Sunday, February 10, 2019

What is Democratic Socialism and does Trump Need to Protect Us from Sanders and Ocasio-Cortez?


What does it mean to be a Democratic Socialist and are Bernie Sanders and Alexandria Ocasio-Cortez supporters such that Trump needs to protect us from them as he declared in his State of the Union speech?

The simple answer is that historically democratic socialism meant democratic ownership and control of the means of production or of the economy, including major corporations.  Democratic socialism is not simply providing government benefits such as Social Security or health benefits.  This is enlightened capitalism or welfare state capitalism but certainly not socialism.  Conflating all this with democratic socialism is simply another effort to Red bait anyone who believes in government helping others.


 In 2015 Sanders declared:
And what democratic socialism is about  is saying that it is immoral and wrong that the top one-tenth of 1 percent in this country own almost 90 percent - almost - own almost as much wealth as the bottom 90 percent.  That it is wrong, today, in a rigged economy, that 57 percent of all new income is going to the top 1 percent.

That when you look around the world, you see every other major country providing health care to all people as a right, except the United States.  You see every other major country saying to moms that, when you have a baby, we're not gonna separate you from your newborn baby, because we are going to have - we are gonna have medical and family paid leave, like every other country on Earth.

For Sanders, economic justice and leveling the opportunity and income gap between the rich and poor is what part of what it means to be a democratic socialist.  Yet historically the term has meant  more that economic justice, it also included democratic control of the economy.

Democratic socialism emerges as a political movement in response to Karl Marx’s criticism of capitalism in the mid nineteenth century.  To simplify, Marx had argued that the core problem of capitalism was  a class exploitation and struggle between the bourgeoisie and proletariat where the latter sells labor power which is extracted as surplus value by the former.  The bourgeoisie own the means of production and over time in their race to maintain profits they increasingly replace human labor power with machines, they drive down wages placing more and more individuals into poverty.  This process creates an economic crisis, intensifying class struggle, and eventually creating conditions for a capitalist struggle.  As the theory was eventually amended by Engels, it suggested an economic inevitability for the revolution.  With Lenin, the communist party would serve as a vanguard movement to lead the revolution.  As further amended by Stalin, this party in practice was highly undemocratic.

Starting in the late nineteenth century individuals such as Eduard Bernstein in Evolutionary Socialism argued that the revolutionary tactics and economic inevitability of the revolution were not  practical or certain.  He and others agreed with much of the basic criticism of Marx but instead tied the future of a classless society to parliamentary democracy.  Specifically, the emphasis was upon linking universal franchise to socialist ideals with the hope that socialism could be brought about by elections.  For Bernstein, socialism was an ethical imperative, it was about treating everyone with respect, and it was grounded in the French Revolution ideas of promoting “Liberty, Equality, and Fraternity.”  It was taking the ideals of political liberalism and translating them into economic democracy.  In effect, workers would have democratic control not just of the government but of the economy.

There was serious debate over whether parliamentary socialism was possible, with writers such as Rosa Luxemburg, Karl Kautsky, and Leon Trotsky reaching various conclusions.  But the core argument about what constituted democratic socialism centered on democratic control of the marketplace–it was democratic control of capitalism.  It was about ensuring that workers and not capitalists made decisions about what to invest, not letting the choice simply remain in the boardrooms of corporate executives.

The dividing line between democratic socialism and what we might call enlightened capitalism or liberalism is significant.  John Stuart Mill’s Principles of Political Economy argued that social injustices could be addressed by simple redistribution of economic resources–the classic welfare state.  Here the government would tax the rich and redistribute economic resources, or use its power to improve the economy.  Eventually this would be the Keynesian economics of the New Deal and Great Society.  It is state capitalism for the benefit for middle class and poor, but it is still capitalism.  Yes, the government can act and manipulate the economy for the benefit of the people, but it can also do that for the benefit of the rich.  This is what the US government has essentially done for the last couple of generations, and this is the criticism that Sanders is leveling.

In so many ways, Sanders is a left liberal following Mill and Keynes–we can use state capitalism to augment  economic redistributions–but he is not a democratic socialist in the classic meaning where the emphasis is upon democratizing both the political and economic systems.  It is about subordinating market choices and the free market to serving democratic imperatives.

Michael Harrington was perhaps America’s finest theoretician of democratic socialism.  He was one of the founders of the Democratic Socialists of America.  His book The Other America in the early  1960s is one of the clearest criticisms of American capitalism and it inspired many.  But in his Socialism Past & Future he crisply defines democratic socialism as:

[D]emocraticization of decision making in the everyday economy, of micro as well as micro choices.  It looks primarily but not exclusively to the decentralized, face-to-face participation of the direct produces and their choices in determining the matters that shape their social lives.  It is not a formula  of a specific legal mode of ownership, but a principle of empowering people at the base...This project can inspire a series of structural reforms that introduce new modes of social ownership into a mixed economy.

Democratic socialism is not the central state planning of the economy where the government owns  all the businesses.  It is as Alec Nove describes in the Economics of Feasible Socialism a variety of business types, but all are connected by the idea that there is democratic control over basic economic choices.  What China has with its state-owned enterprises is not socialism, it is state capitalism, and mostly to the benefit of a few.  Few Chinese have much say over the economic choices being made in that country, one where there is a sharper and sharper class divide.

Democratic socialism for Harrington, and Dorothy Day, as well as Norman Thomas, Eugene Debs, and Emma Goldman, is also as Bernstein argued, infused with ethical imperatives about respecting human dignity and the banner of individual rights as articulated by classical writers such as John Locke and John Stuart Mill. Democratic socialism would assail  the power of the rich and of corporations in America, contending that is not enough just to tax them and redistribute wealth.  Instead, it is about saying they do not get to make the political and economic choices that govern the rest of society.  It is saying that the people get to own the economy and decide for themselves.  Capitalism does not dictate how democracy operates, it is vice-versa.

This is what democratic socialism has historically meant. Sanders may or may not be one or he may be redefining what the term means.  But orthodox democratic socialism is something different than what Sanders described in 2015, what Trump disparages, and what so many think of when the discuss matters such as free health care, college education, or other programs.

Saturday, February 9, 2019

Klobuchar Sexism and the Day the Walz-DFL Agenda Died

For Amy Klobuchar, Tim Walz, and the Minnesota DFL, it was a week ripped from the opening line of A  Tale of Two Cities–It was the best of times and the worst of times.  As Klobuchar prepares to declare her presidential candidacy and Minnesota Governor Tim Walz and the DFL House majority prepare to move their agenda, reality is settling in to derail them.

Klobuchar’s Management Style: Sexism or a Legitimate Criticism?
During her 2016 presidential run I posed a quiz when it came to Hillary Clinton’s campaign:  What percentage of voters would never vote for her because she is female?  I suggested 30% and most everyone thought I was way too high.  Post 2016, I think I was too low.  Going into 2020 there is still a high percentage of voters who will never vote for women for president and sexism will be the fate any female candidate confronts, whether from the voters or the media.  The same will be true for Amy Klobuchar.
A barrage of stories have emerged from the Huffington Post and BuzzFeed that Klobuchar had horrible relations with her staff  both as US Senator and back to her day as Hennepin County Attorney.  These revelations may be news to Minnesotans but have been dirty little secrets and knowledge among insiders for years.  Klobuchar’s ability to massage the local media largely kept these stories from appearing.  Yet now that she is running for president, Klobuchar is facing the rough and tumble reality of a national media which she has not similarly been able to control.  As long as Klobuchar was simply Minnesota’s Senator, making carefully crafted statements on Rachel Maddow or in a Brent Kavanaugh hearing, she was not going to be attached.  But run for president and nothing is out of bounds.
The question is how much of the reporting is legitimate or sexism?   No doubt many men in Congress are terrible bosses and work poorly with their staff yet little or none of that is reported.  There is a double-standard when it comes to female leaders and Klobuchar is confronting that standard now.  But also for so long she has enjoyed an extended honeymoon with the press, and many of the grumblings and criticisms of her have been suppressed.  Do her personnel policies speak to her fitness as a leader?  Klobuchar’s media honeymoon is over.

The Day the Walz-DFL Agenda Died
The most important and overlooked story in Minnesota politics this week was the Senate District 11 special election where Republican Jason Rarick defeated DFLer Stu Lourey.  With the  exception of one story by Channel 5's Tom Hauser, few appreciate what happened, and even then  Hauser underestimated its significance.
Senate District 11 was a solidly DFL seat for eons, held by Becky Lourey and then her son Tony Lourey.  It was part of the coalition of Senate seats at or near the Iron Range that historically help anchor the DFL majority statewide.  With prior to Tony Lourey’s departure to head Health and Human Services in the Walz administration, the MN Senate was split 34-33, with Republican majority.    Governor Walz, the DFL House majority, and Tom Baak dreamed of picking off at least one Republican Senator to move their agenda.  More specifically, the DFL message to Republicans, especially in the suburbs, was that if you do not support our proposals, especially our top-ten bills, you will be vulnerable and we are coming after you in 2020.  That logic ended on Tuesday.
First, in losing the seat, the DFL goes from 33-34 to 32-35.  Picking off two Republicans is harder than one.  It was already going to be difficult to pick up one Republican vote–the GOP had strong ideological reasons to oppose the Walz-DFL agenda.  Why should they support it and give the Democrats victories?  The DFL promulgation of their top ten bills gave the Republicans their list of the top ten things to oppose.  Frustrate the DFL in their core agenda and then run in 2020 against it.
Second, losing this seat takes away the Democratic threat of 2020.  How so?  If Democrats planned to say to suburban Republican senators vote for our bills or else in 2020, Republicans can now say that we are coming after rural, Iron Range, or greater Minnesota Democrats in 2020.
Third, in losing a solidly DFL seat, it continues a nationwide pattern too seen in Minnesota where there is a big political sort going on.  Greater Minnesota and the Iron Range are becoming more Republican, including perhaps permanently shifting the Eighth Congressional District into the  GOP camp.
Finally, all of this questions the wisdom of Walz picking Tony Lourey for HHS and the DFL thinking a third generation of Lourey’s would do the trick.  Minnesota DFL politics has been dynastic for generations–think of the names Humphrey, Mondale, Freeman, and Klobuchar.  Times change and running on familial connections does not always cut it.
The special election loss portends a near fatal blow to the Democrats successfully get much of anything they want this session, and the 2020 electoral threat has been significantly undermined.  It is too early to say deadlock in the 2019 Legislative session or government shutdown, but it is not premature to declare that the Walz-DFL agenda died last Tuesday.

Thursday, February 7, 2019

Klobuchar for President? Her Chances Are Less than Most Minnesotans Think

More than likely, Amy Klobuchar will announce on February 10, she is running for president. As
Minnesota’s most popular elected official, winning her last US Senate campaign with 60% of the popular vote, everyone in the state thinks her presidential prospects are terrific.   But living in the state it will not be popular to say what this, but her prospects of being a successful candidate are against her and contrary to received wisdom in Minnesota, she faces enormous obstacles either as a presidential or vice-presidential candidate.
There are many problems Klobuchar confronts as a presidential candidate, some unique to her, some to coming from Minnesota, some given the direction of the Democratic Party, and in many ways all three of these items are connected.
Consider first Klobuchar first as candidate.  Yes she is well-known in Minnesota but nationally she is still barely a blip in public opinion polls.  A recent Washington Post poll among Democrats gave her only 2 % support.  Other polls at barely 1%.  Outside of Minnesota she remains largely unknown. Part of that problem is that Klobuchar comes from the Midwest–flyover zone for those on the coasts–outside of the major media markets where candidates such as Cory Booker, Kamala Harris, and Elizabeth Warren come from.  They simply have higher name recognition given their states.  This geographic isolation of Minnesota has historically been a challenge for Minnesota presidential candidates.
Second, Klobuchar is not a rock star exciting persona, instead a classic more subdued Minnesotan.  The personality that might play well in Minnesota politics does not necessarily play well on the national level.  Walter Mondale, Hubert Humphrey, Tim Pawlenty, and Michele Bachmann resonated well in Minnesota but not so well nationally.  Minnesotans like their politicians, but the state’s exceptionalism in politics perhaps means that a different skill set and persona are needed here compared to the national level.
Third, Klobuchar faces a narrative problem.  All candidates need a narrative or message and reason for running.  Hillary Clinton’s problem both in 2008 and 2016 was that she had no narrative beyond she was not Bush (in 2008) or Trump (2016) and it was her turn now.  What is Klobuchar’s narrative?  Simply being against Trump is not enough–all the Democrats running in 2020 will be that.  Klobuchar needs to be more than that, and it is not clear what her narrative is, or it is one that may not play.  By that, most of Klobuchar’s tenure as Senator has been in the minority where she has had little chance to make substantive policy in a polarized partisan environment. Her rel record of accomplishment is thin.
Klobuchar’s major selling point is that she can reach across the aisle and work with Republicans.  It is not clear this is a selling point with a Democratic Party–especially during the primaries–that is moving to the left.
Klobuchar is running as a centrist and that is not where Democrats are now, and rarely has  “Running to the right” been a winning strategy for them at the national level.  Campaigning with the endorsement of George Will does not cut it with liberals.  Clinton in 2016 said her strength was going to be winning over moderate Republicans and winning white southerners (as she did against Sanders in the primaries), and look how well that strategy worked.  The US is even more polarized now and it is less clear that now a Democrat can garner Republican votes.  Orthodoxy in the Democratic Party is now for Medicare for all, free college education, and other big idea economic redistributive ideas.  Is this where Klobuchar is?
Klobuchar’s narrative is her experience–again much like what Clinton ran on in 2008 and 2016. She is a former country attorney and three-term Senator.  But Kamala Harris is a former state legislator, San Francisco prosecutor, California Attorney General, and US Senator; equally if not more impressive credentials, even on the topic of law and order.
Klobuchar also seems to be relying on an Iowa strategy to energize her political campaign.  First, it assumes that because Minnesota is next to Iowa and part of the former’s media market extends into the latter, people in Iowa know her.  Second, since Jimmy Carter in 1976, candidates  look to Iowa for a win to capitulate them into a subsequent victory in New Hampshire and beyond.  There are several problems with this strategy, assuming it has worked and that it will be winning formula in 2020.
Bachmann and Pawlenty thought the Minnesota-Iowa connection would work for them and it did not.  Second, since 1972, there have been 10 Democratic and eight Republican contested caucuses. Only six of the Democratic caucus winners and three of the Republican caucus winners have gone on to win their party’s nomination–only 50% does the Iowa winner go on to capture the party nomination.
But in 2020 things also change in a dramatic way–California and Texas move up their primaries to March 3, and the early voting for the former will start about the same time as the date of the Iowa caucus scheduled for February 3.  Moving up the California and Texas primaries changes the importance of Iowa and the logic of campaigning.  Relatively speaking running in Iowa was cheap by comparison to California and Texas which will take millions of dollars and lots of name recognition.  Kamala Harris for one, will be advantaged by the early California primary and if she does well there and Klobuchar not, Iowa may not matter at all no matter how well the Minnesota senator does.
Finally, what about the theory that Klobuchar’s real aim in running for president is to be I’ve-president?  Contrary to all the folk wisdom (and empirical political science including mine supports this), few if any vice-presidential candidates really matter to tickets or voters.  There is a belief in geographic or other balance with vice-presidents as running mates, ut one has to ask what would Klobuchar add to a presidential ticket?  Will she help a Democrat carry Minnesota?  Will she pick up votes in New York?  Is she a pit bull or attack dog like some Veeps are?  Simply being a nice person whom everyone likes in Minnesota does not make one a strategically good choice for vice-president.
Perhaps Amy Klobuchar will defy the odds and win.  One can wish her well.  But an honest appraisal suggests the odds are against her.

Saturday, January 26, 2019

What Minnesota Can Teach America About Avoiding Future Government Shutdowns: Don’t do What we did, Adopt an Automatic Continuing Resolution Law

The US government shutdown is over and now the obviously and entirely predictable boring ping pong match begins.  By that, the entire focus will be on one side gloating that Democrats and Nancy Pelosi won and Donald Trump lost.  Over-quoted and deserved to be ignored conservatives like Ann Coulter on cue bemoan how Trump lost and the Rachel Maddows of the world  respond to her equally on cue, all as part of a click-bait politainment process to hype ratings.  This column will not use the phrase “cave in” more than once, but as of Saturday morning (January 26, 2019) that phrase had 15,300,000 results on a Google search.
The real focus now should be on the causes and consequences of the shutdown and how to prevent a future one.  Technically the government shuts down when there is no legal authorization to spend money. There is a simple way to prevent shutdowns whether in three weeks or the future and it is the same solution I have argued for in Minnesota for the past 15 years–pass a law enabling an automatic continuing resolution to continue funding the government in the event that no budget agreement or normal continuing resolution are adopted.
Minnesotans know a lot about government shutdowns.  We have had three since 2001–more than any government in the US, if not the world.   What we have learned about what causes and ends them might tell Americans something about why the current US shutdown occurred and what it will take to end it and perhaps prevent future ones.
Minnesota is a microcosm of the US.  It once enjoyed a  pristine image political image.  Touted in the 1970s with then governor Wendell Anderson on the cover of Time Magazine as the state that works, the reality is that Minnesota has become a partisanly divided state that has impacted the performance of its state government.  Minnesota is the only state with split partisan control of the legislature. Similar to the federal government which has a budget process and deadlines, Minnesota has one too. 
Yet since the beginning of the twenty-first century, the state has more often than not missed statutory deadlines, resulting in government closures and court fights.  In 2001 with Democrats in control of the Senate, Republicans in the House, and Independence Party Governor Jesse Ventura, the state started its new fiscal year without a budget but was saved from a shutdown with a last minute deal.  With a similar partisan legislative split in 2005 and Republican Tim Pawlenty as governor, there was a partial shutdown of nine days, and in 2011 with Republicans controlling both houses of the legislature and Democrat Mark Dayton as governor, there was a 20-day partial shutdown. In each case, state courts intervened to order essential governmental functions to be funded, and the shutdowns ended when public pressure and political self-interest drove leaders to compromise.  It also did not hurt that the inability to issue beer licenses added to the public pressure.
In addition to these shutdowns, in 2009 Tim Pawlenty sought to use special powers referred to unallotment to end a budget impasse (perhaps similar to President Trump’s threat to use the National Emergencies Act to build the wall), only to see the state supreme court reject it.  In 2017 Governor Dayton used his line-item veto to eliminate funding for the state legislature’s operations in retaliation for the latter’s refusal to follow his budget wishes.  In 2018 he vetoed an omnibus spending bill the Republicans had adopted, containing 80% of all the substantive legislation they had adopted that year.
The causes of Minnesota’s budget woes are multiple. The state has an antiquated budget process, built for a horse and buggy era seeking to operate in a twenty-first century environment.  The budget process is highly decentralized, imposes unrealistic deadlines, and has built into it simply bad policies such as a requirement counting inflation for the sake of revenue but ignoring it when it comes to obligations.  The defective formal process is compounded by partisan divides and polarization not anticipated when the budget process was first designed, as well as by inflated egos, partisan ambitions, and lack of leadership.  When a flawed process is accompanied by petty politics, the result is political dysfunction.  The way the shutdowns ended was a combination of court interventions, public pressures, and fear of electoral reprisal.
Much of what we see in Minnesota is exactly what we see at the federal level.  The formal budget process as articulated in the 1974 Congressional Budget and Impoundment Act simply is broken and needs to be remade. It was legislation adopted post Watergate when there still existed a high degree of consensus on spending priorities and when federal spending was significantly less than it is today. Over time, the process has only four times produced a budget on time (the last in 1997), with most of the time the federal government operating on a series of continuing  resolutions. Fast forward more than 40 years, the budget process is too weak to combat the partisan divide and lack of leadership in Washington, demonstrating that now it is completely broken.
Process and procedure are important, but the history of Minnesota’s and the federal budgeting demonstrate that formal procedures can only go so far.  A bad process makes it hard to do good budgeting.  But processes are only as good as the people who use them.  Budget disputes and government shutdowns are the product of significant political dissensus and failures of leadership.  So much of the US government, from the days of the constitutional framers to the present, was premised upon a basic underlying consensus and commitment to the public good that has evaporated.  Unfortunately, what is needed are new institutional rules to address this reality.
For the last 15 years in Minnesota I have argued for adoption of an automatic continuing resolution that would keep it funded no matter what.  The same should be adopted at the federal level.  The federal government should also consider biennial as opposed to annual budgets, and consider changing committee structures and time lines to streamline the process.  But even with these fixes, they will not solve the core problem driving government shutdowns–polarization, political pettiness, and a crisis of leadership.  After each of its shutdowns Minnesota failed to learn from it mistakes, making no changes in the budget process or adopting the automatic continuing resolution idea.  Instead, the focus was on who was the winner and loser.  The same is now occurring after this federal shutdown.  We will learn little from it and set the country up perhaps for another shutdown in three weeks or in the future.

Tuesday, January 22, 2019

Nancy Pelosi is Wrong–Congress is not co-equal to the president, the framers intended it to be superior.

House Speaker Nancy Pelosi got it wrong in recently declaring Congress as co-equal to the
president.  The reality is that the Constitution and its framers endorsed the concept of legislative  supremacy where Congress is supposed to be the dominate branch of government.   This supremacy  is the key to checking abuses of presidential power.
When Speaker Pelosi initially invited President Trump to deliver the State of the Union speech to Congress on January 29, she wrote: "The Constitution established the legislative, executive and judicial branches as co-equal branches of government, to be a check and balance on each other."
As the framers wrote the Constitution, they did so with the belief in legislative supremacy and the idea that Congress would be the most powerful branch of the government.  Separation of powers and checks and balances were critical features to the new constitution, but  branch co-equality was not.
Consider first the intellectual and historical circumstances surrounding the writing of the Constitution.  The American revolutionary war, as described in the Declaration of Independence, was largely about fear of the British monarchical executive power of King George III.  Much of the Declaration reads as a bill of particulars against the abuses of the king.  In arguing against monarchical powers, the framers were part of a long intellectual and historical tradition going back to seventeenth century England, if not to the Magna Charta,  arguing against the absolute power of kings and queens and in favor of a parliament. 
The British civil wars and the Glorious Revolution were about that.  The American founders were heavily influenced by British political philosopher John Locke who argued precisely in favor of parliamentary supremacy, against monarchical absolutism, and in favor of separation of powers.  Similarly, French political philosopher Baron de Montesquieu, who also  influenced the framers of the Constitution, too argued for separation of powers, but never asserted that the three branches of government would be co-equal.  Instead, he saw legislative authority as supreme and needing checks on it.
At the 1787 constitutional convention several of the framers argued the case that the legislature (Congress) needed to be checked because it was so powerful and, almost quoting Montesquieu verbatim,  could threaten the executive branch.  In part, the fear of Congress’ power was in part the basis of bicameralism (dividing the legislature in two to check its power) and giving the president a veto.
Further proof of legislative supremacy can be found in the text of the Constitution.  Article I which vests legislative power in Congress contains far more enumerated and implied powers than does Article II which vests executive powers in the president.  If a simple listing of the number of powers assigned to each branch means anything in terms of how to assess the relative powers of the two branches, by far Congress was more powerful.
But turn also to the Federalist Papers, considered by many including numerous Supreme Court Justices the definitive statement by Alexander Hamilton, James Madison, and John Jay regarding what the Constitution was supposed to mean.  In Federalist 39 Madison states:
But if the government be national with regard to the OPERATION of its powers, it changes its aspect again when we contemplate it in relation to the EXTENT of its powers. The idea of a national government involves in it, not only an authority over the individual citizens, but an indefinite supremacy over all persons and things, so far as they are objects of lawful government. Among a people consolidated into one nation, this supremacy is completely vested in the national legislature.

Additionally, in Federalist 48 Madison declares:
The legislative department derives a superiority in our governments from other circumstances. Its constitutional powers being at once more extensive, and less susceptible of precise limits, it can, with the greater facility, mask, under complicated and indirect measures, the encroachments which it makes on the co-ordinate departments. It is not unfrequently a question of real nicety in legislative bodies, whether the operation of a particular measure will, or will not, extend beyond the legislative sphere.

History and framers’ intent do not support the idea of co-equality.  Historian Arthur Schlesinger, Jr.  in his 1973 The Imperial Presidency made the same point, as did political scientist David Siemer in his 2018 The Myth of Coequal Branches: Restoring the Constitution’s Separation of Functions.   
What has happened over time is that both as a result of executive branch usurpation and congressional  acquiescence, the president has become too powerful.  Post-Watergate, there were efforts to correct this balance, but they lapsed. And as we have seen in the last few administrations, presidents continue to exercise too much power through executive orders and other actions,  and they need to be checked.  Congress reasserting itself as the dominant branch of the national government is one way to do that.

Saturday, January 12, 2019

Presidential Emergency Power: Can Trump Build a Wall?

The more President Trump changes his mind about declaring a national emergency to build his wall the less likely it is that he has the authority to do it.  But even if he had declared a national emergency immediately, it is unlikely the Constitution or congressional statute allows him to do it.  That is perhaps why Trump has not invoke emergency powers to build the wall–basic principles of American law suggest he lacks the authority to do it.
The US Constitution is a power conferring document.  There are no extra-constitutional powers.  Before the president or any branch of the national government does something it needs to trace authority back to the explicit text of the Constitution or the power must be necessarily implied.  In the case of the president, his authority comes from Article II of the Constitution, or he may be delegated some additional authority to him from Congress via Article I.
Under Article II section 1, executive power is vested in the president.  Under Article II, section 3, the president shall take care that the laws are faithfully executed.  Through either of these clauses the president can issue an executive order and declare a national emergency, but what does that really mean?  Does it mean presidents can ignore existing law or do whatever they want for whatever reason?  Doubtful.  President’s cannot manufacture an emergency and then invoke undefined  powers to ignore the law or the Constitution; this idea violates the very idea of rule of law and the concept of American constitutionalism.
Presidents do not get the right to decide what is an emergency and do whatever they want.  The Supreme Court said this arguably one of the most important cases of all time, Youngstown v Sawyer, 343 U.S. 579 (1952).  Here President Truman declared an emergency and nationalized the steel mills during the Korean War to prevent a labor strike that would have affected production.  If ever there was a crisis, war was it, and the Court ruled against Truman.  In Youngstown many legal scholars think Justice Jackson’s concurrence is best statement ever on presidential power.  Acting with congressional assent presidents have  enhanced power, with congressional silence they only have the powers given to them by Article II, and acting against congressional wishes, presidents have diminished authority.  Truman was acting on his own and lacked the authority to act.  However this third scenario is where Trump is right now when it comes to the wall and the emergency here is no greater than what Truman faced.  There are at least two laws that limit Trump’s discretion to act.
The first law is the 1974 National Emergencies Act.  Responding to abuse by previous presidents, this Act sought to constrain unregulated use of presidential declarations of national emergencies.  Unfortunately, the Act does not define what a national emergency is, leaving it up to the president’s discretion, subject to congressional veto or check on the declaration.  However, there are three problems with this Act. 
First, the original concept of this legislative veto is arguably unconstitutional  as a result of other Supreme Court decisions such as INS v. Chadha, 462 U.S. 919 (1983).  Second, it is not clear that Congress can give the president unbridled or unrestricted discretion to act, especially to disregard  other congressional statutes or provisions, unless it specifically says so.  While the Court is reluctant to invoke the delegation doctrine to limit presidential authority and has not done so since the New Deal, the wide-open language of the National Emergencies Act is a perfect place for the Roberts Court to do this.
But third, there is another law that points to why the president cannot invoke the National Emergencies Act to build the wall.  It is the 1974 Budget Act.  Responding to abuses by Richard Nixon who impounded or refused to spend money allocated by Congress, the Act placed limits on the ability of the president to do this.   In Train v. City of New York, 420 U.S. 35 (1975), the Supreme Court upheld the Budget Act saying that once Congress has allocated money for something the president is not free to disregard the law and spend or not as he wishes. 
The question is, does the authority grant to the president under the National Emergencies Act supersede the Budget Act?  There is no indication that the latter was meant to free the president to disregard spending priorities mandated by Congress.  If there were, Congress would have said so in the Act.  But even if such an intent or purpose was implied, it is doubtful given the purposes of the Budget and National Emergencies Acts that these statutes could be interpreted to be expanding as opposed to contracting presidential authority.  But, as noted above, if Congress did intend this,  it is unconstitutional.  Finally, supposedly Trump is looking at raiding money from hurricane  relief funds.  There is no indication that in allocating this money Congress intended it to be diverted for other purposes.  Whatever general intent the Emergencies Act has, it cannot override specific intent or a mandate to spend as decided by a particular statute. 
There are two addition  problems with Trump invoking the National Emergencies Act.  First, the Act is not for politically manufactured emergencies, especially ones created by the president himself.    Trump today could end the emergency by agreeing to sign a spending bill or continuing resolution.  Giving presidents the ability to invoke a national emergency during negotiations with Congress so that they can get their way is like letting someone take their bat and ball and going home if they are losing.  The National Emergencies Act is not a tool to bypass the Constitution.   Under Chevron v. NRDC, 468 U.S. 1227 (1984), courts are supposed to give deference to reasonable executive agency determinations of ambiguous statutes.  Conservatives, including Justice  Gorsuch, have increasingly questioned Chevron deference and there many be a majority either unwilling to give Trump the benefit of doubt regarding what a national emergency is, finding his use  or interpretation is unreasonable.
Second,  the longer and more Trump delays or vacillates in declaring an emergency the more it shows that the border problem is not an emergency in any ordinary dictionary meaning of the term.
Perhaps then why the President is not invoking the National Emergency Act simply is that  he has been told he will not win this legally, on top of the fact that he is not winning this fight politically.

Monday, January 7, 2019

Alexandria Ocasio-Cortez and High Taxes on the Wealthy: Do they matter?


Let me tell you how it will be
There's one for you, nineteen for me
'Cause I'm the taxman, yeah, I'm the taxman.

–Beatles, The Taxman

Taxes impede economic growth and high taxes kill the economy, right?. This is the belief among many who criticize Representative Alexandria Ocasio-Cortez’s proposal to raise taxes on the wealthy to 70% or more.  But what does the evidence really tell us?

Do high taxes really hurt the economy as much as they believe, and will lowering them have much of an impact on stimulating it? The economic literature is clear — tax breaks to encourage economic relocation or investment decisions are inefficient and wasteful. Hundreds of studies reach this conclusion. When businesses are surveyed regarding factors important to their investment decisions, taxes often come in behind proximity to markets, suppliers, and the quality of the labor force. These other factors occupy a larger percentage of a business's budget than do taxes, and all of them are far more critical to long-term success than are taxes. Businesses occasionally admit this. Nearly 62 percent of those interviewed in a California study on hiring tax credits indicated that they had never or rarely affected their decision to employ individuals.

Anecdotal stories and illustrations also confirm the tax fallacy. High tax states such as Minnesota have generally fared better in terms of economic growth, unemployment, median family incomes, and location of Fortune 500 companies than low tax ones such as Mississippi and Alabama. In many situations high taxes, and with that, government expenditures on education, workforce training, and infrastructure, correlate positively with income, low unemployment, and business retention. One needs to look not just a one side of the equation—taxes—but the other side too—what taxes buy—to see what value businesses get out of them in terms of educated workforces and infrastructure investments. Most debates fail to do this.

Bureau of Economic Analysis statistics demonstrate how economic growth is related to tax rates. One can compare annual economic growth as measured by the percent change in the gross domestic product (GDP) percent based on current dollars to the highest federal individual tax rate and the top corporate tax rate since 1930. If taxes are a factor affecting economic growth, one should see an inverse relationship between growth of the U.S. economy and higher tax rates. The GDP should grow more quickly when top individual and corporate tax rates are lower. If taxes are a major factor deterring economic growth, lines on a graph should go in opposite directions: As tax rates go up the GDP should go down.

No such pattern emerges between high taxes and GDP growth over 80 years. During the Depression of the 1930s corporate and individual taxes rates increased, but in 1934 through 1937 the GDP grew by 17%, 11%, and 14% annually. Top corporate tax rates climbed to over 50% through the 1960s, again with no discernable pattern associated with decreased economic growth. The same is true with top tax rates on the richest which were 91% into the 1960s. Conversely, since the 1980s after Kemp-Roth and then after 2001 with the Bush era tax cuts, there is no evidence that the economy grew more rapidly than in eras with significantly higher tax rates on the wealthy and corporations.  The same is true even of the much heralded 1960s Kennedy tax cuts.  While at one time economists thought they had an almost magical impact on the economy, more recent evidence questions that.

Looking at time periods when tax rates were at their highest, GDP often grew more robustly than when taxes were cut.

Pictures are worth a thousand words, but statistics are priceless. Statistically, if a tax hurts economic growth, the correction with it is -1. If they positively facilitate growth the relationship is 1, and if they have no impact the relationship is 0. The correlation between GDP and top individual taxes is 0.29, between GDP and top corporate taxes is 0.32, and among the three it is 0.14. Statistically, there is a slight positive impact on either top individual or corporate taxes or economic growth, but overall almost no connection between tax rates on the wealthy and corporations and economic growth in the United States.

But what about taxes as job killers? Again running similar statistical tests, there is little connection. Using Bureau of Labor Statistics data on unemployment rates since 1940, the correlation among top individual and corporate taxes and the annual unemployment rate is -0.02—essentially no connection at all.

The simple claim that high tax rates on the wealthy and corporations hurt economic growth and job production is false. The evidence is simply not there to support assertions that high taxes alone hurt the economy or that cutting them will have the stimulus effect asserted.  Representative Alexandria Ocasio-Cortez may be correct that increasing taxes on the wealthy will not only be more fair, but an efficient means to stimulate the economy, help the poor, and generate the resources necessary to fund a fair and equitable America.