BRIAN WILLIAMS:
I know how much you love quoting unnamed Romney advisors, so here’s a Republican official familiar with your campaign selection process, told the folks at Politico, you are looking for a quote, “Incredibly boring white guy for your vice presidential nominee.” Can you confirm or deny?
MITT ROMNEY:
You told me you were not available…
If it turns out Romney actually has a sense of humor, this one’s over.
Reacting to my previous post analyzing the President’s statements Friday last, Burt Likko could not “reasonably understand Obama to be arguing for a proposition to the effect of ‘Everything belongs to society ab initio, so the government should be able to take, that is keep, what it wishes from anyone.’” Mr. Likko asks if we couldn’t avoid coming to such a radical conclusion by instead positing that the President was simply offering an argument in favor of progressive taxation. As I explain below, we cannot.
First, I again note that the President has omitted from his case any compelling need for the increased taxation. If the President believed that individuals had a right in their earnings, he could only deprive that right by offering a justification. He offers none. Were we talking about a different kind of moral case, e.g., that a certain form of human suffering will occur but for higher rates of taxation on a group of people, that would be very different. But he does not point to anything amounting to a moral justification. His campaign thus far has not even been about taxing for the purpose of spending. It’s been about taxing, period. This alone proves the President does not believe that individuals have a right in their earnings. If he did, he’d be forced to offer a justification before taking them other than via a progressive tax. I will explain further below.
To head off an objection, it is true that the President frequently appeals to “fairness.” This is unavailing. Indeed, the standards of fairness and justice are what compel the giving of justifications in the first place. That “justice demands it” is question-begging that does not amount to a justification. If the President is truly concerned about fairness, he would offer a justification for his proposed deprivation of property out of proportion with similarly-situated Americans. Again, the fact that he has not underscores the fact that he does not believe he is contending with a right, which would compel him to do otherwise.
Thus, the President’s implicit contention must be that people do not have a right in their earnings to begin with, or at least to some portion thereof. Following this logic and the President’s other statements, such a right does not vest until individuals first “pay theirfairshare.” His presumption is that the market does not legitimately or correctly apportion earnings and dividends to individuals, because, for example, it fails to adequately account for government’s investments through infrastructure and subsidies and a healthy demography, and so on. For most Americans, a paycheck reflects the real net value derived from your labor. You then pay taxes out of your property to the government, perhaps begrudgingly, as part of your civic duty, as part of the civil compact, as a wholly separate and independent obligation from the particulars of your economic life. For the President, in contrast, part of your paycheck—a quite substantial part, possibly—reflects value that you could not have derived, could never have derived, but for the infrastructure the government provides. That portion was never yours to begin with. You simply hold it in trust for the benefit of your co-investor, the collective, the government, the owner of the means of production, with whom you “do things together.” The government provided that infrastructure as an investment in the enterprise, the economy, in which you toil—not as a passive, disinterested agent, but as an active partner, your joint venturer, whether you knew it or not. You may not be interested in infrastructure, but infrastructure is interested in you.
Paying taxes, then, is nothing to begrudge as far as the President is concerned. It’s simply the way we “fairly” distribute the part of our collective revenue that happened to be paid in your name. But it is only nominally yours. It equitably belongs to us all, each of us as shareholders in our joint venture, our grand corporation, U.S.A., Inc.
That is the only moral logic that comports with the President’s own statements. It’s radical, yes, but not so out of line with what the far left believes. And, I might add, not totally absurd from the standpoint of internal consistency. (It is totally absurd, of course, from the standpoint of political viability.)
Accordingly, I disagree that the desire for more “progressive taxation” explains the President’s statements. Progressive taxation is indeed more familiar and less radical, and so if it fit, we might be compelled to conclude that’s what he meant. But it logically inconsistent with the President’s statements, not to mention incompatible with moral reasoning, which the President time and again has invoked with calls to “fairness.”
Let’s start with what the President’s premises would be under Mr. Likko’s suggested rubric: (1) You have a right in what you earn; and (2) if you earn a lot, you owe more to the government because you got a lot of value from the government. The first problem is that we are right back to the same moral reasoning as above—that is, the second premise has already forced us to concede that in fact we do not have a right to our earnings, and that, instead, to the extent they are derived from government infrastructure. If you “owe” those earnings to the government in this way, they were never equitably “yours” to begin with. Contrast this with taxes traditionally understood, which are not based on some economic investment the government has made, but instead on a wholly separate and independent obligation derived from the very nature of republican government. The obligations are fundamentally different in nature.
The second problem is that premise (2) contains an implied premise (3): that the government is a moral agent who is owed a moral duty of payment on its investment. This is because, as we saw above, the notion that taxes are owed because of government investment is based in the notion as government as an active investor, partner, joint venturer in the individual’s economic life, and thus, like the individual, a moral agent. This is problematic since it forces us into one of the first two scenarios that Jason presented in his post today (scenarios (a) or (b), in which the government has a rightful claim to everything we produce that we could not have produced without it). Only where the government is not a moral agent to which we owe our earnings, and only where the government is an agent of the people rather than an interested party, can we have a rightful claim to what we earn.
The third problem is that, even ignoring the first to problems and assuming we can still somehow have a right in our earnings, conceding that we have less right in earnings beyond a certain threshold is indistinguishable from conceding that we have no right at all in such earnings. Rights are binary: we have them or we don’t. Progressive taxation was ushered in along with social welfare spending with remarkably little effort made to explain its moral foundation. We should not be surprised to find that it has none. The issue has been avoided thus far, however, since, aside from a period of dizzyingly high progressive taxes, economic theory has forced lawmakers to refrain from approaching 100% marginal tax rates. Per Laffer, a 100% tax rate begets $0 revenues.
Despite its salvation by economic theory, progressive taxes are morally illogical unless you reject the premise that the individual has a right in his earnings.
Again, there is no way to parse the President’s moral claims in any intelligible way other than to conclude that he believes an individual has no right to his earnings to the extent of the government’s lien for the infrastructure it provides.
The President has been insisting for some time now that those who earn more than $250,000 a year are not paying their “fair share.” One must assume that the President is aware that these “wealthy” Americans are in fact paying more than their fair share, under any obvious definition of the word. So what exactly does he mean when he keeps referring to a “fair share”?
Last Friday, the President dropped a big hint as to how he answers that question, and in the process put his campaign into damage control mode (including calling out Romney for quoting the President’s words back to him):
If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business, you didn’t build that. Somebody else made that happen. The Internet didn’t get invented on its own. Government research created the Internet so that all the companies could make money off the Internet.
The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together. There are some things, just like fighting fires, we don’t do on our own. I mean, imagine if everybody had their own fire service. That would be a hard way to organize fighting fires.”
Before we get to the “what does he mean by ‘that’” question, let’s focus on what the President’s supporters say he really meant by the money line: “If you’ve got a business, you didn’t build that. Somebody else made that happen.” Let’s assume for the moment that the President is in fact referring to infrastructure—i.e., publically funded schools, roads, fire and police services. And those are just the cheap and easy examples to get the heads nodding. (The President was standing on a road across from a firehouse. Sometimes, you say what you see.) We also need government to provide a stable currency and a transparent, arm’s-length financial system. We need government to provide a legal system that allows individuals to collectivize and risk their capital in limited liability organizations, and to check the behavior of those organizations with appropriate regulations (civil damages are quite a bit insufficient if you’re a victim of the Triangle Shirtwaist fire, for example). We need government to protect intellectual property and balance innovation with Jefferson’s vision of ideas as fires that must spread or die. And so on.
It’s all of this, far more than mere roads and schools and police and fire protection that entrepreneurs absolutely depend on to create new wealth. And if we’re being charitable—because, to be precise, a literal construction defines “that” as referring to the nearest preceding object, i.e., “business”—then the President is referring to this sort of infrastructure.
The real hint to understanding the President’s vision of “fairness,” then, is in another line of his speech: “The point is, is that when we succeed, we succeed because of our individual initiative, but also because we do things together.” This is more revealing than it might at first appear. Consider: Not one serious person is suggesting we stop acting collectively (i.e., through government) to provide education, roads, police and fire service, courts, a stable currency, and the rest of the necessary infrastructure of a modern economy. And this is true even though, as I will argue in a forthcoming long piece, a strict conservative constitutionalism denies the federal government from providing many of the components of this infrastructure.
Thus, the President’s remarks were not advocacy for some particular spending program or other policy objective. They were an articulation of his understanding of the moral basis of the modern economy: A financier, for example, cannot pretend to the same sort of moral claim over a stock dividend as a farmer has over his crop. The simple farmer owed thanks to no man, but the financier owes his good fortune to a long train of economists, inventors, statesmen, intellectuals, entrepreneurs, armies of blue-collar workers, and untold others.
The President is not wrong about this, if I have not gone overboard already by reading so far into his remarks. But there is a logical leap, a principled leap, that the President is not entitled to make unilaterally, not without a full-throated articulation to the American people of what he is about. When he says, “we succeed … because we do things together,” I suspect he means that, somewhere along the way of achieving this modern economy, we have done away with the presumption that the individual owns his success and treasure. I suspect the President thinks we have replaced it with the presumption that the wealth generated in this country—by individuals making profitable use of the infrastructure created by their forebears—belongs to the collective, and specifically to the institution that acts on behalf of the collective: the government. The government owns the means of production, and thus holds a lien on all wealth. The individual no longer invests in infrastructure; infrastructure invests in the individual.
One can also see this presumption in the way the President speaks of taxes. In a recent speech concerning another extension of the Bush tax cuts, the President twice referred to the cuts as “spending,” suggesting that the money you earn does not belong to you unless and until the government decides not to tax it. This further evinces the notion that, for the President, our success and our wealth is derived “together,” and it is together, through government, that it is owned.
The problem is, we don’t do things that way. It is not the American way, no matter how elastic that term may be. It’s not that we can’t have the conversation. It’s just that it’s so obviously far beyond the beliefs of mainstream Americans that it would be politically foolish to try. Maybe Robert Reich will write another honest (and politically toxic) speech in favor of the President’s economic vision the way he did for the left’s health care vision.
For now, the President’s July 13 speech will do. The statement “you didn’t build that” is a double entendre, and for the President, both meanings are true: Yes, that entrepreneurs need infrastructure; but also that the government, not individuals, presumptively deserves the credit for economic success.
CEO tries to commit suicide, fails, then is arrested for admitting he’s a goniff in his suicide note.
Reuters: FBI agents arrested Russell Wasendorf Sr., 64, at the Iowa City hospital where he has been since trying to commit suicide on Monday. He was charged with making false statements to regulators, but prosecutors said they would seek more charges. He faces “decades in prison”, Assistant U.S. Attorney Peter Deegan said.
In the signed statement, left along with a suicide note and released as part of the criminal complaint, Wasendorf said he began forging bank documents after the business he built from his basement risked failing without additional capital. The timeline suggests his deceit lasted almost the entire life of his brokerage.
[HT: IBD]
The Harvard Crimson:
An earlier version of this article used the pronoun “she” to refer to Vanidy “Van” Bailey, the newly appointed director of bisexual, gay, lesbian, transgender, and queer student life. In fact, Bailey prefers not to be referred to by any gendered pronoun.
[HT: Mark Steyn]
THE OCCASION WAS LEO STRAUSS’ [1899-1973] years-long correspondence with the brilliant and mercurial Hegel scholar Alexandre Kojève [1902-1968], contained in the volume “On Tyranny.” The Google books preview is HERE.
Kojève is fascinating, one of those major figures in philosophical-political history you never seem to hear of. [Hell, James Madison doesn’t have a memorial, isn’t on a coin or anything anymore since they killed the $5,000 bill. But we digress.]
Alexandre Kojève invaluably got the European Union started, and Francis Fukuyama, author of The End of History, was his student.
[Was Kojève cool or what? If you threw Sartre, Napoleon Solo and Illya Kuryakin in a blender, you’d get Strauss’ “Dear Mr. Kojevnikoff.”
By contrast, Uncle Leo had a visage like a potato.
Although the cigarette holder is a nice touch. But we digress yet again. Dang us!]
The “End of History” is the not-unlikely prediction that human progress will one day yield something resembling today’s Western World, a bourgeois liberal democracy where everyone’s material needs are met and political division is quieted by the rise of a Universal and Homogeneous State. There will be nothing left to fight about.
Philosophy becomes democratized, the parable of Plato’s cave rendered un-egalitarian and therefore obsolete—if not obscene to modern sensibilities.
Strauss, faced with an effective rebuttal by Kojève of Strauss’ original essay about trying to advise tyrants not to be so tyrannical, on Xenophon’s “Hiero,” was obliged to write a “restatement.” The story is here.
Ah, I’ve taken too much of the gentle reader’s time with preface. I did want to convey the gravity and historical importance of the philosophical issues, laid bare in the Strauss-Kojève correspondence—the clash of the classical and modern worlds played out in the EU/UN/and America’s own left-right context. Hope it enhances the below Strauss excerpt, the final paragraphs near the end of his Restatement.
[To the meta: Strauss-Kojève shows how worthy good-faith exchanges between left/right and classical/modern can be, if only to clarify the issues.
NB: Therefore, any comments that go to Leo Strauss as the prophet of the neo-cons or any of that ad hominem stuff are going to get deleted. Word up, and you know who you are. All the anti-Platonism you want, because Strauss is quite the Platonist. But he mocked Wilsonianism, and wouldn’t be caught dead in a field with messianic democracy.]
_________________
TO BUSINESS, THEN, as Strauss assays Kojève’s Brave New World:
“There is no longer fight nor work. History has come to its end. There is nothing more to do.” This end of History would be most exhilarating but for the fact that, according to Kojève, it is the participation in bloody political struggles as well as in real work, or generally expressed, the negating action, which raises man above the brutes. The state through which man is said to become reasonably satisfied is, then, the state in which the basis of man’s humanity withers away, or in which man loses his humanity.
It is the state of Nietzsche’s “last man.” Kojève in fact confirms the classical view that unlimited technological progress and its accompaniment, which are the indispensable conditions of the universal and homogeneous state, are destructive of humanity. It is perhaps possible to say that the universal and homogeneous state is fated to come. But it is certainly impossible to say that man can reasonably be satisfied with it. If the universal and homogeneous state is the goal of History, History is absolutely “tragic.” Its completion will reveal that the human problem, and hence in particular the problem of the relation of philosophy and politics, is insoluble. For centuries and centuries men have unconsciously done nothing but work their way through infinite labors and struggles and agonies, yet ever again catching hope, toward the universal and homogeneous state, and as soon as they have arrived at the end of their journey, they realize that through arriving at it they have destroyed their humanity and thus returned, as in a cycle, to the prehuman beginnings of History. Vanitas vanitatum. Recognitio recognitionum.
Yet there is no reason for despair as long as human nature has not been conquered completely, i.e., as long as sun and man still generate man. There will always be men (andres) who will revolt against a state which is destructive of humanity or in which there is no longer a possibility of noble action and of great deeds. They may be forced into a mere negation of the universal and homogeneous state, into a negation not enlightened by any positive goal, into a nihilistic negation. While perhaps doomed to failure, that nihilistic revolution may be the only action on behalf of man’s humanity, the only great and noble deed that is possible once the universal and homogeneous state has become inevitable.
…
The Chief of the universal and homogeneous state, or the Universal and Final Tyrant will be an unwise man, as Kojève seems to take for granted. To retain his power, he will be forced to suppress every activity which might lead people into doubt of the essential soundness of the universal and homogeneous state: he must suppress philosophy as an attempt to corrupt the young.
…
The philosophers in their turn will be forced to defend themselves or the cause of philosophy. They will be obliged, therefore, to try to act on the Tyrant. Everything seems to be a re-enactment of the age-old drama.
But this time, the cause of philosophy is lost from the start. For the Final Tyrant presents himself as a philosopher, as the highest philosophic authority, as the supreme exegete of the only true philosophy, as the executor and hangman authorized by the only true philosophy. He claims therefore that he persecutes not philosophy but false philosophies.
The experience is not altogether new for philosophers. If philosophers were confronted with claims of this kind in former ages, philosophy went underground. It accommodated itself in its explicit or exoteric teaching to the unfounded commands of rulers who believed they knew things which they did not know. Yet its very exoteric teaching undermined the commands or dogmas of the rulers in such a way as to guide the potential philosophers toward the eternal and unsolved problems. And since there was no universal state in existence, the philosophers could escape to other countries if life became unbearable in the tyrant’s dominions.
From the Universal Tyrant, however, there is no escape. Thanks to the conquest of nature and to the completely unabashed substitution of suspicion and terror for law, the Universal and Final Tyrant has at his disposal practically unlimited means for ferreting out, and for extinguishing, the most modest efforts in the direction of thought. Kojève would seem to be right although for the wrong reason: the coming of the universal and homogeneous state will be the end of philosophy on earth.”
A favorite meme of the anti-“Religious Right” is that Jesus wasn’t political, and they should stop mixing the Bible with GOP politics. And so, my left eyebrow raised all by itself when I saw this:
“He was out there fighting injustice and speaking truth to power every single day.”—Michelle Obama
Well, actually, not really, Mrs. President. When Jesus saves the adulteress from being stoned in the well-known story from John 8, it’s not that she’s being done an injustice, it’s that those who would stone her are no more guiltless, and could use a little mercy themselves.
When Jesus whips the money-changers out of temple in John 2, it’s precisely because of the blasphemy against God. [Something the Religious Right wouldn’t mind picking up a whip against.]
No, Mrs. President, Jesus wasn’t out there like Alec Baldwin in sandals, doing the politics thing, fighting for truth, justice, and the populist way, “speaking truth to power.” He barely spoke to Pilate atall.
Now, don’t get me wrong, I’m fine with people living their religion and not parking it in a lockbox until Sunday. And there’s certainly plenty of good Christian political theology on the “all men are created equal” front.
Theologically, I’m unhappy with Mrs. Obama turning Jesus into Malcolm or Abbie Hoffman and Christianity into #Occupy, but that’s OK. What I’d like to point out to those who would silence the Religious Right is that the door of religiously motivated activism must swing both ways.
I mean, she’s allowed to be wrong about her interpretation of the Bible, but so is everyone else.
“It’s kind of like church,” Mrs. Obama said. “Our faith journey isn’t just about showing up on Sunday for a good sermon and good music and a good meal. It’s about what we do Monday through Saturday as well, especially in those quiet moments, when the spotlight’s not on us, and we’re making those daily choices about how to live our lives.”
Mm-hmmm. We all agree on that much, then. It opens the door to another argument, though, one better made elsewhere, and a door I think Mrs. Obama would prefer to nail shut.
In our discussion in the comments at the main page, Tom Van Dyke and I discussed whether Chief Justice Roberts’ decision in NFIB v. Sebelius, aka, the Obamacare case, demonstrated the essence of statesmanship (and possibly a shrewd power play) or a defeat for the independent judiciary. I’m still of two minds about it. I do want to agree with Tom and think the best of our Chief Justice. Alternatively, I can’t shake the suspicion that it is profoundly wrong if the Court’s decision was a kind of quid pro quo for Bush v. Gore and Citizens United, as Lawrence Tribe suggested. The Court may not properly look to polls showing sagging popular support for its decisions, or concern itself with the caterwauling on the courthouse steps. The Court is the sole branch of government that is institutionally designed to be not politically responsive, for very important reasons.
The notion that Robert’s “saved” the Court or its “legitimacy” raises many troubling questions. Can we square the competing concepts of an independent judiciary with one that is responsive to politics? If a decision is political (as Robert’s 5-4 decision here arguably is), then can it properly be construed as binding precedent on the Court were it to reassert its independence? The Court, it might be said, would serve two masters: the “We the People” who give authority to the Constitution, on the one hand, and the transient present popular will for whose benefit, in part, the Chief Justice arguably cast his vote, on the other hand.
If the Court begins cowing to popular sentiment, we will have lost the independence of our judiciary. At that point, there would be no point in talking about constitutional conventions. Every session of Congress would be a constitutional convention unto itself.
In short, if Chief Justice Roberts’ move here saved the Court, what kind of a Court did he save? I worry it may not be the same Court we had before June 28, but instead one more responsive to politics, less independent, and thus less able to defend the Constitution. The Court would have been preserved at the Constitution’s expense. Yet it was the Chief Justice’s oath to preserve and protect the Constitution, not the Court. The concern, then, is that the Chief Justice simply got his priorities mixed up.
But again, I remain ambivalent.
John Eastman’s offering on the decision better describes what’s at stake in this regard. He also lays bare the many problems with the “tax” justification presented in the Chief Justice’s opinion. To constitutional conservatives, it’s well worth reading before considering whether Roberts’ gave us any real “silver lining” in his decision. (By the way, you should consider signing up for Prof. Eastman’s email list; he provides very insightful legal and constitutional commentary once or twice a month. Sign up here.)
Hard to know where to begin. As I said in my preliminary assessment yesterday, the opinion by Chief Justice Roberts upholding the Affordable Care Act (aka Obamacare) as a valid exercise of Congress’s taxing power is a sell-out of constitutional principle of the first magnitude. (And yes, for those that caught that typo in the original post, I do know the difference between principal and principle– but it appears that the Chief, in his role as “principal” of the judicial system, may have forgotten his primary role is to uphold constitutional “principle”!).
It is also fundamentally wrong on constitutional law; the doctrine of separation of powers; the meaning of a direct tax; and the idea of limited government and enumerated powers.
It also appears that the Chief may have switched his vote after the original conference and circulation of opinions. Rather than repeat all the evidence for that claim that others have noted, I’ll just point you to the more insightful of the commentaries on this point. Short version: the joint dissenting opinion by Justices Scalia, Kennedy, Thomas and Alito refers to Justice Ginsburg’s concurring opinion as a “dissent,” is written as though it were the majority opinion, and says that if the individual mandate were really a tax, they’d have to address the close constitutional question of whether it was a direct tax–something they don’t address even though, as the case was ultimately decided, the issue was squarely presented.
See in particular Professor Paul Campos’ commentary on this at Salon, Ed Whelan’s commentary over at National Review, and Lawrence Solum’s commentary at Legal Theory Blog.
If that is indeed what happened, and the Chief’s motive was to prevent the Court from being “politicized” and therefore having its legitimacy undermined (in the eyes of elite opinion, that is), he has done just the opposite, both for the Court and his own here-to-for stellar reputation. Indeed, if that is what happened, the Chief should resign; he would not be fit to continue in office. As the great Chief Justice, John Marshall, recognized more than two centuries ago in Marbury v. Madison, it is “the very essence of judicial duty,” the reason a “judge swear[s an oath] to discharge his duties agreeably to the constitution,” that the judge must find “that a law repugnant to the constitution is void.” Then again, in McCulloch v. Maryland, he added: “should Congress, under the pretext of executing its powers, pass laws for the accomplishment of objects not entrusted to the government, it would become the painful duty of this tribunal . . . to say that such an act was not the law of the land.”
We have a judiciary independent of the political process precisely so that can withstand such political attacks and uphold the Constitution. (And oddly, it should be even easier to do so when the political opinion of the majority of the American people is so strongly opposed to the law).
But let us for the time being give the Chief the benefit of the doubt. What, then, of his constitutional arguments.
The law is unconstitutional as an exercise of Congress’s power to regulate commerce among the states, he tells us (and on this point he is joined by Justices Scalia, Kennedy, Thomas and Alito), because Congress cannot force people into commerce in order to gain authority to regulate.
These were the grounds on which Congress passed this bill, deliberately choosing not to raise taxes as a way to fund the massive expansion in health care entitlements. The Chief’s Commerce Clause holding should therefore have been the end of the matter.
Instead, the Chief manipulated the law to treat it as a tax, and then held that the taxing power is broad enough to uphold this law.
There are several problems with that. First, the President and leaders in Congress argued vociferously that the individual mandate was not a tax. Second, Congress did not impose a tax; It imposed a penalty for failure to comply with a regulatory mandate. Third, if it is a tax, the Anti-Injunction Act deprives the Court to even here the case. Fourth, the so-called “tax” did not originate in the House of Representatives, as Article I, Section 7 of the Constitution requires. It originated in the Senate. (Yes, I know. Technically the Senate stripped down a House bill that was languishing there, and then used that bill number as the vehicle for the Obamacare legislation. To say that the bill therefore “originated” in the House is a fraud). Fifth, the power to tax is to provide for the “general welfare,” not effectuate massive transfers of wealth from one group of citizens to another. And sixth, if it were a “tax,” it would be a direct tax, but one that is not apportioned according to population, as required by Article I, Section 9, clause 4 of the Constitution.
Why does this matter? Aren’t these all a bunch of constitutional niceties that really don’t mean much? Actually, no, if the idea of limited government envisioned by our nation’s founders is to continue to have any force.
Even assuming Congress has the power to accomplish such broad and otherwise unconstitutional regulatory purposes by way of the taxing authority — a dubious proposition — the constitutional process for raising taxes is critically important. In insures that our lawmakers are accountable to the people for their actions (heck, the unaccountability of the King and Parliament for imposing taxes on the colonists was the principal reason we had a revolution!). The requirement that tax measures originate in the House was designed because the House is most directly accountability to the people. At the time of the founding, members of the Senate were not even elected directly by the people; that came about only after the 17th Amendment was adopted in 1913. Even today, every single member of the House has to face the voters every two years (rather than every six, as in the Senate), a pretty serious political check on raising taxes.
And the prohibition on un-apportioned direct taxes was designed to prevent the use of the taxing power to redistribute wealth. If Congress can impose a direct tax on some while exempting others, there would be a serious risk of majority tyranny — that is, the prospect that 51% of the population could simply tax the other 49%. That can’t happen with a direct tax that can only be imposed if apportioned based on population. (Note: This is also the problem with a steeply progressive income tax, which allows for the same kind of majority tyranny mischief, but that’s a discussion for another day). But a direct tax with exemptions? Look out.
How does Chief Justice Roberts address this problem? Well, he ducks it. In a great bit of circular reasoning, he contends that the tax is not a direct tax because it doesn’t apply to everyone. But that says nothing about whether it is a direct tax or not; it merely admits that if this is a direct tax, it is unconstitutional. So why is it a direct tax, in my view? Well, for starters, because it is not any of the other kinds of taxes authorized by the Constitution. It is not an excise (such as a tax on liquor or cigarettes); it is not an impost or duty (such as tariffs on imported goods); it is not an income tax, because it is not triggered by your income (although the size of the penalty can be effected by the amount of your income). It is a tax imposed for not doing something. That is the very definition of a direct tax. A good analysis of this point was published by my friend, Rob Natelson, over at Independence Institute. His analysis is spot on. Maybe if the Chief had had the benefit of briefing on this subject, he might not have made such a sophomoric error. But methinks he knew exactly how disingenuous this argument was, and he made it anyway.
What of the second part of the opinion, holding (by a vote of 7-2) that the threatened loss of a State’s entire Medicaid funding if it declined to accept the massive expansion in Medicaid mandated by the Obamacare law was unconstitutional. Many conservative commentators over the past 24 hours, desperate to find a silver lining somewhere in the decision, have focused on this. True, this is the first time that the Court has ever held a federal spending grant to states to be so large as to be unconstitutionally coercive. The Chief called this, quite correctly, “a gun to the head” of the States, “economic dragooning that leaves the States with no real option but to acquiesce in the Medicaid expansion.” But that aspect of the Chief’s holding is immediately rendered largely meaningless. If a State refuses to expand its Medicaid program, as Congress desired, it cannot lose existing Medicaid funding. But its citizens will still be taxed to pay for the Medicaid expansion everywhere else. Few, if any, of the States will be able to reject entry into the new program as a result. The choice will be: Pay for it, and get some money back in return to cover some of the costs of expansion; or Pay for it, and send all your money to other states to pay for the costs of their expansion. That’s every bit as much a “gun to the head” (albeit a six-shooter rather than a bazooka), yet the Chief does not even discuss that coercive aspect of the Medicaid expansion, much less find it to be unconstitutional.
Justices Scalia, Kennedy, Thomas, and Alito authored a joint dissent. That itself is rare; normally dissents are authored by a single justice and then joined by others. As noted above, the dissent reads as though it was written as the majority opinion. We will learn whether that is true or not in the fullness of time, but likely not until one of the current justices retires, passes on, leaves their papers to a library archives, and then we get to the day those papers are unsealed and made available for public inspection. Then, we will see the initial votes of the justices that were cast on the last Friday in March, two days after the conclusion of oral argument in this case.
The dissent is a powerful defense of our Constitution’s system of checks and balances, of federalism, and of the notion that our federal government is one of limited, enumerated powers, not one with unlimited power to compel action by its citizens as it sees fit. My one point of disagreement is that the joint dissent concedes too quickly that Obamacare would be valid if Congress had actually chosen to enact it as a tax. In my view, the Tax and Spend power also has limits. The signature accomplishment of the Rehnquist Court was to restore the foundational idea that the Commerce power had limits, but it has been clear for some that that accomplishment is meaningless if Congress can simply shift to the Tax and Spend power to accomplish the same unconstitutional ends.
This, then, is the greatest disappointment of yesterday’s ruling. When given the opportunity to restore limits on the Tax and Spend Power, comparable to the limits his predecessor was able to restore on the Commerce Power, Chief Justice John Roberts appears to have blinked in the face of political pressure. He apparently found the exercise of the “painful duty” to tell Congress it had exceeded its authority too painful to actually exercise. Chief Justice Rehnquist had the constitutional fortitude to do his duty. A Chief Justice Mike Luttig would undoubtedly have exercised that same constitutional fortitude had he been appointed to the position instead. Those who pushed hard for his nomination, greatly concerned that John Roberts had not been tested in the fire of a landmark decision, have been vindicated. Small consolation, though, given the damage that has been done to the constitutional principle of limited government.
Is there a silver lining? Yes. But it is not simply that this issue now becomes a rallying cry for those who would seek, following the next election, to repeal Obamacare. No; it must be more than that. It must be a repudiation so strong that the Court’s decision itself is repudiated. In 1798, Congress passed the Alien & Sedition Acts, making it a crime to criticize the government. There was a huge outcry against the Acts, but the lower courts upheld them as constitutional. Thomas Jefferson waged his campaign for President in the Election of 1800 largely on repudiating those Acts. He was successful, but the Acts were not just repealed (or more accurately, left to expire). They were repudiated. Jefferson pardoned everyone of the conscientious objectors who had been convicted under the Acts, and the judgement of history has been that the Court decisions holding the Acts constitutional were profoundly wrong. That is the exercise of true power by a truly sovereign people. That is the metal of which free men and women must be made if they are to remain free. That is now our charge, and our moment to take our place in the pantheon of American patriots, defenders of freedom, is now. Will we prove ourselves worthy of the task?
[I won’t likely have time to do any deeper analysis of the decision until the distant future, in news-cycle terms. At any rate, the decision upholding the Affordable Care Act, aka Obamacare, is too important not to offer an initial reaction.]
Although there was consensus that Chief Justice John Roberts would author the opinion, it was also widely assumed that he would follow traditional swing-voter Justice Anthony Kennedy. That is, if Kennedy voted with the liberals to uphold the law, Roberts would side with him so he could author a narrow opinion. That didn’t happen, as it turns out. Kennedy voted with the conservatives to overturn the entire law, and Roberts sided with the liberals on the Court to uphold it.
What was perhaps even more unexpected is that Roberts, who agreed with the conservatives that the individual mandate was not supported under either the Commerce Clause or the Necessary and Proper Clause, found the law was constitutionally supported as a tax. This is surprising because even the Administration seemed to agree this was the lamest of its arguments. It was in fact only the second backup argument advanced by the Administration. And Roberts himself only devotes about a page to explaining why it’s not unconstitutional as a direct tax (i.e., because it is not equally apportioned, but only selectively assessed against certain individuals who fail to obtain government-approved health insurance). It’s pretty obviously not an income or excise tax.
So, what kind of tax is it?
It’s also not a tax for purposes of the Tax Anti-Injunction Act, according to Roberts and the majority. Again, from reports I’ve read of the opinion (not the opinion itself, yet), the analysis on this is pretty thin.
Again, what kind of tax is it?
A magic tax, apparently. Kind of how the California Supreme Court treats pensions as a different kind of contract so as to evade the state constitution’s prohibitions on gifts, retroactive benefits, and taxes beyond the fiscal year, but never gives reasons therefor. It’s a magic contract.
This is why I’m led to the conclusion that this is a political decision: I was not convinced before today of complaints that the Court was improperly influenced by politics, but I am now so convinced after reading parts of Chief Justice Robert’s opinion and reports of same. Joining the other conservatives in striking down the law would have been much easier for him to square with Roberts’ constitutional philosophy. But I think Lawrence Tribe basically got him right yesterday: Roberts was worried about how a decision invalidating the law altogether would reflect on the Court in the eyes of the American people, regardless of the merits of the decision. In my view, unless there was a real existential threat to the Court, the decision is lamentable if this is the reason for upholding the ACA as a “tax.”
That said, I also wonder at the political effect of calling this a tax. NPR mentioned that the “tax” (about $200) is only about a tenth of the cost of a basic health plan for young people (about $2,000), the demographic the “tax” is aimed at. And yet Fox News mentioned that the “tax” is already the biggest tax hike in history. It will be interesting to see how this plays out if indeed the “tax” is insufficient to get young healthy people to buy insurance, which the ACA absolutely depends on to make its other provisions work.
I’m also relieved at the limitations on the Medicaid mandates on the states. It’s not as easy to get political support to push back on states rights issues, so it is important that the Court respected that limit on federal power.
I’m also relieved that the Commerce Clause has been limited, for now. I enjoyed Justice Thomas’s two-page dissent, which says, in essence: When you have mushy Commerce Clause jurisprudence as we do, one ought not be surprised when lawmakers think they can do anything they want. The message to lawmakers has been made clear (for now, at least): They can’t. Not unless they come right out and call it a “tax.”
So in a roundabout way, the Court responded to complaints about being overly political by becoming more political: They punted the constitutional issue back to the people, and at the same time gave opponents of the ACA a powerful rhetorical device for the November election by calling the mandate a “tax” — a substantial and regressive one at that.
All in all, it’s not a principled opinion in either direction. It’s not even a pragmatic decision. It’s a tactical one. For that reason, I’m disappointed for reasons that, quite frankly, I didn’t expect.
[Originally posted on the main page]
Note: This post is part of our League Symposium on inequality. You can read the introductory post for the Symposium here. To see a list of all posts in the Symposium so far, click here.
I am nearly finished with Joseph Stiglitz’s new book, The Price of Inequality, and plan to include a brief review in my contribution to the inequality symposium by early next week. Something about the book grates on me, though, in the way Stiglitz can’t seem to be bothered to offer a complete defense for any of the ideas he advances. Some of those ideas I nonetheless agree with, such as the problem of special interests. (Though he wrongly lays all of the blame on Republicans. Remember Harry Reed’s juicer bill that kicked off a flurry of hedge fund rent-seeking that never stopped? Everyone needs to fundraise, and the letter after your name doesn’t change that.)
Even though I’m unpersuaded by Stiglitz’s polemical rhetoric, he is obviously a brilliant economist and I do not have satisfying answers at the ready for all of his points, roughly stated though they are. For example, do we libertarians and conservatives really make too big a deal over inflation? Does austerity really hurt an economy? Are Sweden and Norway really succeeding because of their generous welfare programs? Are deficit-reduction and tax-reduction really ”curious” notions? Should we revisit Henry George’s idea of socializing the rents of all the nation’s real property? Does “trickle-up economics” really work?
(To this last one, I think, I have a ready answer: putting more dollars in the hands of those other than the poor via tax redistribution results in threshold earners spending money on things they were not otherwise willing to work for. This sends false signals into the market that there is demand for goods and services, when in fact people would not work buy but for redistribution. That artificial demand results in a bubble that the government must sustain through ever more tax redistribution–a one-way ratchet.)
One doozy Stiglitz puts out there is that unemployment is a “market failure.” He offers no explanation for this statement. Indeed, earlier he states that “markets are supposed to be stable.” I suppose “stable” lends itself to subjective interpretation, but markets necessarily involve “creative destruction,” which is anything but stable. Stiglitz also repeatedly calls for “full employment.” In my amateur studies of economics, I’ve learned that full employment is impossible and undesirable given the pressure it puts on inflation. But again, Stiglitz urges (without much explanation) that printing money is no biggie, so, why not?
The big question all of these little ones lead me to ask is, why is Stiglitz not willing or able to offer a full-throated answer? Why am I more confused about economics after reading 300 pages of a Nobel laureate economist than I was going in? The answer to that question seems fairly obvious to me. One theme I will develop in my essay is that we must choose one structure of government or another: free and limited, or centralized and planned. Although the free and limited government project is of relatively recent vintage, we do have more than 200 years of history in our very own backyard in this country from which to draw in understanding and defending it.
The centralized and planned model, on the other hand, has a very long and terrible history. No one would say the failures of the communist and socialist experiments thus far were the result of an inadequate stimulus or not allowing a tax cut to expire. They failed not because someone forgot to carry the one. They failed because they were tragically and fundamentally immoral and wrong-headed.
It is only in the last 60-70 years that some European countries have begun experimenting with so-called social democracy, thus far with very mixed results. At any rate, there are no truly settled conclusions either way to draw from European social democracy (though if we were to judge by recent headlines, I wouldn’t like its chances). Thus, other than a very wonkish understandable only by theoretical economists, Stiglitz has precious little settled practical data from which to draw to make the case for the economic system suited to a centralized and planned economy. I suspect this is why neither Stiglitz nor anyone else will be able to offer a much more persuasive argument for leftist economic policies.