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Reagan’s solicitor general: ‘Health care is interstate commerce. Is this a regulation of it? Yes.'

Reagan’s solicitor general: ‘Health care is interstate commerce. Is this a regulation of it? Yes. End of story.’
Posted by Ezra Klein at 01:09 PM ET, 03/28/2012

Charles Fried is a professor of law at Harvard University. From 1985 to 1989, he served as President Ronald Reagan’s solicitor general. He specializes in constitutional law and is the author of many books on the subject, including 2004’s “Saying What the Law Is: The Constitution in the Supreme Court.” He also wrote a brief on behalf of 104 law professors arguing that the individual mandate is constitutional. We spoke this morning.

Charles Fried, who served as Reagan’s top lawyer, was not impressed by the Supreme Court yesterday. (Harvard Law School) Ezra Klein: Tuesday’s arguments seemed to focus on the question of a “limiting principle.” So is there a limiting principle here?

Charles Fried: First of all, the limiting principle point kind of begs the question. It assumes there’s got to be some kind of articulatable limiting principle and that’s in the Constitution somewhere. What Chief Justice John Marshall said in 1824 is that if something is within the power of Congress, Congress may exercise that power to its fullest extent. So the question is really whether this is in the power of Congress.


The Horrors of an Ayn Rand World

The Horrors of an Ayn Rand World
By Gary Weiss, Alternet/St. Martin's Press
27 March 12

An Objectivist America would be a dark age of unhindered free enterprise, far more primitive and Darwinian than anything seen before.

here is no real doubt what an Objectivist America would mean. We may not be around to see it, but it's likely we'll be here for its earliest manifestations. They may have already arrived.

The shape of a future Objectivist world has been a matter of public record for the past half century, since Ayn Rand, the Brandens, Alan Greenspan, and other Objectivist theoreticians began to set down their views in Objectivist newsletters. When he casually defended repeal of child labor laws in the debate with Miles Rapoport, Yaron Brook [President of the Ayn Rand Institute] was merely repeating long- established Objectivist doctrine, summarized by Leonard Peikoff as “Government is inherently negative.” It is a worldview that has been static through the decades, its tenets reiterated endlessly by Rand and her apostles:


Healthcare Jujitsu

Healthcare Jujitsu
By Robert Reich, Robert Reich's Blog
27 March 12

Not surprisingly, today's debut Supreme Court argument over the so-called "individual mandate" requiring everyone to buy health insurance revolved around epistemological niceties such as the meaning of a "tax," and the question of whether the issue is ripe for review.

Behind this judicial foreplay is the brute political fact that if the Court decides the individual mandate is an unconstitutional extension of federal authority, the entire law starts unraveling.

But with a bit of political jujitsu, the President could turn any such defeat into a victory for a single-payer healthcare system - Medicare for all.

Here's how.


Has he been arrested yet?

I come here everyday hoping to find out that justice has prevailed. Everyday I am more disgusted and amazed that nothing has happened. How in the holy hell has this gone on for over a month?

‘The Fair Society’ — Author Calls for More Equality

Social critic Peter Corning argues for a new social structure based on equality, equity and reciprocity in his new book “The Fair Society.”
By Tom Jacobs

While most of our public policy debates break down along numbingly familiar ideological lines, occasionally an issue will arise where pretty much everyone is in agreement. When bailed-out bankers award themselves bonuses, or the price of a basic-necessity item suddenly spikes for no good reason, we’re virtually unanimous in responding: That’s not OK.
As Peter Corning argues in his new book, The Fair Society, such actions violate a fundamental sense of fairness that appears to be hard-wired in the human psyche. He points out that “Do unto others,” or some other variation on the golden rule, is a tenet of every major religion, as well as a preoccupation of Plato (whom Corning quotes frequently and effectively).


Adam Smith’s Psychology

His “invisible hand” was only part of the story; so was morality!

The founding father of modern free market economics, Adam Smith, is best known for his famous simile in The Wealth of Nations (1776) about the “invisible hand,” which seemed to endorse a dark view of human nature. He wrote: “It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest. We address ourselves, not to their humanity but to their self-love, and never talk to them of our own necessities but of their advantages.”

However, that’s perfectly OK. “Man…is led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was not part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.”
Indeed, later on in his masterwork Smith even seemed to provide a rationalization for unvarnished greed and a no-holds-barred predatory economy when he commented: “In spite of their natural selfishness and rapacity…[men] are led by an invisible hand to…advance the interest of the society...”

Modern economists often become lyrical about “the superiority of self-interest” over altruism in economic life and the virtues of competition and the “profit motive,” while overlooking the fact that Smith’s rendering of the invisible hand was quite contingent. As he said, the invisible hand is not “always the worse” and “frequently promotes” the general welfare. But this is not a sure thing.

More important, many of Smith’s modern acolytes seem unaware of his cautionary warnings, especially in his earlier work, The Theory of Moral Sentiments, where (as a Stoic and a Christian) he stressed the fact that everything in a free market depends on a moral foundation of trust, honest dealing and, as he himself put it, “justice”. (He defined justice as not doing “injury” to others.) “There can be no proper motive for hurting our neighbor.” Smith was even a proponent of the Golden Rule and invoked the “invisible hand” simile in his earlier work to characterize our sense of charity toward those in need.


Thoughts from Adam Smith

"Thus far at least seems certain, that, in order to bring up a family, the labour of the husband and wife together must, even in the lowest species of common labour, be able to earn something more than what is precisely necessary for their own maintenance; but in what proportion, whether in that above mentioned, or in any other, I shall not take upon me to determine."

Adam Smith - Wealth of Nations

Creative Destruction is rooted in the Marxist economic theory

It is rooted in the Marxist Theory and later tweaked by a guy named Joseph Shumpeter.

Shumpeter believed that capitalism couldn't survive.


Creative destruction is a term originally derived from Marxist economic theory which refers to the linked processes of the accumulation and annihilation of wealth under capitalism. These processes were first described in The Communist Manifesto (Marx and Engels, 1848)[1] and were expanded in Marx's Grundrisse (1857)[2] and "Volume IV" (1863) of Das Kapital.[3] At its most basic, "creative destruction" (German: schöpferische Zerstörung) describes the way in which capitalist economic development arises out of the destruction of some prior economic order, and this is largely the sense implied by the German Marxist sociologist Werner Sombart who has been credited[4] with the first use of these terms in his work Krieg und Kapitalismus ("War and Capitalism", 1913).[5] In the earlier work of Marx, however, the idea of creative destruction or annihilation (German: Vernichtung) implies not only that capitalism destroys and reconfigures previous economic orders, but also that it must ceaselessly devalue existing wealth (whether through war, dereliction, or regular and periodic economic crises) in order to clear the ground for the creation of new wealth.

From the 1950s onwards, the term "creative destruction", sometimes known as "Schumpeter's gale" (see below), has become more readily identified with the Austrian-American economist Joseph Schumpeter,[4] who adapted and popularized it as a theory of economic innovation. In Capitalism, Socialism and Democracy (1942), he developed the concept out of a careful reading of Marx’s thought (to which the whole of Part I of the book is devoted), arguing (in Part II) that the creative-destructive forces unleashed by capitalism would eventually lead to its demise as a system (see below).[6] Despite this, the term subsequently gained popularity within neoliberal or free-market economics as a description of processes such as downsizing in order to increase the efficiency and dynamism of a company.


Part II: Can Capitalism Survive?

Schumpter answers "no" in the prologue to this section. But he says, “If a doctor predicts that his patient will die presently,” he wrote, “this does not mean that he desires it.” The section consists of 100 pages with the following ten topics: The Rate of Increase of Total Output, Plausible Capitalism, The Process of Creative Destruction, Monopolistic Practices, Closed Season, The Vanishing of Investment Opportunity, The Civilization of Capitalism, Crumbling Walls, Growing Hostility, and Decomposition. Of these, Creative destruction has been absorbed into standard economic theory. This section constructs a view of capitalism which ultimately tends toward corporatism which, he suggests, will be its own undoing.

Is a leveraged buyout a legitimate form of creative destruction?

I have been reading up on Bain Capital and it's practices of leveraged buyouts and how they ascribe to the theory of creative destruction, but the whole thing has left me a bit confused. My interpretation of creative destruction...The new must always replace (via venture capitalism) the old in order to maintain economic growth. Any thoughts?
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