Tuesday, November 15, 2011

Only a 40% Chance the Supreme Court will Rule Individual Mandate Unconstitutional

In Trade is a predictions market, that lets people bid on predictions of the outcomes of real world events. The markets give probablilities of future events happening, for example, Barack Obama being elected President in 2012. People either buy "yes" shares or "no" shares. Obviously, chance that an event will happen is reflected in the price of the shares, which range from $0 to $10. For instance, if the price of the share is $7.00 dollars, the event is predicted to have a 70% chance of happening. As of this writing, the odds of Barack Obama winning the election is 52% The odds of Romney running against him is 70%.

All of this is very interesting, but it seems a little bit like betting on whether or not the Cubs will in the World Series next year.  Strangely, though, In Trade has a pretty good record of predicting the outcome of events correctly. So, it was diappointing to see that trading is going on for a prediction "The U. S. Supreme Court to rule individual mandate unconstitutional before 31 December 2012" and that the odds of this event are only 40%. If the Supreme Court can torture the language enough to find this horrible law "Constitutional" then we are well and truly done as a nation.

The individual mandate in ObamaCare relies on the dubious notion that the Commerce Clause grants to Congress near universal authority to regulate any activity it wants on the grounds that it has a tangential effect on interstate commerce. (It also relies on a clause, known only to Representative John Conyers, called the "Good and Plenty" clause, but I digress.) This was not the original meaning of the Commerce clause. Remember that the States are sovereign. So, one State, Ohio for example, could enact a "Buy Ohio" law that made it illegal to sell anything made or grown in another State if that product was also made or grown in Ohio. Or, the States could have erected tariffs against products from out of State. Congress could therefore regulate how commerce was to be conducted among the several States. They were given authority to create a framework for trade and commerce internal to the United States that enhanced the general welfare. Then, under President Franklin Roosevelt, the Court began taking a more expansive view of the Commerce Clause, notoriously ruling in Wickard vs. Filburn that even grain that a farmer raised on his own property, and which never left his farm, none the less affected interstate commerce. With this view of the Commerce clause powers of Congress, it is hard to see that any activity could not be regulated. It was put very well at the Volokh Conspiracy:

For example, not everyone eats broccoli. But everyone does participate in the market for food. Therefore, a mandate requiring everyone to purchase and eat broccoli would be permissible under the federal government’s logic, as would any other purchase requirement. As the Eleventh Circuit puts it, “the government’s position amounts to an argument that the mere fact of an individual’s existence substantially affects interstate commerce, and therefore Congress may regulate them at every point of their life.” Whatever we do, we are always implicitly making decisions not to purchase some product or other, and those choices all have economic effects.

There is a bright spot in all this however, the Court has begun trimming the sails of Congress just a bit. In 1995, in Lopez the courts began ruling that some things simply do not meet the test of interstate commerce. 

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