The Rule of Law Kneels Before the Welfare State

The rule of law always suffers before the political exigencies of welfare state legislation. This is because, contrary to its name, the welfare state has little to do with the general welfare. It is essentially a vehicle by which some groups benefit at the expense of others.

The latest is the sweetheart deal struck with labor unions and government workers to exempt them until 2018 from the 40% taxation of so-called Cadillac healthcare plans. This is quite obviously an effort to buy the support of largely Democratic labor unions who have given much money to Obama and other Democrats and whose support is needed to pass ObamaCare.

The claimed justification is to give labor unions an opportunity to renegotiate their contracts. This is because unions often agreed to improved medical coverage in lieu of wage increases. Yes, that is true. But it is also true for the compensation packages that even non-unionized workers receive.

As an obvious violation of the ideal that the same rules be applicable to all, it will not, however, find any strong opposition in the courts. This is because the courts will defer to any veneer of a rational purpose for the exemption.

The problem is fundamentally that any time the State goes beyond legislation that benefits each and all, it must buy off the politically well-connected interests. This is not peculiar to this healthcare legislation nor to the Democrats. (Of course, Obama promised a differ kind of politics – a kind that was and is patently impossible in a welfare state.)

I am not naïve enough to believe that the ideal of the rule of law has ever been followed with the rigor I would like. However, more and more, our politicians care little about even approximating this ideal.

UPDATE: Paul Krugman: “And meanwhile, Democrats have to do whatever it takes to enact a health care bill. Passing such a bill won’t be their political salvation — but not passing a bill would surely be their political doom.” (Emphasis added.) Does the rule of law also kneel before the Democrats’ political advantage?

About Mario Rizzo 75 Articles

Affiliation: New York University

Dr. Mario J. Rizzo is associate professor of economics and co-director of the Austrian Economics Program at New York University. He was also a fellow in law and economics at the University of Chicago and at Yale University.

Professor Rizzo's major fields of research has been law-and economics and ethics-and economics, as well as Austrian economics. He has been the director of at least fifteen major research conferences, the proceedings of which have often been published.

Professor Rizzo received his BA from Fordham University, and his MA and PhD from the University of Chicago.

Visit: Mario Rizzo's Page

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