by Dave Schuler on May 25, 2013
In traditional Chinese political philosophy the “mandate of heaven” was what gave the ruler the right to rule. It was thought to be based and conditional on virtue but the ability to take and retain power was seen as indicative of the presence of the mandate of heaven. We might call it “legitimacy” or “authority”.
Attorney General Eric Holder has lost the mandate of heaven. In the Rosen case he has, apparently, been caught committing perjury. Either he perjured himself in his signed statements to the judge to gain search warrants or in his sworn statements to Congress in which he denied any involvement in the matter.
It’s time for him to go. Organizations on all sides of the political spectrum are calling for his resignation or firing. He has lost the mandate of heaven. His continued presence brings discredit on the administration he’s supposed to serve. Primum non nocere is not just the cardinal rule for physicians. It’s also the minimum requirement for political appointees. It’s time for him to go.
by Dave Schuler on May 24, 2013
Ken Rogoff explains why fiscal stimulus won’t solve the eurozone’s problems:
The eurozone’s difficulties, I have long argued, stem from European financial and monetary integration having gotten too far ahead of actual political, fiscal, and banking union. This is not a problem with which Keynes was familiar, much less one that he sought to address.
Above all, any realistic strategy for dealing with the eurozone crisis must involve massive write-downs (forgiveness) of peripheral countries’ debt. These countries’ massive combined bank and government debt – the distinction everywhere in Europe has become blurred – makes rapid sustained growth a dream.
The way I’ve characterized the problem is that as long as Germany and Greece use the same currency and Germans believe that Greece is a fiscal shambles because the Greeks are lazy and profligate, Greece’s problems will only get worse. The same for Spain, Italy, and Portugal. When France joins countries of the “eurozone periphery” in economic decline and fiscal problems, the fur will really begin to fly.
Meanwhile, I expect the immediate response to Dr. Rogoff’s comments, as obvious as they are, to be personal attacks on him on the grounds that he’s a partisan hack, that his work on deficits has been thoroughly debunked, etc. As he notes at the beginning of the piece:
Commentators are consumed by politics, flailing away at any available target, while the “anti-austerity” masses apparently believe that there are easy cyclical solutions to tough structural problems.
by Dave Schuler on May 24, 2013
by Dave Schuler on May 23, 2013
There’s a paragraph in today’s Wall Street Journal editorial that summarizes neatly my views on the IRS’s singling conservative and libertarian organizations out for excessive scrutiny:
All IGs appear before Congress, but they are really answerable to the President who is responsible for what goes on in the IRS and what the agency actually does. If the IRS is not operating in a way that treats taxpayers evenhandedly and in accordance with its guidelines and mission, it is up to him to change the personnel and make any other corrections so that the taxing power of the federal government is legal and fair. If that isn’t the case, voters deserve to know exactly who is accountable for the decisions of the agency that takes a healthy fraction of their income every year.
I don’t blame the president, specifically, although I do take the point that’s been made by his opponents seriously. He didn’t need to give the “rogue IRS officials” directions. They undoubtedly thought they were doing his bidding.
If it could be proven definitely that he had been informed of the situation some time ago, my evaluation might be different.
Whether he’s known about the situation for some time, he knows now and just being outraged is an inadequate response. Clearly, he should ask for Lois Lerner’s resignation. If she declines, he might want to assign her to the IRS’s Anchorage office.
The WSJ is outraged about the lack of responsibility and accountability. I think that the IRS’s procedures need changing. It’s remarkable to me that the whole thing wasn’t obvious long, long ago and dealt with appropriate. Exactly how much discretion are low-level IRS officials allowed?
Even if the whole snafu turns out to have been the work of just a handful of IRS officials (a story that already seems to be falling apart) quite literally hundreds more must have known. I find it dismaying that it didn’t strike any of them as wrong.
I’ve been complaining for years around here that the moral education of most Americans seems to stop at about age 7. Our system really depends on the honesty, decency, and good sense of ordinary Americans. If that can no longer be depended on, the system that will necessarily replace our present system will look a lot more like Warsaw Pact East Germany than it does like the America I want it to be.
by Dave Schuler on May 22, 2013
Far be it from me to disagree with Dave Zirin of The Nation’s assessment of Chicago’s Mayor Rahm Emanuel:
It all starts with the person who seems committed to win the current spirited competition as the most loathsome person in American political life: Mayor Rahm Emanuel. The same Mayor overseeing the closing of fifty-four schools and six community mental health clinics under the justification of a “budgetary crisis” has announced that the city will be handing over more than $100 million to DePaul University for a new basketball arena. This is part of a mammoth redevelopment project on South Lakeshore Drive consisting of a convention center anchored by an arena for a non-descript basketball team that has gone 47-111 over the last five years. It’s also miles away from DePaul’s campus. These aren’t the actions of a mayor. They’re the actions of a mad king.
I’ve thought so since he was a spokesman for the Clinton Administration. What excites Mr. Zirin’s ire? The mayor’s support for a basketball stadium for DePaul University, to be built in the vicinity of McCormick Place. That’s the arena that was characterized by stadium expert Marc Ganis as “lunacy”, “sheer folly”, and “no economic sense whatsoever”.
Mr. Zirin’s going out of his way to mention that DePaul is a Catholic university makes me mildly uncomfortable (he notes it twice in the column). That it is a private institution would be enough to make the point. Is its being Catholic somehow relevant?
The school closings were a done deal as soon as raises for Chicago Public School teachers were agreed upon. The money has to come from somewhere and there are no good ready candidates. Raising sales taxes or property taxes are more likely to drive retail and investment from the city than they are to increase tax dollars at this point. There is simply no more tax blood in the Chicago turnip. Maybe a payoff for past contributions.
Is there some major political donor, local or out-of-state, who would benefit by such a deal? I’m guessing that the DePaul arena deal has more to do with drumming up contributions than it does to anything else.
by Dave Schuler on May 22, 2013
Has anyone noticed that there hasn’t been a torrent of progressive, liberal, etc. organizations coming forward to say that they received excessive scrutiny, too? Why is that? Because they didn’t receive such scrutiny? Because they don’t mind? Because they didn’t file to receive 501(c)(4) status? All of the above? Something else?
by Dave Schuler on May 22, 2013
Michigan Senator Carl Levin is making the news in his outrage about Apple’s exploiting the tax code to reduce its income tax liability:
Mr. Levin is outraged that Apple subsidiaries in Ireland pay little or no corporate income tax on profits generated from Apple’s international sales. Ireland has a laudably low corporate tax rate of 12.5% to attract jobs and capital, but it turns out that for certain corporations controlled by entities outside Ireland, the deal gets better.
The Apple units are based in Ireland, so U.S. law does not consider them to be U.S. corporations subject to U.S. corporate tax. But since they are managed and controlled by Apple in the U.S., Irish law doesn’t consider them Irish companies and thus they are also not subject to the 12.5% Irish corporate tax. This isn’t alchemy; it’s accountancy.
Carl Levin has been a U. S. Senator since 1979. That means that he held office when most of the laws governing income taxes, individual or corporate, were enacted into law. What was he, an innocent bystander? The problem is, of course, that Apple has strong incentives to do what they can within the law to reduce its tax burden and Apple’s accountants and tax lawyers are smarter than Sen. Levin. Or Sen. Levin, all of his colleagues, and their staffs put together. That will always be the case.
There’s plenty of room for outrage. The WSJ is outraged over the high corporate income tax that incentivizes companies to implement such tax avoidance schemes.
Have you noticed how many of the stories of the day ultimately revolve around the corporate income tax? The IRS singling out conservative and libertarian organizations for scrutiny, Citizens United v. Federal Election Commission, stories about lobbying. They all come down to the corporate income tax.
by Dave Schuler on May 22, 2013
Ruth Marcus brings up a subject in which I have some interest:
As the sequencing of the human genome has expanded the ability to test for such genetic susceptibilities, is the discovery of the gene itself a patentable invention?
The practical consequences are enormous. Would allowing companies that identify such genes to hold patents on them provide an incentive for useful discoveries? Or would it have the perverse effect of impeding research by allowing one patent-holder to lock up work on the gene, and, simultaneously, hurting consumers by driving up costs and availability?
As it happens, the Supreme Court is poised to decide this issue in a case involving a Utah company, Myriad Genetics, and its patents on the BRCA1 and BRCA2 mutations. As is true of many of the cases that make their way to the high court, this is not the easiest of legal questions — except that this one also calls for an advanced degree in biology.
I do not believe that animals, plants, or genes that occur in nature should be patentable. That’s completely consistent with the history of patent law. You cannot patent electricity, gravity, or the Third Law of Motion although you can patent devices that make use of these naturally occurring physical phenomena. Certainly there are gray areas, for example, when a completely new gene is created. But in my view granting patents on naturally occurring genes is theft, plain and simple.
Pointing to the good that can be done by granting such patents is specious. I could do an enormous amount of good with the money I got from robbing a bank.
