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

What if Unions Were Corporations ?

Here are my confused thoughts about the Burwell v. Hobby Lobby and Harris v. Quinn decisions. Unfortunately, I am Waldmann not Mann and don’t know anything about the law.

I will pretend that there is some logic behind the decisions. In Burwell v. Hobby Lobby the majority found that Hobby Lobby has religious freedom — that a profit making corporation is a person for the purposes of the Constitution. In Harris v. Quinn the majority found that the SEIU can not contract with the state of Illinois to pay money mostly to home health care workers and partly to the SEIU in exchange for home health care. Unions, unlike corporations, are not legal persons to the court.

My question is what stops unions from reconstituting themselves as cooperatives ? What if the SEIU were SEIU incorporated owned one member one share by the shareholders of the SEIU (the physical persons formerly known as service workers who have voted to make the SEIU their exclusive bargaining agent). Then Illinois could contract out home health care to SEIU inc which would pay what it pleases to those shareholder-employees who provide home health care in Illinois and keep what it pleases for overhead.

What possible objection could the five conservative justices have to such an arrangement ? I’m sure they would think of something, but I can’t imagine what it might be. States (and the Federal government) regularly purchase services from contractors with no requirement that all the money go directly to the shareholders and the employees who directly provide the service.

I will try to imagine an objection. It might be noted that the transition from direct employment of service workers to contracting out to SEIU inc would be a no-bid contract. I don’t think the Supreme Court can require the elected branches to contract out only via open bidding. No-bid contracting might be bad policy, but I don’t see a Constitutional issue.

OK now I will pretend that they decide that the 14th amendment (for example) mandates open bidding for all government contracts. Oh hell I will pretend that they decide that the 3rd amendment mandates open bidding for all government contracts. This changes nothing. Illinois could ask for bids from organizations which can guarantee provision of all currently provided health care starting 1 second after the contract is signed. Any firm could apply, but only SEIU inc (that is the current home health care workers) could deliver without any transitional disruptions because there is no real transition (except in the eyes of Supreme court justices who love corporations and hate unions).

This isn’t limited to SEIU and Illinois. The UAW could create UAW incorporated a cooperative owned by UAW members. Then they could all quit say Ford. Then UAW inc could offer Ford the auto building services of UAW incorporated. Free constracting in the free market has lead to the creation of many firms which provide workers to other firms (I am thinking of temp agencies). One of the points of contracting out has been to get away from unions. A firm whose employees have voted to recognise a union as exclusive bargaining agent can buy services from an un unionized firm. It seems to me that the trick used against unions can be used by unions to undo Harris V Quinn.

I’m sure this post is even less comprehensible than my usual posts. I will try to explain.

Illinois purchases home health care services from SEIU members. It also contracts a lot of work out to for profit firms. I will just pretend that, for example, it purchases art supplies from Hobby Lobby. The Supreme Court has decided that Hobby Lobby can decide what to do with its revenues even if employees or minority shareholders object. The Supreme court has also decided that their can’t be a contract between Illinois and workers whose exclusive bargaining agent is the SEIU in which the workers are paid and the SEIU is paid. To Alito et al everything would be completely different if Illinois instead paid for home health care provided by a corporation which then employs home health care workers. Then money spent on managers who don’t personally take care of people in homes would be none of the Supreme Court’s business. So why doesn’t the SEIU create SEIU incorporated ?

My ranting gets even more incoherent after the jump.

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First-Reaction Thoughts About Hobby Lobby and Harris v. Quinn

I haven’t read the opinions, concurrence, or dissents in either Hobby Lobby or Harris v. Quinn, so these comments are based on news summaries and quick commentaries by others.  But the biggest surprise in Hobby Lobby, I think, is the express approval, in the opinion and in Kennedy’s concurrence, of HHS’s on-the-fly setup devised in (I think) 2012 as a workaround to allow nonprofit religious organizations (e.g., Catholic colleges) to avoid directly providing the insurance coverage while still enabling the employees to receive the coverage.

The 5-4 outcome of the case apparently relied on this; it was not dictum. Kennedy’ concurrence makes that clear.  (Which is itself a surprise, given Kennedy’s virulent dissent two years ago to Roberts’ opinion upholding much of the ACA itself.)

This is really important, not just as it applies to the contraception issue but also because the HHS-devised workaround has, of course, been attacked by the right as exceeding the authority of the ACA.  As have the other several HHS-promulgated tweaks to the substance of the statute and to its implementation (for example, delays in requiring certain mandates). The Hobby Lobby opinion effectively accepts as legally permissible these substantive and timing HHS-created modifications by HHS to the ACA.

The other thing that strikes me is that, although one commentator writing a few minutes after the release of the opinion thinks otherwise, the opinion does, I think, open the door to diminished corporate-veil protections.

The opinion did not address the First Amendment free-exercise-of-religion clause.  Instead, it interpreted a statute, the Religious Freedom Restoration ACT (RFRA) as protecting closely held for-profit corporations.  The statute provides that “[g]overnment shall not substantially burden a person’s exercise of religion even if the burden results from a rule of general applicability.”  The opinion holds that corporations are “persons” within the meaning of the statute.

The commentator–one of the SCOTUSblog folks writing on their live blog as the Court was in session this morning; I can’t remember who, though–pointed out in answer to a question that the opinion interprets a federal statute and that corporate-structure/corporate-veil statutes are state statutes. The opinion doesn’t alter those state statutes.

But it does, I would think, enable and even invite other incursions through the corporate veil, via federal or state statute or state-court interpretation of rights of potential litigants.

The opinion also apparently tacitly acknowledges, without actually deciding, that First Amendment rights of corporations are solely derivative of their owners’ First Amendment rights, and therefore cannot be treated as though delegated to the personal choices of the CEO.  Thus, the ruling in Hobby Lobby is limited to very-closely-held for-profit corporations.  This obviously is a concession to the dismay expressed by many, many people (certainly myself included, here at AB) at Citizens United’s cavalier delegation of individual publicly-held-corporate shareholders’ First Amendment speech rights to the corporation’s CEO for purposes of donating corporate money to political campaigns. Corporate shareholders, including pension funds, are now entitled to sue to block corporate political donations.

Although Alito wrote the majority opinion in both Hobby Lobby and the other case decided today, Harris v. Quinn, neither opinion reflects what he had hoped for.  Harris, like Hobby Lobby, was decided on as narrow grounds as possible–on grounds that avoid constitutional interpretation and that are decided on other grounds limited in scope to, really, the specific facts in the case.

In my post yesterday on Harris, I suggested the possibility (albeit remote, I thought) that Harris could follow somewhat in the footsteps of an opinion in a case called Bond v. United States, decided on June 2.

The majority voted to hear Bond, intending to use it to make a sweeping Conservative-Movement-cause constitutional pronouncement and overrule a longstanding Supreme Court precedent.  But instead, somewhere along the way after the case was argued and John Roberts had assigned himself to write the opinion, one of the five Republicans–I suspect that it was Roberts himself–had a change of heart. Roberts’s opinion has vestiges of the original draft, but decides the case on other (liberal, actually) grounds.  What was intended initially as a major federalism (i.e., states’ rights to violate federal constitutional rights that the political right don’t care about) ruling based upon the alleged structure of the Constitution ended up as a blow to rampant abuse of prosecutorial discretion.  Hooray.

In Harris, the Conservative-movement cause was not neo-federalism but instead the decimation of labor unions, especially of public-employee ones.  The mechanism was to be the First Amendment speech clause, and Alito, who openly coveted the assignment to write the opinion–earlier, in another case, he said he wanted to overrule a 1977 Court opinion, Abood v. Detroit Board of Education, that was the foundation of the relevant aspect of current labor law–had indicated at the argument in January that he thinks the very existence of public-employee unions violate the First Amendment.

But the best-laid plans went somewhat awry again, and this time apparently it was Scalia (of all people) who threw the first wrench. Scalia reportedly made it known at the argument that the First Amendment speech challenge to the “agency fee” concept in union representation of non-union employees in “union shops”  just doesn’t make sense, in his opinion, even if the union is a public-employee one.

My guess is that Scalia originally agreed only with the bare outcome, but on the limited grounds on which Alito’s opinion ultimately rests: that under the specific Illinois law at issue, the 1977 opinion that approved the “agency fees” didn’t apply to the employees at issue in Harris–home healthcare employees paid by the state’s Medicaid system–because they are employees partially of the state and partially of the customer. My guess also is that somewhere along the way, Alito lost another vote for what was to be his four-justice plurality opinion; one of the four jumped ship and joined Scalia. Alito then was compelled to effectively adopt Scalia’s concurrence as the bottom line–the ruling–in his opinion, but was not compelled to remove the reams of dictum from it that Kagan, in her dissent reportedly mocks at length.*

If my speculation is correct, the substance of the Harris opinion bearing Alito’s name was dictated, literally, by Scalia. In any event, this wasn’t quite the day of victory for Alito & Friends that they had envisioned.  Really, it wasn’t even close to that.

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*Typo in sentence corrected, 7/1 at 1:34 p.m. 

UPDATE: Most of what I wrote in this post based on the early summaries and analyses of the opinions, but before I had read the opinions themselves, holds up surprisingly well, I think.  I don’t think you can read the opinion in Harris without recognizing the real likelihood that most of Alito’s opinion was written as one overturning Abood, maybe as a plurality or maybe as a majority opinion, and then one or two of the justices who had signed on to overturning Abood changed his mind.

I hope to write an update post later today, though. 7/1 at 1:37 p.m.

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Polarized Politics Led To Cantor’s Defeat– and Cochran’s Victory. Why the “Uncommitted Center” Is So Important (Cantor part 2)

Part 1; Cantor’s Defeat and What It Does Not Mean

When House Majority leader Eric Cantor lost his seat to ultra-conservative David Brat, the Washington Post’s Ruth Marcus summed up the majority view among political pundits: “The episode offers a disturbing commentary about the poisonous, polarized state of American politics.” 

I cannot agree. I don’t think “polarization” is toxic.  To the contrary, as the poet William Blake once wrote “Without Contraries, No Progress.”  Conflict can clarify issues, and help us move forward.  Indeed, the clash of opinions is a time-honored way of testing their validity.

Do you remember the 1990s, a decade when it became difficult to tell the difference between Democrats and Republicans? While Republicans headed toward the far right, Democrats moved right of center. During his second term, Bill Clinton started to sound all too much like Ronald Reagan, as he set out to “reform welfare,” forcing single mothers to go to work, even though we weren’t offering them affordable day care. After leaving the White House, Clinton reclaimed his position as a stand-up liberal, but at the time, the distinction between Democrats and Republicans was badly blurred.

Today, the difference between the two parties is clear.  I wouldn’t say that Democrats are ultra-liberal, but conservatives have moved so far to the right that Democrats had no choice but to take a stand on critical issues including: global warming, gun control, the need to raise the minimum wage, and universal access to health care.

By contrast, in the 1990s, Congressional Democrats were “lukewarm” on health care reform. As Paul Starr reports in his newest book, Remedy and Reaction, Senate Finance Committee chairman, Daniel Patrick Moynihan, Democrat of New York, actually stood up to say, “We don’t have a health care crisis.”

But by  2010,  the crisis was obvious, and Democrats came together. Pelosi and Harry Reid marshaled the votes, and Congress passed legislation which, while far from perfect, is solidly progressive: Low-income and middle-income Americans receive the subsidies they need; insurers can no longer discriminate against people suffering from pre-existing conditions, and preventive care–including contraception–is free.There is much more work to be done, but at last, we have begun.

Since then, Congressional Democrats have not had the votes to pass much-needed legislation in other areas.

But at least President Obama is no longer the compulsive compromiser that he appeared to be during his first term in office. I see this as progress. As I have argued in the past, on some issues compromise is not an option.  Too much is at stake.

On the ground,voters are as divided as their elected representatives.  Politically active Democrats have begun to move  left of center while Republican voters have become more conservative. The Pew Research report that I discussed in the first part of this post reveals that a decade ago, only 10% of politically engaged Republicans took a conservative stance on almost all issues. Today, 33% express consistently conservative views. At the other end of the political spectrum, almost forty  percent of committed Democrats are consistent liberals, up from just 8% in 1994. The overall share of Americans who express consistently conservative or constantly liberal opinions has doubled over the past two decades from 10% to 21%. .

“As a result,” Pew reports, “ideological overlap between the two parties has diminished. “Today, 92% of Republicans are to the right of the median Democrat, and 94% of Democrats are to the left of the median Republican.”.

“Republicans and Democrats are more divided along ideological lines – and partisan antipathy is deeper and more extensive – than at any point in the last two decades. And a new survey of 10,000 adults nationwide finds that these divisions are greatest among those who are the most engaged and active in the political process.”

Is Polarization A Threat to the Nation?

Most pundits are appalled.
“It’s a poisonous potion,” writes Bloomberg’s Mark Silva:

“Increasing Ideological Uniformity.

“Partisan Animosity.

“Stir it up:  and what you have is ‘Political Polarization.’

“The antipathy cuts both ways” Silva adds.

On that last point he is right.  As Pew points out, the share of Republicans who have very unfavorable opinions of the Democratic Party has more than doubled over the past 20 years – from 17 percent to 43 percent. Similarly, the share of Democrats with very negative opinions of the GOP also has more than doubled – from 16 percent to 38 percent. . .

“There are actually people who view the other political party as a ‘threat to the nation’s well-being’” Pew notes, “with 27 percent of Democrats saying this of the Republican Party, and 36 percent of Republicans saying this of the Democrats. Those numbers, too, have essentially doubled during the past two decades.”

“Pew calls it ‘a rising tide of mutual antipathy,’” Silva observes.

Let me be clear: l Like Silva, I too, abhor the extremes where sheer anger replaces reason.. (I cringe whenever I hear a good friend say that Dick Cheney should be “put up against a wall and shot.” He says this quite often.)

But I would point out that arch-conservatives seem much angrier than liberal Democrats. This is why Republicans come out to vote, particularly in mid-term elections, in much larger numbers. Rage sends them to the polls.

What I find most disturbing is that these conservatives seem to loathe, not just liberals, but anyone who they view as “Other”:  People who are dark-skinned, poor, foreign, gay, or a feminist who stands up for a women’s rights is  deemed “Not Us.”  This mixture of xenophobia, racism, homophobia and misogyny is what I find truly frightening.

The Disengaged Center – Nearly 40% Of All Americans

Most importantly, what  Silva ignores is that while committed Republicans have headed further right, and committed Democrats have shifted to the left, only 61% of Americans are committed to either party.

The Pew poll reveals that fully 39% belong to an uncommitted center: “Many of those in the center remain on the edges of the political playing field, relatively distant and disengaged, while the most ideologically oriented and politically rancorous Americans make their voices heard.

Those in the center are quieter, less likely to vote, and less likely to make political contributions. These are the people who say “I just don’t pay much attention to politics.” Or, “I’ve given up on politics and politicians.”

But according to Pew, while many in the center do not vote, they do have opinions. “These centrists are not moderates. Those in the center hold strong views on various issues,” the Pew report explains. “The difference is that they are not consistently liberal or conservative.” An over-riding ideology does not determine all of their decisions.

For example, some favor gun control, but are opposed to health care reform. On immigration, their views are mixed. Pew’s research reveals that “all told, 37% of non-ideological Americans support drastic changes in America’s immigration policies.”  Some favor deportation of all unauthorized immigrants while others support immediate citizenship if certain conditions are met.”

Because they are not blinded by a single ideology, their minds are open to listening to rational arguments on various issues. This is why we need them at the polls.

On this point, I am hopeful. As conservatives move further and further to the extreme right, more and more Americans are becoming alarmed. As a result, we may well see more disengaged, disaffected, and discouraged citizens beginning to pay attention to politics.

Mississippi

This is exactly what happened Tuesday, in Mississippi, where veteran Republican Senator Thad Cochran beat back a challenge by State Senator Chris McDaniel, a Tea Party favorite.

On June 3, Cochran, an establishment Republican who has served in the Senate for 24 years, lost the Republican Senate primary to Chris McDaniel, a former talk radio host and Tea Party–backed state senator,

Because neither won 50 percent of the vote. the race went into a runoff. At that point, most observers assumed that Cochran would lose.  With his intense support from passionate Republicans, combined with wide backing from national Tea Party groups, McDaniel was the favorite.

But in the last three weeks of the race, Cochran began to reach out to black voters. He was betting that African-American Democrats might well come out to vote against McDaniel, who is  well known for his New Confederate views. (A Southern reactionary, McDaniel laments how the country has changed, since the days before civil rights legislation passed. He misses the “Old South”.) On his radio talk show, he also had made     racist and sexist remarks that I find too offensive to repeat.

Cochran’s strategy proved shrewd. In the run-off, African-American turnout in the 24 counties with a black population of 50 percent or more was up almost 40 percent from the primary.

Make no mistake: Cochran is a conservative Mississippi Republican. Black Democrats know this. But as one voter said: “One of the other white men is going to get in there. We need to choose.”  By turning out for Cochran these liberals made sure that a rabid, racist conservative would not have a vote in Congress.

You might wonder: How could Democrats vote in a Republican runoff? In Mississippi, which does not register by party affiliation, any registered voter can vote in the Republican runoff election as long they did not vote in the Democratic primary during the first round of balloting on June 3.

Most African-Americans didn’t bother to vote for Travis Childers, the winner of the Democratic primary.  They didn’t think he stood a chance. Thus, they were free to cast a ballot for Cochran.

At Cochran’s satellite office in Hattiesburg, Stacy Ahua, 25, a black field organizer, managing a get-out-the-vote operation explained Cochran’s strategy to the Washington Post: “Some of our people forgot to come out for that first vote and we’ve really tried to get things moving. I think everybody now understands the stakes, whether you’re Democrat or Republican, Catholic or Baptist.”

Exactly. This is what right-wing extremists are now doing nationwide: defining what is at  stake. I thank them.

No surprise, McDaniel’s supporters are livid that African Americans sealed their candidate’s defeat. Already, they are talking about a write-in campaign on his behalf. This  could split the Republican vote.

At the same time, success may persuade African Americans and other Mississippi liberals  to turn out for the mid-term elections. And,  if there is no write-in campaign,  right wingers who are furious at Cochran may refuse to vote. In other words,  Travis Childers might stand a chance. He  is a conservative Democrat, but still the GOP would have one less seat in the Senate.

Convincing Americans That It’s Worth Taking the Time to Vote: The Argument for Partisanship

Writing in the American Prospect, Paul Starr recently made the argument that “if Democrats are going to convince their supporters it is worth the trouble to vote . . . . they need to advocate policies that make as loud and stark a contrast as possible with those of the Republicans. Obama’s belated emphasis on raising the minimum wage and increasing overtime pay are good examples of the approach. Taxing the 1 percent to finance broadly distributed benefits also fits this description. . .

“Such policies will predictably be described as class warfare,” Starr acknowledges. “But . . . the objective is actually to get back to an income distribution more like the level that prevailed in the Eisenhower administration. The entire political and legal spectrum has been moved so far to the right that what used to be centrist only seems populist.”

But in recent years, the zeitgeist has turned. .Both the issues and the candidates are more sharply defined than in the past. As a result, Starr notes, “voter turnout in the 2004 and 2008 elections returned to levels America hadn’t seen in 40 years. Fox News and MSNBC stir up the emotions not just of their devoted viewers, but of those who abhor them; liberals and conservatives alike may be more inclined to vote.

In an earlier piece Star argued: “Democracy needs passion and partisanship provides passion.” Yes.

In Some Cases Compromise Is Not Possible

But do we really want “passionate” partisan representatives in Congress? Don’t’ we want to elect politicians who will compromise with each other?

Not necessarily.

On the face of it “compromise” sounds eminently reasonable, and very often, it is appropriate. When it comes to negotiating tax rates, we may be able to “split the difference’—at least in some cases.

For example: until very recently, the Federal government taxed estates over $1 million. Now the IRS collects a tax only if the estate exceeds $5 million. (In 2013 this change cost us roughly $13 billion in government revenues.) Some conservatives would like to abolish the tax altogether; liberals would be inclined to go back to taxing amounts over $1 million. I could see both sides reaching middle ground by agreeing to tax estates over, say, $2.5 million.

But sometimes we can’t meet in the middle. Some values just are not negotiable.

Below, a short list of issues where Republicans and Democrats disagree, and I would argue, compromise is not possible.

Gun control:  When as are talking about the slaughter of innocents, we cannot “split the difference” with the NRA. There is no reason for civilians to own automatic and semi-automatic weapons. And no one should be able to buy a firearm of any kind without a thorough background check.

Medicaid Expansion: The right to healthcare is a universal right, not a matter of states’ rights. The notion that poor adults should have access to medical care in some states, but not in others, is untenable. Once again, what is at issue here is not money, but blood.

Immigration reform: Do we really want to send Honduran 15-year-olds back to a homeland where they are likely to be maimed, killed, or enslaved by a gang?  (See part 2 of this post)  We must offer asylum to those who are at risk, just as, over the years, we offered protection to at least some European Jews (far too few), as well as some Russian dissidents. Skin color or ethnicity should not affect that decision.

As for children who were brought here by undocumented parents years ago, the idea of sending them back to a country that they don’t know is impossibly cruel. Finally children who grew up here should not be barred from attending college because they are labeled “illegals.” We need more educated workers.

Raising the Minimum Wage:  We know that children in the U.S. go to bed hungry because a parent cannot earn enough to feed them. Food stamps run out before the end of the month. And, if we  lift the minimum wage, we can assuage union fears that more immigrants will depress the average American’s paycheck.

Global warming: On this topic right-wingers are not only a threat to the nation, they’re a threat to the globe. Two-thirds of Americans (67%) say there is solid evidence that the earth has been getting warmer over the last few decades, a figure that has changed little in the past few years. Yet conservatives have managed to block action.

Nevertheless we should thank right-wingers for highlighting the issues. Voters are no longer simply talking about candidates’ personalities. We are facing basic differences in what we think is “right” and “wrong.”

A Pew Research Center survey of “American Values” reveals that when it comes to rock-bottom moral questions, liberals and conservatives simply don’t agree. In particular, Pew reports, when Republicans are asked about government regulation and involvement in our lives, they are more adamant than ever before: Individual rights should be paramount; the government should not interfere.

By contrast, progressives tend to believe that government has a responsibility to regulate with an eye to the “common good”–and to tax and spend with the goal of creating a fairer, more egalitarian society.

Ultimately, their positions illustrate the tension between two political goals: freedom and equality. Conservatives favor freedom; liberals are more concerned about equality.  The reason we have two parties is so that voters can choose.

Can’t we have both freedom and equality? Of course–but in some cases there is a conflict between individual rights and what is best for society as a whole. Then, voters must decide.

On such critical questions, I would argue that we are not looking for a mid-point between “right” and “wrong.”  Either we expand Medicaid for everyone—including childless adults–or we don’t.

In a democracy, our elected representatives should reflect what the majority of Americans think is truly just—including the 40% who are not card-carrying conservatives or liberals.

And in fact, recent polls suggest that most U.S. citizens do have clear views on these issues. The majority favor stricter gun control laws;  think that illegal immigrants should be allowed to stay in this country and eventually apply for citizenship; support a proposal requiring companies to cut greenhouse gas emissions that cause global warming even if it means higher utility bills; believe that we should raise the minimum wage  from $7.25 to $10.10–or higher and support Medicaid expansion

Why then is Congress gridlocked on these questions? Because only a minority of Americans vote , particularly in midterm elections that decide the fate of so many Senators and Representatives.  Thus Congress reflects the beliefs of some Democrats and Republicans at each end of the political spectrum, but not the will of the majority.

Originated at Health Beat Blog

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Le Show!

From Naked Capitalism:

Catch Us on Harry Shearer’s Le Show Today

Posted on June 29, 2014 by Yves Smith

Harry Shearer and I about private equity and the Wikileaks TISA bombshell starting at 1 PM on Sunday. Stations which stream Le Show all day Sunday are listed at publicradiofan.com. Hope you can tune in!

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Shaken, Not Stirred: The Supreme neo-Framers (likely) will continue their perversion of the First Amendment speech clause tomorrow.

In an email this morning, Bill H asked me whether I know much about a case called Harris v. Quinn, in which the Supreme Court will announce the likely 5-4 majority’s ruling tomorrow.  I responded:

I know LOADS about it, Bill, and wrote about it–and about a bizarre comment by Alito during the argument on the case–right after the argument back in Jan. and have mentioned it two or three times since then.  It is really striking that the Supreme Court agreed to hear the case in order to consider the claim: that requiring public employees to pay a fee (not the full union dues, but instead some small percentage of the membership dues as compensation for the union’s legal obligations by which employees who opt out of membership nonetheless gain the benefits of the union contract (pay, benefits, job protections), violates the employee’s First Amendment speech rights.

But what’s downright stunning is that at the argument, Alito said he believed that the very existence of public-employee unions violates the First Amendment because–seriously; he said this–the non-member union-contract beneficiary might want small government.  This, from someone whose first official act as a justice was to join Kennedy (the opinion’s author), Scalia, Thomas and Roberts in ruling that a district attorney did not violate an assistant district attorney’s First Amendment speech rights by retaliating against him for writing an internal memo saying that he believed that a cop had falsified some evidence in obtaining a search warrant.  That opinion, in a case called Garcetti v. Ceballos, was and remains extremely controversial–it was shocking, really–and played a key role in a case, called Lane v. Franks, that the Court decided two weeks ago.

I suggested in my posts about Harris and about that comment by Alito’s during the argument that the non-union beneficiary of a public-employee union contract had the option of quitting his job or refusing the negotiated benefits in order to reduce the size of government.

I had predicted from the outset that the opinion in Harris would be issued on the same as the opinion in Hobby Lobby, so that news coverage of Hobby Lobby would overwhelm coverage of Harris, and I was right. Because of the way in which the Court divvies up majority-opinion-writing among the justices, it is clear that Alito was assigned to write the opinion in Harris.

There is a (very) outside chance that one justice changed his mind since the week of the argument (when the vote was taken and the majority-opinion-writing was assigned), and that someone other than Alito therefore is writing a 5-4 opinion rejecting the outrageous First Amendment claim.  Something sort of like that happened in a case called Bond v. US, argued last Oct. and decided [on Jun. 2], a case that they planned to use to advance their states’-rights juggernaut but instead ended up making an important statement about abuse of prosecutorial discretion–a ground on which they never, ever, would have even considered agreeing to hear the case (okay, maybe they would have, but only because the prosecutor was a federal one, not a state one; but even so, probably not).  In that case the actual outcome didn’t change, nor did the author of the opinion (Roberts), but the basis for the ruling, and the statement of law, changed significantly.

I call Bond the Stirred, Not Shaken opinion.  I have a theory about the reason for Roberts’ late change of heart, and I’ve been intending to post in-depth about it but haven’t yet.

I do expect an outrageous 5-4 opinion by Alito in Harris, though.

Yes, the undermining of public-employee unions–like state-courts’ rights to baldly violate individuals’ non-gun-ownership, non-religious, non-real-estate-regulation-er-takings constitutional rights, and to supersede Congress’s Fourteenth and Fifteenth Amendment powers to buttress, say, individuals’ voting rights–is definitely on the List of Circa 1983 Movement Conservative Legislation-via-Supreme-Court-Pronouncement THINGS TO GET DONE.

And done, these things will get. Now that the chief justice has expressly conceded that their end game has been all along a Court-mandated plutocracy in which legislators’ constituents are those who pay to become one, irrespective of any connection between the location of the constituent/benefactor’s voting residence and the legislator/beneficiary’s legislative district–now that these five justices have used the First Amendment speech clause to formally institute a poll tax, and redefined the term “constituent,” and therefore “democracy,” beyond former recognition*–it’s time for them to get back to other uses of the newly reconstructed First Amendment speech clause.  In the name of the Framers.

The original ones, of course!

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*In his Apr. 2 opinion in McCutcheon v. FEC, Roberts redefined “constituent” as an American who, irrespective of place of residence, donates to a political campaigns in sufficient amounts to buy the candidate or incumbent’s proxy vote on legislation, and “democracy” as plutocracy.  The specific statement is:

[C]onstituents have the right to support candidates who share their views and concerns. Representatives are not to follow constituent orders, but can be expected to be cognizant of and respon­sive to those concerns. Such responsiveness is key to the very concept of self-governance through elected officials.

Ergo–voila! It’s official; we have a plutocracy.

Just in case you were wondering.

[Clarification added 6/29 at 5:08 p.m.]

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Just In Passing – Sunday Morning

The Absurd
Dr. “Chaps” Gordon Klingenschmitt is the Republican nominee for State Rep in Colorado Springs HD15. What qualifies him as a candidate in the Colorado State House? “‘Chaps’ as they call him, has a long history as a disgraced former Navy Chaplain who brags about having successfully performed an exorcism on a lesbian soldier and who has stated again and again that demonic spirits are behind everything from abortion to gay marriage to ENDA to President Obama to Madonna won him the support of the vast majority of GOP caucus-goers earlier this year.

As Susie Madrak of Crooks and Liars says here is a man running for Congress ‘who thinks that “Obamacare causes cancer,’ that the Bible commands people to own guns in order to ‘defend themselves against left wing crazies,’ and that the FCC is allowing demonic spirits to ‘molest and visually rape your children’ is now a Republican candidate for office.”

The Incredulous
Fox News psychiatrist and contributor Dr. Keith Ablow (hat tip: C&L) was on ‘Outnumbered’ the other Thursday morning. After the topic turned to The World Cup, how well the US was doing, and the overall support for the team; here is what he had to say:

Ablow: I am suspect because, here’s the thing. Why, at a time when there are so many national and international issues of such prominence, I’m a little suspicious of yet another bread and circus routine. Let’s roll out the marijuana, pull back the laws, and get people even more crazy about yet another entertainment event.”

What’s wrong with you?

Ablow: This is a way to distract people.

Powers: You have a very dark world view.

Ablow: This is like Rome. I can see why Obama would love the World Cup –

Guilfoyle: What are you talking about? This is encouraging for kids to get out and play sports, and you can play soccer from a young age.

Ablow: It’s overblown. . .”

The World Cup is 84 years old this year and Ablow thinks it was put on to distract us.

The Ridiculous
I am a Vietnam era Marine who had the opportunity to shoot everything up to a 155mm howitzer. I have a few rifles, but, I have nothing beyond 30 caliber. I still shoot even though it is getting harder to do so with all the loons around who wish to publically display. For me, it is a private affair. Here is a reported news event I would call ridiculous.

” A homeowner in Wyandotte, Oklahoma is awaiting damage assessments after an artillery shell entered his home. (hat tip: C&L)

It was fired at the Oklahoma Full Auto Shoot and Trade Show on Saturday, around 3 miles away.

Homeowner Gene Kelley could not fathom what he found after hearing a large crash inside his home.

[…] A 105 howitzer artillery shell, 14 and a half inches long and 3 and a half inches across, was lying on his bedroom floor.”

After ricocheting off a tree branch, the spent round penetrated an outside wall, hit the ceiling, damaged another wall and coming to rest within the house; all while the owner and his wife were in the house.

“The gun range owner says the weapon was fired safely by professionals at a downward projection.”

Aren’t they all trained professionals after something unplanned happens as the result of a firing a weapon? Hey, at least they were not firing HE rounds! The house would have disappeared with them inside of it.

March 3, 1933
Some things never change.

“Recognition of the falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing. Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, on unselfish performance; without them it cannot live.” FDR 1st Inaugural Address

Rights
“Then that little man in black there, he says women can’t have as much rights as men, ’cause Christ wasn’t a woman! Where did your Christ come from? Where did your Christ come from? From God and a woman! Man had nothing to do with Him. Sojourner Truth: “Ain’t I a Woman?”, December 1851

The Fifties and Matt Laeur
“But some people are speculating that you also got this job because as a woman and as a mom because people knew this company was in for a very tough time and as a woman and a mom you could present a softer image and softer face for this company as it goes through this horrible episode. Does it make sense or does it make you bristle?” he asked.” Moron ‘o the day, Digsby

Matt Lauer speaking to Mary Barra, CEO of GM. Why she did not get up and let him have it speaks of her ability to control herself. I would not have been so polite.

Water for The Elephants
“carrying water for elephants” is a phrase that means carrying a heavy load, much like carrying a secret that you can’t tell even someone you love wholeheartedly, just as in the end Jacob does for his wife.

An elephant drinks 25-75 gallons of water a day far more than any man would be able to carry at any given time. “Water for Elephants” “Sometimes when you get older . . . things you think on and wish on start to seem real. And then you believe them, and before you know it they’re part of your history.”

“Most recently former NY Lt. Governor Betsy McGaughey in the WSJ (August 8th) commented on the ACA in ‘ObamaCares’s Phoney Deficit Reduction’ choosing to carry water for the Republican candidates Romney and Ryan with the hope she can convince voters President Obama’s ACA will not reduce the cost of Medicare and instead will rob the Medicare TF. By her words alone, Ms. McGaughey can not change the numeric of Medicare expected and occurring reduced growth and costs resulting from the passage of ACA. In her, Romney and Ryan’s minds the logic of how the robbery of benefits and the Medicare is all too real even when the proof of the opposite is self-evident. The three will have to do double time if they are to provide enough water to conflate the ACA to the public if in fact they are to make them believe the illusion.” Medicare Cuts: What is the Fight About?

I am hearing that part of the contraction in GDP is due to less expenditures in healthcare as a result of more people being insured due to the PPACA. So far, the detractors have been wrong on the PPACA and they “still” can not carry enough water to prove it otherwise.

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Consumption Wealth ratios and Stock Market Returns II

I finally did a bit of empirical work related to Consumption/Wealth as a leading indicator (see older post).

I am reflecting on “consumers – in aggregate – have genuine foresight; this is why consumption-wealth ratios help predict equity returns.” I think I won’t restate exactly whom I am quoting.

My thoughts were that the variable which mostly varies in consumption-wealth ratios is wealth, which bubbles up and bursts down with asset prices, and that the main determinate of equity returns is the price earnings ratio, which bubbles up and bursts down. So my story about the simple correlation is that bubbles cause high measured wealth, which causes a low consumption wealth ratio, and that they are followed by busts so correlated with low equity returns (and vice versa panics cause low wealth, a high ratio of consumption to wealth and are followed by high returns).

I recently noticed that, in my story, consumption is working essentially as a trend. So if I am right, the evidence that fluctuations in aggregate consumption contains useful information because consumption-wealth ratios predict equity returns should equally support the claim that the fluctuations in an exponential trend contains useful information.

First I check the alleged correlation — it is there

. corr conswealth g20rsp500
(obs=208)

| conswe~h g20r~500
————-+——————
conswealth | 1.0000
g20rsp500 | 0.4481 1.0000

Conswealth is the ratio of real consumption to real wealth. Real wealth is net worth of households and nonprofits divided by the consumer price index. G20rsp500 is the growth over 5 years of the S&P500 index divided by the CPI. Both are quarterly series. The correlation is borderline significant when one corrects for overlapping 5 year intervals

. newey g20rsp500 conswealth,lag(19)

Regression with Newey-West standard errors Number of obs = 208
maximum lag: 19 F( 1, 206) = 3.75
Prob > F = 0.0543

|
g20rsp500 Coef. t

conswealth .0712455 1.94
_cons -1.078769 -0.92

Then I estimated the trend in ln real consumption (.0344805 per quarter) and use it to construct an exponential trend which I divide by real wealth to get ecw. All the information in ecw is due to the fluctuations in the denominator: real wealth. The numerator is just an exponential trend.

The regression says that the exponential trend has “genuine foresight”

. newey g20rsp500 ecw,lag(19)

Regression with Newey-West standard errors Number of obs = 208
maximum lag: 19 F( 1, 206) = 13.64
Prob > F = 0.0003

g20rsp500 Coef. t
ecw .103123 3.69
_cons -2.038214 -2.35

In fact if they are allowed to compete, the trend divided by real wealth is a much better predictor that consumption divided by real wealth

. newey g20rsp500 conswealth ecw,lag(19)

Regression with Newey-West standard errors Number of obs = 208
maximum lag: 19

g20rsp500 Coef. t
conswealth -.1977837 -6.49
ecw .2890798 6.91
_cons -1.56284 -2.79

I think these regressions very strongly confirm my guesses about what was going on.

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Nassim Taleb: Two Myths About Rivalry, Scarcity, Competition, and Cooperation

I’m delighted to find that someone with the necessary statistical chops has answered a question I’ve been asking for a while: Have any of the 130+ evolution scientists who’ve savaged Wilson and Nowak’s Eusociality paper (and Wilson’s Social Conquest of Earth) gone deep into the maths of their model (laid out in their technical appendix)? I check periodically, but don’t follow the field carefully.

According to this Taleb Facebook post, the answer’s still no, almost four years after the paper was published.

Emphasis mine, links in the post:

There are two myths that prevail in academic circles (hence the general zeitgeist) because of mental contagion and confirmatory effects (simply from the way researchers look at data and the way it is disseminated): 

1) That people are overly concerned by hierarchy (and pecking order), and that hierarchy plays a real role in life, a belief generalized from the fact that *some* people care about hierarchy *most the time* (most people may care about hierarchy *some of the time* but it does not mean hierarchy is a driver). The problem is hierarchy plays a large role zero-sum environments like academia and corrupt economic regimes (meaning someone wins at the expense of others) so academics find it natural so they tend to see it in real life and environments where if may not be prevalentMany many people don’t care and there is no need to pathologize them as “not motivated” –academics who publish tend to be “competitive” and “competitive” in a zero-sum environment is deadly. I haven’t seen any study looking at things the other way.

2) That “competition” plays a large role compared to *cooperation* in evolutionary settings –of course if you want ruthless competition you will find examples and can model it with bad math. The latter point is extremely controversial, Wilson and Nowak have been savagely attacked for their papers (with >130 signatures contesting it) and, what is curious NOBODY was able to debunk the math (very very very rigorous backup material). If Nowak/Wilson were wrong someone would have shown where, and in spite of the outpour of words nobody did.

I’d condense my thinking on the subject as follows:

1) People mistake rivalry for scarcity. If one tribe excludes all the others from a water source, forces them to do their will to get water, there’s obviously scarcity, right? Wrong.

Don’t get me started on the sacralization of (largely inherited) “property rights,” ownership — the right to exclude others.

2) They don’t understand that competition’s only virtue is increasing and improving cooperation. Cooperation — non-kin altruism, eusociality, etc. — is the thing that got us to the top of the food chain. Cooperation is what wins the battle against scarcity.

Competition fetishists think that competition is always good because it sometimes improves cooperation, even though it frequently does the exact opposite.

Think: trade wars. Or just…wars.

Cross-posted at Asymptosis.

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