Tuesday, December 6, 2011

National Defense Appropriations, Korematsu, and the Law of Mechanics Liens

The current National Defense Appropriations legislation, usually a routine thing, has drawn lots of attention this year because of a provision that arguably permits the military to confine American citizens indefinitely, and without trial, if they are suspected of ties to terrorism. I took a brief look at the bill. It’s a humongous piece of legislation. The table of contents is longer than the one in most University textbooks. It's enough to make one despair. Do we really need that much legislation? It is, of course, impossible for any Congressperson to have a meaningful understanding of this legislation. Should we have our elected representatives routinely vote on things they don't (can't possibly) understand. It's my pet peeve these days.

In California, the Law Revision Commission has just spent ten years revising the mechanics lien laws. This is a fairly arcane and jumbled up part of the law, well loved by a few of us who deal with that stuff day in and day out. The result of this ten year effort was some good ideas, some bad. There was some push-back, and the end result will be a massive reorganization project, but no substantive change. It's nuts, because nobody who works with this needs it reorganized. It will just be a bunch of work for no good purpose. ...And, of course, the legislature didn't have a clue why it was passing this bill.

It's enough to make you sympathetic to those who say, enough already. Let's have part time legislatures and have them pass fewer laws, and only stuff they know sufficiently well to actually debate themselves.

So, this is all a bit off topic from the internment provision of the NDAA. However, it does kind of inform my reaction to some of the breathless chatter in the press and blogosphere about how this spells the end of American freedom as we know it. The provision which arguably permits military detention of terror suspects without trial is a stupid law. It's a bad law. The courts may or may not throw it out as unconstitutional. It will keep a bunch of lawyers occupied for a few years. But it's not the first stupid, or bad, or unconstitutional law that Congress has/will/may pass.

Is this the end of America Land of the Free. I don't think so. Let's wait 'til we see if it actually becomes law, whether the President vetoes it, or what his signing statement will look like, before we get all breathless about this. Let's wait to see what the courts do with it. And then let's wait to see what the military does with it.

In 1944, in Korematsu v. U.S. the U.S. Supreme court infamously upheld President Roosevelt's executive order to intern 100,000 Japanese American citizens without hearing or trial or charge. Freedom in America survived. Whatever happens with the internment provision in the current National Defense Appropriations Act, it's safe to say it will have virtually no effect on American freedom when compared to the Japanese internment camps. A handful of individuals might be unjustly or unfairly affected. They may, or may not have terrorist connections. They may have some good habeas corpus arguments, and they will find good lawyers to fight for them. They may win, or they may lose. The Republic will go on. Congress will keep on passing stupid laws, and occasionally some good laws. Life will go on. There will continue to be causes to fight for.

The internment provision of the NDAA is a good cause to lobby against, to march in the streets against. Let's add it to the list!

Wednesday, September 28, 2011

Money Doesn’t Care About Your Job.

For the country to get healthy, it’s all about jobs. Manufacturing jobs, education jobs, software and hardware development jobs, alternative energy jobs, health care jobs, construction jobs. Good paying jobs. But above all, jobs here in the United States. We are in the most anemic of recoveries, and it’s a jobless recovery. Private industry is barely creating enough jobs to keep up with population growth, and it is not making a dent in our 9.1% unemployment rate.

The Republican narrative is that we aren’t creating enough jobs because there is too much regulation, too much taxation, and too much government spending. If only we eliminated corporate taxation, greatly reduced burdensome regulations, then this happy circumstance would cause the owners of production to hire and make stuff. I believe these folks haven’t heard of the bar code, Walmart, or the “just-in-time” production system.

I have been asking my friend who works in the financial industry why it is that the captains of industry and finance have not manned the ramparts of job creation. Why are they not clambering for job creation programs if this is what’s needed to make America productive again? Two possibilities come to mind. The first is that they believe like John Boehner and Eric Cantor that government is the problem and has nothing to offer in job-creation. I rather discount this possibility because the captains of industry did not reach their perch because they are Dodo birds. A second possibility is that they don’t care. They don’t care whether we create jobs in the U.S., they don’t care whether the U.S. middle class is successful or not, just as long as growth occurs somewhere.

I listened to a couple of private bankers this evening share their investment outlook for the near and not so near term. Their mission is to preserve and grow wealth. From a wealth preservation standpoint, their goals make obvious sense: low taxation, small government, low inflation. This naturally pre-disposes bankers to the Republican agenda. “You are international consumers; you have to be international investors,” they said. I know what they meant. Money will care about world recession because this means there is no safe haven where it can productively grow. However, it will not care if there is 20 percent unemployment and no prospects for middle class jobs in the U.S., as long as there is growth somewhere. Money can be moved at a moment’s notice to be put to work in China, Brazil, India, anywhere where there is growth. Money does not care where this growth occurs. And in the era of bar codes and just-in-time manufacturing, the owners of the means of production don’t care either. They are all bankers now.  Access to capital is what matters. Factories can be built at a moment’s notice anywhere in the world, for delivery to wherever there is demand, as it occurs.

The median age of Japanese and Germans is 45 years. The median age in the U.S. and China is 36. The median age in India is 26 years old. There are 1.4 billion people in China; there are 1.2 billion people in India. This should tell us something about where growth will come from in the next 100 years. Money will not care about 20 percent unemployment or wealth disparity in the United States. If there are consumers to be found in India and China, Money will not care that there is no demand in the U.S. It will not care where the jobs are created. It will care only about low inflation and low taxation. Money will care about small government. If the rest of us want good paying jobs and low unemployment in the United States moving forward, we have to learn to leave the small-government-low taxation-bankers-and-captains-of-industry-know-best narrative behind.

Sunday, September 18, 2011

The Nattering Nabobs of Negativity

Three years into what we now popularly call the Great Rescession, or as Ken Rogoff would have it “The Second Great Contraction,” pessimism abounds. We are bombarded daily with negative stories about lost decades, American decline and Chinese hegemony, PIGS feeding on Germany’s trough, declining standards of living, a broken education system, infrastructure falling into decay, and a fatalistically self-destructive political environment. It’s enough to make sound bite addled journalists like Jonathan Alter call the last decade “the worst in 100 years.”

But every now and then it’s important to say “enough already, let’s get a grip.” The worst decade in a century? Worse than 1929-39? Really? Back then GDP dropped 47% and unemployment was 25%. We didn't have all those achievements in place that Alter boasts for the latter half of the 20th century.  Worse than 1939-45 and its 60 million dead, including close to half a million Americans? Fact is, things ain't so bad.

Here are a few things we have accomplished during the last ten years (give or take), and that we are working on:

1. Knowledge sharing: Google, Wi-Fi, IPhone, IPad, Wikipedia, social networking sites (facebook, myspace, linked-in, etc.), digital cameras, digital books; on-line newspapers and periodicals; research papers widely available on-line; blogs (today I can read Brad DeLong, Greg Mankiew, quality legal group blogs, Crooked Timber, Mondoweiss, and each one of us can have our individual list of quality blogs to follow), and storage of personal data in the cloud.

2. Medical advances: heart attack deaths are cut by 40 percent; AIDS has turned from deadly scourge to a manageable illness; stem cell research advances; big advances in breast cancer treatment and other cancer treatments; great progress in minimimally invasive robotic surgery techniques; advances in functional MRI's, etc.

3. 27 states have passed no-smoking laws.

4. Equality for gays is progressing. We have a continuing and strenghtening commitment to disability accessiblity.

5. Child safety: Between 2000 and 2009, non-fatal injuries for people under 21 decreased by 20 percent, according to the California Department of public health. The incidents of car related injuries for children has dropped by 40 percent. This is due to child seat safety laws, helmet laws, improved regulations for playgrounds and pools, etc. , and advances in technology.

6. Health insurance: We've passed significant legislation to drastically reduce the number of uninsured. Lot's of work to go here, but it's a start.

7. Progress has been made in reducing green-house gas emissions, and in developing alternative energy. LEED standards and other industry standards have been developed for the design and construction of energy efficient, and people friendly, buildings. We have made lots of progress in developing alternate energy: solar, wind, thermal, wave, etc.

8. There have been strong developments in harnessing computers in construction. Building Information Modeling (BIM) is leading to better designs, more efficient construction, and better more energy efficient buildings.

9. There has been lots of research and groundwork-laying for eventually moving beyond the internal combustion engine. Electric cars, electric batteries, high speed trains, etc. Progress has been made on all these fronts.

10. There has been much progress on the aviation front: drone technology is a symbol, but it extends to all manner of lighter, more efficient aircraft, from commercial liners to small private planes.

We all need to take a deep breath and get a grip on reality with both hands, as Brad DeLong says. Neither Obama nor Perry (and never mind Romney) is the Messiah.  We have lots to do, from adjusting the out of whack income and wealth inequality, creating jobs and getting productive, adapting education for this new century: let’s get to work, let’s study hard, let's work hard, let’s have some fun, and as Spiro Agnew might say, let’s not pay so much attention to the nattering nabobs of negativity in Congress and the press.

Friday, July 29, 2011

Absence of Pretty Speeches Fails to Make the Heart Grow Fonder

Like the rest of us, Robert Reich is frustrated, disappointed, and fit to be tied by the charade about he debt ceiling going on in Washington. He's also upset with our President:

"[A]part of the answer lies with the President — and his inability or unwillingness to use the bully pulpit to tell Americans the truth, and mobilize them for what must be done. Barack Obama is one of the most eloquent and intelligent people ever to grace the White House, which makes his failure to tell the story of our era all the more disappointing and puzzling. Many who were drawn to him in 2008 (including me) were dazzled by the power of his words and insights — his speech at the 2004 Democratic convention, his autobiography and subsequent policy book, his talks about race and other divisive issues during the campaign. . . But the man who has occupied the Oval Office since January, 2009 is someone entirely different — a man seemingly without a compass, a tactician who veers rightward one day and leftward the next, an inside-the Beltway dealmaker who doesn’t explain his comprises in light of larger goals. . . . He is well aware that the Great Recession wiped out $7.8 trillion of home values, crushing the nest eggs and eliminating the collateral that had allowed the middle class to keep spending despite declining real wages — a decrease in consumption that’s directly responsible for the anemic recovery. But instead of explaining this to the American people, he joins the GOP in making a fetish of reducing the budget deficit, and enters into a hair-raising game of chicken with House Republicans over whether the debt ceiling will be raised. ...Obama cannot mobilize America around the truth...because he is continuously adapting to the prevailing view. This is not leadership."

An equally frustrated friend, who views me as an unrepentent Obama lover, offered me a chance to speak up for the President. I'm not sure I want to, but since I've been paid to do worse, here goes.

I agree it's frustrating as all get out. We know, and Reich knows, that Obama knows that he could give a great speech about how the debt or the deficit is not the problem right now, that what the economy needs is government stimulus, followed by some increased taxation after the economy picks up, to reduce the deficit and ultimately the debt. [Ugh! doesn't sound very exciting, does it?] I also think he knows that's the right thing to do.

So the question is, why doesn't Obama use the bully pulpit to talk about this and promote understanding, mobilize the electorate and force more responsible action from Congress? I assume, but surely don't know, it's because his political instinct is that a) a speech, or ten, won't get the electorate mobilized on this, b) to the contrary, it might make him vulnerable to Republican demagoguery and lose him the election in a year, and c) even if there were more emails and letters to Congress, it wouldn't sway the Republicans to change their ways.

Hell, maybe the best tactic would be to say, fuck you Boehner, you wann'a play chicken: we won't raise the debt ceiling until you agree to more stimulus, single payer health care, and 70 percent marginal tax rate on income above $1 million! It really doesn't sound very adult, but maybe it would be better than compromising in the vain hope of prompting a sane Republican compromise. It might feel good for a bit, I'm skeptical it would be effective. Fact is, you can't fake this stuff, and the real radicalism happens to be on the right, not the left at this time.

I don't know what the right strategy is. I know it feels lousy to have the Tea Party caucus make the Dems and Obama look ineffective and like wimps. I also know it's easy to blog with great certainty from Berkeley, or to give advice from a cabinet post; it's harder when you have to pull it off, when it's your electoral ass (and ultimately the country's welfare) that's on the line. Or do we think the country would be better off if Obama gave some eloquent speeches now and got beat by Huntsman or Romney next November? Maybe Obama should land an F-16 at Bagram, announce "mission accomplished", and bring the troops home tomorrow. If only it were so easy!

I can't quarrel with the Reich article. He accurately captures our sentiment and frustration, and disappointment. But I also know Reich is a lousy prognosticator of the stock market and I suspect his nose for electoral politics is not as good as his sound analysis of the economics.

In the meantime, Jack Balkin has an interesting analysis of the debt ceiling end game: Treasury debt gets paid, and there is a partial default on Medicare payments, and other safety net obligations that quickly raise the political heat to where Congress raises the debt ceiling, just like they've done 76 times before. A trillion in cuts over 10 years is quickly reversed if you catch the electorate in the right mood. The bite of real cuts will get their attention a lot more than a pretty speech. If the mood changes, then a speech can make a real difference . . . and then I'd much rather have Obama in the White House than Huntsman or Romney!

Friday, July 15, 2011

Robert Reich and Surfing Analogies

In his recent post The Rise of the Wrecking Ball Right Reich says:

1. what government does that helps average people is now so deeply woven into the thread of daily life that it's no longer recognizable as government

2. We've had 30 years of relentless government-hating and baiting, supported by hundreds of millions of dollars from big business interests, convincing the public that government is evil.

3. There has been an abject failure of the Democratic Party - from the President on down - to make the case for why government is necessary

I think all these points are right, and it explains why making the case for government is tough. Yet it's clearly a job we must do. The reason we don't hear Obama or individual elected officials talk about the good things government does more often is that such talk doesn't get them elected. It's up to us to create a groundswell narrative of all the reasons why the social democratic state is worthwhile, worth keeping, worth improving, and worth paying for. We need a groundswell wave that politicians can ride. The wave is out there, made by economists like Reich, Krugman, De Long, and Cummings, and publications like the New York Review of Books and the New York Times. It's just not feeling bottom yet.

If politicians thought they could get votes by making the case, they would. There is a reason they are abject. Therefore, it's up to each one of us to do this: at work, on Facebook, in Church, on the beach, everywhere. The disadvantage we have is that big business won't help. I asked my friend who works at Morgan Stanley why they, as an organization, don't go on record to support additional stimulus to grow the economy, and then bring the deficit down responsibly when employment is up. Since that is what the economy needs, since that's the way to avoid double dips and lost decades, why would Morgan Stanley not support this? He could not provide an answer, but I suspect the answer is that double dips and lost decades are not necessarily bad for Morgan Stanley. This is less obviously true for the construction industry, and Apple, and Ford. Yet big business is generally chiming in with the Rush Limbaugh chorus; they are not touting the merits of Keynes and the social democratic state. When they feel Republicans have gone too far, as when they threaten the full faith and credit of the U.S. debt, they apply pressure discreetly. Why is that?

It would be a lot easier for us, and, yes, politicians too, to make the case that our government is generally worth preserving (and paying for) if we got some help from the business community. If Krugman and Reich are correct, and I think they are, this is in the long term best interest of big business. Why has the ride of big business pearled? To catch the next wave in the sweet spot, business doesn't need small government, it needs efficient and effective government that looks after everyone. A government that Grover Norquist can drown in the bathtub isn't good for business, and surfing is lousy in the bathtub!

Friday, June 17, 2011

The Epistemology of Hockey and Small Government

“Knowledge requires justification” says Gary Gutting in today’s Philosopher’s Stone (NYT June 17, 2011). He picks on the eminently feeble Harold Camping and his prediction that the Rapture would occur on May 21, 2011. Well, it didn’t . . . and how could anyone have known such a thing anyway? Knowledge requires a persuasive account of why we know what we think we know. It requires more than strong belief, like those hockey fans that upended Vancouver the other night who surely “knew” the Canucks were going to win, or some poor shmoe who just “knows” he’s going to win the lottery. There’s no shortage of foolish beliefs strongly held, and finding people to ridicule for this is a target rich environment. Just ask Jon Stewart and Stephen Colbert, or a Boston Bruin fan.

Yet many foolish beliefs have a strong grip on our imagination, and, of course, ridicule is more easily heaped on ideas in decline than on ideas in the ascendancy. Take the widely held belief that lowering taxes and cutting government spending is what’s needed to grow the economy. This idea has been in the ascendancy for thirty years. Liberals have struggled in vain to point out that this article of Republican faith lacks a rationally persuasive account of why it’s true. It’s contrary to the evidence. Yet, the belief has been curiously respectable and immune to ridicule, despite the best efforts of brave souls like Reich and Krugman to point out the emperor has no clothes. When will we know then, that we have these ideas on the run? It’s when we once again hear commentary like Thurman Arnold’s in The Folklore of Capitalism (1937). This from the last time we had this belief on the run:

It was bad form for men to become dependent on government organization; but it was a good thing for employees to become completely dependent on industrial organization, which was supposed to foster initiative and independence down to the lowest worker . . . [W]hen the government wasted, it was wasting the taxpayer’s money. When a railroad, or public utility, wasted it was wasting its own money—which, of course, every free individual has a right to do unless you are willing to change your “system of government” and adopt “Socialism.” Of course, the great industrial organizations collected the money they spent from the same public from which the government collected. However, in the case of a public utility, or textile concern, or a building corporation, the collection was voluntary, since men could go without clothes, light or houses . . . . When the government collected, the collection was an involuntary tax, which in the long run fell upon the poor, because of the great principle that it is unjust to tax the righ any more than you happen to be taxing them at the time, and that the rich will refuse to hire the poor if taxed unjustly.

Now there is putting a belief not supported by a persuasive account of why it's true in its place!