The Laboratories Of Democracy At Work

Amidst all of the focus on the federal government government and its response to the coronavirus pandemic, many people have forgotten that, in our system of government, it is the states that have the power to make the truly important decisions.  They’re about to be reminded about that.

51ryo5scx7l._ac_sy400_The response to COVID-19 has actually been a good illustration of how America is supposed to work — and why we’re called the United States in the first place.  The federal government can offer guidance, and can coordinate how the national stockpiles of ventilators and masks and hospital gowns are distributed among the states according to need and forecasts, but it is the states, each a separate sovereign government with a separate sphere of responsibility, that have made the really big decisions about how to deal with the scourge of COVID-19.

States can, and do, take different approaches to issues — which is why Justice Brandeis long ago described states as the “laboratories of democracy.”  In Ohio, we’ve been under a state-ordered lockdown decree for weeks, and most states have similar lockdown orders, but each of the orders varies in terms of who may work, who is considered essential, and what businesses may operate.  Notably, a number of states, primarily in the middle swath of the United States, have not issued lockdown orders at all.  (And, in case you’re curious, those states for the most part have low rates of COVID-19 cases and COVID-19 related deaths, according to the New York Times state tracking tool.)

I say above that we’re going to see a real reminder of the importance of state decision-making very soon because we’re rapidly approaching the point where the states that have been shut down are going to be deciding when, and how, to get back to work.  On Friday, for example, Texas Governor Greg Abbott said he expects to issue an executive order on reopening businesses in this coming week.  Ohio Governor Mike DeWine hasn’t given a deadline, but has said he also is working on an order to reopen the state for business.  We can expect many other states whose statistics are at the low end of the coronavirus incidence rate list to also be looking to get back to normal, and probably sooner rather than later.

Having a state-centric approach is unnerving to some people, who think centralized decision-making is by definition better decision-making.  Having the states act as “laboratories of democracy” in deciding how to reopen after a pandemic seems like the right approach to me, however.  The United States is a big country, and conditions differ significantly from state to state, in ways that are directly relevant to dealing with shutdown orders and pandemics.  Some states are rural, some are industrial.  Some states are densely populated, and some are so wide open it’s breathtaking.  It makes no sense that Wyoming, say, should be on the same timetable as New York or subject to the same requirements as New York.  In reality, governors and state officials know their states far better than federal officials ever could, and they can and will make decisions that are tailored to the needs of their specific constituents.

We should all pay attention, because we’re getting a real-life, real-time civics lesson — and the lessons will continue in the coming days and weeks.  If the national news media is smart, they’ll start paying a little more attention to the different states and how those state officials are deciding how to restart things.

Betting On Sports

The Supreme Court made a lot of important rulings earlier this year.  One ruling that got a bit lost in the shuffle may end up having an important impact on states across the country, colleges that play big-time sports, and professional sports franchises, too.

300px-eight_men_bannedIn May, the Supreme Court struck down a federal law that effectively banned gambling on sports, with some exceptions, in all states but Nevada.  The federal law, called the Professional and Amateur Sports Protection Act, was based on concern that allowing widespread gambling might undercut sports as a form of wholesome entertainment.  Nevada, which already permitted gambling on sports, was allowed to continue, but other states were largely barred from doing so.  New Jersey passed a state law allowing gambling on sports and then challenged the federal law, and the Supreme Court sided with New Jersey, ruling  that while Congress has the power to regulate sports betting at the federal level, it can’t dictate to states what their individual laws must be.

Why did New Jersey decide to challenge the federal law?  Do you really need to ask?  Of course, the answer is money.  New Jersey’s casinos were struggling, and it objected to Nevada having a federally sanctioned monopoly on sports gambling.  If sports gambling were allowed in its casinos, New Jersey reasoned, it might promote tourism and increase tax revenues.  And these days, states are all about increasing their revenues.

With the Supreme Court ruling, Ohio legislators are now looking at whether Ohio, too, should legalize gambling on sports.  One argument made in favor is that many Ohioans already bet on sports through the underground economy — so why not take the activity above ground and get some tax revenue from it?  But the existence of the illicit sports betting also poses a challenge, because states that want to legalize the activity in order to earn revenue have to figure out how to make legal gambling as easy and attractive as calling the local bookie.  One issue for legislators to consider, for example, is whether Ohio should allow on-line gambling, so long as the website has some Ohio presence and the state gets a cut of the action.  Or, should such betting be limited to licensed casinos?

And colleges, universities, and professional sports leagues are holding their breath, too.  They opposed New Jersey’s effort to overturn the federal law, because confining legal sports gambling to Las Vegas kept it separate and apart from 99.9 percent of campuses, stadiums, and sports arenas.  Now legalized gambling on sports will be out in the open, and there are concerns that gamblers hoping to get an edge might bribe professional and amateur athletes to throw a game or do something to affect the point spread.

College sports administrators and professional sports leagues are worried about another Black Sox scandal — who can blame them?  After all, it’s been 100 years, and the 1919 American League champions from Chicago are still called the Black Sox.

Adding Up The Obamacare Tab

When the Affordable Care Act was passed, its drafters contemplated that states would design their own health care exchanges, with the federal healthcare.gov website serving as a kind of backstop.  That turned out to be a miscalculation.  More than 60 percent of the states — 36 out of 50 — elected not to create their own health care exchanges.

At the time, some critics argued that the decisions of states with Republican governors to refrain from building their own websites was politically motivated.  In retrospect, however, the decisions to eschew developing state-specific health care exchanges seem more like a wise recognition of the limitations of state capabilities, because the experiences of states that did attempt their own websites have been decidedly mixed.

Six of the 14 states that chose to create their own exchanges — Masschusetts, Oregon, Nevada, Maryland, Minnesota, and Hawaii — have had severe functionality problems and have become tremendous cash drains and political albatrosses.  In Massachusetts, Oregon, Nevada, and Maryland alone, the federal government has paid at least $474 million to support the establishment of non-functional exchanges, and that cost total seems certain to increase significantly.  In those states, Democratic politicians are blaming the website contractors and threatening litigation, and Republicans are saying that the states never should have attempted to build the exchanges in the first place.

Obamacare has become such a political football that every fact and development gets spun to death — but if we can’t learn from the current reality, and recognize that mistakes were made in the legislation and its conception, then we are just compounding our problems.  In all, the Kaiser Family Foundation estimates that about $5 billion in federal funds that have been shelled out to states to allow them to assess whether to create state-specific exchanges and then, in some cases, to support their creation.  That’s an enormous sum of money, and it is becoming clear that a significant part of it has been wasted.  Whatever happens with Obamacare, let’s at least hope that in the future we refrain from enacting statutes that require states to develop large-scale, complicated technological systems, on their own, with the federal government picking up the tab.  As the mounting Obamacare costs demonstrate, that approach is fraught with peril.

Watching The Convention On C-SPAN

Kish and I are watching the Republican Convention tonight, on C-SPAN.  It’s great TV, largely because it’s completely unfiltered — just the convention feed itself, with no talking heads to interpret or spin things for us.

What do you learn if you watch a political convention in real time?  For one thing, the United States is still a regional country.  Every speaker we’ve seen tonight has displayed their own unique accent, from the tongues of New England, to those of the Midwest, to the those of the rolling Plains states.  And, even with the continuing growth of the federal government, we’re still a country of individual states.  Every political speaker so far tonight has boasted of the accomplishments of their state and cited the stories of individuals and businesses from their states to illustrate their criticisms of the Obama Administration.

We’ve heard a number of speeches so far, and we also can attest to one other thing:  there aren’t that many great political orators out there — or for that matter, many great speechwriters.  Still, it’s an interesting exercise.  If you want to learn about what Republicans and Democrats really think is important, what better way to do so than watch the conventions those parties have scripted so carefully, seeing those conventions as the delegates themselves do?