Wednesday, November 11, 2009

The First Amendment vs Antitrust

The statism of the Obama democrats is in full swing, and nowhere is this more evident than in their multi-pronged attack on America’s crucial First Amendment rights. Many of the attacks are coming in stealth form, under cover of seemingly unrelated issues, and always through illegitimate powers already appropriated by government - for example, its economic regulatory powers.

On October 12, 2009, the health insurance trade group America's Health Insurance Plans released “a report warning that the typical family premium in 2019 could cost $4,000 more than projected”, according to the Washington Post. The Post stated:

"The report makes clear that several major provisions in the current legislative proposal will cause health care costs to increase far faster and higher than they would under the current system," Karen Ignagni, AHIP's president and chief executive, wrote to board members Sunday. "Between 2010 and 2019 the cumulative increases in the cost of a typical family policy under this reform proposal will be approximately $20,700 more than it would be under the current system."

Industry officials said they intend to circulate the report prepared by PricewaterhouseCoopers on Capitol Hill and promote it in new advertisements. That could complicate Democratic hopes for action on the legislation this week.

Angry reaction from the democrats was swift.

Judiciary Committee Chairman Sen. Patrick Leahy convened a hearing on a bill to remove the industry’s anti-trust exemption.

“The health insurance’s antitrust exemption is one of the worst accidents of American history. It is time to end this special status and bring true competition to the health insurance industry”, said Sen. Chuck Schumer with a straight face. He apparently forgot that it is the government’s own policies that forbid competition.

“It’s something that should have been done a long time ago,” Senate Majority Leader Harry Reid said.

"It is clear where the problem has been. It is absolutely clear that it is an unsustainable situation as we go forward, and it is well known to the public that the health insurance companies are the problem,” chimed in Nancy Palosi.

“[T]he push by Reid and Schumer signals that Democrats are planning to intensify their efforts to paint insurance companies as the villains in the health reform fight…,” reports Politico. “[T]he push [to end the antitrust exemption] is likely to gather momentum as Democrats try to find a way to lash back at the insurance industry — whose report was viewed as a last-minute attempt to scuttle health care reform…”

President Barack Obama noted that insurers are "earning these profits and bonuses while enjoying a privileged exception from our antitrust laws, a matter that Congress is rightfully reviewing."

It’s obvious why the insurers are being punished. They exercised their First Amendment rights. To be sure, the AHIP is trying to straddle both sides of the political fence … first making a deal to collect customers by government decree (mandatory health insurance), then attacking the Finance Committee bill because it does not do “enough to draw young, healthy people into the insurance risk pool by postponing and reducing penalties on people who do not sign up for health insurance”. But the broader issue is a very ominous one.

Antitrust is a body of non-objective, contradictory, and arbitrary laws that embody a legal category that has no place in a free society … economic crime where no one’s rights have been violated. They are unevenly applied (as the insurance industry exemption shows) and based upon vague, unprovable, undefinable, contradictory, and thus impossible-to-defend-against terms like “intent to monopolize”, “restraint of trade”, “anti-competitive practices”, etc. In essence, a business and its corporate officers can and are prosecuted, fined, and even jailed for engaging in the very economic activities that lead to a successful, profitable company … i.e., they can be legally punished for their virtues.

Under antitrust, every business in America is at any given time in violation of some antitrust statute. If a company charges prices that are deemed too high, it can be prosecuted for “price gouging”; too low, for engaging in “predatory pricing”; the same as competitors, for “collusion” or “price fixing”. If a company pursues a long term strategy that enables it to cash in on market opportunities as they arise, such as maintaining a cutting edge research department, diversification in its field, or ample manufacturing capacity to meet projected future demand, it can be charged with “intent to monopolize”. If a company gains too big a market share, it can be charged with “monopolization” (as Microsoft was under the Clinton administration). But if it forms market-sharing agreements with competitors, so as not to run afoul of “anti-monopoly” statutes, it is “carving up markets”, as House Judiciary Committee chairman John Conyers complains.

(For an in-depth look at the nature of Antitrust and non-objective law in general, see The Abolition of Antitrust
by Gary Hull and "Humanity's Darkest Evil": The Lethal Destructiveness of Non-Objective Law by Tara Smith in Essays on Ayn Rand’s Atlas Shrugged, Chapter 18. Also see Steve Forbes, Who Needs Antitrust? We Don't.)

The determination of who is in violation of antitrust statutes, and when, is left up to the sole discretion of bureaucrats, prosecutors, and ultimately judges. Thus, no business can know for sure in advance when it is in violation or compliance, which is contrary to the objective legal principles which are so vital to maintaining “a country of laws and not of men” … i.e., a free society.

“We’re after power and we mean it. … There’s no way to rule innocent men. The only power any government has is the power to crack down on criminals. Well, when there aren’t enough criminals, one makes them. One declares so many things to be a crime that it becomes impossible for men to live without breaking laws. Who wants a nation of law-abiding citizens? What’s there in that for anyone? But just pass the kinds of laws that can neither be observed nor enforced nor objectively interpreted, - and you create a nation of law-breakers – and then you cash in on guilt.”

Harry Reid? Nancy Pelosi? Chuck Schumer? Nope. That was Dr. Floyd Ferris of the State Science Institute, employing implied threats for the purpose of trying to coerce a leading American industrialist (Atlas Shrugged, page 436). But it could have been Reid, Pelosi, or any politician in Washington. Is Ferris’ statement an exaggeration? Think of the nature of the laws that are now being used as a club against a group of American citizens whose only “crime” is to speak out on an issue that directly affects their business. Think of the fact that the fate of nearly 1/6th of the US economy, not to mention our very medical freedom, is at stake in the current debate over the democrats’ plans for “healthcare reform.”

Make no mistake, they’re after power and they mean it.

Because the antitrust laws are so arbitrary, they represent a source of constant fear for businessmen and thus political leverage for politicians who can (and do) use the threat of enforcement as a means of control. The democrats’ threat to the insurance industry of the removal of the “privilege” of being free from unjust laws in retaliation for the exercise of its First Amendment free speech rights is a dramatic concrete example of the fundamental truth that “political freedom cannot exist without economic freedom”.

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