Never Mind the IRS, You’d Better Be Nice to Kathleen Sebelius

catoinstitute — Fri, 17 May 2013 15:01:26 -0500

Written by Michael F. Cannon, Director of Health Policy Studies at the Cato Institute. Posted with permission from Cato @ Liberty.

ObamaCare’s Independent Payment Advisory Board is everything its critics say and worse. It is a democracy-skirting, Congress-blocking, powers-unseparating, law-entrenching, tax-hiking, fund-appropriating, price-controlling, health-care-rationing, death-paneling, technocrat-thrilling, authoritarian, anti-constitutional super-legislature. Its very existence is testament to government incompetence. It stands as a milestone on the road to serfdom.

The Congressional Research Service has now confirmed what HHS Secretary Kathleen Sebelius pretends not to know but what Diane Cohen and I explained here:

[I]f President Obama fails to appoint any IPAB members, all these powers fall to Secretary of Health and Human Services Kathleen Sebelius.

That’s an awful lot of power to give any one person, particularly someone who has shown as much willingness to abuse her power as Sebelius has.

I would also like the Congressional Research Service to address a feature of IPAB that Cohen and I first exposed. According to the statute, we write:

Congress may only stop IPAB from issuing self-executing legislative proposals if three-fifths of all sworn members of Congress pass a joint resolution to dissolve IPAB during a short window in 2017. Even then, IPAB’s enabling statute dictates the terms of its own repeal, and it continues to grant IPAB the power to legislate for six months after Congress repeals it. If Congress fails to repeal IPAB through this process, then Congress can never again alter or reject IPAB’s proposals.

You read that right. For more, read our paper, especially Box 3 on page 9.

CRS, I’m interested to know what you think. Take a close look at the law and get back to me.

Entitlement Spending Is America’s Biggest Fiscal Challenge, but Discretionary Spending Is Still Far too High

catoinstitute — Tue, 16 Apr 2013 12:20:32 -0500

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

If America descends into Greek-style fiscal chaos, there’s no doubt that entitlement programs will be the main factor. Social Security, Medicare, Medicaid, and Disability are all fiscal train wrecks today, and the long-run outlook for these programs is frightful.

Just look at these numbers from the Bank for International Settlements and OECD to see how our fiscal future is bleaker than many of Europe’s welfare states.

Simply stated, if we don’t implement the right kind of entitlement reform, our children and grandchildren at some point will curse our memory.

But that doesn’t mean we shouldn’t worry about other parts of the budget, including the so-called discretionary programs that also have been getting bigger and bigger budgets over time.

That’s why I want to add some additional analysis to Veronique de Rugy’s recent piece in National Review Online, which might lead some to mistakenly conclude that these programs are “shrinking” and being subject to a “Big Squeeze.”

…there is another number to look at in that budget. It’s the shrinking share of the budget consumed by discretionary spending (spending on things like defense and infrastructure) to make space for mandatory spending and interest. This is the Big Squeeze. …in FY 2014 mandatory spending plus interest will eat up 67 percent of the budget, leaving discretionary spending with 33 percent of the budget (down from 36 percent in FY 2012). Now by FY 2023, mandatory and interest spending will consume 77 percent of the total budget. Discretionary spending will be left with 23 percent of the budget.

She’s right that discretionary spending is becoming a smaller share of the budget, but it’s important to realize that this is solely because entitlement outlays are growing faster than discretionary spending.

Here’s some data from the Historical Tables of the Budget, showing what is happening to spending for both defense discretionary and domestic discretionary. And these are inflation-adjusted numbers, so the we’re looking at genuine increases in spending.

As you can see, defense outlays have climbed by about $100 billion over the past 50 years, while outlays for domestic discretionary programs have more than tripled.

If that’s a “Big Squeeze,” I’m hoping that my household budget experiences a similar degree of “shrinking”!

Veronique obviously understands these numbers, of course, and is simply making the point that politicians presumably should have an incentive to restrain entitlement programs so they have more leeway to also buy votes with discretionary spending.

But I’d hate to think that an uninformed reader would jump to the wrong conclusion and decide we need more discretionary spending.

Particularly since the federal government shouldn’t be spending even one penny for many of the programs and department that are part of the domestic discretionary category. Should there be a federal Department of Transportation? A federal Department of Housing and Urban Development? A federal Department of Agriculture?

No, NO, and Hell NO. I could continue, but you get the idea.

The burden of federal government spending in the United States is far too high and it should be reduced. That includes discretionary spending and entitlement spending.

P.S. For those who don’t have the misfortune of following the federal budget, “entitlements” are programs that are “permanently appropriated,” which simply means that spending automatically changes in response to factors such as eligibility rules, demographic shifts, inflation, and program expansions. Sometimes these programs (such as Social Security, Medicare, Medicaid, etc) are referred to as “mandatory spending.”

The other big part of the budget is “discretionary spending” or “appropriations.” These are programs funded by annual spending bills from the Appropriations Committees, often divided into the two big categories of “defense discretionary” and “nondefense discretionary.”

Duplicative Government Programs Are a Symptom of the Problem

catoinstitute — Fri, 12 Apr 2013 14:17:05 -0500

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

The Government Accountability Office has released its third annual report on fragmented, overlapping, or duplicative federal programs and activities. Proponents of making the government more efficient view the findings as an opportunity to achieve cost savings. While there’s obviously nothing wrong with the government spending less money than it has to, the goal should be to permanently shut the trains down – not just try to get them to run on time.

Some examples:

The GAO says “Enhanced collaboration between the Small Business Administration and two other agencies could help to limit overlapping export-related services for small businesses.” The federal government shouldn’t be subsidizing export promotion for commercial interests, period. (See here and here.)

The GAO says “Federal agencies providing assistance for higher education should better coordinate to improve program administration and help reduce fragmentation.” The federal government should not be subsidizing higher education, period. (See here.)

The GAO says, “To achieve up to $1.2 billion per year in cost savings in the Federal Crop Insurance program, Congress could consider limiting the subsidy for premiums that an individual farmer can receive each year, reducing the subsidy for all or high-income farmers participating in the program, or some combination of limiting and reducing these subsidies.” Federal crop insurance subsidies and all farm subsidies should be abolished, period. (See here and here.)

The GAO says, “Federal support for wind and solar energy, biofuels, and other renewable energy sources, which has been estimated at several billion dollars per year, is fragmented because 23 agencies implemented hundreds of renewable energy initiatives in fiscal year 2010—the latest year for which GAO developed these original data.” The federal government shouldn’t subsidize renewable energy (or traditional sources of energy), period. (See here.)

There have been numerous attempts to “reinvent government,” “streamline the bureaucracy,” etc, over the decades as the government has expanded in size and scope. Perhaps the GAO report will spur another. But while the initiatives change, the result is always the same: we still end up stuck with a bloated Leviathan that continues to have its snotty nose in every facet of our lives.

As I often point out, waste always comes with government the same way a Happy Meal always comes with a toy and drink. There is duplication and waste in the federal government because it has become massive and there are virtually no limits on what politicians can spend money on.

I’m not suggesting that government waste should be ignored. Indeed, examples of waste should be held up as reasons to terminate entire government agencies and programs. But I believe that a myopic fixation on “eliminating duplication and waste” is itself a waste. That’s because duplication and waste are merely symptoms of the real problem of big government.

Stop Rewarding North Korea

catoinstitute — Thu, 11 Apr 2013 12:20:32 -0500

Written by Doug Bandow, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

To a degree almost impossible to imagine just a month ago, North Korea has won international attention, dominated events in Northeast Asia, and embarrassed the United States. Unfortunately, the Obama administration has played into Pyongyang’s hands by responding to the North’s provocations. Now Secretary of State John Kerry is visiting East Asia, beginning Friday, where the so-called Democratic People’s Republic of Korea will dominate the agenda.

Rushing off to the region on a high-profile trip is another mistake. Whatever Secretary Kerry does or says is likely to be seen as enhancing the DPRK’s stature. Better for him to have stayed home, phoning his counterparts as appropriate.

No doubt the Obama administration hopes to craft a diplomatic answer to what is widely seen as a crisis. However, Washington dare not reward the North for its caterwauling, even if Kim Jong-un suddenly adopts the mien of a serious leader of a serious nation. Rather, Secretary Kerry should hold out the possibility of engagement, even diplomatic relations—but only if Pyongyang chooses to behave like other nations. No more providing benefits in response to threats.

Moreover, the secretary and other U.S. officials should stop responding to every new North Korean development, big and small. America is a superpower with the ability to vaporize every acre of the DPRK. The North is impoverished; its people are starving; its military is antiquated. Its leaders are evil, not stupid or suicidal, and have neither the ability nor the incentive to attack America. Washington should respond to the next North Korean provocation, whether verbal challenge or missile test, with a collective yawn.

Hope continues to breed eternal that China will tame or replace the Kim regime. No doubt Beijing is frustrated with its nominal protégé. However, the Chinese government will act only if it believes doing so is in China’s interest. Insisting or demanding will achieve nothing. Secretary Kerry must seek to persuade Beijing, an unusual strategy for Washington, which is used to dictating to other nations.

North Korea is a human tragedy, but its belligerent behavior is primarily a problem for its neighbors, not the United States. Washington should give Pyongyang the (non) attention that it so richly deserves.

Investigative Reporters Tackle the Small Business Administration

catoinstitute — Tue, 09 Apr 2013 11:15:39 -0500

Written by Tad DeHaven, a budget analyst at the Cato Institute. Posted with permission from Cato @ Liberty.

When it comes to reporting on the Small Business Administration, it seems to me that most journalists simply assume that if a government agency exists to “help” small businesses then it must be good. So I was pleased to read a weekend piece from two investigative journalists with the Dayton Daily News that challenges the conventional wisdom on the SBA.

As the reporters explain, the SBA’s main job is to back loans issued by private lenders to small businesses that couldn’t get financing on market terms. The result is that taxpayers end up holding the bag when these naturally riskier loans go bad.

And quite a few go bad as this Cato essay on the Small Business Administration explains.

Lenders have little skin in the game so for them it’s heads they win, tails they win. Thus it was shocking – absolutely shocking – that a representative from the SBA and the head of the Ohio Bankers Association provided the reporters with the most favorable quotes.

The entire piece is worth reading, but the authors did a particularly good job of turning the spotlight on the racket that exists between the SBA, lenders, and national franchisors:

Franchises are major consumers of SBA loans, according to the Daily News analysis — and sub sandwich franchises top the list. Subway and Quiznos franchises dominated the list of businesses borrowing the government guaranteed loans. Subway franchises took out at least 4,649 of the 7(a) loans since the beginning of 1990, the data show, while Quiznos took out 2,586.

But the battle of the sub shops went in drastically different directions, according to the loan data. While Subway borrowed more than 2,000 more loans than Quiznos, its loan failure rate was about one-fifth of Quiznos restaurants. Only 4.8 percent of Subway franchise SBA loans were charged off as of the end of February, while almost a quarter — 23.4 percent — of Quiznos franchise loans ended in failure and were discharged to the Treasury.

Quiznos also led all franchises with $43.5 million in defaulted loan guarantees that SBA had to pay the lending banks. Cold Stone Creamery was second with $29.6 million, followed by Days Inn with $16.9 million and Ramada Inn with $14.3 million.

The sub shops also dominate the nine-county Dayton region in numbers of SBA loans, but the disparity is even more stark. While Subway franchises took out more than twice as many 7(a) loans as Quiznos (35 to 16), only one Subway loan (2.9 percent) failed and was charged off compared to six (37.5 percent) of the Quiznos loans.

Nationwide, the 50 franchises that cost the SBA the most totaled more than $411 million in discharged loans.

Corporate franchisors such as Quiznos and Subway contract with individual owners to operate the business, but some corporations take a bigger share of the profits than others.

Quiznos’ cut from its operators makes it harder for them to be profitable, said Robert Purvin, chief executive officer for the American Association of Franchises and Dealers.

“My bet is lurking behind every failure there is price gouging to the franchisee,” said Purvin. “We’ve been after SBA for years to make no loans to franchisors that are bad players.”

He said the SBA is essentially subsidizing these big corporate franchisors because the loan money is often used to pay the franchise fees, royalties and sometimes payments on leases controlled by the franchisor.

What does it say about the state of American capitalism that federal policymakers think it is necessary and proper for the government to subsidize the creation of more Subway shops?

The defaults and wasted capital aside, it is a quote from the Ohio chapter of the National Federation of Independent Business that gets to the fundamental problem with government-backed lending:

“Many small business owners see this as an unnecessary program of government intrusion, of picking winners and losers,” said Roger Geiger, Ohio chapter executive director of the National Federation of Independent Business. “They most certainly wonder how equitable it is when it’s their tax dollars being used to fund what could potentially be a competing business.”

As former Sen. Scott Brown (R-MA) demonstrated a couple of years ago, the average policymaker doesn’t grasp that there are major problems with the federal government picking winners and losers in the market.

Or else they just don’t care.

The inconvenient truth is that from the SBA’s inception it has existed for politicians to show that they “care” about small businesses. For politicians who support economic policies that are destructive to businesses small and large, demonstrating support for the SBA allows them to pretend otherwise.

Untappable Apple or DEA Disinformation?

catoinstitute — Fri, 05 Apr 2013 15:00:22 -0500

Written by Julian Sanchez, a research fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

Tech news site CNET has an interesting, but I suspect somewhat misleading, story today suggesting that text messages sent via Apple’s iMessage service—an Internet-based alternative to traditional cell phone SMS text messages—are “impossible to intercept” by law enforcement. Yet that is not quite what the document on which the story is based—an “intelligence note” distributed to law enforcement by the Drug Enfrocement Administration—actually says.

The DEA memo simply observes that, because iMessages are encrypted and sent via the Internet through Apple’s servers, a conventional wiretap installed at the cellular carrier’s facility isn’t going to catch those iMessages along with conventional text messages. Which shouldn’t exactly be surprising: A search of your postal mail isn’t going to capture your phone calls either; they’re just different communications channels. But the CNET article strongly implies that this means encrypted iMessages cannot be accessed by law enforcement at all. That is almost certainly false.

As cryptographer and computer scientist Matthew Green observes, there is a simple and intuitive way to test whether Apple (or any cloud storage provider) has the capability to access a user’s encrypted content stored in the cloud—as Apple’s iMessages are: The “mud puddle test.” If you slip in a mud puddle, destroying your iPhone (along with any locally stored encryption keys) and forgetting your passwords as a result of the bump on the head, can you still recover your data? Can you, for instance, log in from a Web browser, reset your password, and then restore your content to a new device? If you can—and with Apple’s iCloud services, you can—then the cloud provider must itself hold the keys to unlock that data. So iMessages may not be interceptable from a suspect’s cell carrier, but Apple has to be capable of handing them over when the authorities come knocking with a warrant. In fact, all Apple has to do is provide the cops with an appropriate authentication token and they should, in principle, be able to turn an ordinary iPhone into a de facto clone of the suspect’s own device—so that iMessages show up on the police phone in realtime just as the suspect receives or sends them.

In fact, there’s another big way in which iMessages should be much more convenient and useful to police than conventional text messages. As law enforcement has long complained, most cell carriers store ordinary SMS messages for a few days after they’re sent at most—and some don’t retain message content at all. That means police aren’t able to read through a suspect’s historical messages even if they obtain a search warrant—only new ones. Apple’s iMessages, however, are stored indefinitely—which is a lot more useful if you’re trying to investigate a crime that’s already occurred. That means cops should be absolutely overjoyed if drug dealers or other criminals start using iMessage instead of SMS.

Which brings us to the question of why, exactly, this sensitive law enforcement document leaked to a news outlet in the first place. It would be very strange, after all, for a cop to deliberately pass along information that could help drug dealers shield their communications from police. One reason might be to create support for the Justice Department’s longstanding campaign for legislation to require Interent providers to create backdoors ensuring police can read encrypted communications—even though in this case, the backdoor would appear to already exist.

The CNET article itself discusses this so-called “Going Dark” initiative. But another possible motive is to spread the very false impression that the article creates: That iMessages are somehow more difficult, if not impossible, for law enforcement to intercept. Criminals might then switch to using the iMessage service, which is no more immune to interception in reality, and actually provides police with far more useful data than traditional text messages can. If that’s what happened here, you have to admire the leaker’s ingenuity—but I’m inclined to think people are entitled to accurate information about the real level of security their communication enjoy.

Eleventh Circuit Overturns Department of Labor’s Claim of Authority As “Absurd”

catoinstitute — Thu, 04 Apr 2013 13:02:51 -0500

Written by Walter Olson, Senior Fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

The U.S. Department of Labor claimed the authority to issue rules governing the H-2B guest worker program on the grounds that the underlying statute provides for it to be consulted as part of the program’s administration. On Monday, the Eleventh Circuit U.S. Court of Appeals curtly rebuffed this “absurd” claim. From its opinion:

In its proposed and final rules, DOL cited two statutory provisions as the source of its rulemaking authority. First, DOL cited 8 U.S.C. § 1184(c)(1), which instructs the Secretary of DHS to consult with the “appropriate agencies of the Government” in resolving whether to grant a foreign worker a visa upon the “petition of the importing employer.” Although there is no grant of rulemaking authority to DOL in this statutory section, DOL asserts that as the result of the permission it grants to DHS to consult with it, DOL “has authority to issue legislative rules to structure its consultation with DHS.” The end result, in DOL’s view, is that it is empowered to engage in rulemaking, even without the DHS.

We reject this interpretation of “consultation.” Under this theory of consultation, any federal employee with whom the Secretary of DHS deigns to consult would then have the “authority to issue legislative rules to structure [his] consultation with DHS.” This is an absurd reading of the statute and we decline to adopt it.

Meanwhile, today’s Washington Post reports that the Obama Administration is anxious to get more of its appointees confirmed to the D.C. Circuit, which hears more regulatory appeals than any other, on the grounds that the current roster of judges on the circuit too frequently strikes down the administration’s regulations as exceeding the federal government’s authority. Perhaps the administration would not have to worry about seeing so many of its regulations struck down if it took care not to ground them on claims of authority that are “absurd.”

Was William Shakespeare the First Libertarian?

catoinstitute — Wed, 03 Apr 2013 13:02:05 -0500

Written by Daniel J. Mitchell, a senior fellow at the Cato Institute. Posted with permission from Cato @ Liberty.

I’ve never been a big Shakespeare fan, but that may need to change. It seems the Bard of Avon may be the world’s first libertarian.

Some of you are probably shaking your heads and saying that this is wrong, that Thomas Jefferson or Adam Smith are more deserving of this honor.

Others would argue we should go back earlier in time and give that title to John Locke.

But based on some new research reported in Tax-news.com, we need to travel back to the days of Shakespeare:

Uncertainty over the likely future success of his plays led William Shakespeare to do “all he could to avoid taxes,” new research by scholars at Aberystwyth University has claimed. The collaborative paper: “Reading with the Grain: Sustainability and the Literary Imagination,”…alleges that, in his “other” life as a major landowner, Shakespeare avoided paying his taxes, illegally hoarded food and sidelined in money lending. …According to Dr Jayne Archer, lead author and a lecturer in Renaissance literature at Aberystwyth: “There was another side to Shakespeare besides the brilliant playwright - a ruthless businessman who did all he could to avoid taxes, maximize profits at others’ expense and exploit the vulnerable - while also writing plays.”

In that short excerpt, we find three strong indications of Shakespeare’s libertarianism.

What does it mean that Shakespeare did everything he could to avoid taxes? His actions obviously would have upset the United Kingdom’s current political elite, which views tax maximization as a religious sacrament, but it shows that Shakespeare believed in the right of private property. Check one box for libertarianism.
What does it mean that the Bard “illegally hoarded food”? Well, such a law probably existed because government was interfering with the free market with something like price controls. Or there was a misguided hostility by the government against “speculation,” similar to what you would find from the deadbeats in today’s Occupy movement. In either event, Shakespeare was standing up for the principle of freedom of contract. Check another box for libertarianism.
Last but not least, what does it mean that Shakespeare “sidelined in money lending”? Nations used to have statist “usury laws” that interfered with the ability to charge interest when lending money. Shakespeare apparently didn’t think “usury” was a bad thing, so he was standing up for the liberty of consenting adults to engage in voluntary exchange. Check another box for libertarianism.

To be sure, it appears that Shakespeare was more of an operational libertarian rather than a philosophical libertarian.

And now that I’m giving it more thought, perhaps that doesn’t qualify him for the honor of being the world’s first libertarian.

After all, does the former Treasury secretary, Tim Geithner, deserve to be called a libertarian for evading taxes? Does the new Treasury secretary, Jack Lew, somehow become a libertarian simply because he utilized the Cayman Islands?

Or what about lawmakers such as John Kerry, Bill Clinton, John Edwards, and others on the left who have utilized tax havens to boost their own personal finances? I very much doubt that any of them deserve to be called libertarian (though the burden of government shrank under Bill Clinton, so maybe we can consider him an unintentional libertarian).

But maybe with a bit of literary license, we can make Shakespeare a full-fledged libertarian.

“O liberty, liberty! Wherefore art thou liberty?”

“Double, double, statism and trouble;

Taxes burn, and regulations bubble!”

Hmmm… perhaps instead of my budding second career as a movie star, I should become a playwright instead?

Obama’s Perilous Foreign Policy Path

catoinstitute — Fri, 29 Mar 2013 15:01:06 -0500

To both a greater and lesser degree of success, foreign policy scholars have tried to explain the disconnect between President Obama’s soaring idealism of America’s role in the world and his halting political caution about it in discrete situations. That vacillation has drawn criticism, both for being too meddlesome and for not being meddlesome enough.

Daily Caller contributor Adam Bates ably sums up the president’s incoherence as “not based on any particular logic or worldview beyond the president’s own desire to distance himself from America’s foreign policy past without bothering to actually change any policies.” Indeed. As this author has written in the past, specifically on counterterrorism policies,

On the one hand, Obama openly rejected Bush’s ‘with us or against us’ approach to foreign affairs. On the other hand, Obama’s sophisticated demeanor opened him to criticism, with hawks condemning him as too weak and easily manipulated by America’s enemies.

The administration has supported policies that have failed to deliver tangible benefits to the American people (Libya), continued to prop up brutal regimes (Bahrain, Saudi Arabia, and Egypt), and helped tether our country to the region’s parochial quarrels (Afghanistan, Pakistan, and perhaps ever-more-so in Syria). Despite seemingly courageous attempts to distance itself from failed policies of the past, the Obama administration has managed to drift into strategic purgatory.

Three Cheers for Autonomy

catoinstitute — Wed, 27 Mar 2013 12:22:53 -0500

Written by Trevor Burrus, research fellow at the Cato Institute’s Center for Constitutional Studies. Originally published on Monday, March 25, 2013, it has been cross-posted with permission from Cato @ Liberty.

In today’s New York Times, philosopher Sarah Conly gives “Three Cheers for the Nanny State,” specifically, NYC’s famed big soda ban. Invoking aspects of the theory of “nudge,” made popular in a book by Richard H. Thaler and Cass R. Sunstein, Conly argues that, sometimes, the government can rightfully save us from ourselves.

The popularity of “nudge theory” is closely tied to the recent spate of popular science books on the foibles of the human brain. Books such as Predictably Irrational and A Mind of Its Own are part of a new self-help fad: the idea that scientists studying the error-prone human brain can help us understand why we are unable to quit smoking, lose weight, and many other common problems.

It was only a matter of time until government regulators and their champions embraced this new science in order to put a fresh spin on an old impulse—their never-ending desire to save us from ourselves. But despite the valid insights of cognitive neuroscience, both nudge theory and Conly’s editorial are no more defensible than any other paternalism. We should not be deceived into believing that there is any new wine in those old wineskins.

The error at the heart of nudge theory is that scientists and regulators can discover what our true preferences are absent a choice that reveals those preferences. Traditional economics relies on the theory of “revealed preferences”—the idea that our choices reveal what, at that moment, we really want. This is not to say that we might later regret those choices or that some of those choices may be bad for us. Instead, it merely says that, given the information and desires you had at the time, your choice revealed your preference.

Nudge theory holds that “true preferences” can be discovered in a different way: by mapping the conditions under which we are prone to error and then divining our true preferences by asking what our choices would have been but-for those systematic biases. What results is not the traditional type of paternalism that imposes the preferences of regulators upon the citizens; instead it is new type of paternalism that imposes your “true” preferences upon yourself.

Do you constantly say you want to lose weight but never can find the time to exercise, or perhaps today was just a day when you really wanted a cheeseburger? Well, then regulators can help you achieve your true preferences. Do you wish you could quit smoking but the pressures of each day are made easier by cigarettes? Well, they can help you with that too.

The fundamental problem: Is there any reason the “you” who says he needs to lose weight is more “true” than the “you” who has a cheeseburger? Do you even know which preference is your “true” one? Does that question even make sense? The secondary problem: Is there any way for regulators to discover which is the true “you” and any reason for us to believe they have the incentives to do so? Moreover, can we trust them to not succumb to their own cognitive biases as they help nudge you onto the path towards your “true” self?

In Conly’s words, “the crucial point is that in some situations it’s just difficult for us to take in the relevant information and choose accordingly,” therefore “we need help.” And although she admits that it is not “always a mistake when someone does something imprudent,” the “needs of the majority” must be taken into account.

Although it is not explicitly stated, Conly is discussing costs imposed on “the majority” via the medical system, at least in the context of the big soda ban. Without these shared costs, Conly’s argument is much more difficult to make. With these shared costs, however, there is no personal lifestyle choice that cannot, on principle, be regulated under the theory that the “needs of the many outweigh the needs of the few.” And the Affordable Care Act is only increasing the collectivization of our health-care costs.

Conly hopes to avoid this slippery slope problem by invoking the rationality of regulators, which is a particularly odd thing to do in an opinion piece mostly dedicated to the irrationality of human beings. We need not worry, she says, because “successful paternalistic laws are done on the basis of a cost-benefit analysis: if it’s too painful, it’s not a good law.” Yet the painfulness here is, of course, subjective—for example, the pain of not being able to purchase a big soda or a pack of cigarettes. Yet these are exactly the sort of subjective pains that Conly and other proponents of nudge theory are prone to explain away by saying they aren’t “true” preferences.

And even if the slippery slope were true, argues Conly, “Banning a law on the grounds that it might lead to worse laws would mean we could have no laws whatsoever.” Here, again, she misses the point. We can ban laws that have no conceivable limiting principle, are based on faulty assumptions about human nature, and infantilize adults into wards of the state without worrying about undercutting all laws.

Finally, Conly does not touch upon the broader consequences of having the government treat adults like children who do not know what is best for themselves. There is immense value in having decisional autonomy. John Stuart Mill, who Conly strangely invokes to justify her vein of paternalism, would have found her program abominable. In On Liberty, Mill wrote:

If a person possesses any tolerable amount of common sense and experience, his own mode of laying out his existence is the best, not because it is the best in itself, but because it is his own mode. Human beings are not like sheep; and even sheep are not undistinguishably alike… . If it were only that people have diversities of taste that is reason enough for not attempting to shape them all after one model. But different persons also require different conditions for their spiritual development …

In other words, free choice is also valuable because it is your choice. But it is not surprising that Conly disagrees, seeing as she is the author of Against Autonomy: Justifying Coercive Paternalism.

The new paternalists are no different than the old paternalists. By invoking new scientific studies new paternalists hope to make their programs both easier to swallow and harder to see. While we sometimes might need to be saved from ourselves, that’s what family, friends, churches, and community are for. If the new paternalists takeover, however, who will save us from them?

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