There is an apparent consensus that President Obama was making an incorrect statement when he said (many, many times), one version or another of the following: “If you like your healthcare plan, you can keep it.”  Reportedly, he made such a statement on more than 3 dozen occasions – as early as June 2009, and as recently as September 26 of this year.  He spoke in every imaginable forum – the White House web page, numerous public speeches, in person or on TV, etc., and he spoke before the Affordable Care Act was passed, before the 2010 congressional elections, and before the 2012 Presidential elections – most memorably, in the first Presidential debate on October 3, 2012.

Most of the critical discussions of the President’s statements have focused upon the question of whether the President lied.  For his part, the President has issued various attempts at explaining the statements, and most have sounded as though he considered them to be misstatements or considered himself to have misspoken – interesting terms that seem to have gained a lot of currency in recent years.   So, let’s have a go at clearing up the semantics.

“Misstatement” means, simply, an incorrect statement – in other words, intent is not relevant.  “Misspeak” means, to say something that is not what you meant to say – a definition in which intent is critical.  A “lie” is a misstatement that was intentional – a statement that the speaker knew was incorrect.  The most interesting recent discussions regarding the meaning of “lie,” were, the arguments concerning the infamous allegations that “Bush lied” in publicly building his case that the US should invade Iraq because Hussein possessed “WMDs.” The discussions were interesting because it eventually appeared, with hindsight, that the President, like most of his top advisers and foreign intelligence services – and most of the Congressional leadership (both Democrats and Republicans) – believed that Hussein did in fact possess WMDs.  In other words, the President made statements that may have been incorrect (misstatements) but he did not misspeak and he did not lie.

On the other hand, it now appears that President Obama, in giving his assurances that everyone who had a healthcare insurance plan could keep that plan, was not misspeaking (he said virtually the same exact thing at least 3 dozen times, so he must have been saying what he meant to say ).  But was he making a misstatement?  Was he lying?  On that point, we have the President’s own admission that he knew his statements were not “literally” correct, and that perhaps he “should have said” something else; in other words, his statements were incorrect, he knew they were incorrect, and they were not misspoken.  Hence the inference is unmistakeable: the statements were LIES.

But is that all they were?  Given the time-sequence over which the statements were made, it seems appropriate to consider WHY the incorrect statements were uttered, why they continued to be uttered.  What reason could there have been, for his making statements he knew were not correct?  The answer is obvious:  he wanted to influence other people’s behavior.  And that moves us into a wholly different category of untruths:  FRAUD.

For the benefit of those who escaped the joys and burdens of law school, here is a shorthand summary of the American legal definition of fraud.  It involves nine elements, each of which must be shown:

1. a representation of an existing fact;
2. its materiality;
3. its falsity;
4. the speaker’s knowledge of its falsity;
5. the speaker’s intent that it shall be acted upon by the plaintiff;
6. the plaintiff’s ignorance of its falsity;
7. the plaintiff’s reliance on the truth of the representation;
8. the plaintiff’s right to rely upon it; and
9. consequent damages suffered by the plaintiff.

In our analysis, the “speaker” is President Obama.  The “plaintiffs” are, potentially, each of the various people or bodies the President was trying to persuade:  (a) in his earliest speeches and pronouncements, before ObamaCare was passed, he was trying to persuade Congress, both directly and via the constituents of the respective Senators and Representatives; (b) in his later presentations, leading up to the 2012 Congressional elections, he was trying to persuade the voters in those elections; and (c) in his 2012 presentations, he was trying to persuade the voters in the 2012 Presidential election.    In other words, the President was attempting to perpetrate a fraud in order to get a law passed and in order to win Congressional and Presidential elections.

Did the President’s statements meet the standards of “fraud?”  Run through the list yourself – isn’t the answer obvious?  The only potential plaintiffs who might lose their case would be that small number of people who had actually read the bill and grasped its full meaning – a number that apparently did not include Nancy Pelosi (she of “we have to pass this bill in order to find out what’s in it?” fame) and did not include the millions of other politicians, journalists, and ordinary citizens who are suddenly waking up to see that they have been deceived.

No, the more important point is not that the President lied, it is that the President committed fraud in order to pass a law and win some elections, especially his own Presidential election.  It is we, the people, who have been the victims of his deception.

Here is the (slightly edited) text of a letter I sent to editors of The Wall Street Journal a few weeks ago:

John Cochrane, in “Treasury Needs a Better Long Game” (Opinion, Wall Street Journal, 3/4/13) has finally spoken the truth one dare not utter: we are on the verge of experiencing a doomsday scenario for the US bond markets, the so-called “death spiral” when deficit-spending spooks the bond markets, which forces the price of Treasury obligations down, which in turn increases the deficits, which force Treasury obligations further down, and so on.  A “China Syndrome” in financial markets, where everything melts down and burns its way to the bottom – the destruction of America’s economy, maybe the world’s.

Prof. Cochrane had already laid the foundation for this scenario, in ”Running On Empty” (Books section,  Wall Street Journal, 3/2/13), in which he made the case for the likelihood of that scenario, observing that our cumulative response to the financial crisis of 2008 (or thereabouts) has been for the government to guaranty still more bank debt and then (having thus merely enhanced the incentives for risky behavior) to impose mountains of new regulations that are supposed to compel the bankers to stop engaging in risky behavior – as though such regulations might have even the slightest chance of actually accomplishing that goal.  (Prof. Cochrane went on to spell out the obvious cure that should have been undertaken, but still has not, which is that we need to increase the capitalization of the banks, not the regulation of them, while we try to see about the business of restoring economic growth and overall fiscal sanity.) Andy Kessler, in any earlier piece, “When Interest Rates Rise, Watch Out” (2/22/13), had also sounded the alarm on the financial terror that lies ahead and that would be realized via the bond markets.

Can something be done, to dodge this approaching asteroid before it can inflict upon us the equivalent of a nuclear or electromagnetic-wave attack?  Yes, and Prof. Cochrane has spelled it out: a once-in-a-lifetime opportunity for the US Treasury to issue long-term Treasury bonds (with fixed interest rates that are somewhat higher than the rates on our currently outstanding short-term Treasuries), in exchange for all of the outstanding short-term Treasuries (which have very low floating interest rates), a swap that would not require Treasury to sell any bonds and that could increase our annual interest costs by an amount that is pretty substantial (though quite a bit less than even the short-term costs of the various Obama “stimulus” programs) but would buy us a lot of time to get our fiscal house in order and would cost us chicken feed in comparison to what the swap would save us over the time it would take us to achieve fiscal order.  Will something be done?  Prof. Cochrane has not spelled it out, but it is not difficult to read between his lines:  NO, because the last thing the President (or for that matter, the Fed Chairman)  wants to do, before the 2014 elections, is anything that might inflict pain on the voters, even if the pain is only temporary and even if it is far less than the pain that awaits the voters after 2014 if nothing is done to tackle this financial crisis-in-the-making.

I do not think the professor is crying wolf.

Did The Heller Ruling Do More Harm Than Good?

If Justice Scalia is concerned about people misconstruing his comment that the Constitution is “dead, dead, dead . . .” (in his speech at Southern Methodist University on 1/28/13), he might want to be a bit more careful when he writes opinions like the majority opinion that he wrote in District of Columbia v. Heller, in which the Supremes held that the Second Amendment does not invalidate 21^st-century laws that forbid certain advanced, 21^st-century weapons.  Here is a part of the Scalia opinion:  ““the sorts of weapons protected are the sorts of small arms that were lawfully possessed at home at the time of the Second Amendment’s ratification, not those most useful in military service today, so ‘M-16 rifles and the like’ may be banned.”  Here is a longer, and even more controversial, excerpt:  “It may well be true today that a militia, to be as effective as militias in the 18th century, would require sophisticated arms that are highly unusual in society at large. Indeed, it may be true that no amount of small arms could be useful against modern-day bombers and tanks. But the fact that modern developments have limited the degree of fit between the prefatory clause and the protected right cannot change our interpretation of the right.”

Only Small Arms Are Permitted – That was the original INTENT

In essence, what Justice Scalia was saying was that he does not believe the drafters of the Second Amendment intended to allow private citizens to own bombers and tanks, and that he thinks they only intended to protect a right to bear small, 18^th-century-sized arms.  Yes, the Scalia opinion did us all the favor of affirming that the usage of those small arms was not intended to be limited to usage in a militia, but then he turned around and went all Lefty on us and decided to try to read the minds of the drafters in order to determine whether they intended the Second Amendment literally (as a right to bear ARMS), or more subjectively  – and perhaps more to his personal preference  (as a right only to bear SMALL arms, 18^th-century-style).  Or, to put it even more bluntly, Justice Scalia decided to look for the intent of the drafters of constitutional language rather than to look for the meaning of that language, as generally understood by the American people at the time the language was written.  A huge distinction, a vastly important one.

Robert Bork Believed Intent Was Irrelevant

If you want the definitive word on this topic, here is an excerpt from “The Tempting of America,” by the late Robert H. Bork, former Judge of the U.S. Court of Appeals for the District of Columbia Circuit, who was possibly the greatest conservative legal-scholar, ever:

“What is the meaning of a rule that judges should not change?  It is the meaning understood at the time of the law’s enactment.  Though I have written of the understanding of the ratifiers of the Constitution, since they enacted it and made it law, that is actually a short-hand formulation, because what the ratifiers understood themselves to be enacting must be taken to be what the public of that time would have understood the words to mean.  It is important to be clear about this.  The search is not for a subjective intention . . . When lawmakers use words, the law that results is what those words ordinarily mean . . . All that counts is how the words used in the Constitution would have been understood at the time.”

What Is The Significance Of Looking For Intent Rather than MEANING?

What could be clearer than that?  OK, let’s test this interpretation.  What was meant, in 1789, by the word, “Arms?”  You know, the things that the people had the right to bear, a right that “shall not be infringed.”  Justice Scalia evidently believes the drafters, when they said “arms,” actually intended that to mean, “small arms, of the type commonly carried by people in 1789,” and that they did not mean, “whatever types of arms one might need for the purposes of engaging (perhaps in a militia?) in battle with either a foreign invader or a tyrannical internal government?

Even Bork Was Confused

Constitutional scholars may note the irony in my citation of Judge Bork in support of an argument that the Second Amendment should be read to protect a citizen’s right to bear rocket-launchers or nuclear devices.  The curious fact is that Bork, had he been asked (I can find no record that he was), might have said that Scalia went too far – rather than not far enough – in Heller;  Bork had often commented that he thought the Second Amendment did not apply to private arms-usage at all and was intended solely to authorize the arming of militias.  True enough; apparently Bork sometimes forgot to read Bork.

The Conservative Bork Looked For Meaning, Not Intent

But in this commentator’s view, the Bork of The Tempting of America was the more sensible and coherent one.  I submit that Bork was quite correct in his opinion that laws should be examined for the meaning of the words, not the intention of the drafters, and that Bork’s public comments on the Second Amendment conflicted with his own principles as to constitutional-construction.  It is my view that the judicial search for intent is a classic red herring, a license to re-write the Constitution and turn it into the “living document” that Justice Scalia professes to disdain and fear, and that the willingness of the judiciary to look for intent, rather than meaning, has often led to exactly the kinds of mischief and harm that conservatives (often including Justice Scalia) have so often lamented and blamed upon progressives.

Here are two examples, from Justice Scalia’s majority opinion in District of Columbia v. Heller, of the kind of thinking that has long bothered me in the line of Supreme Court cases that have interpreted the Second Amendment:

“the sorts of weapons protected are the sorts of small arms that were lawfully possessed at home at the time of the Second Amendment’s ratification, not those most useful in military service today, so ‘M-16 rifles and the like’ may be banned . . .”

“ It may be objected that if weapons that are most useful in military service—M-16 rifles and the like—may be banned, then the Second Amendment right is completely detached from the prefatory clause. But as we have said, the conception of the militia at the time of the Second Amendment ’s ratification was the body of all citizens capable of military service, who would bring the sorts of lawful weapons that they possessed at home to militia duty. It may well be true today that a militia, to be as effective as militias in the 18th century, would require sophisticated arms that are highly unusual in society at large. Indeed, it may be true that no amount of small arms could be useful against modern-day bombers and tanks. But the fact that modern developments have limited the degree of fit between the prefatory clause and the protected right cannot change our interpretation of the right.”

While the Court, in Heller, did do us all the favor of ruling that the right to bear arms is not limited to the bearing of arms as a member of a “militia” (despite the infamous prefatory wording of the Amendment), the Court, as you can see, wasted little time in accepting the argument that the right was limited to certain types of weapons and dismissing the suggestion that it was not.  I must confess, I have always been bothered by the legitimacy of that limitation and wondered whether the issue could not be addressed once again – and with full briefing and argument and with a proper utlization of the “militia” clause.

When you think about the reasons why the colonists eventually formed militias – to resist the British and to resist an American federalist government if it grew tyrannical – your mind wanders.  (Mine does, anyway.)  I mean, what if China, having ramped-up its quiet campaign to achieve naval domination of the South China Sea and political control of the governments of most of the Pacific Rim nations, mounted an armed invasion of the continental US?  What about Iran, after destroying Israel, threatened to attack or nuke the US?  What if President Obama continued in his campaign to balance the budget by eviscerating our military?  Rather than having George Washington leading his rag-tag volunteers with muskets, wouldn’t you rather have 100 million guerilla-style American militia-people armed with the latest in digitized weaponry, rockets, and missiles in order to repel the invaders?  In what way would that militia be different from the “militia” contemplated by our Founders?   You need a militia?  Why not a militia sufficiently armed to have a fighting chance to succeed?

For that matter, remember President Obama’s notorious “private army” statement:  “We’ve got to have a civilian national security force that’s just as powerful, just as strong, just as well-funded,” as the U.S. military. What if the President created the “Ready Reserve Corps” mentioned in an obscure provision (Section 5210) of the Obamacare law and, despite all the pooh-poohing of conspiracy theorists who were alarmed by that provision, the President went ahead and established just such a force?  How would that be materially different from the actions of the British that led to our forming (and arming) a militia to resist tyrannical government, whether from without or within the country?  Don’t you suppose China’s, Iran’s, or the President’s military would use sophisticated weaponry?

I have always thought the Second Amendment cases erred in this regard, and I was distressed to see Justice Scalia in 2009 add further weight to this unfortunate precedent.  To me, all of this stuff represents judicial activism by professed Conservatives who present themselves as “original intent” addicts but are not above the occasional bending of the literal terms of the Constitution.  I would not want to know what anyone thinks the Second Amendment drafters had in mind when they were drafting, I would only want to know what the words they wrote would have been generally understood to mean at the time they wrote them.  In this case, though, I see little difference:  the point was to ensure that the citizens, as distinct from their government, should be able to throw off any government – their own or that of another country – that behaved oppressively.

I would not want to believe that the Obama administration wants to disarm us so as to make us more easily controllable in the event of perceived governmental-overreach, but I am not ready to relinquish my Second Amendment rights in reliance upon their assurances of benign intent

Redacted version of an email I sent to my daughter’s  fiance’:

A few words in defense of pampering the rich.  I am talking specifically about tax policy.

I am sympathetic to your youthful, idealistic, compassionate, egalitarian, soak-the-rich/subsidize-the-poor instincts.  But this is about policies of a federal government, defending and caring for an entire nation – 300 million people, not just the poor.  When I suggest a tax policy that pampers the rich, I am talking about our responsibility to all of our citizens, not just some of them.

The background for this topic is, orthodox Leftist fiscal theory (Krugmanism, etc.), which is that there are two ways to pay for new government programs (bailouts, stimulus packages, “investments” in new energy sources, ObamaCare, etc.):  (i) raise taxes, or (ii) print or borrow money.  Regarding the second method, and contrary to everything you learned in college, there are finite limits to the amounts of government cash available to assist our citizens – be they the poor or the rest of the 300 million.  The supply of our money is not literally finite, but when the government prints or borrows dollars in order to spend them, it ends up cheapening the value of everyone’s dollars; the aggregate true value of our entire money supply is finite, no matter how many new dollars we nominally create.  Growing the nominal money supply is, in the end, just a re-distribution of wealth.

So, let’s talk about raising taxes – specifically, my opposition to tax-rate increases for the rich (which I called, pampering the rich), and your revulsion over that concept and your counter-proposal of a more egalitarian tax policy – “equal treatment for all,” as you put it.

First, let me identify the only kind of tax  that is literally egalitarian:  a capitation tax.  That is when  every citizen, regardless of his income or wealth, is required to pay for the defense of the nation and for the privilege of enjoying roads, bridges, and other elements of the nation’s infrastructure –  a tax in the form of a fixed sum, say, $10 per year per person.  Or more realistically, $1,000, or $10,000, or whatever else would equal, for the entire citizenry (roughly 240 million adults), the government’s total expenditure on the provision of such defense and infrastructure – in other words, each adult citizen would pay an annual tax of 1/240,000,000^th of our annual budget.  You want the federal government to spend more, you simply raise the amount of the capitation tax; no deficits, no surpluses, a balanced budget.

In response to the outraged cries of those with below-average incomes (or below-median, below-mode, below-“poverty,” or whatever) and their self-styled defenders, who would submit that such an “equal” tax was unjust or unfair and an infringement of the “rights” of people less-gifted by genetics or life’s vicissitudes, the nation might elect to move toward a more generous version of equality.  Indeed we have been doing so for a very long time.  In this model, an “equal” tax means one in which the taxes upon individual citizens are not equal as to amount, but instead are equal in rate – that is, equal in proportion to the respective citizens’ incomes.  For example, every citizen, instead of paying, say, the same amount of $10,000 per year in tax, would pay, say, 10% of the amount of his income.  This does appear to be a limited form of equality, but it is no longer true equality, because it embodies a bit of social engineering: a determination that citizens should be treated unequally, in that those with greater incomes should pay  more in taxes.  The gradual introduction of this inequality into our tax system has been so subtle, so seemingly “fair,” that nowadays it is seldom thought of as a form of governmental re-distribution of income or wealth, though it truly is.  For example, I, as a higher-income taxpayer, pay 10 times as much in Medicare tax contributions during my lifetime as the contributions made by a person who made only 1/10^th as much money as I, yet that lower-income taxpayer will get exactly the same level of medical care from Medicare as will I.   We are taxed unequally, yet we receive equal benefits.  That is re-distribution.

And that then leads to an even more-advanced form of inequality in taxation policy:  the higher-income taxpayer not only pays more tax because a fixed percentage yields a higher product when multiplied by a higher amount of income; the higher-income taxpayer is also required to pay a higher percentage of his income.  For example, if I earn $200,000 per year and you earn $20,000, an “equal” tax would mean that we each pay the same annual tax – say, $10,000.  A tax that is equal as to percentage of income, rather than as to capitation, would mean, assuming a 10% rate of taxation, that I pay $20,000 in tax while you pay $2,000 in tax – I pay 10 times as much as you, though we each benefit from the same roads, bridges, and armed services.  But instead of that, what we have had as our standard model, since we started gradually unwinding the Tax Reform Act of 1986, is a tax that is quite unequal although it is commonly known by the friendly-sounding euphemism, “progressive,” under which I pay at the rate of 33% of my income ($70,000 on my $200,000 income), while you pay at only 15% of your income ($3,000 on your $20,000 income).   (In reality, you would probably pay no tax whatsoever because of  various applicable credits, deductions, exemptions, and minimums available to lower-income taxpayers, and I would only pay at the 33% rate on the portion of my income that exceeded $178,000, with the rest being taxed at lower rates.)  The Left loves this model so much that they are just dying to make the inequality of rates even greater, in their desperate zeal to be fair and just by soaking the rich.

 The philosophical question is, once we agree to depart from true equality of treatment in the calculation of taxes, how unequal should we get?   These are relative concepts, once you get past the pure capitation tax.   When you say you want equal treatment, I suspect you don’t really mean that; what you probably mean is, you want a further departure from both the pure version of equality (the capitation tax) and the modified version of equality (everyone pays the same percentage of his income – as substantially embodied in the 1986 Tax Reform Act), and you want even more “progressivity” than that which we have already developed, as we have veered farther and farther from the ’86 act.  You don’t want more equality, you want less!  On the other hand, when I say I want more pampering of the rich, what I mean is, there is a certain point at which one must begin to think not only in terms of fairness and social justice, but also in terms of the practical consequences of our policies – even if that means being a bit less aggressive in our efforts to soak the rich via our tax system.

To elaborate:  in my world (as in Milton Friedman’s world), the essential purpose of the income tax is to raise enough money to pay for the stuff we want our government to do, and, while we are willing to allow our tax policy to introduce a degree of re-distribution, fairness, and compassion, we must recognize what Krugman and his ilk will not – which is that there is a point at which additional re-distribution becomes counter-productive, in that it creates significant disincentives for our higher-income people (who tend to be our greatest job-creators) to work and take financial risk, and that that, in turn, reduces the total amount of income that is available for such re-distribution.  If we allow the “Bush tax cuts” to expire, that  would mean that tax rates on higher-income individuals (and corporations) go up substantially and that tax rates on investment income (capital gains and dividends) go up substantially.  In my view, it is just plain stupid – self-defeating – to insist upon these rate increases, because they are likely to end up stunting our economic growth and thereby reducing overall tax revenues rather than increasing them, thus hurting the very people we were ostensibly trying to help.   That is called, cutting off your nose to spite your face.

If you want to label the more sensible policy as “pampering,” or “unequal,” or any other term, so what – must we all become equally poor, in order to ensure that no one gets rich?