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Rewarding Merit Is The Key To Growth

21 Monday Jun 2021

Posted by pnoetx in economic growth, Meritocracy, Redistribution

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Adrian Wooldridge, Autocracy, Clientelism, Friedrich Hayek, John Cochrane, Meritocracy, Nepotism, Pure Democracy, Racial Equity, Redistribution, Ruth Bader Ginsburg, Social Justice, Upward Mobility, W.E.B. Du Bois, Zero-Sum Games

Outward trappings of success, even at very modest levels, are seldom durable or predictive of future achievement if not backed by actual performance. That’s one reason why redistributionist policies are so unsuccessful at fostering upward mobility. They fail by focusing on outcomes rather than on addressing more fundamental causes, like skills, training, and well-functioning markets for low-skill labor. The same applies to programs that prescribe quotas on admissions, tuition aid, and hiring. The beneficiaries of these programs are often placed into situations in which they are unprepared. This makes them vulnerable to stigmatization and ultimately failure. And when poor performance is in any way ignored or forgiven, it has an impact on the psyche of the individual and their reputation, and it creates losses to the rest of society.

On the other hand, conditions and policies that lead to economic growth are likely to benefit the lower strata of society and minorities, to the extent that minorities are more concentrated in lower income quantities than non-minorities. We know incentives always matter, and incentives rely on the ability of individuals to act and succeed. Success implies gains to others who have occasion to avail themselves of the individual’s efforts. They are offering rewards for merit! Furthermore, those offers are always increasing in the value created, and thus, in levels of accomplishment. In that way, individuals always have opportunities to strive for growth.

But none of that works unless meritocracy holds sway. LittlBut none of that works unless meritocracy holds sway. Little wonder that meritocracy is so closely tied to a society’s prosperity, as documented in this article and a forthcoming book by Adrian Wooldridge. John Cochrane provides an excellent review and critique of Wooldridge’s thesis along with several lengthy quotes.

Wooldridge disputes the widely-accepted theory that democracy is a determinant of economic growth (also see here), noting that democracy can create economic pitfalls related to majoritarian excesses, whereas merit-based systems of rewards are common to almost all successful economies, including autocracies (Singapore, China) and democracies/republics (the U.S., Japan, Scandinavia), irrespective of the size of government. He offers examples of countries in which meritocratic systems are weak but nepotism or political “clientelism” are strong, with unfortunate results (Greece, Portugal, Italy). You certainly won’t get efficient outcomes when leaders prioritize family, friends, cronies, and political contributors for plum jobs and other rewards.

Of course, there is no pure meritocracy in the world. Rather, there are varying degrees of meritocracy across different societies. Traditionally, the U.S. economic system has relied on merit to a great extent; returns to merit are largely a matter of equal opportunity, though not entirely. Equally talented individuals do not always have access to the same opportunities. In fact, that is the major point of attack against the concept of meritocracy, but it does not imply that the benefits of meritocracy are a myth. There are many institutional dysfunctions that can and should be fixed to overcome the kinds of problems cited by critics, primarily public education, but the old expression “don’t throw the baby out with the bathwater” seems especially apt.

In fact, meritocracy promotes upward mobility. Here is Cochrane on the great paradox underlying the backlash against meritocracy:

“The US paternalistic/aristocratic elite is running away from meritocracy under the banner of ‘social justice’ and ‘racial equity.’ Yet meritocracy throughout history has been a great equalizer, a great leveler, the main way that excluded out-groups could get ahead.”

And on this point, Cochrane quotes Wooldridge:

“… Meritocracy is one of the great building blocks of modernity, along with democracy, capitalism and liberalism. … Is it really the case that meritocracy is a tool of White male privilege? W.E.B. Du Bois and Ruth Bader Ginsburg might have something different to say. Are lotteries or holistic assessments really better ways of distributing educational opportunities than standardized tests? Most of us would hesitate before flying with a pilot who had been chosen by lottery. Do we really want a society in which group identities trump individual abilities? “

To give the critics their due, however, a more refined version of their argument is that “meritocracy is a myth without inclusion”. Fair enough, but again, any shortfall in participation is not the fault of meritocracy per se, but of underlying conditions and policies fostering substandard education, family instability, high crime and incarceration rates, and high rates of unemployment among those with low skills.

An important strand of Wooldridge’s work is the implication that meritocracy is a redeeming feature of some autocratic regimes. Indeed, Wooldridge is not the least bit skeptical that autocratic rule is sustainable, just as long as merit drives rewards. This is a point on which Cochrane differs. An autocracy in which high echelons are populated by the meritorious will constantly grapple with temptations of the powerful to reward their pals. Lines of accountability must be all the stronger to prevent such decay. Furthermore, autocracy usually weds itself to meritocracy only in a conditional sense. For example, in China, one must support the party. These restraints undermine the benefits of meritocracy by offering less autonomy for individuals to leverage their talent.

“Pure” democracy has its own drawbacks, b“Pure” democracy has its own drawbacks, but at least leaders have autonomy while being accountable to a broader class. And as Cochrane says, the greatest dangers of democracy can be addressed under representative democracy along with other means of protecting minorities and individual rights.

The effort to banish meritocracy is madness and the product of a totalitarian mindset. To speak of the “illusion” or “myth” of meritocracy is to contend that talent, preparedness, sound decision-making, workmanship, precision, effort, and value-delivered represent trickery of some sort. Such is the viewpoint of those who take human well-being to be a zero-sum game. But it’s even worse than that. For example, placing lives in the hands of “randomly selected” pilots would invite catastrophe, and while that example is extreme, it clearly illustrates how non-meritocratic approaches are likely to produce negative sums! Putting resources into the hands of individuals with lesser qualifications is always a prescription for waste. Make no mistake: the road to serfdom is well-traveled and can be a very quick trip. Abandoning merit-based rewards would get us a fast start.

Barrett v. Obamacare

04 Sunday Oct 2020

Posted by pnoetx in Health Insurance, Obamacare

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ACA, Affordable Care Act, Amy Coney Barrett, California v. Texas, Chief Justice John Roberts, Donald Trump, Essential Benefits, Individual Mandate, Inseverability Claude, Jonathon Adler, Josh Blackman, National Federation of Independent Businesses, NFIB v. Sebelius, Obamacare, Recusal, Ruth Bader Ginsburg, Severability

Obamacare’s survival has emerged as the democrats’ big talking point against Amy Coney Barrett’s nomination to the Supreme Court, especially since a case challenging the health care law is scheduled be heard by the Court on November 10th. I’m certainly no a fan of the Affordable Care Act (ACA, or Obamacare). It is anticompetitive and it is a regulatory and pricing nightmare. However, the chances it will be struck down in its entirety are slim to none, whether Barrett is confirmed or not.

The Case Before the Court

The case at hand is California v. Texas, in which 21 democrat state attorneys general appealed a decision by a lower court that the ACA’s individual mandate is unconstitutional. The case against the ACA was originally brought by 20 republican state attorneys general based on Congress’ earlier repeal of the “tax” levied on violations of the law’s individual mandate. With that repeal, the mandate itself became unenforceable because it effectively disqualified the mandate as a matter of congressional intent. More background on the case can be found here.

The reinterpretation of the ACA penalty as a tax was the key turning point in an earlier case, National Federation of Independent Business v. Sebelius, in which Chief Justice John Roberts’ deciding vote upheld the ACA’s individual mandate under Congress’ taxing power. Now, in California v. Texas, a District Court ruled for the plaintiffs that the entire ACA is unconstitutional, not just the individual mandate. Subsequently, however, an Appeals Court ruled only against the mandate. Thus, the case before the Supreme Court is primarily about the standing of the states that originally brought the suit and the status of the individual mandate. The case is unlikely to involve other components of the law, such as the list of minimum essential benefits and protections on pre-existing conditions.

Severability

The Appeals Court decision can be upheld by the Supreme Court without striking down the whole of the ACA. This rests on the doctrine of severability, which holds that a law’s unconstitutional provision(s) do not invalidate other provisions within the same law. The Court has often applied this doctrine in deference to the intent of legislation, to the extent that other parts of a law can stand on their own. Jonathan Adler, who has filed a brief with the Court in California v. Texas, writes that the individual mandate is clearly severable from the rest of the ACA:

“When part of a statute becomes unenforceable, a court usually must ask whether Congress would have preferred what remains of the statute to no statute at all. Typically, it is a court that renders a provision unenforceable, and the court must hypothesize what Congress would have intended in that scenario. Courts also will sometimes assess whether the statute functions without the provision— a proxy for legislative intent.

But this case is unusual. It presents no need for any of these difficult inquiries because Congress itself—not a court—eliminated enforcement of the provision in question and left the rest of the statute standing. So congressional intent is clear; it is embodied in the text and substance of the statutory amendment itself.”

Furthermore, contrary to the claims of the republican plaintiffs in the case, the ACA does not contain an inseverability clause. The Court is likely to invoke the severability doctrine, so Amy Coney Barrett’s (ACB’s) confirmation prior to the hearing would not lead to a ruling against the whole of Obamacare. The Court seems to like small steps.

What She Said

ACB has written that the Court’s original interpretation of the penalty for violating the mandate as a tax was flawed. Again, the argument was attributable to the opinion written by Chief Justice Roberts in NFIB v. Sebelius. The ACA never used the term “tax” in the context of an individual’s failure to comply with the mandate. Instead, it referred to the “penalty” multiple times. In the law’s original form, the clear legislative intent was to penalize certain behavior: failing to buy a product. ACB wrote the following of Roberts’ opinion in 2017:

“He construed the penalty imposed on those without health insurance as a tax, which permitted him to sustain the statute as a valid exercise of the taxing power. Had he treated the payment as the statute did—as a penalty—he would have had to invalidate the statute as lying beyond Congress’s commerce power. … One would be hard-pressed to find many originalists who think that a court should find a way to uphold a statute when determinate text points in the opposite direction.”

Recusal

Josh Blackman says ACB need not recuse herself from hearing California v. Texas. First, the case is not a reconsideration of NFIB because the “tax” no longer exists; second, the current challenge to the mandate does not hinge on the plausibility of Roberts’ opinion in that case; and finally, recusals at the Supreme Court typically require a higher bar than lower courts in order to avoid a short-handed Court. Jonathon Adler discusses a recent moot court on California v. Texas in which ACB participated, and he seems to agree that recusal is unnecessary.

So ACB said the penalty was a penalty, not a tax, but the penalty no longer exists in any case. Congress left the individual mandate with no enforcement mechanism, a clear signal of its intent to set the mandate aside. The severability of the mandate from the ACA, and the “tax vs. penalty” focus of ACB’s remarks on the NFIB decision, offer little rationale for the view that ACB would argue to overturn the entirety of the ACA in California vs. Texas.

Essential Benefits

ACB has had another beef with the ACA, however, which has to do with certain items on the list of minimum essential benefits mandated by the law. The purpose of the list was much like that of the individual mandate: to force payment by all parties to cross-subsidize those who desired certain benefits. The list included contraceptives, abortifacients, and sterilization, and the requirements applied to individual policies as well as plans offered by private organizations, including those having moral and religious objections to the use of these products or services. Those individuals would be forced to offer and pay for the objectionable benefits just the same. In 2012, ACB signed a statement that called the requirement an “assault on religious liberty and the rights of conscience“. That argument seems even more compelling with today’s availability of cheap contraceptives over-the-counter. But the point raised by ACB is now irrelevant: this summer, the Court ruled against the requirement on contraceptives, but the Court didn’t say the whole list is unconstitutional. That aside, the list of essential benefits impedes the objective of offering low-cost coverage to the broadest swath of the population, and it is one of the reasons for the astonishingly high deductibles on Obamacare health policies.

Conclusion

The ACA has many flaws and has prompted a large number of legal challenges. It will continue to do so. Seven of those cases have already risen to the level of the Supreme Court, and there could be more. The ACA is a terrible law: it has driven up the cost of health insurance coverage through community rating and benefits mandates. It has driven up the cost of care through excessive regulatory measures and incentives for providers to consolidate. But while I am no fan of the law, the appointment of Amy Coney Barrett to the Court does not presage its complete overturn. That will almost certainly have to wait for legislation on a complete replacement for Obamacare, which doesn’t seem imminent.

Atheism Cannot Disqualify for Public Office

26 Saturday Sep 2020

Posted by pnoetx in Supreme Court

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Abortion Rights, Amy Coney Barrett, Bret Kavanaugh, Diane Feinstein, Donald Trump, First Amendment, Religious Freedom, Religious Test, Roe v. Wade, Ruth Bader Ginsburg, Supreme Court

Amy Coney Barrett makes a lousy target for personal attacks by the Left. Barrett is President Trump’s nominee for the Supreme Court vacancy following the death of Justice Ruth Bader Ginsburg. A fabricated scandal against Barrett would be much less credible than even the allegations made against Bret Kavanaugh at his confirmation hearings in 2018. So Democrats believe their best opportunity is to paint Barrett as a religious “crazy” who, if confirmed by the Senate, will allow her religious convictions to influence her opinions on the Court relative to issues such as abortion rights under Roe v. Wade.

Barrett has offered rejoinders to Senator Diane Feinstein’s comments (“The dogma lives loudly within you.“) at the hearings on Barrett’s appointment to the Federal Appeals Court in 2017. In particular, Barrett has noted that a religious test is unconstitutional as a criterion for public office, including judgeships. In fact, in another way, Barrett has demolished the claims made by leftists against the qualifications for the bench of those of deep faith. Her argument exposes the Leftist position as an absurdity.

The presumption is that someone having religious convictions has a certain set of moral principles that might be brought to bear on court decisions. We’re expected to believe that’s a danger unique to those of faith. Barrett notes that non-religious individuals, even atheists, have their own set of moral principles. By the same standard, should we not concern ourselves that an atheistic nominee might bring their moral principles to bear on court decisions? Or are we to believe those principles are somehow superior to those associated with religious convictions? That they should simply be overlooked, but not for those of religious faith? Rather, a fundamental requirement is whether a nominee understands and respects the difference between jurisprudence and legislating from the bench, a distinction that was sometimes lost on Ginsburg.

To assert that an atheist’s moral convictions are more objective than those of a religious individual is a flaw in logic and a horrific value judgement. I am not a particularly religious person, but I respect people of faith as well as the protections afforded to the free practice of religion by the First Amendment of the U.S. Constitution. It’s worth noting that those protections apply to atheists as well as religious sects. As Barrett’s position implies, to distrust the judicial judgement of a person of religious faith is as wrongheaded as to distrust the judicial judgement of a nominee devoid of religious faith.

Nominate and Confirm

23 Wednesday Sep 2020

Posted by pnoetx in Supreme Court

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Absentee Ballots, Amy Coney Barrett, Antonin Scalia, Barack Obama, Bush vs. Gore, Check Schumer, Contested Election, Court Packing, Donald Trump, Hillary Clinton, Joe Biden, Judicial Activism, Lindsey Graham, Living Constitution, Merrick Garland, Mitch McConnell, Originalism, Phil Murphy, Ruth Bader Ginsburg, Supreme Court, Ted Cruz, Tom Wolf, Voter Fraud

Many on the left practically cheered the passing of Antonin Scalia in 2016, a reaction I witnessed with disgust on my own social media feeds. Now, we should all mourn the death of Ruth Bader Ginsburg, but some of the same people seem almost comically furious with her for “choosing such a bad time to die”, just 46 days before the presidential election! Or, for refusing to step down during the Obama administration, when she could have been replaced with a much more youthful lefty jurist.

Of course, the Left is also furious that President Trump plans to nominate a candidate for Ginsburg’s vacancy on the Court, and that Republican leadership in the Senate plans to bring the nomination to a vote, perhaps before November 3rd.

Trump and the GOP majority are entitled to do that under the Constitution, and they should. Senator Ted Cruz explained the primary reason:

“Democrats and Joe Biden have made clear they intend to challenge this election. They intend to fight the legitimacy of the election. As you you know Hillary Clinton has told Joe Biden ‘under no circumstances should you concede, you should challenge this election.’ and we cannot have election day come and go with a 4-4 court. A 4-4 court that is equally divided cannot decide anything. And I think we risk a constitutional crisis if we do not have a nine-justice Supreme Court, particularly when there is such a risk of … a contested election.” 

This presidential election might be fraught with more procedural controversy than any before. The coronavirus, or its promoters in the media and the Democrat party, has spooked many voters into the belief that going to a polling place in-person on Election Day is too dangerous. This despite the fact that distancing and masks will be required, and the time it takes to complete a ballot does not require “prolonged exposure” to anyone. So now we face the prospect of mail-in balloting on an unprecedented scale, which is an invitation to manipulation and fraud. A couple of examples:

“… consider some of the suspect decisions already being made in various states that deliberately weaken ballot security. The Pennsylvania Supreme Court, for example, voted last week along party lines (the judges are elected) that county drop boxes, including unattended ones, could be used to collect votes. Gov. Tom Wolf, a Democrat, and his party supported the measure, which reached the court by lawsuits, thus avoiding GOP control of both legislative chambers. The decision obviously opens the door to potential fraud because ballots in unsecured drop boxes could be tampered with or stolen. 

New Jersey’s Democratic Gov. Phil Murphy also made some curious decisions. A Jersey friend sent me a mailer he received that was addressed only to ‘Residential Customer.’ Inside, a pamphlet from the county clerk in Bergen County said that a Murphy order ‘requires’ every county to mail a ballot to ‘every active registered voter.’ That raises the chances of thousands of unmarked ballots being stolen from the post office or front porches, practices not exactly unheard of in New Jersey.”

Already a number of lawsuits have been filed in various states over absentee ballots. There have been missed deadlines, disputes over whether certain candidates should appear on those ballots, invalidated pre-filled applications for ballots, and an incorrect mailer sent by the U.S. Postal Service to voters nationwide regarding absentee ballots. Let’s face it: for all the earlier denials by Democrats that the mail-in ballot process was not subject to gaming or fraud, neither side trusts the other. There will be many more disputes as ballots are counted before and after Election Day.

It’s reasonable to expect that a few cases might rise to the level of the U.S. Supreme Count before election tallies are final in some states, as in the Florida recount in the Bush vs. Gore election of 2000. A 4 – 4 tie on the Court would leave lower, state-court rulings in place that could decide the outcome of a federal election. That’s not how the process is intended to work. Needless to say, that’s another reason why Democrats oppose a Trump nominee prior to the election. There’s no doubt they’d push forward with their own nominee were the shoe on the other foot, however, just as Republicans opposed the confirmation of Merrick Garland in 2016.

So who’s a hypocrite? Republicans who said that they wouldn’t confirm or even conduct a confirmation process in an election year, as in 2016, certainly qualify (Lindsey Graham, among others). It must have seemed expedient to stay so at the time, but it was foolish. And Democrats who now protest after insisting in 2016 (and before) that a Supreme Court vacancy should be filled by the sitting president, even in an election year, also qualify (Chuck Schumer, Barack Obama, Hillary Clinton, and Joe Biden, among others). Here’s what some top progressive legal minds were saying in 2016: It’s a duty and obligation for the president to nominate and for the Senate to undertake a confirmation process!!

Here’s the key issue: The president has the authority to nominate Supreme Court justices any time during his term. If the Senate confirms, then a new justice is seated. If the Senate chooses not to confirm, the vacancy remains. That’s how it works. There have been 29 vacancies on the Court in election years, and in 22 of those cases the sitting president sent a nomination to the Senate. As Justice Ginsburg said in 2016:

“There’s nothing in the Constitution that says the president stops being the president in his last year.”

Her purported wish on her death bed, that her replacement would be chosen by a new president, was not hypocritical. It was a wish, not a legal opinion. It was just as “political” as the contradictory statements made by the politicians, however.

Ginsburg also said it’s the Senate’s job to take up a vote, which the Republicans refused to do in 2016. That was their prerogative, however, and the decision does not bind anyone in the current circumstance.

Mitch McConnell is right:

“In the last midterm election before Justice Scalia’s death in 2016, Americans elected a Republican Senate majority because we pledged to check and balance the last days of a lame-duck president’s second term. We kept our promise. Since the 1880s, no Senate has confirmed an opposite-party president’s Supreme Court nominee in a presidential election year. By contrast, Americans reelected our majority in 2016 and expanded it in 2018 because we pledged to work with President Trump and support his agenda, particularly his outstanding appointments to the federal judiciary. Once again, we will keep our promise. President Trump’s nominee will receive a vote on the floor of the United States Senate.”  

Democrats have promised to “pack the Court” by adding seats to the bench for new, ideologically-preferred justices if a Trump nominee is confirmed, among other threats. They should heed the caution of moderates who know how dangerous that may be. The mere threat gives Republicans reason to pack the Court themselves, when they can, which might be as soon as January. Moreover, nothing could do more to undermine confidence in the Court. RBG herself had the following to say about Court packing:

“Well, if anything, it would make the court appear partisan. It would be that one side saying, ‘when we’re in power, it was only to enlarge the number of judges so we will have more people who will vote the way we want them to…’ So I am not at all in favor of that solution to what I see as a temporary situation.”

Well, of course the Court is divided along certain ideological lines, and to some extent those differences break along dimensions of legal philosophy, such as originalism vs. a “living Constitution”, or judicial activism. That’s not to say that the Court is always partisan, however. The process of nominating and confirming justices should not be as partisan as it has become in the last 25 years (see the last link). Let’s not make it worse.

Trump will nominate an able jurist. Senators should meet and independently assess that individual’s legal qualifications and temperament. My expectation is they will vote to confirm, and I hope that vote takes place without rancor.

Note: Thanks to the Washington Free Beacon for the wonderful meme at the top of this post.

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