Vijay K. Mathur

Recently, the U.S. Supreme Court heard arguments for and against the 2010 Affordable Health Care Act. Justice Antonin Scalia, a skeptic of the health insurance mandate in the law, raised the question to the government attorney, Donald Verrilli, that if the government can mandate to buy health insurance, why can't it mandate to buy broccoli?

The question implied that broccoli is good for a healthy diet and hence good for healthy outcomes; hence if the federal government is allowed to mandate buying of health insurance, it can overreach by mandating consumption of food products like broccoli.

Let me examine Justice Scalia's broccoli example and compare the mandate for broccoli consumption with the mandate to buy health insurance.

The retirement income stream of Americans depends upon various forms of wealth they have accumulated over their working years. Wealth could be in the form of accumulation in Social Security, pension funds, financial assets, and housing and other real estate. However a large fraction of retirees, and those who are ready to retire, do not have sufficient assets in pensions, and other financial assets.

Financial transactions are a transfer of funds from people who are savers-lenders, to people who are borrowers-consumers or investors and financial markets, such as bonds, stocks, or foreign exchange, channel those funds. Financial intermediaries, such as banks, savings and loan institutions, insurance companies, pension funds, and mutual funds, facilitate financial transactions in financial markets. They enable small and large savers and lenders to lend their funds to those who need those funds at reasonable transactions costs, with ability to earn reasonable returns based upon their tolerance and preferences for risk. Financial intermediaries decrease costs of financial transactions due to economies of scale.

It appears that Americans are divided into two camps on the promotion of environmental quality and the role of the EPA to enforce environmental quality standards. One camp, dominated by Tea Party activists and many conservative politicians, asserts that environmental regulations are killing jobs, hence the EPA should be abolished or environmental regulations should be scaled down. Many of them trust the free market to improve environmental quality. The other camp is demanding that EPA should vigorously enforce environmental quality standards and believe that more regulations may be needed to head off climate change.

Let me first clarify a point that is a source of misunderstanding. In a market economy, private goods benefit only those who are able and willing to pay prices for those goods. In markets, with property rights for private goods, demand and supply determine prices at which goods are traded. However, markets cannot efficiently provide public goods. Like national defense, most environmental goods, e.g., air and natural waterways, are public goods.

Many who are unhappy with the decline in the value of the dollar against foreign currencies, and especially against Yuan (Chinese currency), and with the Federal Reserve Bank's monetary policy would like to bring back gold in the international monetary system. The brief history of the gold standard and its variant will show that bringing gold into international monetary arrangements is impractical and misguided. There are two types of arrangements that have prevailed in the past: the gold standard and the gold exchange standard.

Trust (confidence), is an implicit contract between entities -- private and public -- including governments and nations. Even explicit contracts are facilitated by trust. As argued below, trust has economic value in a society. Corruption and fraud in any society inflict the most damage to trust.

Almost every day we hear about corrupt practices of politicians, financial brokers and advisers, law enforcement officers, bankers, hedge fund managers and many others groups of people and institutions. Politicians' activities, guided by contributions from deep-pocketed lobbyists, do not create trust among voters who elected them to do the common good.

This year, on March 23, was the first anniversary of the Affordable Care Act. Experts of different stripes from conservative think tanks, conservative politicians, media pundits and editorial writers of conservative media outlets are on the bandwagon of criticizing the law. The column on ACA by Wisconsin Republican Sen. Ron Johnson in the Wall Street Journal on March 23 caught my attention. He heaped praise on the medical care his daughter got. He had insurance through his employer. His praise was sprinkled by highly critical remarks on ACA.

According to Senator Johnson, ACA will destroy the quality of care and innovations in medical care, and implement bureaucrats' take over: I wonder where he got that information about ACA. He had nothing to say about the imperfections (concentration of economic power) in the insurance markets, lack of health insurance to almost 47 million people now and increasing rapidly over time, denial of insurance based on pre-existing conditions and other hardships people face in getting and continuing their health insurance coverage