Let’s Play “Name the Policy”

Courtesy of the Democrats on the House Ways and Means Committee, here’s a list of “corporate inversions”, companies that have “exited the U. S.” for tax reasons, over the last 30 years. It used to be rare but now it’s pretty common.

Although nearly twice as many companies have “inverted” during the Obama Administration as did during the Bush Administration, that’s just continuing an ongoing trend. Many, many more businesses fled the U. S.’s high taxes during the Bush Administration than during the Clinton Administration.

Now for the interesting part. Do we care? If we care, what policies should we put in place to change matters?

I think we do care for a whole host of reasons from revenue to employment to status. We should bring our corporate tax policies more into line with those of other major economies. That would mean lowering tax rates, taxing corporations only on their domestic earnings rather than their global earnings, etc.

Of course, you could always try punishing them for leaving. The beatings would, presumably, continue until morale improved.

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The Non-Delegation Principle

This post is in support of a point I made in this comment thread at OTB to the effect that Congress has systematically delegated its powers to the executive branch for many years. The graph above illustrates the growth in federal laws over time. Now look at the growth of federal regulations, the executive branch’s elaboration on the law:

I have no opinion on how much federal law or regulation is necessary. Under the principle of “non-delegation” the executive branch is only empowered to promulgate such regulations as are necessary and proper to enforce the laws enacted by the Congress. I think that given the enormous growth in federal regulations over the years and the volume by which they outnumber the laws they’re purportedly intended to enforce the idea that the executive branch has limited itself to promulgating rules that are necessary and proper beggars credulity.

Whether more laws or more regulations can possibly be effective is an interesting and important question but it’s not the point I’m making here. The point I’m making here is that Congress has obviously abrogated its responsibility.

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Defining Our Terms

After reading so many misuses of some specific words this morning describing agreement, I thought it might be handy to provide a few definitions.

Unanimity

Also unanimous. Unanimity means that everybody agrees with something. It’s rare.

Consensus

Consensus means “general agreement”. As a rule of thumb you need at least two-thirds of the participants to agree before you can start calling something a consensus.

Majority

One half plus one.

Plurality

When there are more than two opinions being expressed (including “no opinion”), whichever opinion has the most adherents is the plurality opinion.

Minority

Fewer than one half plus one.

It is not true that there’s a consensus that President Obama is the worst president of the post-war period. One poll has found that it is a plurality opinion.

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What If…

I can think of one immediate consequence of the colonies losing the Revolutionary War. Australia probably would have been settled much more slowly than it was.

Another: I’d probably have grown up speaking French.

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Name Your Poison

When I read about the idea that the Obama Administration was considering changing course and backing Assad in Syria my immediate reaction was

Which of the following choices is the worst course of action?

  1. Back the rebels, Assad is defeated and replaced by an Islamist regime.
  2. Back the rebels but Assad remains.
  3. Back Assad and Assad defeats the rebels quickly.
  4. Back Assad and Assad defeats the rebels slowly.
  5. Back the rebels, Assad remains, and then you back Assad.
  6. Wait for the whole thing to blow over.

You may propose other alternatives. Note that I don’t include an alternative for Assad being removed and replaced by a liberal democratic government because that was not going to happen in any event.

What would the best course of action have been?

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The Hollowing Out of Chicago

There’s a Sun-Times article on income inequality in Chicago I found interesting. Apparently, Chicago is becoming much less equal in terms of incomes fast:

Journalism professor Darnell Little and his Medill Data Project at Northwestern University crunched census income data for the Chicago Sun-Times and found that the wealth gap is widening faster in Chicago than in the suburbs or in the state and country in general.

Statistically speaking, the best way to gauge wealth distribution is a measure called the Gini index. It’s a scale from 0 to 100 in which 0 represents total, utopian equality — i.e., each of us is paid the same amount of money — and 100 means one person is hoarding every last penny.

In 1990, Chicago registered 44.9 on the Gini index. That suggested an only slightly greater level of disparity in the city than for Illinois as a whole, which recorded a score of 44.3 that year.

Jump to 2012, the most recent year for which federal income data is available on a city and county level. Chicago had risen sharply to 51.9 on the income-inequality scale — far worse than the 46.5 for the entire state and 47.1 for the country.

They also found that the city of Chicago was much more unequal than its collar counties were.

I think a little perspective is called for. The reality is that income inequality in Chicago is pretty comparable to that in other large cities. Chicago’s .5286 (according to the linked results) are better than New York’s .5381 and worse than Los Angeles’s .5235 but not drastically so. Probably within margin of error. The least equal cities are Atlanta, New Orleans, and Miami.

If you look at these results with flinty, steadfast gaze, I think the results suggest to us that high Gini coefficients are correlated with black population. Our largest cities are becoming places for the white rich and the black poor. This is the problem that has been dogging us since the end of the Golden Age of the civil rights movement 40 years ago. What can we do to improve the situations of poor blacks? Most of what we’ve done over that period hasn’t reached the poor. The single most positive thing we’ve done has been welfare reform and that’s something the Obama Administration has been trying to reverse.

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Feeding the PBGC Kitty

It’s been a while since I’ve complained about the Pension Benefit Guarantee Corporation, the federal program under which people whose pension plans have gone belly up continue to be paid some sort of pension. It’s another of those public/private hybrids I complained about recently. In a recent editorial the editors of the Wall Street Journal warn that the PBGC may need the next big federal bailout:

Labor unions like to promote their generous defined-benefit pensions. Yet when these benefits prove unsustainable, workers can lose their jobs and retirement savings. The kicker is that taxpayers may soon be tapped to perpetuate this double fraud.

That’s the main take-away from a new report by the Pension Benefit Guaranty Corporation (PBGC), which insures multi-employer pension plans for 10.4 million workers and retirees. The federal agency projects that its deficit for multi-employer plans will balloon to $49.6 billion by 2023 from $8.3 billion. Last year the PBGC forecasted a deficit of $26.2 billion in 2022, and its upward revision reflects the increasing likelihood that more plans will become insolvent and sooner.

Of all of the possible solutions for solving the PBGC’s money problems paying its shortfalls out of the general fund must surely be the worst.

I don’t think the PBGC should exist at all. It’s the rankest sort of corporate welfare, right up there with the Export-Import Bank. It enables companies that are so inclined to underfund their pensions and pay less than the legitimate cost of insuring the funds to underwrite them.

Additionally, it’s manifestly unjust. It forces people who have no pensions to pay for the pensions, largely through their payroll taxes, of those who do.

If you can’t bear to abolish the PBGC, my second proposal would be changing it into a real insurance plan in which premiums are proportion to costs and risks. That would at least be a disincentive for the corporate misbehaviors I mention above. Another possibility would be to limit payouts under the PBGC to what premiums bring in. If it’s good enough for Social Security, why isn’t it good enough for private pensions?

The very last thing we should do is continually stoke the PBGC with money.

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The Rule of Lawyers

Over the last week or so I have read an enormous amount of (mostly hyperventilating) commentary about the Supreme Court’s decision in the Hobby Lobby case. In all of the verbiage I have not encountered an explanation of how you’d arrive at any other decision without setting aside black letter law. Here’s the relevant language of the Religious Freedom Restoration Act:

SEC. 3. FREE EXERCISE OF RELIGION PROTECTED.

(a) IN GENERAL. — Government shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability, except as provided in subsection (b).

(b) EXCEPTION. — Government may burden a person’s exercise of religion only if it demonstrates that application of the burden to the person —

(1) furthers a compelling governmental interest; and

(2) is the least restrictive means of furthering that compelling governmental interest.

(c) JUDICIAL RELIEF. — A person whose religious exercise has been substantially burdened in violation of this section may assert that violation as a claim or defense in a judicial proceeding and obtain appropriate relief against a government. Standing to assert a claim or defense under this section shall be governed by the general rules of standing under article III of the Constitution.

and here’s the relevant language of the “Dictionary Act”, the federal statute that governs how words are used in federal law:

…the words “person” and “whoever” include corporations, companies, associations, firms, partnerships, societies, and joint stock companies, as well as individuals;…

I suppose one might argue that either RFRA or the Dictionary Act were unconstitutional. I haven’t read any but the most half-hearted attempts at doing that, mostly suggesting that the argument could be made without making it. I would welcome being directed to such an argument. My suspicion, however, is that opponents of the decision object to it on policy grounds rather than legal ones and were hoping that the Court would carry the water for the Obama Administration and find some pretext for affirming a regulation that goes beyond what was enacted into law.

Which brings me to Michael Barone’s most recent column. In the column Mr. Barone deconstructs the Obama Administration’s actions in light of its Supreme Court losses, especially the cases in which it’s been defeated unanimously. He sees the administration as hostile to religion:

One thing is abundantly clear, namely that this administration has a crabbed view of the First Amendment right of free exercise of religion. That is apparent not only in June’s 5-4 decision ruling in Burwell v. Hobby Lobby that the Obamacare contraception mandate is trumped by the Religious Freedom Restoration Act.

It’s even clearer in the 2012 Hosanna-Tabor Church v. EEOC case, in which the Court unanimously said that churches have the right to select their own clergy. The administration’s position, that government could decide who counts as clergy, was described as “amazing” by Justice (and former Obama solicitor general) Elena Kagan.

freedom of speech:

The First Amendment freedom of speech is not highly valued by the administration either. In McCullen v. Coakley, decided last month, all nine justices overturned the Massachusetts law, supported by the administration, outlawing protests within 35 feet of an abortion clinic.

property rights:

Property rights are also disfavored by the Obama administration. A unanimous court said the Fifth Amendment requires compensation when the government repeatedly floods its land in Arkansas Game & Fish Commission v. U.S. in 2012.

That year, the court in Sackett v. EPA also unanimously ruled that landowners could sue without risking a $75,000 per day fine to challenge a government order blocking construction in a supposed wetland.

And in 2013, the court in Horne v. USDA ruled that raisin farmers could sue for damages from confiscation of hundreds of pounds of raisins without first paying a $483,000 fine.

and the Fourth Amendment’s protections against unreasonable search and seizure:

Nor is the Obama administration particularly respectful of the Fourth Amendment prohibition of unreasonable searches and seizures. In 2012, a unanimous Court in U.S. v. Jones rejected its contention that the government could attach a GPS tracking device to a car without a warrant.

That was followed by last month’s Riley v. California, in which a unanimous Court rejected the position, supported by the Obama Justice Department, that police could search without a warrant the cellphone of a person under arrest. Chief Justice John Roberts pointed out that smartphones contain much more personal information than the crumpled cigarette package whose seizure the Court upheld in 1973.

A unanimous Supreme Court has also rejected Obama administration prosecutions that went beyond the letter of the law, including double taxation of a firm that paid foreign tax (PPL Corp. v. IRS, 2012), an extension of the statute of limitation against securities fraud (Gabelli v. SEC, 2012) and the “boundless reading” (in Chief Justice Roberts’ words) of a statute implementing the Chemical Weapons Treaty to prosecute a woman who sprayed toxic chemicals on objects likely to be touched by her husband’s paramour (Bond v. US, 2014).

I disagree. I don’t believe that the Obama Administration has any particular aversion to freedom of religion or speech or private property or freedom from unreasonable searches and seizures. I think the administration’s position has a very different source and it’s one I’ve been trying to explain for some time.

I think it’s a difference of opinion over just what “the rule of law” means. There are some people who believe the written law, augmented by precedent and the common law, constitutes the whole of the law. There are others who believe in what I what term “the rule of lawyers”.

Under that rubric you identify your political or policy objectives, impose a regulation that implements them, craft a legal argument to support the regulation, and shop around for a friendly judge who’ll affirm it for you.

I don’t think that’s what most of us think of as the rule or law but I think it’s the operating principle behind a lot of the administration’s actions. Implement the policy, heedless of the law, and fill in the rest later. And it’s equally clear that many of the president’s supporters hail that approach.

My own view is that, if you can’t get the votes to pass the laws you want or repeal the laws you don’t want, don’t rely on compliant judges to do your work for you. That can cut both ways.

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The Council Has Spoken!

The Watcher’s Council has announced its winners for last week.

Council Winners

Non-Council Winners

The announcement post at the Watcher’s site is here.

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“Government is the word we use for the things we choose to do together”*

*for certain values of the words “we”, “choose”, and “together”.

The words in the quote that comprises the title of this post were said by Barney Frank and, with the caveats in my footnote and apparently unlike Heather Wilhelm, I agree with it.

But those are substantial caveats. For example, when a law is enacted by the votes of one half plus one of the members of the House, many of whom were elected by narrow majorities of the 30% of the eligible voters who actually voted, I don’t think there’s a meaningful “we” to speak of, particularly if those who voted “aye” by and large hailed from large cities within eyeshot of the ocean. Silence may signify assent legally but it doesn’t imply agreement, support, or commitment. When the president veers away from the requirements of the law in a desperate attempt at getting something done despite the objections of a recalcitrant Congress that further dilutes any idea of “we”.

When most of my neighbors and I turn out to shovel our front steps, sidewalks, and street and those of our elderly neighbors following a big now, that’s something we choose to do together. It makes us feel good about ourselves and about each other. We have cleared walks and street. It’s something we choose to do together. If we were to break into the homes of those who didn’t turn out with us, drag them from their beds, and put shovels in their hands, shovelling would no longer be something we chose to do together. It would be something that some of us chose and which was imposed on others.

Or if we hired a snowplow (something the neighborhood association does, indeed, do) to plow our streets it might be practical but it wouldn’t be something we chose to do together. It would be something we chose to have done together.

There’s more consensus among the people on my block than in my neighborhood, more consensus in my neighborhood than in my ward, more consensus in my ward than in the city, in the city than in the state, and in the state than in the country. IMO that increasingly attenuated consensus confers decreasing legitimacy. Once upon a time we generally felt that the federal government should leave most things other than the common currency, the military, and foreign policy to the states. That was a recognition of the decreasing legitimacy, support, and commitment that decreasing consensus and distance bring. That practice is no more.

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