Bad Laws and Unintended Consequences, part 1.

This post is a draft. Read at your own risk.

A bad law is one that sets off a cascade other laws to qualify, modify or nullify its provisions. Bad laws grow government the way Peter's grows flowers. Bad laws are crafted out of a complete disregard for the concept of "limited government," which is the founding principle of the United States of America.

Following is a musing on one of what will surely be innumerable unintended consequences of Obama's Law. This post is entitled "..., part 1" because we suspect that there will not be enough books in the whole world to catalogue them all. The law's been law less than a day. Wait until people actually read it.

Our brave congressmen have begun holding pressers about their legal “challenges” to the Obama Healthcare Takeover, which amounts to a de facto enslavement of the entire nation to the government.

Here’s just one way: one of the “challenges” ballyhooed would prohibit the “healthcare system,” of which the government has asserted itself as steward, from providing drugs that are alleged to enhance or enable male sexual arousal to convicted sex offenders.

Perhaps we must be reminded that this issue would not even have been raised had not the government become the personal, intimate assistant of every living American; indeed the arbiter of their lives and deaths. And while, in a society as accustomed to debasement as ours, it might seem a perfectly routine issue to take up, it still illustrates perfectly how the growth of statism is the mother of all slippery slopes.

Aside from the relative merit of the hamstrung logic of such a proposal, its adoption would require the government to know each and every sex offender in the nation and somehow prevent him/her from obtaining the forbidden medicine. And so is nationalized “healthcare” destined to become nationalized surveillance.

For the government, as steward over the lives (and deaths) of all Americans, is now compelled to guard itself against the sort of liability that an army of tort lawyers, deprived of their prey by the nationalization of the industry, would be eager to set upon. And too, it must comply with its own anti-discrimination laws which essentially forbid it from offending anyone, anywhere, at anytime, unless it absolutely feels like doing so.

It should therefore not be too difficult to imagine all the other safeguards against negligence in perfect policing that the government will automatically and mechanically be forced to guard itself against. Attemting to do so will of course require the employment the most comprehensive database on your personal life – all our personal lives – that has ever been amassed (we discussed GE’s bragging about this, before the bill was even passed, here). Who is to know, ultimately, who won’t be allowed what treatments for reasons that can only be attributed to the twisted logic of an absolute bureaucracy?

What about the use of this monster as a tool of coercion or retribution by non-governmental thugs? Suppose Group A decides to craft an argument against the eligibility of Group B to receive treatment provided by taxpayer funds. Won’t that be rich.

The power to influence and intimidate and oppress and control that information and the power to use it held by central authority is the very antithesis of “limited government.”

None of these open-ended horror stories would have been thinkable on Sunday morning, before congress passed this bill.

When the government merely asserted jurisdiction over commerce in material things, it still hadn’t asserted itself over your very existence – but because the care of your body is the care of your very self, and because everyone at some time needs healthcare services, the government has now made that leap to absolute rule.

In a previous post we mused as if from a distance of light-years whether the passage of the healthcare laws was an act of totalitarianism. Now the distance seems to have closed substantially. This IS totalitarianism in the making.

He said what?

As you probably know, the most sweeping legislation since the Constitution itself was just cajoled, greased, and rammed through congress "for the good of the people." Details on it are still sketchy, but among the dictates it is known to contain at this writing is one that can be rendered Thou shalt purchase health insurance OR ELSE.

Recently we heard a soundbyte of the Campaigning Obama, the One who caused the weak to swoon at the sound of his voice, declaring that such a mandate was wrong, wrong, wrong -- at least when it was HillaryCare. When it's ObamaCare, it's good, good, good!

But the real shocker for our ears wasn't another irrefutably misleading statement by Mr. Obama -- we're not surprised by those, even though the sheer volume and bald-faced audacity of them does still indeed flabbergast. Rather, it was when he was trashing "RomneyCare," the Massachusetts healthcare takeover, pronouncing it "Mattatuchets."

We admit to being selective about how much of the media culture we allow to dirty our shoes, but how did we miss the flood of media mockery at such rank illiteracy on behalf of a would-be president? Why, their indignity was non-stop when George W. Bush coined "misunderestimated" -- a word we find quaint and useful. How many hours of intellectual NPR discussion were dedicated to explaining how inconceivable it was that anyone who was so ill-trained in the finer points of grammar and delivery should dare hold himself out as a president; and how the fact that he was president must have been proof of a vast conspiracy to "install" him rather than elect him, because everyone knows that only the erudite win the Establishment nod. Especially the Bay State Establishment.

Excepty when the candidate is the One. Perhaps there was no mass-media orgy of credulity in response to this or any of the other unbelievable, inaccurate, stuttering, or just plain scary faux-pas' that were plain to see during Mr. Obama's world presidential campaign tour.

In any event, having grown up in Massachusetts, we can assure you that anyone who pronounces it that way is not to be taken seriously.

Death Train

It's time we returned briefly to our roots: that is, to posting thoughts that came while on a train.

This morning, on the subway downtown, we attempted to make sense of the fact that the law of the land now gives the government complete control over its citizens' medical needs; that it penalizes with federal imprisonment any who refuse to procure said services; that it authorizes the use of taxpayer funds to finance the murder of millions of infants while in their mothers' wombs; and that this law became law despite the most energetic and sustained resistance to it the American people have organized and mobilized in a generation.

We tried to contemplate the audacity of this end run around the separation of powers; of a president who damns the will of the people, and whether doing so is the very definition of "dictatorship"; of a congress whose complicity was paid for by taxpayer funds that were authorized for the purpose of shoring up the financial system. We wondered if a de facto dictatorship, or a one-off dictatorship is destined to become a day-to-day dictatorship. We considered that every other country that fell to communism never thought it would happen to them; that Germany did not authorize Herr Hitler to marginalize then brutalize then exterminate millions of Jews and those who stood up to defend them first in Germany and then in every country he took over, with designs on conquering the whole world. They didn't authorize him to do that, exactly. They just put him in power based upon the charismatic effects of his force of will. The rest is history.

We looked about the train, loaded with every-day folks. To our left was a man reading some intellectual magazine with an article about "how to stop Israel from building settlements in Jerusalem," even though Jerusalem is the capitol of Israel and Israelis ought to be able to do with its real estate whatever they wish, just as Americans do in Washington, D.C. We thought we heard history rhyming.

As the train rolled into a tunnel, we tried to imagine, for the sake of trying to calibrate our own reaction to such a thing, that this train would emerge with us from its dark tunnel at a place like Buchenwald.

It could happen anywhere, anytime. It begins with the force of one man's will.

How long before we go to jail?

We're not buying anything from the government, or at the direction of the government, especially medical services. We're not submitting our medical records to them, voluntarily or consciously. We understand that the language of the healthcare act that as of this writing appears to be very close to "passage" in the whorehouse know as the legislature criminalizes those who take this position.

We'll let you know when we start posting from the Federal Penitentiary.

The Devil and the Deep Blue Sea

Well, here we are, on the brink of having our nation "changed" right out from underneath us. We are not happy with this situation, because we see it as no-win. The president and his administration have forced and politicized and polarized and distorted and beaten to death the idea of "healthcare reform" such that it may very likely become a Pandora's box of unforeseen ramifications.

Not the bill itself -- that will embody in law certain disaster for the nation. But the debate itself. Here's why: if this bill is defeated, the entitlement class will be incited to revolt. Whether they will be appeased before Louis Farrakhan talks everyone into burning the cities is debatable.

If the bill passes, the rest of us will do all we can to fight it, which means that the legal system will be battling the unlimited resources of the Obama administration for as long as he wants to battle. And all indications are that will be a very long time, indeed. He doesn't appear to be fazed at the process of imperiling the economy, the mechanisms of constitutional government, and the very social fabric of the land to get what he wants.

Neither of these two more obvious possibilities is auspicious for the future of America and Americans.

Frankenstein at College

The enduring name “Frankenstein” must surely be some indication of how indelibly effective the half-man half-machine hybrid creature is as a horror story device. There is an analogous creature in economics, and it is all the more scary because it’s not a work of fiction: you cannot walk out of the theater and make it go away. It is the species known as government-sponsored enterprise. Its kind are known by quaint sounding monikers like “Fannie-Mae” or “Freddie-Mac.” While these are names that make you think of your cousins down South, don’t be fooled by them. The damage these creatures can inflict is real. The half-man part of the GSE acts like a regular private enterprise. It enters into a market and competes with regular private enterprises. However, because of the half-machine part – the “government sponsorship” – it has competition-devastating advantages of cost and scale that can enable it quickly to dominate the market, driving out genuine private enterprises. Now Frankenstein has access to the marketplace but is immune to its main guidance system: competition, and thus the monster may undertake an unrestrained haywire binge.

GSE’s don’t have to make money. It would be nice if they did, but it isn’t essential for their survival. Thus this frightening Frankenstein has, unluckily, a power-supply that is as close to a perpetual-motion machine as is known to man: a taxpayer subsidy. Eek. This horror can destroy the market and taxpayer wealth virtually indefinitely, leaving in its wake all the evils associated with “bad money:” a schizophrenic, distorted market, deprived of the healthy competition which regulates prices and forces a measure of quality; a legacy of bad management decisions that includes unwise investments; a financial black-hole which sucks up money and sends it who-knows-where.

Today we consider for a moment a recent story about kissing-cousin Sallie Mae – the Student Loan Marketing Corporation. Her job is to subsidize student loans. If you’ve noticed that “higher education” just isn’t what it used to be, she just might be the main reason why. Like a tramp at the prom, her virtues are illusory. Her image of sanctity – that pesky government sponsorship – makes her appear to be as safe as a US Treasury bond to the capital markets, so she was -- until the credit markets began reevaluating the depths of taxpayer pockets -- able to borrow all she wanted without having to pay the risk premium that a real private enterprise would have to pay. Amassing mountains of cheap money (aka “bad money”), her job is to entice higher people to finance higher education by borrowing from her at below-market rates (the competition-killer) and to entice education institutions to enroll students to loan that money to. This they are glad to do, because they are in business, it appears, to do just that: manufacture degrees, and the more the merrier. No less eager are the young, apprently, to hang out on college campuses being cool thanks to easy-to-obtain-deferred-repayment-low-cost-loans.

Mass production is rarely associated with the highest quality, and never was it more rarely associated with it than in the mass production of college graduates. Mass production is instead a useful way to stamp out countless identical components to be assembled into roughly identical products. The defective gizmo in the process is the one that isn’t like its millions of peers. It’s the outlier, the non-conformist, the part whose dimensions aren’t so much like all the others as to be indistinguishable from them. The application of such standards of conformity might be a laudable in the production of blenders or automobiles or cans of cat food, but when applied to people it’s called “mediocrity.” Its long term effects on a society remain to be seen, but the early indications are frightening.

But we digress. The inspiration for this little yarn was the article in Bloomberg about Sallie Mae’s efforts to refinance $11 billion in bonds coming due in the next year. It seems that they have recently lured buyers for $1.5 billion at 8.25%. Marvelous. Or not so. After all, the Fed Funds rate at this writing is 0.18%. Sallie is paying nearly double what you’d pay to finance a home for 30 years on a fixed-rate basis. This isn’t as sweet a deal as a GSE might have demanded in happier times; it appears, however, to be very sweet for the buyers of the debt. A bailout by any other name is still a bailout, even if it's for bondholders. The market seems to be assessing a risk premium after all, despite the taxpayer backstop.

Another annoying detail is that the interest that Sallie receives on her student loans – her bread-and-butter -- is fixed at 5.6%, a guaranteed loss of 2.65% for Sallie – well, actually, for Sallie’s “government sponsor”, that is, we the taxpayers. If they make such arrangements with the remaining $9.5 billion coming due, the loss will be $291,500,000.00 over the term of the notes (that's almost a third of a billion dollars). Do you see what we mean by “bad management decisions?” Bear in mind that this deficit will itself have to be financed, likely at higher rates. You might want to scratch second homes, luxury cars, vacations, and other non-essentials (like a college degree?) off your budget for the remainder of your lifetime.

In the article in question, some “expert” is quoted as saying that Sallie Mae “is in a virtuous cycle right now.” If a guaranteed 3% loss on $11 billion is virtuous, I’d hate to see what Sallie’s like when she’s wanton. This does raise questions for us: what with the multi-trillion-dollar deficits that have become so fashionable so fast these days, might there be some future scramble to raise cash when said deficits just as suddenly go out of fashion? What lengths will Frankenstein go to in order to make up for that $333,000,000.00 loss? What claim will it lay upon futures recipients of those mass market degrees? And where did that expert get his degree, at Sears and Roebuck?

Sallie is only half-machine. She’s also half-man – that is, she acts like a genuine private enterprise, and has enjoyed the benefits of the private enterprise system with none of the responsibilities. But when her borrowing costs arise, she might find it more difficult to mint taxpayer losses under some future, more responsible administration. This would remove her luster of irresistibility: her cost advantage. She would definitely be less attractive to would-be borrowers under such circumstances. She would have seen better days, like the harlot who becomes an old maid. Her doom was inevitable, and obvious to anyone paying attention.

It’s an ugly prospect. The world will be better off without her, but it would have been better if she’d never shown up to begin with.

Two things.

Thing 1: What if all the restaurants served ten course meals with filet mignon as the main. Then everyone would complain that the "food system is broken" because everyone knows that not everyone can afford filet mignon.

Thing 2: The problem with influence is that it's a two edged sword. An athlete (or other entertainer) who is a good sport will suggest good sportsmanship to those who watch him. On the other hand, a thug will suggest thuggery. In like fashion, a president who is reasonable and seeks to serve wisely will suggest a spirit of wholesome cooperation in the people his administration serves. On the other hand, a President who "won't back down," who insists he'll "get this done," even if the people clearly don't want him to, even if what he's so insistent on is unreasonable and destructive will instill unreasonable adherence to untenable and destructive pursuits in "the people."

Influence isn't optional, it's inevitable.

Hypocrisy 101

Why is it "racist" to oppose the radical economic and social initiatives of the Obama administration but perfectly OK to slander and slam every hangnail Governor David Paterson has?

When the Servant Rules

Servant. That's what "the most powerful man in the world" is: a servant and a leader. The power of the office of the President of the United States is derived from the consent of the governed -- it is not his own.

Some might suggest that President Obama might recoil from the concept of "servant-leadership" because, as we have been told, he is a black man and the word "servant" when referring to a black man can be construed by mildly paranoid minds to be a reference to slavery or some other racially oppressive mindset. Nevertheless, in this country, the mantle of "servant-leader" (not one or the other) is what the office of president bestows. Even on white presidents.

Now then, when the servant goes on tour using rhetoric such as, "I won't back down! They can back down!", and the "they" in question are the people who oppose a bill that he himself is obsessed with, the servant has ceased to serve and has begun to assert his will -- to speak like an "anti-servant," if you will.

As we see the tactics that Team Obama has invoked to win passage of his pet bill: persuasion, propaganda, shady deals (the Louisiana Purchase, the Nebraska Purchase), the marginalization of anyone who opposes its idea of "healthcare reform" by the media and intellectual elites, the murmur of saber rattling by the likes of Nation of Islam Leader Louis "Hitler was a very great man" Farrakhan, calling again for anarchy because "the white right opposes healthcare", manipulation and abuse of the legislative process, etc, we seem to be hearing more clips of the president asserting his will, his refusal to "back down," his insistence that the healthcare bill be passed now.

Seeing the increasingly aggressive assertions of the president as he refuses to "back down," we can't help but wonder, are we seeing President Obama metamorphose into a tyrant right before our eyes?

Notes On The Right to Be Left Alone

The General Electric Corporation is now running ads (heard on WABC Radio) bragging about how they're building a comprehensive, global database of individual medical records ("for every person on the planet"). We recall wondering what sort "stimulus" would be in the cards for giant GE when we saw pictures of its CEO Jeffrey Immelt hanging out with President Obama last year.

Fuggeddaboudit! It's a done deal!

Given that we know that centralized control of any industry is an unjust power grab, and that we know that power-grabbers lust for information in the way a healthy bull might lust for a cow, and that there have been murmurs about "national medical records databases" since this unholy discussion about "healthcare reform" began a decade ago, we can surmise that the "data-management" franchise of this pork-party will be a lucrative one, perhaps the most lucrative one. We may reasonably conclude that, should we be sentenced to the punishment of life in a land of socialized medicine, that General Electric is the leading contender for the role of Big Brother.

(Need we point out, aside, that since GE is apparently married to the idea of a universal medical records database so intimately that it has launched a PR campaign to tell the world about it, that it has a substantial interest in seeing legislation that would have such a database as its technical foundation pass? Can we be faulted for wondering how much influence this powerful, multinational corporation might exert in influencing the legislative process to bring about the very set of conditions it has apparently set its sights (and resources) on? We don't think so.)

People tend to acknowledge that they recoil viscerally at the thought of their personal details being catalogued and perused and parsed and even rented by some third party.

Now then, all this talk about the evil which we all sense marks the collection of this private information is really moot until someone bothers to develop the doctrine of why doing so is wrong, how it can be unconstitutional, and why it is an affront to liberty.

Here's a starting point: the right to life recognizes the dignity of the human person -- not simply the right to have one's heart beating -- and the recognition of human dignity contains many "rights" that are foundational to dignity -- among them, the absolute right to be free from the prying, assembling, manipulating, and especially capitalizing the details of a person's life.

When China's Bubbles Burst

Ah, now there's something to think about. China has more of them than Mr. Bubble himself. And they know nothing about managing them - else they wouldn't be having them to begin with. Watch how the people panic when a dictatorship mentality stomps in to restore order. Watch how counterparties the world over invoke collateral claims -- or attempt to. Watch how assets get dumped.

How many ships will be scuttled in their wake? And exactly which "central bank" will step in as lender of last resort? Why, all of them, of course, flying the flag of the IMF. If a mere bank in New York can be dubbed "too big to fail," how much more so an entire nation, and one that owns everyone's debt (and makes everyone's junk), at that.

We remind you of previous posts about a supranational currency, and a de facto global citizenship.

We can always pray it doesn't happen.

The Incumbent Democrat Body Count

They're dropping like flies, these Democrats. Some of natural causes (Murtha), some because of special elections (Massachusetts), some are being railroaded out (Gov. Paterson), some are being eaten by their own (Rangel) and accused of nasty things (Massa), and some are mysteriously retiring (Bayh).

It's widely known that the wheels of justice grind slowly, but they do grind -- and in this case, the more the better. And yet, there seems to be an uncanny clustering of misfortune that suggests something more than coincidence at work. While we cannot attribute, prima fascie, the natural causes to anything known to be in the control of David Axelrod or Rahm Emanuel, it does seem that the Democrats are purging their ranks. Forgive us for adopting a skeptical demeanor with regard to whatever it is they intend to install to replace these dead democrats walking.