My apologies for any troubles this may have caused.
Largely, it’s due to the overall dominance of the two primary political parties in the US – the Democratic and Republican parties. These two parties have controlled the Presidency for 160 years and the Congress for 156 years, so long that everyone living right now and their parents (and most of their parents as well) haven’t seen anything different. However, it wasn’t always that way – and there’s no reason to say it will always stay that way. The US Constitution is silent on the issue of political parties, and George Washington remained independent for his entire life. Prior “major parties” include the Federalists, Democratic-Republicans (or Anti-Federalists), the Jacksonian Democrats and the Whigs – each was firmly entrenched in its time and yet each ultimately split, imploded or otherwise faded away into the pages of history. It is certainly possible then that the same might eventually happen to one or both of the current major parties. But for now they so dominate American politics that it is all most potential voters know – none of the third party candidates was invited to the debates or are included in the day to day chatter in the news media.
Given their near-exclusion from the campaign process, limited funds and especially their limited mind-share among the voting public, how can these third party candidates impact the election in a meaningful way? They can influence this election by taking away key votes from Obama or Romney in swing states, changing the outcomes in those states and thus swinging the election to the other party. There is certainly precedence for this – third party candidates such as Strom Thurmond (1948) and George Wallace (1968) have won states and electoral votes, taking these votes from major candidates. Former President Theodore Roosevelt (having grown dissatisfied with the performance of his successor William Howard Taft) ran as the Progressive Party candidate in 1912 and actually finished second in the election overall behind the Democrat Woodrow Wilson, carrying 6 states and 27.4% of the popular vote. And more recently the independent Ross Perot won nearly 19% of the popular vote in the 1992 election, taking large numbers of votes from the incumbent George H.W. Bush and helping bring Bill Clinton into the White House.
Of course, none of this year’s crop of third party challengers is a Ross Perot..and certainly none of them have the history or pull of a Teddy Roosevelt. But given the closeness of this election, even a less successful challenge can make a big impact. In the tight Florida race that ultimately decided the 2000 Presidential Election (in the Supreme Court, no less), George W. Bush won the state and thus the election by 537 votes. Green Party candidate Ralph Nadar had captured 94,000 votes in Florida, many of them at the expense of Al Gore, likely costing him the state and the election. The Constitution Party candidate Goode has the best chance of playing a “Nadar-type” spoiler in a specific area in this election – in the key swing state of Virginia he is a fairly popular former conservative Congressman. If he pulls even a fairly small (10,000-20,000) number of his former constituents, he could give the state to Obama. On a nationwide basis, the overtures made to the religious right by selecting Paul Ryan (see our prior article on this) as his Vice President could open Romney to losing votes to the fiscally conservative but socially liberal Libertarian candidate, Gary Johnson. The few thousand votes Johnson could pull per state would influence the results in a number of close swing states, including Colorado, New Hampshire and Ohio.
Of course, if the early poll numbers are incorrect and the margin is wider for Romney or Obama than currently projected, this could all be irrelevant. But if on election night it’s close, nip and tuck – take a look at how well Johnson and Goode are polling (and how much they are taking from Romney) and if Stein has managed to get decent numbers anywhere (votes that might otherwise go for Obama).
Bookmark this page and return at 9 pm EST tonight for all the latest thoughts, introspection and analysis of the debate as you watch!
We’ll be watching Twitter and comment feeds as well – so be sure to tweet #FromUnderTheCherryTree and let us know what you think.
First, some background on Ryan himself. Paul Ryan has been the U.S. Representative from the 1st District of Wisconsin since 1999 – he is currently running for his 8th term in office. He’s a life-long politician, having worked as an aid and speechwriter before his election to Congress (he was 28 when elected). He currently holds the position of Chairman of the House Budget Committee, a highly visible position within the House and has been something of a rising star in conservative circles. It is this committee chair position that has lead to Ryan’s most recognizable moment – the release of his Republican counter to President Obama’s 2012 budget, entitled “The Path to Prosperity,” in which Ryan detailed how he would attempt to close the deficit and reform Medicare. Though it proved to be quite contentious (and was ultimately defeated in the Senate), this budget proposal earned great notoriety for Ryan and likely strongly contributed to his selection as Romney’s running mate.
But what does Ryan bring to the Romney campaign? What can he contribute either before or after the election? The office of the Vice President itself has little real power – in fact the Constitution enumerates only two: succeeding to the office of President on the death of the then-sitting President and presiding over the Senate. This presiding role is limited to procedural matters and the Vice President is not typically accorded speaking privileges – he is allowed to vote in the Senate only when there is a tie. In recent times, the Vice President has been according a voice in the cabinet by the President and serves in an advisory capacity – but this is strictly an informal practice. As these powers are quite limited, it is unlikely that Ryan would bring anything “unique” or special to them that another could not do just the same. Thus the selection must be all about the election itself.
There are a number of theories as to why a running mate might be selected: to win swing states, to “balance” the ticket in some manner, to appeal to a specific group of voters, and/or to grow/benefit from the growth of a rising party star. For example, Lyndon Johnson was selected in 1960 to increase the appeal of the New England-based John Kennedy in the South and win certain key states. Does Ryan fit any of these common strategies? Well, he plays well in the Midwestern states – but it’s unlikely that he will turn any of the key swing states. Even his home state of Wisconsin is still polling in favor of Obama, something that is unlikely to change.
Perhaps Ryan’s the kind of rising star that can help boost the ticket – or he can be a dynamic campaigner? Maybe, but his rise has been so polarizing (with his budget including a proposal to turn Medicare into a voucher system), it’s unlikely that his particular star would be the boost that ticket in a real way. Mitt is already a decent enough speaker, and Ryan doesn’t seem to have the out and out charisma that would greatly benefit a campaign. Does he balance out the ticket? He’s a white male, approaching middle age with a background in economics and a life-long politician but without any real international experience – much like Mitt himself. He has more national political experience than Romney, but it’s hard to say he provides any real balance in the ticket.
So maybe he appeals to a specific set of voters? Now this is where we see the value of Ryan – he has a strong history of promoting key values that speak to the core GOP values – he espouses things like a strong traditional family unit, strong religious beliefs and is seen as being high on removing regulations and restrictions from private business. These voting patterns and personal stances will help Romney with core conservatives – an area he was seen as being weak in during the primary season against Newt Gingrich and Rick Santorum. Ryan can help energize the GOP base and deliver key conservative votes and dollars to the campaign.
But the positives are only half the story. What about the negatives? A Vice Presidential candidate can both add AND subtract from a ticket. For an example of this, we need only look back four years and see Sarah Palin. Ms. Palin looked like very positive addition to the GOP ticket at first, a popular, young, vibrant woman to pair with an older, much more experienced man. But as she was dissected and put through the campaign wringer, it was discovered that she was lacking in several areas of knowledge and experience. Add in a series of blunders and she ultimately hurt the McCain campaign more than she helped it.
Ryan certainly has his negatives – he is seen as being so conservative that he is rated by many groups as voting anti-senior, anti-civil rights, anti-gay rights and pro religion. This will alienate key segments of the population that Romney would love to have in his court. Further, the fact that Ryan can’t deliver any swing states or key demographics (as opposed to other potential picks – the popular GOP Senators from Ohio or Florida for example) is a major weakness. Large blocks of his voting record indicate that he was looking for the best deal for his district or following the party line (key votes such as TARP, the GM bailout and 1999 repeal of certain key banking regulations).
In the grand scheme of things then, this VP pick is going to have a major impact on the vote of this blogger (and likely much of the American public). Four years ago the pick of Sarah Palin for Vice President sealed many votes for Obama – given the age and overall health of McCain, it was important to select a Vice President that the public could see taking over and leaving the country in good hands. Ms. Palin was not that pick.
So was Ryan a good selection or a blunder? Given his limited appeal in swing states, the alienation of large groups of Americans created by his voting record and availability of other – seemingly better – alternatives, we have to at this point chalk it up as a blunder. It was unlikely that the core conservatives would have voted for a Democratic candidate at any rate and that one positive seems to be far outweighed by the negatives.
What do you think? Blunder or brilliance?
So, you may be asking – this sounds a lot like GoogleDrive or CloudDrive or DropBox, why is Megaupload special? What set Megaupload apart from those other services is how it was used – and how it went about it’s business. The new cloud-based/online backup solutions are designed primarily for uploading and archiving private files. Almost all download links require registration and log-in and the number of downloads is limited (either per file or per time period or both). They are designed for one person or a small group to store their files and have personal access to them any time from any place. Megaupload, on the other hand, not only permitted public download links and large numbers of downloads, but actually actively encouraged it by paying users who shared popular files (say $15-25 per 1,000 downloads). Kim then profited by selling advertising space on these download sites.
The combination of anonymous downloading, nearly unlimited number of downloads and encouragement to upload popular files lead to a particular sort of use for the site – illegal sharing of copyrighted works, such as music, movies and software. At the time of its shutdown, Megaupload was storing more than 25 MILLION GIGABYTES of user data – according to the US government, mostly illegal copies. This data has since been seized by the government; along with most of Kim Dotcom’s assets (he allegedly made more than $175 million from the site over the last 7 years). Kim and other top Megaupload employees were charged in January with racketeering and aiding and abetting criminal copyright infringement.
Now the question becomes can the government prove its case against Kim. And this is where Betamax might just come in and ride to the rescue. Not the actual Betamax video tape format of course (for those that don’t know what Betamax is, see here), but the Supreme Court’s Betamax decision – otherwise known as Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). In this landmark case, Universal City Studios sought to ban the production and sale of Betamax home video recorders (and the similar VHS technology) on the grounds that, once in the hands of the public, these machines could be used to record live programming and play it back later (called “time shifting”) or to make pirated copies of the programming in violation of copyright law. In a 5-4 decision, the Court decided that the practice of “time shifting” constituted a fair use exception under copyright law and (more importantly for Kim and Megaupload) that the technology and products themselves were not at fault merely because some users might put them to illegal use. Because the Betamax recorders had substantial non-infringing uses (possible uses, not necessarily what most people would use them for), the producers of the recorders could not be held liable for any misuse by the public.
This precedent has led to the creation of entire lines of technology. Imagine if the decision had been the opposite – we would not only lack Betamax and VHS VCRs, but also CD-RW and DVD-RW drives (for computers and television), audio cassette recorders, MP3/digital voice recorders, DVRs and so on. Technology many of us use every day, in multiple forms. Creation of new content would be stifled if the ability to create distributable media were tightly controlled in this fashion.
How does this apply to Megaupload then? Well, Kim and his attorneys have made it clear that they intend to argue that Megaupload had a large number of users who were legitimately sharing their own content – or even using it for personal backups. And because the technology has substantial non-infringing uses (just as do GoogleDrive and others in the space), Megaupload as a company cannot be held liable for the misuse of certain users. And as to their business practice of paying for popular uploads and encouraging sharing? Well, didn’t Sony market its Betamax players as capable of recording (copyrighted) television broadcasts and copying tapes? Maybe it doesn’t seem all that different, really…
The government will undoubtedly argue that Sony did not pay Betamax users for making popular recordings (though they did profit from each blank tape sold) and that Megaupload (unlike Sony) was in a position to see what the users were uploading because they hosted the files and saw the traffic numbers. But where is the line drawn? The current new batch of document dropboxes and drives could ostensibly be used for file sharing also (albeit on a more limited basis, given their models). And YouTube regularly has videos posted and then removed that violate copyright restrictions. Where did Megaupload cross the line into “criminally bad”? It should be noted that Megaupload did (largely) comply with the Digital Millennium Copyright Act, which requires that, upon finding copyrighted material posted for sharing illegally, the copyright holder must give notice to the server host who must then remove the content. Megaupload complied with this law in the same fashion as YouTube – removing content upon receipt of a notice – so how did they run afoul of the law? Criminal law, remember, needs to be clear and set a definable standard of behavior – just because something “smells fishy” doesn’t mean it is illegal.
This may yet end up being a landmark case for copyright law – and for technology as a whole – that changes how business is done online forever. Stay tuned for further updates – and in the meantime, comment on what you think should happen below!
“The ACA will reduce the cost of healthcare!”
No, it won’t. For the majority of Americans today, their healthcare costs will stay the same or even go a bit up. How can this be? Well, for that you have to look at the parts of the Act that directly impact care, rather than just health insurance. Such provisions are actually few and far between and are mostly limited to the provision of preventative care and certain medications (notably birth control) without a co-pay or deductable. That would certainly reduce the cost of those items – if the Act stated that premiums could not then be raised, which it does not.
There are other provisions that people point to in saying that the cost of care will go down – namely those provisions that provide for risk pooling and eliminate the ability for insurers to price-in pre-existing conditions (or to decline those with pre-existing conditions). The problem with that argument is that while the price of healthcare may go down somewhat for those with chronic conditions who do not have employer-provided insurance (note that employer-provided insurance never priced in these items), it will go UP for those that don’t have it. Insurance companies have to at least cover the cost of providing the care to their members – so if they cannot cover it by raising premiums on the heavy users of care, they will have to raise premiums across the board. Similarly, if they cannot limit their exposure to risk by declining unhealthy persons, they will have to raise their rates on all of their customers to compensate for the new expenditures.
The Act does not enact measures that would substantially change the cost that hospitals must charge – things like limiting the ability to sue for malpractice or the size of the awards that can be granted, or reducing the cost of new technology and scans – nor does it place limits on what can be charged for care by the hospitals/doctors. Further, the argument that hospitals can now charge less because they will have fewer uninsureds coming in is also a non-starter – they only do so to pass on the cost of their care that those people cannot pay…which will still be happening, just through higher taxes (for Medicaid covered care) and higher premiums (for those uninsureds who use the exchanges to acquire health insurance).
“The ACA won’t increase the deficit!” and “My state is getting more FREE Medicaid money to use!”
This is another favorite of ACA proponents – the idea that somehow the Federal government can give out more money (either directly to them or to their states) and it won’t either a.) increase the deficit or b.) increase taxes. Or do both. The problem with this should be clear – the Federal government (while it can just print money) cannot increase spending without getting the funding from somewhere. Proponents like to point to the original March 2011 Congressional Budget Office estimation that the Act would reduce the deficit by some $124 billion. However, they fail to mention that same CBO released a revised estimate in March 2012 that showed a much higher net cost, leading to an INCREASE in the deficit of ~$188 billion.
The logic that the Medicaid money to the state to expand their programs is somehow “free” is also incorrect – the money that forms those block grants must come from somewhere. The Act largely anticipates that this will come from an increased Medicare tax base (so a new tax) and new penalties on those that don’t sign up for insurance. The problem is that it’s circular logic – if the Act encourages a good number of people who are today uninsured to sign up for insurance, then there won’t be as many that have to pay the penalty…and so their won’t be enough funding for the Act’s programs. We must remember this; money that comes from an entity that you in part finance isn’t free.
“Cheap generic drugs, here we come!”
There is exactly one provision of the ACA that impacts generic drugs – a grant of authority to the FDA to allow generic makers to make biologic drugs after only 12 years of exclusivity (down from the normal patent period). While this may allow for cheaper (though still not cheap) biologics, it may have an unanticipated side effect on the drug market – one that we are in part already seeing. There’s a good reason that new pharmaceuticals are so expensive – it takes decades of research and trials to bring a drug to market. And as drugs become harder and harder to discover (more and more exotic compounds/sources), they require ever more research. Research that is funded by then selling the successfully found medications. But with the push towards increasing the availability of generic versions of medications, that funding is being limited and any failed trials can push a company to the brink or out of the business entirely. If generics are pushed even more, who knows how many potential discoveries we’ll lose out on forever?
“With this decision in hand, Congress can start mandating everything that I spend my money on!”
This one isn’t quite true either – Congress has exactly the same powers as it did before. I’ll explain – per the ruling, the ACA cannot compel anyone to purchase health insurance – in fact, it would be unconstitutional for Congress to attempt to require any sort of purchase. What Congress can do is use its taxing power to “encourage” certain courses of action. In this case, the ACA states that all those who do not purchase health insurance will be subject to a penalty in the form of an additional income tax based on their adjusted gross income, similar to any other income tax.
To understand the distinction the court has made, it is useful to think about the effect that the law has, rather than the language that is used. What would be the effect if Congress had instead enacted an income tax increase generally, with a new deduction for those that purchase health insurance? Would that not be the same in overall impact? Certainly – and it would have the same impact of increasing the likelihood that each citizen would purchase insurance to avoid having to pay the tax.
But then doesn’t that mean that Congress could “mandate” any purchase in a similar fashion? Yes, in fact it does – but they have for years! Every time they create a deduction for one thing or another, they are effectively “mandating” that in the same way as they now have for health insurance – deductions for mortgage interest on home purchases are designed to increase home buying, deductions for charitable giving encourage more donations, and so on. There are deductions for purchasing alternative fuel cars, investing in renewable energy and many more, all of which are in effect no different than this new “mandate”.
“The US finally has universal healthcare!”
No, we’re still a long way from there. This isn’t even universal health insurance, let alone universal healthcare.
Because the oral arguments over the Act were some time ago now, it may perhaps be helpful to recall what the issues were in the first place. All of the arguments centered around 2 primary provisions – the so-called individual mandate and the expansion of Medicaid. The individual mandate is the portion of the act that requires everyone in the United States to purchase health insurance, with the caveat that if one does not purchase such insurance, one would be subject to an a penalty in the form of an additional tax collected based on AGI (adjusted gross income). The expansion of Medicaid provisions expanded Medicaid coverage to millions of Americans who previously did not qualify as they had incomes above the cut-off. Here the contested provision was one that stated that if states refused to expand their Medicaid programs (Medicaid is administered and controlled by the state governments, they merely receive block grants from the Federal government for it) they would lose all Federal funding – even current funding.
The arguments themselves were (stated in favor of the Act):
Looking at the opinion, it’s plain to see that this was not a total win for the Federal government and the Obama administration. On a per argument basis, here’s how the decision shook out:
Thus, while this was certainly a “victory” for the Obama administration, it’s not quite the overwhelming and convincing win that is being portrayed. The Court didn’t buy the ability to create commerce is a part of the Commerce Clause. Nor did they agree with the government that the challenge should be tolled until the tax is collect (though this ultimately wouldn’t matter). Most importantly the Court held that, though the Medicaid expansion could be valid as applied, Congress may not use existing funding as a stick with which to keep the states in line – and in so doing applied a “coercion theory” that had not been articulated since the late 1930s. Allowing Congress to force something on the state governments against their will would have seriously damaged our federal form of government, casting shadow on the independence and, in fact, relevance of state level governments in the 21st century.
With a final resolution to the situation and a government now in place, the run on Greek banks that had occurred in the run up to the elections has reversed itself at least in small part, with 2 billion euros being returned to the banks over the past week. These inflows will undoubtedly help the economy as they relieve the pressure that the massive withdrawals had put on the banking system, restricting liquidity and forcing Greek banks to turn to the Bank of Greece and the European Central Bank reserves.
At the individual level, the questions are fairly straight-forward, though the answers are not. The primary questions are, much as today, how does one save enough to retire and live comfortably their remaining years and what does one do after retiring from a career that likely had taken the majority of their waking hours for 40+ years. The question of savings and investment is exacerbated by the increased lifespan after retirement – if people are living on average 20 or more years, then some will certainly live 25, 30 or even 40+ years in retirement. How can one save enough in a 40 year career (and presumably be paying off school loans, then a home loan, then raising a family) to live 40 more years afterwards? And can you really expect to spend all that time fishing or travelling or such after pushing for so many years to increase productivity and become better at your craft?
At the national level, it all boils down to money. Namely, how can Social Security cope with the increased number of retirees and their increased lifespan? How can we expect that we can support a populace that spends half of its lifespan out of the productive workforce? (An 87 year old would spend 22 years growing up and 22 years in retirement.) The simple answer is that we can’t support a populace like that – and Social Security can’t handle the increased load – because it was never designed to. When Social Security was passed in 1935 (yes, the country survived for over 150 years without it), the life expectancy at birth was 61.7 years, meaning that the average person could expect to receive $0 in Social Security since they wouldn’t live long enough to collect it. The system was designed to provide for those that lived longer than average – not support the population for decades.
So what can be done in the face of these looming demographic changes in our society? The answer is simple, but will undoubtedly be controversial and unpopular: increase the retirement age, indexing it to the life expectancy. The retirement age is already set to increase from 65 to 67 over the coming years – and estimates are that increasing it to 70 would save 13% in expenditures from the trust fund. But that may not even be enough as the life expectancy continues to lengthen. If we use the same ratio as was established in the initial law to determine the new retirement age, we would (and perhaps should) reset the full benefit age to 82. That would certainly solve the retirement savings, productivity and Social Security issues.
So what do you think? Up the retirement age to 70? 75? 82? Or is there another solution?
Oh, and to those that say it’s “their” money that they are getting back, you need look no further than the very first Social Security recipient to debunk that myth. From the Wikipedia article on the History of Social Security:
The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1939 she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92.
In two months she received more money than she paid in 3 years. And ultimately collected nearly 1000x what she put it – quite a return on her investment!
This isn’t my first go-around with the implications of the natural resources under the Arctic – several years ago I explored the issue as part of a law review note. At that time (2007), Russia was making an attempt to claim large amounts of the seabed – and thus the oil reserves beneath it – through legal channels. Namely they were claiming that the newly discovered Lomonosov Ridge is geographically part of continental shelf of Asia and so, under the Law of the Sea Treaty, should be considered Russian territorial waters. Russian geologist and geographers sent to survey the ridge went as far as to place a Russian flag on the seabed. At the time, I noted that there were a number of countries that would have viable claims to the seabed under the treaty, including Russia, Canada, Greenland (and so Denmark) and the United States and that it would likely ultimately fall to the international tribunal convened under the treaty to decide. Fast forwarding 5 years, it has come down to those countries attempting to make claims but the issue then (and now) is that the United States, though heavily involved in writing the treaty, has not yet ratified it and cannot avail itself of this forum. As the value of the undersea resources continues to increase, the US may have no choice but to ratify the treaty and allow the tribunal to split the resources among the claimants.
Of course, regardless of who owns the seabed, new technologies will be required to work in such an inhospitable environment. New oil platforms will have to be designed to handle the sea ice of the Arctic Ocean; nuclear icebreakers (currently in use by Russia) may be needed to reach the platforms and guide the supertankers both to pick up their cargo and deliver it…and perhaps even more exotic technologies. The book excerpt linked above mentions the possibility of forgoing the surface platform entirely – a scenario where the wellhead is drilled and capped with a reservoir. The reservoir would then be tapped by a submarine-tanker which can carry the oil under the ice to markets around the world. Before you laugh, remember that the largest submarines in the world are already quite large – and a nuclear submarine is far easier to handle under the ice than a massive supertanker trying to go through it.
So this then is the future of powering the Earth’s demand for oil and natural gas – superpowers fighting over frozen wastelands, debating geophysical boundaries and terms and sending massive sub-tankers to tap the precious resources trapped under an icy ocean. The desert sands and Sheikhs will hand the reins of the world’s energy markets over to the snow and Inuit.