The McArdle Mystery

… the mystery being why a respectable publication like The Atlantic keeps a dimwit like Megan McArdle on the payroll.

In the past few hours McArdle has dropped two Atomic Bombs of Stupid, one of which is nicely debunked by Scott Lemieux.

In the other, titled “Government Arguing That Health Insurance Premiums Are Really Taxes?“,

The arguments on the health care mandate in Florida went forward today, with the government trying to clarify how the mandate is a tax, (though not in a way that would mean Barack Obama lied about raising taxes on people with incomes below $250,000 a year), and not an attempt to grossly exceed the enumerated powers of the legislature.

Is the Obama Administration arguing that the mandate is a tax? McArdle provides no evidence for this.

McArdle is discussing a suit brought by the state of Florida against the insurance mandate. The state of Florida’s argument is that the feds are assuming the right to regulate all economic behavior. The judge asked, “They can decide how much broccoli everyone should eat each week?” and an attorney for the plaintiff said yes. But, McArdle continues, the State Department attorney argued that insurance is a financial mechanism, not a product.

I am glad to see that the government’s fine lawyers can make these sometimes difficult distinctions. But the issue here is not whether insurance is a financing mechanism or a physical good like shoes or vegetables. The issue is whether under the Constitution the federal government can compel an individual to participate in a private market transaction–purchasing health insurance from a private company–in which the individual had not otherwise chosen to participate.

Moreover, if it’s really just a revenue-raising mechanism, a way for the government to pay for health care, then aren’t they saying that the insurance premiums paid to health insurance companies actually taxes? This is different from the administration’s argument that the penalty for not complying with the mandate is a tax. Instead, they’re effectively describing the premiums themselves as taxes–financing mechanisms that the government uses to pay for care.

But in this case, it’s not the government paying for the care. The care is being paid for by private insurance.

But if that’s the case, shouldn’t the CBO have scored the total cost of these premiums–the cost involved for everyone to purchase insurance? That wouldn’t be unprecedented.

Is she saying that the cost of all the insurance purchased from private insurance companies be figured into the federal deficit? If she’s arguing that someone should calculate the overall impact of the mandate on the nation’s health care costs, lots of people already have done that, including the CBO.

I have a different question: could it possibly be legal to define the health insurance premiums as a tax? As far as I’m aware, it’s not legal for a third party to collect and disburse US government tax revenues with relatively minimal oversight, which is what we’re talking about here. Not that I want to define our massive health care bureaucracy as constituting “minimum oversight”, but there are a bunch of missing controls that we’d require from an actual government agency.

In other words, it’s not the Obama Administration who is arguing that the mandate is a tax. It is McCardle arguing that it is the same thing as a tax. The constitutional argument has nothing to do with taxes, however, but with Congress’s powers to regulate interstate commerce.

I wrote earlier this week that the individual mandate is necessary to making the health care reform law work at all. Without it, the whole thing will pretty much collapse. The Obama Administration is arguing that the commerce clause applies, because all the decisions to purchase health insurance in aggregate will have a massive impact on the cost of insurance for everyone and the cost of health care generally.

Anyway, this big ol’ pile o’ stupid inspired the second big ol’ pile of stupid, linked above, arguing that if Congress can tax anything it wants, it could discourage abortions by taxing them. I don’t have the strength to deal with that one, which is why I defer to Scott Lemieux.

14 thoughts on “The McArdle Mystery

  1. The Atlantic keeping a dimwit like Megan McArdle on the payroll is proof of “Global Dumbing.”
    Why does she write about economics, a subject she knows less than NOTHING about (outside of the fact that the rest of the known universe also qualifies – as well as any future discoveries)?
    A Bonobo could solve Fermat’s Theorum faster than Megan can figure out the change on a $1.65 soft drink if you gave her $20.15 and hinted that you needed a couple of quarters to finish doing the laundry. Hell, a f*cking banana could figure it out faster!
    Does she even exist? Is she even a real human? Is The Atlantic showing some progress in that infinite number of monkey’s on an infinite number of typewriters thing-a-ma-jiggy idea we always heard about, and these are the exciting results?
    Or, is IBM trying to create the “Worlds Stupidest Computer?” ‘Big Spew!’
    She simply cannot be real, and have that job. Can she?
    Wait, look at the rest of the experts’ we have foisted on us every day.
    Of course she’s real. And if a RepubliConfederate becomes President, she may well end up as the Economic Advisor, maybe charged with telling “The Whore of Babblin’ On” how, as President, we need to tax the poor some more so that we can have “Trickle Up Economics” that will create jobs for cabana boys and groundskeepers on all of the golf courses. And then, she can explain in McArdleEconomics, how many trillions go into a billion.

    She must have some really nasty pictures of the Editors!
    I mean, but really, what can be THAT horrible that you have to keep her employed?
    Jesus, I think most sentient hominids would forgive serial killing, mass murder, incest, cannibalism, and schtupping farm animals on the Sabbath, just to never see her name on another byline.
    What does she have on you, Editors? What could be THAT bad? WHAT??????????

  2. As I understand it, the mandate is an either-or. Either you pay a tax for NOT having health insurance – OR – you have insurance which the government will subsidize for individuals and small businesses to make it happen for 30 million people who are without insurance and without minimal health care.

    There is no mandate that says you must have insurance or there is a criminal penalty. I remember specifically there is no criminal penalty if you do not avail yourself of the different options for subsidies. There is a tax. The government is empowered to collect taxes in the Constitution.

    • Doug — McArdle says plainly that she is NOT talking about the penalty for not purchasing insurance. She is saying that purchasing insurance from a private company amounts to a tax if the government mandates it.

  3. I don’t understand what the BFD is; we all agree that responsible people want health insurance at a decent. affordable price. Obama’s plan, while not perfect by any means, wins by a mile, but the right is too blinded by FOX propaganda to see the benefits. FOX has poisoned the well.
    I think the problem is that it is Obama’s plan, “damned uppity negra.”

  4. So the rightees seem to be saying that because any law would require oversight it should not exist because the government does not do oversight well. Or maybe they are calling for oversight, but I doubt it. Given that this is Florida, one only needs to turn to their newly elected senator to better understand how much the GOP likes oversight. They’re fine with fraud but only the kind committed by individuals…not so much corporations and themselves. They also have a one-sided regard for regulation — good for individuals, not so much for corporations.

    As best I can tell there’s no one out there arguing not to have healthcare, just for their “right” not to have it which is kind of like claiming ones right to be stupid even though one would never do anything stupid. Likewise no one is arguing to give up their medicare though a few want the government to keep their hands off their medicare.

    it’s not legal for a third party to collect and disburse US government tax revenues with relatively minimal oversight

    That’s a little mind-boggling and the arguments are deceptive. From a rational source would seem like a reason to stipulate just the kind of oversight they think there should be. But wait, the insurance companies don’t provide oversight already? Surely they do. I’ve had to fight hard to get them to pay when they’ve resisted. I suppose once it’s premiums from the government they’ll feel obligated to waste it? Unlike what they do with premiums paid by my employer and I? So which is it, insurance companies that have to be watched so closely they can’t be trusted or insurance companies that should that shouldn’t have to submit to oversight themselves?

    I’m more concerned about the oversight of insurance companies and well-documented knee-jerk denial of claims while the GOP apparently sees little need for that.

  5. Ezra Kline –

    “But of those who aren’t exempt and aren’t insured, the choice will be this: Purchase insurance or pay a small fine. In 2016, the first year the fine is fully in place, it will be $695 a year or 2.5 percent of income, whichever is higher. That makes the mandate progressive.

    And what happens if you don’t buy insurance and you don’t pay the penalty? Well, not much. The law specifically says that no criminal action or liens can be imposed on people who don’t pay the fine.”

    So my question is – WHAT mandate? As the law is written there is a $700 TAX which you can avoid by applying that money to the purchase of health insurance. There IS no universal mandate mandate with any criminal penalty whatsoever.

  6. I believe Megan’s position at The Atlantic is secretly funded by a DARPA grant, part of a project investigating the new science of anti-information, which is to actual knowledge much like anti-matter is to regular matter. McCardle, as near as can be determined, is the purest known source of anti-information, and her work product allows continued research into this bizarre phenomenon.

    Anti-information is often confused with dis-information, but it is something else entirely. Disinformation has a measurable political or ideological spin, but anti-information has no intrinsic spin, merely destructive power. Preliminary studies show that when anti-information from a McCardle column collides with normal information in the human brain, the resulting release of energy actually causes brain cells to implode, and perhaps disappear through a subatomic wormhole. That the Pentagon should be exposing readers of The Atlantic to this on a regular basis is heinous, akin to the Tuskegee experiment.

    I’m pretty sure that trying to understand one of her columns only worsens the damage. I don’t try to do that anymore – it took me months to recover from the last time.

  7. Pat,
    “Must we all become junior legal eagles? out of necessity?”
    With morons like Megan in “journalism,” and the new Congressmen coming in to chair committee’s, the answer is “yes.” Because they can’t or won’t figure anything out for us.
    We may also want to take crash courses on environmental issues that may impact us, become our own banking experts, and inspect our own bridges and roads. And, as for food safety, my recommendation is, if you have your inlaw’s living with you, to have your the favorite one be your food taster/tester. “Here, Mother, we just bought this, try some of it…”

  8. If the mandate is a tax, then I believe it’s more secure than claiming that it’s economic activity, since Congress clearly has the power to tax. Don’t even need the Necessary and Proper Clause for that one. The problem with McArdle, and most like her, is that when you try to fit reality into their purely ideological (or should that be idiotological) strain, it pushes logic right out the window.

  9. It looks like DADT is going to be repealed! YESSSSSSSSSSS!!!
    I’m actually shocked. ‘Teh Gay’ has been a great wedge issue for the RepubliConfederate Party for a long time.
    This is now another brick taken out of the wall of hatred and injustice. One down, countless others to go…

    Of course, The Dream Act didn’t pass – with the help of 5 Democrats. So that brick remains fast.
    I can understand McCain, who figures that gives him more illegals to choose from for cheaper labor when he’s looking for cabana boys and serving girls for his many homes and mansions. What’s your excuse, Democrats?

  10. You guys shouldn’t be calling McCardle an idiot, since you lack the facts or understanding of what she is arguing.

    First, the Obama administration is claiming this is a tax within the court system. In fact, it is a penalty to make sure people have insurance. The claim is that they have the power to do so under the Commerce Clause, even though they are regulating against inactivity. Not to mention, that privacy rights and freedom of association rights are a concern.

    But let me help you guys out. This is what you really mean: we don’t really care if something is Constitutional, we just want the legislation.

    • First, the Obama administration is claiming this is a tax within the court system.

      McArdle doesn’t say that, though. She presents the tax argument as her interpretation of what the mandate is. All of the news stories I have seen say that the Justice Department argues that the mandate is permitted under the Commerce Clause, Article I, Section 8, 3rd paragraph. This has nothing to do with taxes, which is a separate power.

      If you can link to the actual court documents or to some authoritative source saying that the Justice Department claims that the purchase of insurance from a private insurance company amounts to a tax if the government mandates it, then please do so. I have seen the argument that the penalty for not purchasing insurance amounts to a tax, but that’s not what McArdle is talking about.

      The claim is that they have the power to do so under the Commerce Clause, even though they are regulating against inactivity.

      Yes, Congress has the power to regulate commerce between states, which is separate from its taxing powers. You are mixing up two different things.

      The administration’s argument is that the mandate itself is permissible under the Commerce Clause, which has nothing to do with it being a tax. So far, two federal judges have agreed with this and one has disagreed. My understanding is that the majority of constitutional scholars are siding with the Justice Department on this one. There’s a nice article explaining the issue at History News Network, by a law professor at St. Louis University.

      Not to mention, that privacy rights and freedom of association rights are a concern.

      A huge stretch in both cases, but it’s nice to see a right winger acknowledge there is such a thing as privacy rights. Usually you righties tell us we liberals made that one up.

      But let me help you guys out. This is what you really mean: we don’t really care if something is Constitutional, we just want the legislation.

      In fact, we liberals care deeply about the Constitution. (And, unlike you, some of us actually know what’s in it.) The difference is that we do not acknowledge that “constitutional” is whatever some right-wing whackjob says it is.

      As I said, the majority of constitutional scholars say you’re wrong, and so far two federal judges say you’re wrong. And since you don’t even understand what the Commerce Clause is, I say you’re wrong.

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