Analysts across the ideological spectrum generally agree that the government’s regulatory bodies fail far too frequently. However, analysts seem to learn different lessons from this experience.
Washington Post business columnist Steve Pearlstein cites numerous examples of failure and concludes, “It's time for the business community to give up its jihad against regulation.”
It hardly captures the breadth and depth of these regulatory failures to say that during the Bush administration the pendulum swung a bit too far in the direction of deregulation and lax enforcement. What it misses is just how dramatically the regulatory agencies have been shrunken in size, stripped of talent and resources, demoralized by lousy leadership, captured by the industries they were meant to oversee and undermined by political interference and relentless attacks on their competence and purpose.
It’s true that regulators often do the bidding of the industries that they regulate. But “regulatory capture” is a long recognized phenomenon that undermines the contention that the government is well-suited to be a watchdog.
Regardless, is Pearlstein right that federal regulatory agencies were “dramatically” shrunk? Not according to a new study from George Washington University and Washington University in St. Louis. The figure shows that regulatory spending actually rose an inflation-adjusted 31 percent during the Bush administration (FY2002-FY2009):
Similarly, regulatory staff jumped by 42 percent under Bush’s watch:
There are too few periodical venues for good short fiction these days, so I'd normally be enthusiastic about the Wall Street Journal's decision to print works of fantasy. Unfortunately, they've opted to do so on their editorial page—starting with a long farrago of hypotheticals concerning the putative role of the Foreign Intelligence Surveillance Court in hindering the detection and apprehension of failed Times Square bomber Faisal Shahzad. In fairness to the editors, they acknowledge near the end of the piece that much of it is unvarnished speculation, but their flights of creative fancy extend to many claims presented as fact.
Let's begin with the acknowledged fiction. The Journal editors wonder whether Shahzad might have been under surveillance before his botched Times Square attack, and posit that the NSA might have intercepted communications from "Waziristan Taliban talking about 'our American brother Faisal,' which could have been cross-referenced against Karachi flight manifests," or "maybe Shahzad traded seemingly innocuous emails with Pakistani terrorists, and minimization precluded analysts from detecting a pattern." Anything is possible. But it's a leap to make this inference merely because investigators appear to have had fairly specific knowledge about his contacts with terrorists after he had already been identified. They would not have needed to "retroactively to reconstruct his activities from other already-gathered foreign wiretaps:" Once they had zeroed in on Shahzad, his calling patterns could have been reconstructed from phone company calling records whether or not he or his confederates were being targeted at the time the communications occurred, and indeed, those records could have been obtained by means of a National Security Letter without any oversight from the FISA Court.
This is part of a more general strategy we often see deployed by advocates of expanded surveillance powers. After the fact, one can always tell a story about how a known terrorist might have been detected by means of more unfettered spying authority, just as one can always tell a story about how any particular calamity would have been averted if the right sort of regulation were in place. Sometimes the story is even plausible. But if we look at the history of recent intelligence failures, it's almost invariably the case that the real problem was the inability to connect the right set of data points from the flood of data already obtained, not insufficient ability to collect. The problem is that it's easy and satisfying to call for legislation lifting the restraints on surveillance—and lifting still more when intelligence agencies fail to exhibit perfect clairvoyance—but difficult if not impossible, certainly for those of us without high-level clearances, to say anything useful about the internal process reforms that might help make better use of existing data. The pundit in me empathizes, but these just-so stories are a poor rationale for further diluting civil liberties protections.
Let's move on to the unacknowledged fictions, of which there are many. Perhaps most stunning is the claim that "U.S. intelligence-gathering capability has been substantially curtailed in stages over the last decade." They mean, one supposes, that Congress ultimately imposed a patina of judicial oversight on the lawless program of warrantless wiretapping and data program authorized by the Bush administration in the aftermath of the 9/11 attacks. But the claim that somehow intelligence gathering is more constrained now than it was in 2000 just doesn't pass the straight face test. In addition to the radical expansion of the aforementioned National Security Letter authorities, Congress approved roving wiretaps for domestic intelligence, broad FISA orders for the production of "any tangible thing," so-called "sneak and peek" searches, looser restraints on existing FISA wiretap powers, and finally, with the FISA Amendments Act of 2008, executive power to authorize broad "programs" of surveillance without specified targets. In a handful of cases, legislators have rolled back slightly their initial grants of power or imposed some restraints on powers the executive arrogated to itself, but it is ludicrous to deny that the net trend over the decade has been toward more, rather than less, intelligence-gathering capability.
Speaking of executive arrogation of power, here's how the Journal describes Bush's warrantless Stellar Wind program:
Via executive order after 9/11, the Bush Administration created the covert Terrorist Surveillance Program. TSP allowed the National Security Agency to monitor the traffic and content of terrorist electronic communications overseas, unencumbered by FISA warrants even if one of the parties was in the U.S.
This is misleading. There was no such thing as the "Terrorist Surveillance Program." That was a marketing term concocted after the fact to allow administration officials to narrowly discuss the components of Stellar Wind initially disclosed by the New York Times. It allowed Alberto Gonzales to claim that there had been no serious internal dissent about the legality of "the program" by arbitrarily redefining it to exclude the parts that had caused the most controversy, such as the vast data mining effort that went far beyond suspected terrorists. It was this aspect of Stellar Wind, and not the monitoring of overseas communication, that occasioned the now-infamous confrontation at Attorney General John Ashcroft's hospital bed described in the editorial's subsequent paragraph. We continue:
In addition to excessive delays, the anonymous FISA judges demanded warrants even for foreign-to-foreign calls that were routed through U.S. switching networks. FISA was written in an analog era and meant to apply to domestic wiretaps in the context of the Cold War, not to limit what wiretaps were ever allowed.
Forgive me if I'm a broken record on this, but the persistence of the claim in that first sentence above is truly maddening. It is false that "FISA judges demanded warrants even for foreign-to-foreign calls that were routed through U.S. switching networks." Anyone remotely familiar with the FISA law would have known it was false when it was first bandied about, and a Justice Department official confirmed that it was false two years ago. FISA has never required a warrant for foreign-to-foreign wire communications, wherever intercepted, though there was a narrower problem with some e-mail traffic. To repeat the canard at this late date betrays either dishonesty or disqualifying ignorance of elementary facts. Further, while it's true that a great deal of surveillance has always, by design, remained beyond the scope of FISA, it is clearly false that it was "meant to apply to domestic wiretaps" if by this we mean only "wiretaps where all parties to the communication are within the United States." The plain text and legislative history of the law make it clear beyond any possible doubt that Congress meant to impose restraints on the acquisition of all U.S.-to-foreign wire communications, as well as radio communications targeting U.S. persons. (The legislative history further suggests that they had hoped to tighten up the restraints on radio communications, though technical considerations made it difficult to craft functional rules.) We continue:
The 2008 FISA law mandates "minimization" procedures to avoid targeting the communications of U.S. citizens or those that take place entirely within the U.S. As the NSA dragnet searches emails, mobile phone calls and the like, often it will pick up domestic information. Intelligence officials can analyze, retain and act on true smoking guns. But domestic intercepts must be effectively destroyed within 72 hours unless they indicate "a threat of death or serious bodily harm to any person" or constitute "evidence of a crime which has been, is being, or is about to be committed and that is to be retained or disseminated for law enforcement purposes."
This means that potentially useful information must be discarded if it is too vague to obtain a traditional judicial warrant. Minimization is the FISA equivalent of a fishing license that requires throwing back catches that don't meet the legal limit. Yet the nature of intelligence analysis is connecting small, suggestive and often scattered clues.
The kernel of truth here is that the FISA Amendments Act did impose some new constraints on the surveillance of Americans abroad. But the implication that "minimization" is some novel invention is just false. Minimization rules have always been part of FISA, and they exist precisely because the initial scope of FISA acquisition is so incredibly broad. And those minimization rules give investigators enormous latitude. As the FISA Court itself explained in a rare published ruling:
Minimization is required only if the information "could not be" foreign intelligence. Thus, it is obvious that the standard for retention of FISA-acquired information is weighted heavily in favor of the government.
Similarly, the redaction of identifying information about U.S. persons is not required when that information is needed to properly interpret the intelligence, so the idea that analysts would have scrubbed mention of "our American brother Faisal" from an intercept of Taliban communications cannot be taken too seriously. It's not entirely clear what the editors are referring to when they say "domestic intercepts must be effectively destroyed within 72 hours:" Do they mean "inadvertent" intercepts of entirely domestic communications, or one-end domestic communications legitimately acquired under the FAA, or what? Either way, that's not really consistent with what we know about FISA minimization in practice: At least as of 2005, it appears that "minimized" communications were at least sometimes retained in ultimately retrievable form, though not logged. In any event, if I'm reading them correctly, the Journal is suggesting that NSA should be broadly sweeping up and retaining even the apparently innocent domestic communications of Americans, on the off chance that they might later prove useful? I can imagine being that consumed by terror, but I think I would be ashamed to admit it in public. Moving on:
Meanwhile, the FISA court reported in April that the number of warrant applications fell to 1,376 in 2009, the lowest level since 2003. A change in quantity doesn't necessarily mean a change in intelligence quality—though it might.
As it happens, I covered this in a post just the other day. As a Justice Department official explained to the bloggers at Main Justice, the numerical decline is "due to significant changes in the legal authorities that govern FISA surveillance — specifically, the enactment of the FISA Amendments Act in 2008 — and shifting operational demands, but the fluctuation in the number of applications does not in any way reflect a change in coverage." Finally:
These constraints are being imposed at the same time that domestic terror plots linked to, or inspired by, foreigners are increasing. Our spooks did manage to pre-empt Najibullah Zazi and his co-conspirators in a plot to bomb New York subways, but they missed Shahzad and Nidal Hasan, as well as Umar Farouk Abdulmutallab's attempt to bring down Flight 253 on Christmas Day.
Abdulmutallab was a non-U.S. person who didn't set foot in the country until after setting his underpants aflame; there is no reason whatever to believe that FISA restrictions would have posed an obstacle to monitoring him. As for Nidal Hasan, investigators did intercept his e-mails with radical cleric Anwar al Awlaki. While it seems clear in retrospect that the decision not to investigate further was an error in judgment, they were obviously not destroyed after the fact, since they were later quoted in various press accounts. Maybe those exchanges really did seem legitimately related to Hasan's research at the time, or maybe investigators missed some red flags. Either way, the part of the process the Journal is wringing its hands about worked: The intercepts were retained and disseminated to the Joint Terrorism Task Force, which concluded that Hasan was "not involved in terrorist activities or terrorist planning" and, along with Army officials, declined to open an investigation. Rending already gossamer-thin minimization requirements is not going to avoid errors of that sort.
The Journal closes out their fantasy by melodramatically asking "whether FISA is in practice giving jihadists a license to kill." But the only "license" I see here is of the "creative" variety; should they revisit the topic in the future, the editors might consider taking less of it.
Kagan gets an endorsement from superstar conservative appellate litigator and Bush II appellate nominee (also my old boss) Miguel Estrada here (see last paragraph).
Plus, Stuart Taylor says Kagan's nomination could mean a more conservative Court:
Commentators on the left . . . complain that Kagan never compiled much of a record of aggressively championing liberal causes during her years as a law professor. Some say she was too friendly as dean of Harvard Law School to conservatives and did not recruit as many women and minorities for the faculty as diversitycrats desired.
Speaking as a moderate independent, I like everything about Kagan that the left dislikes. To borrow from my friend Harvey Silverglate, a leading Boston lawyer who champions both civil liberties and an old-fashioned liberal's brand of political incorrectness, 'they want people who look different but think alike.'
Kagan seems to be a woman who thinks for herself.
Taylor also highlights what many libertarians will find most troubling about her record (other than strong hints of her lack of sympathy, albeit predictable for a Democratic nominee, with the litigation interests of the business community): her apparent endorsement of the Bush administration's legal framework for detention of enemy combatants.
Tony Blankley, former press secretary to Speaker of the House Newt Gingrich, exults in the Washington Times that Americans are waking up "to our heritage of freedom" and to the abuse of the Constitution:
All the following acts have suddenly awakened Americans to their Constitution: (1) The nationalization of car companies and banks; (2) the subordination of the car companies' legal bondholders to union bosses; (3) the creation of trillion-dollar slush funds (the stimulus package) used for, among other purposes, the corrupt purchase of congressional votes; (4) the mandating of individual health insurance purchase against the will of Americans; (5) the attempt to have Obamacare "deemed" to have been enacted, rather than actually publicly voted on by Congress.
Amazingly, spontaneously, Americans are educating themselves about the details of our Constitution.
He's absolutely right. All those actions do raise serious questions about whether there are still any constitutional limitations on government, which is to say, whether the Constitution is still in effect, questions that Roger Pilon also raised this week in the Christian Science Monitor. But it would be even better if Americans had noticed the threats to constitutional government a bit earlier, if not during the New Deal or the Great Society, then perhaps during the past decade when, as Gene Healy and Tim Lynch wrote in 2006:
Unfortunately, far from defending the Constitution, President Bush has repeatedly sought to strip out the limits the document places on federal power. In its official legal briefs and public actions, the Bush administration has advanced a view of federal power that is astonishingly broad, a view that includes
- a federal government empowered to regulate core political speech—and restrict it greatly when it counts the most: in the days before a federal election;
- a president who cannot be restrained, through validly enacted statutes, from pursuing any tactic he believes to be effective in the war on terror;
- a president who has the inherent constitutional authority to designate American citizens suspected of terrorist activity as "enemy combatants," strip them of any constitutional protection, and lock them up without charges for the duration of the war on terror— in other words, perhaps forever; and
- a federal government with the power to supervise virtually every aspect of American life, from kindergarten, to marriage, to the grave.
President Bush's constitutional vision is, in short, sharply at odds with the text, history, and structure of our Constitution, which authorizes a government of limited powers.
But better late than never, and we join Tony Blankley in hoping that the Constitution's limits on the powers of the federal government will once again be an issue in American politics and governance.
Like the sequel to a horror film, the politicians in Washington just passed another stimulus proposal. Only this time, they’re calling it a “jobs bill” in hopes that a different name will yield a better result.
But if past performance is any indicator of future results, this is bad news for taxpayers. By every possible measure, the first stimulus was a flop. But don’t take my word for it. Instead, look at what the White House said would happen.
The Administration early last year said that doing nothing would mean an unemployment rate of nine percent. Spending $787 billion, they said, was necessary to keep the unemployment rate at eight percent instead.
So what happened? As millions of Americans can painfully attest, the jobless rate actually climbed to 10 percent, a full percentage point higher than Obama claimed it would be if no bill was passed.
The President and his people also are arguing that the so-called stimulus is responsible for two million jobs. Yet according to the Department of Labor, total employment has dropped significantly -- by more than three million -- since the so-called stimulus was adopted. The White House wants us to believe this sow’s ear is really a silk purse by claiming that the economy actually would have lost more than five million jobs without all the new pork-barrel spending. This is the infamous “jobs saved or created” number. The advantage of this approach is that there are no objective benchmarks. Unemployment could climb to 15 percent, but Obama’s people can always say there would be two million fewer jobs without all the added government spending.
To be fair, this does not mean that Obama’s supposed stimulus caused unemployment to jump to 10 percent. In all likelihood, a big jump in unemployment was probably going to occur regardless of whether politicians squandered another $787 billion. The White House was foolish to make specific predictions that now can be used to discredit the stimulus, but it’s also true that Obama inherited a mess -- and that mess seems to be worse than most people thought.
Moreover, it takes time for an Administration to implement changes and impact the economy’s performance. Reagan took office in early 1981 during an economic crisis, for instance, and it took about two years for his policies to rejuvenate the economy. It certainly seems fair to also give Obama time to get the economy moving again.
That being said, there is little reason to expect good results for Obama in the future. Reagan reversed the big-government policies of his predecessor. Obama, by contrast, is continuing Bush’s big-government approach. Heck, the only real difference in their economic policies is that Bush was a borrow-and-spender and Obama is a borrow-and-tax-and-spender.
This raises an interesting question: Since last year’s stimulus was a flop, isn’t the Administration making a big mistake by doing the same thing all over again?
The President’s people actually are being very clever. Recessions don’t last forever. Indeed, the average downturn lasts only about one year. And since the recession began back in late 2007, it’s quite likely that the economic recovery already has begun (the National Bureau of Economic Research is the organization that eventually will announce when the recession officially ended).
So let’s consider the political incentives for the Administration. Last year’s stimulus is seen as a flop. So as the economy recovers this year, it will be difficult for Obama to claim that this was because of a pork-filled spending bill adopted early last year. But with the passing of a supposed jobs bill, that puts them in a position to take credit for a recovery that was already happening anyway.
That may be smart politics, but it’s not good economics. The issue has never been whether the economy would climb out of recession. The real challenge is whether the economy will enjoy good growth once the recovery begins. Unfortunately, the Obama Administration policies of bigger government -- combined with the Bush Administration policies of bigger government -- will permanently lower the baseline growth of the United States.
If America becomes a big-government welfare state like France, then it’s quite likely that we will suffer from French-style stagnation and lower living standards.
Today Politico Arena asks:
Terror suspects: Eric Holder's defense (nothing new here)--agree or disagree?
There's no question that after the killings in Little Rock and Fort Hood, the decision to try the KSM five in a civilian court in downtown Manhattan, and the Christmas Day bombing attempt (the government's before and after behavior alike), the Obama-Holder "law-enforcement" approach to terrorism is under serious bipartisan scrutiny. And Holder's letter yesterday to his critics on the Hill isn't likely to assuage them, not least because it essentially ignores issues brought out in the January 20 hearings before the Senate Committee on Homeland Security, like the government's failure to have its promised High-Value Interrogation Group (HIG) in place.
Nor are the administration's repeated efforts to justify itself by saying it's doing only what the Bush administration did likely to persuade. In the aftermath of 9/11, and in the teeth of manifold legal challenges, the Bush administration hardly developed a systematic or consistent approach to terrorism. Much thought has been given to the subject since 9/11, of course, and it's shown the subject to be anything but simple. Nevertheless, if anything is clear, it is that if we are in a war on terror (or in a war against Islamic terrorists), as Obama has finally acknowledged, then the main object in that war ought not to be "to bring terrorists to justice" through after-the-fact prosecutions -- the law-enforcement approach -- but to prevent terrorist attacks before they happen, which means that intelligence gathering should be the main object of this war. And that, precisely, is what the obsession with Mirandizing, lawyering up, and prosecuting seems to treat as of secondary importance. Intelligence is our first line of defense -- and should be our first priority.
Washington is fretting this week over news that mortgage applications fell dramatically in November. Coupled with earlier indications of renewed softening in the housing market, there is growing fear that housing is headed for a "double-dip downturn" that could further damage the economy. As a result, Federal Reserve policymakers are considering additional stimulus, while the National Association of Realtors is suggesting an(other) extension of the "temporary" homebuyer tax credit.
Remarkably, neither policymakers nor the media are asking the obvious question: Given all of the emergency interventions in housing that government has undertaken, and the fact that the housing market continues to erode, do such interventions do much good?
Since the bursting of the bubble in 2006, the great unknown has been whether housing prices will revert to their historical trend (and possibly to below trend for a short period), or stabilize at some permanently higher level because a portion of the bubble (aided perhaps by public policy) would prove enduring. There is good reason to expect reversion to trend, but the economy can surprise us.
Let's use an example to understand this better. The graph below depicts the course of house prices for my hometown of Hagerstown, MD, an area within commuting range of suburban DC that was hit particularly hard by the bubble and its deflation. The black line is a house price index computed by the Federal Housing Finance Agency for 1989–2009. The red line is an extended linear trendline drawn using index data from the period 1989–2002. (You can do the same analysis for your area using these FHFA data.) The question, then, is whether house prices will fall all the way back to the trendline or will stabilize at a level above the trendline.
The sharp downward slope at the end of the price line and the latest housing news suggest that Hagerstown is destined to revert to trend (perhaps after a period below trend). I've drawn similar figures for several other locations and they show similar patterns. It looks like the nation's housing markets, for the most part, are reverting to trend.
When this crisis first began in 2007, Bush administration officials vowed to "stabilize house prices at the highest possible level." However, despite their efforts and those of the Obama administration, Congress, and the Fed, reversion to trend appears inevitable. At best, those efforts may have slowed the reversion — in which case, I suppose the Bush goal has been met.
It can be argued that a gentler reversion to trend may be more tolerable than a sharp return. On the other hand, there are fears that a lengthy softening of the housing market will lead to more defaults, less worker mobility, continued weak consumption, and a long period of high unemployment and stagnant wages for those who are working. Perhaps a sharp return would be the quickest way to shed the ill effects of the bubble.
This leaves us with a final question that policymakers, the media, and the public should be grappling with: If all of these emergency housing interventions only result in a slower reversion to trend, then is that benefit worth the cost?