Topic: Government and Politics

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.”

George ‘Herbert Hoover’ Bush

According to Politico.com, Vice President Dick Cheney lobbied Republican senators to support the bailout of auto companies, arguing that it would be “Herbert Hoover time” in the absence of government intervention.

Cheney is right, but for the wrong reasons. To the extent that it is “Herbert Hoover time,” it is because the current administration has repeated many of the mistakes that were made by President Hoover. There was a huge expansion in the burden of government spending under Hoover, up 47 percent in just four years. There’s been an equally huge increase in government spending under Bush. Hoover dramatically increased government intervention with everything from schemes to prop up wages to protectionism. Bush’s intervention takes a different form, with mistakes such as steel tariffs, Sarbanes-Oxley, and bailouts.

Hoover’s legacy is statism. Bush’s legacy is statism. The only unanswered question is whether Obama will be the new Roosevelt — i.e., someone who compounds the damage caused by his predecessor with further expansions in the burden of government.

Does Obama Know Blagojevich?

At the top of the front page of the Washington Post, Eli Saslow’s article is headlined “Obama Worked to Distance Self From Blagojevich Early On.”

The article assures us that they’re very different kinds of Chicago politicians, and they barely know each other. Obamaphile Abner Mikva says, “Obama saw this coming, and he was very cautious about not having dealings with the governor for quite some time.”

But Saslow never mentions a very interesting statement from Obama’s incoming chief of staff, Rep. Rahm Emanuel, that had been reported by ABC, the Wall Street Journal, and other sources in the past few days. Emanuel told The New Yorker earlier this year that six years ago he and Mr. Obama “participated in a small group that met weekly when Rod was running for governor. We basically laid out the general election, Barack and I and these two [other participants].”

Original New Yorker story here. True, one of those other two participants, strategist David Wilhelm, said that Emanuel had overstated Obama’s role. But Rahm Emanuel, a totally connected Chicago pol who is now Obama’s White House chief of staff, says that he and Obama were key strategists for Blagojevich. And that statement had been widely reported. How could Saslow and his editors not mention it?

Sometimes the article’s a bit mysterious. For instance, this paragraph is supposedly about how Obama kept his distance from Blago, but the facts seem to be more about Blago keeping away from Obama:

Long before federal prosecutors charged Blagojevich with bribery this week, Obama had worked to distance himself from his home-state governor. The two men have not talked for more than a year, colleagues said, save for a requisite handshake at a funeral or public event. Blagojevich rarely campaigned for Obama and never stumped with him. The governor arrived late at the Democratic convention and skipped Obama’s victory-night celebration at Chicago’s Grant Park.

And this paragraph? Shouldn’t the phrase “Even though” actually be “Because”?

Even though they often occupied the same political space — two young lawyers in Chicago, two power brokers in Springfield, two ambitious men who coveted the presidency — Obama and Blagojevich never warmed to each other, Illinois politicians said. They sometimes used each other to propel their own careers but privately acted like rivals.