in the long run.

I'm reminded of the old anecdote: the plural of data is not anecdote :p People love to cite the individual case because it allows them to ignore the effects of public policy on society in the aggregate.

Posted by: Cassandra at October 9, 2010 12:57 PM

Just one more thing.

The really perverse thing about government as an insurer is that when government gets into the insurance business, the first thing it does is break every rule that allows insurance to work in the private sector: cost is severed from risk, high risk groups can't be denied coverage nor can they be charged more than low risk groups.

I read an interesting quote about 'Bam today in the WSJ. It said something to the effect that people like to call Obama a socialist but the real problem is that he displays an unrealistic faith in capitalism.

He thinks that it will continue to function no matter how many burdens and additional costs are imposed on it. But sooner or later, there's that straw that breaks even the sturdiest camel's back.

Posted by: Cassandra at October 9, 2010 01:00 PM

It is no accident that the term moral hazard comes to us from the insurance industry.

I'm not sure I agree that this is true. I first encountered the concept of moral hazard in my graduate econ studies in discussions of the commons--that is goods common to all, used by all, but maintenance paid for by none. For instance, cod fishing is done by all, but no one wants to suffer even a part of the expense of maintaining the cod fish population, so cod get over fished, and all fishers suffer as a result. The moral hazard is that someone else will pay for the upkeep, and I'll just free ride on that.

What I see as a central problem in our moral hazard as it applies to the insurance industry is an utter misunderstanding of what insurance is. Some see it, without being willing to admit it, as a privately funded welfare program. "Everyone has a right to health insurance." "It's necessary for everyone to buy insurance, as that's the only way to hold costs down for everyone." "We have to have taxes to pay for insurance costs." There are other examples: "general allowance for families or a national health insurance plan" from the article at the other end of the uniquely Western idea link (itself inaccurately attributed in the uniqueness, but that's another story).

Insurance is none of that. Insurance is nothing but a business transaction wherein Party A pays a fee to Party B to have Party B assume the risk attached to a specified behavior by Party A. In the early days of insurance, this was a shipper paying, e.g., LLoyd's of London to assume the risk of a sailing ship failure. For an agreed nonrefundable remuneration, LLoyd's would pay the shipper for, for instance, the cost of the lost ship and its payload were the ship lost at sea. The insurer--Party B--makes its money by insuring in this way lots of Parties A, knowing full well that some Parties A would suffer a compensable loss, but the aggregation of premiums charged more than made up for these occasional payouts. This was because the fee charged--the premium--was consistent with both the risk assumed and the number of insurees under contract (the latter being the excuse for requiring all to buy insurance under ObamaCare). As the insurance industry matured, it got better with its actuarial tables and with investing the premiums to make more money (don't let those lazy pounds sit around idle), and it got better at accurately matching its premiums to the risks and the number under contract.

Fast forward to the US in the 20th century. Life insurers have calculated my life expectancy down to a gnat's patootie, and they'll charge me a premium for insuring me (my survivor) against the bet that I'll die today--knowing that the odds of my dying today have a decimal and more zeros than I can shake a stick at before a 1 shows up. I agree with those odds, and so I don't buy life insurance--I commit that premium to other purposes. So it is with health insurance. The insurance companies know full well the odds of my getting a particular ailment today, this year, etc. They know full well the odds of my getting a repeat of an ailment, given that I had it once before--one aspect of the pre-existing condition thing. They know full well the odds that I'll still have a particular ailment today, given that I had it yesterday, or that I'm arriving at an ER with that ailment in progress. But they're not allowed to charge a risk-based premium, nor are they allowed to determine freely what risks will be assumed. Fifty different satraps, fifty different states, all have their own rules of what a health insurer will cover and what it will be allowed to charge for that coverage. Cost/benefit no longer is allowed to apply, business sense no longer is allowed to apply; it's a person's right to have health insurance, and at a price that person can afford, not a price at which the insurer can afford to provide the insurance, not at a mutually agreed price in a free market: it's not a business transaction anymore; it's welfare which the government(s) have Dragooned the insurance companies into providing. Can't get pre-existing conditions covered? You could. If the insurer were allowed to charge a risk based premium. The plain fact is, a pre-existing condition is a higher risk population pool, and if the insurer isn't even allowed to break even on its risk assumption, it has no reason to make the deal. So either the government requires the insurer to insure, or the insurer leaves the market.

Costs will come down a long way if the insurance companies were allowed/required to compete, but the fifty satraps with their regulations and premium mandates (no interstate competition here) treat the insurers more like regulated monopolies than like independent companies competing in a free market.

One empirical example of mandating a demand that doesn't exist naturally: Friedman (I think it was; it was a while ago) did a study looking at the effect of the then nascent Medicare on the cost of a hospital bed. In the year before Medicare became law (1968-ish) the cost of a hospital bed was rising some 4 per centage points faster than the overall rate of inflation. In the year after Medicare, with that enormous influx of artificial demand--artificial because it was functionally mandated, since the new taxes were being collected regardless of whether the "insured" was interested having the insurance--the cost of a hospital bed rose 8 points faster than inflation. In the 40+ years since, it's not gotten better, and the demand still is artificially inflated.

The moral hazard, then, becomes the hazard that I have no risks, because someone--not me--is paying for the outcomes. And this is the bane of democracies: in the end, we all vote our bellies. But it takes longer for us to get here than it does a dictatorship to destroy us by other means, so I still opt for democracy. This does put a, umm, premium on a population remaining vigilant, which may be what the coming (I hope) revolution is all about. And here is where I disagree a little bit with Cassandra's characterization of Noonan's article: There is a real fear that government, with all its layers, its growth, its size, its imperviousness, is changing, or has changed, who we are. And that if we lose who we are, as Americans, we lose everything. We are beginning to recognize the nature of the moral hazard confronting us systemically, and of which (health) insurance is merely symptomatic, and we are starting to act on that recognition.

Health insurance is a right? No. It's no more my right to have health insurance than it is my right to engage in any other business transaction in which the other party would like to demur from participating.

Sorry for the long post.

Eric Hines

Posted by: E Hines at October 9, 2010 01:39 PM

What I see as a central problem in our moral hazard as it applies to the insurance industry is an utter misunderstanding of what insurance is.

Moral hazard, as I understand it, is a problem no matter where it arises (in insurance, where it must be managed and accounted for like all other risks, or in public policy, where it is usually ignored).

I think the phenomenon you refer to above is a compounding factor to the already present problem of moral hazard. The perversion here is that an inaccurate metaphor (government health care = insurance) is being used to obscure the fact that what used to be a voluntary assumption of the risk by an insurer (who in turn spreads the risk to people who are willing to pay into a general fund out of which they can recover the value of lost property or recoup certain expenses that aren't certain to occur) is now an involuntary assumption of risk by a particularly inept insurer... government.

In traditional insurance, the insurer assumes risk but so do the insured. If a large enough catastrophe occurs, the insurer may not be able to indemnify all claimants, in which case they sacrificed present income but were not indemnified against future risk. Alternatively, their premiums may go up. So I think that although the risk isn't equally borne, it is borne by both the insurer and other insured.

As to whether the term originated from the insurance industry, that's what I was taught in econ and I've seen it several places (including dictionary definitions). But I'm willing to stipulate that it has implications beyond traditional insurance, and also that these sources may be wrong ;p

Posted by: Cassandra at October 9, 2010 02:08 PM

We are beginning to recognize the nature of the moral hazard confronting us systemically, and of which (health) insurance is merely symptomatic, and we are starting to act on that recognition.

Call me a pessimist, but dissatisfaction with government doesn't equate to 'starting to act' yet. Noonan spends most of her op-ed talking about the growing intuition that "government is contributing to or promoting harmful/destructive behaviors".

Other than that one reference, I see precious little recognition that government has acted at our behest because we either didn't understand that there was no free lunch or simply didn't care.

Posted by: Cassandra at October 9, 2010 02:21 PM

Another example of the power and clarity of my writing....

My quibble over the origin of "moral hazard" was intended merely to be a lead in to the concept as it applied to the present bastardization of insurance.

The point of the rest of my drivel was simply that were insurance not so bastardized, moral hazard would not be present in the industry, or not nearly so much.

In your large catastrophe scenario, this is one of the things reinsurance is designed to do--reinsurers insure the insurer against too large loss. Your point is valid, but that string can be pushed down the road a couple of layers.

There's also some evidence (I've not seen it replicated; although I've not tracked it, either) that those insurees who retain more of the risk by opting for larger deductibles actually turn out to be poorer risks than those who opt for smaller deductibles--they're self-identifying as risk takers. But these data also could be getting contaminated by the nature of insurance as welfare and not as a business transaction.

Eric Hines

Posted by: E Hines at October 9, 2010 02:26 PM

I agree that Noonan's limited reference to the coming revolution--if it is, indeed, coming--is pretty thin gruel. But a necessary first step is to toss the present government.

I'm not sanguine that a proper victory will occur in November, and I'm less sanguine that it will be sustained over the succeeding two (at a minimum--it really needs to be a generational thing) election cycles. Too much of an empiricist, I suppose.

However, if we do get favorable results, then the resulting small government forces can begin to address that moral hazard generated by "government is contributing to or promoting harmful/destructive behaviors" almost as a side effect of beginning to undo the specific damages inflicted. True enough, this would better be dealt with were the matter explicitly articulated by the revolutionary population, but even Locke's and Rousseau's audiences weren't that articulate.

I have more hope today than I did a year ago, but I am keeping my powder dry.

Eric Hines

Posted by: E Hines at October 9, 2010 02:37 PM

There's also some evidence (I've not seen it replicated; although I've not tracked it, either) that those insurees who retain more of the risk by opting for larger deductibles actually turn out to be poorer risks than those who opt for smaller deductibles--they're self-identifying as risk takers.

Huh... and here I thought I was just cheap! :)

I tend to think that absent some really nasty, big b**ch slap courtesy of the reality fairy, nothing will change.

Posted by: Cassandra at October 9, 2010 06:13 PM

Huh... and here I thought I was just cheap! :)

That's the spousal unit's call; _I_ would never suggest such a thing....

The thing that worries me is that even if the tsunami that's being gloated over comes to pass, the losers learn far more from the loss than do the winners from the win. And this needs to be a generational fight, with lots of battles to be won. There's a lot of damage to be undone; and there're a lot of HIAed, if not outright lost, morals to be recovered; and there're a lot of addictions to kick. As the Dems like to point out, we didn't get into this mess overnight. It will take a whole mess of overnights to begin to get back out of it.

Eric Hines

Posted by: E Hinesq at October 9, 2010 07:23 PM

...our own desire to insulate ourselves from risk.

Who is this "we"? I spent the day riding motorcycles.

Posted by: Grim at October 9, 2010 09:01 PM

Posted by: david foster at October 9, 2010 10:41 PM

Cassandra, I read this post twice. First I skimmed it, realizing that no one was ever gonna love me. I can live with that. *sniff*

However, that is how I see myself; as a sheepdog of people's resources. So far, even though I do *not* practice financial planning, or give advice, I have subjected my advice with the CYA of 'Run this by your CFP and CPA. They are the ones you pay the big bucks to'

One of the things that insurance has to do is not only watch its bottom line, it has to keep costs down and revenue consistent; from premiums and financing streams.

The first thing they will do is ration care to protect the bottom line, because they don't answer to patients; they answer to a board of directors and the ones who hold *their* debt.

Government, On the Otter Heiny, isn't being accountable to the American people, who are being forced to own the note for this. Yet, they are telling insurance companies, 'you'd better' and giving exemptions right and left...thus, discriminating.

At least, that is how I see it. However, I am doomed to be unloved.

*sniff*

Posted by: Cricket at October 9, 2010 10:54 PM

Cricket~
Maybe that's one of the reasons I didn't stick with the accounting stuff...

Posted by: Miss Ladybug at October 9, 2010 11:45 PM

...our own desire to insulate ourselves from risk.

Who is this "we"? I spent the day riding motorcycles.

Yeah, but you didn't spend the day bulldogging freight trains from them.

Eric Hines

Posted by: E Hines at October 10, 2010 09:11 AM

Ow! I am mocked! That's it! I am taking my spreadsheets and calculators and going home.

I know what you mean. When my friend was bemoaning the fact that they got turned down for a loan, to expand their business (in this economy, no less!), I listened vewwwy cawwefully to what she said she turned in to the bank.

It wasn't what the bank needed to hear. When I explained what they were actually looking for and why, she got an aha! moment and resubmitted the paperwork, enhanced by the suggestion. Of course she ran it by her CPA to see if my suggestion was 'correct.'

They got their loan and are expanding their business.

What BUGS me though, is now they will have to contort their way through the morass of legislation to avoid paying taxes on their hard-earned money, and providing insurance for their employees. Sadly, though, they are limiting it to family because of the punitive insurance legislation.

How many more enterpenuers are going to limit their growth because they just can't afford it?
It will be interesting to see how the exemptions play out. I say this because the government regulates what used to be a 'free market.' It begs the question too, if there are exceptions to the rules, then why make the rules in the first place?

Posted by: Cricket at October 10, 2010 11:24 AM

Cricket..."It begs the question too, if there are exceptions to the rules, then why make the rules in the first place?"

You make the rules for those who are not politically well-connected. This places a premium on *becoming* politically well-connected, so that you have a chance of being one of the exceptions, which has the effect of increasing the power and income of the political classes.

Posted by: david foster at October 10, 2010 12:29 PM

It begs the question too, if there are exceptions to the rules, then why make the rules in the first place?

What more effective political payoff than to grant an exemption to the rule?

Eric Hines

Posted by: E Hines at October 10, 2010 12:30 PM

There is indeed a trend to legislate in extreme detail, rather than in general principles...hence, 2000-page bills. One reason for this, as Eric and I both noted above, is that this method increases the power of the political class. Another reason is that it simply takes more intelligence, specifically abstract thinking capability, to deal with the general than with the specific. This is not a form of intelligence commonly found among CongressCreatures, who are better known for low cunning.

Posted by: david foster at October 10, 2010 01:14 PM

Wouldn't those exemptions raise the issue of "equal protection"? I would think so, and would think the legislation could be challenged on THOSE grounds as well, and since no one in Congress thought to include a severablity (sp?) clause, so if we (those, collectively, who oppose this legislation) can prove ANY part of it unconstitutional, we can ditch the whole thing...

Posted by: Miss Ladybug at October 10, 2010 07:48 PM

Yeah, but you didn't spend the day bulldogging freight trains from them.

This is a tough crowd.

Posted by: Grim at October 10, 2010 08:16 PM

Wouldn't those exemptions raise the issue of "equal protection"?

Not a bit of it. On the contrary, they're creating equality of protection by not requiring those who cannot comply to do so anyway, which exemption allows avoidance of unfair punishment. Equal protection of [mumble], you see.

There is, though, one of those Evil Republicans (I don't remember who) who has promised to introduce legislation this fall/next session that will require each subsequent law proposed to carry with it a certification by its sponsor that the law proposed is Constitutional.

Eric Hines

Posted by: E Hines at October 10, 2010 11:20 PM

That's a law I could get behind, Eric. And, I think they should also go through all the existing laws and do the same thing, and if they can't, repeal it...

Posted by: Miss Ladybug at October 11, 2010 01:21 PM

You mean people! Repealing laws before they have had a chance to be passed! You know what this is, don't you? Legislative abortion, that's what.

Isn't that illegal?

Posted by: Cricket at October 11, 2010 02:27 PM

It's only if we don't retroactively abort the legislators who propose them, too.

Posted by: BillT at October 11, 2010 03:13 PM

The thought police are circling your house now, Mr. DeBill.

Posted by: Cricket at October 11, 2010 05:44 PM

That's a law I could get behind....

I'm not sure I do support such a law. It sounds good, but here are a couple of potential unintended consequences:

1) Suppose Congressman GotVotes certifies that a law he's putting up to tax little old tennis-shoed ladies' used cars is constitutional, and then the courts overturn it, anyway, as unconstitutional. Is GotVotes now liable for perjury? If yes, will he seriously be censured/impeached? And if not, isn't this license simply to make another empty claim, to spout more ObamaTalk?

2) Given the courts' present deference to the will and intent of Congress, it also seems to me that such a certification will make it even more unlikely that an unconstitutional law will be found to be so in court.

Eric Hines

Posted by: E Hines at October 11, 2010 05:44 PM

Rather than a "revolt of the accountants", this really is a "revolt of the adults".

What Noonan claims is Americans don't like being held accountable for their behavior. I think she is needs to take some deep breaths, rip up her column, and try again.

Accountability. I can think of no more omnipresent reality based precept that pioneers and settlers had to live up to. Who had a cold miserable winter if they didn't cut enough firewood? Who went hungry if they didn't plant enough crops or hunt enough game? Whose kids were hurt if they weren't taught to read, or cared for if they gotr sick? People who are willing to be held accountable for their own actions and inactions, and pay the price or reap the reward accordingly. That is called maturity, responsibility. That is the backbone of American history.

What we have is a government that runs its affairs, and indirectly our affairs, like a 4 year old in a candy and toy store. Where are the adults?

Posted by: ruralcounsel at October 12, 2010 09:39 AM

I've got no problem with accountants. They're just trying to keep us honest. I'd have called what Noonan was decrying the tendency to become pencil-necked control-freak bureaucrats. People hire accountants and pay them money cheerfully for the work they do. Who hires a bureaucrat?

Posted by: Texan99 at October 12, 2010 03:37 PM

"Who hires a bureaucrat?"

The US Government.
0>;~}

Posted by: DL Sly at October 12, 2010 03:55 PM

Eric,
There's an easy solution. Instead of "Certifying" the law as constitutional (something which I do not believe that a legislator is necessarily competent to assess) you make him cite the provision of the Constitution that they believe grants the power to enact it.

In this scenario there is no presumption that the legistator is, in fact, correct nor is there punishment for simply being wrong.

Posted by: Yu-Ain Gonnano at October 12, 2010 06:27 PM

Instead of "Certifying" the law as constitutional...there is no presumption that the legistator is, in fact, correct nor is there punishment for simply being wrong.

That certainly would seem to answer the first concern; I'm not sure it addresses the problem of a court spring-loaded to be deferential in the direction of Congress. Unless the Congressman demonstrates an especially egregious ignorance of the Constitution (http://www.grimbeorn.blogspot.com/2010_10_10_archive.html#422259227389520376)

Eric Hines

Posted by: E Hines at October 12, 2010 07:00 PM

Ecktuelleh, DL Sly, we the people hire them when we vote for them.

Ms. Noonan is just jealous because accountants harshed her mellow.

I plan to do that on a routine basis. It is my reason to live.

Posted by: Cricket at October 12, 2010 10:25 PM

Eric,
In many ways I think in many ways it may make it easier to overturn laws because it provides a direct avenue for overturning it. That is, it eliminates the ability of judges to take the tack of "I like this law, now let's go find an excuse to say it's Constitutional".

The legistator must declare its basis in the Constitution and it must stand on that basis, and that basis alone.

The way I see it, the presumption of correctness would only occur if, as a result, the citation requirement prevented passage of unconstitutional laws.

Do you really think abortion would have been legalized if the legislators had to cite that the 4th Amendment declares that an act cannot be illegal as long as it is committed in private?

Posted by: Yu-Ain Gonnano at October 13, 2010 10:02 AM

Do you really think abortion would have been legalized if the legislators had to cite that the 4th Amendment declares that an act cannot be illegal as long as it is committed in private?

Do you really think it would not have been--no matter the part of the Constitution cited? This was a purely political decision.

My concern is that a bald assertion that _my_ law, which I am proposing, is Constitutional (even if I claim a particular part as supporting that) will just be more empty rhetoric, but that with this verbiage added, the courts, already spring-loaded to defer to the intent of the Congress, will simply use such assertions as further indication of that intent, not at all as any indication of the actual constitutionality.

Eric Hines

Posted by: E Hines at October 13, 2010 01:40 PM

My concern is that a bald assertion that _my_ law, which I am proposing, is Constitutional

That's the thing.

If you can properly cite an enumerated power then the law is, in fact, constitutional.

If you cannot properly cite an enumerated power then you have just provided the direct avenue of challenge to your opponent.

the courts, already spring-loaded to defer to the intent of the Congress, will simply use such assertions as further indication of that intent

I have seen no evidence of the court taking the position of "Congress intends this law to be constitutional therefor it is". What I see is "I like this policy therefor I'll find an excuse to say it is constitutional".

After all, Congress intended for McCain–Feingold to be constitutional and yet Citizens United won.

My point is that (that) M-F(ing law) could not have passed congress in the first place as no Constitutional citation could be found to support it.

Posted by: Yu-Ain Gonnano at October 13, 2010 04:38 PM

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