Hennessy's View

U.S. District Judge Roger Vinson today ruled Obamacare directly violates the Constitution by mandating that citizens buy health insurance. 

This ruling goes further than the previous Virginia ruling. Judge Vinson declared the entire Obamacare bill unconstitutional because the individual mandate portion is not severable from the rest of the law.

Third, Judge Vinson granted the plaintiffs “declaratory relief,” the functional equivalent of an injunction, freeing them from the burden of compliance. From the Wall Street Journal:

Meanwhile, Republicans are drafting a series of bills targeting particularly unpopular pieces of the law, include its requirement that larger employers provide coverage or pay a fee. And they’re laying plans to choke off funding to hire federal workers to enact the law.

More broadly, Monday’s decision sharpens the battle lines over the broader issue of whether the federal government can require Americans to purchase something solely because they are living on U.S. soil.

The Department of Justice said it would appeal the ruling. 

This is great news for everyone who believes in the rule of law.  It also points out how critical it is that we regain control of the U.S. Senate before one of the Supreme Court’s conservatives leaves the bench.  The 5-4 balance of power currently favors (slightly) the rule of law. Any vacancies will be filled by an Obama appointee who would effectively overturn the idea of limited government.

For now, though, share this great news with friends:  ObamaCare is unconstitutional.  And a federal judge said so.

Meanwhile, Gateway Pundit reports that the Obama administration has come unhinged over the ruling. Michelle Malkin has the full ruling. Relive the healthcare battles on stlouisteaparty.com.  Brooks Bayne has more on The Graph.

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Last week I wrote about Creating Shared Value. In that post, I pointed to a Harvard Business Review article by Michael Porter and Mark Kramer. If you haven’t read both my post and the Michael Porter piece, please do so now.  I’ll wait.

Now that you’re up to date, let me add the Tea Party angle to this. 

Though Porter did not dwell on government’s role in Creating Shared Value (CSV), he did point out that government must reform for CSV to succeed.  Here are a few of the Tea Party reforms necessary if Porter’s (and Whole Foods CEO John Mackey’s) vision is to succeed:

Stop Vilifying Business:  Both parties fail to defend business when business is unfairly attacked.  Instead, politicians tend to jump on the populist bandwagon, piling on companies and industries. One example:  the regulation of cable television in the early 1990s.  Responding to false claims that cable companies were gouging customers, Congress stepped in and imposed regulations that caused cable rates to increase faster and customer satisfaction to tumble. 

Stop Picking Winners:  General Motors, Chrysler, Bank of America, Citigroup, and dozens of other banks and businesses should have failed.  Only illegal and inappropriate government interference in the market saved these companies, transferring financial responsibility from the owners to the tax payers.  Regardless of future performance, our economy is worse off than it would have been had government stayed out of the mess.  Moreover, innovation and ideas that might have improved the world and increased sustainability are lost because government’s clunky hand manipulated the markets.

Stop Creating Entitlements: Welfare reform gave us a few years of federal budget surplus. With Barack Obama’s historical and dangerous deficits, the last thing we needed was a new entitlement. But Obama and the 111th Congress gave us just that with health control.  John Mackey of Whole Foods pointed out a system that many employers offer that reduces healthcare costs and makes good insurance affordable for everyone.  Were affordable health insurance Obama’s actual goal, he would have embraced the high deductible solution. Instead, he outlawed it.  Government must eliminate all entitlements, not make new ones, if CSV is to succeed.

Reform the Tax Code:  Most of the our favorite tax breaks—designed to change behavior—will go away in order to pay off massive deficits brought about by entitlements and political handouts.  It’s time, then, to flatten out the tax code.  That means establishing in a tax-free income level (say $20,000), and a tax rate (say 18 percent).  The new 1040 looks like this:

Income:________ – $20,000 = _____________ * 0.18 = Tax Due ______________

Creating Shared Value is a business strategy.  Fully embraced, it offers the possibility of remarkable growth for companies, communities, and economies.  It rejects the notion of trade-offs, like clean air or full employment. Instead, it means clean air because of  full employment.

Companies can reach CSV only if government gets out of their way.  And if companies get out of their own ways.  But Michael Porter has advanced a strong argument for the later.  Now it’s time for the Tea Party to encourage government to do its part.

How else can government help advance Creating Shared Value by reducing its size, scope, and cost?  Leave your thoughts below in the comments.

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The news might seem unimportant to us in the USA:

Day after day they marched, tens of thousands strong, defiant chanting demonstrators surging through the streets of Cairo, a capital unaccustomed to the shouts and echoes of dissent. The subject of their protest was the policies of Egypt’s supreme ruler, Hosni Mubarak. Some carried signs demanding his ouster. Others called for a return of long denied civil and political liberties and the enforcement of Islamic laws.

Except I changed a few words.  I replaced “Tehran” with “Cairo”, “Iran” with “Egypt”, and “Mohammed Reza Pahlavi” with “Hosni Mubarak.”  The paragraph above is from Time Magazine’s cover story on turmoil in Tehran from September, 1978. Read more: http://www.time.com/time/magazine/article/0,9171,916373,00.html#ixzz1CN3AbsVh

The Obama White House response to anti-government turmoil in Egypt today parallels Jimmy Carter’s vacillating and indecisive response to Iran 33 years ago. Carter, who praised the Shah in 1977, seem lost for a response to turmoil in 1978, and joined the world in criticizing the Shah after the fall.

That’s courage.

Here’s how events unfolded as the Shah—a bulwark against both Soviet domination and radical Islam in Southwest Asia—faced exile or death:

Even by late 1978 few people in the Carter administration, including the American embassy staff in Teheran,²⁰ seemed to know much about the leaders or directions of the revolution. Khomeini’s violent ideas and extraordinarily anti-American, anti-Zionist views apparently had not yet registered. U.S. policy appears to have straddled both sides. For example:

—Shortly after the Shah declared martial law, President Carter called him to voice support.

—Yet in October, after weeks of daily reports sent back to Washington on events in Iran, Ambassador William H. Sullivan “could detect neither high-level concern nor any comprehensive attitude toward the events that were in progress.”

—On 4 November 1978, as rioters spread fires across Teheran, destroying banks, theatres, and the British embassy, security advisor Brzezinski called the Shah from the Iranian embassy in Washington to express his assurance that the United States would “back him to the hilt.”

—Concurrently, certain high-level State Department officials evidently had concluded that the Shah was the major problem in Iran and that he had to go regardless of who replaced him.

—Energy Secretary James Schlesinger (a previous Defense Secretary in the Ford administration) argued that the Shah had to be saved, and proposed a U.S. show of force in the Indian Ocean.

—Late in December President Carter seems to have agreed, dispatching the aircraft carrier Constellation to the Indian Ocean. Then, possibly out of concern over risk to the carrier, the President countermanded his own order.²¹

Thus, as time ran out for the Shah and for Washington, the Carter administration split between supporting the monarch, dumping him, or riding out the storm. Events, not policy, now determined American responses in Southwest Asia.

Last week, White House spokesman Gibbs refused to support Mubarak publically.

Today, a world long caught up in economic turmoil turned its attention to turmoil in Cairo. We should be scared, because the Obama Administration has no plan. The White House, we learned, has not contacted Mubarak since the crisis began.

It’s as if Obama had no idea there was an Egypt.

If Egypt falls to radicals, the Suez Canal will close.  Israel will face extinction. Oil and gasoline prices will soar, possibly to $200 a bbl and $8.00 a gallon, respectively.  The nascent and weak recovery would quickly turn to economic depression.

**UPDATATE** US Rep. Thaddeus McCotter (one of my favorites) issued a statement tonight to that begins brilliantly:

The Egyptian demonstrations are not the equivalent of Iran’s 2009 Green Revolution.  The Egyptian demonstrations are the reprise of Iran’s 1979 radical revolution.  Thus, America must stand with her ally Egypt to preserve an imperfect government capable of reform; and prevent a tyrannical government capable of harm.

Yeah, yeah, you bleeding hearts will criticize Mubarak.  But if Mubarak falls, you will see horrors that have been hitherto unimaginable.

And still this idiot in the White House is incapable of formulating a policy.  As was said of Carter’s dealings with Iran in 1978, events, not policy, will determine American response to what happens in Egypt.

Don’t say I didn’t warn you.

***UPDATE II*** Michelle Malkin has another angle: the people must be heard. True, but these protests seem eerily like Tehran 1978.  Don’t assume this will end well–for the oppresses liberals in Egypt or for the world.

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Many of the people who support eliminating state oversight of the St. Louis Board of Police Commissioners are not conservatives.  Decidedly not.

There are some good conservatives who disagree over the Board of Police Commissioners for the City of St. Louis. I’ve heard some of these conservative make some strong arguments for abolishing the board or relinquishing it to St. Louis Mayor Francis Slay.

Some of the arguments in favor of so-called “home rule” are flat out false.  The biggest fallacy is the claim that local control is a Constitutional principle.

States are the only political sub-division mentioned in the Constitution.  Some claim that people are a second, but that doesn’t make sense.  People are not political subdivisions, but the earthly source of all political power. People, alone, may create political institutions.  Where the Constitution mentions “the People,” it is simply asserting powers that are reserved explicitly by the people.

So the Constitution divides the country as such: the United States and the respective States. 

Technically, the states have no Constitutional requirement to further subdivide.  A state could be nothing but a state.  It could authorize no cities, no counties.  Each state must create United States House of Representative districts, but those boundaries are irrespective of cities and counties. 

The principle of home rule has no Constitutional basis.  Supporters of abolishing state oversight of police boards practice deception when they hint otherwise.

I am confident that we will soon learn who is really behind the current home rule initiative.  When that information comes out, those supporting the initiative will have little choice but to switch sides. 

More to follow.  In the meantime, don’t be deceived.

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I am a big fan of Milton Friedman.  I’m also becoming a big fan of Creating Shared Value.  Some believe the two values are inconsistent, but I disagree.

In 2005, Reason Magazine posted an online debate between Friedman and Whole Foods Market CEO John Mackey.  The debate coincided with the 35th anniversary of Friedmans’ famous The New York Times Magazine article entitled: : "The Social Responsibility of Business Is to Increase Its Profits." 

Now, 2005 was before Mr. Mackey became the darling of the tea party because of his defense of privatized medicine in 2009.  At the time, I’m sure, free marketers took sides with Friedman. 

But in that debate, Mackey makes a compelling case for businesses understanding the long-term effects of their operations and decisions—and for learning how to articulate the benefits of capitalism to society:

Both capitalism and corporations are misunderstood, mistrusted, and disliked around the world because of statements like Friedman’s on social responsibility. His comment is used by the enemies of capitalism to argue that capitalism is greedy, selfish, and uncaring. It is right up there with William Vanderbilt’s "the public be damned" and former G.M. Chairman Charlie Wilson’s declaration that "what’s good for the country is good for General Motors, and vice versa." If we are truly interested in spreading capitalism throughout the world (I certainly am), we need to do a better job marketing it. I believe if economists and business people consistently communicated and acted on my message that "the enlightened corporation should try to create value for all of its constituencies," we would see most of the resistance to capitalism disappear.

Today, I have to admit, I agree with Mackey.  Milton Friedman’s 1970 article that the only social responsibility of the corporation is to maximize profits was not wrong.  It was poorly expressed. As Mackey points out, Friedman’s words have been (ab)used by leftists ever since—usually by leftists who’ve never read the article. 

Earlier in the debate, Mackey pointed out that Adam Smith’s less famous work focused, not on maximizing profits, but on maximizing value:

[E]conomists would be well served to read Smith’s other great book, The Theory of Moral Sentiments. There he explains that human nature isn’t just about self-interest. It also includes sympathy, empathy, friendship, love, and the desire for social approval. As motives for human behavior, these are at least as important as self-interest. [hyperlink added]

We’ve learned many great ideas from Friedman, including the ridiculous cost of government hidden in a 32 cent pencil.  Free to Choose was the most important book on economics I read in high school.  I’m sure it was for many others, too. 

We also learned the importance of messaging from Dr. Friedman  by way of John Mackey.  We owe both men a debt of gratitude.  And we owe the great free market system our vigilance in promoting the political system that advanced humanity more than any.  By creating shared value, corporations keep the engine of liberty alive. 

On Friday, I’ll write more on the idea of Creating Shared Value. 

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