Supreme Court Overreach

Two important cases hit the Supreme Court this week (and we will discuss each of them in this post), but honestly, the wrong one is receiving the attention.

Don't get me wrong - homosexuality is a sin. But I don't see that the Supreme Court decision is that big of a deal from the standpoint of Christian ethics. From the way people are talking, this signifies that Christians have lost the battle on marriage and that this redefinition will corrupt society.

While marriage is incredibly important, and its redefinition will has corrupted society.

The reason why this decision is no big deal is that Christians lost the battle on marriage back some, I don't know, years and years ago when it was still shameful in our culture to be homosexual. We lost the battle on marriage when it was redefined to only mean a union based on the love of two people, and their desire for commitment.

Marriage has never been solely about people. It's been about God. It's been a covenant before God that reflects God's relationship with His people. In the Old Testament, that meant the Israelites; in the New Testament and now, that means the church. At the point where we lost that in heterosexual relationships, the battle on marriage was already lost.

Once marriage is redefined as only the celebration of love between two people (we are not talking about sex here), can you really argue with homosexual marriage? I mean, it certainly seems offensive and nonsensical to say that heterosexual love is somehow more worthy to be celebrated than homosexual love.

But once marriage was redefined by the way our culture framed it, that's what we would be left arguing. But in the grand scheme of things, this court decision matters little from the standpoint of the sanctity of marriage because marriage had already been corrupted long ago. This is simply a manifestation of that.

From a political standpoint, things do prove to be a bit more interesting. It would seem to me that this whole homosexual marriage decision should never have been made by a court. The Supreme Court's role is to interpret the Constitution, and the way that they managed to work that into this decision is a little questionable.

To say that the right to marriage is included under the fourteenth amendment's protection is just flat out ridiculous. There is very little referenced in the text about the dignity that Justice Kennedy sees as paramount to this position. Additionally, you could question, why marriage ever had anything to do with the government in the first place? Oh, right, taxes.

But why even on a broader level is this a federal issue? The fourteenth amendment is the catch-all for applying the Constitution to the states and those claims are very dubious indeed.

Determining what marriage should look like in each state is something that should probably be decided by people in that state, not bureaucrats in robes sitting behind a bench. But I have shown a little too much of my libertarianism in this post.

I guess we should look at the other important Supreme Court decision now. I haven't heard as many opinions on this that I disagree with, so I won't spend as much time on it. But I wonder how many of you immediately know what I'm talking about when I mention the other decision.

The Affordable Care Act was being challenged, but not so as if to repeal it or take it off the books. No, this challenge said that the text of the law did not allow federal power where the federal government wanted power.

The question was about in places where states do not want to establish exchanges. The federal government does not have the authority to force states to comply with this part of the law, and that the Court did not contest. Instead, in these places, the federal government simply runs the exchange.

The question before the court was if the federal government, by the text of the law, would be able to enforce subsidies themselves in this situation. As Dr. Marc Clauson reports,

"The issue in this case is whether the Act’s tax credits are available in States that have a Federal Exchange rather than a State Exchange. The Act initially provides that tax credits 'shall be allowed' for any 'applicable taxpayer.' 26 U. S. C. §36B(a). The Act then provides that the amount of the tax credit depends in part on whether the taxpayer has enrolled in an insurance plan through 'an Exchange established by the State under section 1311 of the Patient Protection and Affordable Care Act.'" 

It would seem rather problematic for the law that can be stifled by a state who does not want to set up an exchange. In that situation, there seems to be no reason to assume that the subsidy program of Affordable Care Act can apply, unless you take the meaning of state to mean government, rather than one of the 50 states.

Which I suppose is possible, but making that clarification of a vague law is hardly the role of the Supreme Court. Clarifying the law in this way is the spot of the legislative branch itself. Allowing the Court to do this is an open door for them "clarifying" many laws now and in the future.

But the clarification even now still doesn't make a whole lot of sense. As Dr. Clauson wrote,

"The Court apparently wanted to save Obamacare.  So it said essentially that the term “state” the language above meant either a state or the Federal government.  This meant that it had to interpret the word state as “the state,” some government, any government, to get to the point of including the Federal government.  Roberts seemed to realize this, since he said it was not a natural interpretation.  But that didn’t stop him or the majority."

Thus, the Court saves Obamacare instead of letting it go through the normal legislative procedures. And you know, that is a scary precedent to set.

So, from the standpoint of the Court doing what it's supposed to do, it was a pretty bad week in both of these cases as both represent overreach.

More than Money Transfers: How Government Subsidizes Industries and Businesses

The government will not stop picking winners and losers in the area of economics. Instead of staying with the original purpose of government, government officials decide to subsidize any and all organizations that they think (or profess to think) would be quite beneficial to the American people.

We have on this here blog already tackled the subject of subsidization in some detail. I have not come anywhere close as of yet to exhausting all possible theses for blog posts. Thus, this post is not a rehash of why subsidies are generally disadvantageous. That has already been done. This post is about describing what a subsidy is.

Merriam-Webster's Online Dictionary defines subsidies as,

"A grant by a government to a private person or company to assist an enterprise deemed advantageous to the public"

This definition describes what most people would automatically think of when they hear the word subsidy, but I believe that this definition is just a tad incomplete. You see, the government utilizes more means to "assist an enterprise deemed advantageous to the public" than just direct money transfers.

Black's Law Dictionary explains,

"A grant, usually made by the government, to any enterprise whose promotion is considered to be in the public interest. -Although governments sometimes make direct payments (such as cash grants), subsidies are usually indirect. They may take the form of research-and-development support, tax breaks, provision of raw materials at below market prices, or low-interest loans or low-interest export credits guaranteed by a governmental agency." 

Looking at this definition may cause some to look at subsidies in a whole new way. Some are not going to be convinced just because this credible source says so, that this is really what subsidies are. So let's break down the various parts of this definition, so as to show that what it claims are subsidies are actually used by the government to aid the promotion of certain companies above others.

It is not difficult to see why research-and-development support should be considered a subsidy. This is a form of direct cash transfer to organizations to aid research and development.

Bear in mind that there is a difference between research and development. Research is intended to search out facts that may or may not have practical use. Development on the other hand is intended to specifically search out practical applications to facts already established. It's similar to the difference between science and applied science.

According to a 2007 study by the Congressional Budget Office, the federal government funds 50% of the research, and 17% of the development in this country. This money has been largely going to development of such items as could be essential to national security.

As far as the intention goes, this form of subsidy is actually not that heinous. It is not intended to advance one company above another in a given industry. However, it is still subsidization. In this case, the intention is to advance one industry above another.

Picking winners and losers in economics after all is not always limited to individual companies. For instance, if the government sponsors research and development on wind energy, so as to ensure lower prices in the end, it is picking wind power as a winner, and other forms of energy, like nuclear, fossil fuels, and solar power as losers.

But the more traditional picking winners and losers from individual companies does occur too. Let's take a look at tax breaks. Now I know that no one wants to pay more taxes, and thus, tax breaks are seen as advantageous. But tax breaks if not universal, have a tendency to benefit one company or industry above another.

Let's say that Sauron has placed a 20% tax on the gardening industry. This forces higher prices upon Sam's Roses and Herbs. Sam's customers are turned away to an organization with horrible customer service, and a far inferior product - Saruman's Farm Market.

Astonished, Sam investigates Saruman's Farm Market. He discovers that Saruman's Farm Market is able to provide lower prices because it only has to pay 5% in taxes. You see, Sauron and Saruman are allies, so Sauron decided to help Saruman's business with a hefty tax break.

Since Sam doesn't know the dark lord, he does not get this tax break, is suffocated by the higher rates, and ultimately goes out of business. Don't worry about him though, a miser named Frodo Baggins hires him to be his personal gardener, and the two become fast friends.

Of course, the end for a business can't always be as pleasant as this one here, but the closing of a business isn't that unlikely an event. Maybe that itself won't happen, but the higher taxes will definitely cripple the business and subsequently the business owner and the employees.

Of course, if the tax break is universal, then it will not be subsidization and we can all celebrate the benefits to the businesses and the customer.

Sometimes though, the government is just a little bit more sneaky. You see there are times when the government acts as a corporation itself. In these particular situations, it hardly ever sells its items at a  fair price. Rather, the price is far below market levels. This is precisely what Black's Law Dictionary means when it says, "Provision of raw materials at below market levels."

In this instance, since Saruman's Farm Market pays less to buy his fertilizer from the government, he doesn't have to charge as much to make a profit, as Sam's Roses and Herbs does just to make ends meet.

It's not just in Middle-Earth either. This type of experience is prevalent within our country today. The government gets involved in industries and sells the fruits of their labor to selected organizations, thus picking the winner and losers.

The last point made by Black's Law Dictionary refers to subsidies by low-interest loans. The most obvious examples of these loans are the institutions of Fannie Mae and Freddie Mac.

These institutions work to provide lower interest rates to their clients. It sounds like a phenomenal idea, but then we all know about the collapse of both of these well-known organizations quite well. According to the Cato Institute in 2007, the greatest difficulty lies with the distortion of the lending market, and the diversion of loans away from private corporations.

And if you really think it doesn't matter that banks and other lending agencies might struggle because they are tyrannical and need to be stopped anyway, I suggest you watch It's a Wonderful Life. There are good and bad companies in every industry. And the government is just not well equipped to determine which is which.

But of course they just keep trying, and with harmful consequences. Not just the giving of money to corporations, but almost any governmental policy can be twisted and abused by legislature to give support to one company above another. We must be vigilant to watch the government's legislation carefully to ensure that they do not use subsidization to control our economy.

Addictions in Politics

America's politicians have an addiction problem. It is not an addiction with drugs or alcohol (at least not that I am aware). Despite the consequences, politicians return to this addiction. The addiction of which I speak is that of subsidization.

It's not just those stinking Democrats either. The Republicans would just as well like to support their agenda by subsidy. For instance, the Republican party supports subsidies for the nuclear industry.

Today, I would like to examine a laundry list of reasons that this addiction to subsidies is as painful as any other addiction.

1. It is redistribution at its worst
The money that the government is giving to these industries doesn't just come from thin air. It is taken from the US taxpayer. As previously mentioned, the US citizen gives this money to the federal government for a specific purpose which does not include giving handouts to any industry no matter how noble the government politicians think or profess it to be. This idea opens the door to all kinds of corruption.

2. It diverts resources
Newsflash: the federal government does not know what's best for the United States citizens. Over the past few years, we have seen this repeatedly. The rollout of a burdensome "one size fits all" healthcare plan has shown that the government doesn't know how to cope with the individual needs of all families in the United States. Yet when the government subsidizes certain industries, it is trying to determine which corporations should receive money and should thrive to be available to the American citizen. They are trying to decide what we need.

3. It encourages lobbyists
Subsidies are bound to be given by politicians, and this is a known fact. If you then are trying to make an investment in a risky venture, you might decide that instead of risking your own money directly, you would try to risk the money of the US taxpayer. Then all you have to do is lobby politicians to receive the handouts in the form of a subsidy. It is simple and easy. This highlights that decisions regarding subsidies aren't even being made with our best interests in mind in the first place, but rather with the interests of the politicians themselves.

4. Subsidies rarely go to small businesses
Small businesses are rarely seen or noticed by politicians. This life source of the US economy then is neglected by the government in favor of already established businesses. These large businesses themselves are not evil corporations, but how is a small business supposed to survive against any business that can lower their prices significantly below market levels because of the money that small business and other hardworking US citizens are paying to the large corporation? Small businesses are attacked twice: once through taxes and another time through the artificially lower prices of their competitors.

5. Subsidies provide ways to avoid political pressure
In the end, subsidies make life easy for politicians. Instead of confronting real issues, they can write a check to some industry and tell them to fix it. In this way, politicians can appear to solve the problem without doing anything at all. Nuclear regulations are too strict and are constricting investment. Here have some money. Healthcare regulations are killing health insurance. Here, Americans, have some free government sponsored healthcare! We see then why politicians are so addicted to such a harmful subsidy regime. It allows them to avoid any real responsibility for their actions.