Obamacare and the Privatized Social Safety Net

16 11 2011

For all my discontent with “left neoliberalism” and its pervasive influence, it’s nice when you get some concrete specifics, as applied.

In my piece on the constitutionality of the individual mandate, I argued that the Affordable Care Act created a distressing precedent, whereby the government addresses inequality-causing market failures through broad requirements of consumers to protect profits as a precondition to regulations and requirements of capital. The administration’s thinking in creating the individual mandate was undergirded by left neoliberal preference for “market solutions,” as much as by an over-cautious political calculation whereby industry had to be placated before social ills could be addressed.

And lo and behold, unbeknownst to me, the Hon. Brett Kavanaugh, a D.C. Circuit Judge appointed by George W. Bush, was saying the same thing, although from the opposite perspective. In his dissent to the Fourth Circuit Court of Appeals’ decision upholding the Act’s Constitutionality, Kavanaugh characterizes the individual mandate as an example of legislative ingenuity in a new era of “privatized social services”:

The elected Branches designed this law to help provide all Americans with access to affordable health insurance and quality health care, vital policy objectives. This legislation was enacted, moreover, after a high-profile and vigorous national debate. Courts must afford great respect to that legislative effort and should be wary of upending it.

This case also counsels restraint because we may be on the leading edge of a shift in how the Federal Government goes about furnishing a social safety net for those who are old, poor, sick, or disabled and need help. The theory of the individual mandate in this law is that private entities will do better than government in providing certain social insurance and that mandates will work better than traditional regulatory taxes in prompting people to set aside money now to help pay for the assistance they might need later. Privatized social services combined with mandatory-purchase requirements of the kind employed in the individual mandate provision of the Affordable Care Act might become a blueprint used by the Federal Government over the next generation to partially privatize the social safety net and government assistance programs and move, at least to some degree, away from the tax-and-government-benefit model that is common now.

Courts naturally should be very careful before interfering with the elected Branches’ determination to update how the National Government provides such assistance. Cf. Heart of Atlanta Motel, Inc. v. United States, 379 U.S. 241 (1964); NLRB v. Jones & Laughlin Steel Corp., 301 U.S. 1 (1937). The significant implications of a Commerce Clause decision in this case – in either side’s favor – lead to this point: If we need not decide the Commerce Clause issue now, we should not decide the Commerce Clause issue now. I therefore would not strain to sidestep the Anti-Injunction Act.

(emphasis added)

In other words, Kavanaugh seems to be saying, the individual mandate may appear unconstitutional in the same way that the Civil Rights Act (Heart of Atlanta Motel) and the National Labor Relations Act (Jones & Laughlin Steel) did because it is novel, as they were. But novelty, or new-ness, isn’t proof of unconstitutionality; it may just augur a new era of legislative instruments. Kavanaugh, rightly I think, sees the Affordable Care Act as the first step in that new era: an era where the government, rather than redistributing wealth or restructuring economic relationships to address social ill, fuels capital’s ability to act on the assumption that the “spontaneous order” of consumer choice and entrepreneurial acumen will cure social ills.

You may believe this to be true, that it’ll work. But if you do, you have to contend with the fact that the empirical evidence for it is thin; for all the Great Society’s many failures, the replacement of tight regulatory regimes with preference for public-private partnerships and market mechanisms has seen an explosion in income inequality, economic insecurity, household debt, and the concentration of political power.


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21 11 2011
Your Dissatisfaction Is Your Fault « Same Subject, Continued

[…] just short of abolishing private management of capital,” whereas today it is “not privatizing the social safety net and education.” The sort-of parlor trick Chait is engaging in here is that he asks, […]

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