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Obama’s Constitution
At the beginning of his inaugural address, President Obama observed that
“America has carried on, not simply because of the skill or vision of those in high office, but because we the people have remained faithful to the ideals of our forebears and true to our founding documents.” [my italics]
Although Obama had taught constitutional law for 12 years, the rest of his address raises a question whether he has ever read the Constitution. For he spells out his vision by committing his administration to a wide range of activities for which there is little or no authority in the Constitution.
“We will build the roads and bridges, the electric grids and digital lines that feed our commerce and bind us together. We will restore science to its rightful place and wield technology’s wonders to raise health care’s quality and lower its cost. We will harness the sun and the winds and the soil to fuel our cars and run our factories. And we will transform our schools and colleges and universities to meet the demands of a new age.”
Moreover, he asserts, our government should be judged by “whether it works — whether it helps families find jobs at a decent wage, care they can afford, a retirement that is dignified,” not by such “stale political arguments” as whether the policies that might generate these outcomes are constitutional and generate benefits higher than the costs.
Nor are the commitments of his administration to be limited to those of greatest concern to Americans.
“To the people of poor nations, we pledge to work alongside you to make your farms flourish and let clean waters flow, to nourish starved bodies and feed hungry minds. And to those nations like ours that enjoy relative plenty, we say we can no longer afford indifference to the suffering outside our borders; nor can we consume the world’s resources without regard to effect.”
“What is required of us now is a new era of responsibility – a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world.”
President Obama is intelligent and charming –- but not wise. The Constitution only authorizes the president to be the chief executive of the federal government and the commander-in-chief of the armed forces, ample challenges to the most skilled person, but the president is not the sole leader of the federal government, the American nation, or the free world. Based on his inaugural address, President Obama has no apparent sense of the limits of what he can and should do –- and that will reduce his effectiveness in addressing those issues within his clear authority.
Filed under: Government and Politics; Law and Civil Liberties
Another $700 Billion
For the second time in six years, the Bush administration has asked Congress for nearly unlimited authority without an independent professional review of the evidence that led the administration to request such authority.
In making the case for the Iraq war resolution, according to Senator John D. Rockefeller, “the administration repeatedly presented intelligence as fact when it was unsubstantiated, contradicted or even nonexistent. As a result, the American people were led to believe that the threat from Iraq was much greater than actually existed.”
As it turned out, of course, no “weapons of mass destruction” were ever discovered.
The skeletal proposal for the Troubled Asset Relief Program states that “Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency. The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this act without regard to any other provision of law regarding public contracts” – again without an independent professional review of the evidence that led the administration to request such extraordinary authority.
In both cases, the administration requested urgent congressional approval of these measures when members of Congress were anxious to go home to run for reelection. And a final irony: the total direct cost of the Iraq war to date has been about $700 billion, the same amount that the administration has requested to buy bad mortgages.
Filed under: Finance, Banking & Monetary Policy; Foreign Policy and National Security; Government and Politics
Build a Wall
The prize for the best policy idea of the week goes to Steve Ahlenius, the president of the Chamber of Commerce in McAllen, Texas on the Mexican border. As reported in The Monitor, a local newspaper:
McAllen, Texas calls for a wall around Washington, D.C.
We feel the need to protect ourselves from bad legislation, bad ideas, and a waste of taxpayer money.
A wall around their homes and businesses will give the legislators and Washington bureaucrats a better understanding of what kind of message this action will send.
Let’s see if they decide to climb over it, tunnel under it, or walk around it.
Morbid Comparisons
On Monday, a student at Virginia Tech shot and killed 32 of his colleagues and then himself – the most deadly peacetime shooting incident in U.S. history. Many Americans are still grieving about this incident and are puzzled about what would lead a young man to such deadly behavior.
On Wednesday, terrorists killed 312 civilians in Iraq, including 140 civilians in a truck bombing across from the busy Sadriya market in a mostly Shi’ite neighborhood in Baghdad, only hours after Prime Minister al-Maliki committed the Iraqi government to assume responsibility for security by the end of this year. The deaths due to the terrorism in Iraq on Wednesday substantially exceeded the high level of recent terrorism. Terrorists killed 500 Iraqi civilians last week, including 47 civilians killed when a suicide bomber blew up a car at a busy bus station in Karbala. A truck bomb destroyed a major bridge across the Tigris River, and a suicide bomber penetrated the fortress-like Green Zone, blowing himself up inside the parliament cafeteria and killing one member of parliament. Moreover, last week was not unusual in Iraq. Over the past year, terrorist attacks killed 73 Iraqi civilians per day, including those by the 17 bombings that killed 50 or more civilians. (These estimates are from press releases by Antiwar.com and are based on reports in the Iraqi press).
Most Americans have no comprehension of the level of terrorism in Iraq. Since the American population is 12 times the Iraqi population, the above numbers should be multiplied by 12 to understand the relative magnitude of terrorist activities in the United States and Iraq. At the recent rate of terrorist activities in Iraq, around 876 Americans per day would be killed by terrorist attacks! At that rate, Americans would be experiencing a level of grief and despair beyond our current comprehension.
I draw several lessons from this morbid comparison: There is every reason to improve our understanding of the motives that led to the massacre at Virginia Tech and the responses that might have reduced the number of fatalities, because the victims were Americans and these conditions are more likely to be under our control. At the same time, we should recognize that the presence of a substantial number of American troops in Iraq may have contributed to but, at least, has not reduced the extraordinary rate of terrorism, that more troops or different tactics are not likely to be more successful, and that the several civil wars underway in Iraq are not under our control. We have an important stake in reducing the number of future incidents like that at Virginia Tech and Oklahoma City. It is much less clear that we have an important stake in the outcome of the several civil wars in Iraq.
Filed under: Foreign Policy and National Security; General
Putting an End to “The War on Terror”
Our responses to the threat of terrorism are all too often described as “the war against terrorism.” But this makes no linguistic sense; terrorism is one of many dangerous phenomena, not an enemy. We do not describe our responses to the threat of hurricanes, for example, as a war against hurricanes. More important, the war metaphor has severely biased both the nature and extent of our responses to the threat of terrorism.
First, the war metaphor implies that the primary response to the threat of terrorism should be a military response. Terrorism, however, is the tactic of those who are motivated to seek political change by violence but are militarily weak. The most important and too often neglected first question to address is whether some change in policy — such as the foreign basing of U.S. military forces — would reduce the motive for a terrorist threat against Americans at a lower cost than any other potential response. Maybe not. In that case, the most effective responses to the residual threat of terrorism are improvements in intelligence, intelligence sharing, and the capability of local police forces — with several special operations forces the only important military response. The very expensive new weapons systems in the U.S. defense budget, in contrast, contribute nothing to increasing our security against the threat of terrorism.
Second, the war metaphor leads to an overreaction to the the threat of terrorism by inviting misleading comparisons of current conditions with those during prior conditions properly described as wars. Those who defend an aggressive response to the threat of terrorism are quick to point out that the current losses of liberty and property to counter this threat have been small relative to those during wars. But the threat of terrorism is very different than the threats during a war in three dimensions: Terrorism presents the small probability of a small loss (unless terrorists acquire a nuclear weapon) but one that may be extended indefinitely. A war presents a larger probability of a large loss but one that is likely to be limited to a few years. Most of us are prepared to sacrifice some liberty and property when there is an increased threat to our lives, but the difference in conditions presented by the threat of terrorism and wars strongly affects how much that we are prepared to sacrifice. In general, people should be expected to be willing to pay a lower current price for security when the expected loss is lower and the period of potential loss is longer; for both of these reasons, how much liberty and property we should be expected to sacrifice in response to the threat of terrorism is far less than during a war.
This perspective leads me to conclude that the U.S. Government should substantially reduce the several dimensions of the current cost of responding to the threat of terrorism to a level sufficient to support only the most effective of these responses for a duration that may be indefinitely long. Americans may have a lot to learn by a better understanding how Britain, Spain, and some other countries have responded to a threat of terrorism for decades with little sacrifice of liberty or property.
We may still need to replace the war metaphor with some metaphor that better reflects an effective, sustainable response to the threat of terrorism, but I will leave that to someone who is a better wordsmith.
Filed under: Foreign Policy and National Security; General
Divided Government May Help Restore the Republican Party
For the moment, the Democrats are expected to win control of one or both houses of Congress in the congressional election this fall. That may have two strongly beneficial effects on the Republican Party:
- More congressional Republicans will rediscover their commitment to fiscal responsibility when most of the proposals for increased spending originate in a house of Congress controlled by the Democrats. For the past five years, in contrast, congressional Republicans approved almost all proposals for increased spending by the Republican president or their party colleagues.
- More social conservatives will rediscover their commitment to federalism in order to protect the authority to address value issues by state governments when it becomes clear that there is no political opportunity for federal decisions on these issues. With the first unified Republican federal government in 50 years, in contrast, social conservatives have been motivated to propose federal political decisions on these issues for which there is no national consensus.
The combination of a long unnecessary war, the fiscal excesses disguised as compassionate conservatism, and an intolerant social agenda has almost destroyed the traditional Republican political coalition, leaving many of us without any enthusiasm for the candidates and policies of either party. The first step to restoring the Republican Party, ironically, may be a Democratic victory in the congressional election this fall.
Several years in the political wilderness may do much to clear the mind.
A Civil War May Be the Necessary Next Step Toward a Political Equilibrium in Iraq
Iraq is an artificial country, the combination of three former Ottoman provinces with a quite different Muslim group dominant in each province. Few people have significant loyalty to any government of the combination of these provinces, and Iraq can probably be held together only by a strong man who commands the support of the military. After Tito’s death, for example, the former Yugoslavia broke up into six independent governments, and the separation of Serbia and Kosovo is still likely.
My judgment is that the only plausible political equilibria in Iraq are the emergence of a strong man or the fragmentation into three independent governments dominated by the Sunnis, Shia, and the Kurds. A civil war, I suggest, may be the necessary next step toward either of these outcomes. Current U.S. government policy, of course, is to try to achieve an accomodation among these groups without continued violence or an indefinite U.S. military role, an outcome that is desirable but increasingly implausible.
The U.S. government may not have the capability to prevent a civil war in Iraq, and in any case, we may not have a dog in that fight.
Our government, ironically enough, may prefer the emergence of a Sunni strong man to maintain a unified Iraq, someone like Saddam Hussein who is not subservient to Iran; and of course, Hussein was “our” man in the Middle East during the Iran-Iraq war. Fragmentation into three governments would be the preferred outcome only if it did not precipitate a larger regional war. The problem is that the Turks may oppose an independent Kurdistan on their border, and the Saudis may oppose a Shia state subservient to Iran on their border.
The increasing sectarian violence in Iraq may yet be controlled by the military and police forces of the current government without indefinite U.S. military support. Fine, but the Iraqi government should be aware that popular support for an indefinite U.S. military role in Iraq is falling rapidly. In the event of a more open civil war, the U.S. government should avoid taking any side in the conflict and should pursue a loss-minimizing strategy during a rapid phase-out of U.S. troops. In anticipation of a possible fragmentation of Iraq, the U.S. government may still have enough leverage on other governments to reduce the prospect of a larger regional war.
There is no plausibly rewarding outcome to the U.S. role in Iraq. Sometimes, the wisest course, if also the most difficult, is to choose the least bad of a set of bad outcomes.
Madness!!!
President Bush has endorsed adding the former Soviet province of Georgia to NATO, a measure that seems designed to provoke the Russians without adding any net benefits to the alliance. Georgia would bring more liabilities than assets to NATO because it is inherently indefensible. It is nearly surrounded by Russia; its only border with NATO is a short border with eastern Turkey. Georgia has no significant military forces of its own, and Russian troops already occupy two enclaves there.
Article V of the NATO Charter obligates all NATO governments to respond to an attack on any NATO country, increasing the probability that a minor confrontation between Georgia and Russia would lead to a larger war between NATO and Russia. NATO should not be broadened to include countries on the Russian border unless those countries have substantial military forces and defensible borders. For a similar reason, the earlier addition of the three Baltic countries to NATO was a mistake. Peaceful and productive relations with Russia are more important than any value these new members bring to the United States and NATO.
President Bush was gracious in hosting the president of Georgia this week and was correct to support the major economic reforms that Georgia has initiated. But he was wrong in endorsing NATO membership as a sort of after-dinner mint. There are much larger issues at stake for the U.S., Europe, and Russia. One wonders what Bush now expects to accomplish with Putin at the G-8 meeting in St. Petersburg next week.
Filed under: Foreign Policy and National Security; General
Updating “An Unnecessary, Expensive, and Probably Unconstitutional Board”
Last week, I wrote about the Public Company Accounting Oversight Board (PCAOB). Here’s an update:
Last week, the Securities and Exchange Commission appointed an obscure member of the Federal Reserve Board as chairman of the PCAOB, increasing his annual salary from $165,200 with the Fed to $615,000.
Again, Congress ought to use this occasion to question the purpose and structure of one of its recent creations.
An Unnecessary, Expensive, and Probably Unconstitutional Board
Congress should pay attention to what is happening with one of their recent creations. The Securities and Exchange Commission will soon appoint two members of the Public Company Accounting Oversight Board (PCAOB), a private monopoly that was created by the Sarbanes-Oxley Act of 2002. This board is unnecessary, expensive, and probably unconstitutional.
This board was created to establish auditing standards for all public accounting firms and to monitor the performance of these firms, based on the presumed failure of Arthur Andersen, one of the formerly Big 5 public accounting firms, to adequately audit the financial reports of Enron. The Sarbanes-Oxley Act, however, left in place a major conflict of interest affecting these firms: The public accounting firms continue to be paid by the companies that they audit. Instead of correcting this conflict of interest, Congress established a new board to regulate all of the public accounting firms, although only a few such firms have ever been charged with a major breach of auditing standards. Congress could have corrected this conflict of interest by shifting the payment for audits from the audited firms to the stock exchanges on which the firms are listed; the stock exchanges would then recover the audit payments in their listing fees. In this case, the PCAOB would be unnecessary, an overreaction to what was apparently a rare breach of the existing auditing standards.
The PCAOB is outrageously expensive. The chairman is paid an annual salary of $615,000, and each of the other four members are paid an annual salary of $500,000 — in both cases, a multiple of the salary of the President of the United States who has many more serious problems to worry about.
Moreover, all of the candidates for the two open positions are current or former federal officials for whom a much lower salary was a sufficient incentive.
As a private monopoly with both regulatory powers and taxing powers, the PCAOB is probably also unconstitutional. The PCAOB sets its own budget that is financed by a mandatory fee on all public listed corporations. A case has already been filed that challenges the constitutionality of the PCAOB, which if successful would probably invalidate the whole of the Sarbanes-Oxley Act. So much the better.
For an update, see here.
Build a Wall around the Welfare State, Not around the Country
Most of the members of the conference committee on the immigration bill seem to have forgotten our own heritage.
Compared to the present, the United States had a higher rate of immigration just prior to World War I when we had no significant immigration controls (except against the Chinese) and no federal welfare programs. Most of these immigrants were from Ireland, Italy, Hungary, Poland, and other poor European countries; most spoke no English and had only crude manual skills. Many Americans from families who had been here for more than a few generations were prone to speak disparagingly about the status and prospect of the new immigrants. For all that, almost all of these new immigrants (including my grandfather) were work-oriented, family-oriented, no burden to others, and, within a generation, fully assimilated Americans.
Most current immigrants, other than being Hispanic, are very much like those who chose to make their future in the United States a century ago. The record of recent immigrants is impressive: a relatively high employment rate, a relatively low rate of birth to single mothers, and an unusually low incarceration rate. So far, the one major difference from prior immigrants is that the Hispanics are less education-oriented. Given the opportunity, there is every reason to expect them to be good workers, good neighbors, and fully assimilated Americans within a generation. Read the rest of this post »
House Faces the Dumbest Bill of the Year (So Far): A $2.10 Increase in the Minimum Wage
House Republicans have one last chance to demonstrate that they have any remaining intelligence or principles. On June 13, the House Appropriations Committee approved a bill that would increase the minimum wage from $5.15 to $7.25 per hour over the next three years. This bill, with the support of seven Republicans on the committee, would implement one of the highest priorities of the congressional Democratic leadership.
An increase in the minimum wage is one of the dumbest possible policies for the following reasons:
- The employment of the least-skilled members of the labor force—often new entrants—would be reduced.
- The non-wage benefits and working conditions of those who keep their jobs at the higher wage would probably be reduced.
- Most of those who keep their jobs at the higher wage would be secondary workers in non-poor families.
An increase in the minimum wage has long been a symbolic issue for the Democrats, however inconsistent with their other professed political values. House Republicans should challenge the Democrats on this issue, pointing out that an increase in the minimum wage would most hurt those that they claim to help. To do this, the House Republicans should split off the minimum wage provision from the appropriation bill, allow a separate floor vote on this provision, and demonstrate the absurdity of this proposal by a defeating this measure by a large margin. I’m waiting for a demonstration of good sense, in part, to determine whether there is any remaining reason to favor a Republican majority in the House.
A Case for a Different Libertarian Party
All of this blogtalk about which major party is likely to be more receptive to libertarian policy positions, I suggest, is a waste of time unless the winning candidate of either party is dependent on the votes of libertarians.
Increased outrage about the state of American politics and the prospect for a larger number of close elections increases the potential effectiveness of a different libertarian party — one that sometimes endorses one or the other major party candidate but does not run a party candidate for that position.
The Libertarian Party’s efforts to promote their policy positions by running Libertarian candidates is counter-productive when they reduce the vote for their favored major party candidates. A disciplined group that is prepared to endorse one or the other major party candidate in a close election, however, can have a substantial effect on the issue positions of both major party candidates. The following conditions must be met to achieve this effectiveness:
- The party cannot run a separate candidate.
- The size of the party must be larger than the expected vote difference between the major party candidates.
- After the major party candidates are selected, the party leadership must have the opportunity to bargain with both major party candidates on the issue positions of highest priority for the party.
- The party, as much as possible, must act in concert to support the major party candidate who is chosen by the members of the party in that district.
There is no reason for this libertarian party to be active in any district for which the party does not meet all four of the above conditions. (For most libertarians, the most difficult of these conditions to meet, I suspect, is condition 4.) In addition, the party should not emphasize the same issues in every district, because the choice of these issues should depend on those for which the major party candidates are willing to bargain.
This is a strategy to increase the approval of libertarian policy positions rather than the usually counter-productive effort to increase the number of votes for Libertarian candidates. Maybe it is better to term the organization that I have described as a libertarian political action group, not a libertarian party.
Republicans Need to Relearn How to Govern; Democrats Need New Policy Ideas
Harold Meyerson (Washington Post, May 10) was wrong to conclude that “The emerging Republican game plan for 2006…(reflects) their bankruptcy of ideas.” The Republican problem is not their lack of ideas but that the Bush administration has confused the politics of governing with the politics of campaigning. In 2005, President Bush proposed or endorsed major reforms of social security, taxes, immigration, and tort law. Most of these proposed reforms have not yet been addressed because the Bush administration would not work with Democrats to find a common ground, and the Democratic leadership would not even acknowledge the problems of current law that these proposed reforms would address. The prospect for comprehensive immigration reform is better only because of substantial support among the Democrats.
For all that, it is the Democratic Party that has been bankrupt of appealing policy ideas for the past 30 years. Marty Peretz, the editor of the New Republic, recently remarked that
It is liberalism that is now bookless and dying. Who is a truly influential liberal mind in our culture? Whose ideas challenge and whose ideals inspire? There’s no one, really. What’s left is the laundry list: the catalogue of programs…that Republicans aren’t funding, and the blogs, with their daily panic dose about how the Bush administration is ruining the country.
The policy proposals that are now bubbling up from the congressional Democratic leadership are a grab-bag of old ideas, some of which are remarkably dumb. An increase in the minimum wage is dumb because it reduces the employment of the least-skilled members of the labor force with most of the benefits accruing to secondary workers in non-poor families. An increase in the fuel economy standards is dumb because it reduces the cost of driving and applies only to new vehicles. One proposal that merits serious bipartisan attention is to revive the pay-as-you-go rules on federal spending and taxation that expired in 2002.
In summary, the Bush administration needs to learn how to govern, and the Democrats need to generate some appealing new policy ideas.
“Starve the Beast” Just Does Not Work
For nearly 30 years, many Republicans have asserted that the best way to control federal spending is to “Starve the Beast” by reducing federal tax revenue. Moreover, this assertion has been endorsed by two Nobel-laureate economists, Milton Friedman and Gary Becker.
There are at least three problems with this perspective:
- It is most implausible that reducing the tax burden of government spending on current voters would reduce the level of government spending that Congress would approve. In private markets, there is a consistent negative relation between the price of a good or service and the amount demanded.
- The “Starve the Beast” assertion is inconsistent with the facts, at least since 1980. My study finds that there was a strong negative relation between the federal spending percent of GDP and the federal revenue percent of GDP from 1981 through 2005, even controlling for the unemployment rate.
- An increased belief in the “Starve the Beast” assertion has substantially reduced the traditional Republican concern for fiscal responsibility – leading to a pattern of tax cuts, increased spending, and increased deficits. This pattern has been strongest during the current Bush administration, primarily because the Republicans control both the administration and a majority of both houses of Congress.
In 2005, federal revenues were 17.8 percent of GDP. My estimate is that an increase of federal revenues to about 19 percent of GDP would be necessary to stabilize the federal spending percent of GDP. Control of at least one house of Congress by the Democrats, however, is likely to be necessary to achieve this outcome. Republicans should not consider this inconsistent with Reaganomics. After the major reduction in marginal tax rates in 1981, Reagan approved tax increases in each of the next three years and a major tax reform that increased federal revenues in the short run.
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