Archives: 12/2009

Two Admirable Leaders in the Workers’ Lib Movement

pinera-walesa.jpgHere’s a picture symbolic of our times. It features our colleague José Piñera and Lech Walesa, both of whom have done so much to increase human freedom: Walesa for leading a workers’ movement that played a key role in the collapse of Soviet communism; and José Piñera for leading a revolution in private pensions that is turning workers into capitalists around the world.

The picture and the caption below appeared in El Diario Financiero (Chile) on Friday.

Former Chilean Minister of Labor and Social Security, José Piñera, appears alongside legendary Polish union leader Lech Walesa (right) and Robin Harris (left), adviser and biographer of former British Prime Minister Margaret Thatcher. Former Polish President Walesa holds the Polish version of “El cascabel al gato,” the best-seller written by the father of Chile’s private pension system. This notable gathering took place in the Croatian capital, Zagreb last week at an international conference about the 20th anniversary of the fall of the Berlin Wall. The three individuals spoke on a panel on “Lessons for the Future of Europe.” The conference was organized by Damian von Stauffenberg, member of the famed aristocratic family that opposed Hitler, and president of the Educational Initiative for Central and Eastern Europe (EICEE).

Recklessness in the Senate

This morning, Politico Arena asks:

“The Senate health care vote: An ‘awesome achievement?’”

My response:

Far from being an “awesome achievement,” as Paul Krugman exclaims in this morning’s New York Times, the Senate’s 1:00 a.m. health care vote marks a new low in government recklessness.  Even Krugman admits that “it’s a seriously flawed bill” and “we’ll spend years if not decades fixing it” – like we’ve “fixed” Medicare, Medicaid, and Social Security, presumably.  To put it simply:  Would any responsible person handle his own affairs the way the Senate has handled this affair?

For starters, no one knows, much less understands, what’s in this bill.  For months, we’ve been fed ever-changing bits and pieces supposedly contained within its 2,000-plus pages, only to find that a “manager’s amendment” has emerged from Harry Reid’s secret enclave.  The promises that the bill will expand coverage while reducing health care costs and the federal deficit are simply laughable.  Just this morning the Washington Post’s Dana Milbank reported that yesterday the Congressional Budget Office said “it goofed and overstated the cost savings from the bill by half a trillion dollars.”  When you have to resort to starting taxes next year but holding benefits off until 2014, among other such budgetary gimmicks, you know you’re dealing with one gigantic fraud.

The Wall Street Journal notes this morning that according to the National Journal’s composite of all health polling, some 51 percent of the public is now opposed to this scheme.  As the details seep out over the coming months, and taxes kick in, one can only hope that November 2 will be the day of reckoning for this reckless bunch.

Sen. Reid Pulls a Fast One

The more the American people learn about Senate Majority Leader Harry Reid’s (D-NV) government takeover of health care, the less they like it:

Rather than go back to the drawing board and write a better bill, Reid instead did something that much of the U.S. Constitution and the rules of the U.S. Senate exist to prevent: he quickly rammed a sweeping and unpopular bill through the Senate before the American people could learn how it would affect them.

Reid’s strategy was cynical, undemocratic, and corrupt.  Reid systematically suppressed a full CBO cost estimate of his legislation.  He bought senators’ votes with billions of the American people’s tax dollars.  Yesterday, Maine’s moderate Republican Sen. Olympia Snowe wrote:

Only three weeks ago the Senate received a more than 2,000 page bill on one of the most complex issues in our history, and we have since considered fewer than two dozen amendments out of more than 450 filed.  A little over 24 hours ago, the Senate received a final, nearly 400 page manager’s amendment that cannot be changed or altered, with more than 500 cross references including to other statutes and will be voted on at 1 am Monday morning. It defies logic that we are now expected to vote on the overall, final package before Christmas with no opportunity to amend it so we can adjourn for a three week recess even as the legislation will not fully go into effect until 2014, four years from now.

When Democrats leave Olympia Snowe decrying how the bill was crafted “in the shadows, without transparency, just to garner the necessary 60 votes and nothing more” and that “legislation affecting more than 300 million Americans deserves better than midnight votes on a bill that cannot be further amended and that no one has had the opportunity to fully consider,” you know you are witnessing a raw partisan power play.

Reid’s power play succeeded, if that’s the right word.  Around 1:00  this morning, Reid cleared the toughest procedural obstacle to approving the bill.  He cleared it on a strict party-line vote, without a single vote to spare.  Barring some unforeseen snag, the Senate will approve Reid’s bill before Christmas.

Yet this thing ain’t over.  The Reid bill must be reconciled with the House bill, which passed by a similarly narrow margin, in a House-Senate conference.  And there are significant differences between what the two chambers seem willing to support – on taxpayer funding of abortions, taxing union health plans, creating a government rationing board, subsidies for undocumented workers, creating a so-called “public option,” et cetera.

That House-Senate conference may take weeks.  During that time, the American people will do what Reid does not want them to do: they will learn more about how his bill would affect the deficit, their health insurance premiums, their tax burden, and the quality of their care.  If so, it will be harder, not easier, for Reid to get 60 votes the next time around.

Every step of the way, Democrats have tried to portray this thing as being inevitable.  The extremely narrow House and Senate votes, and the remaining tensions and acrimony that exist among Democrats, positively scream that ObamaCare is not inevitable.

Good News on Housing!

The Wall Street Journal reports that some mortgage insurers and lenders are beginning to relax their down-payment requirements, so that buyers in some parts of the country can now borrow 95% instead of 90% of a property’s value. Buyers who can’t come up with even a 5% down payment can turn to the Federal Housing Administration, which will make loans with as little as a 3.5% down payment. Unsurprisingly, the FHA is increasing its market share.

Meanwhile, the Treasury department is pressuring mortgage companies to reduce payments for many more troubled homeowners, averting foreclosures. So, good news: people who lack income and assets will be able to take out loans to buy houses, and if they can’t make the payments they signed up for, the government will pressure their lenders to accept lower monthly payments in return. We’re back on the road to easy, universal homeownership.

Oh, wait.

Postal Employees Live It Up

The U.S. Postal Service lost $3.8 billion last fiscal year and expects to lose $7.8 billion this year. That hasn’t prevented employees from indulging in fancy foods and booze on the USPS’s dime. A recent audit by the USPS inspector general found $800,000 in unjustified and “imprudent” purchases, most of which occurred in just a five month span.

The following are some highlights lowlights:

  • “No business justification was provided for $355,451 of food provided at a September 2008 national sales educational conference attended by over 600 employees…We noted that beer and wine were served on one occasion, a bartender charge of $500 was included on one occasion, and one dinner for 650 guests totaled $62,714, which is $96 per guest.”
  • “A postmaster installation celebration and reception held in October 2008 included unallowable food purchases totaling over $17,000. The menu included crab cakes, beef wellington, shrimp, and scallops.”
  • A two-day meeting in September 2008 that cost $27,567, including a per dinner cost of $93. In addition, employees were provided paid lodging “even though their official duty station was within nine miles of the conference facility.”
  • Five employees purchased gift cards from unauthorized vendors totaling $31,791. Two districts purchased almost $15,000 worth of movie tickets. Another district purchased thirty retirement watches at $216 a pop.
  • “Three meetings included expenses for flowers, linens, candles, and red carpets totaling $4,579.”

These are not rare lapses by a usually frugal USPS management. The inspector general has issued fourteen audits in the last three years with similar findings.

Of course, private companies spend money on conferences, meetings, and events. But they don’t force people to buy their products or use their services. The USPS has a government-granted monopoly over first-class mail. It’s time to put an end to the government mail monopoly, and this audit is one more reason why.

Properly Extending the Right to Keep and Bear Arms to the States

I recently blogged about an interesting op-ed in which Ken Klukowski and Ken Blackwell of the American Civil Rights Union argue that the Supreme Court need not overturn The Slaughter-House Cases while “incorporating” the right to bear arms against the states.  (Josh Blackman fisked the article in more depth here.)   This piece was essentially a distillation of the ACRU’s amicus brief in McDonald v. City of Chicago, which ultimately argues, like Cato’s brief, that Chicago’s gun ban is unconstitutional.

It has come to my attention, however, that I mischaracterized one aspect of the Kens’ op-ed (sorry about that): while they are indeed against overturning Slaughter-House, the authors still seek to apply the Second Amendment right through the Privileges or Immunities Clause (like Cato and most libertarians), rather than through the Due Process Clause (like many conservatives and gun rights proponents).  This is the ACRU’s main argument, and it is based largely on Ken Klukowski’s recent law review article – indeed, the brief’s body cites Klukowski article some 20 times, often for propositions that find no further support in case law or academic literature.  (Josh has also provided a short critique of the ACRU brief/Klukowski article, so I won’t do that here.) 

In any event, this clarification gives me an opportunity to name and outline the five possible ways a justice could come down in the McDonald case:

  1. “Extreme Anti-Gun” – Affirm the lower court in its entirety, deciding that it correctly interpreted Supreme Court precedent, that reconsideration of this precedent is unwarranted, and therefore that neither the Second Amendment nor the right to bear arms it protects extends to people in the states (as opposed to in federal territories, like the District of Columbia).  I can’t imagine that any justice will vote for this way; even those who dissented in Heller generally support the selective incorporation of rights against the states.
  2. “Conventional Liberal” – Affirm the lower court in part but clarify that while the Second Amendment is indeed “incorporated” as against the states via the Due Process Clause, Chicago’s gun ban is still okay – possibly under a test weighing the individual right against the city’s interest in reducing gun violence. There may be one to four votes for this position: Justice Breyer likes balancing tests; Justice Stevens may feel that his hometown’s regulations are justified; and Justices Ginsburg and Sotomayor may feel the same way about New York.
  3. “Conventional Conservative” – Reverse the lower court, “incorporate” the Second Amendment via the Due Process Clause – adopting an analysis akin to that of Ninth Circuit Judge Diarmuid O’Scannlain in the Nordyke case – and strike down Chicago’s gun ban.  The NRA’s brief primarily advocates this position, as do many conservatives fearful of the Privileges or Immunities Clause.  There may be one to eight votes for this position: The “minimalist” Chief Justice Roberts may be hesitant to overturn longstanding precedent; Justice Scalia may decide that the devil he knows (substantive due process) is better than the one he doesn’t (privileges or immunities); Justice Kennedy may feel vested in his own expansive “fundamental rights” jurisprudence under the Due Process Clause (see my review of a book analyzing that jurisprudence); Justice Alito may share one or more of the above sentiments; and one or more of the aforementioned liberals may decide to “bite the bullet” and go along with this position.
  4. “Mend Slaughter-House, Don’t End It” – Reverse the lower court, overturn three old precedents – Cruikshank (1876), Presser (1886), and Miller (1894), which were decided at a time when none of the rights in the Bill of Rights was considered to apply to the states – “incorporate” the Second Amendment via the Privileges or Immunities Clause without touching Slaughter-House, and strike down Chicago’s gun ban.  This is the ACRU position, and while I don’t think it’s textually or historically supportable – a scholarly consensus across ideological lines holds that Slaughter-House was both wrongly decided and forecloses any significant application of the Privileges or Immunities Clause – it could emerge as a political “compromise.”  (If Justice O’Connor were still on the Court, I could maybe see her advancing this position.) 
  5. “Originalist/Libertarian” – Reverse the lower court, overturn Slaughter-House and the three aforementioned cases, extend the right to keep and bear arms to the states (which is technically distinct from “incorporating” the Second Amendment), and strike down Chicago’s gun ban.  This is Cato’s position – as well as that of the liberal Constitutional Accountability Center on behalf of eight leading constitutional law professors from across the political spectrum – and there will be one and may be up to all nine of the justices here: Justice Thomas has long said that he’d like to revisit Slaughter-House in the appropriate case, and he surely led the push to grant a cert petition whose question presented called for briefing about the Privileges or Immunities Clause; any of the others who seriously grapple with the arguments in Alan Gura’s brilliant petitioners’ brief (and those of his amici, us included) will also have to go this way despite their various political qualms.

In short, I see at least five votes in favor of extending the right to keep and bear arms to the states, but it’s an open question as to whether the Court will do that via the Due Process of Privileges or Immunities Clause of the Fourteenth Amendment.   

Now, you may ask why, if I’m so confident that the fifth option above is correct, don’t all conservatives qua self-professed “originalists” gravitate towards it (and, conversely, why some liberals qua “living constitutionalists” do).  That’s an unlawyerly matter of policy preferences: as the Kens’ op-ed details, conservatives (and some libertarians), while wanting to extend Heller’s interpretation of the Second Amendment to the states, are wary of opening a Pandora’s Box of positive rights (health care, housing, welfare, etc.), as well as the perpetual culture-war bogeymen (abortion, gay marriage, pornography, etc.).  Liberal intellectuals, meanwhile, are holding their nose at having to extend gun rights because they feel that’s the only concession they have to make to achieve their utopic constitutionalization of the entire progressive agenda.

While libertarians share the conservative concern about positive rights – as well as legal, if typically not policy, qualms about courts’ handling of social issues (e.g., that Roe v. Wade is bad law even if some libertarians are pro-choice; that Lawrence v. Texas is good law but achieved through Kennedy-esque hand-waving rather than sound legal reasoning) – many of us see the benefits of being able to protect economic liberties and other natural rights.  For example, unlike conservatives, we generally like Lochner, the 1905 case that struck down on “liberty of contract” grounds a New York law limiting bakers’ hours.

Yes there’s a danger – particularly if President Obama gets to replace not only Justices Stevens and Ginsburg, but also Scalia and Kennedy – that overturning Slaughter-House will open the aforementioned Pandora’s Box, but: 1) that danger isn’t necessarily mitigated by somehow managing to use the Privileges or Immunities Clause without overturning Slaughter-House; 2) the danger is no different than under the current substantive due process doctrine; and 3) if we are to remain originalists not just in overturning Slaughter-House but in future jurisprudence, the progressives’ arguments fail, the danger is averted, and the Box stays sealed. Josh Blackman and I wrote our article, “Keeping Pandora’s Box Sealed: Privileges or Immunities, The Constitution in 2020, and Properly Extending the Right to Keep and Bear Arms,” in part to address the valid concerns (sketched in the Kens’ op-ed) about the consequences of truly reviving the Privileges or Immunities Clause.

While we won’t assuage the staunchest social conservatives – (adult) pornography is protected speech (but even more so is political advertising!) – we should mollify many faint-hearted originalists.  Anyone who thinks the Constitution is a “dead” document, whose text is to be interpreted according to its original public meaning, has to admit that the Privileges or Immunities Clause protects something more than what Slaughter-House said it did.

To see how all this works in greater detail, read our Pandora’s Box article, which I’ve previously discussed here , here, and here.  And again, Cato’s amicus brief is here; see also this law review article by its principal author, Cato adjunct scholar Timothy Sandefur.

George W. Bush: Biggest Spender Since LBJ

The Congressional Budget Office has released final budget numbers for fiscal year 2009. The numbers allow us to take a last look at the Bush administration’s record on spending from a statistical point of view.

The following three charts show annual average real (or constant dollar) outlays during the tenures of recent presidents. Presidents were in office for either 4 or 8 budget years, except JFK (3 years), LBJ (5 years), Nixon (6 years), and Ford (2 years).

President George W. Bush’s last year was fiscal 2009. Outlays that year were $3.522 trillion, according to the CBO. However, $108 billion was spending for the 2009 economic stimulus package passed under President Obama. Bush was thus roughly responsible for $3.414 trillion of spending in 2009, which includes outlays for the financial bailouts enacted under his watch. (For FY2009, $154 billion for TARP and $91 billion for Fannie and Freddie).

Spending in Bush’s first year (FY2001) was $1.863 trillion, thus he presided over an 83-percent increase in overall federal spending, which includes defense, domestic, entitlements, and interest. Even without TARP and Fannie/Freddie, spending was up a huge 70 percent under Bush over eight years. By contrast, total spending under eight years of President Clinton increased just 32 percent. These are the overall increases in nominal dollars.

Now let’s look at the real annual averages. Figure 1 shows the average increase in total spending under recent presidents. Bush II was the biggest spender since LBJ. His spending increases were far larger than the three prior presidents.

Of course, presidents share spending power with Congress and it is easier for presidents to control discretionary spending than entitlement spending. Nonetheless, the results in these charts reflect the general spending approach taken by the presidents quite well. For example, Bush II was instrumental in adding the Medicare drug benefit, which by 2009 was adding more than $60 billion a year to federal spending.


Figure 2 shows total federal spending without interest payments. Presidents have the least discretionary control over interest. The biggest spenders by this measure were again LBJ and Bush II. Note that Bush’s record by this measure is worse than in Figure 1. That is because Bush lucked out with relatively low interest rates on the federal debt and relatively low amounts of federal debt because of four years of surpluses under President Clinton.


For Figure 3, I took out both interest payments and defense spending from the totals. So spending includes domestic discretionary spending and so-called entitlement spending–in other words, mainly spending on the growing federal welfare state. By this measure, Eisenhower, JFK, LBJ, and Nixon had awful records. These were the years of massive creation and expansion of federal subsidy programs for the elderly, state governments, and many other groups. By the late-1970s, the creation of new programs had slowed but existing programs continued to grow.

The 1980 election of Ronald Reagan represented a revolt against the rapidly expanding welfare state. His record shown in Figure 3 of just 1 percent real spending growth over eight years was impressive, at least relative to the other presidents of the last half century.

What about Bush II? Figure 3 shows that he was the biggest domestic spender since Nixon. He set the stage for the explosive spending growth we are seeing under President Obama. Big spending was a key cause of Bush’s failure as president both economically and politically, and it is proving just as damaging and unpopular under President Obama.