03/29/2012 archive

“Punting the Pundits” is an Open Thread. It is a selection of editorials and opinions from around the news medium and the internet blogs. The intent is to provide a forum for your reactions and opinions, not just to the opinions presented, but to what ever you find important.

Thanks to ek hornbeck, click on the link and you can access all the past “Punting the Pundits”.

The New York Times Editorial: Activism and the Roberts Court

The ideological nature of the health care case was obvious on the last day of oral argument. By the time the proceedings were over, much of what the conservative justices said in court seemed like part of a politically driven exercise – especially because the issues addressed on Wednesday were not largely constitutional in nature. In fact, they were the kinds of policy questions that are properly left to Congress and state governments to answer, not the Supreme Court.

On Wednesday morning, the court heard arguments on the issue of “severability” – the question of what should happen with the rest of the 2,700-page statute if the requirement that most Americans obtain health insurance is struck down. The insurance mandate was effectively reduced to a bumper sticker by the opponents in their constitutional challenge, and the entire law reduced to little more than an appendage to the mandate.

Robert Sheer: Five Hypocrites and One Bad Plan

The Supreme Court is so full of it. The entire institution, as well as its sanctimonious judges themselves, reeks of a time-honored hypocrisy steeped in the arrogance that justice is served by unaccountable elitism.

My problem is not with the Republicans who dominate the court questioning the obviously flawed individual mandate for the purchasing of private-sector health insurance but rather with their zeal to limit federal power only when it threatens to help the most vulnerable. The laughter noted in the court transcription that greeted the prospect of millions of the uninsured suddenly being deprived of already extended protection under the now threatened law was unconscionable. The Republican justices seem determined to strike down not only the mandate but also the entire package of accompanying health care rights because of the likelihood that, without an individual mandate, tax revenue will be needed to extend insurance coverage to those who cannot afford it.

This is your morning Open Thread. Pour your favorite beverage and review the past and comment on the future.

Find the past “On This Day in History” here.

March 29 is the 88th day of the year (89th in leap years) in the Gregorian calendar. There are 277 days remaining until the end of the year.

On this day in 1951, the Rosenbergs are convicted of espionage.

In one of the most sensational trials in American history, Julius and Ethel Rosenberg are convicted of espionage for their role in passing atomic secrets to the Soviets during and after World War II. The husband and wife were later sentenced to death and were executed in 1953.

The conviction of the Rosenbergs was the climax of a fast-paced series of events that were set in motion with the arrest of British physicist Klaus Fuchs in Great Britain in February 1950. British authorities, with assistance from the U.S. Federal Bureau of Investigation, gathered evidence that Fuchs, who worked on developing the atomic bomb both in England and the United States during World War II, had passed top-secret information to the Soviet Union. Fuchs almost immediately confessed his role and began a series of accusations.

Fuchs confessed that American Harry Gold had served as a courier for the Soviet agents to whom Fuchs passed along his information. American authorities captured Gold, who thereupon pointed the finger at David Greenglass, a young man who worked at the laboratory where the atomic bomb had been developed. Gold claimed Greenglass was even more heavily involved in spying than Fuchs. Upon his arrest, Greenglass readily confessed and then accused his sister and brother-in-law, Ethel and Julius Rosenberg, of being the spies who controlled the entire operation. Both Ethel and Julius had strong leftist leanings and had been heavily involved in labor and political issues in the United States during the late-1930s and 1940s. Julius was arrested in July and Ethel in August 1950.

By present-day standards, the trial was remarkably fast. It began on March 6, and the jury had convicted both of conspiracy to commit espionage by March 29. The Rosenbergs were not helped by a defense that many at the time, and since, have labeled incompetent. More harmful, however, was the testimony of Greenglass and Gold. Greenglass declared that Julius Rosenberg had set up a meeting during which Greenglass passed the plans for the atomic bomb to Gold. Gold supported Greenglass’s accusation and admitted that he then passed the plans along to a Soviet agent. This testimony sealed Julius’s fate, and although there was little evidence directly tying Ethel to the crime, prosecutors claimed that she was the brain behind the whole scheme. The jury found both guilty. A few days later, the Rosenbergs were sentenced to death. They were executed on June 19, 1953 in Sing Sing Prison in New York. Both maintained their innocence to the end.

Since the execution, decoded Soviet cables, codenamed VENONA, have supported courtroom testimony that Julius acted as a courier and recruiter for the Soviets, but doubts remain about the level of Ethel’s involvement. The decision to execute the Rosenbergs was, and still is, controversial. The New York Times, in an editorial on the 50th anniversary of the execution (June 19, 2003) wrote, “The Rosenbergs case still haunts American history, reminding us of the injustice that can be done when a nation gets caught up in hysteria.” This hysteria had both an immediate and a lasting effect; many innocent scientists, including some who were virulently anti-communist, were investigated simply for having the last name “Rosenberg.” The other atomic spies who were caught by the FBI offered confessions and were not executed. Ethel’s brother, David Greenglass, who supplied documents to Julius from Los Alamos, served 10 years of his 15 year sentence. Harry Gold, who identified Greenglass, served 15 years in Federal prison as the courier for Greenglass and the British scientist, Klaus Fuchs. Morton Sobell, who was tried with the Rosenbergs, served 17 years and 9 months. In 2008, Sobell admitted he was a spy and confirmed Julius Rosenberg was “in a conspiracy that delivered to the Soviets classified military and industrial information and what the American government described as the secret to the atomic bomb.”

Today the Supreme Court heard arguments about the severability of the individual mandate in the Affordable Health Care bill  and the expansion of Medicaid.

The day after the Supreme Court suggested that President Obama’s health care law might be in danger of being held unconstitutional, the justices on Wednesday turned their attention to the practical consequences and political realities of such a ruling.

The justices seemed divided on both questions before them: What should happen to the rest of the law if the court strikes down its core provision? And was the law’s expansion of the Medicaid program constitutional?

The two arguments, over almost three hours, were by turns grave and giddy. They were also relentlessly pragmatic. The justices considered what sort of tasks it makes sense to assign to Congress, what kinds of interaction between federal and state officials are permissible and even the political character of the lawsuits challenging the law. One justice dipped into Senate vote counting.

The court had in other words, on the third and final day of a historic set of arguments, moved from the high theory of constitutional interpretation to the real-world consequences of what various rulings would entail.

The arguments on severability, which hinged totally on whether the mandated stays or goes, boiled down to three points:

1. sever only the mandate, allow the rest of the law to stand and let Congress sort it out;

2. sever the mandate along with insurance regulations like guaranteed issue and community rating, to prevent what the government argues would be an insurance death spiral;

3. or throw out the whole law, which did not include a standard severability clause.

The Justices seemed divided over point #2 and #3 rather than #1. For the most part, the discussions and comments were reflective of the consequences of overturning the entire law or any part of it:

[..] A common reaction, across the bench, was that the Justices themselves did not want the onerous task of going through the remainder of the entire 2,700 pages of the law and deciding what to keep and what to throw out, and most seemed to think that should be left to Congress.  They could not come together, however, on just what task they would send across the street for the lawmakers to perform.  The net effect may well have shored up support for the individual insurance mandate itself.

The dilemma could be captured perfectly in two separate comments by Justice Antonin Scalia – first, that it “can’t be right” that all of the myriad provisions of the law unrelated to the mandate had to fall with it, but, later, that if the Court were to strike out the mandate, “then the statute’s gone.”  [..]

Justice Anthony Kennedy, who is considered the swing vote on the individual mandate, expressed concern “possible unintended consequences in the form of huge costs to insurance companies if the mandate – which would bring millions of healthy young people into the healthcare system and spread out costs – was invalidated alone”:

“We would be exercising the judicial power if one … provision was stricken and the others remained to impose a risk on insurance companies that Congress had never intended,” Kennedy said. “By reason of this court, we would have a new regime that Congress did not provide for, did not consider.”

The four liberal justices expressed deep reservations about tossing out the sweeping law that has hundreds of other provisions, some of them already in effect.

Justice Sonia Sotomayor, one of the four and an Obama appointee to the court, asked whether the court should allow Congress to decide what to do next. “What’s wrong with leaving it in the hands of people who should be fixing this, not us?”

Justice Ruth Bader Ginsburg went further. She said many parts of the law had not been challenged in court. “Why make Congress redo those?”

On the matter of Medicaid expansion a majority of the justices were inclined to support the government’s role in prodding states to expand the state-federal Medicaid healthcare program for the poor, providing coverage for an estimated 17 million Americans:

The court’s more liberal justices all expressed puzzlement about why there should be a problem with the expansion in light of the fact that it is almost entirely to be paid for by the federal government. The states say they are being coerced into participating because a decision not to may cause them to lose not only the new money but also existing funds.

Justice Elena Kagan described a hypothetical program only slightly different from the real one. “It’s just a boatload of federal money for you to take and spend on poor people’s health care,” she said to a lawyer for the states, Paul D. Clement. “It doesn’t sound coercive to me, I have to tell you.” [..]

He (Chief Justice John G. Roberts Jr) said the court’s decision on the Medicaid expansion should be informed by the reality that the states have “since the New Deal” cheerfully accepted federal money.

“It seems to me that they have compromised their status as independent sovereigns because they are so dependent on what the federal government has done,” the chief justice said.

Justice (Antonin) Scalia addressed the political realities of the litigation itself, asking Mr. Clement whether there was “any chance that all 26 states opposing it have Republican governors, and all of the states supporting it have Democratic governors?”

Mr. Clement responded, “There’s a correlation, Justice Scalia.”

In her last article on Wednesday’s sessions, Slate‘s Dahlia Litwick gives her assessment of the last three days:

Amid all the three-day psychodrama, it’s easy to get confused about what’s happened and what hasn’t. Court watchers seem to generally agree that the individual mandate is in real peril and will rise or fall with Chief Justice Roberts and Justice Kennedy. Court watchers also agree that 19th-century tax law-while generally adorable-will not prevent the justices from deciding the case by July. And they also agree that they may have counted five justices who appear willing to take the whole law down, along with the mandate, and the Medicaid expansion as well.

But the longer they talked, the harder it was to say. A lot of today’s discussion started to sound like justices just free-associating about things in the law they didn’t like. That doesn’t reveal all that much about the interplay between the four separate challenges-what happens when they all have to be looked at together-or anything at all about what will happen at conference or in the drafting of opinions. Could the five conservative justices strike down the entire health care law, and take us into what Kagan described this morning as a “revolution”? They could. Will they? I honestly have no idea anymore. As silent retreats go, this one was a lot less enlightening than I’d hoped.

Constitutional law professor Jonathan Turley discussed the hearings with Keith Olbermann on Countdown, calling this case a “game of chicken” that “can be deadly.”

Those of you that read this regular series know that I am from Hackett, Arkansas, just a mile or so from the Oklahoma border, and just about 10 miles south of the Arkansas River.  It was a rural sort of place that did not particularly appreciate education, and just zoom onto my previous posts to understand a bit about it.

Uncle Richard was my father’s eldest brother.  He was born in 1900, whilst my dad was born in 1919 (and he was NOT the baby).  You can see right away that my grandfather’s family was really spread out over the years.

They lived in Illinois, so I did not see them really often, but they did come to visit enough that I got to know them fairly well.  Uncle Richard was a bit talker and a big drinker, whilst Aunt Bess was quiet and dignified.  My mum really liked Aunt Bess, and they were close as could be in the early 1960s with expensive long distance and no internet.  They communicated mostly by letter, and postage at the time was around 6 cents.  

It’s very strange that governments knowing that austerity is just deepening the recession in Europe, they continue down the same path.

UK GDP fell faster than previously estimated in fourth quarter, ONS says

• UK GDP fell 0.3% rather than 0.2% in fourth quarter

• Economists had expected no change

• Disposable incomes fall 1.2% – worst since 1977

Britain’s economy was even weaker than expected at the end of last year, underlining the country’s struggle to avoid another recession. [..]

The signs from business surveys and much of the official data so far for this first quarter have been taken as evidence of at least a small new-year bounce-back. But there are widespread doubts over whether that can be sustained. Economists cite many headwinds facing the UK economy, including high oil prices, a government austerity drive and the sovereign debt crisis in the eurozone. [..]

Government spending, exports and household consumption grew, but economists warned that pattern had little chance of holding up.

“The government purse strings are being tightened, growth is deteriorating in key export markets, with the eurozone now likely to be in another recession, and revised retail sales data have signalled a far weaker start to the year than previously thought, raising concerns that households are continuing to retrench amid worries about the economy, jobs and rising prices,” said Chris Williamson, chief economist at Markit.

So what did the Cameron government do? If you guessed double down on austerity, you’re right. Jonathan Portes analogy with Shakespeare’s Macbeth is quite apt:

I described this as the “Macbeth argument”, from the following quote:

   “I am in blood stepped in so far that should I wade no more, Returning were as tedious as go o’er.”   [Act III, scene iv.]

In other words, since Macbeth has already killed Duncan and Banquo, it is better to carry on (and order the deaths of Macduff and his family) than to stop. So, although misguided policy has led to unnecessary economic damage, that damage is (returning to economist speak) a sunk cost; and the pain ahead is less then the pain that we would suffer if we changed course, as a consequence of the possible negative financial market reaction.

The Treasury also appears to subscribe to a variant of this argument.  When the original fiscal consolidation plan was welcomed by the rating agencies, that was a vote of confidence:  

   “Standard & Poor’s, the ratings agency, revised its outlook on Britain from negative to stable..The Chancellor said: “”That is .. a vote of confidence in the Coalition Government’s economic policies..”  Telegraph, 26 October 2010

But when the same rating agencies realised the damage the plan was doing to growth, that made it even more necessary:

   “Fitch revised the outlook on the UK’s rating to negative from stable….”A week from the Budget this is a reminder of why it is essential Britain sticks to its plans to deal with its debts,” a Treasury spokesman said…”  Telegraph, 14 March 2012

Spain has already fallen into another recession, sucked in by the black hole of austerity:

Spain’s economy is suffering its second recession since 2009, the Bank of Spain said, a development that obstructs the government’s efforts to reorder public finances as it prepares the budget for this year.

“The most recent information for the start of 2012 confirms the prolongation of the contraction in output,” the Madrid-based central bank said in its monthly bulletin today.

Spain’s gross domestic product declined 0.3 percent in the fourth quarter of last year, less than two years after emerging from the last recession. Prime Minister Mariano Rajoy will present his 2012 budget on March 30, amid growing pressure from investors and European peers to rein in the deficit, which was 8.5 percent of GDP last year.

The spending plan, his first since coming to power in December, won’t increase tax on consumption nor cut civil servants’ salaries, Rajoy said today in Seoul. The previous administration slashed wages of public workers by an average 5 percent in 2010.

Rajoy, who leads the pro-business People’s Party, hasn’t said where he will cut spending, even as he pledged today to present a budget that is “very austere.”

And just as with Britain and Greece, the same causes are exacerbating the Spanish problem, from Delusional Economics at naked capitalism:

Back in November last year I posted on my confusion over the jubilation shown by the citizens of Spain as they elected Mariano Rajoy as their new political leader. Mr Rajoy’s strategy during the election campaign was to say very little about what he was actually intending to do to address his country’s financial problems, preferring to simply let the incumbent party fall on its own sword so that he could take the reins. It became obvious soon after the election that, despite his party’s best efforts to dodge questions, the intention was simply to continue with even more austerity.

Since that post I have continually warned that although Spain is obviously a different country to Greece in regards to how its problems have manifested, it still faces significant macroeconomic challenges that were not being correctly reflected in the bond market. [..]

And in the United States, conservative state governments continue with their austerity agenda that continues to be a drag on the economy:

Republicans seized control of both branches of the legislature in 11 states after the 2010 elections. It’s in these very states that public sector layoffs are disproportionately concentrated, leading to one of the biggest rounds of job losses for the public workforce since record keeping began. Governors and state legislators promised to focus on creating jobs and balancing budgets during campaign season-even newly elected Pennsylvania Governor Tom Corbett still claims that creating jobs is one of his “top priorities.” Instead, these newly Republican states are targeting public workers, causing a significant drop in employment in the public sector that has threatened the entire economy. [..]

Economists argue over how significantly public sector layoffs in a weak economy hurt the recovery, but many agree that it has a substantial impact. Paul Krugman has estimated that if the government workforce had grown at a Reagan-era rate instead of decreasing rapidly, unemployment would now be closer to 7 percent, instead of the 8.5 percent it’s been hovering around for the past five months.

Growth in  public employment would have three positive effects on the economy:

1. It would increase spending in the private sector, thus improving the GDP;

2. It would increase tax revenues to not just the federal government with increased collection of payroll tax, but also increase the tax revenues of both state and local governments.

3. Increased spending by would have a positive effect on employment in the private sector with a need for workers to meet the demand for goods and services.

Don’t try to tell this to economic conservatives because there is more blood to be spilled. No matter how much they wash, the stain of recession remains in the hands of conservative governments in Europe and the US.