We are developing the social individualist meta-context for the future. From the very serious to the extremely frivolous... lets see what is on the mind of the Samizdata people.

Samizdata, derived from Samizdat /n. - a system of clandestine publication of banned literature in the USSR [Russ.,= self-publishing house]

The Chicago way

“Company officials will be trapped in a catch-22. They can lay off as many people as they want because of Obamacare. But because they’ll have to swear to the IRS that their decisions had nothing to do with Obamacare, they can’t speak publicly about what’s happening. What a great way to silence the people who are on the front lines of dealing with Obamacare’s horrific effects.”

On the continuing delightful rollout of the Affordable Care Act in the US. Giving politically sensitive stuff to the Internal Revenue Service: what could possibly go wrong? Again, as many others have observed, the saga comes straight out of Ayn Rand’s Atlas Shrugged.

As for the way in which this whole disaster has progressed, perhaps one of the worst aspects has been how Obama has more or less junked any pretence at worrying about the rule of law to minimize the political damage to himself. But should any of this be surprising to anyone now? Tim Sandefur has some thoughts on the constitutional damage done by ACA, and Obama’s conduct before, during and since the passage of this legislation.

My reservation about the quote at the top is that surely any ban on stating why a person has been made redundant violates the First Amendment. It might be nice to see this issue tested. (Please try not to giggle at the back of the class.)


30 comments to The Chicago way

  • Lee Moore

    I don’t think it’s a ban on stating why a person has been made redundant. It’s a neater trick than that. It’s a condition for taking advantage of the delay that you haven’t reduced employee numbers to benefit from the delay. And in order to claim the relief, you have to claim that you meet the conditions for the relief – i.e. that you haven’t reduced numbers to benefit from the relief.

    Still, unlike lots of Obama’s other delays to Obamacare, this one might actually give rise to a lawsuit that has a chance. i.e. if an employer refuses to make the declaration and then gets penalised by the IRS and goes to court, we may get to hear the court’s opinion of this delay.

  • Tedd

    It’s good to see Mr. Sandefur getting some coverage here. He may not be to the taste of all Samizdatistas, being more of a classical liberal than a libertarian or conservative, but I always find his perspective worthwhile.

  • Surellin

    The IRS has certainly opened itself to a huge lawsuit. This will be interesting.

  • Laird

    I don’t agree with your First Amendment argument. This is not a form of prior restraint on speech which a court would recognize. You’re free to say anything you want, but you won’t receive the benefit of this particular exemption if you say the wrong thing. You and I may perceive that as a restraint, but it’s unlikely that any court would. Obama is offering a specific benefit to “persons” (companies) which take a specific action (namely, not shrinking their workforce purely to take advantage of the exemption). How is this different than any other tax benefit? If you install energy-efficient windows in your house you qualify for a tax credit; if you install ordinary windows you don’t. Same principle here. In each case you’re signing your tax return “under penalties of perjury“.

    But I do agree with the point that this president has absolutely no respect for the rule of law. That has been blatantly apparent for a very long time. This is just one more illustration of his (and his attorney general’s) gross violation of their respective oaths of office that the laws be “faithfully executed”. These are impeachable offenses, but of course we all know that nothing will ever come of that.

  • Snorri Godhi

    From the link, it appears that there is no **explicit** ban on stating the reasons why a person has been made redundant: the **stated** goal is to prevent people from actually being fired because of Obamacare. But again, what authority does the IRS have to make and enforce labor legislation by decree? What if an employer refuses to give a motivation for firing workers? what if an employer says that the workers were fired because of Obamacare?
    It would be nice to see it tested in court, but not as a violation of the First Amendment, i think.

  • Sam

    So, Acme Widgets can start a subsidiary company – Ultimate Widgets – that has 49 employees, then set it free and kill the parent corp. There is always a work-around (and if this doesn’t work for some reason, another will).

  • RRS

    Ah! Yes!

    “Test it in Court”

    See what has become of a legal system originated to identify and enforce obligations.

  • Snorri Godhi

    Oops, it appears that while i crafted my comment, Laird has provided an answer to the issue i raised: if employers cut the workforce without saying that the intent is something other than gaining a tax exemption, then they do not gain the tax exemption.
    Strictly speaking this is to make a mockery of the Rule of Law, but i suppose that worse things have already happened to the Rule of Law.

  • Jaded Voluntaryist

    So… they’ve made it illegal to embarrass the president with the threat of a fine?

  • Laird

    Not quite, JV. The fine already exists; it’s just that you will be spared it if you reciprocate by sparing the President embarrassment. See the distinction?

    BTW, might there be a Fifth Amendment problem here (with respect to the constitutional privilege against self-incrimination)? I haven’t really thought that through yet. The certification (that taking advantage of the exemption was not a “motivating factor” in the discharge of employees) is made under penalties of perjury, which is a criminal offense.

  • Rob

    Might have been asked before, but what would it take for the Democrats to overturn the two term rule for Presidents? I am completely ignorant of US politics, so would be interested to know.

    How much opposition, on a scale of zero to just above zero, would there be from the media ?

  • Laird

    Rob, the two-term limit is enshrined in our Constitution (the 22nd Amendment), so changing it would require another constitutional amendment. Such an amendment must be approved by 2/3rds of the members of each house of Congress (or called for by 2/3rds of the states, although that approach has never been done) and then it must be ratified by 3/4ths of the states. Effectively, this means that it would take only 13 states, or 136 congressmen, or 34 senators, to block any such amendment. Given the fractured state of our polity, and the relatively close political division in both houses of Congress, the repeal of the 22nd Amendment seems extremely unlikely, whether or not our mainstream media approves.

  • Laird

    Oops, that should have 146 congressmen.

  • bobby b

    ” . . . what would it take for the Democrats to overturn the two term rule for Presidents?”

    Victory in a bloody civil war.

  • Paul Marks

    J.S. Mill mentions in “On Liberty” (in passing – as if it was unimportant) that economic liberty and general liberty (such as freedom of speech) are different principles – this is, perhaps, the very worst of Mill’s errors.

    Economic liberty is part of the same principle of liberty – as this post shows.

    Economic liberty and general liberty (such as freedom of speech) stand or fall together.

  • Mr Ed

    Is not lying to a Federal official a Federal felony? Just asking, as if it is, anyone providing false info might get 10 years, or 345 years, depending on whether the Judge has heard of cricket scores or likes a plea bargain to get to the golf course before lunch.

  • bobby b

    “Is not lying to a Federal official a Federal felony?”
    – – –

    Well, sure, but this situation already involves much more specific and provable conduct, a more specific legal test to be met, and either simple self-incrimination or complete acquiescence. They don’t need the False Info charge.

    The ACA says you need to apply to the IRS for the cheap-harbor status of “small employer” classification. You can receive that classification even if you get to that required small size through layoffs, as long as the layoffs were demonstrably driven by certain specific listed factors, and that list does NOT include your desire to structure your company size for Obamacare advantage.

    When you seek IRS certification of your small company size, you have to prove up that you fit the statutory language defining “small”, and part of that definition involves attaining your smallness “honestly”. The IRS has decided (in rulemaking) that it will accept as proof of this your own self-serving sworn testimony that you downsized for proper reasons and not for any improper ones like “because we wanted to be a small employer in the eyes of the PPACA Empress.”

    So if you then go to the papers and declare that you fired enough employees so that you could be a “small employer” for the ACA, you would be directly contradicting a central and material representation that you made, under oath, to the IRS earlier.

    Which is not a comfortable place to be. That’s where you get picked up and criminally charged with perjury, plus you lose your “small employer” status retroactively (because they’ll push to deem your sworn statement “false when made”, which is criminal fraud on top of the perjury), and they’ll recapture whatever taxes you saved plus multiples of that amount in penalties and interest and they’ll grab all of your cash just in time to keep you from being able to hire a lawyer to defend you against serious felonies with long prison penalties.

    But free speech isn’t implicated at all. You can say anything you want to say. But if you decide to directly contradict your own earlier sworn testimony to a federal agency, well, we still have the right to be stupid, I guess.

  • Mr Ed

    Thank you bobby b, clearly anyone rash enough to try to play games with the system would be storing up trouble. I pity American citizens and residents who think that they live in a free country, I am sure that North Koreans know the massive perils they face, but how many Americans think about their own, far smaller but self-inflicted hazards?

  • Jaded Voluntaryist

    I could be wrong, but I have a feeling that all this Obamanomics will be nothing but a memory fairly soon. I just don’t see it sticking.

    In any case, America is still a lot better than most of the developed world. While a number of small countries are undoubetly freer (see Switzerland, the Czech Republic and Costa Rica), it is still miles ahead of say, France. It is certainly a step up from Scotland where I live. They are currently looking to appoint a “state guardian” for every child in the country.

    I’m looking for work in the US again. I don’t want a state guardian, and will find it very hard to avoid breaking both their kneecaps if one comes anywhere near my children. Accordingly I conclude I had better get out of here before they make a criminal out of me.

  • Laird

    JV, Obamanomics (writ large) will be more than a memory. He’s thrown enough mud against the wall that some of it will stick permanently. No one complains about the General Motors bailout any more (most people have already accepted the lie that all the “loans” have been repaid). Massive economic intervention (Quantitative Easing) has become received wisdom and is now wholly unremarkable; artificially low interest rates help keep home prices up, which is very popular. People don’t like Obamacare, but a large percentage of the populace still likes the idea of Obamacare, just not this particular implementation of it. We’ve started down the road to complete socialized medicine and I don’t see how we can ever go back (short of total societal collapse, of course). That genie is completely out of the bottle now. And of course Obama’s “contributions” to the regulatory apparatus, and especially the federal courts, will have long-lasting deleterious repercussions.

    This is the ratchet effect (or, as Glenn Beck would put it, the Overton Window) at work: there will be some occasional and half-hearted retrenchment once Obama leaves office, but overall our society will have taken another irreversible lurch to the left. That’s the socialist way.

    I don’t want to discourage you from seeking employment here; it probably is an improvement over Scotland (much as I love that country). But you should know that it’s no bed of roses here, either, and the number of people leaving and renouncing their citizenship grows every year. Perhaps that’s just the “grass is greener over there” syndrome, but according to published surveys there are lots freer places in this world than the US.

  • Jaded Voluntaryist

    According to this website I should be considering Chile….. interesting.

    It ranks countries based on what freedoms are most important for you. For me gun rights and freedom of expression are top of the pile, but everything else is a bonus of course.

    The US is still near the top for what I consider important though.

  • I should point out that, with regard to the title of this post, “The Chicago Way” is shorthand for banana republic politics: punishing enemies, rewarding friends, graft and wheel-greasing, jobs for pals, intimidating opposition with state agencies, suppressing criticism… the list goes on and on.

    And as a (former) 10-year resident of Chicago, let me remind everyone of the old saying: “Everything you ever heard about Chcaigo politics is true.”

    So using the IRS (and the implicit threat thereof) to implement socio-political policy is just another manifestation of the Chicago Way, implemented at national level.

  • CaptDMO

    “…gun rights and freedom of expression”
    Oh, you mean an inalienable assumption of self defense…from “reinterpretation” by “appointed” folks?

    ONE current issue in the US is inexplicable willingness to accept serial “OK, double or nothing?” from the consistently losing minority of “social” experiment gamblers.
    The other is not “collecting” from welchers when faced with “I’m NOT paying on my debts because….”
    By SOME apparently insatiable logic, dunning for gambling losses is met with “Yeah? Nice place here. Be a shame if something happened to it.”, then running with tear streaked facs, for known relative safety behind mommy’s skirt, sticking out a snide tongue once they’ve taken positive actions ensuring mommy can’t see.

    If they can JUST win that ONE really big pot, ALL their “complaints” will be settled. They just KNOW that historically, it’ll be different THIS time, because THIS time they’ve done it RIGHT.
    Meanwhile, …baby STILL needs new shoes, and there’s EVEN LESS “seed corn” that hasn’t been planted yet.

  • Laird

    JV, I’ve heard good things about Chile, too. Unfortunately, they just elected a socialist president who seems determined to emulate all the successes of Argentina, so I’m keeping a wary eye on the place.

  • I googled what JV was alluding to, and it is (of course) all too real.

  • Julie near Chicago

    Laird is two for two. Absolutely right, I’m sorry to say.

    Ditto Paul.

    I’ve been wondering about the Fifth Amendment myself.

    . . .

    I’ve heard that Chile is now listing leftward. Nobody wants to be the only one who’s Right, I guess.

  • TDK

    As Warren Meyer has argued in several posts, the jobs lost to Obamacare will be mainly in the past rather than now. Employers will have seen what was coming and adjusted already.

  • Libertarian

    I see all these intelligent, restrained comments on this website. And I occasionally watch the humorous debates in the UK House of Commons where the freshest freshman sounds heads and shoulders above ANY U.S. politician, and I have to wonder: how in the HECK did the UK get a decade or two ahead of the U.S. as we both travel down the road to serfdom??