When Politics is Everything

Usually, this blog focuses on economic and financial policy, but at times we are forced to recognize that politics is deeply intertwined with our economic fates. This is one of those times.

We face a dilemma in American society – a dilemma highlighted once again by the recent Supreme Court decision on Obamacare. Whether one likes it or not, this was a political, not a constitutional, ruling. But how did we end up with a Supreme Court making political judgments? This is part of a trend.

Simply put, the politicization of everything in democratic society—religion, race, sex, ethnicity, war, national defense, abortion, marriage, education, media, economic policy, financial policy, Supreme Court appointments and rulings, etc.—has rendered our democracy incapable of functioning as it was designed. Democracy—meaning ‘rule of the people’—was intended to exercise the will of the people over national policy priorities through three functional branches of government. Objectively, our democracy is designed to make choices and compromises in the best interest of the citizenry. We have a branch of government that makes laws, an executive that executes the laws, and a judiciary that passes judgment on the law based upon a constitution and more than 200 years of legal precedent. There is a strong impression now that this process has broken down, sacrificed to an ideological battle between two warring political parties. We no longer seem to be able to accomplish the simple task of governing ourselves. The point of this post is to examine why. Let’s start with this latest case of the ruling on Obama’s healthcare legislation.

As we digest the various interpretations of the Roberts decision, we begin to see that Roberts found himself in a “damned if you do, damned if you don’t” political dilemma. Faced with a highly contentious policy and a growing perception of the politicization of court rulings, Roberts sought to de-politicize the SCOTUS by sending this policy issue back to the peoples’ legislature under the redress of a national election in four months. But in so doing, Roberts was forced to make his ultimate legal judgment based on politics alone. This irony can only further politicize SCOTUS decisions and appointments. This is why Senate battles over high court appointments have become so contentious and nasty. And also why Roberts, his fellow justices, and their judgments have become the unwilling symbols of a failed democracy. This is apparent whether one agrees or disagrees with the rulings on Bush v. Gore, Citizens United, or Obamacare.

A democratic society that does not buy into the electoral and legislative outcomes of the two branches of government that somewhat reflect the will of the people, finds itself battling over the control of nine unelected judges making constitutional decisions that have degenerated into unholy politics. No wonder Asians with autocratic governments see little to admire in American-style democracy. (Of course, these nations are under the illusion that in the great battle between freedom and state control, they are immune and will reap only the benefits of economic efficiency. Of course, eventually they will find out they are wrong.)

Roberts’s no-win situation is the inevitable result of a modern society that has sought to politicize every aspect of daily life. In America the battle lines were drawn between an inherently conservative polity and a progressive state-driven agenda. We can trace these conflicts through the history of the 50s and each subsequent decade right up to today. The skirmishes began by politicizing race, sex, and religion by means of the judicial system, and continued to politicize war, national security and defense. Then our politics infected reproduction, education, taxes, marriage and most recently, financial policy. The worse transgression has been the politicization of media, the necessary arbiter of objective information in a free society. What’s going on here?

The desire to win the war of politics by any means necessary causes the losers to constantly engage on new battlefields. When stymied by the inability to prevail through electoral and legislative politics at the national level, the losers have turned to an unelected SCOTUS as a last redoubt. But a politicized SCOTUS corrupts the last institutional bulwark defending the very constitutional freedoms for which it was intended. Sadly, Roberts’s attempt to diffuse our contentious politics is doomed to fail.

Where do we go from here? Reversing course will require a deep self-reflection on the part of citizens and voters over political priorities and what makes life worth living. It must come from ground up as opposed to top down political leadership. The choice is probably best defined as between the real risks of freedom vs. the frequent delusion of security. Let’s hope we can get there sooner than later.

Obamacare and “Information”

Good quote applying Hayek and market theory to the illusion of centralized health care:

Perhaps ObamaCare will be remembered as the breaking point for top-down planning. There is not enough information available for the government to micromanage a system as complex as health care, which represents more than 15% of the economy. Austrian economist Friedrich Hayek wrote some 50 years ago about the “pretence of knowledge,” meaning the conceit that planners could know enough about complex markets to dictate how they operate. He warned against “the belief that we possess the knowledge and the power which enable us to shape the processes of society entirely to our liking, knowledge which in fact we do not possess.”

True enough, ObamaCare was built on an unworkable foundation. The original sin in health care goes back to the wage and price controls in effect during World War II. The federal government let employers avoid wage controls by adding health insurance as an untaxed benefit for employees. Employer-provided insurance has since insulated most Americans from the cost of care. The predictable result is endless demand for increasingly inefficient services.

When was the last time you saw prices posted in a doctor’s office or hospital? Yet price is the key means through which information is transmitted, at least in functioning markets. There are many ways to make sure that the poor and seriously ill get medical care, including direct subsidies that don’t undermine the price mechanism. But the complexity of accomplishing this goal in a hyperregulated health-care industry overwhelmed the system.

If the justices do send ObamaCare back to be rethought, politicians should address the problem with more humility. We’ll know health care is on the road to recovery when basic information such as clear rules and transparent prices are again part of the system.

Full article here.