Atlas Shrugged coming to a theater near you. Not a minute too soon.

More than fifty years after Ayn Rand argued that government could tear an economy apart by trying to “do good,” her hallmark novel Atlas Shrugged is coming to at theater near you.

Some think it’s not a minute too soon.

“Being conversant in Ayn Rand’s classic novel about the economic carnage caused by big government run amok was practically a job requirement,” writes Stephen Moore in the Wall Street Journal about working in public policy at the conservative think tank Heritage Foundation. “If only “Atlas” were required reading for every member of Congress and political appointee in the Obama administration. I’m confident that we’d get out of the current financial mess a lot faster.”

Written with fewer pages than the Affordable Healthcare for America Act, the novel is more readable and perhaps more prescient. And, because the book has finally, fifty years after publication in 1957, been produced in cinematic format (i.e. a movie), politicians may not have any excuse not to catch the main points.

Points such as:

• Government doesn’t really create or save jobs.

The stimulus programs of the last couple years were created on the premise the government spending will produce economic growth. Where does that money come from? Two places: the government can print it or the government can borrow it. The first risks inflation and the second has to be paid eventually, ostensibly by tax dollars. Tax dollars are dollars taken out of the economy.

Enter Frederic Bastiat and “That which is seen, and that which is not seen.” Sure it’s great if the government puts money into the economy, but it is not without effect. It is spent, which creates products, services, and boosts the economy. That is what is seen. On the other (invisible) hand, what is unseen is that the money isn’t used by those who produced it. It has to come from somewhere else-a taxpayer, who will not be able to spend the money. It is taken from them, by force, and redistributed to whomever the government decides needs it more than the original producer. Further, by taking the money from the taxpayer, we decrease his incentive to produce, and spend, more.

If economics has taught us nothing, it has shown that the market is better at picking winners than the government. Putting government bureaucrats and pandering politicians in charge of picking winners just does not work.  (See also: Adam Smith) (Unless you own G.E. stock…)

Which leads to the next point:

• Congressmen don’t know much about economics (Republican or Democratic).

The counterintuitive part, at least for you guys who graduated near the top of your classes at very prestigious law schools and made a lot of money in litigation or bond-counsel work or whatever but have not spent a lot of time selling hotdogs or landscaping or painting houses, is this: Profits are evidence of the creation of social value, not deductions from the sum of the common good. Washington totally flubbed that one during the health-care debate. Enormous profits come from the creation of enormous social value. Exxon, for instance. Americans may not have cozy feelings toward Big Oil, but given a choice between free gas for a year from the local Exxon station or lunch with a bigfoot politician, most Americans would just pick up a Slim Jim on their way to fill up on gratis high-test and motor on down the road and take a rain check on the coq au vin with Senator Snout.

Thanks, Mr. Williamson. Some more points:

• Put lipstick on a pig, (or a law), and it’s still a pig. Call it Affordable Care, but it’s just semantics–a bad law is still a bad law.

• A politicians’ gut reaction to a crisis is to “do something,” and that something is not necessarily wise. Usually, though, it does create another government agency.

For the uninitiated, the moral of the [Atlas Shrugged] is simply this: Politicians invariably respond to crises — that in most cases they themselves created — by spawning new government programs, laws and regulations. These, in turn, generate more havoc and poverty, which inspires the politicians to create more programs . . . and the downward spiral repeats itself until the productive sectors of the economy collapse under the collective weight of taxes and other burdens imposed in the name of fairness, equality and do-goodism.

And that’s just to start.

In one of my favorite parts, quoted by Moore in his WSJ review, John Galt, as government bureaucrats plead for his help to save the economy, calls for the abolition of the income tax:

Galt: “You want me to be Economic Dictator?”

Mr. Thompson: “Yes!”

“And you’ll obey any order I give?”

“Implicitly!”

“Then start by abolishing all income taxes.”

“Oh no!” screamed Mr. Thompson, leaping to his feet. “We couldn’t do that . . . How would we pay government employees?”

“Fire your government employees.”

“Oh, no!”

Comments Moore:

Abolishing the income tax. Now that really would be a genuine economic stimulus. But Mr. Obama and the Democrats in Washington want to do the opposite: to raise the income tax “for purposes of fairness” as Barack Obama puts it.

The book, and the movie, too, if reports are to be trusted, bear an uncanny resemblance to our times. It was written, after all, to take place in “the day after tomorrow.”

About the Movie

Synopsis of the film from the film’s site:

Dagny Taggart (Taylor Schilling) runs Taggart Transcontinental, the largest remaining railroad company in America, with intelligence, courage and integrity, despite the systematic disappearance of her best and most competent workers.

She is drawn to industrialist Henry Rearden (Grant Bowler), one of the few men whose genius and commitment to his own ideas match her own. Rearden’s super-strength metal alloy, Rearden Metal, holds the promise that innovation can overcome the slide into anarchy.

Using the untested Rearden Metal, they rebuild the critical Taggart rail line in Colorado and pave the way for oil titan Ellis Wyatt (Graham Beckel) to feed the flame of a new American Renaissance.

Hope rises again, when Dagny and Rearden discover the design of a revolutionary motor based on static electricity – in an abandoned engine factory – more proof to the sinister theory that the “men of the mind” (thinkers, industrialists, scientists, artists, and other innovators) are “on strike” and vanishing from society.

From the Foundry:

The film covers Part I of the three-part novel, condensed into just 102 minutes. (Parts II and III are to follow in sequels, the producers say.) The scenes that are included give a good sense of the book’s beginning, though it is too short to allow much development of the characters and their relationships. The foundational plot mystery of successful businesspeople going missing one after another is cleverly established, and the strong performance of Grant Bowler as Rearden supplies backbone.

Fans of the book will find some enjoyable, if brief, nods to rich portions of the book that were left out, including the back story of main characters Dagny Taggart and Francisco d’Anconia. Keep an eye out for that famous cigarette with the dollar sign on it.

According to Ron Rodgers of Rocky Mountain Pictures, the film will come to Utah at the end of April or the beginning of May at Megaplex and/or Cinemark Theaters.

Related articles

• Ayn Rand’s Atlas Shrugged Debuts Tax Day (eagleviews.org)
• Movie Review: Atlas Shrugged Part 1 – The 40-Year Wait is Over (blogcritics.org)
• G.E. and U.S.A. are Rent-Seeking BFFs (joshblackman.com)
• Atlas Shrugged: “spectacularly good” or “incomprehensible gibberish”? (reason.com)
• Previewing the Atlas Shrugged Movie (atlassociety.org)
• Reason.tv: Adapting the Epic – The Making of Atlas Shrugged the Movie (reason.com)

Misdiagnosis: Judicial Activism « James Madison Institute

In the wake of the latest in a series of cases on the Affordable Health Care for America Act–Obamacare to its detractors, the Holy Grail of legislation to its defenders–the pejorative of “judicial activism” has been leveled  at Judge Roger Vinson and his ruling striking down the law.

While the White House avoids using the term judicial, they disagree with the ruling.  Attacking the merit of the ruling, the White House appeals to the strength of numbers, saying that“This ruling is well out of the mainstream of judicial opinion.”

Despite the appeal to numbers, the constitutionality of an act of Congress isn’t really dependent on a majority.

In reality, upholding the U.S. Constitution’s limits on governmental authority is a proper exercise of judicial authority. Indeed, the doctrine of judicial review has been recognized ever since the landmark case of Marbury v. Madison in 1803. And Judge Vinson’s ruling is far from an abuse of that authority.

via Misdiagnosis: Judicial Activism « James Madison Institute.

The Commerce Clause argument in Virginia v. Sebelius, among others

Yesterday, the headlines shouted that individual mandate of the Affordable Health Care for America Act (let’s just call it “the Act” for short) was found unconstitutional by a federal court in Virginia. (see my short post on it here) Partisan critics of the ruling were quick to point out that there have already been two cases upholding it; partisan supporters were just as quick to note that this is the first substantial ruling on the act.

After a brief reading of the opinion, here are a few quotes from it and a couple of thoughts:

The Obama Administration‘s arguments in support the Act fall can be boiled down to this: Congress was within its powers to pass the Act because it acted under its power to regulate interstate commerce. To pick that apart, the Administration is arguing that Congress has the right to regulate activities that in the aggregate “substantially affect” interstate commerce. The Administration is relying upon aggregation theory, says Judge Hudson:

“…which is conceptually based on hypothesis that the sum of individual decisions to participate or not in the health insurance market has a critical collective effect on interstate commerce.”

In other words, each of us make enough decisions on health care that all taken together it is enough to affect interstate commerce. Under the Commerce Clause argument, the Minimum Essential Coverage Provision–what is more commonly known as the “individual mandate“– is necessary to make sure that the program of reforms in other areas work. In essence, if not everyone is paying into the system, then there won’t be enough people paying in to support the sick and poor that cannot pay for the benefits of health care. The dysfunctional system cannot be reformed if every person does not participate because, well, to put it simply–it’ll cost too much. So, to sum up the argument, since Congress has the power to regulate healthcare under the Commerce Clause, it also has the power under the Necessary and Proper Clause to make the regulations necessary.

Judge Hudson notes that although the Necessary and Proper Clause “vests Congress with broad authority to exercise means […] to implement legislation, it is not without limitation.” This is an interesting, and perhaps understated commentary, on what many, including Speaker Pelosi, see as the definition of the Necessary and Proper Clause. It is an unenumerated power, but there are still limits. The means to accomplish the end must be “rationally related to the implementation of a constitutionallyenumerated power, but it must not violate an independent constitutional prohibition.” And here is the crux of the Virginia assault on the Act; it is a violation that “offends a fundamental restriction” on the Commerce Clause powers.

Central to the Commerce Clause is that it relates to economic activity. Can the government compel an unwilling person to perform an involuntary activity? Previous cases that the Administration cited dealt with individuals who grew wheat or cannabis and thereby voluntarily inserted themselves in the stream of interstate commerce. Here, however, the individual mandate compels a person to do an involuntary act, buy health insurance, and thereby become subject to the Commerce Clause. Because this goes beyond the bounds of the Commerce Clause, Congress is outside of its ability to use the Necessary and Proper powers to force the purchase. Congress can use its authority to pass constitutional laws; outside those bounds its powers are “bridled.” Quoting Chief Justice Marshall,

[l]et the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consistent with the letter and spirit of the constitution, are constitutional.

And thereby is why Judge Hudson ruled the individual mandate of the Act unconstitutional. As laudable as were the intentions of Congress in passing the Act, “the legislative process must still operate within constitutional bounds. Salutatory goals and creative drafting have never been sufficient to offset an absence of enumerated powers. And, my favorite quote: “Congressional findings, no matter how extensive, are insufficient to enlarge the Commerce Clause powers of Congress.”

What are those boundaries? Judge Hudson cites case law that limits Congressional powers under the Commerce Clause to subject matter that is economic in nature and voluntary activity. However, despite arguments by the Administration that everyone will at some point in their life need healthcare of some sort, this was the bridge too far for the Judge.

Neither the Supreme Court nor any federal circuit court of appeals has extended Commerce Clause powers to compel an individuals to involuntarily enter the stream of commerce by purchasing a commodity in the private market.

Because it is not voluntary, the government cannot require individuals to make a purchase, to participate in the market.  Ironically, this seems to be the very lynch pin upon which the entire scheme relies–without participation, voluntary or otherwise, of healthy individuals paying into healthcare, the government will be unable to pay for the costs of covering the poor and sick.

Interestingly, critics are attacking Judge Hudson’s interpretation of the Necessary and Proper Clause powers. See their discussion here. Others suggest that Judge Hudson is writing for Justice Scalia, and that it is a better opinion than the critics are giving him credit for. “Nonetheless, once read in light of Scalia’s concurring opinion in Raich, Judge Hudson’s analysis is considerably more coherent that his critics allow.”

There are other arguments in the case, including a tax argument that Judge Hudson calls “simplistic.” (He also refers to the precedent it cites as “dicta,” a slap at the value of the authority the Administration cites).  I thought the Commerce Clause argument, however, was the most interesting, not to mention the most important.

A last and important element of the opinion is that of the severability of the individual mandate clause from the rest of the Act. In other words: can the rest of the Act survive even though the individual mandate is unconstitutional? In this case, because it is difficult for the court to determine whether Congress intended that the rest of the Act to survive the invalidity of any single clause, the Judge ruled only on the section (1501 in this case, if you were wondering) is invalid and the rest of the Act, as it is currently unchallenged, survives.

Read the opinion here.

Related articles

• Federal judge rules mandatory health coverage unconstitutional (lawafterthebar.wordpress.com)
• Further Thoughts on the Virginia Health Care Ruling and the Necessary and Proper Clause (volokh.com)
• ObamaCare Loses in Court (online.wsj.com)
• Mandatory Health Care Provision Struck Down As Unconstitutional (jonathanturley.org)
• The Crucial Role of Choice in Henry Hudson’s Opinion (reason.com)
• Obamacare Individual Mandate Struck Down (pajamasmedia.com)

Federal Judge Rules “individual mandate” Unconstitutional

It won’t be the last stop  for President Obama’s signature health care bill, the Affordable Health Care for America Act, but it was a road bump that I’m sure the Obama Administration could have done without. Today, a federal judge in Virginia ruled that the “individual mandate,” which mandates health coverage for most Americans by 2014, is unconstitutional. The judge did not address the entire law, such as parts dealing with expansion of Medicaid coverage.

Although the case is eventually headed to the Supreme Court, opponents of the law were pleased with the ruling.

“I am gratified we prevailed,” Virginia Attorney General Ken Cuccinelli said in a statement. “This won’t be the final round, as this will ultimately be decided by the Supreme Court, but today is a critical milestone in the protection of the Constitution.”

Ken Cuccinelli's suit argued that individual mandate is an unconstitutional expansion of the Commerce Clause. | AP Photo

Interestingly, health care stocks rose at the news, with Standard & Poor’s 500 Health Care Index up 0.5 percent at noon New York time.

The ruling, according to the WSJ, is the first against the law. The judge stated that the law’s requirement that most Americans carry insurance or pay a penalty “exceeds the constitutional boundaries of congressional power.” Two other cases have ruled in favor of the law.

Despite the plaintiff’s request, Judge Hudson did not issue an injunction against the law. Although the individual mandate does not go into effect until 2014, aspects of it will take effect as soon as January.

In his opinion, Judge Hudson reasserted sounded more than a little like the late Milton Friedman:

“At its core, this dispute is not simply about regulating the business of insurance — or crafting a scheme of universal health coverage — it’s about an individual’s right to choose to participate.”

Find the opinion text here.

Related articles

• Health Law Ruled Unconstitutional (online.wsj.com)
• Judge Rules Obamacare Provision Unconstitutional (themoderatevoice.com)
• Mandatory Health Care Provision Struck Down As Unconstitutional (jonathanturley.org)

Constitutional amendments from the folks who love it most

Indubitably, during the recent election, one of the major rallying points of Tea Party aligned voters  was the US Constitution and its interpretation. Indeed, although the Tea Party started out as primarily a revolt against perceived spending policies of the Obama Administration and the Democratic controlled Congress (for example, the Affordable Health Care for America Act and the Troubled Assets Relief Program I and II ) during a troubled economy,interpretation of the Constitution has become a point of particular interest to many of those who consider themselves to be members, or supporters, of the Tea Party. Within that group can be found different veins of thought, including those who support nullification of federal laws through state action, devoted readers of Cleon Skousen’s “5000 Year Leap,” and, of course,  Glenn Beck. (And by mentioning any of them here, I do not mean to disparage them or diminish, but merely to observe they are out there).

What has been increasingly interesting to me  has been the opinion by many of these same people that the Constitution itself needs to be amended. Joe Pyrah, a reporter for the Daily Herald in Provo, Utah, recently (read: “today”) noted on in a blog post at the Sausage Grinder that “it’s clear that lawmakers who hold up the Constitution as the document we most need to get back to aren’t entirely happy with it.” He was speaking, of course, about the myriad of bills proposed by Utah legislators that deal with editing  amending the Constitution. Among them that he noted:

• Joint Resolution Urging Congress to Call a Constitutional Convention on the Process for Repeal of Federal Laws
• Joint Resolution Applying for an Article V Amendments Convention
• Joint Resolution Urging Congress to Repeal the Fourteenth Amendment to the Constitution
• Joint Resolution Urging Congress to Repeal the 16th Amendment to the United States Constitution
• Concurrent Resolution Urging Congress to Pass Balanced Budget Amendment to U.S. Constitution

Is it strange, and a little hypocritical, that the same people who are calling on Congress to follow the Constitution in the passage of laws are the same who are calling on Congress to amend the Constitution. There was great outcry when the health care reform act was passed, and while there are arguments that it was marginally constitutional, it did not help that its proponents dismissed the constitutional questions. You recall the press conference when Speaker Nancy Pelosi was asked what part of the Constitution allowed Congress to mandate health care–she scoffed, an act sure only to raise opponents ire, not support.

When those  very same opponents of government intervention turn to the Constitution as their ally, and then start advocating amending it, there are those who laugh. However, perhaps they laugh to soon. The Constitution is designed to be amended.

At the root of the assumptions about Tea Party supporters–often even calling themselves “Constitutionalists”–is the belief that Tea Partiers believe that the Constitution is a sacred document, something sprung out of the heads of the Founding Fathers much the same as Athena sprang from Zeus’ head.

Contrary to popular opinion, however, the Founders were not a monolithic group of individuals sharing a common interpretation of how the American government should work.  In fact, they were a bickering bunch of politicians, albeit brilliant ones, who recognized the mutual benefit of uniting their thirteen states in a federated union. Federalism, the result of their compromises in 1989, is a unique American model that is unmatched elsewhere in the world, before or since.

Among the compromises agreed upon in the Constitution is the ability to amend that document. It was well understood that society would changed, the nation would grow, and that there were problems that the Founders just did not want to deal with. Most notable among the these issues were the rights added during the first Congress and known today as the Bill of Rights. Also notable were issues like slavery and the right of all to vote.  While there were those amongst the drafters who believed these things were important, the issues became a block to the compromise necessary to establish a “more perfect union.” It wasn’t  a perfect union; just more perfect one.

And today, neither Tea Party supporters nor their detractors believe that the Constitution is perfect. In fact, the place they diverge most often is in their policy arguments, not in their Constitutional interpretation. However, when policy arguments fail, it is to the document that we turn. When there are problems that need resolving, we evaluate whether their are sufficiently grave that the Constitution guide them and control the resolution of those problems.

For example, let’s take from above one of the resolutions proposed before the Utah legislature, that one “Urging Congress to Call a Constitutional Convention on the Process for Repeal of Federal Laws.” At first glance, this one appears to be the same as that recommended and sponsored in a bill before Congress by Utah’s Rep. Rob Bishop. (see “Amending the Constitution? A BFD”) Written almost simplistically, the purpose of this bill is to strengthen the principles of the 10th Amendment by allowing states more of a say in what the federal government does. Up until the 17th Amendment, Senators were selected by state legislators and were therefore more responsive to the dictates of elected state leaders, those tasked with managing a state’s government. Since the 17th Amendment, however, Senators have been elected directly by the people of the state. The argument goes that because voters are less aware and less responsive to the needs of the state as a whole, Senators are no longer responsive to the state in the manner they were previously. It’s a republic versus democracy type argument; one side wants the Senate, and Senators, closer to the state as an entity and the other side wants the Senate to be responsive to the people directly. With the proposed amendment, the Constitution would be amended to create a process that would put states back at the negotiating table, a chance to give their say about federal laws. In short, it shifts some of the balance of power towards the states. (And, by way of apropos, the convention is limited to just that question in order to prevent the entire Constitution from being rewritten).

What does that sound like to me? Like the same debate that happened in the halls in Philadelphia while the drafters argued over the form the Constitution would take. Who would have more power: the states or the central (what we call federal) government? This isn’t because these law makers don’t “love” the Constitution–rather, it is a policy debate over who should be making laws that affect the citizens of the United States in Utah. It’s a fair debate, and amendment is a fair way to go about making these policy changes happen.

Whether or not their a big enough deal to amend the Constitution, though, is another debate entirely…because amending the Constitution is  B.F.D.

Related articles

• Loving The Constitution To Death (plastic.com)
• Amending the Constitution? A B.F.D. (lawafterthebar.wordpress.com)
• Do we need a “repeal amendment”? (hotair.com)
• Should the Constitution be amended to empower the states, by a 2/3 vote, to repeal provisions of federal law? (althouse.blogspot.com)
• Conservatives To Push For Constitutional Amendment That States Can Supercede Federal Laws (alan.com)