French economist and Nobel Peace Prize laureate Frédéric Passy was born on May 20, 1822. English economist and philosopher John Stuart Mill was born exactly 16 years earlier.
On May 20, 2002, Portugal recognized the independence of East Timor, formally ending 23 years of Indonesian rule and three years of provisional UN administration. Portugal was the former colonizer of East Timor until 1976.
In his 2012 State of the Union speech, President Obama declared, “It’s time to apply the same rules from top to bottom: No bailouts, no handouts and no cop-outs.”
Yes. He said that. But in reality, the handouts and cop-outs have kept on coming, like the solar wind.
A Washington Examiner editorial notes that while “Obama blasted the influence of insurance lobbyists and vowed to take on the industry … as president, he passed a health care law that funnels more than $1 trillion in subsidies to insurers, and fines Americans who do not purchase their products.”
Go ahead: call that a handout.
But what about bailouts?
While newspapers like The Washington Post insist that Obamacare is exempt from such an eventuality, there remains the part of the Affordable Care Act known as the risk corridor programs. These reimburse “insurance plans for claims that cost significantly more than premiums that new subscribers paid in,” according to The Post’s Wonkblog. The goal is to protect health insurance companies from the risks they face in the new Obamacare exchange.
Companies that make money will pay into a fund that will be used to bail out companies that lose money. But, after obvious complaints about limits, the Centers for Medicare and Medicaid Services (CMS) pushed a mandate that the program be revenue neutral, that the money paid out not exceed that paid in.
Last Friday, in 435 pages of regulations, CMS abandoned this call for budget neutrality. Instead, the regulation states, “In the unlikely event of a shortfall for the 2015 program year, HHS recognizes that the Affordable Care Act requires the secretary to make full payments to issuers.”
A taxpayer bailout: fully in place.
This is Common Sense. I’m Paul Jacob.
Fox News’s Bill O’Reilly and 2012 Republican presidential candidate Mitt Romney agree with America’s progressives: raising the minimum wage is common sense.
The Swiss had a chance to prove their solidarity with that notion yesterday, when they voted on whether to establish a minimum wage in the country, a rather high one of 4000 francs per month (something close to 22 francs per hour). They voted the proposal down.
Overwhelmingly. By over 76 percent.
Unlike in America, this minimum wage would have affected a huge hunk of the population. One out of ten Swiss workers earns less than the proposed minimum. In America, only about a single percentage of workers earns close to the national minimum.
This matters, as Frédéric Bastiat clearly explained, because price regulations can have two effects: a loss of production, or none at all — “either hurtful or superfluous.” No effect, when the price floor (as in a minimum wage) is set lower than the level most prices are already at (or, for which workers already work). But when the price floor gets set higher, goods go off the market — with too-high wage minimums, workers with low productivity cease to get hired.
Swiss voters could scarcely afford to risk the jobs of ten percent of the workforce.
In America, raising the minimum wage is usually a matter of sacrificing a few people (whom voters mostly don’t know — Bastiat’s “unseen”) while rejoicing in the higher wages of those workers retained (the “seen”).
In Switzerland, the government declared the down vote a victory for common sense.
Which it was.
This is Common Sense. I’m Paul Jacob.
On May 19, 1897, Oscar Wilde was released from Reading Prison. His “Ballad of Reading Gaol” would later become a classic, and his only great work following his imprisonment.
Legislation that limits or hampers exchanges is always either hurtful or superfluous.
Governments that persuade themselves that nothing good can be done but through their instrumentality, refuse to acknowledge this harmonic law.
Exchange develops itself naturally until it becomes more onerous than useful, and at that point it naturally stops.
What if the solution to the current political impasse would be to ignore party bosses and work with those with whom we disagree on so much? After all, we don’t disagree on everything. Click on over to Townhall.com, for this week’s Common Sense foray into political strategy. And back here, for more reading.
William Easterly looks at the inherent callousness at the heart of modern talk of “development.” His starting point, below, is the big difference in ideas between 1974’s dual winners of the Nobel Prize in Economics, Gunnar Myrdal and F.A. Hayek. Myrdal supported a double standard. Hayek did not.
Myrdal also promoted a huge assumption we still live with today: that of the benevolent dictator, the one who gets all the credit for progress. The common folk, you see, are just pawns in the dictator’s hands.
On May 17, 1973, televised hearings regarding the Watergate scandal began in the United States Senate.
On May 16, 1843, one thousand pioneers from Elm Grove, Missouri, set off for the Pacific Northwest, blazing what became known as the “Oregon Trail.”
Can the American people squeeze out the middle . . . like popping the world’s biggest zit?
Ralph Nader thinks the answer is Yes, if by “the middle” we mean the political center, where the Republican and Democratic Party higher-ups want to be, and where most folks in Congress find themselves.
Huge swaths of the American people, he says, are ready for some big changes. But the ruling insider class stands in the way.
What is needed? A coalition of progressives and libertarians and other independents willing to work together on issues like
Nader thinks a coalition like this is, as the title of his book has it, “Unstoppable.”
His book hasn’t been getting the attention it deserves. (Even from me: I’m at Disney World as I write this, and somehow reading of books hasn’t exactly taken over my schedule.) Nader, one of the most influential activists in American history, has hit a nerve, but not a lot of media outlets. I’m told he did chat with the folks on Fox Business News’s The Independents, but he could use more readers and more listeners.
Interestingly, Nader tips his hat to my day-job outfit, Citizens in Charge, as “already at work” doing what needs getting done, putting citizens (not well-connected businesses and pressure groups) at the center of the government.
By working for greater ballot access and initiative rights everywhere.
So, join us. (And I promise: no more pimple-popping metaphors.)
This is Common Sense. I’m Paul Jacob.