Chávez Declares Socialism the ‘Kingdom of God’

ChavezA new poll in Venezuela shows that President Hugo Chávez’s approval ratings have fallen from about 60 percent early this year to 46 percent now. Likewise his disapproval ratings have increased from about 30 percent earlier in the year to 46 percent now, and 59 percent of those polled view the country’s situation negatively.

Despite having received upwards of $800 billion in revenues during Chávez’s ten years in power, the government is doing a dismal job of carrying out its proper functions—such as controlling crime or corruption—and public administration in other areas is deteriorating. Chávez recently announced regular cuts in electricity and water provision. (These issues will be discussed in an upcoming Cato forum on Venezuela on November 10.)

As domestic conditions deteriorate, Chávez is apparently feeling more empowered, or at least feels the need to continue his relentless accumulation of power. Today, El Universal, a Venezuelan daily, reports that Chávez has announced that he can expropriate private enterprises at will because he was given that power by the people. Why worry about the rule of law when you have the ability to interpret the will of the people? Chávez’s comments reported today should dispel any doubts that he considers himself a savior to his country:

Every day I’m more of a revolutionary, every day I’m more socialist… I’m going to take Venezuela toward socialism, with the people and the workers…The revolution is not negotiable, socialism is not negotiable, because every day I’m more convinced that socialism is the kingdom of God on earth. That is what Christ came to announce.

Ian Vasquez • October 27, 2009 @ 5:06 pm
Filed under: International Economics and Development

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The Real Story Behind the Chrysler Bankruptcy

If you worry about the abuse of executive power and declining respect among elected officials for the rule of law, you should watch this eloquent illumination of what really went down in the Chrysler bankruptcy earlier this year. The speaker is Richard Mourdock, Treasurer of the state of Indiana. The setting is a Cato Institute policy forum on October 15 about the “sordid details of the Bush/Obama auto industry intervention.”

As state treasurer, Mourdock is the person responsible for investment decisions concerning Indiana’s state employee pension funds, some of which owned a small share of Chrysler’s $6.9 billion in secured debt and some of which opposed the administration’s offer of $.29 on the dollar for that debt. Though these small secured holders were publicly castigated by President Obama as “unpatriotic” and unwilling to sacrifice for the greater good, Mourdock led the effort to stop the “sale” of Chrysler all the way to the U.S. Supreme Court.

Mourdock’s presentation gives a flavor for the tactics employed by the  Obama administration to “encourage” senior, priority creditors to back off their claims so that chosen parties could take priority—tactics that included backroom reminders that some of those creditors had received and might seek more TARP funding, threats of bringing the full weight and measure of the White House press office to bear down on dissenters, public condemnation, and other forms of arm-twisting most Americans would find unseemly for a U.S. presidential administration.

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Daniel Ikenson • October 26, 2009 @ 3:24 pm
Filed under: General; Government and Politics; Regulatory Studies; Tax and Budget Policy; Trade and Immigration

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New Report: Honduras Acted Constitutionally

A new report by the non-partisan Law Library of Congress now publicly available reviews the legal and constitutional issues surrounding Honduran President Zelaya’s removal from office. The report concludes that both the Supreme Court of Honduras and the Congress acted in full accordance with the constitution in removing the president from power. The study, first reported by Mary O’Grady in the Wall Street Journal this Monday, is consistent with the point she, Juan Carlos Hidalgo, and others have made with regard to Washington’s unbelievable policy of undermining Honduras’ rule of law by insisting on Zelaya’s return to power, calling his removal a coup, and otherwise sanctioning the small nation’s Supreme Court by suspending the visas of its justices.

Ian Vasquez • September 24, 2009 @ 2:51 pm
Filed under: Foreign Policy and National Security; General; Government and Politics; Law and Civil Liberties

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Why Chile Is More Economically Free Than the United States

42-16335429In the 2009 Economic Freedom of the World Report, Chile is now #5, one place ahead of the United States.

In 1975, of 72 countries, Chile was No 71. How did this happen? The explanation lies in what I call the “Chilean Revolution,” because it was as important and transformative to my country as the celebrated American Revolution that gave birth to the United States.

The exceptional political circumstances of this period have obscured the fact that from 1975 to 1989 a true revolution took place in Chile, involving a radical, comprehensive, and sustained move toward economic and political freedom (from a starting point where there was neither one nor the other). This revolution not only doubled Chile’s historic rate of economic growth (to an average of 7% a year, 84-98),  drastically reduced poverty (from 45% to 15%), and introduced several radical libertarian reforms that set the country on a path toward rapid development; but it also brought democracy, restored limited government, and established the rule of law.

In 1998, The Los Angeles Times described the importance of the Chilean Revolution to the world:

In a sense, it all began in Chile. In the early 1970s, Chile was one of the first economies in the developing world to test such concepts as deregulation of industries, privatization of state companies, freeing of prices from government control, and opening of the home market to imports. In 1981, Chile privatized its social-security system. Many of those ideas ultimately spread throughout Latin America and to the rest of the world. They are behind the reformation of Eastern Europe and the states of the former Soviet Union today… which demonstrates, once again, the awesome power of ideas.

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José Pinera • September 17, 2009 @ 4:52 pm
Filed under: International Economics and Development

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Bagram, Habeas, and the Rule of Law

Andrew C. McCarthy has an article up  at National Review criticizing a recent decision by Obama administration officials to improve the detention procedures in Bagram, Afghanistan.

McCarthy calls the decision an example of pandering to a “despotic” judiciary that is imposing its will on a war that should be run by the political branches. McCarthy’s essay is factually misleading, ignores the history of wartime detention in counterterrorism and counterinsurgency, and encourages the President to ignore national security decisions coming out of the federal courts.

More details after the jump.

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David Rittgers • September 16, 2009 @ 3:42 pm
Filed under: Foreign Policy and National Security; Law and Civil Liberties

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Fixing Detention in Afghanistan

The Obama administration is currently revising detainee procedures in Afghanistan. Bagram Airfield, located north of Kabul, is home for roughly 600 detainees. The Department of Defense plans to institute new review boards patterned on the ones at Guantanamo Bay, allowing detainees to challenge the basis of their detention and present evidence supporting their release.

The Bagram Theater Internment Facility has long used Unlawful Enemy Combatant Review Boards to determine who should remain in custody. These boards provided minimal process and, consequently, minimal ability to determine if the detainees were militants or intelligence operatives fighting the government. The detainee was not allowed to attend the hearing.

The shift in policy is an improvement, but a better model has been proposed by the Heritage Foundation’s Cully Stimson, Holding Terrorists Accountable: A Lawful Detainment Framework for the Long War. Stimson proposes that detention hearings follow the model used to determine the status of Salim Hamdan, Usama bin Laden’s driver. A military judge heard arguments for and against a finding that he was an unlawful enemy combatant, taking procedures for Hamdan’s appeal straight from Article V of the Geneva Conventions. This clearly meets American obligations under international law and decisions made in this forum are more likely to survive review in a federal court.

The change in policy also comes on the heels of a Marine General’s report that 400 of the 600 detainees in Bagram pose no threat to the Afghan government or to American forces. We did a better job with detention in Iraq, isolating hardcore foreign fighters, providing job training and community support to the local flunkies who took potshots at American forces for a quick buck, and prosecuting as many detainees as possible in the Iraqi Central Criminal Court.  We should follow a similar template in Afghanistan.

For related discussion of the merits of the American presence in Afghanistan, watch today’s policy forum at Cato, Should the United States Withdraw from Afghanistan? It streams live at noon today, featuring Malou Innocent, Ted Galen Carpenter, and Christopher Preble.

David Rittgers • September 14, 2009 @ 11:40 am
Filed under: Foreign Policy and National Security; Law and Civil Liberties

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The War on Terror Is Over—Spread the News!

Daniel Henninger shares the good news in the Wall Street Journal today: The war on terror is over!

Unfortunately, he appears to bemoan that development. The excesses of the “war on terror” will—regrettably, to him—be reined in by lawyers.

His basic thesis is, very roughly: Lawyers interfere with good things. Lawyers are going to interfere with torture. So torture is a good thing.

This litigation nightmare, together with the chilling effect of the special prosecutor’s potential indictments, has as its goal making the price of aggressive interrogation too high under any circumstance, including a one-hour-bomb scenario.

Bring back the Dalkon Shield, asbestos, and torture!

Except that the ticking time-bomb/”one-hour bomb” scenario is never going to happen. It’s an interesting ethical thought experiment—and riveting fodder for TV—but not a serious dilemma for our security policy.

I take delight when commentators misuse history or culture to jazz up their writing, and Henninger throws a slow, fat pitch right over the plate: He quotes the famous anti-laywer line from Shakespeare, “The first thing we do, let’s kill all the lawyers.”

The line was spoken by a criminal to other criminals as they dreamed up a criminals’ “chicken in every pot” scenario. This undercuts the idea that we’d be better off without lawyers and the rule of law.

Terrorists are too weak to advance their own unpopular ideologies, so they seek to tear down their opponents’. Henninger’s attack on the rule of law in the United States invites exactly what terrorists want us to do.

Jim Harper • August 27, 2009 @ 4:14 pm
Filed under: Foreign Policy and National Security

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A Transparent Inquiry: The Only Way Forward

How could a country that claims to abide by principles like constitutional government and the rule of law do anything other than investigate credible claims of official abuse?

News that Attorney General Holder will appoint a prosecutor to investigate such claims will only surprise or upset people who have lost track of our national values.

CIA Director Leon Panetta doesn’t help the cause by issuing a statement to the CIA staff saying, “America is a nation at war.” Whether we are or not, that lullaby-in-reverse — reassuring CIA staff with a poke at the panic button — would seem to ratify expediency over professionalism.

Jim Harper • August 24, 2009 @ 3:39 pm
Filed under: Foreign Policy and National Security

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Sotomayor Doesn’t Deserve a Supreme Court Seat

Having sat through the entire gavel-to-gavel coverage of last week’s confirmation hearings, I still don’t know if I would vote to confirm Sonia Sotomayor if I were a senator, I really don’t. Deciding how to vote on this is more than a simple matter of deciding whether she is “qualified” to sit on the Supreme Court—which is hard enough given there is no fixed qualification standard.

It also has to include how much deference you want to give the president, in general terms but also taking into account that Sotomayor will likely be confirmed and you want to position yourself politically for the next nominee. And it has to include, of course, how your constituents feel; while it’s cowardly to follow opinion polls blindly, you are accountable to those who sent you to Washington. There are many other considerations, both political and legal.

But I’m not a senator—or even a senator’s aide—so I don’t have to make that decision. As a constitutional lawyer, however, I can say that—even as most of Sotomayor’s opinions are uncontroversial—it is impossible to overlook the short thrift the judge gave to the judicial process in Ricci v. DeStefano and Didden v. Port Chester. I am similarly hard-pressed to accept hearing-seat conversions that contradict over 15 years of speeches and articles: most notably against the idea that judges’ ethnic backgrounds—and even “physiological differences”—should affect their rulings.

Given Sotomayor’s repeated past rejection of the idea that law is or should be objective, stable, or discernible from written text, her inability during her testimony to explain her judicial philosophy—or even state her position on important cases and issues beyond an acceptance of precedent (by which she would no longer be bound in her new role)—leaves me with an abiding concern about the damage she could do to the rule of law in this country. Because of the nominee’s evasion, obfuscation, and doubletalk, I like her less now than I did before the hearings.

And so, on second thought, I do know how I would vote. During John Roberts’s confirmation hearings, Sen. Dick Durbin said that “no one has a right to sit on the Supreme Court” and that the “burden of proof for a Supreme Court justice is on the nominee.” I will follow this very apt “burden of proof” paradigm and respect the logic of Sen. Arlen Specter, the Republican-turned-Democrat former judiciary committee chairman who at President Clinton’s impeachment trial curiously evoked Scottish law to vote “not proven.” Given the impropriety of citing foreign law (another issue on which the nominee failed to explain her “conversion” in hearing testimony), I would vote that the case for confirming Sonia Sotomayor to the Supreme Court is “not proven”—under American law.

Ilya Shapiro • July 22, 2009 @ 2:04 pm
Filed under: Government and Politics; Law and Civil Liberties

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Week in Review: Stimulus, Sarah Palin and a Political Conflict in Honduras

Obama Considering Another Round of Stimulus

With unemployment continuing to climb and the economy struggling along, some lawmakers and pundits are raising the possibility of a second stimulus package at some point in the future. The Cato Institute was strongly opposed to the $787 billion package passed earlier this year, and would oppose additional stimulus packages on the same grounds.

“Once government expands beyond the level of providing core public goods such as the rule of law, there tends to be an inverse relationship between the size of government and economic growth,” argues Cato scholar Daniel J. Mitchell. “Doing more of a bad thing is not a recipe for growth.”

Mitchell narrated a video in January that punctures the myth that bigger government “stimulates” the economy. In short, the stimulus, and all big-spending programs are good for government, but will have negative effects on the economy.

Writing in Forbes, Cato scholar Alan Reynolds weighs in on the failures of stimulus packages at home and abroad:

In reality, the so-called stimulus package was actually just a deferred tax increase of $787 billion plus interest.

Whether we are talking about India, Japan or the U.S., all such unaffordable spending packages have repeatedly been shown to be effective only in severely depressing the value of stocks and bonds (private wealth). To call that result a “stimulus” is semantic double talk, and would be merely silly were it not so dangerous.

In case you’re keeping score, Cato scholars have opposed government spending to boost the economy without regard to the party in power.

For more of Cato’s research on government spending, visit Cato.org/FiscalReality.

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Chris Moody • July 10, 2009 @ 6:37 pm
Filed under: Cato Publications; General

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The Sotomayor Hearings

judgesotomayorNothing has changed in the six short weeks since Sonia Sotomayor was nominated to the Supreme Court: she remains a symbol of the racial politics she embraces. While we celebrate her story and professional achievements, we must realize that she — an average federal judge with a passel of unimpressive decisions — would not even be part of the conversation if she weren’t a Hispanic woman.

As Americans increasingly call for the abolition of affirmative action, Sotomayor supports racial preferences. As poll after poll shows that Americans demand that judges apply the law as written, the “wise Latina” denies that this is ever an objective exercise and urges judges to view cases through ethnic and gender lenses.

At next week’s hearings, Sotomayor will have to answer substantively for these and other controversial views — and for outrageous rulings on employment discrimination, property rights, and the Second Amendment. To earn confirmation, she must satisfy the American people that, despite her speeches and writings, she plans to be a judge, not a post-modern ethnic activist. After all, a jurisprudence of empathy is the antithesis of the rule of law.

Ilya Shapiro • July 9, 2009 @ 4:33 pm
Filed under: Law and Civil Liberties

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New Government of Honduras Takes a Wrong Turn

Facing mounting international pressure to reinstall a would-be despot, the provisional government of Honduras is taking a very wrong turn by asking the National Assembly to temporarily extend curfew powers and limit basic individual liberties.

The government claims that the measures, which will be in place for 72 hours, are justified to prevent any civil unrest given the imminent return of former president Manuel Zelaya to the country.  However, the provisional authorities are actually undermining the rule of law and constitutional liberties that they claimed to be protecting when removing Zelaya from power last Sunday.

The individual rights and liberties that would be affected: the inviolability of homes, the right to protest peacefully, the guarantee against being held for more than 24 hours without charges, and the freedom to move around the country undisturbed.

These actions are unjustified. By moving to take away civil liberties from Hondurans, the provisional government undercuts its moral standing vis-à-vis the increasingly autocratic rule of Manuel Zelaya it came to replace. Even if these measures are meant to be temporary, history shows that once a government claims emergency powers, it is very hard to completely relinquish them once the “emergency” is gone.

Moreover, these restrictions do little service to the argument of the new Honduran government that Zelaya’s removal was not a military coup d’état. Having the army policing the streets and curbing the free movement of people and their right to protest peacefully gives the impression that the military is in charge and calling the shots.

The Honduran government should scrap these measures and reassure the population that their individual rights and liberties guaranteed under the Honduran constitution will be fully respected.

Juan Carlos Hidalgo • July 2, 2009 @ 8:50 am
Filed under: Foreign Policy and National Security; International Economics and Development

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Honduras’ President Is Removed from Office

Honduran President Manuel Zelaya is just the latest democratically elected Latin American leader to violate his country’s constitution in order to achieve his political goals. Both he and the practice of democracy in Honduras are now paying the price.

The removal from office of Zelaya on Sunday by the armed forces is the result of his continuous attempts to promote a referendum that would allow for his reelection, a move that had been declared illegal by the Supreme Court and the Electoral Tribunal and condemned by the Honduran Congress and the attorney general. Unfortunately, the Honduran constitution does not provide an effective civilian mechanism for removing a president from office after repeated violations of the law, such as impeachment in the U.S. Constitution. Nonetheless, the armed forces acted under the order of the country’s Supreme Court, and the presidency has been promptly bestowed on the civilian figure — the president of Congress — specified by the constitution.

Restoration of stable democracy in Honduras could benefit from two things: one, the Electoral Tribunal and Congress calling for general elections earlier than they are scheduled in November; and two, an international condemnation of moves by strongarm figures like Zelaya to undermine democratic institutions and the rule of law.

Juan Carlos Hidalgo • June 29, 2009 @ 1:58 pm
Filed under: Foreign Policy and National Security; International Economics and Development

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The No-Rights List

A media drumbeat is steadily building to keep those on the government’s terrorist watch list from buying firearms. A month ago, Rep. Carolyn McCarthy (D-NY) introduced a bill to bar them from purchasing a gun even if they had no legally disqualifying criminal conviction. Now Sen. Frank Lautenberg (D-NJ) has introduced his own legislation to achieve the same goal.

This is arbitrary government at its best. The “no-fly” list used to prevent suspected terrorists from boarding aircraft has tagged Nelson Mandela, Sen. Ted Kennedy (D-MA), Rep. Loretta Sanchez (D-CA), Rep. Don Young (R-AK), Rep. John Lewis (D-GA), a retired general, a Marine reservist returning from Iraq, the President of Bolivia and dead 9/11 hijackers, a former federal prosecutor, and over twenty men named John Thompson as threats to our national security. The list now contains over 1 million names. This prompted calls for probes into the watch list, and the ACLU filed suit to challenge the list.

The push to prevent firearms purchases by persons on this list is nothing new. Here is White House Chief of Staff Rahm Emanuel saying in 2007 that, “if you’re on that no-fly list, your access to the right to bear arms is cancelled, because you’re not part of the American family; you don’t deserve that right. There is no right for you if you’re on that terrorist list.”

If the government can take an enumerated liberty away from selected citizens by placing them on a “no-rights” list without due process, the rule of law is dead.

David Rittgers • June 23, 2009 @ 3:55 pm
Filed under: Law and Civil Liberties

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Indiana: Defender of “the Rule of Law”

While the majority of Chrysler’s senior creditors sacrificed their fiduciary duties and caved into political pressure in accepting the Obama Administration’s pre-packaged bankruptcy of Chrysler, a small group of state pension funds in Indiana has challenged the Obama plan and is asking the Supreme Court to review said plan. As in the 1930s, the protection of contractual rights, one of the most basic pillars of a free society, along with the rule of law, is now in the hands of the Supreme Court.

As discussed in today’s Washington Post, these pension funds believe their rights were infringed by the Administration’s placing of junior creditors in a preferred situation to senior creditors. It doesn’t take Ms. Manners to remind us that cutting in line, whether in traffic, at the grocery store, or in a bankruptcy, is plain rude. To have the government re-order the line for you is even worse.

To re-build confidence in our markets, trust in our institutions must be re-stored. Not simply in our private institutions, but also in our government. If players believe the game is going to be rigged, fewer will be willing to play. And while the Administration has portrayed Chrysler’s senior creditors as nothing more than greedy speculators, the Indiana request exposes that myth. President Obama should clearly articulate why retired state employees, such as teachers and firefighters, should have their pension funds raided solely for the benefit of the auto unions. Here’s to hoping Indiana goes all the way in this Court.

Mark A. Calabria • June 8, 2009 @ 3:22 pm
Filed under: Finance, Banking & Monetary Policy

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. . . But Obama Generally Comprehends Terrorism

My difference with the President on releasing photos of Abu Ghraib notwithstanding, he exhibits an understanding of terrorism and how to counter it — an understanding that was not on display at the other end of Pennsylvania Avenue this week or at the American Enterprise Institute today.

Here’s a portion of President Obama’s speech today showing that he knows how overreaction to terrorism (such as resorting to torture) plays into the terrorism strategy:

As commander-in-chief, I see the intelligence, I bear responsibility for keeping this country safe, and I reject the assertion that these are the most effective means of interrogation. What’s more, they undermine the rule of law. They alienate us in the world. They serve as a recruitment tool for terrorists, and increase the will of our enemies to fight us, while decreasing the will of others to work with America. They risk the lives of our troops by making it less likely that others will surrender to them in battle, and more likely that Americans will be mistreated if they are captured. In short, they did not advance our war and counter-terrorism efforts – they undermined them, and that is why I ended them once and for all.

Jim Harper • May 21, 2009 @ 1:34 pm
Filed under: Foreign Policy and National Security

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Week in Review: The War on Drugs, SCOTUS Prospects and Credit Card Regulation

White House Official Says Government Will Stop Using Term ‘War on Drugs’

The Wall Street Journal reports that White House Drug Czar Gil Kerlikowske is calling for a new strategy on federal drug policy and is putting a stop to the term “War on Drugs.”

The Obama administration’s new drug czar says he wants to banish the idea that the U.S. is fighting ‘a war on drugs,’ a move that would underscore a shift favoring treatment over incarceration in trying to reduce illicit drug use…. The Obama administration is likely to deal with drugs as a matter of public health rather than criminal justice alone, with treatment’s role growing relative to incarceration, Mr. Kerlikowske said.

Will Kerlikowske’s words actually translate to an actual shift in policy? Cato scholar Ted Galen Carpenter calls it a step in the right direction, but remains skeptical about a true change in direction. “A change in terminology won’t mean much if the authorities still routinely throw people in jail for violating drug laws,” he says.

Cato scholar Tim Lynch channels Nike and says when it comes to ending the drug war, “Let’s just do it.” In a Cato Daily Podcast, Lynch explained why the war on drugs should end:

Cato scholars have long argued that our current drug policies have failed, and that Congress should deal with drug prohibition the way it dealt with alcohol prohibition. With the door seemingly open for change, Cato research shows the best way to proceed.

In a recent Cato study, Glenn Greenwald examined Portugal’s successful implementation of a drug decriminalization program, in which drug users are offered treatment instead of jail time. Drug use has actually dropped since the program began in 2001.

In the 2009 Cato Handbook for Policymakers, David Boaz and Tim Lynch outline a clear plan for ending the drug war once and for all in the United States.

Help Wanted: Supreme Court Justice

Justice David Souter announced his retirement from the Supreme Court at the end of last month, sparking national speculation about his replacement.Souter Dedication

Calling Souter’s retirement “the end of an error,” Cato senior fellow Ilya Shapiro makes some early predictions as to whom President Obama will choose to fill the seat in October. Naturally, there will be a pushback regardless of who he picks. Shapiro and Cato scholar Roger Pilon weigh in on how the opposition should react to his appointment.

Shapiro: “Instead of shrilly opposing whomever Obama nominates on partisan grounds, now is the time to show the American people the stark differences between the two parties on one of the few issues on which the stated Republican view continues to command strong and steady support nationwide. If the party is serious about constitutionalism and the rule of law, it should use this opportunity for education, not grandstanding.”

Obama Pushing for Credit Card Regulation

President Obama has called for tighter regulation of credit card companies, a move that “would prohibit so-called double-cycle billing and retroactive rate hikes and would prevent companies from giving credit cards to anyone under 18,” according to CBSNews.com.

But Cato analyst Mark Calabria argues that this is no time to be reducing access to credit:

We are in the midst of a recession, which will not turn around until consumer spending turns around — so why reduce the availability of consumer credit now?

Congress should keep in mind that credit cards have been a significant source of consumer liquidity during this downturn. While few of us want to have to cover our basic living expenses on our credit card, that option is certainly better than going without those basic needs. The wide availability of credit cards has helped to significantly maintain some level of consumer purchasing, even while confidence and other indicators have nosedived.

In a Cato Daily Podcast, Calabria explains how credit card companies have been a major source of liquidity for a population that is strapped for cash to pay for everyday goods.

Chris Moody • May 15, 2009 @ 3:18 pm
Filed under: Cato Publications; General; Law and Civil Liberties; Regulatory Studies

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“Gangster Government” at Work

With the Obama administration preferring to rely on politics rather than the law to “fix” the auto industry, bondholders have discovered that the new politics of this administration is quite a bit more brutal than the old politics practiced by the Bush administration.

Henry Payne and Richard Burr write of “gangster government” using not just demagogic public attacks on greedy bondholders but apparent threats of regulatory sanction to get its way in bankruptcy court.  They explain:

The holdout debtholders sought the refuge of the courts, where decades of bankruptcy law promised that secured lenders would receive just compensation for their investment. But then Obama called in his fixers.

In his April 30 news conference, Obama singled out Chrysler’s self-described “non TARP lenders” as “speculators” who sought to imperil Chrysler’s future for their own benefit. “I do not stand with them,” Obama thundered. “I stand with Chrysler’s employees and their families and communities. . . . (not) those who held out when everybody else is making sacrifices.” Michigan Democratic allies like Sen. Debbie Stabenow and Rep. John Dingell piled on, calling the lenders “vultures.”

Then, on Detroit radio host Frank Beckmann’s show May 1, a lawyer for the lenders, Tom Lauria, chillingly revealed how “one of my clients was directly threatened by the White House and in essence compelled to withdraw its opposition to the deal under threat that the full force of the White House press corps would destroy its reputation if it continued to fight.”

Lauria later confirmed the threats came from Rattner and that the target was Perella Weinberg, which had suddenly withdrawn its opposition after the president’s April 30 press conference.

The White House denied the threats, but Business Insider subsequently reported that “sources familiar with the matter say that other firms felt they were threatened as well. None of the sources would agree to speak except on the condition of anonymity, citing fear of political repercussions.”

“The sources, who represent creditors to Chrysler,” continued the Insider story, “say they were taken aback by the hardball tactics that the Obama administration employed to cajole them into acquiescing to plans to restructure Chrysler. One person described the administration as the most shocking ‘end justifies the means’ group they have ever encountered. . . . Both were voters for Obama in the last election.”

The idea of the White House–with the IRS and SEC at its disposal–threatening investment firms should have sent off alarm bells in America’s newsrooms. Inexcusably, the media establishment largely ignored the hardball tactics. This is the same media that has doggedly reported on President Bush’s U.S. attorney firings and the post-9/11 interrogations of terrorist suspects.

I have no opinion on who should get what as part of Chrysler’s bankruptcy — other than that the taxpayers shouldn’t be paying for America’s version of lemon socialism so common around the world.  But crude political interference by the political authorities in Washington in a bankruptcy case erode the rule of law and administration of justice.  If Obama and company believe that the end justifies the end when it comes to handing the auto companies over to favored interests, who among us is safe from similar action by this or another administration in the future?

Doug Bandow • May 14, 2009 @ 9:00 am
Filed under: Finance, Banking & Monetary Policy; Government and Politics; Law and Civil Liberties

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Who Will Replace Justice Souter?

You could call it the end of an error.  David Souter, the “stealth justice” who George H. W. Bush nominated mainly to avoid a confirmation battle and who so disappointed conservatives, is finally free to leave a city he never took to and return to his native New Hampshire. 

Little more can be said about Justice Souter. He has always been inscrutable, at first leaning right, shifting toward the middle in the landmark 1992 cases of Planned Parenthood v. Casey (abortion) and Lee v. Weisman (prayer at high school graduation), and ending up at the left end of the Court alongside Justices Stevens, Ginsburg, and Breyer — all the while employing an unpredictable jurisprudential method.  And he has always been reclusive, refusing reporters’ and scholars’ interview requests and being the biggest opponent of video cameras inside the Court.  Perhaps most memorably, Souter gained notoriety after his vote in Kelo v. New London (allowing the taking of a private home for the benefit of a developer) spurred property rights activists to petition for the use of eminent domain to turn his farm into the “Lost Liberty Hotel.”

Speculation now turns to possible replacements, and what President Obama will do with his first chance to fill a seat on the high court.  Will he risk a big political battle on this issue so early in his term, or will he appoint someone more confirmable but less pleasing to his base? 

He is under great pressure to appoint a woman, and the three leading female candidates are new Solicitor General Elena Kagan, Second Circuit Judge Sonia Sotomayor, and Seventh Circuit Judge Diane Wood.  Kagan would be an almost-certain pick a year from now, but having been just confirmed to be the so-called Tenth Justice, she might be seen as too green for elevation.  Sotomayor — because she is Hispanic and despite a mixed judicial record — was the odds-on favorite until the Court took up the employment discrimination case of Ricci v. DeStefano (argued just last week), an appeal of a bizarre opinion Sotomayor joined that denied the claims of firefighters who had been passed over for promotion because of their race.  That leaves Wood, a renowned authority on antitrust, international trade, and federal civil procedure, whose age (58) suggests that this is likely the last vacancy for which she will be considered.  Wood offers a seriousness of purpose and no ideological ax to grind, and is thus the best nominee supporters of constitutionalism and the rule of law can hope for at this time.  (Full disclosure: I took two classes from Judge Wood in law school.)

Ilya Shapiro • May 1, 2009 @ 7:47 am
Filed under: Government and Politics; Law and Civil Liberties

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Does Transparency Inspire Terrorism?

The debate over the Obama administration’s release of the torture memos took an important turn during the past week, as reflected in discussions on the Sunday morning shows.

The economy was the lead story on Fox News Sunday, but in the second segment Chris Wallace led his questioning of Senator Kit Bond (R-MO) as follows:

The Pentagon now says that it’s going to release hundreds of photos of alleged abuse of detainees by U.S. personnel – this, after, of course, the release of the interrogation memos. Senator Bond, how serious is the threat of a backlash in the Middle East and the recruitment of more terrorists, possibly endangering U.S. soldiers in that part of the world?

Revelation! The idea that abusive practices on the part of the United States would draw people to the side of its enemies.

In the media, most of the debate up to now has centered on the tactical question of whether torture works, and to some degree the moral dimension. (Here’s David Rittgers on the former and Chris Preble on the latter.)

There’s an ineluctable conclusion from understanding that torture drives recruitment which endangers our soldiers: It is strategic error to engage in abusive practices. Abuse on the part of the United States adds heads to the hydra.

But wait. Wallace’s question may imply that it is release of the photos – not commission of the underlying offenses – that risks causing a backlash. This cannot be.

Given the governments they’ve long experienced, people in the Muslim and Arab worlds will generally assume the worst from what they know – and assume that even more than what they know is being hidden. Transparency about U.S. abuses cuts against that narrative and confuses the story that the United States is an abuser akin to the governments Arabs and Muslims have known.

Abusive practices create backlash against the United States. Transparency about abuses after the fact will dispel backlash and muddy the terrorist narrative about the United States and its role in the Middle East.

As the question turns to prosecution of wrongdoing by U.S. officials, such as lawyers who warped the law beyond recognition to justify torture, transparent application of the rule of law in this area would further disrupt a terrorist narrative about the United States.

Jim Harper • April 27, 2009 @ 9:02 am
Filed under: Foreign Policy and National Security; Law and Civil Liberties

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