Archives: 05/2018

Could Next Vice Chair Bring A New Rule to the Fed?

Richard Clarida had his nomination hearing to become Vice Chair of the Board of Governors of the Federal Reserve System before the Senate today.  He delivered a nearly mistake-free performance, giving articulate and concise answers to Banking Committee members’ questions.  His responses showed an understanding of both the Fed’s current normalization plans and some political concerns.

Clarida is widely agreed to be an expert on the international monetary system, with his nomination receiving a bipartisan letter of support, a rare occurrence in today’s Washington.  However, most of the questions he fielded were on the regulatory aspects of the Fed.  Here, Clarida mostly underscored Chair Powell’s interest in employing cost-benefit analysis to appropriately tailor regulations throughout the financial system, without sacrificing safety and soundness. 

Clarida’s missed opportunity came when Senator Elizabeth Warren asked whether any Fed “rule” could be made stronger.  Candidly, his answer was mostly boilerplate.  Instead of standard talking points, Clarida could have highlighted the evolution of his own thinking on monetary rules and targets since the crisis that has led him to embrace a price level targeting regime.  While such a target is better than the Fed’s current inflation target, there are reasons to believe Clarida may become an advocate of superior option: nominal GDP level targeting.  Adopting the proper target would improve monetary policy, in terms of both credibility and effectiveness, and address many of the concerns voiced by Senators today—from seeing escalating home foreclosures during downturns to having the Fed employ multiple rounds of QE to combat those slowdowns.

The Age of Discretion, As the Post Sees It

The Washington Post editorialized last month in favor of dropping the voting age to 16. I dashed off a letter to the editor, which they didn’t run, and is here adapted:

At what point are young people to be entrusted with important life responsibilities? The Post has repeatedly opposed easing the drinking age from 21 so as to allow persons of 18 or 20, who may include service members returning from combat missions, to enjoy a glass of beer. It opposes subjecting late-teen juvenile offenders to the level of accountability applied to adult criminal defendants. Its coverage suggests sympathy with proposals to raise the marriage age to 18, which would mean that a couple of 17 is not deemed mature enough to enter on binding vows of mutual support even with parental blessing and judicial ascertainment of their independent choice.

Now the Post supports slashing the voting age to 16. Perhaps the pattern here is that the Post sees 16 year olds as incapable of making decisions to govern their own lives, yet competent to govern everyone else’s.

 [cross-posted from Overlawyered]

Central Americans Assimilate Very Well

On Friday, White House Chief of Staff John Kelly justified the administration’s new policy of separating children from parents fleeing violence in Central America by explaining:

They’re not MS-13… . But they’re also not people that would easily assimilate into the United States, into our modern society. They’re overwhelmingly rural people. In the countries they come from, fourth-, fifth-, sixth-grade educations are kind of the norm. They don’t speak English; obviously that’s a big thing. … They don’t integrate well; they don’t have skills.

His comments mix true facts—that Central American immigrants aren’t criminals, that they tend to have less education, that they often speak less English—with several inaccuracies—that they can’t fit into modern society, that they don’t have skills that the United States can employ, and ultimately that they don’t assimilate or can’t integrate well.

Show Me the (Education) Money, Tar Heel Edition!

North Carolina is becoming the latest hot spot in the education funding wildfire—thousands of protesting teachers are expected in Raleigh on Wednesday—so before I deliver the promised wrap up on my state spending series, I thought I’d add NC to the mix.

As you can see on the following chart, North Carolina’s total spending per-pupil, which includes both operational and capital costs, fell appreciably between the 1999-00 school year, the earliest with readily available federal data, and 14-15. It dropped from inflation-adjusted $10,397 to $8,986, a roughly 14 percent decline. Like other states already profiled, spending peaked right before the recession, but unlike hot-spot states Colorado, Oklahoma, and West Virginia, it never recovered to eventually exceed the beginning of the period. It basically kept dropping until the last year in the period.

Where have the biggest changes been? Breaking the spending down in the chart below, the state has generally kept instructional spending pretty steady, ending only 3 percent lower in 14-15 than 99-00. The big drops were in capital outlays and interest on school debt. The latter disappeared almost entirely, and the former dropped 71 percent, from $1,549 to $448. Like other hot-spot states, North Carolina saw increases in various support categories, with the biggest percentage increase in “other support,” which grew 50 percent.

So there’s your North Carolina snapshot. Coming next: Our final installment looking at some of the possible reasons for these changes.

Victory for Defendant Autonomy and the Criminal Jury Trial in McCoy v. Louisiana

Robert McCoy was charged with the murder of three of his family members in Bossier City, Louisiana. The state brought capital charges against him, but McCoy maintained his innocence—claiming he was not even in the state at the time of the murders—and demanded a jury trial. But in light of the evidence against him, McCoy’s lawyer thought the best trial strategy would be to admit guilt to the jury and hope for leniency in sentencing. McCoy adamantly opposed this plan, but his lawyer pursued it anyway and told the jury that McCoy was guilty. The jury returned three murder convictions and sentenced McCoy to death.

Today, the Supreme Court held that it violated the Sixth Amendment for McCoy’s lawyer to admit his guilt over his express objection, and it ordered the state of Louisiana to grant McCoy a new trial. The majority opinion by Justice Ginsburg accords with the principle of defendant autonomy, and the long-standing maxim that the Sixth Amendment guarantees the right to a personal defense. While a defendant is, of course, guaranteed the “Assistance of Counsel,” the defendant himself remains master of the defense and is entitled to make fundamental decisions in his own case. The heart of the Court’s analysis closely follows the framework (and language) articulated in Cato’s amicus brief, which emphasized that defendant autonomy—not ineffective assistance of counsel—was the proper lens through which to view this case:

Autonomy to decide that the objective of the defense is to assert innocence belongs in this latter category [of decisions within the defendant’s sole prerogative]. Just as a defendant may steadfastly refuse to plead guilty in the face of overwhelming evidence against her, or reject the assistance of legal counsel despite the defendant’s own inexperience and lack of professional qualifications, so may she insist on maintaining her innocence at the guilt phase of a capital trial. These are not strategic choices about how best to achieve a client’s objectives; they are choices about what the client’s objectives in fact are.

Counsel may reasonably assess a concession of guilt as best suited to avoiding the death penalty, as [McCoy’s lawyer] did in this case. But the client may not share that objective. He may wish to avoid, above all else, the opprobrium that comes with admitting he killed family members. Or he may hold life in prison not worth living and prefer to risk death for any hope, however small, of exoneration. When a client expressly asserts that the objective of “his defence” is to maintain innocence of the charged criminal acts, his lawyer must abide by that objective and may not override it by conceding guilt.

Slip op. at 6-8 (citations omitted).

You Shouldn’t Need a License to Braid Hair

The Fourteenth Amendment states that “No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law.” Passed during Reconstruction, these provisions held the promise that freedman would finally be granted the same rights and protections as their white brethren. Yet less than five years after this amendment was enacted, the Supreme Court eviscerated the Privileges or Immunities Clause in what became known as the Slaughter-House Cases (1873).

There the Court held that the clause—which was supposed to protect substantive rights against state infringement—only guaranteed a limited set of federal rights, such as the right to access seaports, to use navigable waters, and to demand protection on the high seas (not exactly the key motivations for the Civil War). The ruling not only delayed the protection of African Americans’ civil rights, it left the Court’s Fourteenth Amendment jurisprudence hopelessly confused and contradictory.

Slaughter-House eventually led to the development of modern “substantive” due process doctrine as a makeshift bandage over the hole in the Fourteenth Amendment left by the unprotected privileges and immunities. While allowing the Court to protect some rights, the “incorporation” of certain rights through the Due Process Clause relegated other, often “economic” rights to second-class status. Instead of judges’ taking a hard look at the actual reasons a law was passed and asking whether the government has overstepped its constitutional bounds, infringements of the right to earn a living or the freedom of contract barely receive a passing glance. They are upheld unless nobody—not even the judge hearing the case!—could possibly imagine a legitimate rationale for the law. Suffice it to say, hardly any laws are struck down under this so-called rational-basis test.

Enter Ndioba Niang and Tameka Stigers, both of whom are traditional African-style hair braiders attempting to support themselves by offering their services to willing customers. The Missouri Board of Cosmetology and Barber Examiners, however, demands that they first pay thousands of dollars to receive completely irrelevant training that has virtually nothing to do with hair-braiding. Applying the usual government-can-do-whatever-it-wants-regarding-economic-regulations level of judicial scrutiny, both the federal district court and the U.S. Court of Appeals for the Eighth Circuit upheld the licensing scheme.

Federalism Wins Supreme Court Jackpot

The smart money was always on the Supreme Court to make the kind of ruling it did today, strike down a federal law that purported to tell states whether they could legalize sports betting. That doesn’t make it any less exciting or refreshing—and it’s deliciously apt as both the Washington Capitals and Vegas Golden Knights remain in the hunt for the Stanley Cup. 

In the first “anti-commandeering” case in more than 20 years, the Court resoundingly (7-2) reaffirmed a principle that should be obvious: the federal government can’t force states to pursue federal policy. That there were seven votes for that proposition underlines the renewed interest in federalism that’s spreading across the country. 

Indeed, as important as Murphy v. NCAA is for the gaming industry, the reason this case was so closely watched is because of its implications on so many areas of policy that have revealed federal-state tensions of late. From environmental regulation to sanctuary cities, marijuana to guns, states are flexing their sovereign muscles in a way that strengthens our body politic. It’s insane to think that in a large, pluralistic country like the United States, so many decisions should be made one-size-fits-all in Washington. Federalism is good for red states and blue states alike. 

Finally, a note on what the Court didn’t decide today: despite the protestations of the two dissenting justices (Ruth Bader Ginsburg and Sonia Sotomayor), it’s not at all clear that the federal government has constitutional authority to ban or regulate in-state gambling (if it decided to do so directly now that it can’t force the states to do its dirty work). If New Jersey and Nevada want to allow the March Madness money to flow, while Utah and Georgia don’t, what business is it of Congress? Justice Clarence Thomas was right to call this out—so remember this day if and when the justices ever reconsider their overexpansive Commerce Clause jurisprudence. 

For more background on this case, see my previous post discussing Cato’s brief, my op-ed on the subject, and my short law review article