Relevant and even prescient commentary on news, politics and the economy.

BREAKING NEWS: Bain Capital Wanted to Lend GM and Chrysler Money For Their Managed Bankruptcies!***

**This appears to be incorrect. It was based on a story that CNBC has now updated. It was “Bain Consulting,” not Bain & Co., that advised the government on re-financing the automobile companies. — klh

Ah!  Mystery Solved! Yesterday,in my post, “Crony Capitalism On A Grand Scale“—the title of the post borrowed from an op-ed piece by Romney in yesterday’s Detroit News characterizing the auto bailouts that way—I noted that Romney seems unaware that both companies filed for bankruptcy.  Romney says, as apparently he says often when forced at gunpoint to explain his opposition to those bailouts, that he was for the idea of “managed bankruptcy” for both companies, and never actually acknowledges that that is what happened.  Much less that these bankruptcies were “managed,” and therefore were able to emerge from bankruptcy as ongoing enterprises rather than as pieces of physical assets, machinery and the like, for a Bain Capital-owned company in the process of being restructured, to scavenge and resell.

This was a mystery to me. Sure, Romney regularly makes up facts to match Tea Party of Club for Growth ideology.  But in Michigan,everyone—everyone—knows that GM and Chrysler went through formal bankruptcy proceedings.  In court. How, I wondered, did he expect to get away with pretending that these companies didn’t go through managed bankruptcies?

Ah! Mystery solved! In an ABC News report last night by Chris Bury (a genuine news reporter,not a pundit disguised as one, and a long-ago favorite of mine from back when he was reporting for Nightline), illustrates the impact of the bailouts on Michigan’s economy, which is suddenly resurgent.  And in the report, which is today’s Yahoo News highlighted ABC NEWS video, explains what Romney means by “managed bankruptcy.”

Turns out, he means, best as I can tell anyway, that private equity firms lend the corporation the money to get through bankruptcy, in exchange for ownership of the company after its emergence from bankruptcy.  In the case of GM and Chrysler, many tens of billions of dollars.  In an op[ed in the New York Times back then, he described the managed bankruptcy he had in mind as one in which the government would guarantee private loans, but it would not itself provide the financing.  Which raises the question of how, exactly, this would have saved the government money, since the companies are repaying the government the loans to the extent possible.

But it also raises the question of Romney’s recommendation that the government play Russian Roulette with the auto industry.  Bury’s report points out that Bush Administration officials who put together the initial bailout legislation recognized, as did the Obama administration officials who took over, that the chance was nil that private equity money in such large sums would be forthcoming.  And why he conflates ideology with fact, even when the stated fact is baldly nonsensical. “If(automakers) get the bailout … you can kiss the American automotive industry goodbye,” Bury’s report quotes Romney as saying in that New York Times op-ed.  Destroying the industry by saving it?

Meanwhile, an editorial in today’s Washington Post* says,in complaining about Obama’s proposal to raise taxes on bailed-out banks in order (the editorial says) to cover the auto bailouts:

TARP was the price the country paid for a public good — financial stability — that the country needed. It’s inconsistent for the president to hail the bailout of one private industry —autos — while playing politics with the bailout of another — banking — that was and is no less necessary to a modern economy. It compounds the inconsistency to demand that the latter pay for the former.

Apparently the [Post]’s editorial board thinks GM and Chrysler caused the housing bubble and sold subprime mortgage-backed securities.

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*The sentence has been corrected to say that the editorial is in today’s Washington Post. Originally, the sentence said incorrectly that the editorial is in today’s Wall Street Journal.

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***Yup.  Definitely incorrect.  See my above post on the subject. 

As I just wrote in response to a comment, I’m still sorta dismayed that the title of my post was treated, even by a PR firm representing (I guess) Bain, as a representation of fact rather than as the sarcasm that it pretty clearly was.  

Oh, well.

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UPDATE to “What if Eisenhower’s budget were your (grandparents’) family’s?”

In my first of two posts yesterday, “What if Eisenhower’s budget were your (grandparents’) family’s?”, about an ABC News item from the evening before discussing Obama’s proposed 2013 budget, and propagating the truism, so popular among pols and pundits, that the federal budget is like a family’s, only with eight zeroes following total expenditures, income receipts and carried debt, I mentioned that the piece contained a February 2009 clip of Obama promising that his final first-term budget would halve the deficit that his administration inherited.  I saw the video because it was highlighted on the Yahoo News pages yesterday morning.

Jake Tapper, ABC’s White House correspondent said Obama was now breaking that promise. I pointed out that the promise probably was based in part on Obama’s intent to end some of the Bush tax cuts (the clip shown was just a few words of Obama’s comments).  Reader RJS noted in the comments to my post that Dean Baker also posted a takedown of the ABC News report and of the silly federal-budget-and-family-budget analogy. 

Baker also mentioned Tapper’s inclusion of the clip of Obama’s February 2009 promise to halve the deficit, and points out that the main reason that the promise is unfulfilled is that the economic downturn proved far more severe than Obama and most mainstream economists recognized at the time, and so the tax revenues have been correspondingly lower than anticipated.  

I thought of mentioning this in my post yesterday, but didn’t because, well, y’know, a promise is a promise, and the Tapper’s point concerned specific economic legislation proposed by Obama.  Baker notes that if Obama kept his promise now and proposed a budget that halved the deficit for fiscal 2013, the deficit reduction would be, um, pretty temporary, since drastically cutting government spending in a weak economy with a persistently high unemployment rate would weaken the economy further, leading to lower tax revenues ….

Of course, communicating this requires a short explanation of Keynesian economics.  Which—who knows?—maybe Obama will actually start doing.  If a gun is held to head.

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Crony Capitalism On A Grand Scale

An article in yesterday’s New York Times, which I think deserves much more notice than it seems to be getting,  says that last week, “Mr. Romney’s campaign held an elaborate “policy round table” fund-raiser at a Washington hotel, featuring panel discussions run by lobbyists [who are] former cabinet officials or members of Congress.”
Today in the Detroit News, that very same Mr. Romney has an op-ed piece complaining that the GM and Chrysler bailouts were “crony capitalism on a grand scale.”  The reason for the epithet?  That by prior agreement heading into the managed bankruptcies of those companies—bankruptcies that in fact were “managed” ones rather than just plain bankruptcies, and that therefore allowed the companies to emerge from bankruptcy and continue operating—union jobs received more protection than non-union jobs, and because Chrysler’s secured creditors were not protected. 

Okay, well actually, he doesn’t acknowledge that the two companies did file for bankruptcy, and instead claims that they should have been forced to do so.  To file for “managed bankruptcy,” that is.  At least if I understand him correctly.  And actually, he claims (again, if I understand him correctly) that GM’s secured creditors will, by fiat of the Obama administration, not be repaid in full.  And he says that were it not for the bailouts, the companies would have survived without layoffs, or without as many layoffs, or without non-union layoffs … or ….

What?

In fact, as every Michigander (and Ohioan) knows, both companies filed for bankruptcy, the bankruptcies were “managed,” and both emerged from it much-downsized but still employing many thousands of people directly or via their suppliers.  And, as they also know, neither company would have emerged from bankruptcy at all without the government’s financial assistance.  Which is why the government agreed to the bailout.  

And, according to a comment to the op-ed, GM’s secured creditors in fact were promised that they would be repaid in full, and expect to be. 

So what’s Romney’s point? Best as I can tell, adding the actual facts to the op-ed, it’s that Chrysler’s secured creditors, who would have been paid virtually nothing had the company dissolved, weren’t privileged over the employees, in the restructuring.  This doesn’t sound to me like a serious plea for votes.  Not from employees—even laid-off ones—anyway.  And, since most of Chrysler’s secured creditors probably don’t vote in Michigan, not from the secured creditors either.  But maybe they’ll attend his next fundraiser, to meet those lobbyists whom Romney will delegate his policymaking to. 

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What if Eisenhower’s budget were your (grandparents’) family’s?

What if Eisenhower’s budget were your (grandparents’) family’s? What if Kennedy’s were? How about LBJ’s?  Nixon’s? What if Reagan’s were your parents’ or your own family’s? How about G.H.W. Bush’s? Clinton’s? G.W. Bush’s?
One of my pet peeves is the use by political reporters and pundits of sophistic or downright imbecilic supposed analogies.  (Like last week’s classic from Politco’s Jim VandeHei, analogizing Obama’s justification for agreeing to team up with a Super PAC, notwithstanding his opposition to the Citizens United decision, to a teenager’s refrain that he wants to what “everyone else” is doing—as if what the teen’s friends are doing would have a profound effect on the teenager and others unless that teenager went along.)
So this morning when I clicked on the Yahoo News page, my opening page for one of the web browsers I use, and saw that one of the featured videos was a clip from last night’s ABC Nightly News broadcast, titled “What if Obama’s Budget Were Your Family’s?”, I shook my head in dismay at the sheer persistence of this ridiculously false analogy. 

The clip begins with Diane Sawyer introducing a piece by ABC’s White House correspondent Jake Tapper purporting to explain Obama’s submitted budget by reducing the basic amounts of money—the budget total, the deficit in the budget, and the amount of debt already owed—by lopping off eight zeroes at the end, so that $38 trillion becomes $38,000 (a plausible middle-class annual expenditure), for example.  In this analogy, the family’s annual deficit is about $9,000, because this is a so-called working-class family whose annual income is $29,000. The $9,000 deficit will be added to the family’s already-existing “credit card” debt of $153,000.  Or something.

The clip then shows Tapper at Jay Carney’s press briefing yesterday asking whether, given the increase in amount of debt after one year, this isn’t irresponsible.  Tapper then moves to a Feb. 2009 clip of Obama promising to reduce the deficit his administration inherited, by one-half.  Tapper says Obama’s budget breaks this promise.

Which it does, assuming that the promise wasn’t based partly on a proposal to end most of the Bush tax cuts.  The clip is, well, clipped, so its context is missing.  But since Obama’s attempts to end enough of the Bush tax cuts to substantially lower the deficit have been blocked by the Republicans, any reference to this broken promise should give Obama the opportunity to point this out.  All he has to do is actually take that opportunity to do that.  Which, with Obama, is problematic.

But as for the tiresome family-budget analogy, Obama himself is partly to blame for its persistence, having (stupefyingly) adopted it, repeatedly, himself rather than explaining the easily explainable: that the analogy is false and destructive.  Basic Keynesian economics is really not very hard to explain, so why make false representations of economic fact that undermine your policy positions, rather than bother to explain it?

But even just taking the analogy on its own terms, I’m wondering why all of that working-class family’s current $153,000 debt is described as credit card debt rather than, say, mortgage debt, or student-loan debt, or car-purchase debt owed as monthly car payments (and necessary for the family breadwinners to get to work).  Or why the credit card debt might not reflect necessary purchases such as food and gas, or, say, a furnace or roof replacement for the home.  Is their income too low for them to own a home?  Have a car?  Take out college loans?

And this is not even to mention that families cannot raise their annual income by deciding to do so, as governments can by, say, increasing tax receipts. 

Which brings me to the point in the title of this post: What if Eisenhower’s budget were your (grandparents’ or parents’) family’s? Really were?  What would the country be like now if it had been?  What if Kennedy’s were? How about LBJ’s?  Nixon’s?  How about Reagan’s?  G.H.W. Bush’s? Clinton’s? G.W. Bush’s?  And what if the current budget, and revenue-raising options, really were like your family’s?

Any takers?  Jake Tapper? 

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Corporate Leveraging of Campaign Contributions Under Citizens United

Last week, Dan posted what had been an email message I sent him in response to a link he’d sent me to an article by Thom Hartmann on Truthout about the Supreme Court’s infamous Citizens United opinion.  The key (consecutive) paragraphs of Hartmann’s piece, which I quoted in my email/post, were:

Most Americans don’t realize that the idea that “corporations are people” and “money is speech” are concepts that were never, ever considered or promoted or even passed by any legislature in the history of America. Neither were they ever promoted or signed into law by any president – if anything, the opposite, with presidents from Grover Cleveland in 1887 to Barack Obama in 2010 condemning them.

And Congress and the executive branch are the two of the three branches of government that are elected by the people, and thus the only two to which the founders of this country and the framers of the Constitution gave the right to create laws.

The Supreme Court is so much not supposed to create law, that Article 3, Section 2 of the Constitution even says that it must operate “under such Regulations as the Congress shall make.”

I said there are two problems with what Hartmann’s arguments—arguments that are being made by many others as well who are appropriately outraged by Citizens Unitedand earlier corporate-free-speech Supreme Court opinions. 

One problem, I wrote, is that there needs to be an explicit distinction made between the idea of “corporate personhood” in law, generally, and “corporate personhood” in a constitutional-rights sense.  I said that Hartmann and the others who have adopted this position, including the drafters of the current proposed constitutional amendment to negate Citizens United by declaring corporations non-persons, clearly intend that this apply only to the corporate-free-speech Supreme-Court-created laws.

I said that the “corporate personhood” fiction actually was created, I believe, simply as a practical way to allow corporations to own property, and that eventually that fiction enabled corporations to sue and be sued, to be subject to criminal laws and civil regulatory law and to be charged with violations of those laws and to be fined for violations and required by court order to comply with (say) a particular environmental or securities regulation or whatever.  I noted that state statutes, which provide for the creation of corporations, and federal statutes, which recognize corporations as legal entities, do provide for these things.  And although they don’t use the term “corporate person,” these laws (e.g., tax laws, environmental laws, lawsuit procedural laws) do include corporations in the statute’s “definitions” section, in defining the term “person,” in order to make clear that the statute or regulation does apply to corporations.

I then made the point that the problem of corporate personhood is not that the law, either statutory or court-created, treats corporations as legal entities that have legal rights and obligations, but instead that the Supreme Court has pronounced corporations “persons” for purposes of First Amendment speech rights.  Constitutional rights, I explained, apply only to persons.  In order to accord corporations First Amendment rights, the Court had to declare them persons—not mere legal entities in a statutory sense (as in say, corporations can own property), but persons—in a constitutional sense.  This, I said, is a really important distinction.

And it is.  A really important distinction. 

The distinction gets complicated, though, I said, when you consider that there are some constitutional rights that most people would think do and should pertain to corporations: the Fourth Amendment’s guarantee against warrantless searches and seizures, and the Fifth and Fourteenth Amendments’ due and property “takings” provisions, for example.  But that’s because actual people do own direct monetary shares of corporations, and so corporate property does belong to real people, and because the constitutional protections at issue there—against warrantless searches and seizures of documents, for example—would compromise those rights of real persons (the corporation’s employees or customers, for example).

In other words, to the extent that the corporation—or union, or nonprofit political organization (the iconic example in legal opinions being the NAACP)—has constitutional, rather than mere statutory, rights, those rights are derivatives of the rights of the organization’s human members. 
The First Amendment right to advocate for a particular political candidate or party or political position, using shareholders’ money is hardly a right that logically derives from those shareholders’ own First Amendment speech rights, I said.  “The exercise of those speech rights cannot reasonably be interpreted as intentionally collective among the shareholders; the specific expenditure is not foreseeable to shareholders, and many shareholders, whose politics differ from that of the CEOs, would be horrified by it if the transparency that Justice Kennedy so vaunted in the opinion actually existed and they knew about the corporation’s political role,” I wrote.

My post was posted prematurely.  I’d intended to edit it before it was posted.  And, as I said in a comment I posted to the post, that comment needs clarification, because it implies inaccurately that corporate management normally lacks, or at least should lack, the legal authority to take actions that are unforeseeable to shareholders.  What I meant is that corporate management—and, regarding the use of corporate funds for political purposes of this sort, this presumably would be the CEO—should not be able to leverage the First Amendment speech rights of unwitting shareholders in so unforeseeable a respect. What Citizens United did was authorize corporate top management to leverage shareholders’ First Amendment speech rights and shareholders’ money for political campaign expenditures.  But unlike Goldman Sachs when lending leverage to Bain Capital, these shareholder political donors are captive ones.

Of course, the Fab Five majority in Citizens United did pretend otherwise.  But then, as I said in another earlier post on AB, declaring clearly-false facts in order to arrive at their chosen result in that case is the very hallmark of that opinion. 

In the comments to my earlier post that this post clarifies, there was some discussion about whether the remedy for an objecting shareholder is to simply sell the corporate stock.  But for that to be an option even just for people who own the stock directly rather than through a pension fund or mutual fund, the corporation would have to divulge to its shareholders its intent to make that expenditure.  Suffice it to say that corporations do not divulge the specifics of these expenditures, even after they’re made, much less beforehand.  And the sale on short notice may cause the shareholder to accept a financial less on the sale, all in order to prevent the derivative use of the individual’s First Amendment speech right never foreseeably conferred in the first place. 

This particular constitutional right, by its nature, should not transfer so artificially and unintentionally.

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For readers who didn’t see my earlier post, and who are curious, I said that the other problem with what Hartmann and others are arguing is their claim that the courts have no authority to render decisions pronouncing rules of constitutional law.  I said, accurately, that this claim is profoundly dangerous.  I said it mirrors what Clarence Thomas and Antonin Scalia regularly claim, except of course when they themselves are fabricating some new rule of constitutional law.  As they did in Citizens United.

I also said I love Thom Hartmann, but that I think his position here needs some refinement.

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Op-ed: Political Opportunity (Not)

op-ed by Beverly Mann
Political Opportunity (Not)
 
The link at the end of Steve Roth’s post yesterday, “American Exceptionalism #238: Opportunity (Not),” is to a post on Sunday by Paul Krugman on his NYT blog, in which he discusses Alan Krueger’s speech last week.  Krugman’s blog entry says:
 
“Alan Krueger, the chairman of the Council of Economic Advisers … gave a very informative speech on inequality last week that should have received more press than it did. Much of it was stuff that inequality mavens already know, but he had one striking result that was what I suspected but hadn’t seen demonstrated: a clear negative relationship between inequality at a point in time and intergenerational social mobility.
 
“Below is what he dubs the Great Gatsby Curve…. As he shows [using graphs], America is both especially unequal and has especially low mobility. But he also argues that because we are even more unequal now than we were a generation ago, we should expect even less social mobility going forward.”
 
As everyone who discusses politics with me knows,  huge pet peeves of mine are Obama’s refusal to discuss specific facts, including statistics, in speeches to the public—and his failure even to speak to the public at all on substantive issues.  Exceptions are ridiculously rare.  But the campaign is about to start, and—who knows?—he might actually deign to occasionally speak in specifics and cite facts (including statistics) in order to refute the Republican mantras of anti-Keynesianism and anti-progressive tax codes.  Assuming, of course, that he agrees with his own Council of Economic Advisers chairman about the importance of the statistics, and recognizes the salience of those statistics with the public.  
 
Another pet peeve of mine is the silly meme of political pundits, such as Maureen Dowd, in which they repeatedly describe Obama as professorial—as if professors teach their classes by speaking in clichés and generics.
 
But even if Obama continues his personal policy of refusing to argue Democratic economics and tax policy and to use statistics to support the arguments, Democratic congressional candidates hopefully will be smart enough to mention the important statistics and discuss them.  I expect that Elizabeth Warren will be a model for them in this.  Hopefully they’ll take note and follow her lead.
 

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An Invitation for Libertarians

An Invitation for Libertarians

Here at Angry Bear, we’ve had a number of posts on LIbertarians over the years. Inevitably, someone writes to tell us we’re misrepresenting Libertarians… even when we’re quoting well known libertarians.

So… if you are libertarian consider this an invitation. Send me one to three paragraphs on what it means to be a libertarian or what libertarianism is. Or put it in comments. (I beg the indulgence of non-libertarians to please not put up comments of their own.) If you feel what you are writing about applies particularly to one or another strain of libertarianism, please make that clear.

I will put up as a separate post, verbatim, those e-mails and comments I get sent that seem to me to best tell the libertarian story from the libertarian perspective to the slightly left of center audience that resides here at Angry Bear. (I can’t promise to print everything that comes in to avoid the sort of repetition that will simply detract from the story.)

Here’s your chance to have your story told in your words.

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We trust that AT&T will not take it personally

Part of an e-mail from Beverly Mann on additional expansion of corporate personhood concept at the Supreme Court:

I agree that, as the article at Raw Story says, the decision is a striking contrast to the court’s ruling in Citizens United, which upended decades of campaign finance regulation, allowing corporations to spend unlimited amounts on political campaigns without having to identify themselves.

Some commentators are amused by the last sentence of the final paragraph of Roberts’ opinion in the case. The paragraph reads:

We reject the argument that because “person” is defined for purposes of FOIA to include a corporation, the phrase “personal privacy” in Exemption 7(C) reaches corporations as well. The protection in FOIA against disclosure of law enforcement information on the ground that it would constitute an unwarranted invasion of personal privacy does not extend to corporations. We trust that AT&T will not take it personally.

The line strikes me as a nod to a hilarious Supreme Court Dispatch article that Dahlia Lithwick wrote in Slate, reporting on the oral argument in the case in January, in which she treated AT&T as an actual human and said “he” was in court that day to watch the argument.

But there’s really no mistaking that Roberts and some of the others are feeling burned by the massive criticism of the Citizens United opinion last year.

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Does the Tea Party Dislike Goodwin Liu?

by Beverly Mann

Does the Tea Party Dislike Goodwin Liu?

Politico had an article last week called “Will Senate ever vote on Liu?” Liu is Goodwin Liu, a prominent liberal Constitutional Law professor at the UC, Berkeley. His official profile at the U. is here.

Obama nominated him in 2009 to the Court of Appeals for the Ninth Circuit, the appellate court for the west coast states, Arizona, Nevada and Hawaii, and by far the largest of the federal appellate courts. His Judiciary Committee hearing was held more than a year ago, and the nomination was voted out of that Committee more than a year ago but was never brought to a floor vote because Republicans planned to filibuster it. Obama renominated him early this year, and his Committee confirmation hearing was held yesterday. The Politico article says this time the nomination will be brought to a floor vote but that his confirmation is unlikely.

The Politico article summarizes the controversy about his nomination:

Liu, 39, has captured the hopes of liberals who see him as one of Obama’s few bold judicial picks, someone with the intellect and youth for the circuit court bench, a traditional stepping stone to the Supreme Court. But Republicans have argued that he lacks any judicial experience, his legal writings are proof of his intention to legislate from the bench, and his criticism of Supreme Court Judge Samuel Alito after he was nominated to the court revealed an inexperienced social activist who has no place on a federal bench.

The article says the Democrats and the Obama administration blame Senate gridlock, generally, on judicial nominees for the Senate’s earlier failure to confirm Liu, but “Republicans have suggested that Democratic leadership had been unwilling to take time on the Senate calendar in order to entertain a lengthy floor debate about Liu’s positions on controversial issues like affirmative action and the death penalty.”

Apparently what offends the Republican senators the most about Liu is that he testified against Samuel Alito’s confirmation to the Supreme Court in 2006, saying that Alito’s record as a federal appellate judge suggested that he “envisions an America where police may shoot and kill an unarmed boy to stop him from running away with a stolen purse … where a black man may be sentenced to death by an all-white jury for killing a white man.” Liu has retracted the comment and apologized for it, and said yesterday in his opening statement that it “was not an appropriate way to describe Justice Alito as a person or his legal views.”

He’s probably right that that statement was not an appropriate way to describe Justice Alito as a person or his legal views. The statement was, after all, about Samuel Alito, not Clarence Thomas. But the fact remains that Alito, like Thomas, selects a (very) few constitutional rights that he votes to interpret broadly, almost always those that are part of the rightwing political agenda, circa 1985, and, like Thomas, votes to effectively decimate the other constitutional rights, certainly when it comes to the rights of criminal defendants, but also concerning the rights of others. (Unlike Thomas, Alito and his spouse haven’t claimed intellectual-property rights to “Liberty.”)

The Politico article quotes Rep. Judy Chu (D-Calif.), chair of the Congressional Asian Pacific American Caucus as saying, “We will have to work very, very hard on his behalf and I know that Goodwin Liu is intending to meet with every senator that he can. I hope that through his one to one meetings people will see how reasonable and measured he is, and he can get enough support so that he can break through cloture.”

But Chu and the White House should focus their efforts as well on noting that Liu, unlike Alito, is a strong civil libertarian in most respects, not just the respects that rightwing ideology dictates, and certainly not just in the respects that Reagan-era rightwing ideology dictates. And although Washington has yet to recognize this, the two—Tea Party ideology and Reagan-era rightwing ideology—diverge significantly, at least in theory, on many legal issues, including concerning the issues that they really care about.

I mean, how many Tea Partiers really care one way or the other about the death penalty? Or, for that matter, about affirmative action? What they do care about is civil liberties, generally, not just a few select ones.

So moderate Republican senators who vote for cloture on Goodwin Lui’s nomination probably won’t be defeated by a Tea Party candidate in a primary election because of that cloture vote. If it’s mentioned at all, say in a TV ad by some private group (the Koch crowd, maybe?), the senator could simply respond that Liu is a libertarian.

And, if necessary, that Alito is almost entirely not.

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Beverly Mann maintains her own blog at the Annarborist

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A Scalia Tea Leaf on the Healthcare Law?

by Beverly Mann
from The Annarborist

A Scalia Tea Leaf on the Healthcare Law?

Judicial decisions, like the Constitution itself, are nothing more than “parchment barriers,” 5 Writings of James Madison 269, 272 (G. Hunt ed. 1901). Both depend on a judicial culture that understands its constitutionally assigned role, has the courage to persist in that role when it means announcing unpopular decisions, and has the modesty to persist when it produces results that go against the judges’ policy preferences. Today’s opinion falls far short of living up to that obligation—short on the facts, and short on the law.

—Antonin Scalia, yesterday, dissenting in Michigan v. Bryant

The tea-leaf-reading on how two or three of the justices will vote on the constitutionality of the PPACA has become a bit tiresome, I think, but I’ll engage in it here anyway.

As most people who’ve followed the issue closely know, in 2005 the Supreme Court held (in a case called Gonzales v. Raich) that Congress had the authority under the Commerce Clause to criminalize the production and use of marijuana even when the marijuana is home-grown and used only by the grower, and therefore never enters interstate commerce, because marijuana grown for the personal use can have a substantial effect on the marijuana trade in interstate commerce.

Also as people who’ve followed the PPACA-constitutionality tea leaf-reading debate know, Scalia wrote a separate opinion in that case concurring in the majority’s result. The Commerce Clause alone, he said, does not give Congress that authority, but that Clause coupled with the Necessary and Proper Clause—the clause that gives Congress the power to “make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof,” including the power to regulate interstate commerce—do.

A fine distinction that only constitutional law nerds think about, but it is the distinction that is at the heart of the debate about the constitutionality of the PPACA.

Michigan v. Bryant is not a Commerce Clause case. It is a Sixth Amendment Confrontation Clause case. The Sixth Amendment gives criminal defendants certain specific rights, including the right to confront (i.e., cross-examine) the prosecution’s witnesses under oath at trial. And seven years ago, in a case called Crawford v. Washington, the Court reversed a 1980 opinion that had carved out a chasm of an exception to that right by allowing the admission of hearsay statements if the statement bears “adequate ‘indicia of reliability.’ ”

Scalia wrote the Crawford opinion. Since then Scalia has been at the forefront of the Court’s expansion of Crawford to kill prosecutors’ use at trial of various types of hearsay evidence, and apparently had been able to run interference internally within the Court to kill attempts by prosecutors to overturn Crawford at least in part. Until yesterday, when he lost that battle to, of all justices, Sonia Sotomayor.

Scalia, in a dissent eloquent both in its logic and its passion, masterfully deconstructs Sotomayor’s opinion. I recommend it to anyone who’s interested in issues of this sort or who wants to see Scalia in a context beyond the sort of public caricature he has, seemingly deliberately, become. That opinion is very understandable to non-lawyers, I think.

But its importance to the issue of the constitutionality of the PPACA is not just the paragraph I quoted from it but that he wrote it in defending a constitutional right dearer to the political left than to the political right. The paragraph is the second-last one. The very last one says:

For all I know, Bryant has received his just deserts. But he surely has not received them pursuant to the procedures that our Constitution requires. And what has been taken away from him has been taken away from us all.

—-

Scalia’s dissent is here. Sotomayor’s opinion is at here.

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