Sunday, December 19, 2010

The Revolving Door -- Peter Orszag and Citibank

From Deal Book:

Wall Street has long stacked its ranks with Washington types.

It is the elephant in the room of White House grand bargains: after building a reputation and Rolodex in politics, the wise man moves on — or in many cases, back — to the financial industry to make a killing.

A decade ago, a former Treasury secretary, Robert E. Rubin, left the Clinton administration to become a senior adviser and board member at Citigroup — collecting a $10 million a year paycheck with no management responsibility.

On Thursday, Peter R. Orszag, President Obama’s first budget director and a protégé of Mr. Rubin, followed in his mentor’s footsteps and joined Citi’s investment banking group as a vice chairman. Mr. Orszag, 41, is the second cabinet official to join Citi this month, and his appointment comes days after the Treasury Department’s $10.5 billion stock offering helped further extricate the bailed out bank from Washington.


- Commentary from James Fallows.
- A response.

House Judiciary Committee Hearings on Wikileaks

C-Span video here. Is legislation adjusting the Espionage Act necessary to deal with the ease at which secrets can be made public?

- ReadWriteWeb.

The Future of the Commerce Clause

This is a very big deal and I'll integrate it into my discussion of federalism in 2301. It involves potential of challenges to the commerce clause and its impact on federalism. Linda Greenhouse kicked up a discussion of the consequence of the recent Virginia Court ruling on the individual mandate component of the health care law. Will it lead to the narrowing of the commerce clause that New Deal critics have been pursuing for decades?

It has been 15 years since the Rehnquist court began applying the constitutional brakes to assertions of federal power that had seemed unassailable since the New Deal. Its first target was modest, a five-year-old federal statute called the Gun-Free School Zones Act that most people had never heard of, which made it a federal crime to possess a gun within 1,000 feet of a school.

The vote in United States v. Lopez was 5 to 4. Chief Justice William H. Rehnquist wrote the court’s opinion, observing that the Constitution’s commerce clause did not confer on Congress a general police power disconnected from the regulation of economic activity. To uphold this statute, he said, would be to blur the “distinction between what is truly national and what is truly local.” For the first time since 1936, the Supreme Court struck down a federal law as exceeding Congress’s commerce power. In dissent, Justice David H. Souter warned that “it seems fair to ask whether the step taken by the court today does anything but portend a return to the untenable jurisprudence from which the court extricated itself almost 60 years ago.”

Thus began the Rehnquist court’s federalism revolution, a 5-to-4 forced march through the various sources and attributes of Congressional power. The targets included, most notably, Congress’s authority under Section 5 of the 14th Amendment to enact into law its own vision of the guarantees of equal protection and due process when that vision was broader than the court’s own. William Rehnquist had waited a judicial lifetime to assemble a majority that would follow him on such a course. Eleven federal statutes would eventually fall, in whole or part, on federalism grounds in less than a decade before the court, including the chief justice himself, began to blink and the revolution petered out.

Ever since, it has been quite easy to get a good debate going, among people who spend time thinking about such matters, about whether the federalism revolution really had amounted to much beyond the symbolic. True, the court did strike down a provision of one fairly high-profile law, the Violence Against Women Act, under which women could sue their attackers for damages. But no major federal program felt the ax. I had been an early proponent of the view that something big was happening. But in recent years, while still finding the subject of great interest, I was beginning to have my own doubts about what it all had meant.

Until now. In his opinion on Monday striking down the individual mandate of the new health care law, Judge Henry E. Hudson of federal district court in Virginia cited the Lopez case and United States v. Morrison, the Violence Against Women Act decision (also a 5-to-4 Rehnquist majority opinion), more than a dozen times. Judge Hudson deployed the two cases as the major building blocks for his argument that Congress lacked constitutional authority to require individuals either to purchase health insurance or pay a fine to the Internal Revenue Service, a provision the judge said was “neither within the letter nor the spirit of the Constitution.”
She then adds her criticism of the decision which itself has been criticized:

- Ilya Solim.
- Conor Friedersdorf.

Tuesday, December 14, 2010

On Obama's Judicial Appointees

From the Huffington Post:

As the first congressional session of Obama's presidency draws to a close, what began as a slow process of confirmation has ballooned into a full-blown judicial crisis. The Senate has overseen the slowest pace of judicial staffing in at least a generation, with a paltry 39.8 percent of Obama's judges having been confirmed, according to numbers compiled by Senate Democrats. Of the 103 district and circuit court nominees, only 41 have been confirmed.
By this time in George W. Bush's presidency, the Senate had confirmed 76 percent of his nominees. President Clinton was working at a rate of 89 percent at this point in his tenure.
More:

- Jonathan Chait.
- Jonathan Bernstein.

Monday, December 13, 2010

What is Triangulation?

Nothing really, other than political bargaining. In his takedown of the phrase Jonathan Bernstein has some succinct things to say about the bill making process:

With unified government, the best course for a president is usually to pass legislation by mobilizing his party. That's pretty much what Barack Obama did during the 111th Congress. The trick is going to be, always, to keep the handful at the extreme left (for a Democrat) happy while also appealing to the 218th most liberal Member of the House and the 60th most liberal Senator. Barack Obama may have, in some sense, wanted to be bipartisan or postpartisan or whatever, but the easiest coalition for almost everything he wanted to get done was going to be highly partisan.

When there's divided government, the calculus changes. While it's still possible that there will be issues in which the easiest winning coalition is constructed beginning with the left and moving to the center, there are other potential available coalitions that involve finding things that both sides really want that the other side doesn't mind that much. That's obviously the case with the tax cut deal: liberals don't care nearly as much about tax rates for the rich as do conservatives (yes, they care a lot -- but not nearly as much). Conservatives do not, it seems likely, oppose UI extension nearly as much as liberals favor it. What this all boils down to is that in the next Congress, there are going to be things that pass with the support of both John Boehner and Barack Obama, and perhaps without the support of some Democrats. Or else, nothing is going to pass at all.

Now, what's "triangulation" in that context? Nothing. Triangulation is an advertising slogan coined by Dick Morris to advertise himself -- to give him as large a share of the credit for Bill Clinton's 1996 re-election as possible. That's all.

Evangelicals and Environmentalism

Slate reports on how attitudes towards the environment and global warming have created (at least a minor) rift within the evangelical movement.

Virginia Federal Judge Rules Individual Mandate Unconstitutional

From the NYT:

A federal district judge in Virginia ruled on Monday that the keystone provision in the Obama health care law is unconstitutional, becoming the first court in the country to invalidate any part of the sprawling act and ensuring that appellate courts will receive contradictory opinions from below.

Judge Henry E. Hudson, who was appointed to the bench by President George W. Bush, declined the plaintiff’s request to freeze implementation of the law pending appeal, meaning that there should be no immediate effect on the ongoing rollout of the law. But the ruling is likely to create confusion among the public and further destabilize political support for legislation that is under fierce attack from Republicans in Congress and in many statehouses.

Saturday, December 11, 2010

Standing, Class Action Lawsuits and Wal-Mart v. Dukes

A case involving accusations of gender discrimination at Wal-Mart is also allowing the court to question the very practice of bringing class action lawsuits forward. Once again the court is flirting with the idea of limiting standing, the right of people to demonstrate to the court that they have a legitimate reason to take a case to the court.

- ScotusBlog: Walmart v. Dukes.
- ScotuBlog: This Week at the Court.
- Wikipedia: Walmart v. Dukes.
- ClassActionBlawg.
- Wikipedia: Class Action.
- Findlaw: Gender Discrimination

A Czar is Born

The Claremont Institute takes on Cass Sunstein.

Predictions: What Can the 112th Congress Do?

Some folks go at it over at Politico.

Friday, December 10, 2010

The World Post-Wikileaks

A discussion in the NYT:

In the tempest that has followed the release of a trove of secret government files by WikiLeaks, officials and security experts are trying to figure out how to stop such a large-scale breach from happening again.

While Julian Assange, the Wikileaks founder, defended publication of the documents as a victory for openness, national security officials see a dangerous precedent.

Even if WikiLeaks itself can be controlled, have the gates opened to a flood of similar enterprises and even more damaging disclosures?

Perhaps it was inevitable that once the web was developed it would be impossible to keep secrets anymore.

- Wikileak's War on Secrecy.

Is Growing Inequality a Problem?

A ten part series.

Tax Reform on the Horizon

A topic we will discuss next semester. According to Ezra Klein:

On Tuesday, I asked Glenn Hubbard, one of the architects of the Bush tax cuts, how he'd reform the tax code. That was the wrong question to start with, he said. "First, you need to figure out the size of government."
Easy enough

Thursday, December 9, 2010

Tax Bill and DADT Blocked

An example of how legislation can be stopped -- even though majorities support them -- by blocking bill form reaching the floor.

- The Senate and DADT.
- The Senate and Aid for 9/11 Workers.
- The House and the Tax Bill.

The Tribe Memo

A great insider's analysis of the personalities and dynamics on the Supreme Court.

Wednesday, December 8, 2010

House Republican Announcements

- Committee Chairs have been announced. (more from The Hill)
- House Calendar Released.

Will Obama's Compromise With Republicans Drive a Wedge in the Democratic Party?

Greg Sargeant thinks not:

. . . there may be a gap between what high profile liberal commentators -- the so-called "professional left" -- think of Obama, and what self-described rank-and-file liberals think of him. The impression of liberal wrath is also perhaps exaggerated by media organizations that seem eager to feed that storyline.

The question now, however, is whether GOP gains in Congress will induce the Obama team to undertake a strategy that risks genuine alienation of liberals. Obama advisers have reportedly concluded that the key to winning back independents in advance of 2012 is to demonstrate compromise with Republicans in order to recapture his post-partisan appeal.

The Upcoming DADT Vote

Updates:

- Jonathan Caperhart.
- Greg Sargeant.

The Tax Cut Deal

CNN breaks down what was cut:

Tax Deal Breakdown.png

The Tax Deal as Stimulus

From the NYT:

A year ago, President Obama and the Democrats made the mistake of assuming that an economic recovery was under way. This week’s deal to extend the Bush tax cuts shows that the White House’s top priority is avoiding the same mistake again — even if it has to upset many fellow Democrats in the process. |

Mr. Obama effectively traded tax cuts for the affluent, which Republicans were demanding, for a second stimulus bill that seemed improbable a few weeks ago. Mr. Obama yielded to Republicans on extending the high-end Bush tax cuts and on cutting the estate tax below its scheduled level. In exchange, Republicans agreed to extend unemployment benefits, cut payroll taxes and business taxes, and extend a grab bag of tax credits for college tuition and other items.

Posner Wants More Stimulus

From the New Republic:

The bursting of the housing bubble, which brought down the banking industry because banks were so heavily invested in financing residential real estate, had three effects that relate to the paradox of thrift, each amplified by the accompanying implosion of the stock market bubble. First, the decline in house and stock values reduced household wealth without reducing people’s debt burdens, because debt is a fixed expense rather than a percentage of the value of the assets that secure it. (That’s why so many mortgages are “under water”: the unpaid balance of the mortgage exceeds the market value of the property that secures it because the value has fallen but not the debt.) So people felt poorer and therefore more vulnerable to economic adversity, and they reacted by reducing their consumption, thus saving more.


Back and forth from the Becker - Posner Blog
What is the Paradox of Thrift?

An Impeachment Trial in the Senate

From the NYT:

The proceedings in the Senate on Tuesday were as remarkable as the charges that lawmakers there were asked to weigh. As tax policy debates swirled around the Capitol, the Senate on Tuesday began pondering the fate of Judge G. Thomas Porteous Jr. of Federal District Court in Louisiana, whom the House of Representatives impeached in March on four articles of “high crimes and misdemeanors” stemming from charges that he received cash and favors from those with business in his court.

This is only the 12th impeachment trial of a judge in Senate history.
Update: The Senate voted to convict.

Saturday, December 4, 2010

Drawing the Line Between Free Speech and Bullying

Wendy Kaminer is not a fan of legislation introduced in the Senate that addresses bullyign on school campuses:

There's no dearth of important issues for Congress to address in the lame-duck session, but New Jersey Senator Frank Lautenberg has introduced an entirely gratuitously anti-harassment bill anyway--The Tyler Clementi Higher Education Anti-Harassment Act of 2010. (Congressman Rush Holt introduced the same bill in the House.) Federal civil rights law has long prohibited harassment in schools receiving federal funds; Tyler Clementi was not the victim of harassment or any absence of rules against it: his suicide followed a gross and apparently criminal violation of privacy--the secret taping and broadcast of his sexual encounter with another male. So, there's no need for this bill and no sense in naming it after Clementi--unless you're intent on emotionally blackmailing people into supporting it. Naming legislation after a victim cuts off debate, daring opponents to risk appearing insensitive to the sufferings of survivors.

But this bill is not simply redundant; it's repressive, proposing a subjective definition of harassment that's more restrictive of speech and more likely to be applied arbitrarily than the definition formulated by the Supreme Court some 10 years ago. You can find a concise critique of the bill at thefire.org, which stresses that "the bill removes the requirement that the (alleged harassment) be objectively offensive... The bill also fails to define what constitutes a "hostile or abusive" educational environment, leaving that determination to college administrators"--administrators who have proven themselves oblivious or hostile to free speech, as a lamentably long list of FIRE's cases show.

Starve the Beast

A few comments from Bruce Bartlett on the effectiveness of the "starve the beast" strategy towards reducing the size of the federal government.

-- The Idiocy of Starve the Beast Theory.
-- 'Starve the Beast' - Origins and Development of a Budgetary Metaphor.
-- To Starve or Not To Starve the Beast.

In Kevin Drum's comment we get an interesting observation:

If you raise taxes to pay for government programs, you're essentially making them expensive. Conversely, if you cut taxes, you're making government spending cheaper. So what does Econ 101 say happens when you reduce the price of something? Answer: demand for it goes up.

Cutting taxes makes government spending less expensive for taxpayers, which makes them want more of it. And politicians, obliging creatures that they are, are eager to give the people what they want. Result: lots of spending and lots of deficits.

If you want to reduce spending, the best way to do it is to raise taxes so that registered voters actually have to pay for the services they get. I don't have a cute name for this theory, but it's true nonetheless. Even for Republicans.


This suggests that it is rational for people to want more government programs if they do not know the true costs of those programs. If you want to cut government, raise taxes.

Friday, December 3, 2010

Some Takes on the Vote on the Fiscal Commission Vote

From the Brookings Institution.

In class yesterday as we were reviewing the bicameral system and how it was intended to tie the House closely to the immediate preferences of the public and detach the Senate from the same I suggested that the Senate was more likely to support the plan since the longer terms of office shield them from the immediate anger (short-term) that could follow their support. This despite the fact that the proposals serve the long term needs of the country.

Well, I was right.

5 out of 6 Senators voted for it.
5 out of 6 Representatives voted against it.

Will Ron Paul Chair the SubCommittee That Oversees the Fed?

Maybe:

One important indicator will be who is chosen to lead the House subcommittee that oversees the Fed when Republicans take control of the House of Representatives in January. First in line for the job is Representative Ron Paul of Texas, the libertarian renegade Republican, frequent presidential candidate, and outspoken critic of the Federal Reserve who wrote the best-selling polemic, "End the Fed.''

Were he to assume the chairmanship, Paul would represent an altogether different type of critic: he really means what he says. But he's no lock for the job. His views on monetary policy, and his disinclination to defer to the GOP leadership, have twice before led his own party to ignore his seniority and deny him control of this subcommittee, in 2003 and 2005. One acid test of whether the Republican Party is serious about trying to aggressively influence monetary policy and thwart QE2 is if it finally lets Paul loose on the chairmanship.

Paul expects it will. "I'm assuming that I'll get it,'' he said. "I've had no indication at all that I won't.''

Representative Barney Frank, the outgoing chairman of the Financial Services Committee, agrees. "I think the GOP is afraid to deny him that chairmanship. The Tea Party would revolt."
- The Domestic Monetary Policy and Technology Subcommittee.

Wikileaks and Espionage

Some musings.

Investment v Consumption

Two conservatives debate the role of government.

Institutions Matter

This is the most clear headed comment I've yet seen about the (potential) problem posed by wikileaks and other organizations that seek to subvert established institutions:

. . . could we please pause for a moment amidst all of our technological triumphalism to reflect on the potential downside to all of this antinomian empowerment of the individual? The libertarian imagination, amply furnished with metaphors of invisible hands and spontaneously generated order, is thrilled by such technological empowerment. What could be better than giving every human being on the planet the capacity to subvert all established authorities and institutions, private or public, tyrannical or meritocratic? What would be better, I submit, is lucid self-awareness about how much our liberty depends on the existence of stable, functioning institutions to protect it against those who long to extinguish it in the name of sundry anti-liberal theological and ideological projects.


The framers of the Constitution would agree with this sentiment. It is the very point made in Federalist #10 and helps us understand, in a contemporary context, the dangers that passionate majorities angry at existing institutions, can pose to free societies. Not that stable societies always respect or maintain individual freedom -- they don't always -- or that occasional challenges to the status quo are not worthwhile -- they are in fact necessary in order for societies to evolve and for freedom to expand. But the chaos that inevitably results when stable institutions are gleefully undermined is perhaps the greatest threat to individual freedom. Madison would certainly agree with that sentiment.

That said, institutions must be subject to challenge from time to time in order to determine whether they are in fact preserving freedom or merely maintaining existing privileges. Early efforts to expand suffrage, for example, were opposed for much the same reason. It took time for the expansion of political participation to demonstrate that it would not undermine existing institutions and lead to chaos. This was demonstrated empirically, and the same will have to be demonstrated in this case. Can free societies survive the transparency and instability that unlimited information will force on its institutions? We will see.

For educators, charged with preserving the republic, the trick will be to ensure that students will be made aware of the historical role that properly designed governing institutions and systems have played in securing liberty and not make capricious choices that can undermine them.   

Filibuster Reform Proposal

Oregon Senator Jeff Merkley would like to see us return to the old fashioned filibusters of yesterday, the one's that actually involved an endless floor debate.

- The Plum Line.
- The Senator's Memo.
- Congress 101.
- Kevin Drum.