That’s the name of the website of Jack Dean, who is interviewed in this new Reason.tv video about how excessive pension promises to bureaucrats are creating a fiscal nightmare for state and local governments.
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ObamaCare Is Undermining Economic Recovery, Job Growth
In a recent Wall Street Journal oped, Carnegie-Mellon economist Allan Meltzer explains how ObamaCare is delaying economic recovery:
Two overarching reasons explain the failure of Obamanomics. First, administration economists and their outside supporters neglected the longer-term costs and consequences of their actions. Second, the administration and Congress have through their deeds and words heightened uncertainty about the economic future. High uncertainty is the enemy of investment and growth…
Mr. Obama has denied the cost burden on business from his health-care program, but business is aware that it is likely to be large. How large? That’s part of the uncertainty that employers face if they hire additional labor…
Then there is Medicaid, the medical program for those with lower incomes. In the past, states paid about half of the cost, and they are responsible for 20% of the additional cost imposed by the program’s expansion. But almost all the states must balance their budgets, and the new Medicaid spending mandated by ObamaCare comes at a time when states face large deficits and even larger unfunded liabilities for pensions. All this only adds to uncertainty about taxes and spending.
Meltzer concludes that the Obama administration is making the same mistake as FDR: “President Roosevelt slowed recovery in 1938–40 until the war by creating uncertainty about his objectives. It was harmful then, and it’s harmful now.”
For more on the harm caused by government-created uncertainty, read my colleague Tad DeHaven’s recent posts.
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Kagan May Well Become “The Liberal Scalia”
More highlights from Day 2 of the Kagan confirmation hearings:
• In addition to backing away from President Obama’s empathy standard, Elena Kagan, under questioning by Senator Grassley, backs away from her “judicial hero” Aharon Barak, saying that she does not share his judicial philosophy, which involves judges making policy decisions and affirmatively shaping society. This is an important concession. Grassley also elicits the statement that only the president and Congress should worry about American influence in the world.
• The wily Arlen Specter, in his last Supreme Court hearing (unless Justice Ginsburg retires over the summer), treats his questioning as a prosecutor would. Technical questions and cutting off responses when Kagan begins to expound on the current state of the law, when what he really wants to know is what she thinks about the law. Unfortunately, Specter accepts Kagan’s statements that she respects Congress but does not press her right when the next question would demand an actual opinion on Citizens United or on Morrison (an important case in which the Court struck down the Violence Against Women Act as beyond Congress’s powers to regulate interstate commerce). Kagan admits that Citizens United was a “jolt to the system” because states had relied on the pre-existing campaign finance regime. Unfortunately, this is again an empirical statement rather than a normative one.
• Kagan does express a firm opinion in favor of televising Supreme Court proceedings (this is one of Specter’s bugaboos). “I guess I’ll have to have my hair done more often,” she says.
• Lindsey Graham is definitely worth the price of admission. First he prompts Kagan to admit that “my political views are generally progressive” after she declined to characterize herself in anyway in response to previous senators’ queries. Then he gets her to endorse her classmate Miguel Estrada for the Supreme Court (which may be of interest to General Petraeus, who testified before another Senate committee today). Finally, in questioning regarding the Christmas Day bomber, he provokes an ethnic love-in after his question about where Kagan was on Christmas Day elicits the response, “well, like all Jews, I was probably at a Chinese restaurant.” As he did with Sotomayor, Graham makes clear that he is likely to disagree with many of Kagan’s judicial decisions, but will vote for her regardless.
• John Cornyn is the first senator to push the size and scope of government as a major line of questioning. He asks her one of my pet questions: What limits are there on government?” Kagan replies by reciting the Commerce Clause standards set forth in existing precedent, that Congress cannot touch activity that is not economic or that is left traditionally to state power. Well, that’s progress, but of course it raises the question of whether forcing someone to buy health insurance involves regulating economic activity and whether health care regulation is a traditional state responsibility.
• Tom Coburn picks up where Cornyn left off, proposing a hypothetical bill requiring everyone to eat three fruits and three vegetables per day. Kagan considers that a “dumb law” but says that “courts would be wrong to strike down laws simply because they are senseless.” Well, ok, but is that particular senseless law unconstitutional? Kagan seems pained (in real psychic discomfort) but Coburn lets her off the hook in reading from the Federalist Papers—a nice edition that should make for a good picture in the Oklahoma papers—and talking about the explosive growth of government. Kagan shrugs off this discursion by citing Marbury v. Madison—“the role of the courts is to say what the law is”—and concluding that deficits aren’t a problem courts can resolve, at which point Coburn’s time runs out. We will revisit this issue.
In short, Kagan is without doubt smarter, wittier, and more collegial than Sonia Sotomayor. Unfortunately, that means she is likely to be more dangerous, a true “liberal Scalia.” We now know that two of the catchphrases from these hearings will be that “I’m not going to grade cases”—why not?—and that everything the Court has ever decided is “well-settled law.” In my mind, Kagan has not yet met the burden of persuasion regarding constitutional limits on government, which is my focus at these hearings. I would look for Senators Sessions, Cornyn, and Coburn to hit this issue hard on the next go-around.
CP at Townhall
Kagan Displays Legal Knowledge, But No Legal Views
In questioning by Senators Hatch, Kyl, Feingold, and Grassley, Elena Kagan revealed that she has a firm grasp on legal precedent, including what exactly the Court said in Citizens United (as distinct from what President Obama said about the case in his State of the Union address). However, other than an explicit rejection of Obama’s empathy standard—she endorsed “law all the way down” rather than “heart” or “empathy” for “that last five percent”—we still don’t know what she actually thinks about any of these cases. She wouldn’t even go so far as to criticize Citizens United—a case she herself argued from a position she admitted she thought was right at the time. So everything the Court has ever decided is right? That can’t possibly be right; no lawyer or scholar in the country could possibly agree with every single thing the Court has done in the last year, let alone in the history of the Republic. Well, Solicitor General Kagan, tell us, then, which cases were decided incorrectly—whether or not they should be overruled given other considerations.
To give an example, the two gun cases Heller and McDonald: Kagan has said that judges must respect a precedent unless it proves unworkable or new facts emerge that would change the circumstances of a case. Is it possible for any new facts to emerge that would allow a future Court to determine that the Second and Fourteenth Amendments do not protect an individual right to keep and bear arms for self-defense? If recognition of the right proves “unworkable,” would the proper remedy come from the Supreme Court or a constitutional amendment repealing the right?
More generally, I’m still waiting on Kagan to indicate that the Constitution limits government power in any way—as opposed to merely being challengeable for allegedly violating individual rights. The Constitution provides for a government of delegated, enumerated, and therefore limited powers, after all, so where do those limits lie. Can the federal government regulate activity that is neither commerce nor crosses state lines? What can Congress force people to do under its power to regulate commerce? Can Congress make any crime a federal crime? Can the government rewrite leases, mortgages and other contracts? What kind of protections does the Fifth Amendment’s takings clause give to private property? To be fair, there haven’t been many of these types of questions—and I hope the senators go into these lines of questioning in the remaining time they have—but I firmly believe that a judicial nominee bears the burden of persuading all of us that she understands the Constitution and the governmental structure it creates, not just Supreme Court decisions.
CP at Townhall
Obama, Civil Liberties, & the Left
A confession: For all my innumerable policy disagreements with Barack Obama, on election night 2008, I found myself cheering with the rest of the throng on U Street. I fully expected to be appalled by much of his agenda — but I had also spent years covering the Bush administration’s relentless arrogation of power to the executive in the name of the War on Terror, its glib invocation of “national security” to squelch the least gesture toward transparency or accountability, its easy contempt for civil liberties and the rule of law. However fitfully, I thought, we could finally hope to see that appalling legacy reversed. And that seemed worth celebrating even if little else about the declared Obama agenda was.
As you might guess, I had a lot of disappointment coming — and not just with Obama. There were, of course, principled civil libertarians on the left, like Salon’s Glenn Greenwald and Firedoglake’s Marcy Wheeler who kept banging the drum with undiminished fury. But many progressives seemed prepared to assume that Bush’s War-on-Terror policies would be out the door close on the heels of their author — conspicuously muting their outrage even as the reasons for it persisted. Meanwhile, the right — disappointingly if not entirely surprisingly — managed to fuse a penchant for breathless Stalin analogies with an attitude toward expansive surveillance powers and arbitrary detention authority that ranged from indifference to endorsement.
So it’s a little encouraging to see evidence over the last few weeks that burgeoning progressive disenchantment with Obama along a number of dimensions seems to be bringing these issues back into sharper focus. In a recent interview in Der Spiegel, Daniel Ellsberg of Pentagon Papers fame (described by the paper as a “lefty icon”) blasted Obama for “continuing the worst of the Bush administration in terms of civil liberties.” ACLU director Anthony Romero declared himself “disgusted” with the president, and Kevin Drum of Mother Jones catalogued a slew of reasons to agree with that appraisal. The real test of an issue’s salience, however, is whether it makes The Daily Show, and so perhaps the most significant bellwether is Jon Stewart’s decision to devote an unusually long and blistering segment to Obama’s failure to live up to his rhetoric on civil liberties and executive power:
The Daily Show With Jon Stewart | Mon — Thurs 11p / 10c | |||
Respect My Authoritah | ||||
www.thedailyshow.com | ||||
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Democrats have spent most of the past decade playing defense against “soft on national security” attacks from the right, on the assumption — borne out thus far — that the base wasn’t going to punish them for folding on civil liberties issues. But while many progressive complaints now being aired are themselves the product of an unrealistic view of presidential puissance, this really is one sphere where the president has enormous latitude to unilaterally affect policy. It’s therefore also a set of issues where scant progress can’t easily be blamed on Republican obstructionism.
During the Bush era, we saw the brief emergence of a small but hardy left-right “strange bedfellows” coalition opposed to the FISA Amendments Act. Now I find myself wondering: If progressive grumblings on this front continue and grow louder, will the Tea Party movement that’s sprung up in the intervening years realize that their own rhetoric logically commits them to the same position? And if they do, will civil libertarians on the left be open to resurrecting that odd alliance?
Kagan the Tight-Lipped, Fair-Weather Originalist
Here’s what you have missed if you don’t have the luxury of watching C‑SPAN all day:
- Senator Sessions went after Kagan hard on the Military-Recruiting-at-Harvard imbroglio. I don’t think he did any damage—which I’ll define as convincing someone on the fence to go against her—but the thing to keep in mind here is that the Don’t Ask Don’t Tell policy that so enraged then-Dean Kagan was federal law, not military policy. Punishing the military for an act of Congress you disagree with—one on which you advised President Clinton—is disingenuous at best. And I say this even though Cato supports ending DADT and filed a brief against the Defense Department in the Rumsfeld v. FAIR case involving denial of federal funds to schools who hamper military recruitment (we argued that private schools, like Harvard, should have more freedom to design their policies than public schools; in no way did we support the tenuous statutory claims made by Kagan, which the Court rejected 8–0). There are policy differences and legal advocacy, and then there’s the rule of law.
- Kagan’s attempts to walk away from her “Confirmation Messes” law review article are simply unconvincing. In that article, she said among other things that “[w]hen the Senate ceases to engage nominees in meaningful discussion of legal issues, the confirmation process takes on an air of vacuity and farce, and the Senate becomes incapable of either properly evaluating nominees or appropriately educating the public.” Now Kagan says she can’t even talk about whether past cases were correctly decided because they’re all “settled law.” She can get away with this because of the sizeable Democratic majority in the Senate, but there is simply no principled way anyone can argue that what Kagan wrote in 1995 is now somehow wrong. Yes, nominees should not be forced to pre-judge cases—Kagan will be fully justified in refusing to opine on the constitutionality of the individual health care mandate—but how are we to get to know a nominee’s judicial philosophy if she declines to answer questions about that philosophy?
- In her response to Senator Kohl about whether she’s an originalist like Justice Scalia or a critic of originalism like Justice Souter, Kagan kept referencing the “original intent” of the Founders. This line of analysis is completely wrong. It’s not the intent of the Founders (or Framers, or authors of the Federalist Papers, or anyone else) that matters but the original public meaning of the constitutional provision at issue in any given case. So it seems that Kagan either doesn’t understand originalism or doesn’t take it seriously. Indeed, she followed-up by saying that original intent was sometimes useful for interpreting the Constitution and sometimes not, that there are many tools for interpreting the Constitution. I take this to mean that when originalism suits Kagan’s desired result, she will pay it lip service. Otherwise, well, ya gotta do what ya gotta do to achieve your preferred position.
- Whether it be campaign finance, abortion, executive detention, or anything else, Kagan is tending to answer questions by reference to existing precedent rather than an affirmative statement by her of the law. This is good strategy—she shows she’s knowledgeable without tipping her hand on what she actually thinks—but fails to meet the Kagan Standard for candor from nominees. She’s no longer auditioning to be a constitutional law professor or the government’s advocate: it is completely fair to ask her to give us some actual opinions of what she thinks about the state of the law, not just describe it.
- At times, Kagan manages to engage in some cordial rapport and even jokes with several senators.
The more I watch Elena Kagan, the more I’m liking her personally and the more I’m concerned about what she’d be like on the bench.
CP at Townhall
Stimulus Now, Restraint Later?
Journalists have been repeating lately that “economists say” that we need yet more government spending now to keep on goosing the economy, even though — to be sure — we will need to cut back on spending at some point in the undefined future, to avoid the fate of Greece. Well, maybe some economists. But I’m sure this “economists agree” claim is no more true today than it was a year ago. Here’s one example, from NYU economist Mario J. Rizzo, coauthor with Cato senior fellow Gerald P. O’Driscoll Jr. of The Economics of Time and Ignorance:
But let’s look at the arguments made by the opponents of fiscal stimulus.
Some have argued that, as deficits increase, people now offset the putative stimulus by increasing their savings in anticipation of future tax increases. So there is no stimulus now.
Others have argued that, for example, extending unemployment insurance (again) to those unemployed for more than six months will increase the length of unemploymentnow (by subsidizing it) while failing to stimulate.
The stimulus failure is due to the relatively small increase in spending induced by non-permanent increases in income (as unemployment insurance is certainly not permanent source of income). Even more, producers know that the spending is non-permanent so it is unlikely to result in increased employment of labor. Thus, there is no stimulus now; in fact if unemployment continues there is a kind of anti-stimulus now.
Austrians have argued that failing to allow the housing market to adjust by both fiscal and monetary propping-up measures, worsens the situation now by prolonging the inevitable adjustment to a bubble sector. As the adjustment is dragged out and the rest of the economy suffers the dampening effectsnow. This must include the uncertainty as to when (in calendar time) the market will be allowed to adjust.
In empirical work, John Taylor finds that to the extent there was some effect of the fiscal stimulus it was very small and lasted only a matter of two or three months for each major injection. So I guess the long run is four or five months by this reckoning:Compared with the 2008 stimulus, the 2009 stimulus was larger, but the amount paid in checks was smaller and more drawn out. Nevertheless, there is still no noticeable effect on consumption. I also show the timing of the “Cash for Clunkers” program in Figure 7; it did encourage some consumption, but did not last and cannot be considered an effective method to stimulate the economy. In addition, my analysis of the government spending part of the stimulus is that it too had little positive impact.
Even frameworks that stress future consequences of current stimulus need not be long-run theories in the calendar sense. For example, if the anticipated taxes required to pay off or service current deficits consist of rises in marginal income tax rates, output will be considerably lower and the real interest rates higher in a matter of a couple of years than without stimulus.
The upshot of all of this is that the anti-stimulus economists are not claiming we must trade off benefits now for some long-term pie-in-the-sky benefits. Most are saying: The stimulus route leads to (almost) no benefits now as well as costs later.