NOW, on we go. A few things you must know regarding where, in fact, I have been hiding. I would love to regale you with stories of skiing in the Alps with Martin Sheen, or exploring the wreck of the Titanic with Mark Zuckerberg, or going to Mars and visiting Tupac, but, alas, I have been leading a life of banality. I tackled a month long summer course at the end of May and through June (hence my absence), during which time useless mathematical dribble was forced into my cerebellum. I have not completely recovered my sanity. BUT, "the strife is o'er now" as the old hymn says and I have emerged from the rabbit hole, enlightened. Mix in taking the GRE in mid June and composing graduate school applications and you will find my life has effectively been sucked away.
But my GOSH, what a great load of THINGS have happened in this month long hiatus, and I do love a nice thing or two to keep me interested. Just a quick rundown of the list of nuggets I plan to tackle in this one post:
1.) The 78904586723th Summit of the European Council to discuss the future of the EU and Euro
2.) Something called Obamacare...I think the Supreme Court said something? Its a tax penalty that is also a tax on a penalty taxing a penalty and...a...thing.
....seriously, order a pizza or pour a drink or something. This one's gonna be a long one. There may be only two broad topics, but both are of monumental importance.
The European Council's "Great Compromise"
At the end of last month, the European Council met in Brussels to discuss the (again...and again) the future of the Eurozone and its beloved currency. For those who are unaware of the institutional bodies of the government of the European Union, the European Council has the distinct honor of doing absolutely nothing. Ok, maybe that is a bit of an unwarranted jab, but really, the Council is comprised of the heads of state from all the member of states of the EU and is tasked by the Treaty of Lisbon to "provide the Union with the necessary impetus for its development". Basically a big think tank full of the big wigs.
See, big wigs:
The main topic on the agenda (as you may have surmised) was the future of the EU in the wake of the Greek elections last month. In a nutshell, the elections resulted in a victory for the current government who towed the line on the "stay in the EU" argument. Many foresaw a victory by the opposition party as a precursor to the Greeks exiting the EU. But, the iceberg was averted, and the EU continued to keep all of its member institutions together as one big happy family. Whether or not a Greek exit (or Greexit, as it was being monikered) would lead to the dissolution of the EU altogether is debatable, but the fact that the Greeks are staying put for the time being called for a major discussion on how to best avert this same situation occurring, perhaps, with another deficit ridden member (Italy, Spain, Portugal for example).
The two sides of the debate can be summarized thusly: German Chancellor Angela Merkle has been unshakable in her (and her country's) commitment to austerity measures for those EU member states who have been lent money (German money) to stabilize their economies, meaning, practically nil public sector spending and a huge cut in taxes. To her credit, she rationalizes this stubborn attitude in experience: the German economic miracle that took place after the great World War Two and, ultimately, after the reunification of Germany following the Soviet Union collapse in 1991 all were results, arguable, of these policies. What is good for the Germans, the thinking goes, will also be good for all EU members.
To be expected, the debtor nations do not take kindly to the German government effectively running their country's fiscal and monetary policy. Italian and Spanish heads of state, Mario Monte and Mariano Rayjoy, have been pushing for a banking union between EU members to drive down the yields on sovereign bonds, and also advocating more freedom with which loaned money can be spent, saved or invested by the respective debtor country. The Council's meeting green lighted both of these efforts and resulted in the following: the creation of a single Europe wide bank adviser (appointed and constructed by the European Central Bank), and the injection of bail out funds directly into banks, and not to just governments with austerity measures attached.
However, there are caveats. Europe’s politicians did not commit themselves to a banking union. There was no agreement to euro-wide deposit insurance or to a common bank-resolution scheme. And although the summit agreed that euro-zone rescue funds could be injected directly into banks, this depends on the single supervisor being in place first (again, to be decided on and appointed by the ECB).
I am dubbing this Council meeting the "Great Compromise" of the EU crisis thus far. Both sides have claimed a victory in this fight, and both seem pleased with the short term results and accolades of financial firms and commentators. Unlike the article I linked to, I believe that (seeing that the ECB banking adviser board is done in a bipartisan way) the give on both sides at this Summit is what, ultimately, the citizens of the EU deserve: compromise between the nations. And isn't that why this whole experiment began in the first place? Yes, it is.
Roberts Rules
I will not rehash what I am sure you already know. The Affordable Healthcare Act was found constitutional under the taxing power of Congress, with a ruling decision of 5/4 coming down to Chief Justice John Roberts. In a completely non partisan way, I was floored by the ruling. Not so much in the substantive consequences of the passage of the law, but in the conundrum legal reasoning used by the Chief Justice. Throwing out the "landmark" status of the case and constitutional questions it posed and answered, I will remember this case for a particular quote that the Chief Justice used in his opinion.
“Members of this Court are vested with the authority to interpret the law; we possess neither the expertise nor the prerogative to make policy judgments. Those decisions are entrusted to our Nation’s elected leaders, who can be thrown out of office if the people disagree with them. It is not our job to protect the people from the consequences of their political choices.”
Boom. Headshot. As the saying goes. With all the hubbub of the individual mandate and the commerce clause implications and the ideological rhetoric from both sides, this quote cuts through it all. In effect, Roberts recognizes that the Constitution grants powers to Congress and that Congress, using those powers, may enact legislation that is both constitutional and unpopular. He, as a Justice, does not assume that every constitutional law will be popular and every unconsitutional law will be blatantly unpopoular. Is that how it should be? I think, yes. Now, do I agree wholeheartedly with CJ's reasoning here? Perhaps not, but that is not the focus of this particular blog piece. By now, you have formed your opinion of the ruling, perhaps read as I have the 193 page ruling, and no blog piece I put forth to you will change your opinion.
Here, though, is where my "pat on the back" of the CJ ends. What I can do is relay to you what I know to be true of the implications of the ruling. I have already been notified by my family that our Flex healthcare payment system allotment is to be cut in half because of this ruling. We are a family four who could barely make due with the allotment as is, and now it is being halved. That is a real world consequence for you, constant reader, amidst the self aggrandizing and, might I say, absolutely pathetic and altogether stupid comments made by both sides in defending and attacking this issue. Here is a favorite of mine:
Gold. Oh, and this gem as well from the White House Chief of Staff Jack Lew on July 1, 2012 when he was confronted with the question of whether or not the new healthcare tax is an infringement upon the campaign promise of 2008 to not raise taxes on families making $250,000 or less a year:
"That's not what the Supreme Court said, what the Supreme Court said was that this is Constitutional, they said that it didn't matter what Congress called it, it is a penalty for the 1% who choose not to buy insurance. Technically, what they said is that Congress has many powers, there's the commerce clause, there's taxing power, and it was Constitutional, that's what they said...it doesn't matter what they call it"
My response, **clears throat**
Let's clear something up at the very top of this conversation. The individual mandate was deemed constitutional under the Article 1, Section 8 power of Congress to levy taxes. The Court has ruled since then that under this taxing power, Congress can also issue a penalty for not complying with laws on the books as it did in the nuclear waste case of New York v US. What Mr. Lew is trying, and failing miserably to do, is to defend the health care...ahem....penalty by making the distinction that a "tax" applies to **all** citizens, whilst a "penalty" applies only to a group percentage of the population (here, he and Nancy Pelosi both supply the number of 1%, straight from the Office of Pull the Statistics out of your Butt) who are being "irresponsible" and who are "free riders" and are thus, "making their health care cost a burden to others".
It is amazing how this rhetoric has changed. It is amazing that how merely 6 months ago we had to suffer through the lamentations of how families are without health insurance because they cannot afford it and it is for this reason that we must pass this law. Now, all of a sudden, the mere 1% of the population who do not have health insurance are now demonized as free riders who should "pay their fair share", according to Mr. Lew. Wait, wasn't I supposed to feel bad for those who could not afford insurance? And that this act was the only way to save these poor souls? The millions of poor, uninsured Americans who were not being treated fairly by the system. Now, apparently, those millions are really only 1%, and they all choose to be mean, horrible, obstructive minded people who refuse to pay for a health insurance plan.
What is this, amateur hour? You are the White House Chief of Staff. Pretty big title, business cards and everything. And this is the best argument you have. Really? It seems like he is taking me for an idiot.
And I am not amused.
The bottom line is this, you will pay a penalty, you will be taxed if you do not buy health insurance. Regardless of the amount, the principle of this ruling is broad and unmistakable. The Congress can penalize inaction of the individual in any sphere with a tax penalty.
Well, we made it through. Two very, very large topics today that (I hope) make up for my lack of posting this past month. Stay tuned later htis week for the "under the radar" story regarding the LIBOR. Juicy, juicy stuff.
"Keep the faith, stay off the naughtiness".
Nice work Mr. Schwennsen, keep it up.
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