Can the Occupy Movement Tackle Crony Capitalism?

In a comment on Shawn Gude’s previous post on the main page about the Occupy movement, I asked who the “1%” is and whether Occupy protesters were primarily aggrieved about “Wall Street,” or whether they were aggrieved about “wealth inequality” more generally.  Commenter Michael Drew referred me to this post at Rortybomb entitled “Who are the 1%, and what do they do for a living?” purporting to get right to the point.  Here’s the operative chart:

Can the Occupy Movement Tackle Crony Capitalism?

These numbers show that the wealth share of CEOs and other private sector executives has actually decreased almost 14% since 1979.  In contrast, the share of financiers increased more than 80%.  Yet the rest of the Rortybomb piece lumps business leaders into the same category as financiers.  Why? 

The most obvious explanation is that the Occupy movement is primarily organized around a moral commitment to a particular definition of “fairness” oriented around results rather than process.  I previously outlined the problems with drawing a necessary connection between wealth inequality and “unfairness” or “injustice.”  But I have also discussed the real problem of power inequality:

There is nothing unjust about economic inequality.  What does become unjust, however, is when those who benefit from an organized system of laws to amass wealth[ ] then use that wealth to abuse that system of laws.  What results, then, is not just wealth inequality (which I contend is no sin by itself), but power inequality.  Where power inequality exists in great enough measure, a political system can no longer sufficiently guarantee procedural fairness.  And where there is no guarantee of procedural fairness, wealth inequality suddenly becomes a real injustice—inequality of wealth is only just to the extent it is the result of free choices, and free choice cannot be presumed where there exists an inequality of power.

Pointing generally to wealth inequality fails to take into account the threshold-earner phenomenon and the clarion call of cultural critics to work less and eschew building financial fortune and to spend more time in non-economic activities. It also fails to account for the fact that, in real terms, the poor have experienced significant economic improvement in the past 30 years. The rest of us, too, get the benefit of the new technology and other cheap consumer goods that corporations invent, develop, manufacture, and distribute, many of which undeniably improve our lives. I previously made and developed these and other points on these pages in my review of Paul Krugman’s book.

If power inequality—e.g., “crony capitalism”—is the problem, does the Occupy movement have a solution?  Simply more regulation and more central control won’t get us there.  In fact, that road may wind up making matters worse.  Cronyism is a two way street.  True, the bigger an industry gets, the more resources it can devote to rent-seeking.  But that has nothing to do with the incentive to rent-seek.  A powerful interest has little reason to buy influence in a weak government.  The problem of faction and “crony capitalism” thus gets worse as government becomes more powerful and centralized. 

The controversial 2005 Supreme Court opinion in Kelo v. New London provides a worthwhile illustration.  The Supreme Court’s failure to enforce the “public use” clause of the Fifth Amendment, a structural check against the influence of factions, has led directly to more crony capitalism.  For example, corporations’ and developers’ wealth had little to do with the crony capitalism that befell Suzette Kelo when her home was taken by the city council of New London, Connecticut at the behest of the Pfizer Corporation—who later scrapped their plans and abandoned her bulldozed neighborhood as a blighted vacant lot.  Had the Court faithfully applied the Constitution according to its plain language—so as not to give near-unfettered discretion to local governments—Pfizer would have had no reason to rent-seek in the first place.  Had the law of the land clearly prohibited the taking of property from one private party to hand over to a more politically favored private party, Pfizer would not have bothered asking the town council to exercise a power it clearly didn’t have.

Fixing the damage done by Kelo is relatively straightforward because we know where the system failed.  Constitutional checks were already in place but the Supreme Court ignored them.  The Court can and at some point will reverse Kelo

The rest of our problems concerning economic and regulatory policy are more difficult because we’ve been operating off book.  Who do we blame for our financial crisis?  “Fat cats”?  “Crony capitalists”?  “Corrupt politicians”?  These are not new phenomenon.  They were baked in the cake as we evolved our federal government by way of court decisions and “Constitutional Moments.”  We got the progress and economic growth hoped for, but we failed to install structural checks against the downsides.  No wonder “class warfare” is brewing:  populist forces are rushing to fill the vacuum created by having altered the balance of governmental power that has given factions  more access to the levers. 

Somewhere under the din of bongos, the Occupy movement has some legitimate grievances.  However, a generalized grievance of against wealth disparity will not get us the structural checks we’ve been lacking.  The movement could take up a more intellectually cohesive position by rallying against centralized economic and financial planning and restoring America to a more constitutional model.  Unless it does that, I predict we’ll see some legislative reforms pandering to the vague demands of the movement, but little in the way of serious reform. 

[Cross-posted at Dutch Courage]

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143 thoughts on “Can the Occupy Movement Tackle Crony Capitalism?

  1. Well-argued.

    Since you’re offering an agenda for the movement, would you care to flesh it out a bit more than just citing reversal of Kelo and suggesting that the meaning of the movement ought to be to be “against centralized economic and financial planning and restoring America to a more constitutional model”? What does this mean in concrete terms? What are, say, the top three specific priorities, and what would result if those reforms, but only those three, were achieved?

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    • Maybe others will have more imaginative ideas. Our federal system was a structural check against locating too much power in a convenient central body subject to capture by special interests. Nothing will ever eliminate cronyism, but breaking up centralized power into the states would reduce its influence. Federalist 62 also seems helpful:

      It will be of little avail to the people, that the laws are made by men of their own choice, if the laws be so voluminous that they cannot be read, or so incoherent that they cannot be understood; if they be repealed or revised before they are promulgated, or undergo such incessant changes that no man, who knows what the law is to-day, can guess what it will be to-morrow. Law is defined to be a rule of action; but how can that be a rule, which is little known, and less fixed?

      I admit, however, that paring back the federal government will likely mean less overall wealth. But the Occupy movement seems to espouse the kind of Jeffersonian/Jacksonian aversion to the pursuit of wealth that crushes man’s spirit. Conservative political philosopher William Voegeli is pessimistic about restoring the old structural components of our republic, saying “It’s impossible to regard the idea of restoring the jurisprudential status quo ante 1937 as anything other than a quixotic, self-marginalizing gesture.” But I’m not so sure. There could be an alignment between republican-virtue conservatives and the Occupy movement to the extent they might both be willing to give up some of the economic efficiency of central planning if it meant empowering the individual and deflating the financier class.

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      • I really think that Occupy is best understood as a naive expression of discontent with a failure of the established oroder to deliver on the terms it was understood to promise. That’s why I think an agenda from them is both beside their point (and therefore unlikely), and astrategic for them. As such, I think you’re simply getting ahead of where they are or will ever be programmatically. I think it would be better to just advance this proposal directly to ideologically-inclined but mainstream liberals, who may be energized by OWS and animated by its complaints but consider themselves oriented toward self-consciously programmatic and structural reforms, rather than to the movement per se, if you can see your way clear to doing that. You should start by becoming familiar with voices like Lawrence Lessig and Mike Konzcal if you are not already. These are the people with whom this conversation could get off the ground, I believe. But for that (assuming you are or after you get acquainted with such interlocutors), you will need a concrete agenda, unlike the street dwellers. Clinging to an identification as right-of-center or conservative, with the accompanying distrust of those who identify as left-of-center or liberal, will be an obstacle to to achieving success in this endeavor, if you are serious about it.

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          • His latest popular book is the one I’m thinking of. I haven’t read, but I’ve heard some interviews and I think you’d find it interesting tho you’d have some problems with it (opposition to Citizens United, etc.). But that’s the point.

            Sorry – didn’t see the Konzcal reference.

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            • About 100 pages into Lessig’s book. It’s a quick read so far and the premise is pretty straightforward. It’s not only about corporate dollars, it’s all lobbyists, e.g., including teachers and other unions. All things I agree with. Haven’t gotten to his treatment of Citizens United yet, but my feeling on that case is that I don’t have a problem reducing the influence of factions, I just have a problem with doing it legislatively where the First Amendment already says “Congress shall make no law.” Doing it legislatively rather that constitutionally also begs the very question of fairness: if we’re restricting the speech of certain interests, one wonders what competing interests stand to gain, and how much of their weight they’ve thrown behind the law. It’s a worthy objective, but my sense is it has to be accomplished through constitutional amendment.

              I’ll report back after I finish the book.

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        • The point of this approach is not to make it “easier,” it is to diminish the value and thus the incentive to rent-seek. A representative of Congress in your pocket gets you a lot more juice than a representative of the Alaska legislature. It’s more expensive, than a single state representative, but less expensive than 50 state representatives. So keeping power centralized winds up being good crony-nomics.

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          • It’s easier to buy an entire state legislature than it is to buy 50+1 in Washington. Particularly in poor states. It should speak volumes that it’s already been done (in quite a few states), even though Washington controls more power than the state legislatures.

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          • What Kimmi said. Depending on the state, a legislative race can cost only a few thousand dollars.

            Of course, this comes to my bigger argument about those in favor of delegating power back to the states. If all you want the government do is jail bank robbers who go across state lines and make sure the nuclear missiles are pointed the right way, then why stay a country?

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            • I want the states to do more than the two things you describe, but as a federalist, my answer is mostly economics and defense. Defense is self-explanatory. Economically, the US is the most extensive free trade zone in the world. The ability to freely trade, travel, and relocate with such minimal restriction benefits us all greatly. So even if I got my heart’s desire and a lot more authority were transferred back to the states*, I would still want us to all be under a single umbrella.

              * – And truth be told, I am not an absolutist by any stretch. There are some things done on a state-by-state basis that I do think should be done on a federal, even if there are more things the other way around. And there is only so much latitude I am willing to give the individual states in doing what they will, even if it’s a whole lot more than centralizers would.

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  2. It’s not obvious to me that there’s much of a connection between cronyism and personal wealth or income inequality. That is, I’m not sure that it’s very common for people to bribe Congressmen with their own personal money, as opposed to doing it with corporate funds.

    If this isn’t happening, then taxing the personal incomes of the rich isn’t going to do much to prevent cronyism. And preventing corporations from holding enough cash to bribe legislators isn’t an option, because legislators cost a lot less than the legitimate things that corporations need to be doing, like building factories and such.

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    • Well said, sir!

      Similarly, taxing corporate income (“corporate income tax” being the catch-all populist panacaea around my locale these days) isn’t all that likely to combat cronysim, again for the simple reason that it’s still cheaper for teh ebil corpuh-ayshuns to lobby for preferential treatment rather than actually compete in a freer market. Can we discourage lobbying without prohibiting legislators from trying to figure out how their proposed legislation will actually affect the real world?

      I think I’m operating from a position of ignorance here when it comes to politicians and lobbyists. Help me out here: What purpose was the institution of lobbying intended to serve in the first place? (My first guess: some Arts major wanted to pass a bill, and needed an Engineer to tell him not to screw things up) More to the point, are there presently any indications (a) that lobbying serves anything close to this purpose or (b) that politicians are interested in having this purpose served?

      I tend to see lobbying as a naked exercise of power in the service of regulatory capture, but a lot of that is pure ideological bias. I probably shouldn’t advocate wrecking it if I can’t show that it doesn’t serve any useful purpose.

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      • I think I’m operating from a position of ignorance here when it comes to politicians and lobbyists. Help me out here: What purpose was the institution of lobbying intended to serve in the first place?

        Theoretically, the function of Congress is to represent the interests of the people in their districts. But how does a Congressman (incidentally is there a gender-neutral term for someone in congress?) know what their district think about a policy proposal, especially if it wasn’t an issue during the election? Equally, if a citizen has strong feelings about a law, how are they to let the government know?

        The solution is to allow the people to petition their government for irrelevances (the Founding Fathers thought it important enough to merit a specific mention in the 1st Amendment). If people have strong views about a law they can tell their Congressman about it. Equally, the Congressman can seek the opinion of their electorate, if they feel they need guidance.

        The problem is that it is effectively impossible to separate the benign activities I just described from lobbying as it is commonly understood. Stopping lobbying, assuming it’s even possible would, mean intolerable restrictions on people’s freedom of speech and would make it nearly impossible for voters to have nay say in how they were governed.

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        • It’s worth noting, also, that corruption need not take the form of outright bribery. Even if it were made such that corporations could not possibly give any sort of material resources to politicians, they’d still have a great deal of influence due to the fact that they create jobs, which constituents love.

          If a lobbyist from Acme Corporation, a firm which employs 50,000 workers in a particular representative’s district, that representative is going to listen to what he has to say. And if the lobbyist says that Acme could hire another 10,000 workers if the government could just help them out a bit with expanding the plant, then that representative’s going to listen, because those 10,000 jobs are going to help him get reelected.

          This is corruption in the sense that it’s a corruption of the legislative process. And it leads to bad policy, because politicians aren’t qualified to be picking winners and losers. But there’s no bribery. It’s all on the up-and-up. The representative isn’t even going to keep quiet about it—he’s going to brag about it in his campaign speeches. And so populism becomes the handmaiden of corruption.

          I suspect that corruption works this way fairly frequently. And even where money changes hands, I wonder if maybe it’s less quid pro quo than, “Aren’t they those nice people who helped me get reelected? I guess I should hear what they have to say…Oh, I think the voters are going to like this.”

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          • So you’re saying that members of Congress shouldn’t support a policy that would add ten thousand jobs to their district?

            I mean, I just don’t understand the arguments sometimes. People say “oh, Congress gets elected to run the country, they should be above petty pork-barrel politics!” Really? Why? I certainly wouldn’t vote for someone who said “I’m gonna go to Congress and sell all your asses down the river for the greater good of society!”

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            • I don’t have a problem with pork barrel politics. I have a problem with conservatives complaining about pork barrel politics, then putting banner headlines on their web site about the ‘new jobs’ they’ve brought to their districts.

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            • Then you get back to the whole “picking winners & losers” bit.  Every corporation, with a bit of largess from the state or federal government, could grow & create more jobs, so shouldn’t we do that for all corporations then?  Why is only ACME getting the bit of corporate welfare?  And what happens if ACME decides to forgo expansion, or expands into a different state, but the pet congressman failed to include provisions on the money requiring the expansion happen soon, and locally (happens all the time)?

              Refer back to Kelo, Pfizer promised jobs, local government uprooted a bunch of people and gave the land for a song, and Pfizer walked away.

              Or local to me, the School District had a school they no longer needed, and instead of selling the building at market value to a private school that wanted to expand, they sold it for a song (about 25% of market value) to a church because the church leaders were politically connected.

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        • yawn. ya ain’t need much to fix lobbying. Fix the “buddy buddy” ability of corporations to hire ex-Senators, and possibly have a requirement that someone from the actual district show up to speak (not too onerous. it’s a quick teleconference or plane ticket)

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        • This may prove to burdensome, either from a practical standpoint or from a restriction-on-free-speech standpoint, but there could be standardized ways in which grievances or contact with elected officials is handled. Certain channels must be utilized; others are forbidden. This would probably help, since most of the channels I’d restrict (private dinners, golf course outings, etc.) are the type that are likely uniquely exploited by professional lobbyists and are not available to the common person. Of course, enforcement would be an issue and it would become difficult to determine a golf outing among friends and a golf outing between lobbyists and politicians. There are a myriad of other potential problems, but just because something is hard doesn’t mean it’s not possible.

          The bigger issue, for me, is the conflation of speech with money.

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  3. These numbers show that the wealth share of CEOs and other private sector executives has actually decreased almost 14% since 1979. In contrast, the share of financiers increased more than 80%. Yet the rest of the Rortybomb piece lumps business leaders into the same category as financiers. Why?

    This is a red herring. The issue is wealth inequality, not CEOs — it’s therefore immaterial if their % has decreased slightly. The problem is that everyone on the list above is amassing much, much more money than the other 99% of society; the CEO take may be marginally smaller, proportionately, than it was a generation ago, but in absolute terms it’s grown almost exponentially.

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    • The issue is wealth inequality, not CEOs — it’s therefore immaterial if their % has decreased slightly.

      Or, as I would say, the unequal concentration of wealth/capital–even if the percent distribution of that concentration between CEOs or financiers (or basketball stars or real estate moguls or whomever else) varies somewhat with the development of new financial instruments and the fluctuations of the stock market–doesn’t change the nature of the social power which the wealthy command at all. Paul Ryan and others who want to get us to focus on who “really” has the most dollars at their beck and call at any one time, as if that is a criticism of OWS, are implicitly granting the legitimacy of the class warfare argument, but attempting to get the narrative away from the real point of class warfare: not the fact of wealth inequality, but the unfair power over society which that inequality grants.

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      • ‘nother aspect of class warfare: the newly popular isolation of those with too much money. Time was, you knew the richest person in town, he used your library and your streets — hadda compelling reason to contribute. Now that’s not the case no more — rich people wall themselves off in private little places where they don’t do anything (even restaurants) that ain’t rich-people-only.

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        • Very true, Kimmi. The self-segregation of the upper and upper-middle classes (through private schools, gated communities, elite gym memberships, not to mention all the conveniences made possible through high-speed internet connections and outsourcing) is one of the primary ways in which they (we!) wield social power: making our political concerns wholly separate from those lower down on the socio-economic scale.

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          • It’s not exactly a new phenomenon, though. Paul Fussell talks about the “upper out-of-sight” class as the one at the very top of the ladder. Its signal characteristic is invisibility, not ostentation. The latter is for the vulgar rich.

            Perhaps some of that out-of-sight quality is being passed down the class ladder, but if so, it’s not a new creation.

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          • I’m not middle class (my income is well below $200k), but I take the city bus. Most upper-middle class people still go to the movies, and in my city they use the public parks.

            The concern is not that “we can isolate ourselves”, but that the truly rich can afford to stop paying taxes altogether, and simply pay for what they need, to hell with the rest of us.

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            • Kimmi, I think it’s all part of the same social dynamic: whether it is a matter of financial or personal recusal, either way you see a radial individuation of the person and their interests, to a degree that the masses without great wealth and/or fortuitous connections cannot contemplate. (Jetting off to the Mayo Clinic on one’s own time and dollar–or even being able to find the time-off and the child care to make such a trip possible–for a cancer diagnosis just isn’t an option for the 99%.)

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    • Also, it would make sense that the percentage of CEO’s would go down. The 1% has grown larger because the population has grown larger. But it is unlikely that the number of companies with millionaire CEOs would grow proportionally with population. And that does not mean their total wealth is lower, only that their numbers as a percentage of total members of the 1%. Simple math, brotha.

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  4. What results, then, is not just wealth inequality (which I contend is no sin by itself), but power inequality.

    Interestingly Tim, Marx got there first:

    Hard-won, self-acquired, self-earned property? Do you mean the property of petty artisan and of the small peasant…? There is no need to abolish that; the development of industry has to a great extent already destroyed it, and is still destroying it daily….But does wage-labour create any property for the labourer? Not a bit. It creates capital, i.e., that kind of property which exploits wage-labour, and which cannot increase except upon condition of begetting a new supply of wage-labour for fresh exploitation….[Thus, to be] a capitalist is to have not only a purely personal, but a social status in production. Capital is a collective product, and only by the united action of many members, nay, in the last resort, only by the united action of all members of society, can it be set in motion. Capital is therefore not only personal; it is a social power.

    Now obviously you’re likely to have massive disagreements with use socialists over how to properly understand the various steps in this chain of reasoning, to say nothing of the legislative and/or moral implications of each of them, but the end point is actually pretty nearly the same for both of us. The socialist argument is not, fundamentally, about the equalization of any and all capital accumulation; it is about the equalization of the social power which disposable wealth brings. Which means that someone genuinely interested in liberating the market from the concentration of “procedural unfairness” in particular hands, and someone interested in re-establishing an ethos of solidarity in the midst of actions by those who have benefited greatly from–and have in fact been fiscally encouraged in–policies of outright financial irresponsibility, probably both need to be looking at the same class of people and institutions as target of ire and reform.

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  5. The most obvious explanation is that the Occupy movement is primarily organized around a moral commitment to a particular definition of “fairness” oriented around results rather than process.

    Comedy gold.

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      • First, the words “the most obvious explanation,” attached to Tim’s pet theory to explain everything liberal (Tim’s one method is to tell people to his left what they think). So, “The most obvious explanation just happens to be my silly pet theory” is always comedy gold. That his particular pet theory is an only slightly more subtle version of “liberals wants equality of outcomes, not equality of opportunity” canard makes it even funnier. It’s particularly silly in response to a movement that thinks the process is all fished up. Obviously they’re worried about outcomes as well, but they’ve focused pretty extensively (almost exclusively) on who influences the process. I would have said all this, but I know from experience how much good it would have done. Not that what I actually said will do any good, but it was a quick release.

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  6. Well said Tim,

    The only sense I can make out of the OWS movement is that they are hoping for better cronies. I can tell them how that will work out.

    Howard Stern’s interviews of protestors revealed that the key to getting laid in the park was ownership of tents or sturdy cardboard forts. If I was to join the movement I would demand equal access to tents and forts.

    Equal poontang for all!

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  7. I’m going to take issue with your interpretation of Kelo and its significance. None of my property law professors thought it was all that big of a deal. It was already the case when Kelo was handed down that the sort of taking at issue in that case was illegal in several states, and most of the rest of them have passed statutes limiting local governments’ eminent domain powers in Kelo‘s wake. If anything, Kelo was just a signal to state governments that if they didn’t like this sort of thing, they actually had to do something about it. One doesn’t really hear much about takings for economic development anymore, because the concept is so unpopular that even where it isn’t illegal, local governments are basically leaving well enough alone.

    There are much, much better examples of crony capitalism out there–TARP anyone?–which make your point much more effectively.

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    • It was perhaps “not that big a deal” in the sense most observers predicted it, given precedent and the make-up of the Court. But surely was a big deal in signaling how far decisional law had come from the text and in the social and state backlash.

      Anyway, I thought it a useful illustration particularly because it is so universally despised.

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      • I’d say that Kelo v. New London is indeed a useful illustration–of exactly how the process is supposed to work. The Court held that the text of the Fifth Amendment does not define “public use”. Therefore that definition is, per the language of the Constitution, “reserved to the states specifically, or to the people”. Meaning that it’s up to the legislature to defined exactly what “public use” means–which is exactly what has occurred.

        PS Kelo’s house was relocated to a site elsewhere in New London. The field may be a vacant lot, but it’s not like they sent out the D-9’s to mash the place flat.

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        • Good heavens, if it is above the Court’s pay grade to take up what “public use” means, what isn’t? After all, the Court seems to be pretty confident that it can figure out what “just compensation” means. Do you contend it is engaging in inappropriate judicial activism by failing to defer to local legislatures on the question of whether a landowner has been justly compensated?

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          • Show me the part of the Constitution where it says “the Supreme Court gets to redefine the Constitution however it wants based on bellyfeel”.

            The fact that you personally didn’t like the definition of “public use” in Kelo v. New London doesn’t mean that there wasn’t one. And Kelo is hardly the first time the situation arose; it’s just the first one that popped up when there was a blogosphere to get all worked up about the situation. Kelo is actually in line with earlier Court decisions on the subject.

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            • Were the Court to hold that the “public use” clause prohibits the taking of property from one private party to give to another private party, that would not redefine the Constitution. It would overturn decisional law, but not the Constitution. And I put little stock in decisional law that has no reasonable relation to the text of the document that gives it authority:

              It is a maxim among these lawyers that whatever has been done before, may legally be done again: and therefore they take special care to record all the decisions formerly made against common justice, and the general reason of mankind. These, under the name of precedents, they produce as authorities to justify the most iniquitous opinions; and the judges never fail of directing accordingly.

              —Jonathan Swift, Gulliver’s Travels

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              • But Tim, don’t you have to argue that ere the Court to hold that the “public use” clause allows the taking of property from one private party to give [sell?] to another private party, that would redefine the Constitution in order to argue that the Constitution prohibits it? What is you argument that the texts prohibits that such a public use could be economic development? Isn’t the point of the clause that just compensation must be given – what evidence is there that either a broad or a narrow understanding of ‘public use’ was intended? The court clearly didn’t find enough to rule this state action unconstitutional. Obviously, the Court could reverse itself on the question (and could do so again, for that matter), and as a matter of prediction appreciate your confidence that they will. But what is the textual argument that they must?

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                • Perhaps the best response is that not even the Court calls this a “public use.” Instead, they have almost literally rewritten the Constitution by saying what “public use” really means is “public benefit.” So the question whether Kelo and its predecessors presented a “public use” is not even the question the Court takes up anymore. Thus, the Court is not even applying the Constitution. They’re applying their own precedent. The operative question then becomes, does the nexus between that precedent and the Constitution hold water? I say it clearly doesn’t.

                  What do you say? Would you make the argument that a “public use” includes taking one person’s property to give to someone else who promises to make more taxable privateuse of it?

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                  • I get the inherent disgust that creates in people, but on the other hand, but that’s just the kind of inclination we need to separate from our analysis of what the law actually is, isn’t it? I don’t know exactly how “public benefit” is used structurally, but as james Hanleys points out, the Court’s job is to construe the words in the text some way or other. If the court set as a test for whether something is public use whether the public authority had as its objective in the action the realization of some “public benefit,” then that seem to me to be within the scope of the interpretive job we’re asking them to do, since we are conceding (at least James was) that the textual term is vague. To me, I think I see a reasonable connection to the text there (if that is how the decision is structured), but we can certainly differ.

                    But this all was pursuant to an argument as to why there isn’t a stare decisis brden to meet ert to Kelo – i.e. you claim that the decision bore little enough relation to the text that any precedential authority in it is trifling. I’d add that it’s also a very young decision (though presumaby the court also has an interest in avoiding the appearance of being fickle. Perhaps there is a paper to be written about a sweet-spot in terms of a timeframe for when precedents become ripe for overturning, since after some period of time they attain an impregnability based only on being of long standing).

                    None of this amounts to an argument that the court must arrive at a narrow understanding of “public use.” I can see one – just a plain meaning argument whereby whatever is ultimately created must be for public use, such as a park, community center, government building, etc. Is this your argument? We tend to understand most of Constitutional terms as vague, especially given the changed face of the world since 200 years ago. How do we know in what instances we must suddenly adopt a strict plain-meaning style of interpretation? It isn’t clear to me why we must adopt that interpretation in this case, or even how it can be done as a general matter. But I’m willing to listen to whatever your argument is.

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        • The Court held that the text of the Fifth Amendment does not define “public use”. Therefore that definition is, per the language of the Constitution, “reserved to the states specifically, or to the people”. Meaning that it’s up to the legislature to defined exactly what “public use” means–which is exactly what has occurred.

          Oh, good lord, the Constitution doesn’t define cruel and unusual punishment, either. Do you really want to leave it up to the legislatures of the states to define that?

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            • Really? I’ve read the thing through and through, and I don’t see any place where it says such things.

              Don’t you get it? If it was simply up to state legislatures to define those vague words, they could completely define away any real substantive meaning to them, and the Constitution would be utterly meaningless as a constraint on government.

              It’s exactly the Supreme Court’s job to prevent states from doing that by figuring out what the in-practice definitions of those vague words will be.

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              • Did you forget to read the Tenth Amendment?

                “It’s exactly the Supreme Court’s job to prevent states from doing that by figuring out what the in-practice definitions of those vague words will be.”

                I never thought I’d see an anti-statist libertarian declaring that he preferred a world were nine non-elected persons could decide what the law meant for the entire country.

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                • James Hanley is correct here: the states cannot define “cruel and unusual” on their own. Where the Constitution gives the federal [central] gov’t powers, they are absolute, the “law of the land.”

                  The fight over Roe v. Wade is over the SC inventing [of locating”] a right to abortion in the Constitution, but “cruel and unusual punishment” is already explicitly there.

                  Would the SC be overstepping by defining capital punishment as “cruel and unusual” by “evolving” standards never contemplated by its ratifiers? Sure, that would be an originalist argument.

                  But even Scalia says

                  “So, I think another example is the right to jury trial. In a series of cases, the Court had seemingly acknowledged that you didn’t have to have trial by jury of the facts that increase your sentence. You can make the increased sentence a “sentencing factor” — you get 30 years for burglary, but if the burglary is committed with a gun, as a sentencing factor the judge can give you another 10 years.

                  And the judge will decide whether you used a gun. And he will decide it, not beyond a reasonable doubt, but whether it’s more likely than not. Well, we held recently, I’m happy to say, that this violates the right to a trial by jury.

                  Secondly, and this is the killer argument — I mean, it’s the best debaters argument — they say in politics you can’t beat somebody with nobody, it’s the same thing with principles of legal interpretation. If you don’t believe in originalism, then you need some other principle of interpretation. Being a non-originalist is not enough. You see, I have my rules that confine me. I know what I’m looking for. When I find it — the original meaning of the Constitution — I am handcuffed. If I believe that the First Amendment meant when it was adopted that you are entitled to burn the American flag, I have to come out that way even though I don’t like to come out that way. When I find that the original meaning of the jury trial guarantee is that any additional time you spend in prison which depends upon a fact must depend upon a fact found by a jury — once I find that’s what the jury trial guarantee means, I am handcuffed. Though I’m a law-and-order type, I cannot do all the mean conservative things I would like to do to this society. You got me.

                  [Bold face mine, because it’s funny.]

                  The Living Constitution would not have produced that result. The Living Constitution, like the legislatures that enacted these laws would have allowed sentencing factors to be determined by the judge because all the Living Constitution assures you is that what will happen is what the majority wants to happen. And that’s not the purpose of constitutional guarantees.”

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      • I don’t see it. Kelo didn’t confer new powers on local governments. It was a refusal to outlaw something that had been going on for years. It didn’t open up the floodgates; as Ryan points out, there’s less of it now that previously. And it’s entirely within the power of local and state governments either to make it illegal, or simply to stop doing it. If you disagree with Kelo, good for you, but to treat it as some sort of watershed makes no sense.

        Or do you just hate George W Bush so much that you want to retroactively outlaw the foundation of his personal fortune? :-)

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  8. Crony Capitalism is not to be fought by the government. It’s to be fought by the Fourth Estate, which is well represented by those people in Guy Fawkes masks at OWS. Expose, illuminate, and let sunshine disinfect.

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  9. Tim,

    A well-argued piece, and I am generally in agreement. I only want to quibble about a particular word choice.

    A powerful interest has little reason to buy influence in a weak government

    I think “weak” government is not really what we want, but rather “limited.” I don’t want my government to be weak when it comes to its capacity to repel invaders, or weak when it comes to its capacity to punish rapists, etc. But I do want it limited to doing those types of things.

    I suspect you agree with that, so I don’t think I’m arguing with you.

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  10. If power inequality—e.g., “crony capitalism”—is the problem, does the Occupy movement have a solution? Simply more regulation and more central control won’t get us there.

    Perhaps the protesters don’t accept this standard theory of the right. Maybe they believe that regulations and “central control,” promulgated on behalf of the 99% with minimal influence by plutocrats, could in fact largely solve the problem of power inequality. Naive, perhaps, but they seem to be giving it a shot.

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  11. “The rest of us, too, get the benefit of the new technology and other cheap consumer goods that corporations invent, develop, manufacture, and distribute, many of which undeniably improve our lives.”

    I agree with this, but I have to say that my experience comes from within a bubble formed by having wealthy in-laws, Canadian health care, and marrying into a family of accountants who know how to economize like crazy, which means I sometimes miss the other side of it. I was discussing debt and so forth after class with a student who is older, has children, and works full time fixing ATMs. Where he agreed with me is that it’s great now for consumer items- who would have ever thought you could buy a $30 DVD player, for instance? But when it comes to his big purchases- a mortgage, car insurance, health insurance, a college education for himself and someday his daughter- he’s just barely able to manage it and likely won’t be anymore if things like tuition and insurance premiums keep rising. Or he’ll go even deeper into debt. So, I get the sense it’s very easy to maintain a certain working class consumer lifestyle in the US, but difficult to move up out of that station.

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    • So, I get the sense it’s very easy to maintain a certain working class consumer lifestyle in the US, but difficult to move up out of that station.

      So the first part is easier than in the past, and the second part is about the same as in the past.

      I really think this movement is about rising expectations, not about anything actually getting worse for the middle class.

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      • I don’t. You can look at mean income dropping throughout the boomer’s lifetimes (or at least the past thirty years). You can look at wages not keeping pace even with reported inflation, let alone what the hell the free market says inflation is (see shadowstats)

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      • No I don’t agree at all about the second part. Maybe it depends on how you define “the past” and “middle class” though.

        The guy is working his way through college, which you certainly must know is considerably more expensive than it used to be- the tuition at our university goes up every single year at a rate higher than the rate of inflation, and you’ll find that’s normal for American universities. (I’d also note it seems to increase nearly as quickly as the administrative level of universities metastasizes). He’s also got a young daughter and has to start thinking about her education now.

        Then you have health insurance. I mean, my father works harder than anyone on this board, guaranteed, and his health insurance premiums are killing him. He’s got the cheapest insurance he can get in a fairly poor state, but his rates have more than doubled in the last decade. I think on average the cost of health insurance premiums rose by something like %138 over the last decade. It’s the single highest expense he has at this point.

        And then finally you have a high unemployment rate and a pretty high underemployment rate, especially in the area I teach.

        So, no, I just don’t get the sense that things are about the same as they were in the past, but people’s expectations have just risen in the last few decades. Now, maybe if we compare this to the 1950s or 1960s, there’s some sort of parity. But, even there, my father worked his way through George Mason at a grocery store without racking up any loan debt! So, it`s hard to believe that things are about the same even going back four decades.

        Does this mean that OWS has the answers to any of these problems? Probably not. And I’ll note that neither this student, nor my father are interested in protesting. But, I’m not alone in thinking there are some legitimate frustrations for working people right now.

        http://www.businessinsider.com/what-wall-street-protesters-are-so-angry-about-2011-10

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        • Rufus,

          In the past most people didn’t even have a chance to go into debt to go to college, nor did they have anything that even mimicked health insurance.

          people’s expectations have just risen in the last few decades.
          My point exactly.

          I’m not alone in thinking there are some legitimate frustrations for working people right now.
          I’m not saying their frustrations aren’t legitimate. I’m just saying the sense that things really are worse now than in the past depends on mythologizing the past and ignoring its reality.

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          • Yes, we’re all aware things are better than the 1890’s. But, as far access to higher education, access to health care, and access to a secure retirement, things have gotten worse since the 70’s and 80’s for a large segment of the population.

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            • [A]s far access to higher education, […] things have gotten worse since the 70?s and 80?s for a large segment of the population.

              I’m not sure the problem is access to education — I don’t have sources and my google-fu has failed me, but my impression is that post-secondary enrollment has increased pretty steadily since the ’70s. The problem, it seems to me, is that tuition and student debt have risen drastically in response to student loans that are easy to get and hard to pay off.

              In a lot of ways I see OWS as the leading edge of a higher-ed bust, and I’m surprised that this interpretation doesn’t get a lot more air time.

              (I’m not claiming that “access to health care and access to a secure retirement” are irrelevant, btw.)

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              • Yeah, I meant access to higher education without putting yourself into debt for the next twenty years. Even up to the early to mid 90’s, you could get into a state university and graduate with a really low amount of debt.

                However, thanks to direct state funding as a percentage of total funding going lower and lower and costs increasing, the universities have to get their cash somewhere.

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                • Would it be fair to say that you see increasing student debt primarily as a supply-side issue, where universities are forced to increase tuition to remain solvent? That makes me wonder why enrollment wouldn’t drop in response (“make something more expensive and you’ll sell less of it”).

                  Obviously, I see increased student debt primarily as a demand-side phenomenon: the existing student-loan structure makes debt really easy for students to acquire, and universities have raised tuition to cash in on the surplus. We both see the same problem, but we’re likely to have very different ideas of how to address it.

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                  • It’s a problem on both sides. Enrollment isn’t decreasing because we’ve been drilled for the last 30 years that if you don’t go to college, you’re essentially screwed for life. Now, this has the bonus of being largely true when you look at lifelong income.

                    On the other hand, since college is getting more expensive as a whole and state funding of higher education is going down when compared to inflation and as a percentage of funding toward the university system as a whole, there’s only one other option – raise tuition.

                    But yes, I have no question we’d have a different approach. I’d fix the problem the way many other First World countries have – pay for it via general taxation and lower tuition for all students at public universities.

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                    • Enrollment isn’t decreasing because we’ve been drilled for the last 30 years that if you don’t go to college, you’re essentially screwed for life. Now, this has the bonus of being largely true when you look at lifelong income.

                      That might not be true for long, but I get where you’re coming from. I think that also drives the ease of availability of student loans.

                      On the other hand, since college is getting more expensive as a whole and state funding of higher education is going down […], there’s only one other option – raise tuition.

                      Just about every department I’ve had contact with has tried to cut costs by offering more online courses, having more adjuncts and sessionals teach undergrad courses while hiring fewer faculty, and so on. I know of a number of departments that run a profit based on distance-ed professional degree/degree-upgrade programmes. Raising tuition is far from the only option available.

                      I’d fix the problem the way many other First World countries have – pay for it via general taxation and lower tuition for all students at public universities.

                      That’s an exceptionally regressive transfer. On the demand side of the equation, can we compromise on high tuition with subsidies for low-income students?

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                    • On enrollment, I understand your point, but don’t agree with it. In the near future, because assuming things forty-fifty years from now is idiotic, a college degree will always be worth more than not having one, especially as a social ‘status marker’ when everyone around you has one.

                      On departments, sure, there are ways to cut spending that way. But the truth is, the vast majority of people, including the parents paying for college, don’t just want college to be some podcasts you download and worksheets you send to an email address that’s actually a grading center in Malaysia. They want a community, a direct connection, and all the rest of the ‘college experience.’

                      On paying for it, I don’t think comparing Quebec college education that looks insanely cheap to my eyes (1600/yr? Seriously?) to the modern American experience is a great analogy, but I’ll bite. I’ll go all in for not free tuition, but a locked tuition amount that’s lower than current average amount (just to throw out a number – $5,000) that can’t increase more than inflation with the rest made up from general revenues along with the usual Pell Grants and Student Loans that already exist.

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          • My point exactly.

            The sentence was probably unclear- I was saying that I do not get the sense that it’s merely a matter of people’s expectations rising. I think there is more to it and that people can, to some extent, compare themselves to their parents and be unhappy with what they see. At least for myself the idea of living the sort of comfortable middle class life my grandparents did with his job and her staying at home doesn`t seem conceivable. My sense is that the big investments are less conceivable, especially for working people, than they were back in say the last half of the twentieth century and that this is where some of that frustration is coming from. I also think those charts I linked to give at least some credence to that notion.

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        • Exactly. Wages are stagnant, if you’re lucky enough to have a job, housing, education, and health care are less and less affordable, and fancy toys are cheaper. And we’re supposed to believe that the last of those makes up for the rest.

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          • But should we believe that it doesn’t mean anything?

            People say that OWS protestors having iPhones doesn’t mean that they aren’t poor. But…what if it does? What if the goods that make life both livable and enjoyable are so inexpensive that even persons of relatively limited means can possess them? Isn’t that a good thing? Isn’t that a victory?

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            • -a- victory, perhaps. (certainly for security/safety. 911 is a lot easier to call)

              As we near economic armageddon, I should celebrate the small things? perhaps. ;-)

              Nah, I ain’t about cheering. I’m about fixin’. How about you?

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  12. The movement could take up a more intellectually cohesive position by rallying against centralized economic and financial planning and restoring America to a more constitutional model

    So what do you think about breaking up the banks?

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  13. Rufus,

    Ah yes, the good ol’ days, when we didn’t worry about health care costs — we just did the middle class thing and died like we were supposed to.

    Things are MUCH better than they have ever been before. Individual incomes are not dropping on average, inflation is absurdly overstated, technology makes poppers live better than prior era kings, income mobility robust most of us that avoid having kids before finding a father.

    But I exaggerate. You are right, things with extensive government interference — health care, education, energy, warfare, and housing are getting less affordable. Perhaps we can get the OWSers to lobby for less government.

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