Category Archives: Economics

Taxation, Public Policy Radar, Commentary, Public Policy Principles News, Economics

Obamacare: An Analysis

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DrNoIntroduction

I’m fifty-six and most of my life I have been unconcerned with medical issues because of good health.  I was a jock, was never seriously injured and took my health for granted.  During the summer of 2007 I began to get weary and put on weight, so I eventually went to the hospital.  l was immediately admitted and diagnosed with genetically-caused liver failure.  In September 2007 I was admitted to the Cleveland Clinic and in November I had a liver transplant.   Over the five months in the Clinic, I incurred four major infections including E-coli, MRSA Staff, C-diff, and Pseudomonas along with Pneumonia.  I was on dialysis, had a heart attack, had a major internal bleed, suffered blood clots including one which has left me permanently blind in my right eye and was reduced to 120 pounds.

Our first hospital bill was for nearly half a million dollars and total costs for my care and expenses came closer to a million than half a million dollars. Needless to say, I am now extremely interested in health care issues and medical costs. I have excellent medical insurance through my job but had not paid close attention to the details of the coverage for years, though I knew I had pretty good coverage.  Fortunately nearly all of my bills were covered by this insurance and payment of the nearly ten thousand in expenses not covered by my insurance was generously assisted by friends in Ashland, the Ashland University community, and my Providence Church family.

This personal medical crisis motivated me to read the entire House of Representatives thousand plus page health care bill proposal.  I’d heard and read numerous analyses, both pro and con, by medical professionals, journalists, and Congressmen, but I needed to see for myself.  The following are some of my impressions of the bill.

The Proposed Health Care Bill

This bill is lengthy and boring with technical language making it extremely difficult to follow especially if one is not versed in the legal nuances of Medicare, Medicaid, and Social Security.  I’m a professional philosopher with the skill to decipher challenging reading, but this bill makes Aristotle and Kant look like a piece of cake.  It will take bureaucrats years to explain and apply the intricacies of this bill and I doubt if more than a few Congressmen could even follow the train of thought.

The bill causes one to realize that we already have a large government controlled health care program called Medicare.  The majority of this new bill is amendments to Medicare leading to a major expansion and overhaul of its system.

One of the legitimate roles of government is to protect its citizens.  All I want from government is for it to protect me from those who might rip me off.   This bill has elements which fulfill that function.  It protects whistleblowers who report abuses of the system.  It attempts to bring justice by reducing disparities in already established government health care including racial, ethnic, and geographic disparities.  It provides translators to communicate about health services for those citizens (and for noncitizens) with poor English.  It reduces paper-tracking by creating standardized electronic administrative transactions.

The bill is concerned about improper relationships between physicians and distributors of covered drugs.  To reduce fraud there is close monitoring of physician owned hospitals.  This overhaul includes revising rebates for prescription drugs.  It increases inspection reports on nursing homes and more safeguards on hospice programs.  It sets up a consumer website and an improved complaint process that should improve quality control.  It enforces repayments of Medicare overpayments.  Many of these seem to be protections for the patient and society which are good.  Yet it fails to address the central issues about these programs; they are under federal management and are running out of money.  Remarkably the new bill only adds to their problems by allocating more centralized authority and more money to broke programs.

Therefore, one should be skeptical whether a government run system (Medicare, Medicaid, and Social Security) that is going broke should be the model and foundation for a new expanded societal-wide program.  Their economic failure should warn us about the dangers of combining government and health care.

Ten Important Observations

Below are ten major observations I have:

  1. The striking realization that most comes to mind when reading this bill is the massive allocations of funds to all of the new bureaucratic layers and innovations this bill sets up.  This bill allocates billions of dollars, but there is little said about gathering funding for all these projects.  The only mention of funding is the new 1% tax on those making 350,000-500,000, 1.5% for 500,000 to 1 million, and above 1 million is 5.4%.  This whole process seems forced down our throats without any thorough-going cost analysis or plan.


  2. I appreciated and loved my doctors at the Cleveland Clinic and most of them were international.  My lead transplant surgeons were Italian and Irish assisted by fellows who were Malaysian and Japanese.  My hepatologist is Lebanese and nephrologist is Indian.  They are all world class, brilliant, and great communicators.  Why are they all practicing in the United States?  I am sure there are numerous reasons such as great hospitals, fantastic training and research facilities, a wide-range of opportunities including freedom to practice their specialties in the best health care system in the world and make excellent salaries.  I am afraid that if we cap salaries, establish fee limits as in Social Security and Medicare, and alter the system then these fantastic doctors will no longer want to practice medicine in the U.S.  They will have better options in other locations and our health care will suffer.


  3. It allows the private insurance companies to continue in business but they must comply to the regulations and standards set upon them by the government as they must submit to health coverage participation requirements.  This will restrict freedom and the free market.  The next three points expose some of the new regulatory structure.


  4. The role of Secretary of Health and Human Services will be greatly increased, becoming one of the most powerful domestic cabinet positions.  This position will have unbridled power to establish medical and health policy.  Some of the responsibilities of this office will be to control billions of dollars of allocations, provide lists of public health options, exclude certain providers from participation, exercise regulatory power as necessary, determine criteria for quality of care, oversee nursing home care, identify services which are misvalued using specific criteria they create, oversee state loans for medical education and establish a Public Health Workforce Corps along with a means of distributing these people through the country.


  5. Page 41 says, “There is hereby established a Health Choices Commissioner…who shall be appointed by the President by and with the advice and consent of the Senate” (though it does not say confirmation).   Some of the responsibilities of this Commissioner will be data collection, audits, establish uniform standards for insurance, and oversee exchange of programs.   The Commissioner will appoint an ombudsman to deal with complaints and grievances.  This Commissioner may terminate contracts and determine affordability credit eligibility.  The Commissioner will determine whether the person is Medicaid eligible, determine the income based tiered limits of funding, shall specify the cost sharing reduction in cost sharing reduction amounts, be able to determine the cost effectiveness of various health procedures, and adjust the cost of living to reflect geographic differences.  The Commissioner shall establish uniform marketing standards all ensured Quality Health Benefit Plans shall meet and establish the process for review of denied claims.  In summary this person will have the authority to reframe the private and public options.


  6. A Health Care Benefits Advisory Committee will be established and chaired by the Surgeon General.  It will recommend covered benefits for each essential, enhanced, and premium plan.  It is composed of nine who are not federal employees and appointed by the President and nine who are not federal employees who are appointed by the Comptroller General .  They will recommend initial benefits standards, including covered treatments and levels of cost sharing and give recommendations to the Secretary.


  7. Pages 769-770 speak about family planning and who qualifies.  Nothing is mentioned directly about abortion.  Since the Hyde Amendment passed in 1976 federally funded abortions have been excluded in America, however, this new bill will trump the Hyde Amendment and if the Secretary of Health and Human Services includes abortion as part of covered health care then funded abortions will again return.  If this remains in a passed bill, true pro-life supporters may need to consider civil disobedience and withhold their taxes.


  8. Advanced care planning is advocated which will include Living Wills, end of life services being explained by a practitioner, and counseling a person whether to permit life sustaining treatment, including use of antibiotics, hydration, and nutrition.  Every five years a counselor will reevaluate a person’s choices.  End of life care options will be included in the “Medicare and You” booklet Handbook.  This opens the door for counseling in the direction of euthanasia and  pressure on the elderly and infirm to equate value of life with quality of life.


  9. There is no doubt with this new massive intrastructure and funding for a public health option it will crowd out choice and the private options.  This will remove the power to make decisions about health care out of our hands.  With that development health care will certainly be rationed.  Of course health care is already rationed through Medicare which consumer reporter John Stossel calls a “Ponzi Scheme.”  Paternalism will replace liberty.  Does it make sense to allow government control through this Commissioner when we have given government oversight to Medicare, Medicaid, and Social Security and all these programs are either broke or going broke?  Is there any rational basis to trust government with this responsibility?


  10. The first nine points are significant but the most fundamental unearthing is the quantity of power placed not only in the hands of government but specifically in the hands of the executive branch of government.  The President is given authority to appoint a Commissioner of Health care.  In conjunction with the Secretary of Health and Human Services, this person is given oversight, with a board, over the whole health area.  In other words, they have governance over 1/6th of the American economy under the directive of the President where there is no congressional oversight but only accountable to the President.  Not only is there a socialization of healthcare, but this places another large percentage of the economy directly in the executive branch of government.

Further Questions

There are sections of this bill which leave me with more questions than answers. What do they mean by a heath care excise tax on those employers who refuse to offer benefits?  Why is there a separate section specifically on California?  What are the implications of creating a National Health Care Work Force or National Health Service Corps?  Is this Corps only for those who have obligated service as the repayment for a government loan for medical education?  What will the effects of the bill be on MEDICARE ADVANTAGE?  How will they actually compute quality of performance?  What is a Telehealth Advisory Committee?  What really will Medicare and Medicaid look like after all of this restructuring?

Near the end of the bill there is an Advisory Committee on Health Workforce Evaluation and Assessment, how will this affect businesses and what power will they have other than the allocation of funds?  What is meant on p. 859 when it speaks of 600 million for medical prevention and wellness and how is this included in the Cap and Trade bill (p. 815)?   What will be the government philosophy in the school based health clinics?  Though I am sympathetic  to incentives for those who work as health care providers in underserved areas is this a legitimate role for government to give these incentives?  On p. 407 there are grants to those providers of services who are community organizers, would this be for ACORN and like organizations? Please spell out more clearly what is meant on p. 589 where civil monetary limitations are determined by the Secretary of Health and Human Services.  What is the Health Care Comparative Effectiveness Research Trust Fund and its ability to disperse 90 million dollars and increasing each successive year ?

Conclusion

I watched the Obama press conference on the health bill.   It was one of the most boring hours of television I’ve ever watched.  The president’s answers were obfuscated.  I kept asking myself, “what does this do for me and my family?” but he never answered this question.  I learned nothing, except the President has not read the bill.  He was often incoherent, answering a single question with five minutes of blather.  I don’t think he understands the basics.  All he cares about is the transfer of power from the people to the government.  Even Palin’s resignation speech looked like a coherent speech in comparison.  Now I know why.  He doesn’t understand the bill…all he understands is the desire for government control and oversight.

During the ’08 campaign I heard Obama referred to as a socialist by a McCain supporter.  McCain was supporting socialist ideas as well, especially in his support of Bush’s bailouts of the banking industry.  The more accurate term that came to my mind while reading this document was Totalitarianism.  Totalitarianism is “a society in which the ideology of the state has influence, if not power, over most of its citizens.”    This is exactly what we see happening.   According to Karl Loewenstein, a totalitarian regime “attempts to mold the private life, soul, and morals of citizens into a dominant ideology.  The… ideology penetrates into every nook and cranny of society” (Wikipedia).   Totalitarian states tend to condemn and silence outsiders; they attempt to establish control over their subjects and are often lead by a charismatic leader.  Those who passively submit to Totalitarianism seem to be willing to sacrifice freedom for security.

During the campaign for the presidency, candidate Obama adamantly stated that the Bush administration was guilty of centralizing power in the executive branch of the government.  This was an accurate and astute observation and evaluation.  He went on to add that one of the changes he would make would be to alter this development.  The hypocrisy is that as president, Obama has rapidly and intensively increased this trend through the bailout of banks, through the stimulation package, the takeover of the auto industry, the cap and trade bill, and the appointment of czars unaccountable to Congress.   These will be dwarfed by the passage of this proposed Health Care Bill.   One sixth of the economy will come directly under the auspices of the Executive Branch of Government, the Presidency.  Will you sit back and idly watch as freedom is sacrificed for the appearance of security?

Dr. Mark Hamilton, Associate Professor of Philosophy, Ashland University, Board Chairman of the Institute for Principled Policy

Taxation, Public Policy Radar, Commentary, Public Policy Principles News, The Vote, Economics

Black Eye On Westerville- The Aftemath

This entry is part 3 of 3 in the series Black Eye On Westerville

Our dollars under assault from greedy governments

…He has erected a multitude of new offices, and sent hither swarms of officers to harass our people…imposing taxes on us without our consent…

Declaration of Independence- 1776

NEWSFLASH to all governing bodies! There is a finite limit of income that is available to be taxed. Theoretically it is 100% of income. Practically, it is a significantly lower percentage of income.

We only feel the need to point this fact out because it is clear that a new tidal-wave of taxation is currently being generated at all levels of government. The excuses are myriad. The effects will be devastating, as are all tax increases especially during economic downturns.

So why all the talk of tax increases when Westerville residents just voted themselves, a majority of them anyway, a 15% tax-cut? Well, not so fast. It is probably just a temporary reprieve if events in Columbus are any indicator.

During the recent Westerville Income tax increase campaign we asked the question repeatedly- What’s the next bite of the apple? When it became legal for cities to charge residents an income tax it was sold to residents initially as a very small bite of the apple which would eliminate the need for the hated (and unbiblical) city portion of the property tax and piggy-back sales taxes. Most municipalities went for a 0.25-0.5% income tax, promising that this would be more than enough to run the city in perpetuity. The cities would never have to ask for more to run at current levels of government. And that’s the rub. Governments used new revenues to grow far larger and more intrusive than any of those early residents who foolishly voted in income taxes could possibly have imagined.

Not so city planners, professional city managers and other government “experts” who have college degrees in such “progressive” fields as Urban Planning, Regional Governance, Public Affairs, etc. The dream of 19th century “progressive visionaries” is now the nightmare of 21st century urban and suburban tax-slaves. It has been only since the mid-20th century that progressives in small to medium-sized cities created and seized de facto control of zoning and planning commissions, which were originally promoted as bodies designed to protect the freedom of use and value of private property. In fact, they have become agents of modern-day government feudal lords, dictating such matters of grave importance as street curb-cuts (vital to the survival of businesses on a street; if you’re in doubt please examine the state of business in the Morse Rd and Rt. 161 “business” corridors in Columbus which have a system of virtually inaccessible “access” roads, another sign of city tyranny; these areas are also dying or virtually dead zones) grass length, the color of house paint used, the storage of boats and other extra vehicles, the type and placement of fences and even the replacement of hot-water heaters. This kind of intrusion costs money and bureaucracies must come up with new revenues to pay armies of bureaucratic “inspectors.” Hence the wave in the late ’70’s and early ’80’s of income-tax increases to the 1% level. Again, that was all that the cities would ever need.

As city governments continued to grow in size, cost and intrusiveness yet more revenue became necessary. And as the resistance to tax increases grows the tactics of city leadership becomes more sophisticated and demonstrative of their desire to thwart the will of a majority of taxpayers (as opposed to the majority of voters, an extremely important distinction). As this article in the Columbus Dispatch demonstrates, cities like Columbus and Westerville use a combination of “special” election dates, usually in August to minimize voter turnout, and targeting voters who are most likely to vote for tax increases and vote in every election no matter when (the dreadful PROS 2000 campaign in Westerville used an August “special election” date with the same targeted voter strategy). Selected quotes from the article-

On the night of the election, Coleman called it the most sophisticated campaign in which he had been involved…

Brad Sinnott, central committee chairman for the Franklin County Republican Party, said timing trumped strategy for tax-backers.

“There’s no doubt part of their strategy was to get this through in a low-turnout, midsummer election.”

Of course, the city denies that election timing is a legitimate complaint-

But city officials insist that they scheduled an August election not for political advantage but because they need the money now.

Of course, that argument crumbles under the weight of the revelation that voter turnout was not encouraged but that…

The campaign’s target audience was the small pool of voters who never miss an election, no matter what time of year it takes place.

Was the strategy successful? Clearly it was, since a grand total of 8.4% of the registered voters (52% of the 16.2% of registered voters, again, NOT taxpayers, who voted) in Columbus were able to impose a 25% tax increase on the residents of Columbus who pay taxes and, worse, non-resident taxpayers who are completely disenfranchised in municipal elections despite paying most of the taxes. And Columbus utilized the implied promise of continued expansion of social welfare spending to entice voters who pay little or nothing in taxes but receive the benefits to vote themselves largess from the public treasury.

As we have pointed out repeatedly here on this blog, cities long ago slipped into the same form of tyranny that American colonists so courageously resisted in the 1760’s through the 1780’s; over-regulation of the backbone of any economy, the small local business (a rapidly disappearing entity in Columbus), and taxation without representation. As noted in the quotations from the Declaration of Independence, taxes are being imposed without the consent of a significant percentage of the taxed. In fact, 42% of non-resident taxpayers (!) pay 53% (!) of Columbus income taxes (reference here) though they cannot vote and have no say in city government. Westerville’s numbers are similar.

What does this increase in Columbus mean to communities surrounding it? Since Westerville employed an absurd “Tax Fairness” argument, based on Westerville residents who had to pay Columbus and Westerville taxes, in their recent successful campaign to both increase the city income tax and shift the whole burden to a minority of taxpayers who both live and work in the city of Westerville (absurdity exposed here) it is conceivable that Westerville could come back to the voters to demand, in the name of “fairness,” that a new 25% tax increase MUST be passed by taxpayers (a majority of whom would be exempt from the increase, just like the last initiative). Since the city is busy using its windfall from the recent tax hike to hire zoning and planning “inspectors” and other bureaucrats to harass churches over building occupancy permits and businesses who want to remodel buildings for occupancy, buy every dilapidated or limited-use building that comes on the market thus squeezing even private small rental businesses aka taxpayers out of the market, just like they did, for instance, to the Westerville Athletic Club and taking them off the tax roles therefore cutting revenues, and otherwise throwing good money after bad on schemes that will destroy the business viability of the south side of town by imposing a Rt. 161 style “access” road ghetto upon its temporary occupants, it will probably find that it needs more revenue sooner than later and the “tax fairness” argument may have to be dusted off and modified for another run despite promises to the contrary. Think in terms of Westerville Public Schools who now claim they “need” nearly 8 additional  mills to run the new Taj Mahals they have recently built or between $400 and $600 additional dollars per year from the average Westerville School District homeowner.

What should be done about this mess? Well, the first step is at least being considered. The Columbus Dispatch reports here about a bill that would allegedly restrict the use of “special elections” for the purposes of getting around higher voter turnouts. We think the bill in question is Ohio House bill HB 260 but we don’t know for sure, since the atrociously written story in the Dispatch gives exactly NONE of the important details like the bill number, the sponsors or any serious attempt at analysis in depth.

The second and most important step will require, frankly, a great deal of time, effort and money to get done. The cities and those eager to use the current taxation structure of the cities for the purpose of confiscation and redistribution of wealth through disenfranchised taxation (taxation without representation) will never allow the next step without a major fight. That is, either allowing all TAXPAYERS into a city’s treasury the right to vote in city elections, including tax initiatives, and requiring a number of non-resident representatives in City Councils proportional to non-resident revenue derived or, more simply, outlawing the collection of taxes from those who have no say in city government. No city will be willing to swallow either option (they will immediately hide behind The Ohio Constitution’s “Home Rule” provision) without a fight and no state legislators, being political animals, have stepped up to offer any relief to agrieved taxpayers mostly because they are more frightened of the reactions of cities and corporate campaign donors than they are of the mostly quiescent taxpayers who aren’t currently raising a stink.

A state constitutional amendment initiative will almost undoubtedly be required to fix this. It would be a real down and dirty political slugfest, complete with charges of greed and racism. There would be no major corporate support, since major corporations rely on the tax abatements and other city bribes to buy their support and loyalty. When cities are restricted from collecting taxes from non-residents they will have to cancel the 100’s of millions of dollars in tax abatements that corporations enjoy statewide. Major corporations will put millions into the effort to stop the initiative. The campaign will be dirty and ugly. Corporatate management likes the idea that their employees are forced to pay their property taxes in their stead and without their consent.They hate the idea that employees might figure out that they operate on few if any property taxes while their employees are milked with the help of corporate management who donate to the campaign funds to pass the taxes. Politicians will line up at the corporate trough to collect money that will flow like water in an all out effort to stop the attempt to make them pay their property taxes. Many politicians that conservatives thought were their friends will be exposed as phoneys more interested in re-election than fighting the tough fight to restore truly fair taxation.

Here is a Columbus Dispatch article from late July indicating that 95% of Columbus Issue 1 campaign funds came from corporate donors, among them highly tax abated companies like Nationwide Insurance, Grange Mutual Insurance, Limited Brands, NetJets, Corna-Kokosing Construction, Wolfe Enterprises and, surprise, surprise the Dispatch Printing Company, not to mention several engineering firms, all of whom benefit while their employees suffer. The thousands they donated is a small investment against the millions they don’t pay in taxes. The same holds for smaller cities which line up corporate donations in order to maintain tax abatements.

We don’t tell you this to scare you away from the battle. We are being realistic. It will require real time and effort to get this problem fixed and there will be a lot of hard feelings and possibly jobs lost as employees are fired by major corporations for supporting the effort to make them pay the taxes they have maneuvered cities into waiving. It would have to be a true grass roots effort. Are you mad enough for that, yet?

Public Policy Radar, Commentary, Public Policy Principles News, Economics, Biblical Worldview

The Spending Habits of Congressman Boccieri

CongressI read with great interest Congressman Boccieri’s explanation for his support for the “Cap and Trade Bill” in the July 8 Ashland Times-Gazette.  Congressman Boccieri is a first-term Democratic Representative for the 16th Congressional District which covers Canton, Wooster and Ashland.   It is very disappointing that he supported this bill against the expressed wishes of many of us living in his congressional district.  I know many who wrote him requesting a “No” vote on this bill.  This bill is not in the best interests of the people living in North Central Ohio.  It will cause jobs to continue to leave Ohio.  Even though this bill was generally supported by the Democratic Party, it was voted against by many Democratic congressmen from Midwestern industrial states.  They understood something that Congressman Boccieri did not:  the potential demoralizing effects of this bill on our region.  This is why many of us thought Representative Boccieri would also join the vote against this bill.  It passed because of overwhelming support of congressmen in the Sunbelt states and a minority of Midwestern congressmen who betrayed their constituents.  It should be noted that Congressman Boccieri publicly stated (as reported in the Canton Repository) in April that he would not support this bill.  This makes his change of mind a great disappointment and seems quite erratic.

It appears like Boccieri was bought off at the last minute by the availability of $30 billion loan fund for businesses.  What small businesses can currently afford another loan?  He argues this bill will not increase taxes, but it will indirectly raise taxes through increasing carbon emission costs and utility costs affecting all businesses that will necessarily pass the costs on to customers and raise everyone’s utility rates.  In his comments in the Times-Gazette article Representative Boccieri maintained that he wanted one thing changed in the Senate version:  the removal of a provision calling for a national building code that would place strict environmental requirements on homes prior to their sale.  This will cause all of you to make certain your home is environmentally suitable prior to your selling it.  It is hypocritical to say one opposes this expensive overwhelming section of the bill and want the Senate to adjust it, yet to vote for it in Congress.  If he feels so strongly about this part of the bill he should have taken a concerted stand of conscience and voted against the entirety of the bill unless the change was made.  When one votes for the entirety of a bill, one supports the bill.  This will really stimulate the housing market by raising the costs to sell and buy homes (sarcasm).  Has Representative Boccieri become a Pelosi puppet?

It is likely this bill will cause more manufacturing jobs to leave Ohio and the United States, increase costs for all Americans, boost utility rates,  weaken the housing market, and will not improve the environment or decrease global warming , especially since emerging economic nations like China and India have chosen not to participate in emissions reduction.  Forty-four Democratic Congressmen voted against this bill; Congressman Boccieri should have made it forty-five.

This bill was promoted as a partial solution to global warming and our dependence on foreign oil.  Environmental issues should be a concern for all of us.  The evidence for global warming is mixed; I’ve read scientific reports on both sides of the issue and believe it has become too politicized for most to really know the truth.  It is, however, important to be good stewards and personally leave our environment in better shape than we found it for future generations, but these are personal moral responsibilities.  But if Congressman Boccieri supports global warming issues so strongly we need an investigation into his own lifestyle, including what make of automobile he drives and what his utility bills are.  Is he an environmentally good example for us all to follow?  A good leader with strong convictions will consistently live out his views and start with himself prior to putting his values on others.  I believe in personal stewardship of the environment and want to do all that I can to make the environment better as a good use of what God has graciously given me and to leave my personal environment better off than I found it for my children and grandchildren.  There certainly must be a basic right to clean water and clean air.  This is why I’ve had solar panels for a decade (for which I could receive no tax exemptions during the Clinton era) and had an efficient log home built two decades ago.  We should understand the moral obligation for a safe livable environment for our children but it should be done incrementally with major tax cuts for environmentally friendly purchases to stimulate the economy and improve the environment not by taxing us for environmental usages.

Congressman Boccieri also voted for the 800 billion stimulus bill which has not yet stimulated the economy (and doubtfully ever will) as the unemployment rates continue to climb.  This so-called stimulus is being used to plug financial holes in State budgets, not create the long-lasting solid jobs needed.  This bill was also rushed through so it could bring immediate results which have not occurred and there has been a failure to provide adequate oversight to the spending.  Did Congressman Boccieri “misread” the economy as Vice-President Biden has recently recognized?  I think the spending philosophy of most of us in this part of Ohio runs contrary to the position and voting record of Mr. Boccieri.  This impetuous spending will lead to disaster.  Congressman Boccieri, SLOW DOWN, YOU’RE SPENDING TOO FAST!

Dr. Mark Hamilton is an Associate Professor of Philosophy, Ashland University and Chairman of the Institute for Principled Policy

Public Policy Radar, Gambling, Commentary, Public Policy Principles News, Economics, Biblical Worldview

From A Facebook Thread on the Ohio Gambling Crisis

GamblingPublished by permission of Mark Stevenson

It has been so long since I have posted something here, but Ohio is at a critical juncture. For years, we have fought efforts to legalize gambling. It appears as if today we may finally fail. Governor Strickland, who has previously held a position against gambling, has now bent to the gambling interests. In fact, the governor has been working on a state budgetary crisis and has been working with the legislature to balance the budget. Well known fact: governor wants to be re-elected in 2010 and does not want to tax citizens. Therefore, this is his only answer for state revenue to increase, allow slot machines in for the very first time!

My friends, if you are an Ohioan, please call your state senator and tell him or her today to vote NO on the state budget, since it allows a provision for the governor to write an Executive Order to allow slots into Ohio. In fact, tell both your state senator and House Member to vote NO. Some will listen!

I already spoke with my state senator’s office and the response was that the senator felt like he had no choice other than to let the governor have his way. I told him that was bologna and the senator absolutely has a choice to go against the governor. I don’t care what agencies cease to get funding for the day! Stand for principle, or be a big coward and incur the wrath of the conservatives in Ohio. Have some guts and stand like a man, for crying out loud! Pulezzze!!!!

Below is an alert that was sent out on Sunday. Pay attention as this unfolds!

Pastor Mark
Life Comes At You Fast!!!

Legislative Alert – Vote Expected Monday

To all:

Governor Strickland is expected to sign an executive order on Monday (today) to authorize the state lottery to use casino style slot machines (VLT’s) at Ohio’s racetrack locations – a casino scheme previously rejected by Ohio voters. He has convinced the Democratic leadership in the House and the Republican leadership in the Senate to cooperate by changing state laws on gambling in the budget bill.

Elected legislators in BOTH the Ohio House and Ohio Senate need to hear from their constituents by this morning.

Background:

The Ohio Constitution was am ended on May 8, 1973 to permissively grant the Ohio General Assembly the authority to authorize a state agency to conduct lotteries and award lottery prizes based on a common understanding of the lottery game as one which utilizes the sale of tickets as the means of play.

Ohio citizens in 1973 did not amend the Ohio Constitution to give a state agency OR any governor the power to authorize casinos.

Facts:

* Casino games have been rejected by Ohio voters four times since the Lottery’s inception, including twice in the past three years.

* Putting VLT’s at Ohio’s existing racetracks was rejected by voters in 82 out of 88 counties.

* Less that one year ago almost 3.4 million Ohioans refused to accept an expansion of gambling.

* In the counties which host 5 of the 7 racetracks, voters flatly rejected the placement of video lottery terminals at these facilities near their homes and neighborhoods.

* Governor Strickland ESTIMATES that VLT revenues will generate $933 million, but Ohioans would have to LOSE more than twice that amount for the state to get its share. This means an estimated $2 BILLION would be sucked out of the consumer economy. (Once the money is lost in a slot machine, you can’t get it back to spend it on clothing, food, appliances, cars, or other consumer products. Ohio’s economy cannot afford it in the middle of this recession!)

Other points to consider:

* To override the vote of the people shows a significant disrespect for the “consent of the governed” which is foundational to our system of government.

* To balance a multibillion dollar budget on what Ohioans would choose to lose at a slot machine is extremely irresponsible.

Action:

Please contact your state senator and state representative IMMEDIATELY (today). Ask him/her to vote NO on the budget. Any support of this budget will be considered a support for bringing in casinos which have specifically been rejected by the majority of Ohio voters.

The final vote on the budget could take place by Monday afternoon.

Find your legislator at http://www.principledpolicy.com/?page_id=4

Please CALL today (leave a voicemail; if voicemail is full – call back in the morning). Emails will not be as effective this time.

Please take the time to read the blog on the “rule of law” at http://www.facebook.com/l/;www.aproundtable.org

Respectfully submitted,
Melanie Elsey

Commentary, Economics, Biblical Worldview, Book Review, Education, Public Policy Radar, Private Property

Hamilton’s Curse–Hamiltonian Hegemony

This entry is part 7 of 9 in the series Hamilton's Curse

HamiltonsCurse

Nationalized banking, protectionist trade policy, corporate welfare–is this the definition of the current state of affairs (or those soon to come) in America? It likely will be. It is the definition of a mercantilist system of governance, and it is one that Alexander Hamilton advocated for during the period of the Constitutional convention. Those three legs were (and still are) the base of the stool of Federalist big-government nationalism.

It was, however, not the way government actually operated up until the latter part of the 19th century. Jeffersonian ideals of limited, divided sovereignty still held a pulse until that time, but the times, as the song goes, were a’changing. It took a “crisis” in order to knock the supports out from under the republican form of government.

The crisis, the War between the States, allowed the administration of Abraham Lincoln, the “greatest disciple” of Hamilton according to DiLorenzo, unprecedented opportunity to radically shift the country toward a truly mercantilist position. The method of the manipulation took the form of Congressional acts supported by Lincoln after the point in the conflict when southern Democrat members of Congress had exited.

In order to revive the national banking system, the Legal Tender acts of 1862 were put into place, and a paper money system (greenbacks) was locked into place with the National Currency Acts of 1863-64. The interface between government interest and the banking industry was noted by the New York Times as having “crystallized a centralization of power, such as Hamilton might have eulogized as magnificent” (quote from page 129 of the book).

DiLorenzo goes into a long account of Lincoln’s tariff policy, showing that protectionism and its cousin autarky (economic isolationism) were very welcome in the “house that Lincoln built”. Ohio’s own Clement Vallandigham was willing to speak out against this radical consolidation of power in the hands of the national government, but was deported by the administration for his troubles.

The third leg of the stool, the establishment and nurturing of corporate welfare, took the form of: railroad subsidies; land grants in order to give railroad owners free access to construct; the creation of powerful lobbies; and eventually bribes in order to keep the whole profit-taking scheme going (the Credit Mobilier scandal).

Now, such welfare takes the forms of: subsidies through various bureaucracies (think farm subsidies); favored corporation status (think FDA and other governmental barriers to competition in various markets); the creation of powerful lobbies; and “stimulus” or “TARP” acts to give taxpayer dollars directly to non-competitive private corporations that are “too big to fail” according to the national government.

Then, as now, the public reaction to such scandals as Credit Mobilier and AIG consists of a demand for more governmental control of business, which happened to be the problem in the first place. Not that this is something that the corporations are really trying to avoid. In fact, the public is being hustled by very crafty operators all around. The public naivete is best summed up by DiLorenzo while quoting Butler Shaffer on page 141 “‘government regulation has generally served to further the very economic interests being regulated’ and that the advantages businesses sought were those ‘denied them in the marketplace.'”

From Lincoln through Obama, the mercantilist system advocated and advanced by Alexander Hamilton has grown steadily along with the growth of governmental power and control over all aspects of American life.

It’s just another part of the “curse”.

Public Policy Principles News, Economics, Book Review, Public Policy Radar, Commentary

Hamilton’s Curse- The Founding Father of Crony Capitalism

This entry is part 6 of 9 in the series Hamilton's Curse

GadsdenThis chapter review is being written on July 4th, after something of a hiatus. Not a hiatus from the work that the Policy Institute does but a hiatus from blogging caused by too much to do in the struggle for liberty and too little time to do it. As Christ said “The harvest is plentiful, but the laborers few.”

To the left is the flag that is on this author’s flagpole today. It is the Gadsden flag, an early republican naval ensign. In part that’s because of the flag’s symbolism. A coiled rattlesnake ready to strike was an early symbol of resistance to tyranny, something that is very relevant in today’s political climate.

What does this have to do with Alexander Hamilton? Everything, really. Hamilton was, indeed, a patriot as his military action in battles like the seige of Yorktown demonstrate. Unfortunately, he was also a brilliant and manipulative political strategist who believed that the United States needed to become an aristocratically led monarchy to achieve its destiny as a great empire. And his vision caused him to be involved first in bringing down the Articles of Confederation because they could not be made to conform to his vision of empire, then to rebuild the economy on the model of British mercantilism in order to create the capital necessary to build the empire. Just because a man is both a genius and a patriot, does not mean that he is automatically an admirable figure in a nation’s history, as the book demonstrates.

Dr. Thomas DiLorenzo chronicles the 7 decade struggle to make Hamilton’s economic system the adopted system of the United States and the many faces it wore during that period. It was a see-saw battle which saw Hamilton’s system advance and recede several times, mostly along regional and philosophical lines, before the War Between the States brought Hamilton’s system into use in the United States to stay (for now, at least).

One of the pillars of Hamilton’s system was “crony capitalism,” also called today corporate welfare. It’s modern supporters call the system “tax-financed subsidy.”Modern liberals claim to hate “corporate welfare” but this is a ruse and a political shell game. They are more than willing to supply “tax-financed subsidies” to businesses in the “green economy,” for instance and are more than willing to make revolutionary changes to tax structure to raise the funds for it. When it is pointed out that “tax-financed subsidies” is “corporate welfare,” supporters will launch into lengthy soliloquies on the necessity of the action, all of which purposefully tries to steer the questioner in the opposite direction of his question.  They learned well from Hamilton, whose Report on Manufactures for the new United States government under the Constitution is considered to be either a masterpiece of economic vision or a confusing jumble of economic non-sequiturs, based on the reader’s knowledge of how economies work.

DiLorenzo demonstrates that Hamilton placed himself clearly in the camp of what, in the late 19th century became the “Progressive movement,”  in opposition to Adam Smith’s laissez faire approach to economics. Under Smith’s system (which is not theoretical but empirical, i.e. based on observation), the free market decides where investments are best made. Rewards and punishments come in the form of profitability or bankruptcy. Under the Hamiltonian-mercantilist system, highly educated and specialized central-planning “experts” can best decide where subsidies and protectionist taxation (tariffs) can be applied in order to give a fledgling invention or industry the help it needs in establishing itself. And if the market doesn’t want that particular product? Then obviously, more subsidies are necessary until public perception catches up to “innovation.” DiLorenzo explains in some detail how Smith successfully demonstrated that the best competitors, meaning the best businessmen with the best product wins in a free market. Hamilton argued for the power of government to be used to “level the playing field” but forgot to point out that this means that such a system can be abused to provide rewards for political allies instead of its stated purpose. In British mercantilism the King became a de facto business partner with subsidized business; in Hamilton’s system it is co-operative politicians.

Hamilton’s call for import tariffs had an unintended but not unforseen consequence: the increase of foreign import duties to match. Adan Smith had explained this relationship in the Wealth of Nations. Hamilton arrogantly insisted that Smith’s observations had been mistaken. This led to a form of economic isolationism that Hamilton actually thought a good idea. In fact it created regional strife and industrial stagnation internally and gave foreign manufacturers an advantage in the world market.

Hamilton wrote in his Report on Manufactures of his certainty that only government would have the resources and the motivation necessary to build roads to the interior. Unfortunately for his theory, within 10 years of his publication of the report, state chartered private firms were busily building roads at rates that astounded observers. Road building companies were eagerly invested in by merchants and manufacturers to provide easier access to growing western markets. Unfortunately, this lesson did not make an impression on Hamilton’s enthusiastic supporters later in the 19th century. They insisted in pouring good money after bad in building a system of roads and canals, many of them literally to nowhere, that became a money pit, bankrupting several mid-western states and causing severe economic consequences nationally. A major culprit whose name became prominent later was an ingenious Illinois state legislator and enthusiastic supporter of the Hamiltonoan philosophy who managed to become the key player in bankrupting his state through “internal improvements” crony capitalism in the 1840’s- Abraham Lincoln.

Hamilton’s system went into disgrace for a time, especially during the presidency of Thomas Jefferson. The election of 1800 was a complete repudiation of the Federalist-Hamiltonian philosophy of government. During Jefferson’s first term Hamilton died. Henry Clay became the new champion of what Hamilton had coined the American System. Clay became not only the systems champion but one of its beneficiaries. Being a hemp farmer he received a sizable hemp subsidy (hemp was an important crop because it made the finest marine rope available at the time). As the American System gained ground in the 1820’s in the wake of the War of 1812 it began to cause severe regional divisions between north and south. The industrial north was being subsidized with the tariffs raised by taxing imports into the agrarian south. At the same time the south’s markets were being severely restricted by retaliatory tariffs on agricultural imports. This situation eventually bloomed into the nullification crisis of the early 1830’s and then later into the secession crisis of 1860-61.

In the meantime the twice-chartered national bank, which would have allowed the creation of huge amounts of credit for the federal government was allowed to expire in 1811 and simply killed by withdrawal of funds in 1836. A new national bank was vetoed in 1841 and several times after this. This was an extremely important pillar of the American System. Hamilton’s scheme simply would not work without a vast amount of available credit. Hamilton’s empire was to be built on debt and the creation of fiat money. Jefferson’s system was hard currency (gold and silver based) and “pay as you go.”

As the War Between the States showed, these were incompatible systems and the result was an acrimonious and bloody divorce suit that demonstrated the vast differences between Hamilton’s “living document” method of constitutional interpretation featuring gross abuse of the “General Welfare” and “Elastic” clauses versus the strict constructionist interpretation which posits that the words and phrases in the Constitution have meaning and the intent of the writers of the document should be followed when discernable.

In the next chapter we will see what happened as the American System became dominant and how it got that way.

Public Policy Radar, Commentary, Public Policy Principles News, Economics

Hold It A Minute…

constitutionThe Congress shall have Power To… exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings… Article I, § 8 of the US Constitution.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. The 10th Amendment to the US Constitution

Frankly, the reading of these two portions of the highest law of the land, the Constitution could not be clearer. The Federal government must have the legislative condent of a state to own property within that state’s borders.

This clear requirement has been completely ignored by the Federal government for over a century and a brewing problem in California is illustrative of the need for states to reassert their authorities as guaranteed in the  1oth Amendment.  You see, California is bankrupt. And as part of that bankruptcy they are discussing the closure of state parks. According to an AP story–

California officials said Wednesday they are trying to avert the federal government’s threat to seize six parks that could be closed to help reduce the state’s ballooning budget deficit

Seize the land by what authority, you might be asking? According to the story-

National Park Service Regional Director Jonathan Jarvis warned in a letter to that all six [stste parks] occupy former federal land that could revert to the U.S. government if the state fails to keep the parks open.

The article quotes Jarvis as writing…

…”Lands conveyed to the State under the Federal Lands to Parks Program must be open for public park and recreation use in perpetuity as a condition of the deed”

Did you catch that? Formerly Federal land, deeded to the state with a caveat? A caveat that the Federal government is prohibited from making? Well, how’s it forbidden from making the caveat, you might be asking?

Since the  state of California has the authority under the two sections of the Constitution stated to simply revoke the permission granted the Federal government to own the land, this caveat is legally meaningless. There is nothing legally from keeping the State of California from simply seizing any particular piece of, or in fact all of, the Federal property in California by a simple act of the California legislature.

In reality it would be foolish for California to seize, for instance, the San Diego Navy Yard. But the Constitution is clear that it is permitted to do so (they might have to give “just compensation” per the 5th Amendment, but of course the US Supreme Court has a terrible track record on arbitrary seizures and property values, so that could work in California’s favor) and that means if they wish they can simply brush Mr. Jarvis’ protestations to the contrary aside as one would a pesky blood-sucking mosquito.

How does this effect Ohio’s public policy? Ohio currently has a “Sovereignty Resolution” before the State Senate, Senate Concurrent Resolution (SCR) 13. In it Ohio merely proclaims that it retains the rights and responsibilities of a sovereign state and intends to use them to make Ohio a place where its citizens can feel free from the over-reach of Federal authority. Like, for instance, forcing the state to keep parks open when it is bankrupt at its own expense.

Just another reason Ohio needs to remind the Federal government that it is a sovereign state.

Taxation, Education, Public Policy Radar, Private Property, Public Policy Principles News, Economics

Tax and Spin- Part 10: Conclusion-Accountability the Key

2 Comments
This entry is part 10 of 11 in the series Understanding Property Tax Levies

taxOhio does combine a “renewal” levy and an ordinary “additional” levy into one single vote, and although renewal-plus-additional-levy issues and ballots are straightforward – unlike replacement levies and ballots – they still deny voters a real choice. In this writer’s opinion, such combination votes ought to be illegal; renewals and additionals should be in separate votes. Thus, the replacement levy should also be illegal.

A partial solution to the replacement levy problem – one that addresses only the ballot language – would be to change the ballot wording to show the true tax increase. That is, it must show at least the proposed millage and the effective millage of the levy to be replaced and in no way indicate a tax decrease, including in the ballot title. (The Revised Code prescribes the wording for the body of the ballot but does not address the title, which is as deceptive for replacement levies as the body and is more noticeable to the voter.)

Repealing the replacement levy or changing ballot wording would be done by the Ohio General Assembly – with much encouragement from citizens. Although at least some of the legislators are aware of the deceptive ballot language, any action by them thus far has been inadequate to remedy the problem.

The fact that state lawmakers are very greatly influenced by local officials cannot be stressed too strongly. Local officials have had much to do with getting the legislature to create the types of levies described in this treatise. Replacement levies, in particular, have been a cash cow that local governments will likely lobby to keep, should a legislator introduce a bill to repeal their existence (no bill has been introduced as of this writing). That means that many citizens must be able to understand replacement levies and care enough about fairness that they can and will explain to their representatives and senators the unjustness of these levies and will encourage them to actively support the repeal of the law or change in the law that authorizes the levies. Unfortunately, in addition to possible pressure from local officials, another hindrance to getting the law changed is what this writer has found: some legislators do not understand replacement levies.

Because repeal of the replacement levy law or even a change in ballot language could take months or years – or might not happen at all – informed citizens should also work at the local level by educating other citizens, including their local officials, and supporting only those candidates that pledge not to use replacement levies. Citizens should also vote against all replacement levies, no matter how desirable the intended use of the funds might be. Only if the levies repeatedly fail will local officials stop using them and again make more use of the simple “additional” levy when they truly need funds for appropriate services.

It is the hope of this writer that Ohioans will hold their government accountable – that they will learn about taxation and individual tax issues, that they will educate others, that they will work to eliminate unfair and deceptive taxes, and that they will support only those candidates for office who are honest enough to do the same.

You can access and print a copy of Carolyn’s full article here. Put this information into the hands of your family, friends and neighbors.

Taxation, Education, Public Policy Radar, Private Property, Public Policy Principles News, Economics

Tax and Spin- Part 9: Some Solutions

This entry is part 9 of 11 in the series Understanding Property Tax Levies

taxOhio law has traditionally given local voters the final say for all property taxes other than those that are levied on the ten inside mills, with a few exceptions. However, that authority is no authority when tax laws are cleverly written to force more taxes on citizens without their vote. Neither is that any authority when laws are written so that voters are misled into voting for the opposite of what they really want or when both the Yes and No choices on a ballot issue might be undesirable, as with replacement levies.

What is the solution to the replacement levy problem? One answer is to repeal the law that authorizes the levies. Following are some reasons:

• The replacement levy is an unnecessary tax. Simple “additional” property levies have always been available – and are still available – to increase revenue for the government.

• The replacement levy is an early product of the legislature’s continuing effort to diminish the effects of H.B. 920 and to tie taxes to increases in property values. However, there is no correlation between the rising cost of appropriate government services and increases in property values. Even if there were, trying to make levies match property growth is generally unworkable because, in addition to their property tax levies, government taxing districts get various other kinds of funding from local, state, and federal government sources, as well as private sources. Further, the fact that the “replacement levy and increase” and “replacement levy and decrease” exist is evidence that replacement levies don’t always fit with inflation of property values. Also, this writer has observed that the plain “replacement levy” is often used to inch up taxes – just because it is available – when renewals would be appropriate and would have been used previously.

• Replacement levies limit the reasonable authority of citizens – even citizens who know the levies are used to increase taxes – to determine the magnitude of their government. When an existing levy is expiring, replacement levies force voters to choose between 1) voting No to no longer pay even the tax they had been paying, or 2) voting Yes to increase their tax. They are unable to vote simply to continue to pay the same tax they had been paying, as some people prefer. Government officials know that the majority of voters generally would not vote to eliminate a tax; therefore, by using the replacement levy, they use the equivalent of a
new tax with the old – the equivalent of a renewal levy plus an additional levy. In that way, they twist the arms of the voters to increase their property tax. In fact, levy proponents often insist that the voters must pass a levy or the government agency would have to cut services because it would not even have the revenue it had been getting.

Next: Part 10: Conclusion–Accountability the Key

Private Property, Public Policy Principles News, Economics, Taxation, Education, Public Policy Radar

Tax and Spin- Part 8: Eliminating Confusion-Step 3

This entry is part 8 of 11 in the series Understanding Property Tax Levies

taxBallot Example No. 3

The third ballot example, proposed in November 2003, is for a “replacement and decrease.” It is even more deceptive than the first two examples because it appears to provide a tax reduction. Instead, it produced a 267% increase. It reads as follows:

“14 PROPOSED TAX LEVY (REPLACEMENT AND DECREASE)
GREENE COUNTY

A Majority Affirmative Vote Is Necessary for Passage.

A replacement of a portion of an existing levy, being a reduction of 0.02 mill, to constitute a tax for the benefit of Greene Memorial Hospital for the purpose of CURRENT OPERATING EXPENSES OF GREENE MEMORIAL HOSPITAL, INC. FOR THE SUPPORT OF HOME HEALTH SERVICES AND FOR THE PURCHASING OF EQUIPMENT SERVING THE EMERGENCY DEPARTMENT, NURSING SERVICES, CANCER SERVICES, BIRTHING CENTER AND OTHER DEPARTMENTS OF THE HOSPITAL at a rate not exceeding 0.5 mill for each one dollar of valuation, which amounts to $0.05 for each one hundred dollars of valuation, for a period of five years, commencing in 2004, first due in calendar year 2005.”

The words “decrease,” “portion of an existing levy,” and “reduction of 0.02 mill” appear to indicate a decrease in tax. Nothing in the wording on the ballot in any way indicates a tax increase.

The misleading ballot language is explained as follows: Although the ballot does not show it, the existing levy that was to be replaced by this issue is called a 0.52-mill levy. That, unfortunately, refers to the millage that was voted at least as far back as 1976.

The ballot language compares the proposed levy of 0.5 (or 0.50) mill with the old, no-longer-in-effect 0.52 mill. The proposed levy was indeed 0.02 mill less than the old voted millage, but that old millage had nothing to do with one’s then-current tax.

The so-called 0.52-mill levy had been renewed a number of times over the years and, consequently, by 2003, the effective millage – the millage that determines one’s current tax – had decreased to 0.136028 mill. Therefore, instead of the tax being reduced from 0.52 mill down to 0.50 mill, as the ballot wording seems to imply, it was actually increased from 0.136028 mill to 0.50 mill.

The cost of this replacement levy was this amount: 35% X $100,000 X $0.0005 X 87.5% = $15.31.

Had the proposal been for a renewal levy, the tax would have been this amount: 35% X $100,000 X $0.000136028 X 87.5% = $4.17.

Therefore, the replacement levy cost 3⅔ times the existing levy – with no clue of the increase on the ballot.

In the case of another election and a similar “replacement and decrease” levy, this writer asked a number of people afterward what their thinking was about the tax issue. Every one of them said that he voted for the levy because he thought he was voting for a tax cut. Although the “replacement and decrease” is the most deceptive tax, none of the replacement levy issues gives any indication of a tax increase in the replacement portion of the ballot.

The reader should realize that although the dollar size of these countywide levies might seem small, each property owner pays on many such levies. Also, a large increase in the percentage of tax on individual properties is reflected in a large increase in revenue for the government because so many property owners are paying on the levies. To be informed, a voter needs to know the true effect of these levies so that he can question why such a large increase in revenue is suddenly necessary.

Next-Part 9: Some solutions