Topic: Government and Politics

Obama’s Not-So-Centrist Cabinet

Journalists continue to insist that President-elect Obama has named a largely centrist Cabinet. But they’re clinging to a storyline that might have been true two weeks ago but no longer is. Obama’s national security team — Hillary Clinton, Robert Gates, and James L. Jones — and his economic team — Lawrence Summers, Tim Geithner, Christina Romer, and Bill Richardson — could be regarded as centrists, or at least as centrist Democrats.

But as the Cabinet selection process went on, Obama increasingly named left-wing activists to jobs in which they could carry out his ambitious plans to “transform our economy” and be the 21st-century Franklin Roosevelt. Tom Daschle at HHS wrote a book on how we need a Federal Health Board to manage and regulate every aspect of our health care. Hilda Solis at Labor is a sponsor of the bill to eliminate secret ballots in union authorization elections and of heavy regulatory burdens on business. She opposed the Central America Free Trade Agreement and generally opposes free trade. Shaun Donovan worked on affordable housing issues in the Department of Housing and Urban Development during the Clinton administration — just the policies that led to the mortgage crisis and then the general financial crisis. His reward for a job well done? He’s coming back as secretary of HUD.

White House science adviser John Holdren is an old-time “running-out-of-resources” Paul Ehrlich cohort who disdains economics and famously lost a bet with Julian Simon on whether the prices of natural resources would rise, reflecting growing scarcity. He and Steven Chu as Secretary of Energy; former New Jersey Department of Environmental Protection chief Lisa Jackson as the head of the Environmental Protection Agency; and Carol Browner, former administrator of the Environmental Protection Agency under President Bill Clinton, as the White House’s “energy/climate czar,” are all global-warming catastrophists who see an urgent need to impose crushing burdens on the economy in the name of influencing the climate a century from now.

The choice of Tom Vilsack to be secretary of agriculture is said by the Washington Post to be an example of Obama’s moderation and intention to balance competing interests. You see, he’s popular with “groups representing big agricultural interests, which praise him for his support of biotechnology and subsidies for corn-based ethanol.” But also with groups that want to shift Ag dollars to smaller farms. So the question to be decided is who gets the gravy, not whether the gravy will be ladled out by Washington. There doesn’t appear to be anyone in the Obama Cabinet who will speak for the taxpayers’ interest. Or who will argue that it would best for the whole country to let the market work and not have the government pick any winners or losers.

Sometimes journalists just don’t seem to reconcile the “centrist” claim with their own understanding of Obama’s intentions. The Los Angeles Times, for instance, begins its article, “The Cabinet that President-elect Barack Obama completed on Friday is a largely centrist and pragmatic collection of politicians and technocrats without a pronounced ideological bent.” But two paragraphs later the authors note:

Obama wants this Cabinet to market and put in place the most dramatic policy changes in the country since Franklin D. Roosevelt’s New Deal: a mammoth program to improve roads and bridges; a healthcare system that covers more sick people at less cost; limitations on fossil fuels and greenhouse gases that contribute to global warming; big investments in energy efficiency; middle-class tax cuts along with a tax hike on wealthy Americans.

That doesn’t sound like the agenda for a pragmatic and non-ideological administration. That’s what you would expect from a bunch of statist ideologues who have been waiting years or decades for an election and a crisis that would allow them to fasten on American society their own plan for how energy, transportation, health care, education, and the economy should work. That’s not centrist, it’s a collectivist vision hammered out by Ivy Leaguers and activists over the past couple of decades. In its more idealistic formulation, it’s based on the premise that smart people know what the people need better than the people themselves do, and that command and control work better than markets and individual choice. In its more practical application, it’s interest-group rent-seeking dressed in the trappings of public interest.

The proof will be in the pudding, of course. It’s the policies that matter, not the people. But these are people who weren’t selected for the misty dream of listening “not to your doubts or your fears but to your greatest hopes and highest aspirations” but rather for their determination to ensure that “generations from now, we will be able to look back and tell our children that this was the moment when we began to provide care for the sick and good jobs to the jobless; this was the moment when the rise of the oceans began to slow and our planet began to heal; this was the moment … when we came together to remake this great nation.” And for their commitment to use “this painful crisis [as] an opportunity to transform our economy.”

And for the rest of us, this is a time to remember that limited constitutional government and free markets sustain life, liberty, and the pursuit of happiness better than collectivist agendas carried out by powerful states.

Congress Doesn’t Vote, Gets a Pay Raise

Members of Congress are getting a pay raise for 2009. With the economy in dire straits, you’d think members would be afraid to be seen voting themselves a raise. And so they were. But the good news – for Congress – is that if they don’t vote on their pay raise, then they get it. It’s automatic!

Now one might say that members of Congress run a very large enterprise – a federal government that spends $3 trillion a year, and getting larger every day – so it’s not unreasonable for them to get at least as much pay as they do. But FedEx Corp. and other companies are cutting the pay of senior managers. Surely members of Congress would not argue that they have managed the finances of the U.S. government better than the managers at FedEx, Motorola, Eastman Chemical, and other companies have handled their firms’ challenges. If members of Congress had their pay cut when the budget is not balanced, maybe we’d get more fiscal responsibility in Washington.

The Hill newspaper notes that members made $30,000 in 1969, which would be the inflation-adjusted equivalent of $195,000 today. Perhaps members of Congress should not be rewarded for overseeing such a striking erosion in the value of the dollar over just 40 years.

Emoluments! Get Yer Red Hot Emoluments Here!

A few weeks ago, while attending the Federalist Society’s annual lawyers convention, I got to chatting with UCLA law professor (and former member of the Cato Supreme Court Review editorial board) Eugene Volokh about something that a commenter to his well-known Volokh Conspiracy blog had queried: might Hillary Clinton, then just-announced as “on track” to become the next secretary of state, be constitutionally disqualified from that job?  I quickly turned to Article I, section 6, clause 2 of my handy Cato pocket Constitution (I carry one in every suit jacket and can attest that they make great stocking-stuffers) to look at the source of the problem: the Emoluments Clause.  Nothing against her in particular but indeed, it seemed that Sen. Clinton’s appointment — or that of any member of Congress whose term coincides with a cabinet pay raise — would violate the clear constitutional text.

I won’t rehash the arguments here, especially because both Eugene and I (and many others, including   venerable Supreme-Court-justice-in-waiting-of-Obama’s-first-male-appointment Laurence Tribe) blogged about it.

I thought that would be the end of it, but they keep pulling me back in.  Today, for example, I have an elaborated version of my earlier blog post in the American Spectator.  And tomorrow I’ll be appearing at a Judicial Watch forum discussing the issue along with John O’Connor, author of “The Emoluments Clause: An Anti-Federalist Intruder in a Federalist Constitution.”  (The panel is at the National Press Club, 529 14th St. NW in Washington, runs 1:30–3:00pm, and is open to the public.)

Interestingly, though Congress last week passed a “Saxbe Fix” for Sen. Clinton, we now have another emoluments problem, with Sen. Ken Salazar (D-CO), whom President-elect Obama has just nominated to be his Interior Secretary.

Leaving aside the constitutional issue, that makes four senatorial vacancies (and two gubernatorial vacancies) created by the victory of the Obama-Biden ticket, including, of course, the Rod Blagojevich mess in Illinois.  That has to be some sort of record, but I fear it’s the only way the incoming administration will reduce the size of government (and only temporarily at that).

Blagojevich’s Real Outrage

I’ve often said, as for instance here, that P. J. O’Rourke is so funny that people forget what an insightful reporter and analyst he is. (In the article linked, I suggested giving young people his books Parliament of Whores and Eat the Rich as “a post-graduate course in political science and economics .”)

Now it looks like I may have to say the same about Joe Queenan, the humor columnist and author of such books as Red Lobster, White Trash, and the Blue Lagoon. In the Washington Post Queenan says that Rod Blagojevich’s attempt to sell the president-elect’s U.S. Senate seat is actually not his most corrupt deal. He makes a strong point:

What’s far more worrisome is Blagojevich’s bizarre confrontation with the Bank of America. The day before he was arrested on charges of massive corruption, Blagojevich visited a group of striking workers at a North Chicago firm called Republic Windows & Doors. After being laid off the week before, the employees had begun a sit-in, demanding benefits they were still owed by their employer, which said it could not meet their demands because the Bank of America had cut off its financing. At this point, Blagojevich informed bank officials that unless they restored the shuttered window-and-door company’s line of credit, the state of Illinois would suspend all further business with Bank of America. A few days later, the bank caved in and ponied up a $1.35 million loan.

The idea that the governor of a state as prosperous and important and sophisticated and upscale as Illinois would make this kind of threat is terrifying. Even more terrifying is that Bank of America saw no alternative but to give in. Yet even more terrifying is that nobody outside Chicago seems to have gotten terribly worked up about the situation, riveted as they are on the governor’s more theatrical transgressions. But peddling a Senate seat or using scare tactics to shake down a newspaper are nowhere near so serious a menace to society as letting the government arbitrarily intervene in financial transactions between banks and creditors. A crooked governor we can all handle. But a governor who capriciously decides which commercial enterprises a bank must finance and which it can ignore is a scary proposition indeed.

Rome wasn’t built in a day. But get the wrong politician in office, and you can burn it in a day.

What the grandstanding Blagojevich reportedly attempted to do in the Republic Windows vs. Bank of America set-to is precisely the sort of thing that happens in China, where the government routinely orders up bank loans to politically connected firms. Whether a failing company actually deserves financing becomes irrelevant to the conversation; the government doesn’t want a company to fail, so it decides that it must not go under, even if it’s run by clowns, stooges, gangsters or in-laws.

Tis Better to Be Regulated by One Gorilla than by Fifty Monkeys

When Congress lawfully exercises its constitutional powers to regulate a particular aspect of interstate commerce, states cannot also regulate in that area.  This anodyne principle, arising from the Constitution’s Supremacy Clause, is known as preemption.  Today, in its last public action of 2008 and its first 5-4 decision of the term, the Supreme Court violated that principle in a case involving cigarette labeling, Altria v. Good.  The Court erroneously determined that the Federal Cigarette Labeling and Advertising Act does not preempt a suit for fraudulent labeling under state law. 

While the Act expressly covers labeling and advertising “with respect to any relationship between smoking and health,” Justice Stevens’s opinion somehow finds that it does not cover smoking- and health-related suits predicated on the general duty not to deceive.  (The Court was not asked to address, and did not address, the threshold question of whether the Act infringes on the free speech rights of advertisers.) 

As Justice Thomas points out in dissent, the majority has created an unworkable rule that depends on how one frames “the legal duty that is the predicate of the common-law damages action” rather than the text of the federal statute at issue.  Thus, not only will cigarette manufacturers who dutifully comply with federal law now face countless suits under countless state laws, but their fates in those suits will hinge on the creativity of counsel and the gullibility of judges.  And of course, this type of reasoning can easily be extended to circumvent preemption in other regulatory fields, including this term’s eagerly awaited FDA case, Wyeth v. Levine.

Are We All Keynesians Now?

Reuters reports that Obama may propose as much as $1 trillion (yes, trillion) of new spending, which would be in addition to the huge expansion of government under Bush, is it true (as Richard Nixon once remarked) that “we are all Keynesians now?

Not quite. Here’s a new video that explains why Keynesian “stimulus” proposals are theoretically misguided. The video also provides real-world evidence showing that bigger government does not work.

So if Keynesian spending is theoretically flawed and doesn’t work in the real world, why are politicians on a spending binge? As I state in the conclusion, they love spending other people’s money.

As always, feedback is welcome.

Taxpayers Picking Up the Tab for a Bigger Bailout Thanks to Republican Lobbyists

The Associated Press reports on the various former Republican politicians who got fat contracts and enriched themselves in exchange for lobbying on behalf of Freddie Mac. Unfortunately for taxpayers, these amoral lobbyists were successful and the government-created entity was able to dig itself even deeper into a hole - which taxpayers are now responsible for filling.

When the Washington Nationals played their first-ever baseball game in the nation’s capital in April 2005, two congressmen who oversaw mortgage giant Freddie Mac had choice seats — courtesy of the very company they were supposed to be keeping an eye on. …The Nationals tickets were bargains for Freddie Mac, part of a well-orchestrated, multimillion-dollar campaign to preserve its largely regulatory-free environment, with particular pressure exerted on Republicans who controlled Congress at the time. Internal Freddie Mac budget records show $11.7 million was paid to 52 outside lobbyists and consultants in 2006. Power brokers such as former House Speaker Newt Gingrich were recruited with six-figure contracts. Freddie Mac paid the following amounts to the firms of former Republican lawmakers or ex-GOP staffers in 2006: Sen. Alfonse D’Amato of New York, at Park Strategies, $240,000. Rep. Vin Weber of Minnesota, at Clark & Weinstock, $360,297. Rep. Susan Molinari of New York, at Washington Group, $300,062. Susan Hirschmann at Williams & Jensen, former chief of staff to House Majority Leader Tom DeLay, R-Texas, $240,790. …The tactics worked — for a time. Freddie Mac was able to operate with a relatively free hand until the housing bubble ultimately burst in 2007.

Interestingly, at least one of these former politicians is contemplating a return to the political arena. He even portrays himself as a friend of the taxpayer. It is unclear, though, how much of a friend he really is considering that the story reveals that, “Freddie Mac enlisted prominent conservatives, including Gingrich…, paying [him] $300,000 in 2006, according to internal records.”