Friday, September 29, 2017

Gerrymandering Should Be Against the Law (But What Is It?)

Does it make any sense that Republicans running for the State Assembly in Wisconsin in 2012 received 48.6% of the two-party statewide vote, but ended up with 60.6% of the Assembly seats? Is it fair that they received 52% of the two-party statewide vote in 2014, but won 63.6% of the Assembly seats?

Of course not. But that is exactly what happened. [1] And it is unsurprising that these results engendered a lawsuit: Whitford v. Gill. The plaintiffs accuse the state of using gerrymandering tactics “that ‘wasted’ Democrats’ votes — both by spreading them out so they could not achieve a district majority (‘cracking’) and by concentrating voters in a small number of districts to limit the number of seats their party could win (‘packing’).” [2] (“’”Wasted” is…a term of art used to describe votes cast for losing candidates and votes cast for winning candidates in excess of 50% plus one . . . .’”)

“Political gerrymanders predate the founding of the United States. However, the judicial branch has yet to develop a coherent approach to delineating the constitutional limits of partisan gerrymanders. In fact, in 2004, a plurality of Justices in Vieth v. Jubelirer resigned themselves to the idea that partisan gerrymandering claims are nonjusticiable because ‘no judicially discernible and manageable standards for adjudicating political gerrymandering claims have emerged.’ However, in his concurrence, Justice Kennedy held out hope for judicial review, challenging lower courts to search for the kind of standard that the plurality had given up on finding.” In other words, while political gerrymandering doesn’t seem fair, it is difficult to articulate a standard that everyone should comply with, and the Supreme Court has yet to accomplish it.

But in Whitford v. Gill, the federal district court may have fulfilled the wish of Justice Kennedy and come up with a coherent standard. As the Harvard Law Review puts it,

“To identify excessive partisanship, the majority adopted the plaintiffs’ three-prong standard: a districting plan violates the Constitution if it ‘(1) is intended to place a severe impediment on the effectiveness of the votes of individual citizens on the basis of their political affiliation, (2) has that effect, and (3) cannot be justified on other, legitimate legislative grounds.’”

The case is now with the Supreme Court, and oral arguments will be heard on October 3rd. [3]

By Steven Nass 
While it will be useful if the Court can come up with a standard to rid the world of political gerrymandering rather than just throwing up its hands, the real cure for the problem will not be an option for the Court. That cure is to abolish legislative districts entirely, and have representatives run at-large. That way, there will be a correspondence between the number of votes a party gets and the number of seats that it wins, and we won’t see absurd results such as have obtained in Wisconsin. And if a candidate was running for a seat in a 99 member state assembly, he would only need to finish in the top 99 to win a seat.

But geography is an important consideration in legislative representation, it might be said. Wouldn’t an at-large election eliminate that representation feature? Not at all. People would still be able to vote for people who lived near them. What’s more, geography isn’t the only factor that causes people to have a unity of interest. In fact, it is questionable that it is even a chief factor. A person who makes less than the median income is likely to have more in common politically with someone on the other side of his state with the same income than he has with a wealthy person who lives less than five miles from him. Proximity as a determining factor of representation is a highly overrated idea.

But we’ll probably have to settle for getting rid of gerrymandering, if we can achieve that much.

Thursday, September 28, 2017

Trump's Tax Cuts: in Real Life They're for the Rich

President Trump’s tax plan is likely to be a “huge windfall for the wealthiest Americans.” [1] But it will “not directly benefit the bottom third of the population,” and it will create only modest benefits for the middle class. So much is to be expected. Tax cuts are going to benefit those who pay the greater share thereof.  

Of course, we can expect the usual rhetoric in support of cutting taxes on the wealthy, that it will spur economic growth. And, indeed, Mr. Trump has already said that the cuts will “increase investment and spur growth, creating broader prosperity.” But he “is proposing to cut taxes during one of the longest economic expansions in American history, and it “is not clear that the economy can grow much faster; the Federal Reserve has warned that it will seek to offset any stimulus by raising interest rates.”

Moreover, the suggestion that cutting taxes on the wealthy will stimulate the economy is a dubious one, as a 2012 study by the Congressional Research Service demonstrates.

“Throughout the late-1940s and 1950s, the top marginal tax rate was typically above 90%; today it is 35%. Additionally, the top capital gains tax rate was 25% in the 1950s and 1960s, 35% in the
1970s; today it is 15%. The real GDP growth rate averaged 4.2% and real per capita GDP increased annually by 2.4% in the 1950s. In the 2000s, the average real GDP growth rate was 1.7% and real per capita GDP increased annually by less than 1%. There is not conclusive evidence, however, to substantiate a clear relationship between the 65-year steady reduction in the top tax rates and economic growth. Analysis of such data suggests the reduction in the top tax rates have had little association with saving, investment, or productivity growth.” [2]

So the proposition that cutting taxes on the wealthy will spur economic growth is a claim without proof. That won’t stop politicians from making the claim, of course. But it is useful to keep before our eyes the fact that they have no fact-based reason for making it.

Another concern is that tax cuts will have an adverse effect on the national debt. Historically the response to this concern is that cutting taxes will stimulate the economy to such an extent that there will be no loss of government revenue. Thus, there should be no surprise that the “Trump administration insists that its tax cut will catalyze such an economic boom that money will flow into the federal coffers and the debt will not rise.”

Here again we confront a claim that is not supported by the evidence. Indeed, the “Reagan and Bush administrations made similar claims,” to support their tax cuts, but the “debt soared in both instances.”

What tax cuts on the wealthy do accomplish is an exacerbation of income inequality, and the United States has the dubious distinction of being in the top third of nations in the world in that regard, being 40th out of 150 according to the CIA World Factbook. [3] As the Congressional Research Service study put it, tax “policy affects after-tax income. Since the U.S. individual income tax is a progressive tax system, after-tax incomes tend to be more equally distributed than before-tax income. Changes in tax policy would change the distribution of after-tax income.” Unsurprisingly, then, “pre-tax incomes tend to be more equally distributed and labor’s share of income larger when the top tax rates are higher.”

So while there is no reason to believe that Mr. Trump’s tax cuts will improve the economy, or that they will not worsen the national debt, they certainly will widen the nation’s already dire income gap. It is for the American people to decide if that is what they want from their leadership.

Wednesday, September 27, 2017

Cynical Federalism: Some Thoughts on President Trump's Tax Proposal

The Republican Party ostensibly consists of today’s Jeffersonians. Empowering the states over the federal government is an ongoing theme with them. Thus the Graham-Cassidy healthcare bill featured block grants to the states which would devise their own health plans.

It is true that an emphasis on state power often appears to be a smokescreen for other agendas. During the civil rights era, southern states used “states’ rights” as a slogan to counter federal efforts against segregation. And those who say they oppose federal safety net programs on federalism grounds often turn out to oppose safety net programs on the state level as well.

But it must be conceded that the Constitution does not give the federal government plenary power, and that the “powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.” [1] There truly are limits to federal power, even if they are often invoked cynically.

With that acknowledgement, it must be pointed out that, for many, federal tax cuts are not ends in themselves but the means by which federal power is diminished. Thus Grover Norquist infamously said, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.” [2]

That should be kept in mind as we consider President Trump’s tax proposal, a proposal that will drop the top personal tax rate from 39.6 percent to 35 percent [3], lower the top corporate tax rate to 20 percent from 35 percent, and likely exacerbate the national debt. [4] We will likely be missing the point if we argue that revenues are already insufficient to fund government operations, because that is precisely the goal: drowning the government in the bathtub. In saner times such ambitions would have been deemed unpatriotic.

Of course, we can anticipate arguments that many of the things being handled by the federal government today should properly be handled on the state level, and that we shouldn’t be funding such things on the federal level at all. Federal funding of welfare programs is often pointed to as something that should be completely taken over by the states.

Now to evaluate the sincerity of such an argument, should it be made in defense of Mr. Trump’s tax proposal, we should consider what would be an effective method for the federal government to encourage states to take up the burden. One very good approach would be for the federal government to allow a tax deduction for taxes paid on the state level. This would incentivize states to develop programs that they could enact without increasing the overall tax burdens on their citizens.

But Mr. Trump’s proposal does exactly the opposite of that. In point of fact, deductions for state and local taxes will be eliminated under the plan. One is left to wonder how serious the Republicans are about states taking over certain federal operations. As we see time and again, they are not simply opposed to federal safety net programs, they are opposed to safety net programs entirely.

Federalism is an idea too often deployed for cynical purposes.

Sunday, September 24, 2017

We Have to Make Things

The U.S. International Trade Commission (ITC) found on Friday “that low-cost, imported solar panels from China and other countries have hurt two domestic manufacturers. They are Georgia-based Suniva and Oregon-based SolarWorld.” [1]  It is anticipated that the ITC will “hold a public hearing on October 3 as it considers potential remedies to help the manufacturers. Those remedies could include levying tariffs on panels imported from other countries. The commission will then forward those recommendations to” President “Trump in November,” and he will “have 60 days after that to decide what to do.”

Not everyone in the solar industry is happy with this outcome. As Fortune puts it,

“The issue has split the solar industry. On one side are a few solar manufacturers like Suniva and SolarWorld that say low-cost imports have made it impossible to be profitable. On the other side is the U.S. solar installation industry, which has benefited from low-cost panels that have led to explosive growth in rooftop systems on homes and commercial buildings as well as massive solar farms.” [2]

So it’s manufacturers versus installers. If you’re neither of those, whose side should you be on? Here are some things to consider:

First of all, we have to make things. This is not only because manufacturing jobs tend to pay better in the United States, but also because those who do make things can, at any time, withhold them from those who do not. It’s a matter of national security. Thus, Alexander Hamilton did not scruple to encourage the use of protective duties on articles coming into the United States, saying in his Report on Manufacturers that duties “wear a beneficent aspect towards the manufacturers of the country.” [3]

Hamilton’s ideas were developed by Henry Clay, who proposed what he called the “American System,” which consisted of these features:

“• Support for a high tariff to protect American industries and generate revenue for the federal government

“• Maintenance of high public land prices to generate federal revenue

“• Preservation of the Bank of the United States to stabilize the currency and rein in risky state and local banks

“• Development of a system of internal improvements (such as roads and canals) which would knit the nation together and be financed by the tariff and land sales revenues.” [4]

“Henry Clay’s ‘American System,’ devised in the burst of nationalism that followed the War of 1812, remains one of the most historically significant examples of a government-sponsored program to harmonize and balance the nation's agriculture, commerce, and industry. This ‘System’ consisted of three mutually reinforcing [sic] parts: a tariff to protect and promote American industry; a national bank to foster commerce; and federal subsidies for roads, canals, and other ‘internal improvements’ to develop profitable markets for agriculture.” [5] The American System was “implemented under Clay’s disciple and admirer Abraham Lincoln and his successors during the period between the 1860s and the 1940s, when the US became the planet’s leading manufacturing economy behind a high wall of tariffs.” [6]

All of this is mentioned in anticipation of those who would equate laissez faire capitalism with the founding of the Republic. It is simply not the case. The “free trade” dogmatism that we witness today came much later. So someone calling for protective tariffs should not, for that reason, have his patriotism called into question.

But there is a legitimate criticism which points out that tariffs can lead to higher prices in the domestic market. Solar panels manufactured in the United States are likely to cost more than those made in China simply because of the relative labor costs, if for no other reason. To this concern your humble servant can do no better than cite to a speech of William McKinley, who said this during a speech in Boston in 1882:

“Under free trade the trader is the master and the producer the slave. Protection is but the law of nature, the law of self-preservation, of self-development, of securing the highest and best destiny of the race of man. [It is said] that protection is immoral.... Why, if protection builds up and elevates 63,000,000 [the U.S. population] of people, the influence of those 63,000,000 of people elevates the rest of the world. We cannot take a step in the pathway of progress without benefiting mankind everywhere. Well, they say, ‘Buy where you can buy the cheapest’.... Of course, that applies to labor as to everything else. Let me give you a maxim that is a thousand times better than that, and it is the protection maxim: ‘Buy where you can pay the easiest.’ And that spot of earth is where labor wins its highest rewards.” [7]  

A company that pays cheap wages creates a situation in which its competitors have to pay cheap wages as well in order to compete. But when every company starts paying cheap wages, the number of items sold goes down. That is because the more people there are receiving cheap wages, the fewer number of people there will be who can afford the items manufactured. The economic system ends up getting sucked into the vacuum created by the cheap wages.

Of course, we can’t treat the solar panel installers as if they didn’t exist. Even if it was demonstrable that the total number of jobs gained through protective measures would exceed the number lost, we can’t reduce human beings to statistics. Or we shouldn’t do that anyway.

The fact remains, however, that we need to have things manufactured in the United States. We cannot afford the dependency that would follow if we did not. But American manufacturers are at a distinct disadvantage in relation to countries like China when it comes to labor costs. The only alternative is to level the playing field with tariffs, since lowering American wages to China levels would adversely impact our overall standard of living.

This is not to say that we should leave the installers without options. Right now, American governments do far too little in the area of finding people work. We hear a lot of complaints about how many people are on welfare and food stamps, but there seems to be less interest in making sure that people have work. If it does turn out that protective measures enacted to protect the American solar panel manufacturers cause harm to the installers, resulting in layoffs, giving those laid off the right of first refusal for job openings with the manufacturers might well be something to consider.

This would include requiring the manufacturers to bear the burden of any necessary training. If the country steps in to help the manufacturers, it would be fair to ask the manufacturers to help the country.

We need to relearn the necessity of a strong manufacturing base in the United States, and we need to remove incentives for manufacturers to relocate their facilities to countries where there is cheap labor. At the same time we should be mindful that we have been moving to a service economy for some time, and we must take steps to ensure that people employed in that sector are not harmed in the process of transitioning back. 

Wednesday, September 20, 2017

The Graham-Cassidy Bill: It's Not Their Job to Do It Well

They’ve got to be kidding. Right?

Alas, no. The Republicans still have not found a cure for their obsessive compulsive disorder, and they’re going to take another shot at repealing Obamacare, which, apparently, I have to explain is the same thing as the Affordable Care Act.

The Congressional Budget Office (CBO) hasn’t had a chance to score the latest proposal. It “is working to provide a ‘preliminary assessment’ of the latest Republican health-care bill by early next week but will not estimate how the measure would affect health insurance premiums or the number of people with medical coverage until later.” [1] That might be a problem, because if “the Senate does not vote by the end of next week, it will become nearly impossible to repeal the law because the drive to kill the Affordable Care Act will lose the procedural protections that allow it to pass the Senate with a simple majority, rather than the 60 votes that would otherwise be needed.” [2] Republicans may thus feel pressed to push the matter to a vote (again) without a proper CBO analysis.

The leaders of this latest effort are Republican Senators Lindsey Graham of South Carolina and Bill Cassidy of Louisiana, and their “bill has two major elements, one that is new and one that was found in many other Republican repeal bills this year.”

“The new element is a block grant,” which “would give each state a fixed amount of federal money for health care and health insurance each year from 2020 to 2026,” in an amount that “is slightly less than what the federal government is expected to spend under the Affordable Care Act on the expansion of Medicaid, on premium tax credits and on subsidies to reimburse insurers for reducing the out-of-pocket costs of low-income consumers.”

What is not so new about “the Graham-Cassidy bill” is that it “would make deep cuts in Medicaid. It would end the expansion of eligibility under the Affordable Care Act, which has extended coverage to 13 million people. And it would put the entire program, which serves more than 70 million people, on a budget, ending the open-ended entitlement that now exists. States would receive a per-beneficiary allotment of federal money.” The CBO “has estimated that 15 million fewer people would have Medicaid as a result of similar proposals in other Republican bills.” So we will not be out of line in anticipating that the Graham-Cassidy bill will do the same.

One has to wonder what inspires such misanthropy, especially since it has been carried out in such a manic fashion. But we should consider the possibility that the greatest fear of the Republican contingent regarding Obamacare is that it will eventually work. And it will be called “Obamacare,” after a Democratic president.

Submitted, thus, for your observation, the worst part of having political parties: they don’t want the other party to accomplish anything good or worthwhile. They want to be the ones doing good, so as to better sell themselves come election time. And they are not above actively getting in the way of the other party doing something that will benefit the citizenry. So the Republicans have never wanted the Affordable Care Act to work, which is probably why many Republican governors opposed the Medicaid expansion that came along with it.

All of this is simple and intuitive enough. But there is a particular problem that arises in connection with Republicans and healthcare. There are defects in Obamacare, things that need to be fixed, not least of which is the fact that it doesn’t ensure that every citizen has health insurance. The application of common sense discloses that covering more people would be an improvement.

But the Republicans are largely foreclosed from taking that route, because much of its donor base does not believe that the federal government should involve itself with such concerns, and is also opposed to taxes that are adequate to fund such endeavors in any event. It is, therefore, not surprising that every substitution for the Affordable Care Act that the Republicans come up with covers fewer people than does the current legislation, not more.

It’s tough to be a Republican when it comes to healthcare. If you improve on the current law, or even do nothing, you will anger your donor base. If you make things worse you’ll have to try very hard to keep the voters from noticing. The healthcare controversy cries out for a reform of the manner in which we elect people to office.

Monday, September 18, 2017

Imparting Confidence in the Justice System After the Stockley Aquittal

Your humble servant has forsworn criticizing trial verdicts, having become keenly aware in his life meanderings that there can be a meaningful distinction between media reports about a case and what is presented as evidence in courts. Thus you will not see in these pages any critique of the judge’s verdict in the case of the State of Missouri vs. Jason Stockley, the former St. Louis Police Officer who shot and killed Anthony Lamar Smith after a car chase in 2011 [1], and whose acquittal resulted in protests. [2]

Now some will think my position despicable, and others will deem it admirable. Which one will likely depend upon the political persuasion of the one making the assessment. But I try to operate under what I trust is not a delusion, that politics don’t belong anywhere near a courtroom, and that verdicts should be based on evidence alone. And the simple fact is that anyone who did not see all of the evidence competently presented in court is not qualified to pass judgment on the verdict.

Media reports don’t count. In fact, judges will be heard to tell jurors not to read or listen to media reports regarding the case they will decide on. Thus, anyone who decides a case based on media reports is doing so based on information that wouldn’t be allowed in front of a jury, and you can rest assured that it is not because the information is thought reliable enough to be considered. If you have some doubts about that you are invited to consider the fact that we are often treated to surprise acquittals that seem to contradict everything we have heard about a case, from O.J. Simpson to Casey Anthony. Really. We ought to wonder about that.

Still, a panegyric to the American legal system is out of place here. Widespread distrust of that system has developed, and that will hamper its effectiveness, regardless of its virtues. When a country’s legal system is no longer trusted to deliver justice, private and extrajudicial remedies are not far behind.

So how do we restore confidence in the legal system?

First of all we have to recognize that there is a problem, and that, for some people, “restore” might not be the right word. I refer, of course, to black people, whose history involves slavery, lynching, and Jim Crow Laws; who make up 40% if the American incarcerated population, notwithstanding the fact that they are only 13% if the population [3]; who now find themselves in the midst of a white supremacist renaissance; and who, due to the foregoing, just might be uneasy about their prospects of being treated fairly by American officialdom. And we do seem to have repeating incidents of white officers shooting black people, and suffering no legal sanction, do we not? No one who remembers Bull Connor’s fire hoses and attack dogs will be dismissive of the potential ramifications here. None of this means that Jason Stockley should have been found guilty, but it does provide insight into why many people might perceive that the fix was in from the get go.

Secondly, we need to ruthlessly search for biases that exist in the system, and strive to eliminate them. No more needs to be said on this point, since it virtually goes without saying.

Thirdly, we need to enhance the safeguards that have been part of our common law heritage for centuries. Jason Stockley was indicted by a grand jury [4], and that is how all felony prosecutions should begin. When this function is handled by prosecutors, it can give the appearance of rigging. But we should not have grand juries that operate as rubber stamps for prosecutors. Indeed, grand juries should operate independently of prosecutors’ offices, and should be provided with legal advisors that are not attached to prosecutors. And everyone should be allowed to bring cases before grand juries: private citizens as well as police officers. This will avoid the kind of controversy that emerged when a grand jury decided not to indict Officer Darren Wilson in the fatal shooting of Michael Brown. [5] When charging decisions are made by private citizens, temporarily called into service for that purpose, with safeguards in place to ensure that they are not dominated by agents of the government, greater public confidence in the charging process should follow.

Jason Stockley was acquitted at a bench trial. That means that there was no jury, and the facts were tried by the judge. In felonies, that should never happen. Trials in felonies should always be by jury. That’s how our common law system was designed. It is the only way to ensure factual determinations by disinterested people, as opposed to government insiders.  

Now the trial judge in this case might well be the most scrupulous and honest jurist who ever donned a robe. He may be possessed of a wisdom barely conceivable by ordinary mortals. But he has acquitted a white officer in the shooting of a black man in a case where the facts as reported by the media make such a verdict questionable. That, as they say, doesn’t look right. A jury verdict would have been less susceptible to conspiratorial insinuations.

Finally, since it would be undesirable to go too far in restricting media reports on ongoing court cases, it seems we’re going to have to put up with yellow journalism in this connection. But there is a remedy for disinformation, and that is education. Means will have to be found to constantly remind the public that the facts of court cases cannot be properly assessed by anyone who hasn’t seen the competent evidence presented in a trial; that, as faulty and fallible as human judgment is, a person who has seen the evidence unfold in a trial will be far less subject to such frailty than someone who is getting all of his information from media reports. This is information that doesn’t take long to articulate, is uncomplicated, and can be imparted in elementary school.

We are time and again confronted with people taking to the streets in response to verdicts. Every time that happens it manifests a lack of confidence in our justice system. Making the justice system work as it was designed, combined with the educational effort mentioned, should go some distance in alleviating that problem.

Friday, September 8, 2017

No Need for Debt Ceilings

Once upon a time, there was no aggregate debt ceiling in the United States. Items of indebtedness were authorized by Congress on more of an individual basis. But then, in “the 1930s, Congress moved towards aggregate constraints on federal borrowing that allowed the Treasury greater ability to respond to changing conditions and more flexibility in financial management.”  [1] The idea was to allow the Treasury Department more leeway to borrow as necessary, so long as it stayed within the set limit. This debt limit, or debt ceiling, has been raised several times since then.

Now it is important to keep in mind that the debt ceiling is a limitation on how much the federal government may borrow. It is not a limit on how much indebtedness the government may incur. So Congress may authorize any number of government expenses without having to worry about the debt ceiling. But if those expenses turn out to be more than the debt ceiling, and the expenses cannot be paid with cash on hand, as it were, then it has to raise the debt ceiling so that the Treasury Department can borrow the necessary money to pay the bills.

Now, of course, one would expect raising the debt ceiling when necessary would be a perfunctory operation. While reasonable people might differ on what liabilities should be incurred in the first place, once an indebtedness arises it should be paid. Certainly this is true where the credit of the United States is on the line. And, actually, defaulting on the public debt is arguably unconstitutional, since Section 4 of the 14th Amendment provides that the “validity of the public debt of the United States, authorized by law…shall not be questioned.” [2] Surely no responsible public servant would endanger the credit of the United States by causing it to default on the public debt, or even threaten to do so.

Well, actually...

In 1995, House Republicans threatened to not raise the debt ceiling “unless President Bill Clinton agreed to a package of sweeping spending cuts.” [3] They redoubled their efforts in 2011, threatening the world economy, and resulting in a downgrade in the nation’s credit rating. [4] Undaunted, House Republicans went at it again in 2013. [5] In essence, they took the country hostage in support of their fiscal program. They justified their conduct by taking advantage of the public’s understandable confusion between incurring additional debt and raising the debt ceiling in order to pay debt that was already incurred.

They tried to sell their threat as fiscal responsibility, when, in fact, failing to raise the debt ceiling would have caused the United States to default on its obligations. Each time they ultimately acquiesced, and one hopes it was because they actually perceived how irrational it would have been to disallow the Treasury Department to discharge existing indebtedness. But at no time did they attempt to disabuse the public of any misconceptions they might have created.

In any event, even a delay in raising the debt ceiling can have deleterious consequences. The Government Accountability Office “estimated that delays in raising the debt limit in 2011 led to an increase in Treasury’s borrowing costs of about $1.3 billion in fiscal year 2011.” [6]

Now the Republicans are in complete control. They have both houses of Congress and the White House, and should have no need of a doomsday weapon like threatening to not raise the debt ceiling. But it seems they might have been concerned that the Democrats might swipe the weapon from the Republican arsenal, and it appears that there was good reason for their apprehension.

The recent Republican plan on point “was to raise the debt ceiling for eighteen months, which would kick the next difficult vote past the 2018 midterm elections.” [7] That would facilitate smoother sailing for their agenda, without having to worry about Democratic blackmail. But for “weeks, Chuck Schumer, the Senate Minority Leader, had been plotting a strategy to use the debt-ceiling vote to extract concessions from Donald Trump and his fellow-Republicans.” The Democratic plan was to raise the debt ceiling for only three months. The punchline is that any raising of the debt ceiling will require Democratic votes, since opposition can be expected from the Republican Party’s nihilist wing.

Now one would have been reasonable in expecting President Trump to follow congressional Republicans on this. After all, he was willing to allow his presence to be odious in future history books with the misanthropic Republican health plan. But here he surprised everyone, and “struck a deal with Democratic congressional leaders on Wednesday to increase the debt limit and finance the government until mid-December, blindsiding his own Republican allies as he reached across the aisle to resolve a major dispute for the first time since taking office.” [8] What’s more, he “said on Thursday that he and congressional leaders had discussed the possibility of jettisoning a long-standing cap on U.S. government debt, saying it is not really needed.” [9] That means he is considering getting rid of the debt ceiling entirely.

And he’s right. It isn’t really needed. Spending should be controlled on the front-end, not after liabilities have already been incurred. All the debt ceiling accomplishes for us is to provide a way for unscrupulous politicians to blackmail the country by threatening to ruin its credit. We have no need of that at all. 

Wednesday, September 6, 2017

Trump's Rescinding DACA Is No Surprise, But the Ball Is in Congress's Court

Is anyone really surprised that President Trump decided to rescind the Deferred Action for Childhood Arrivals (DACA) program? After all, he didn’t win the election by appealing to the better angels of our nature, did he? And when he made a wall along our southern border a primary feature of his campaign (along with the comic relief of insisting that Mexico would pay for it), it ought to have been fairly clear that the DACA program would not survive long under a Trump presidency.

It doesn’t matter that “the nearly 800,000 individuals who have received the protections have started families, pursued careers and studied in schools and universities across the United States.” [1] It is of no moment “that many Dreamers have never known another home than the US.” Rescinding the DACA program is precisely the sort of thing he was elected to do. While he may have gone from promising a healthcare plan that would cover everybody during the presidential campaign to touting one that would result in tens of thousands of people losing their health coverage as president, this latest action is right in line with the Donald Trump we saw as a presidential candidate.

There is a civics lesson to be learned here.

The reader will recall that the Obama administration attempted to expand the reach of the DACA program in 2014. [2] The idea was to make millions more people eligible for the program, expand the time they were allowed to remain in the country, and develop a new but similar plan for people who had a son or daughter who was either a U.S. citizen or a legal resident. Twenty-seven states with Republican governors didn’t take kindly to this, sued, and obtained a preliminary injunction against the program expansion pending trial. (The subsequent election of Donald Trump rendered the litigation inconsequential.)

Why would any American court rule against such a palpable act of human kindness? The problem is separation of powers. The president, regardless of whether you love him or hate him, cannot make laws. He can sign legislation passed by Congress, or try to veto it, but he cannot make laws all by himself. If he tries to do it, as it seems that Obama was doing in this case, the courts are going to restrain him without asking whether the president’s decree is a good or a bad idea.

At the same time, the president has a very specific constitutional duty: to see to it that the laws are faithfully executed. [3] So it is not a stupid argument that the president should be enforcing the laws on the books rather than making up his own. To be sure, he or his subordinates can issue orders or regulations. But those have to be consistent with congressionally passed laws already existing.

And thus the president has been able to wash off some of the stink from this latest move, by announcing that the administration will continue to renew “permits for anyone whose status expires in the next six months, giving Congress time to act before any currently protected individuals lose their ability to work, study and live without fear in the US.” He is obviously punting to Congress. But, actually, that is exactly who should have the ball.

No one should be buffaloed into believing that Donald Trump is overly concerned about the fate of Dreamers. But his stated position that it is for Congress to grapple with the issue of non-citizens brought to this country in childhood is right on the mark.

Now, of course, it is not likely that Congress wants to do that. Its members showed no interest in doing so at all during the Obama administration, which is why Mr. Obama, in desperation, engaged in what was probably an unconstitutional action. But, perhaps, a Republican in the White House might provide them more inspiration. They may not like the current occupant overmuch, but it would be an opportunity to earn the party a merit badge.

Of course, it is risky for Congress to do its job. When politicians do their jobs they become answerable for what they do. Thus, Congress has taken the craven and cowardly path when it is available, which is why it has effectively given up its constitutional power to declare war to the president. Who wants to be responsible for a war, after all? Something might go wrong. On the other hand, who wants to look timid in the face of even imaginary enemies? Better to let someone else handle it and suffer whatever repercussions develop.

But now we have an issue that has publicly been tossed into Congress’s lap. If it chooses inaction, it will be at once contemptible and visible to all. Doing nothing means that people who have never known another country than the United States might be deported to what is, for them, a foreign land; and this after they have spent most of their lives being inoffensive and productive participants in American society.

One hopes that even the wealthiest of mean-spirited campaign donors will prove unable to inspire members of Congress to carry an action like that with them into eternity.

Tuesday, September 5, 2017

The Other Side of NAFTA

Irony has taken center stage at the NAFTA renegotiation talks.

Throughout the primaries and the 2016 general election, President Trump made his disapproval of the North American Free Trade Agreement a centerpiece of his campaign, arguing that free trade agreements like NAFTA hurt American working people while enriching the elite. [1] It was hard to argue with him on that point. As Robert E. Scott, and economist with the Economic Policy Institute, wrote in 2003,

“Since the North American Free Trade Agreement (NAFTA) was signed in 1993, the rise in the U.S. trade deficit with Canada and Mexico through 2002 has caused the displacement of production that supported 879,280 U.S. jobs. Most of those lost jobs were high-wage positions in manufacturing industries. The loss of these jobs is just the most visible tip of NAFTA’s impact on the U.S. economy. In fact, NAFTA has also contributed to rising income inequality, suppressed real wages for production workers, weakened workers’ collective bargaining powers and ability to organize unions, and reduced fringe benefits.” [2]

None of this should have come as a surprise, of course. Free trade encourages manufacturers to locate their plants where labor is cheaper, and enables them to threaten domestic workers with just such a move. With free trade amounting to a religious tenet for both major political parties, Donald Trump was able to present himself as a champion for working people, a strategy that paid off handsomely.

But Mr. Trump also expressed his appreciation of right-to-work laws during the 2016 campaign. He said he favored “states with right-to-work laws because ‘it is better for the people’ to not have to pay union dues if they don’t want to.” [3]

Of course, right to work laws can only be said to be “better” for working people in the extreme short term. To be sure, an individual worker saves the money that he would otherwise pay in dues if he so chooses. But right-to-work laws weaken labor unions by depriving them of funding, and it cannot be denied that union workers are better compensated than their non-union counterparts. [4] [5]

Interestingly, right-to-work laws have nothing to do with the right to work. They are laws that impose a specific restriction on contract terms between a labor union and an employer. That restriction is that a company and a union may not enter into a contract whereby all of the company’s employees must become union members. They may not enter into such an agreement even if both sides want to do so. Right now, twenty-eight U.S. states, and Guam, have right to work laws. [6]

Now it is obvious that since right-to-work laws weaken unions, and unions increase compensation for working people, that a country with right-to-work laws will have an advantage under a free trade agreement over a country that does not. That is because the companies will be encouraged to locate their facilities in countries where they can find the cheapest labor. Thus, in the NAFTA renegotiation talks, while the United States tussles with Mexico over its cheap workforce [7], “Canadian negotiators are demanding the United States roll back” its right-to-work laws. “The request is part of a push by Ottawa to get the U.S. and Mexico to adopt higher labour standards under the deal.” [8] According to The Globe and Mail,

“One source familiar with the discussions said Canada wants the United States to pass a federal law stopping state governments from enacting right-to-work legislation; the source said the United States has not agreed to such a request. Canada believes that lower labour standards in the United States and Mexico, including right to work, give those countries an unfair advantage in attracting jobs.”

So the Canadian negotiators believe that the United States has achieved an unfair competitive advantage because we treat our workers so poorly. When it comes to depressing wages through the artifice of right-to-work laws, their point is hard to argue with, though it is doubtful that our current national leadership will engage in that much self-reflection.

And we thought it was only Mexico that was trying to start a race to the bottom.