Archive for May 7, 2012
The Supreme Court is currently deliberating on the constitutionality of the Patient Protection and Affordable Care Act’s “individual mandate”, which requires all Americans to purchase medical insurance.
It has been pointed out by opponents that the individual mandate is an unprecedented requirement to engage in commerce. The Congressional Research Service, for example, observed that “it is a novel issue whether Congress may use the clause to require an individual to purchase a good or a service.”
The Cato Institute came to a similar conclusion, that “[f]inding the mandate constitutional would be the first interpretation of the Commerce Clause to permit the regulation of inactivity — in effect requiring an individual to engage in an economic transaction.”
Yet it seems that, from an examination of history, they are incorrect. (more…)
On Saturday, François Hollande defeated Nickolas Sarkozy in the French Presidential runoff election. This event promises to alter the tone of French politics, and of the European economy.
Hollande is a Socialist. Unlike Americans, Europeans do not fear the word “socialism.” Europeans do not swoon in terror at the term, like a delicate Southern belle.
The President-elect ran on a platform of decrying the “austerity” measures that have been hobbling European recovery from the Great Recession. Rather than further cut public spending and worker benefits — actions which appear to have led the European economy to continue shrinking — Hollande wants to increase infrastructure spending and start once again to protect France’s workforce. He even wants to (gasp!) increase taxes on the wealthy, raising the top tax rate to 75 percent.
Across Europe, the citizenry may be reaching their limit with austerity measures that haven’t led to economic recovery, but have served to reduce worker benefits and standard of living. Greek parliamentary elections just brought to power two parties opposed to the extreme measures that have been imposed upon their country. It will likely be a matter of weeks before a coalition government is formed in Greece, but when one does, the world can expect Greece to reject the latest round of austerity that’s been forcing the Greek people ever further into poverty.
What do these developments mean for the European economy? And what do changes in Europe portend for America? (more…)