A Boogie Man Made Up to Scare YOU

There are a few myths, you could call them "boogie men," that have dominated how we think about the future and in doing so have altered how we understand our current political problems. In this post, I'll deal with the death of social security myth.

Particularly during the 2000 election, politicians, journalists, and analysts convinced us that social security was headed on its way to complete disaster. Politicians did this to push their political agenda, journalists did it because it was a great news story, and analysts...well there weren't too many and the only ones that were making noise either weren't being heard or weren't exactly sure what to make of all the commotion. The problem for analysts is that they had long sounded the alarm about social security: that it's basically a glorified pyramid scheme. So, when politicians started pointing to serious shortfalls in the system, they were at first excited that someone was finally listening to them, and then baffled when they realized that those politicians were just making problems up. Explaining why the talk of the death of social security was a myth was confusing and nobody had (or has) the guts to explain why. After Bush's victory, the issue became further confused as he proposed a privatization scheme. Instead of analysts explaining why this was even bigger nonsense, the scheme got shut down by Democrats scaring people into thinking that Bush was trying to ruin social security (which he was) without actually explaining how. Thus, we were left with the idea that social security was in trouble, but that fixing it would be siding with Bush. To sum up, social security was never fully explained to America and any debate surrounding it (from either the left or the right) has centered around the issue of fear. Since fear is powerful, politicians looked everywhere for fear and found it in a good line about how social security would soon be dead. Unfortunately, this is all nonsense.

Where to start? How about the beginning? All good diatribes start with history and this one won't be any different. The social security act was signed into law in 1935 under President Roosevelt during his so-called "Second New Deal." I won't go into the details of why it was created or why it's important, etc. Maybe I'll save that for another diatribe. The important point is that Roosevelt orchestrated the act and that he was a master politician that even Machiavelli would be jealous of. Roosevelt did three things to demonstrate how smart he was (despite the fact that he knew very little): he funded the program with payroll taxes, he separated social security from income taxes, etc., on employee checks, and he sold social security as a government-sponsored insurance system. Why was this so smart? I hoped you would ask:
1. between 1935 and 1952 when Eisenhower embraced the program, republicans/ conservatives put all their energy regarding social security into making it a program financed by the general fund [the general fund refers to all revenue collected by the government]. In other words, they wanted it to be financed like any other program. Why was this so important to them? Simple. By making it an appropriation of the federal government they could cut into it and eventually eliminate as they did with just about every liberal program when Reagan and Bush II took office. But, by placing the funds in a sealed program within the government, conservatives couldn't touch it.
2. By separating social security from other taxes, Roosevelt made sure that wage earners would know exactly where their payroll taxes were going. Thus, when we look at our checks we might think, "what is the government doing with all this money" for our state and federal income taxes, but when we look at the social security tax, we know exactly where the money is going. The gimmick paid off by giving the program a high degree of legitimacy and accountability.
3. by selling the program as a kind of old-age insurance, Roosevelt neglected to tell America that it was a quasi-pyramid scheme. To demonstrate, let me tell you the story of the first person to receive a social security check: Ida May Fuller, a Vermont resident, retired at the age of 66. She had paid $24.75 in payroll taxes when she retired, but like everyone after the program was created, she was entitled to full benefits. As it turned out, she lived to be 101 years old. That meant that she collected $22,888.92. One might ask, "where did all this money come from, if she only paid 24 dollars?" The odd scenario was created because social security payouts are not done through a locked account that you've been paying money into your whole life (as many people think) but out of current employee payrolls. This means that the continued success of the program depends on new entrants into the workforce; a.k.a. a pyramid scheme. Ms. Fuller played the part of the classic 1st entrant in the pyramid, receiving thousands of percents more value than she put it in, as did her entire generation.

As you may know, pyramid schemes get a bad rap. This is because they usually fall apart when there are no more new entrants. Such a scenario WILL someday happen (although it could be at the end of the world) when a whole generation of people who for their entire lives have paid into the system will not receive any benefits. This is the real fault of the social security system. Interestingly, it could happen anytime. It could happen tomorrow if Congress decided to end the program or it could end in 10,000 years. This is the insolvency of social security; it is also the only insolvency of social security...sort of.

But what about the whole end of social security thing? What about projections of a collapse in 2018 or 2041? What about the $11 trillion dollar deficit inherent in the system? Lies, lies, fibs, and half-truths (not in that order). All this talk about the end of social security as we know it began in 1982. In '82, budgetary analysts decided to finally address a major problem with social security: the baby boom generation. The baby-boom seriously upset how the system was financed and it meant that one day, when the baby-boom generation retired, there would not be enough funds to pay them benefits because they would be such a large percentage of the population. A commission headed by a young(er) Alan Greenspan came up with a solution: raise payroll taxes now on the baby-boom generation so that a surplus would be created to meet those demands in the future. And...the problem was solved. Let me say that again: the insolvency created by the baby boom generation has been solved...sort of.

So, why did we hear about it 20 years later as a big problem. For that we have Daniel Patrick Moynihan to thank. Moynhihan, who deserves his own diatribe, was a kind of half-intellectual, half-politician. By that I mean he wasn't a particularly good intellectual or a particularly good politician. In 1998, he headed a study that "discovered" a huge hole in the social security system that would explode in 2011 as the first baby boom generation began to retire. His reasoning was this: those payroll taxes collected for the last 20 years were collected in treasury bills. That means to redeem them, the SSA (social security administration) would have to go to the nation's revenue funds, get the money, and send it out to retirees. He then asked an interesting question, 'given our large deficit, where the hell are we going to get the money to pay the SSA?' hmm..sounds like a big problem...do you have any solutions?...I mean where could the SSA get this money?...it would be like if you put your money in the bank and then the bank used it for a whole bunch of loans...where would you go to get your money back???...






FROM THE BANK!!!!!!! The only reason that social security is not funded by general funds is that Roosevelt worried it could lose legitimacy and be vulnerable, thus he gave it its own funds (overseen by the SSA). The SSA then collects extra money, turns them into treasury bills as the government pays off debt and then gets the money back because it's still money that belongs within the protected funds of the SSA. In fact, to question if the government should pay SSA is not only ludicrous, it is a serious (unintentional) assault on the entire legitimacy of social security. And legitimacy is important for social security because...well, it's a pyramid scheme. Not paying back the SSA would be not paying back all those retirees who have been paying extra money into the system for the last 20 years. In reality, the extra payroll tax was a brilliant ploy because it allowed the treasury to pay less interest on its deficits all those years. Unfortunately, it means that we have been having even BIGGER deficits the last 20 years than previously thought and it means we will have BIGGER deficits in the future as we pay back the SSA. But it is not because of SSA that we have those deficits, in fact, without the SSA our deficits would have been even BIGGER as we would have had more debt to pay interest on (translation: the Reagan deficits were even BIGGER than we were told and the Clinton surpluses really were about breaking even...which is why you never hear about this...neither party wants to tell you how badly they've been doing the last 20 years...)

Moynihan's report drew attention to an issue that didn't really need any. In response, politicians took advantage of the hysteria, apparently realized that Moynihan was crazy, and started scaring people with more problems that weren't problems. In 2000, Gore and Bush gave their solutions to a problem in social security that wouldn't become one until 2041 or 2048, depending on which analyst (called actuaries) you asked. According to the SSA actuaries, around 2048, the surplus built up between 1982 and 2011 will become exhausted. After that date, the SSA would not have enough funds to fully fund the benefits of retirees. This is the "sort of" problem I mentioned earlier with the baby boomers: in the 2040s the children of baby boomers will begin retiring. Coupled with the expected increased life expectancy of the baby boom generation, this will represent a drain on the system. It was a demographic feature not included in the 1982 solution. It is from this problem that Bush and Gore based their programs to save social security.

Before I go through why this is all nonsense, let's go through the Gore and Bush proposals of 7 years ago (remember that back then, before 9/11, there wasn't much to talk about except social security and tax cuts). Gore's solution was the oft-SNL parodied "lock-box." Gore said the way to solve the problem of the 2040s and any future accounting problems would be to create a kind of 'rainy-day' separate fund to rescue social security. He would do this by using the surplus accrued during the Clinton years and by not giving a huge tax break to the wealthy (as Bush would do).

Bush's plan, which he would finally attempt to pass in 2005 following his "presidential mandate" victory in '04, would be to establish private accounts. The whole plan was a bit complicated and even more slimy, so I'll try to go through it quickly. Look at it this way, social security would not be able to pay full benefits to retirees in 2048 from a lack of funds. Bush's solution would be to stop the collection of the surplus payroll taxes and instead allow current workers to use it for private investment in the stock market. He argued that investments in Wall Street would increase the value of those accounts sufficiently to pay for 2048 and afterwards. Sounds good? Well, here are a few things to consider:
- the plan calls for a kind of optimism in the stock market that...well requires a lot of the faith that Bush is always wearing on his sleeve. Revenues gained from investment would have to grow faster than treasury bill interest rates to have any effect. And of course, the stock market could crash and then...no more social security. How every working American would be able to manage these portfolios is also a mystery.
- the plan would halt the pyramid scheme: with private accounts you actually would be collecting your money at the end that you had been putting in while you were working. If we can get more out of the stock market than through the payroll taxes, why would you want social security around anyway? that is the question conservatives hoped you'd be asking. The entire plan is a way to convince America that social security is a lousy welfare program.
-with even optimistic projections, the best we could do would be to receive full benefits when 2048 comes around. Well, if that's the case, why don't we find another way to guarantee full benefits that wouldn't put the entire system at risk? It's a good question and there's a reason Bush and Cheney used a lot of gloom and doom talk when selling the private accounts program to convince people that social security had no future: it is easily fixed.

There are a variety of ways to fix the 2048 disaster. One, suggested by Gore is the lock-box. Another way could be the same used in 1982: raise the payroll taxes. Of course, when this was suggested by Kerry, republican attack dogs charged that he was trying to raise taxes. Well, if Reagan could do it, why can't we do it now? We could also raise the maximum income taxed for collection. I didn't mention it earlier, but as part of the compromise when the social security act was passed, Roosevelt agreed that there should a cap on the income that were subject to payroll taxes. For example, if you made $120,000 a year, you might only have to pay payroll taxes on $80,000. You then would receive benefits for a person who paid $80,000 a year (by the way, social security is slightly progressive in that those with larger salaries get slightly less retirement benefits as a percentage of what they pay than those with smaller salaries). Simply by raising the maximum limit by 15-20 thousand dollars we could solve the looming "disaster" in 2048. This isn't a big tax hike. Those that had more money subject to payroll taxes would receive MORE social security benefits when they retired to compensate. Still, the system would be solvent. In fact, there are all sorts of gimmicky ways to fix social security (raise retirement age, slightly decrease benefits, have a general fund tax) that won't risk completely ruining the system. Because of this flexibility, there really is NO PROBLEM. It's just a matter of how we decide to fix it.

What the Roberts Court Means for America

I spent a lot of time on the Supreme Court in my last post. I even defended the dual free-speech cases decided on Monday. However, today, the Roberts court showed the new direction of the court and suggested what impact it will have on American society and economy.

As you may know, Justice Sandra Day O'Connor stepped down from the court last year and with the simultaneous death of Chief Justice Rehnquist, Bush appointed two new conservative justices, Alito and Roberts. O'Connor long served as the moderate swing vote on the court. She was appointed to the court despite not having strong conservative credentials by Ronald Reagan because she was the best conservative woman Reagan could find after he promised to appoint a woman to the court in a 1980 campaign pledge. O'Connor, who leaned conservative in many of her decisions, would often side with her liberal colleagues in somewhat random cases (most famously those involving abortion and affirmative action). With O'Connor gone, Bush replaced her with more steadfast conservatives. I should mention that both Roberts and Alito are competent judges, unlike Thomas, and were reasonable choices, unlike Meyers, given that everyone knew that Bush was going to appoint conservatives. It is not that Bush picked bad judges, it's that he, as a conservative, chose conservative judges. Now we live in a country where our laws are interpreted by appointments of a political ideology, conservatism, that our nation voted for (sort of, when considering that the 2000 Florida recount was stopped by a 5-4 decision in the Supreme Court). The two cases decided today give us a glimpse to what conservativism at the last court in the land means for America.

In two joint cases, Parents v. Seattle and Meredith v. Jefferson, white parents sued their school district for using race to assign which schools students could attend. In Meredith, the child was unable to transfer to another school for kindergarten because only minority (in KY this means black) students were being allowed in since the school did not meet a district mandated 15% nonwhite student body. A similar complaint was brought in the Seattle case, which involved another district law that high schools could not drift more than 15 percentage points away from the district's overall makeup (60% of the students in the district are nonwhite.)

In today's decision, in a predictable 5-4 vote, the supreme court invalidated school assignment plans that take race into account. Ironically using Brown as precedence, the court decided that using race to place students in different schools was a violation of the 14th amendment. This means America will finally have racial equality, right?

Not quite. First, we must ask ourselves, why do districts have these placement systems in the first place? Brown ended the practice of official segregation of public schools. Previous to Brown, no matter what neighborhood a child lived in, or even if they lived across the street from the school, black kids went to black schools and white kids went to white schools. Brown forced districts across the country to end such practices. Since the decision, however, except in the big cities where groups were hyper-segregated, residential segregation has increased. This is largely a result of white flight to the suburbs away from the ghettoizing and darkening inner-cities. As America became more residentially segregated, its school system came to reflect it. Now instead of going across town to go to the black school, black students walk to their neighborhood dilapidated school while white students drive luxury cars to their suburban white school. I'm being hyperbolic, but this was the way America reacted to Brown. Of course, many people who left the city for the suburb with the intention of getting their kids into the "white" school did so not because they were racist, but because they wanted their kids to be in good schools and they wanted to leave a poorer neighborhood before it became run-down. This is something that every family wants, it's just that the white families had the resources to actually do it. The result was schools with incredible inequalities in the racial profile of the students and the school-funding not just in the same area, but within the same school district. Thus, in the late 1960s, federal courts began forcing districts to first deal with the vast inequality in school funding and then with the growth of highly segregated schools.
In one such decision in 1971, Serrano v. Priest, the supreme court ruled that districts had to equally distribute property tax funds (which were primarily used to fund public schools) across the whole district. Previously, property taxes were given to the school that served the neighborhood, resulting in richer neighborhoods having much wealthier schools. It shouldn't have come as a surprise when items like Proposition 13 sprung up to solve the problem by slashing property taxes (leaving school funding mostly to the state and "voluntary donations," which of course disproportionately came from richer neighborhoods and COULD be given to individual schools).

With such persistent inequalities in wealth within school districts came equally insistent inequities in student body make up. Within some districts, better schools were about 90% white, while worse schools were 90% minority. When such a district crossed some threshold and became what a federal court called 'segregated' they either took over the district or court ordered it to rectify the problem. Often the solution was forced busing. Ironically, forced busing placed students in a position they were before Brown--of being bused across town to a school far away when they may have lived across the street from a better school--except now it was done in the name of desegregation rather than segregation. Since the practice was so unpopular for a variety of reasons, school districts sought means to achieve the same ends that would be less unpopular with parents. One way, which was used in the high school I attended, was to start magnet programs in inner-city schools, thus putting more funds in poorer schools and attracting students of a different racial (and economic) make up into the school voluntarily. The other, which is what these supreme court decisions are all about, was preventing transfers to wealthier schools by white students and placing more white students in predominantly non-white schools if those schools were reasonably close by. For example, I live on the outskirts of my city and all four high schools are in the center of the city and in relatively close proximity. Imagine that the of the four schools in my district 2 of them were predominantly white and 2 were predominantly black, the district might send me to the predominantly black one for integration purposes because all of the schools are near each other and the busing difference would not be significant. Likewise, a black student living in the center of the city might be sent to a white school, because even though he's closer to the black school, he's still pretty close to both of them. It is these kinds of tweaking of school lines and limits on transfers that have allowed districts to push towards some type of desegregation.

With the decisions on today, schools will no longer be able to use race as a tool for preventing segregation as I described. The decision will have two effects. One, it calls into question the entire idea that schools should be desegregated. If race cannot not be taken account for school assignments, then how can a district do anything to desegregate itself. Secondly, it will force districts to find other means to solve problems of economic and racial inequality within their district. Possibly, schools could use family income rather than race to place students. Such a system has never been attempted and may simply cause richer residents (white or black) to leave the district.

The decision makes it much tougher for districts to desegregate and calls into question the stated goal of desegregation. Additionally, in its argument that to 'treat races fairly we need to treat races fairly' is the seed to undue affirmative action as a whole. I'll save it for another post, but I am actually opposed to affirmative action. I am opposed to for a few reasons, but one main one is that I believe that the need for affirmative action can be solved through public school desegregation. We live in a world of vast racial inequality. It is with the public school system that America has its only real hope for integration of people of diverse economic and racial backgrounds. The push for such desegregation has originated with federal courts. With this decision, this will less become the case. Rich, poor, black, and white students all benefit from a diverse student body. This is not to mention the benefit it affords to a democratic society. If we cannot come together in the public school system, where will we come together. Where will the fortunate get a glimpse of America's underlcass and where will the unfortunate raise themselves out of their situation? Where will America learn more about each other than Chappellistic stereotypes (yes, I just invented the word Chappellestic)? The decision signals an to the end of a battle for America to truly achieve a color-blind society that America has long been losing.

After that peppy diatribe, let's move on to the Supreme Court's second big decision. This one is a little more complicated. To describe it in simple terms is a little misleading, but to go into the details makes it lack some of its importance. I'll try somewhere in between.

In Leegin v. PSKS, the court decided, 5-4 again, to overturn a law made in 1911 that illegalized certain price floors. For those of you who never took economics (or fell asleep trying to) a price floor is a minimum price that a good can be sold for. Economics teachers drill into their students that price floors are bad, because, well, most economics teachers are neo-liberal arch-conservatives (more on this in another post) that don't know what they're talking about. But that aside, the issue here was not government enforced price floors, which economics teachers hate, but price floors agreed upon between companies, which economics teachers never talk about, because they've been illegal since 1911. The issue in this case was weather a discount retailer could sell a good less than its producer allowed. Producers don't want discounts to get to extreme in relation to their products because they fear it will upset their other sellers and it might cause a drop in their selling price. Thus, producers often make agreements with sellers that they cannot sell something for less than an advertised price. This is a notorious practice for guitar companies and is also why Ross does not usually advertise with the labels of their merchandise. Up until today, producers could not form agreements with sellers that would force them to not sell below a price floor at all. Now, this is permisible.

So, what's the big deal? For those of you who don't know your history, 1911 was the heyday of the progressive movement. One of the goals of the movement was to engage in "trust busting." Trusts were basically cartels, which are basically oligopolies. In those economics classes you might have heard all about supply and demand and the beauty of the free market and all that stuff. With all that pretty stuff they would always include a little disclaimer for every economic principle that sounded something like "in a perfectly competitive market...," which is the economics equivalent of physicists "in a vacuum..." While good for simplification of formulas and ideas, it also means that everything you learn in economics and beginning physics applies to phenomenon that are almost completely absent on earth. Additionally, as you add more air resistance the equations become less and less descriptive of what you're supposed to be describing (try dropping a baseball from a tower in a hurricane), and as you lessen competition, the laws of supply and demand begin to have less and less relevance.

In a perfectly competitive market, firms will seek to lower their prices to maximize sales. As a market turns moves towards monopoly, the system becomes less consumer friendly. In a monopoly, firms seek to raise prices to maximize profits. Simple game theory will tell you that two competing firms, if they can come to an agreement, would both benefit from not engaging in price competition. This is good for the companies, but bad for the consumers who end up paying more to increase the company's profit margins. This is why the progressives went after businesses for engaging in oligopolistic practices like price floor. If a seller and a producer are allowed to agree on a price floor, there's little reason for preventing companies from agreeing on price floors with each other. The result would be price gouging of consumers and big profits for businesses. Should we be surprised then that the decision was made by the court's 5 conservative members. There's a reason they're there.

So, how did we get from the progressivism of the Warren Court, to the moderate reaction of the Rehnquist Court, to the 5-4 conservatism of the Roberts Court? There's an easy answer. In between 1932 and 1968 (36 years), the years that the Warren Court was built, the Democrats held the presidency for 28 years. In between 1968 and 2008 (40 years) the Democrats have held the presidency for 12 years. It's simply probability as to when justices are forced to retire. Of course, justices usually like to step down when they think their replacement will agree with him/her, which is why Clinton was able to appoint 4 justices. Still, the dominance of Republicans at the executive level has allowed conservatives to turn the court in their favor away from the judicial philosophy of the Warren Court. The result has been and will be decisions like those announced today.

Free Speech

Free speech and the first amendment have recently been in the news following some controversial supreme court decisions. Despite the fact that the decisions are considered to be conservative (basically because it was decided by the 5 conservative justices on the court: Roberts, Alito, Thomas, Scalia, and the swing vote Kennedy) I actually agree with the decisions. Without going into details, I'll just say that today's conservative justices are actually more intellectually coherent on the issue of free speech. The following post, however, has little to do with the court's most recent opinions. Instead, I want to look at the history of law regarding free-speech and suggest the direction that future rulings on the subject should go.

A good beginning would be the actual text of the 1st amendment: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." As you can see, a lot of the 1st amendment deals with other issues besides free speech, namely freedom of religion (which will be covered in another post), freedom of the press, freedom of assembly, and freedom of petition. Of course some of those other issues deal directly with freedom of speech (freedom of the press, in particular). If one is to isolate the words related to speech, the text becomes 'Congress shall make no law abridging the freedom of speech.' Notice that these laws limit themselves entirely to acts of Congress. In other words, there are no restrictions on the states or the executive. Legal practice soon came to broaden the bill of rights by applying it all laws restricting Congress to the executive branch where it was constitutionally appropriate to do so.This was the limit of the constitution in terms of free speech until the Civil War. After the Civil War, 3 amendments were passed that broadened some protections against citizens. Specifically, Section 1 of the 14th amendment states "No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States." It was initially unclear exactly what privileges and immunities were meant to be included as protections. Eventually, through legal theory developed by Hugo Black (who ironically was a former KKK member) and instituted via the Warren Court, the 14th amendment became interpreted to cover the bill of rights as 'protections and immunities' from states granted to citizens.' In other words, the 1st amendment, for example, became broadened to include actions not just by Congress, but by the states as well. To conclude, supreme court ruling precedence and new amendments have pushed the 1st amendment to include rights that cannot be abridged by any government (federal, state, or local).

However, the court has also placed limits on free-speech. Believing that absolute free-speech could cause insurrection and/or criminal activity, the supreme court has searched for a formula that would protect the right, but also limit the most egregious activities. It is from this desire that the court upheld Wilson's Espionage and Sedition Acts (to some degree) in Schenck v. U.S. by invoking the idea developed by Justice Holmes and Brandeis that free-speech should only be limited when it presented a "clear and present danger." The example that became adopted in the popular understanding of the phrase, of 'shouting fire in a crowded movie theater,' is a highly misleading analogy. Instead, the "danger" refers to the danger of people engaging in criminal activity or endangering the republic. Under this ruling free speech can be curtailed if and only if the government can demonstrate that the speech would encourage criminal activity or hinder the Congress from carrying out its basic duties. As you can see, the movie theater analogy has almost no application to the latter guideline. Rather than shouting fire in a movie theater, the "clear and present danger" test applies to telling a soldier that the war he is fighting in is an unjust one because this may cause him to desert (both a criminal act and a hindrance to Congress's ability to carry out a basic duty, that is, waging war).

Schneck was decided in 1919, but the Supreme Court was still unsure of what the ruling meant. The Schneck case had been applied to a wartime scenario, thus it was unclear what the limits of free-speech were in peacetime. So, in Dennis v. US, the Supreme Court broadened limits to free speech. In this case, the court upheld the Smith Act, which outlawed subversive (communist) activities that threatened to overthrow the government. Justice Vinson argued that Congress has the right to prevent speech that may advocate for the overthrow of the government. As he argued, using vitriolic language, "''[o]verthrow of the Government by force and violence is certainly a substantial enough interest for the Government to limit speech. And in combating that threat, the Government need not wait to act until the putsch is about to be executed and the plans are set for action." Instead of merely identifying a "clear and present danger" the government had to demonstrate that such an insurrection was at least somewhat realistic or possible. In other words, a drunkard in Kansas could not be convicted under the Smith Act for saying he wanted to be King of America, but a communist party organizer saying that capitalism needs to be overthrown could be.

Thus, in the age of McCarthy, protections against infringements of free speech were at their lowest. In 1969, however, the Warren Court overruled the Dennis decision with Brandenburg v. Ohio, which is still the law of the land. In the case involving a KKK rally, the court completely rid itself of "clear and present danger" and instead installed a new test that linked abstract speech to action by requiring that any infringement on speech that uses the advocacy of violence or criminal action for its basis must demonstrate that "such advocacy is directed to inciting or producing imminent lawless action and is likely to incite or produce such action (stress added)." The key was now "imminent" danger rather than the unclear "clear and present danger" of a half century ago. The court did step back and add that such a strict defense could be reexamined in a condition of wartime (which was somewhat bizarre given that the nation was in the middle of the Vietnam war). Brandenburg serves as the test for free speech today.

However, I believe that the ruling is flawed. Firstly, as the history I have ran through demonstrates, freedom of speech protections have been more dependent on the composition of the supreme court rather than on an abstract principle. This is alarming because this is not at all how the Bill of Rights were intended, nor is it a good way of administering law (if one doesn't know what is illegal, how can one avoid breaking the law). Instead, we need an absolute right to free speech. Secondly, the ruling quite directly opens itself to overrule during wartime. This is highly alarming since it is in a state of wartime that free speech is most often infringed. Before I begin tearing down Brandenburg, I should acknowledge the achievement of the Warren Court. Frankly, I think is perhaps the second greatest thing to happen to this country (my top four would be the Declaration of Independence, the Warren Court, Lincoln, and Franklin Roosevelt). The court dominated by Warren, Black, Frankfurter, Douglas, Fortas, and Brennan was bigger than any president and more drastic than any legislation. The Brandenburg case was a great step in the right direction and it successfully cast off the ridiculous rulings in Dennis and Schneck. With that said, the court missed a grand opportunity with Brandenburg. While better than its predecessors, the decision was seriously flawed. Part of the problem was the details of the case. Yet, the decision has remained the standard and now as the court turns more conservative there is little chance that it will be altered in the direction it should be.

The main fault with Brandenburg is that it failed to lay down a firm protection of political speech. Political speech in any circumstances, unless it particularly advocates violence, should be permissible in all circumstances. Additionally, acts that are done for political theater, unless there is a reasonable reason for the act to be illegalized, should be allowed (burning draft cards should be legal, although not reporting for duty can be punishable.)There need not be any other restriction. Unfortunately, Brandenburg sets down several limits. For one, it refers to advocacy of "lawless action". Under these criteria, a government need only to illegalize any kind of protest, etc. to limit the freedom of speech of someone trying to organize a rally or a petition, for example. By including "lawless action" the decision leaves itself open to easy loopholing.
Secondly, by not making a distinction between political speech and non-political speech, the ruling protects speech that doesn't need protecting.
Thirdly, the entire basis of limiting political speech, that people will be manipulated by demagoguery or pushed towards insurrection, is retained. Such a basis, (as the term DEMAgoguery might suggest) is essentially anti-democratic. It rests on the idea that people are easily manipulated and can't make their own decisions. If this is true, then a democracy cannot function. In fact, the whole reason the founding fathers installed a right of free-speech is because they felt that all political expressions should be able to compete in the marketplace of ideas. If an idea is a good one it should be listened to, if it isn't, then it won't be. It is not up to any person, government, or group to decide which ideas are good. It is up to the people. It is remarkable that such a basic fundamental principle of democracy is easily cast aside. No matter how radical, racist, revolutionary, or conservative a speaker may be, he/she should be entitled to express their political opinions. As I mentioned there should be some limits to this, but only two: it should not be obscene if it is in a public place and it should not advocate violence (because this could directly endanger the lives of other citizens). Beyond those restrictions, there shouldn't be any as long as the speech is political.

Fourthly, the decision does not solve the problem of speech in wartime. Every major war in American history has been accompanied by severe curtailment of political speech. Under Adams there were the Alien and Sedition Acts (and there wasn't even a war), under Lincoln there was his suspension of habeus corpus and his handling of C.L. Vallandigham (for my abridged history paper on this subject, go here), in World War I we had the Espionage Acts, in World War II we had Japanese internment, in the Cold War we had all sorts of restrictions including the Smith Act, Taft-Hartley, and HUAC, and today we have the Patriot Acts. In each case, speech was restricted needlessly and with each case (with the exception of the Patriot Act) historians have almost unanimously condemned those restrictions. They did so with reason. Governments have pushed for restrictions of on freedom of speech in wartime not because they needed to, but because they could. Since I'm talking purely about political speech (as opposed to revealing troop positions, for example), free speech has no military relevance. Realizing this, most governments claim that free speech hurts troop morale. Well, if troops are willing to die for freedom, perhaps they'd be willing to put up with it. The final rationale, that free speech decreases support for the war is nonsensical. Of course it decreases support for the war; that's exactly its intention. In case our leaders have forgotten, the United Stats has been involved in plenty of crazy unjust wars. It is the right and duty of citizens to challenge the moral righteousness of any war. The morality of war is decided by the people in how they express themselves and how they vote (and also by historians), not by the government. The former means freedom of expression, the latter can only be fairly accomplished with freedom of expression. Thus, absolute protection of political speech cannot be a side issue dealt with in the future, as it is in Brandenburg. If it is absolute, it must be that. It must not be open to negotiation during wartime, but most fully practiced during wartime. The insanity of our current war testifies to the need of citizens to speak their mind. After all, our ideas can't be any crazier than our present administration's.

The Great Health Care Debate

Every 4 years health care pretends to be a big presidential campaign issue. This is despite the fact that nothing has been done with it since the establishment of Medicare and Medicaid in 1965. However, because there are few real domestic issues to talk about and two major candidates (Edwards and Clinton) have made it "their" issue in the past and present, it has (re?)emerged as a major issue once again. Unfortunantly, much of the debate surrounding health care is muddled because of the number of interest groups, political opportunists, people who nothing about it, and people with unsubstantiated opinions. Hopefully, the following diatribe will help steer you through some of the confusion. As always, you have to start with history.

The first modern health insurance was given to Los Angeles workers on an irrigation project in 1908. As part of their wages, they were given access to doctors and medical treatments as a means to promote efficiency. Although often taken for granted, health insurance, from its beginning, was driven by employers who saw the benefit of a healthy work force. In 1929, as the depression hit, Baylor University Hospital offered a prepayment insurance plan to people in the surrounding area in order to avoid bankruptcy. The hospital joined with others in the area eventually evolving into Blue Cross. In 1939, the first true HMO (Health Maintenance Organization) was founded by Henry Kaiser to attract workers to work in his shipbuilding plants (as part of the preparedeness strategy for World War II) in Richmond, CA. (My grandfather was one of the first patients of the Richmond Kaiser hospital. After a crane operated by a drunkard smashed his leg, he awoke one day in his hospital bed to find Henry Kaiser willing to strike a deal with him: if he didn't sue, he'd give him lifetime employment. My grandfather didn't sue. He would later get a job with Pacific Bell.) In 1945, Harry Truman proposed a national health insurance scheme that would provide universal coverage based on payroll taxes (similar to social security and the model for medicare). However, the plan was struck down basically by the organizing of one interest group: the American Medical Association (AMA). The AMA is an association of doctors and is akin to what the bar association is for lawyers. The AMA had a few reasons to oppose Truman's plan, including that it would set how much they could charge for specific services and it would force doctors to deal with certain patients. Interestingly, the most prevalent and appealing rationale was that Truman was trying to "socialize" or "communalize" medicine. At the time, America was in the grip of anti-communist fervor and doctors tended to be very conservative. With hindsight, it was a bit of paranoia considering the rest of the industrialized world has adopted a similar plan and have not fell to the communist menace (yet?) and America has been able to survive despite "socializing" medicine for retired people and poor children (medicare and medicaid)

With the failure of the Truman's plan, medical insurance was thrown into limbo, basically to this day. Without a national plan, employers and employees found privatized health cooperativese (HMOs) to fulfill their medical needs. This of course left millions completely uninsured. In 1965, an attempt was made to solve some of the egregious results of privatized health care by using a social security surplus from the baby boom generation to help fund medicare and medicaid (more on social security in a later diatribe). The most recent health care proposal was made by Bill Clinton in 1993. Hillary was put in charge of the plan and she went to work: producing a massively complicated 1,000 page bill to congress. It was so complicated I can't really discuss it here, but basically the plan aimed to provide everyone with health care that they could reasonably manage on their own, cut health care costs, and cut down on bureuocracy and paperwork. Also, you'd get a health care card to carry around everywhere you went, which I think would be pretty cool. I'll save a full discussion of the Clinton plan for another post, but I'll just say this: it was an awesome plan. It was also the most confusing piece of public policy in American history and easily derided by interest groups who could simplify it into what it wasn't. It was another case of our news media completely failing us.

Fast forward to 2008, and we're faced with another "Great Health Care Debate." As I said, these kind of "debates" happen every four years. Basically, Democrats are waiting for health care costs to get so ridiculous, which they will, that people will have to turn to them. They've been waiting for a while (basically since 1945). Unfortunantly, a lot of people know there's something wrong with health care, they just don't know what. That's because there are four problems (actually, there are 5, but I'll get back to that later):

1. Lack of Universal Coverage: Every country in the industrialized world has universal health care except the United States. Why does everyone else have it? Because your gardener with measles is allowed into your gated community. In other words, even the rich have an interest in everyone around them being healthy. Currently about 20% of the country, 60 million people, don't have health care of any sort. Since hospitals have to help people with emergencies regardless of whether they have insurance or can pay for it, a lack of universal coverage costs hospitals a lot of money, by the way. So what? Who cares if the hospital has to spend money? The answer is that you do...or should. Public hospitals are funded by taxes (which means you pay for it) and private/HMO hospitals are forced to raise their hospital rates, which means you have to pay more to be at the hospital (which are now crowded because fewer are being built because too many people who can't pay are going to them because they're not insured) and they raise their insurance rates. Honestly, these costs are a drop in the bucket, but what isn't a drop in the bucket is all the money that is used to treat uninsured people for diseases and ailments that could have been prevented if they had regular access to a doctor if they had medical insurance. Lastly, because HMOs are driven by profit they have an inherent interest to maximize the costs for the consumer, assuming they can remain competitive. Of course, a privatized health care may cause costs to lower because of competition, since so few companies are actually involved in health care and there is significant economies of scale in the health care industry, there is actually relatively low price competition, and when it does occur, it is usually only for the short term. Contrasted with public and non-profit universal health care systems, private health care providers are less concerned with pushing down the costs to the consumer, although they may be more efficient. However, in a market where efficiency often translates to poorer services since there are few options, efficiency as it understood in this context may not actually be a good thing. In fact, because physicians have so many overlapping regulations from HMOs, hospitals, and the government, the private system may actually contribute to MORE bureaucracy and paper work. This just adds more and more costs.

2. Expensive Drugs: You've all heard about those old people going to Canada to get their medication, right? Why do they go to Canada? Because Canada has a national health plan that sets how much drug companies can charge for a certain drug. If the company refuses to sell it for that low...well, then they don't sell them to Canada. Presently, no drug company is boycotting Canada. Well, you might ask, if Medicare is great, why do the elderly have to go to Canada? It's an accident of history. When Johnson signed Medicare into law, the pharmeceutical industry was rather small and did not have the fancy drugs it has now. Johnson just assumed it wouldn't be a problem for people to pay for their own medicines. With some drug costs amounting to $20,000 a year, this has become a disaster.

3. Doctors, Hospitals, HMOs Can Charge Whatever They Want: Without government oversight and regulation in this area, the above mentioned groups can basically charge whatever they want for services. Of course, it's not that simple. Doctors if they're part of an HMO charge whatever the HMO says they can charge (apparently doctors like to be told what to do by a businessmen rather than a politician). A similar thing happens with hospitals and HMOs. HMOs then are limited by the laws of supply and demand and can only charge what people are willing to pay. Thus, everything's peachy pie and the free-market works, right? Well, sort of. There can be a large discrepancy in costs for certain procedures between different HMOs and the average consumer can't figure out what would be the cheapest way to get it. The bigger problem, though, is that a free-market only works when there is free-competition (in other words, never). There are only a limited amount of HMOs an employer or employee can choose from. HMOs have gotten good at carteling their prices to raise them to ever higher level and less good at using price-competition. Hospitals in particular have been hit by a deregulatory fervor left over from the 1980s that sold off most hospitals to large companies who are very intent on gouging their clients. The result has been increased costs for the consumer (a.k.a. you and your employer).

4. Lawsuits: Without government oversight, private doctors have become vulnerable to giant and ridiculous malpractice lawsuits. Surgery isn't easy, but if you as a doctor, who's spent a decade training for the profession, screw up, you could become bankrupt. Most doctors get equally outrageously expensive malpractice insurance plans. Of course, who ends up paying for the added costs for the doctors? If you guessed someone else...you're wrong.

All four of these problems have contributed to an immense increase in the cost of health care. So much so, that HMOs have had to raise their prices. This not only means that both employers and employees have to pay more for health care, but also that small businesses can no longer afford paying for employee health care.

The result has been even less people being covered by any kind of health insurance. Let's look at the numbers. The United States notoriously spends the most money per capita on healthcare in the world. For every man, woman, and child, the US spends about $5700. Comparatively, the UK and Canada spend about $2500. Honestly, comparisons to Britain are misleading because the British system is hyper-centralized, of poor quality because of lack of funding, and would never be used in the US for a variety of reasons. Comparisons with Canada are also questionable because the nation does so much free-riding off of American medical technologies. Additionally, France's system does not lend well to comparisons because it is so highly socialized and controlled by the central government. Instead, I like to use Japan and Germany for comparisons. In both cases, health care is extremely decentralized (which would lend itself well to American federal structure) and contains elements of privatization within a larger nationally run system (in other words, it's similar to what we could have, especially if Truman had won his battle against the AMA). Japan, by the way spends $2600 per capita and Germany $3200. Germany and Japan are interesting also in that their governments spend less on health care as a percentage of government spending than the United States. This is because both systems have been highly de-bureaucratized.

But just because a country spends less on health care, it doesn't make their system any better. A country could spend nothing on health care and...well, they wouldn't be very healthy. Thus, we need some measurement to compare the health value of certain systems. There are a number of different statistics to look at. One easy one is life expectancy. The U.S. life expectancy is 77.5 years compared with 80 in Germany, 82.5 in Japan, 80.5 in Canada, and 79.5 in the UK. Of course, there are a number of reasons why people might live longer that have nothing to do with health care spending (for example, pollution, working hours, age of retirement, etc.) A better statistic then could be infant mortality. Once again, the U.S. is behind: .6% of infants die in the U.S. during the first year of life, compared with .3% in Japan, .4% in Germany, and .5% in the UK and Canada. There are a variety of other statistics I could use to prove the same point: the US, despite spending almost twice as much on health care per person than other developed countries, has one of the lowest health benefits out of its system.

There are essentially two reasons for the inherent comparable inferiority of our system. One is that we, unlike everyone else, do not have universal health care. This has caused a lot of our statistics to become skewed: the early deaths and infant deaths are suffered disproportionately by uninsured people. Some might call this unfair skewing, others might call it indicative of the worst pieces of our health system. Essentially, about 20% of people in this country have health care that is comparable, if not worse, than that in 3rd world countries. Amazingly, a good chunk of our population could look at health care in Cuba, China, Nigeria, or Slovenia with envy. (speaking of which, in a 2000 world ranking of health care systems in the world by the WHO, the U.S. was listed as 37th, one spot ahead of Slovenia and two spots ahead of Cuba.) The other reason is the 5th reason why health care is so expensive that I foreshadowed earlier. If you remember those movies where some struggling father (who usually looks like Greg Kinnear) finds out that his daughter has leukemia or some other terminal disease and he promises to do everything he can to provide her with the best treatment money can buy as he works 7 jobs to find a cure, you'll have an idea where the fifth expense comes from. While it may sound heroic and it makes for a good movie, it is not the best strategy for managing health care. This is because while to that father no amount of money would be too much to his daughter, as a society the value of saving that child is severely diminished. After all, how much money would you give for treating a terminally ill child in Wisconsin? If it's a lot, I can give you some websites and phone numbers. For most people, of course, your wallet is limited and that money could probably be spent better somewhere else. It's sad, but true. However, unlike in every industrialized country in the world, the United States' health care system spends millions of dollars keeping alive terminally ill patients. It is estimated that about $1000 per capita could be saved by "streamlining" when hospitals send home patients and give up on treatments. It's cold but true. The British health system is notorious for such coldness, but most other systems have installed a variety of methods of cutting back on such costs. The U.S. even has its method: most HMOs only cover hospital bills for a month, then you're on your own. That means that if you suffer irreperable brain damage, but still can "live," you'll only be able to do so if you have a special health care package or very wealthy relatives. Given that, you may guess why U.S. health care costs are so statistically inflated: when the insurance runs out, Americans, because they want to be the guy in the movie and because compared to the rest of the world, they have the money to do it, are more likely to support terminally ill patients and patients with irreperable brain damage.

I separated the 5th reason from the rest because it has little to do with health care reform and more to do with economics and American temperament. As I mentioned, changing some rules could save as much as $1000 per capita, but the reason that HMOs don't is because Americans don't want to do this. Fair enough. There are other ways to cut back costs.

In fact, a variety of ways are being proposed during this election campaign. The proposals of the Democrats have driven the debate. In reality, the difference between the Obama, Clinton, and Edwards plans are negligible and trivial. Honestly, the only reason these candidates have a plan is to, one, establish themselves as viable candidates, and two, give the Democrats something to talk about in debates. It doesn't hurt that talking about health care helps the Democrats. You may have noticed that the candidates have not released their Iraq plan yet. All plans that have been proposed and will be proposed by the Democrats have the following characteristics:

1. they will mix private and public systems and include HMOs.

2. they will seek a cost cutting mechanism. Clinton has proposed a panel to analyze and regulate medical practice efficiency. More conservative candidates may focus on tort reform, just because they hate lawyers like John Edwards.

3. They will seek universal or near-universal health care. Because his plan is not compulsory, strictly speaking, Obama's plan is not a true universal health insurance coverage plan. This is more a technicality more than anything else. Look for all the other candidates to exploit this in debates.

4. They will maintain a patient's ability to choose a doctor and give them some flexibility in their preferences.

5. They will pretend their plan is simplistic when it is extremely complicated.

6. They will address drug costs.

7. They will be very confusing and boring.

The Republicans have been less willing to propose a health care plan because they know it's not an issue they're going to win with. In many ways, they will basically argue that the status quo is okay and all that is needed is a few minor tweeks. In 2004, Bush did just that with a half-assed drug plan and a highly conservative tort reform package that had no chance of passing in Congress (full of lawyers?).

One Republican that has broken the mold is Rudy Giuliani. Giuliani's proposal is so crazy it just might...be crazy. Giuliani's plan is to continue the conservative mantra of tax cuts and deregulation and apply it to health care. Essentially, Giuliani proposes to give every American a tax credit for having health care and let them choose their own health coverage. He uses the term PPO to refer to the new health organizations that will spring up in the new consumer directed health provider market, but he's just using something familiar to describe something foreign. As he talks about it, Giuliani would make health insurance similar to auto insurance. Now, there would be some benefits to this, namely that costs would be radically driven down as the Geicos of health care compete in the marketplace for those who want insurance in name only to get the tax credit. Unfortunately, health insurance is not auto insurance. As in auto insurance, consumers would be vulnerable to swindling. Currently, health care plans are screened by labor unions and employers and simplified for the buyer so that they aren't scammed. Without these intermediaries, such screening would be left to the consumer. There is also the problem of funding. Where would this tax credit come from? Will Giuliani raise taxes to pay for the tax break? Probably not. Certainly the plan, without new taxes, would be beneficial for the employer who would no longer have pay anything to have their employees in good health. Giving a tax break with the numbers Giuliani has been throwing around ($15,000 per family) would cost about 150 billion dollars. I do have to admit that the plan would insure more people and would probably approach universal coverage, accepting that the insurance would be completely voluntary. In some speeches he has suggested giving a further tax break (welfare?) to those who can't afford the few thousand dollars that would differ between the tax break and the cost of the health plan. But the biggest problem with the plan, the problem that makes it nonesensical, is that treating health insurance like auto insurance defies the whole purpose of health insurance. The basis of health insurance is that you don't know when you might get sick. Although some people are usually healthier than others, it's not comparable to people being better drivers than others. If you were struck by a sudden and expensive illness you would be forced to pay the monstrously high premiums you would have to pay for crashing into three school buses while drinking vodka and changing your baby. The reason people get health insurance is so that they are covered when something goes wrong, not for when they make a mistake. In this system, if you got sick, your premiums would raise and you would be a less sought after customer by health insurance providers. In fact, it is the pooling of clients without health problems with those that have health problems that makes health insurance a profitable undertaking for HMOs.

The health care debate is confusing, tedious, and easily convoluted. Hopefully, I've outlined what the problem is and given a foundation for making your own political decisions. Obviously, my own viewpoint is that we need a decentralized public system. However, I accept that this is politically impossible (thank you, AMA). I should end by giving you the following warnings:
1. No matter how much you study it, health care will always be confusing. It is sometimes impossible to get past the rhetoric and figure out what's actually being proposed.
2. If there's a simplistic campaign commercial that makes a plan seem ridiculously bad, it's probably misleading you.
3. If someone uses the term "socialized medicine" he/ she is probably a closet fascist.
4. If there's a lot of money behind a plan (from drug companies, hospital associations, or HMOs), it's probably a bad plan.
5. Just because it's complicated it doesn't mean it's bad. It just means that it'll never get passed.