The Obama administration decided that, under their health care reform, nearly all health insurance plans are legally required to provide contraceptives like birth control, ella and Plan B.

The Catholic Church objected and asked for an exception for insurance plans provided to employees of Catholic churches, colleges and charities.

The administration did make one strange exception, however. They said that if the religious organization doesn’t serve people of different faiths—if they only serve their own—then they are not covered by this rule.

Set aside your feelings, one way or the other, about birth control. I see no moral issue with it, while others do. Look at the substance of what this decision means: it is the federal government forcing religious institutions to either violate their beliefs, discriminate against people of other faiths, or be unable to operate. There is no other choice.

Ross Douthat commented about the absurdity of this:

Ponder that for a moment. In effect, the Department of Health and Human Services is telling religious groups that if they don’t want to pay for practices they consider immoral, they should stick to serving their own co-religionists rather than the wider public. Sectarian self-segregation is O.K., but good Samaritanism is not. The rule suggests a preposterous scenario in which a Catholic hospital avoids paying for sterilizations and the morning-after pill by closing its doors to atheists and Muslims, and hanging out a sign saying “no Protestants need apply.”

The administration’s decision—and health care reform itself—is bizarre in its lack of consideration of ramifications, but it’s also dangerous. If the federal government can mandate that religious organizations violate their own beliefs—force them to provide something to their employees which is squarely immoral for them—why can’t the federal government also mandate that all organizations involved in women’s health also teach a class on abstinence? Or that all private schools must incorporate intelligent design into their biology courses?

That sounds absurd, because it is, but I see no substantive difference between the law requiring one and the law requiring the other. What principle distinguishes them?

Good news: the unemployment rate dropped to 8.3 percent in January from 8.5 percent in December 2011, and 243,000 jobs were added. Most importantly, the drop in the unemployment rate was not due to people dropping out of the jobs market, as it has been in prior months—it was due to people actually finding jobs.

The economy does seem to be gaining some momentum, and while it’s still not strong (and we have a huge hole to climb out of), that’s absolutely good news. Hopefully Europe can remain stable enough to allow the economy to strengthen.

Chris Martucci on United States v. Jones:

So it is unfair to say that Scalia overemphasizes trespassing. His argument is more subtle. To suggest that he overemphasizes physical intrusion would be to make the same mistake the lower court makes, i.e., to assume that a test used in one particular case is the only test.

The Tax Policy Center’s Howard Gleckman:

The multinationals’ minimum tax would be entirely unworkable. Even if Congress passed the levy, which it won’t, those firms will find ways around it. Minimum taxes are Band-Aides for a flawed tax system. The solution is not to create a new penalty for firms that learn to manipulate the law, it is to fix the basic law in the first place.

If Obama wants to prevent companies from gaming the system, he could lower the corporate rate and eliminate tax preferences. He raised this in last year’s state of the union address but did nothing about it. That’s too bad. With a low enough domestic tax rate, companies would have less incentive to shuffle income overseas.

This proposal in particular was bewildering. Obama (rightly) acknowledges that American companies face one of the highest corporate tax rates in the world, and it hurts our competitiveness. His solution, perplexingly, is to tax multinational companies a minimum tax rate, while using it (apparently) to lower the tax rate on companies which hire more people in the U.S.

This proposal symbolizes the administration’s general approach: use law to punish people. Instead of lowering our corporate tax rate to be more competitive, Obama wants to increase taxes on companies that don’t repatriate income, and then provide deductions or tax credits (“tax loopholes,” as the president is wont to call them) to companies that stay here to make the too-high corporate tax rate more palatable.

He needs to think through this a bit more. He derides a complex tax system which allows individuals and companies to pay “too low” of an effective tax rate, yet here he is trying to make the problem worse.

Last night, President Obama claimed—again—that Warren Buffett pays a lower tax rate than his secretary. Problem is, that probably isn’t true. Greg Mankiw explained why that is—nearly five years ago:

Another piece of the puzzle is that Mr. Buffett’s tax burden is larger than it first appears, because he is a major shareholder in Berkshire Hathaway.

When the C.B.O. studies the tax burden, it includes all federal taxes, including individual income taxes, payroll taxes and corporate income taxes. In its analysis, payroll taxes are borne by workers, and corporate taxes by the owners of capital. For the richest 1 percent of the population, 9.3 percentage points of their 31.1 percent tax rate comes from the taxes that corporations have paid on their behalf. The corporate tax would undoubtedly loom large if the C.B.O. were to calculate Mr. Buffett’s effective tax rate.

Ross Douthat on the president’s State of the Union address:

The more serious peril, though, has to do with policy rather than politics. A campaign narrative premised on more places this administration on a collision course not just with the Republican Party, but with budgetary arithmetic itself.

Tom Goldstein says that the Supreme Court’s United States v. Jones ruling did not mean a warrant is required to track individuals with GPS:

Here is the upshot. Five Justices join the holding of the “majority” opinion (per Scalia) that by attaching and monitoring a GPS device the police conduct a “search”; four Justices (those in the Alito concurrence) reject that view. Five Justices join or express their agreement with the portion of the “Alito” opinion concluding that the long-term monitoring of a GPS device violates a reasonable expectation of privacy; four Justices (those in the majority, minus Sotomayor) leave that question open.

That alignment of Justices importantly leaves two questions unanswered. First, does the “search” caused by installing a GPS device require a warrant? The answer may be no, given that no member of the Court squarely concludes it does and four members of the Court (those who join the Alito concurrence) do not believe it constitutes a search at all.

Second, assuming no warrant is required for installation, is a warrant required for short-term monitoring of the GPS device? Again, the answer may be no, as the majority conspicuously avoids addressing this issue and four members of the Court (again, those who join the Alito concurrence) squarely say that the answer is “no” (Alito op. at 13). Justice Sotomayor alone says that this scenario “will require particular attention.”

(Via .)

The Supreme Court ruled unanimously that tracking someone’s vehicle using GPS is a search under the Fourth Amendment, and thus requires a warrant. Antonin Scalia wrote:

“We hold that the government’s installation of a GPS device on a target’s vehicle, and its use of that device to monitor the vehicle’s movements, constitutes a ‘search’ ” under the Fourth Amendment’s protection against unreasonable searches and seizures, Scalia wrote.

That it took the Supreme Court to decide that placing a GPS tracking device on someone’s car—for a month—should require a warrant is a statement to just how bad a state we are in.

The 9th Circuit Court of Appeals ruled on a similar (and more egregious case) in 2010, where the DEA not only tracked a person’s car without a warrant, but trespassed on his property to place it on his car. They ruled in favor of the government.

The Labor Department announced today that the economy added 200,000 jobs in December and that the unemployment rate dropped to 8.5 percent. Most encouraging, though, is the decrease in the unemployment rate was not primarily due to people dropping out of the job market, as has been true in previous months:

Among the pieces of good news in Friday’s report: the drop in the jobless rate came largely from real gains, not from discouraged workers giving up the job hunt. The new jobs were spread broadly across industries, with transportation and warehousing, retail, manufacturing and restaurants all hiring.

200,000 jobs is significant, too, because it’s more than the 125,000 jobs or so a month required to keep up with population growth. We need much more growth than that to dig ourselves out of the hole the 2007-2009 recession dug, but at this point, any growth is positive.

Tim Ricchuiti takes exception with my characterization of Greece, Italy and Spain’s problem as being too much debt:

Not quite. It’s not the heavy weight of debt (as Krugman has posted about at length the past week, most notably in this column) that’s causing European nations to struggle. What’s causing those nations to struggle is their inability (until recently) to finance that debt at any sort of tenable rate (7% or under). The reason those governments couldn’t finance their debt is that investors don’t want to purchase debt that might not be paid back. The reason the debt might not be paid back is that, unlike the case of the United States, Great Britain, Finland, and various developing nations, European countries like Spain, Italy, and yes, Greece, can’t print their own money (their own money being Euros). Therefore, they’re at risk of not being able to pay back their Euro-denominated debt. The United States, on the other hand, will never be unable to print dollars, and will always be able to pay back its dollar-denominated debt.

Greece and Italy used substantial amounts of debt to sustain their welfare states, and while their economies are doing reasonably well, there’s no problem—they can roll over their debt before it comes due at similar interest rates and everything works out fine. The problem they now face is their economies are not doing well at all, tax revenue has decreased, and thus their deficits have shot up as they continue to fund their expensive government programs.

As their deficits have continued to grow, and their debt has continued to grow as a percentage of GDP, investors became afraid that they would not be able to pay their debt. Which is why, as Tim says, investors would not purchase their new debt at a sustainable rate: because their debt burden is too high.

Tim argues that this is only a problem because Greece and Italy are on the euro—rather than their own currency—they cannot “print” more money, that is, devalue their currency so the past debts are worth less now than they were then and are thus more affordable to pay.¹ Tim further argues that the U.S. will never have this problem, because since we do control our own currency, and our debt is denominated in our currency, we can inflate our currency to reduce the magnitude of our debts.

That’s perfectly accurate, but that does not happen in a vacuum. Everything else is not held equal. Investors will factor the risk of intentional inflation into their investments, and expect higher interest rates for future debts, too. Perhaps Greece and Italy (and the U.S., if we don’t right our ship in the interim) will leave the euro, re-denominate their debt, and pay their existing debt of a smaller magnitude. But what happens when Greece and Italy go back to those same investors, who just received substantially less than they were supposed to from their debt, and ask them to purchase their new debt? It’s going to be expensive, and unless Greece’s and Italy’s economies begin growing strongly, they’ll have the same problem all over again.

I never intended “…the heavy weight of their debt” to be a conclusive summation of Italy and Greece’s problems. Their problem is a confluence of a very poor economy, low tax revenues as a result, and debt used to finance an expensive welfare state. It’s but a piece. A very large, very heavy, piece.

1. Let’s set aside normative criticisms of this, which are substantial—”inflating” your currency for the purpose of making past debts more affordable is essentially stealing from creditors, because in real terms, they receive less than they were supposed to. [↩]

Ken Rogoff eviscerated Joseph Stiglitz in 2002, and it’s worth reading again, as Stiglitz hasn’t exactly gotten any better since:

Let’s look at Stiglitzian prescriptions for helping a distressed emerging market debtor, the ideas you put forth as superior to existing practice. Governments typically come to the IMF for financial assistance when they are having trouble finding buyers for their debt and when the value of their money is falling. The Stiglitzian prescription is to raise the profile of fiscal deficits, that is, to issue more debt and to print more money. You seem to believe that if a distressed government issues more currency, its citizens will suddenly think it more valuable. You seem to believe that when investors are no longer willing to hold a government’s debt, all that needs to be done is to increase the supply and it will sell like hot cakes. We at the IMF—no, make that we on the Planet Earth—have considerable experience suggesting otherwise. We earthlings have found that when a country in fiscal distress tries to escape by printing more money, inflation rises, often uncontrollably. Uncontrolled inflation strangles growth, hurting the entire populace but, especially the indigent. The laws of economics may be different in your part of the gamma quadrant, but around here we find that when an almost bankrupt government fails to credibly constrain the time profile of its fiscal deficits, things generally get worse instead of better.

This is also worth reading because those same recommendations Stiglitz made for developing nations then are the same ones Krugman et al. are making now for European nations struggling under the heavy weight of their debt.

Reihan Salam points out that until the 1980s, the growth in health care costs was in line with most of the developed world, and since the 1990s this held true, too. What this means is that while the U.S.’s health care costs are a larger percentage of our GDP than in other developed nations, this isn’t because our costs are growing faster—it’s because we started from a higher base as a result of outsized growth during the 1980s.

Salam argues this invalidates arguments that our higher health care costs relative to single-payer countries means single-payer is more cost-effective:

So if the real problem with U.S. health spending is that the U.S. diverged from its peer countries for a decade-long stretch, solving that problem isn’t quite as simple as mimicking the institutions and strategies of our peer countries, whether it’s Canada’s single-payer system or the hybrid models of France or Germany. Our peer countries are facing the same challenges we are, albeit with slightly more breathing room.

This isn’t something to celebrate, either—actually, it’s a warning sign that the rest of the world’s health care costs are growing at roughly similar rates to our own. If the rest of the world is in the same boat, there’s no easy solution to slow our own health care costs, but it’s something we’ll have to do. And we’ll have to find a way to slow them even more than the rest of the world, because we’re starting from a much bigger hole.

Clive Crook:

A new report by the Organization for Economic Cooperation and Development shows that in the middle of the last decade — i.e., after the Bush tax cuts were introduced — the U.S. income tax was about as strongly redistributive as income taxes in Canada, Denmark, Finland, the Netherlands and Sweden. You might have noticed that the CBO report on top incomes was widely quoted, but one finding got less attention: Between 1979 and 2007, “the federal individual income tax became slightly more progressive.”

The awkward truth is that the U.S. income tax system is anomalous not because it taxes the rich lightly but because it taxes everybody else lightly.

Walmart has made significant steps to make themselves, and their operations in China specifically, more environmentally-sustainable:

Acknowledging that Walmart customers “need low prices,” he said he also believed that “more and more, they will be looking at the entire life cycle of a product: How is it made, how is it sold, how is it used, and how is it reused? To meet these customer expectations, we need to ask ourselves: Is a product made in a factory that is a responsible steward of the environment and our natural resources?”

Interesting report by Orville Schell for The Atlantic. His point that Walmart and the Chinese Communist Party are made of similar, if not the same, cloth is a bit vapid, but it’s worth reading for discussion about how Walmart is exerting pressure on its manufacturers in China to become more environmentally-friendly.

Of late, the Obama administration has been invoking the progressive era as a sort of model to guide them. David Brooks doesn’t find it particularly applicable:

In sum, in the progressive era, the country was young and vibrant. The job was to impose economic order. Today, the country is middle-aged but self-indulgent. Bad habits have accumulated. Interest groups have emerged to protect the status quo. The job is to restore old disciplines, strip away decaying structures and reform the welfare state. The country needs a productive midlife crisis.

In the broader strokes, I think Brooks has it absolutely right.