Posts Tagged: law


9
Feb 10

Ask Your Congressional Representative to Do Nothing

Every 12-step program has an initial confession, a moment of recognition.  Here’s one: I am a lawyer and I do not know the law.  I have practiced law for more than 35 years, fulfilled continuing legal education requirements and kept up with the daily reporters.  Yet I do not know the law and would venture there is no lawyer who completely knows the law.  Shocking!

Why No One Knows the Law

The law has made itself unknowable.  How did we get to such a place?  There are 50 titles in the United States Code, the official compilation of federal law.  Each title has coordinate regulations compiled in the Code of Federal Regulations.  The tax laws are in Title 26:

If you go to the US Government Printing Office (www.gpo.gov ), you can order a complete set of Title 26 of the US Code of Federal Regulations (that’s the part written by the IRS), all twenty volumes of it, at the bargain price of $974, shipping included.

According to the US Government Printing Office, it’s 13,458 pages in total. The full text of Title 26 of the United States Code (the part written by Congress–available for an additional $179) is a mere 3,387 printed pages, bringing the adjusted gross page count to 16,845. [Statistics as of 2006].

Remember this is one title among 49 others.

An attorney can master small sections or even subsections of the law, but never all the law. Since we live in a federal system, such an aspiring attorney would have to master not only federal law, but also state statutes and regulations.

From day one of law school, a basic principle is hammered home: ignorance of the law is not a defense to a criminal offense.  Thus, we live with the ultimate paradox:  the least schooled of our citizens are charged with complete knowledge of the law, a task that is unattainable even by the most skilled legal practitioners.

Where Laws Come From

Laws emanate from the talented quills of our elected representatives.  Taft and Hartley (labor laws), Sarbanes and Oxley (corporate governance), Glass and Steagall (banking), Smoot and Hawley (tariffs) were all elected representatives.  Congressional representatives demonstrate their worth by identifying a societal wrong that cries for redress. Then they form a coalition to pass legislation.  Often campaign contributions from interested parties find their way to the sponsoring legislator. Immortality awaits these legislators.

Once a law is passed, administrative agencies create regulations to interpret.   Regulations can run many times the length of the law.  Moreover, they have the force of law and in some instances carry criminal penalties for an infraction.

Laws Have a Cost

A law is a hidden tax.  When passed, the simplest of laws require legal analysis, interpretive regulations and a compliance program.  These functions are performed by highly paid professionals. Following the momentary drama and satisfaction of bill passage, these long term costs begin.  Newly passed laws may conflict with existing laws, leading to uncertainty and then an inevitable clarifying court challenge.  Ultimately, these costs are passed along to the consuming citizenry.

What to Do

A modest proposal: we should elect Congressional representatives who promise NOT to pass laws.  Even better would be elected representatives who promise to repeal the most harmful ones.

More seriously, we need   to overhaul and simplify our legal codes.  Society needs basic safeguards, but we have far exceeded that standard. Every problem in society does not require the passage of a law.  Perhaps what we really need is greater trust and a renewed sense of shared responsibility and sacrifice.   Then we would need fewer laws.

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5
Feb 10

It is All a Derivative of Productive Enterprise

The bulls on CNBC touted the increase in health care employment in the most recent Non-Manufacturing Institute for Supply Management Report on Business. Similarly, Fox Business News trumpeted growth in health care employment, but did point out these jobs paid substantially less than jobs in the manufacturing sector.  What both news outlets missed was that these jobs were derivative.  These positions are substantially funded by the productive sectors of the economy.

Economic Illiteracy

Michael Shedlock this week focused on a major theme plaguing America, economic illiteracy. See Are Teachers to Blame for Economic Illiteracy? Nowhere is this lack of economic literacy more evident than in the service sector in general and health care in particular.  If polled, most Americans would most likely answer that the government or insurance companies provide health care in the United States.  Medicare and the current debate on health care reform only add to this misperception.

Thank Goodness for the Private Sector

Health care money comes from the support of the private sector which directs a portion of a workers’ compensation to paying health insurance premiums for their employees.  Public sector employers also pay health insurance premiums for their employees.  However, in the case of the public sector, that employer is recycling tax receipts, real money, received from private sector activities.  In short, without a productive private sector there would be no health care support.

Restoring Economic Literacy

Americans have come to expect a “free lunch” from the government. Of course, this is fantasy; there is no free lunch.  Health care is paid for by our productive enterprises and manufacturing was the lynchpin.   Further, other service industries such as law, insurance, travel, leisure, entertainment, and others are derivatives of productive manufacturing enterprises.  When the economy turned down law firms were among the first to layoff partners and associates.  Without a vibrant private economy legal activity declined, with fewer contracts real estate transactions, mergers, acquisitions and frivolous lawsuits.  Corporations reduced their legal budgets.  Similarly, other service businesses contracted.

Outsourcing lucrative manufacturing jobs and global wage arbitrage have only worsened the unemployment situation in the United States.  Reliance on a service economy and public sector employment has been false bedrock for our system.  If we want first class health care, we must bolster the private manufacturing sector and reduce the public sector.  Government dominance of our health care system and other service sectors (think banking) only ensures larger deficits, continued recession, higher unemployment and an inadequate, underfunded, cheap, quick and dirty, band aid solutions health care system.

That is not a good prescription for anyone’s health.

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