Politics

Super Dienstag

trumpf.rally

This is the end of the GOP’s Southern strategy.  For years, Republicans have courted the white Southerners at the core of the Trump constituency, defended them from attacks on their “culture” of white identity and racial resentment, mimicked their anti-intellectualism—and understood all along that their votes would provide the margin needed to enact the policies of the conservative elite, even if many of those policies (like supply-side economics and neocon foreign policy) have little natural appeal or relevance to working class Southern whites. The GOP even understood that if these voters formed a splinter party (e.g., George Wallace’s AIP), it would be game over for the conservative elite.  What the Republican leadership never imagined is that the Trump constituency would actually one day take over the Party.

This could also be the end of identity politics on both the right and the left.  My wish—understanding that I may be riding alone on this one—is that Trump’s nomination and resounding loss in November not only will break up the Republican Party (amid general condemnation of all it stands for) but also will wake up the Democratic Party.  What I hope for, ultimately, are two reformed parties:  one that represents the class interests of the affluent/rich, and one that represents the class interests of the less affluent/poor—and neither of which distracts us with arguments about morality, culture and identity that have no real bearing on our actual material concerns.

What would it be like if every voter made choices solely on the basis of which candidate’s policies would make him or her materially better off, whether measured in terms of, e.g., lower tax and regulatory burdens (on the one side) or, e.g., the availability of social insurance against unemployment, health and retirement risks (on the other side)?  Intelligent voters could even take a long-term view of their own material well-being—for example, the affluent/rich could vote for government subsidized health insurance in order to ensure social stability and a supply of healthy workers (or even out of empathy!), and the less affluent/poor could vote to reduce business taxes in order to promote job creation or to incentivize the production of other social goods—without upsetting the basic class equation.  With elections focused squarely on class interests and economic outcomes, policies that address the enabling structures of extreme inequality would, at last, be on the table.

What wouldn’t happen in this new two-party system are the false alliances that are made when identity drives politics, and the instability that results when voters are first persuaded, and then unpersuaded, to vote against their own economic interests.  Why an end to identity politics?  Because the memory of Trump 2016 will be there to remind us what happens.

mein.trumpf0304b

Do the Brits really not care to belong to any club that would have them as a member?

In a Brexit scenario, Britain could end up negotiating EFTA/EEA membership (the “Norwegian option”) or EFTA membership only (the “Swiss option”). Or it could quit the Europe club altogether—unprecedented for an EU member state, albeit not for territorial possessions of a member state (call it the “Greenlandic option”).

Greenland’s melting. Don’t be Greenland, people.europe

Doubling the SEC and CFTC budgets

According to a blog post yesterday by Jeff Zients, assistant to the President for economic policy and director of the National Economic Council, President Obama’s fiscal year 2017 budget proposal includes funding of $1.8 billion for the Securities and Exchange Commission and $330 million for the Commodity Futures Trading Commission, up 11% and 32% respectively. More significantly, Zients’ post says that the President is calling for doubling the budgets of the SEC and the CFTC (albeit only from their substantially lower fiscal year 2015 levels) by fiscal year 2021. This has prompted the usual sputtering about excessive regulation and its dolorous effects on economic growth and the price of financial services. Raising barriers to entry in the financial sector. Stifling innovation.

Yadda yadda yadda. As if no serious person would deny the empirical truth of these statements. Far be it from me. But I have some questions:

How much of the 5-year increase in SEC and CFTC rulemaking, examination and enforcement activity will be directed at issuers and end-users (not otherwise engaged in financial activities) and how much will be directed at financial intermediaries (banks, broker-dealers, swap dealers, investment advisers, commodity trading advisers, etc.)?

The growth of the financial sector—particularly in the asset management and household credit sub-sectors—has consistently outpaced GDP growth over the last 35 years, during intervals of both comparatively strict and comparatively permissive financial regulation. To the extent the increased regulatory burdens in the next five years fall on financial intermediaries, what is the evidence that the resulting impediments (if any) to financial sector growth would adversely affect the real economy? That a smaller financial sector might in fact benefit the real economy by releasing some of the human capital and other scarce resources now devoted to extracting rents from the intermediation of financial assets?

The efficiency of the financial sector—as measured by the unit cost of financial intermediation—is today about what it was in 1900. This despite the reduced transaction and other marginal costs resulting from advances in information technology, the use of derivatives to manage risk and the move to an “originate-to-distribute” banking model. Is there any evidence that a 5-year increase in SEC and CFTC rulemaking, examination and enforcement activity would make the financial sector even less efficient and financial intermediation even more expensive, given the insensitivity of unit cost to changes in marginal costs over the very long term?

And if the financial sector’s persistent inefficiency results from the same oligopolistic and other anticompetitive behaviors that seek complex and arbitrary regulation as a means to bar entry and stifle innovation, then wouldn’t it be better to reduce the financial sector’s size and influence (e.g., through antitrust enforcement and campaign finance reform) than to “starve” our only means of goading it into more responsible behavior?

Good textualism vs. bad textualism

Around here, the reaction to President Obama’s speech at the Catholic Health Association conference a couple of days ago, where the President called out the “cynicism” underlying the petitioners’ claims in King v. Burwell – being the second attempt by die-hard Obamacare opponents to recruit five willing executioners on the Supreme Court – was nothing short of hysterical.  In addition to the usual attacks on the President’s disrespect for the rule of law and Nietzschean impulses, there was renewed finger-wagging to the effect that the language in dispute is not a “a drafting error or a typo” but rather stands on its own as wholly dispositive of the matter at hand.

So, while we wait for the ruling to come down, let’s read the amicus curiae brief filed by Eskridge, et al., and see statutory interpretation done as God and Oliver Wendell Holmes intended.  The introduction and summary of argument:

The court of appeals held that the Patient Protection and Affordable Care Act (ACA) does not prohibit the Internal Revenue Service (IRS) from providing tax credits to individuals who purchase health insurance on exchanges created by the Department of Health and Human Services (HHS). Petitioners challenge that conclusion on the sole ground that seven words in 26 U.S.C. § 36B – “established by the State under section 1311” – foreclose tax credits on HHS-created exchanges. The text, they say, is clear, so by holding otherwise, the court below elevated statutory purpose over statutory text.

But this is not, as Petitioners suggest, a case about textualism vs. purposivism. It is a case about good textual analysis vs. bad textual analysis. Textualism does not require courts to read statutory provisions in a vacuum. To the contrary, it is a “fundamental canon of statutory construction that the words of a statute must be read in their context and with a view to their place in the overall statutory scheme.” FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 133 (2000) (internal quotation marks omitted). By focusing exclusively on Section 36B’s seven words in isolation, Petitioners violate textualism’s core tenets and adopt an interpretation that would nullify the Act as a whole.

Modern textualism developed as a response to purposivism, which held that the letter of the law must yield to legislative “intent.” A search for legislative intent, textualists have explained, violates the constitutionally prescribed process of bicameralism and presentment: The only “law” to interpret is the text of a statute passed by both houses of Congress and signed by the president. By combing the legislative history for indicia of legislative intent, moreover, purposivist analysis risks substituting judicial judgment for the judgment of Congress. Thus, by focusing on the text of a statute – rather than on ethereal notions of legislative “intent” – textualism cabins judicial discretion, respects legislative supremacy in the policymaking process, and renders the interpretive process more predictable.

But textualism is not hyperliteralism, and textualists do not read the words of a statute in a vacuum. To the contrary, “reasonable statutory interpretation must account for both ‘the specific context in which … language is used’ and ‘the broader context of the statute as a whole.’” Utility Air Regulatory Grp. v. EPA, 134 S. Ct. 2427, 2442 (2014) (quoting Robinson v. Shell Oil Co., 519 U.S. 337, 341 (1997)). Thus, a statutory phrase that has one apparent meaning when read in isolation may have a different meaning when read in the context of the statute as a whole.

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King v. Burwell – place bets gentlemen

Before oral arguments even begin this morning, I’m going to go way the hell out on a limb and predict the final outcome.

It will be 5-4 in favor of the government.   Either (i) Roberts will write the opinion of the Court, joined by Breyer, Ginsburg, Kagan and Sotomayor, or (ii) there will be no majority opinion, with Alito, Kennedy, Scalia and Thomas on one side, Breyer, Ginsburg, Kagan and Sotomayor on the other, and Roberts siding with the government but writing only for himself.  There is a slight possibility that Kennedy would join a majority opinion, leaving Roberts free to hang with the boys, but I’m counting on him to flake out with a literalist approach to the statutory language.

I take it as a given that Chevron deference to agency interpretation is a dead letter with the Court’s right wing, at least when the agency is the IRS and a Democrat is in the White House.  But the more interesting discussion – which I expect to dominate today’s argument – is around Constitutional federalism and the Pennhurst doctrine, basically the idea that if Congress is going to place conditions on States’ entitlement to federal funding, it had better do so clearly and unambiguously, sort of like an “actual notice” requirement.  Whatever else those four words in 26 U.S.C. § 36B may mean to a committed textualist, no one can seriously claim that Section 36B put States on Pennhurst-worthy notice that they would lose Obamacare subsidies if they didn’t set up their own exchanges.  But since Alito, Scalia and Thomas have given up on being serious, that is probably what they will in fact claim.

Again assuming that Kennedy joins the nihilists, I think Roberts will use Pennhurst to thread the needle, prevent a humanitarian disaster and, once again, be the lonely steward of the Court’s reputation.  His one-man opinion will uphold the IRS regulations, essentially by saying that if the IRS had instead withheld Obamacare subsidies from states that didn’t set up their own exchanges, it would have violated principles of Constitutional federalism under Pennhurst.  The four liberal Justices may join Roberts’ opinion (making it an opinion of the Court), but I think it’s at least as likely that they will write their own opinion, basically on Chevron or general “don’t waste my time with this nonsense” grounds.  The main reason I think that may happen is because Roberts will go a little too far with his Pennhurst logic in an attempt to snatch a conservative victory from the jaws of Obamacare defeat, and try to sneak in a brand new way for States to challenge federal mandates.  (That federalism stuff is dangerous, I tell you.)  So Roberts will be on his own, much as he was with his taxing power argument in NFIB v. Sebelius.

Well.  Now I’m feeling exposed.  Still, I hope I’m right.  All this nifty argumentation aside, if the challengers win this one, with full knowledge of how many people will die as a direct result, they’re not just vandals – they’re terrorists.

Was Bush lying or was he stupid? Yes.

At least Silberman acknowledges that the WMDs didn’t exist, and that our war aims depended on the existence of WMDs.  And by doing so, Silberman implicitly accepts that the invasion of Iraq – and not merely the intelligence failures leading up to it – was a colossal foreign policy and military blunder with enormous costs in blood, treasure and prestige.  Quibbling about whether President Bush (as opposed to the Bush Administration) lied (as opposed to being merely prone to confirmation bias) is, to me, a distraction from what might be learned from a tragic failure of governance and leadership.

Which leads me to say, okay, President Bush (the person) didn’t (knowingly, willfully) lie.  So what?  What, exactly, does that prove about the stupidity and fecklessness of government in the 21st century – just a few years following the end of a long cold war during which, through a combination of smarts, moral courage, rigorous analysis, skepticism and, yes, basic humanity did we (and the Soviets), our immense nuclear arsenals on hair-trigger alert, still manage not to wipe out civilization?  If intelligence failures up the US chain of command had resulted in our launching a nuclear first strike against the Soviet Union and their launching a retaliatory strike against the United States, would the fact that the President’s own personal conduct wasn’t to blame have helped one God-damned thing?  Have we really defined Presidential leadership down to this extent?

Another way that Silberman’s analysis oversimplifies and distracts is by setting up the “intelligence community” and the “Bush Administration” as separate entities operating at arm’s length.  I think anyone who understands how government institutions operate, especially at the executive policy-making level, knows that individuals from different offices, agencies and even branches of government tend to create informal alliances and networks that share information and access and pursue common policy agendas.  Nothing especially nefarious about this – but these alliances and networks do tend to obscure whether someone is “pressuring” someone else to make a particular finding.  In other words, the fact that elements of the intelligence community and the Bush Administration were working together with the shared goal of invading Iraq (apparently on the basis of any plausible pretext) makes it next to impossible to find the smoking gun evidence that Silberman seems think is necessary to conclude that any arm-twisting took place.

Look.  As I am forever reminding you, this is the government we’re talking about.  Government agencies and their agenda-setters come up with ideologically motivated, poorly reasoned findings as a matter of utmost routine.  Want the CIA to say that Saddam has WMDs?  The neoconservative alliance says:  here you go.  Want the Treasury Department to say that asset management firms can threaten financial stability?  The market risk hysteria network says:  coming right up.  There is no difference between the two except in terms of their potential for death and destruction.  Anyone who automatically gives more deference to police/military/intelligence agencies just isn’t thinking clearly.

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DiFi tortures the CIA

Here’s an email I just sent to everyone in my firm:

The report of the Senate Select Committee on Intelligence was released a few minutes ago.  It can be downloaded here.  Everyone should read as much of it as they can bear.
Barest summary of the report:  In the years after 9/11, the CIA systematically tortured terror suspects and other detainees pursuant to orders from the Executive branch.  Senior members of the Bush Administration (presumably including Vice President Cheney) committed war crimes, in knowing violation of both international and US law, under cover of deliberately shoddy and misleading legal advice from, among others, a sitting Federal judge.  No one will be prosecuted.
 The report’s most important conclusion:  The torture yielded no actionable intelligence, a fact that should finally put an end to the specious arguments about ends and means.  That torture doesn’t “work” is not a surprise.  Torture isn’t, and wasn’t, about extracting information.  It is, and was, about power, revenge, rage and cruelty.  Certainly, torture isn’t a sign of strength, or moral clarity in the face of existential danger.  It’s a sign of fear and, ultimately, weakness.
 Justification for this email:  If a meaningful distinction can be made between “law” and “politics” – and, by extension, between what is and what is not appropriate for workplace discussion – my considered judgment is that the attached Senate report is concerned with issues of law.  At the very least, the report (in its discussions of the Yoo and Bybee memos) highlights the ethical lapses lawyers can commit when pressured by important clients to reach a favorable conclusion.
 Jeff

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