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Will the Court Throw Out Obamacare?

November 21, 2011 – 12:55 pm

Last Monday, the Supreme Court announced something that’s been obvious for a while now: It will rule on the constitutionality of the Patient Protection and Affordable Care Act, nicknamed the ACA or Obamacare. This was inevitable, because four appeals courts have ruled on the Act and disagreed: three said it was constitutional, and one said not. Since a federal law can’t be constitutional in some parts of the country but not others, the Supreme Court needs to straighten this out.

The rulings so far. At the district court level, rulings tended to be political: Judges appointed by Republican presidents invalidated the law while those appointed by Democrats upheld it. (The most polemic invalidation was Reagan appointee Judge Roger Vinson’s in the Pensacola District.) Fortunately, the appellate courts were more, well, judicious in their rulings. In particular, the D. C. appeals court ruling two weeks ago gives a good model of the two most likely ways the Supreme Court might go.

Like the Supremes, the D.C. court had a conservative majority: a Reagan appointee (Laurence Silberman), a Bush II appointee (Brett Kavanaugh), and a Carter appointee (Harry Edwards). Both the majority opinion and the dissent were written by the conservatives.

The majority opinion (by Silberman, supported by Edwards) upheld the constitutionality of the ACA. The dissent (Kavanaugh) didn’t rule on the constitutional issues, saying that the courts could not intervene until the law has fully taken effect in 2014.

Both opinions are well thought out, and I believe the Supreme Court will back one or the other of them.

The issues. The controversial part of the ACA is the individual mandate: It requires people to buy health insurance and penalizes them if they don’t. This notion was proposed by the conservative Heritage Foundation in the 1990s as an alternative to Medicare-like proposals for universal health care, because it keeps the health insurance industry private. Newt Gingrich supported the mandate then, and Mitt Romney made it the center of his Massachusetts healthcare plan.

Now, however, conservatives claim it is unconstitutional for this reason: Article I, Section 8 of the Constitution lists the powers of the federal government, and conservatives hold that none of those powers can be stretched to cover the individual mandate.

Supporters of the law claim that it is authorized by Section 8’s Commerce Clause

Congress shall have Power… To regulate Commerce with foreign Nations, and among the several States, and with the Indian tribes

plus the Necessary and Proper Clause

Congress shall have Power … To make all Laws which shall be necessary and proper for carrying into Execution the foregoing powers

In other words, Congress can regulate the interstate market in health care, and in carrying out that mission, Congress has found it necessary and proper to mandate that people buy health insurance.

It’s not a tax. The annoying thing about this whole debate is that Congress could have avoided it by wording the law differently. If it had called the mandate a tax instead of a penalty (in other words, we’re going to tax people who don’t have insurance) it would have fallen under the sweeping power to tax that Section 8 gives Congress:

The Congress shall have Power to lay and collect Taxes

One reason Judge Kavanaugh gives for delaying a ruling until after 2014 is that in the meantime Congress could make the whole issue moot with this minor rewrite of the law.

The who-pays-what-to-whom would be identical. The difference is purely moral: Under the ACA as it stands, an uninsured person is breaking the law, for which s/he is assessed a penalty (collectable by the IRS on the income tax form). If the mandate were a tax, an uninsured person could obey the law by paying the tax (in the same amount on the same form).

The administration has argued that this makes no practical difference, so the courts should rule the ACA constitutional under the taxing power. But judges aren’t buying it. Who’d have suspected: You can’t tell a judge that it makes no difference whether a person obeys or breaks the law.

Or maybe it is a tax. The main reason not to rule on the ACA until 2014 is the Anti-Injunction Act, which says that a judge can’t issue an injunction to prevent a tax from going into effect. If a tax is invalid for some reason, the proper process is for the government to begin collecting the tax and for the courts to get involved only after people to sue to get their money back.

The point, I think, is to keep one or two renegade judges from screwing up the whole government by shutting off its revenue.

I know what you’re thinking: If the mandate is a penalty and not a tax, what does the Anti-Injunction Act have to do with it? Well, apparently there’s a penumbra of some sort, so that if a non-tax is sufficiently tax-like, the Act applies. (You can tell from the D.C. court ruling that Silberman and Kavanaugh had a long argument about this. I confess to skimming this part of their opinions.)

Action vs. inaction. Sooner or later, though, either now or after it takes effect in 2014, the Court is going to have to rule on whether the Commerce Clause authorizes the individual mandate.

Anyone who wants to invalidate the ACA has to deal with the long history of courts interpreting the Commerce Clause loosely and expansively. Under current precedents, Congress can regulate economic activity within a state if that activity is part of a larger interstate market, and it can even regulate non-economic activity (like limiting the quantity of wheat that a farmer can grow for his own use) if some larger scheme of economic regulation depends on it. Commerce-clause justifications have only been rejected when the obvious intention of the law was to regulate local, non-economic activity (like keeping guns away from schools) on the vague justification that the activity has some eventual impact on interstate commerce.

So the basic commerce-clause justification of the ACA goes like this: Healthcare is an interstate market, so Congress has a legitimate interest in regulating it. The scheme implemented in the ACA is a legitimate attempt to regulate that market. That scheme falls apart without the individual mandate, so the mandate is necessary and proper to carry out Congress’ commerce-regulating power.

The counter-argument is that none of the precedents cover the ACA’s individual mandate, because they all concern some kind of activity, while the mandate is regulating inactivity. Simply by existing, the ACA claims, you affect the interstate healthcare market. So upholding the ACA is breaking new ground and substantially expanding the power of the government. If the ACA is upheld, what couldn’t Congress force people to do?

Judge Silberman’s ruling. Silberman agrees with the counter-argument up to a point, but not all the way to its conclusion. The precedents don’t cover inactivity, but the whole activity/inactivity distinction is itself new. It’s not in the Constitution, and it’s not implied by the precedents. So it’s not exactly conservative to toss the law out on these novel grounds.

What’s more, he rejects the basic conservative frame that the mandate is an individual-liberty issue:

Appellants’ view that an individual cannot be subject to Commerce Clause regulation absent voluntary, affirmative acts that enter him or her into, or affect, the interstate market expresses a concern for individual liberty that seems more redolent of Due Process Clause arguments. But it has no foundation in the Commerce Clause.

… it is irrelevant that an indeterminate number of healthy, uninsured persons will never consume health care, and will therefore never affect the interstate market. Broad regulation is an inherent feature of Congress’s constitutional authority in this area; to regulate complex, nationwide economic problems is to necessarily deal in generalities. Congress reasonably determined that as a class, the uninsured create market failures; thus, the lack of harm attributable to any particular uninsured individual, like their lack of overt participation in a market, is of no consequence.

Silberman finds no obvious place to limit Congress’ Commerce Clause power here, but notes that Congress is subject to a “political check”. In other words: This is one of many areas where Congress has the constitutional power to do all kinds of crazy things, and it’s up to the voters to see that they don’t. If Congress only had the power to do wise things, we wouldn’t need to have elections.

What will the Supreme Court do? I think that Silberman and Kavanaugh have blazed the two possible paths that an honest conservative judge can follow: Unless you want to invent some new restriction that isn’t in either the Constitution or the case law, you have to find the ACA constitutional. Your only other option is to punt the ball to 2014 or 2015 by invoking the Anti-Injunction Act.

Now, the Roberts Court has shown itself to be political. Its maneuvering around Citizens United, where it made a ruling more sweeping than either side was asking for, is a case in point. In that vein, I find it disturbing that the Court has chosen to review not just the individual mandate of the ACA, but also its Medicaid expansion, which none of the appellate courts had a problem with. That hints at another activist ruling, where the Court answers a question no one is asking.

Still, Silberman’s reasoning will be hard to reverse, particularly since his opinion quotes both Roberts and Scalia. So I believe the Court will take either the Silberman or the Kavanaugh route.

But the choice between them will be based on politics, not law. The Court’s decision, which may not come out until June, will frame the healthcare issue for the fall election. (Kavanaugh already hints at this by suggesting that a future president could decide not to enforce the mandate if he believes it to be unconstitutional.)

The decision will be determined by the Republicans’ electoral prospects: Will it be better for them to have the issue hanging, or to know that the ACA will take effect unless a new Congress reverses it or a new president refuses to enforce it?

So I’m taking the moderately cynical view of the Roberts Court. I don’t think they’ll throw the ACA out just because they dislike it politically, but which of the valid legal options they’ll take will be determined by politics.

By weeklysift | Tagged , | Comments (3)

Paterno and the Bishops

November 21, 2011 – 12:34 pm

I generally try to avoid topics that are already over-covered in the media, but I do want to say a couple things about the Penn State scandal.

First, if you’re not a college football fan, it’s hard to appreciate what a shock this all has been, and why it’s drawing so many comparisons to the Catholic clergy’s pedophilia scandal. Maybe the person in the best position to comment is sexual-abuse-prevention activist and College Football Hall of Fame quarterback Don MacPherson:

The program under Joe Paterno is considered one of the cleanest in college football, boasting high graduation rates and on-field performance. … Penn State stood above in the hypercompetitive and often unscrupulous world of college sports, and this served as a recruiting tool and an assurance to parents of promising high school football players. It’s also not hard to understand why parents of troubled young men would want their sons to have the influence of the environment that Penn State and [Paterno assistant coach and accused child rapist Jerry] Sandusky provided.

Many other college coaches … well, let’s not slander them by name, but I would just roll my eyes if I heard a similar story about them. Their whole careers display an it-doesn’t-matter-if-you-don’t-get-caught approach to life. If exposing some crime would threaten the image of their programs, of course they’d look the other way. But Joe Paterno? That’s disturbing on a deeper level.

Second, the comparison between the Catholic Church and the Penn State football program points up something else: American society has changed since the Catholic Church scandal broke. There was a certain amount of wagon-circling around Paterno and his program, but not really that much by comparison to the pedophile-priest scandal. (The Catholic League’s Bill Donohue is still circling the wagons.)

Instead, a lot of people who clearly wanted to defend Paterno largely skipped past denial and went straight to how-could-this-have-happened shock and grief.

This ESPN clip comes from the day after the scandal broke. ESPN analyst and former Paterno linebacker Matt Millen (while he wants to give Paterno a chance to defend himself) is already wrestling with the cognitive dissonance of it — at one point going silent because he will start crying otherwise.

Millen’s reaction goes straight to the heart of why this story is upsetting: It overturns our comfortable notion that good people only do good things and bad people only do bad things. It’s obvious that for all these years, Paterno has been a moral voice in Millen’s head, calling him to live by a higher standard. And Jerry Sandusky … I’ll let Millen tell it:

Jerry Sandusky is your next door neighbor. He’s the guy you’ve known your whole life. He’s a helpful guy. He’s a light-hearted guy. He’s a smart guy. He’s a willing-to-help person. He’s everything you want. That’s the thing that just … could you see it coming? I mean … I’ve sat here. I’ve known the guy since 1976. I’ve been in meetings with him. He’s been in my home.

But all that doesn’t lead Millen to say “It can’t be true!” Instead he asks himself: “Could you see it coming?”

This mystery is part of what McPherson is confronting in his article The Myth of the Monster Pedophile: Sandusky wasn’t a child rapist pretending to be a nice guy, and he wasn’t a nice guy suddenly possessed by a child-raping demon. He was genuinely a nice guy in some settings and genuinely a child rapist in others. That’s what’s so disturbing.

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Jobless Recoveries are Normal Now

November 7, 2011 – 2:27 pm

This might be the most important graph in American economics, but in the popular media hardly anybody talks about what it means.

It comes from the blog Calculated Risk (which has been updating it for a long while now), and is based on data from the Bureau of Labor Statistics.

Each colored line represents a different recession in the American economy since World War II, starting with the 1948 recession (in blue). The longest and deepest (in red) is the current recession. The curves are scaled according to the percentage of jobs lost, to make the different recessions more comparable. (Otherwise the 1948 recession would look small just because the economy was smaller then.) The horizontal scale is months, and the recessions are lined up so that Month Zero is when employment bottomed out.

For the purposes of the graph, a recession starts when the number of jobs peaks, and it ends when employment returns to that previous high. That’s a little different than the definitions most economists use. Typically, economists say a recession is over when GDP starts rising again, which is why the Wikipedia says the current recession ended in June, 2009. But employment is what is known in the trade as a “lagging indicator”. In other words, even after the recession is technically over, you’ve still got a lot of jobless people wandering around.

At its simplest level, this jobs-based graph just verifies something you probably already feel in your bones: This recession is longer and deeper than anything we’ve seen since the Depression, and it’s not over yet.

But that’s not what I want to point out. Instead, I want you to notice this: The last three recessions have a different shape from the others. The earlier recessions are short and sharp. Jobs go away fast and come back fast. The job market hits a definite bottom, and 8-10 months later everything is back to normal.

But the recessions of 1990 and 2000 look like smaller versions of the recession we’re in. In each of them, the bottom is flat rather than sharp, and employment doesn’t come all the way back for a long time after that — two years for the 2000 recession and nearly-two-and-counting for the current one.

Therefore: The job market is changing in some long-term way that has little to do with our month-to-month political squabbles. The 1990 recession starts and ends under President Bush the First. The 2000 recession gets started under Clinton and its long, slow recovery happens under Bush II. The worst of the current recession is on Obama’s watch, but the shape and depth of the curve was already well established when he took office.

It’s hard to find a Republican/Democrat pattern here. About all you can say for or against Obama, for example, is that the deep recession curve that had already developed under Bush II has gone on to have the same shape you’d expect from the previous two recessions.

Other simple explanations similarly fall flat. For example, we had a modest budget surplus and no wars at the beginning of the 2000 recession, but a huge deficit and two wars going into the current recession. But the two curves have the same shape.

I’m going to go on to list some characteristics and possible explanations for the new-style recession, but I don’t claim to have answers for it. (There are things I’d like to see done, but ending this article with any policy proposals I can think of would do a disservice to the data. I’m pointing to something solidly real, and my “solutions” would be speculative.) Mainly, I want to offer two principles for critiquing anybody else’s proposals:

  • If you’re not talking in terms of decades, you’re not dealing with the real problem. Whatever the causes are, they’ve been brewing since at least the late 1980s.
  • You can’t fine-tune your way out. Any change in policy that is going to make a dent will have to be big and fundamental. If the pattern is unaffected by the differences between Clinton and Bush, or Bush and Obama, we’ve either got to think a lot bigger or accept these long slow recessions as fate.

The old recession pattern. OK, now let me try to express the change in words rather than curves. The old-style recessions fit the inventory-correction model of the business cycle in a manufacturing economy.

To say that in English: Good times cause everybody to get too optimistic at the same time. (GM builds too many cars, contractors put up too many new subdivisions, Sears stocks too much merchandise, and so on.) When this over-optimism starts to become apparent, everybody slams on the brakes at the same time.

So orders drop, factories get shut down, and workers get laid off. But it’s all temporary. After a few months, retailers manage to sell off their overstocked inventories and need to order new stuff again. Then the workers get called back, the factories re-open, and the recession is over.

The last few recessions haven’t looked like that in several ways.

Bubbles. First, financial bubbles play a much bigger role in setting the recession off. The current recession starts with the housing bubble, the 2000 recession with the dot-com bubble, the 1990 recession with the savings-and-loan crisis.

Psychologically, it’s the same cause: Good times make people over-optimistic. But in the old model it was producers who became too optimistic about what they could sell, so they produced more than the market could consume.

In a bubble, on the other hand, it’s speculators who become too optimistic. So condos are built in Florida not because anybody expects people to live in them, but because speculators think they can flip them to other speculators for a quick profit. Or mortgages are written without any expectation that the payments will be made, because investment bankers have figured out a way to package those mortgages into CDOs that the ratings agencies will stamp AAA.

That’s a very different problem than GM building too many Corvettes or Sears stocking too many washing machines.

Bubble-popping recessions are harder to recover from because there is no “normal” to get back to. The NASDAQ stock index peaked over 5000 in March, 2000. That level was justified by visions of limitless future profits that turned out to be imaginary. So even 11 years later, the NASDAQ is still only about half what it was.

Inventory recessions are like taking a wrong turn. Bubble recessions are like dreaming something and then waking up. You can’t just go back.

Job destruction. Partly due to changes in the economy and partly due to changes in the social contract, businesses are now actively looking for ways to get rid of their workers. So the old model (where GM laid off some workers until things got better, then hired them back) looks quaint now.

These days when you lose a job, it’s gone. The company has probably closed the factory for good, merged with a competitor, or otherwise re-engineered its process to get along without you. When demand comes back, your former employer will open a new factory in Mexico or subcontract to a supplier in China or buy robots. At best, it might only threaten to do those things so that it can hire you back as a temporary contractor at half your old rate.

[BTW, this week I ran into a joke that is probably from the 50s or 60s. Union leader Walter Reuther and industrialist Henry Ford II are touring a new highly mechanized Ford plant. “Tell me, Walter,” Ford says, “How do you plan to get these machines to join your union?” Reuther replies: “The same way you’re going to get them to buy your cars.”]

Job recovery takes longer now because the economy has to create brand new jobs, not just re-start the old jobs. This means that the experience of being unemployed is completely different. The laid-off GM worker could collect unemployment, fix up the house, coach Little League, and be reasonably certain to go back to work in a few months.

Today the unemployed have to have a plan, and searching for a new job can be harder and more stressful than working. Worse, the new job often pays significantly less than the lost one.

Inequality. A long-term trend in back of the other trends is increasing inequality. As more and more money flows to the 1%, they don’t need more goods and services; they need more investment opportunities. That restless cash looking for a home pumps up the bubbles, funds the mergers, and buys the robots. But it doesn’t create new markets that need more workers.

What should we do? I’m not sure, but it needs to be much bigger and very, very different from anything currently on the table.

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The Cain Scandal After a Week

November 7, 2011 – 2:13 pm

When I was putting the Weekly Sift together last Monday morning, I had a decision to make. Politico had raised the Herman Cain sexual harassment charge the night before. Should I call your attention to it or not? I decided not to.

For most of the week, it was the top news story. And yet, when I did my headline-scan this morning, it was nowhere to be seen. The most recent opinion polls show Cain still at or near the top of the Republican field, as if nothing had happened. (Though one poll shows his favorability ratings among Republicans dropping from 66% to 57% — still higher than, say, Rick Perry, who had no scandals this week.) Cain’s Intrade shares bottomed out below 5o cents (indicating a 5% chance of him getting the nomination) on Saturday, and were rising sharply towards 65 cents this morning. Then another accuser announced a press conference and they dropped to 35 cents.

So the conventional wisdom doesn’t know what to think. If we’ve heard everything, Cain will weather the storm. If we haven’t, who knows?

Here’s the yardstick I’m using to decide what’s a big deal and what isn’t: Politically, a scandal is only important if it changes people’s minds. Which means: As satisfying as it might be for me to speculate about what Cain did or did not do and whether that does or does not dynamite all the moralistic foundations of his candidacy, my opinion makes no difference in this matter, because I was never going to vote for Herman Cain anyway.

Politically, this only matters if it changes the minds of Cain’s supporters and potential supporters. And so far, I don’t think it has.

Not that Cain’s audience doesn’t care about sexual misconduct. Quite the opposite, they’ll turn on him quickly if they start believing that he pressures women for extra-marital sex, especially if some of the women turn out to be white. (They’ll tell you that supporting Cain proves they’re not racist. But I don’t believe they’re that not-racist.)

But what would it take to convince them? They aren’t going to believe “the liberal media”. And even if one or more women come forward, Republican primary voters will say that they just wanted money, which they’re being paid (probably by all-around boogeyman George Soros) to come out of the woodwork.

As Dahlia Lithwick points out, Cain’s defenders have already gone far beyond just saying “we don’t know what happened” or “innocent until proven guilty” and are instead attacking the whole notion of sexual harassment. They know Cain is innocent because sexual harassment is a “scam” (Fred Thompson) and “a lawyer’s ramp, like racial discrimination” (John Derbyshire). The mere possibility of lawsuits “drains the humor and humanity from the workplace” (Kurt Schlichter), presumably because it’s so darn hard to make a female subordinate laugh without hinting that you want to have sex with her. Rand Paul agrees, saying he will no longer “tell a joke to a woman in the workplace, any kind of joke, because it could be interpreted incorrectly”. Lithwick concludes:

Nobody is suggesting these claims [against Cain] are necessarily true. But to claim that they must be false because all women lie and all harassers are just joking is a terrifying proposition.

Here’s the sad truth: If you care about sexual harassment and are willing to take a woman’s testimony against a powerful man seriously, you’re probably already a Democrat. So your opinion on the Cain scandal doesn’t count.

[I anticipate a sneering comment from some conservative about Bill Clinton and Paula Jones. You need context to understand Democrats’ dismissal of Jones: Jones’ story was marketed by the same people who claimed the Clintons had murdered Vince Foster. She was the Nth attempt to drum up a scandal against Clinton, after the first N-1 had been bogus.]

So there are only a few ways Cain’s harassment scandal becomes important: if there’s an embarrassing photo, if so many women come forward that the Wilt Chamberlain racial stereotype starts to apply, if people other than the victims (especially powerful men) come forward with supporting testimony, or if the pressure throws Cain so far off his truthy style that he looks guilty to his supporters.

So far all the furor is coming from people who never liked Cain anyway. Unless that changes, the scandal just has entertainment value. Politically, it doesn’t matter.

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Nonviolence and the Police

October 31, 2011 – 12:23 pm

I assume that by now you’ve heard about this week’s police attacks on the Occupy protests — most outrageously in Oakland, but also in Denver and Atlanta. (If not, chase the links and watch some of the video. Descriptions don’t capture it.) These attacks resemble what had happened previously in New York and Boston.

This is a good time to review how nonviolent protest works, because a violent response challenges a nonviolent movement in two ways: First, violence makes protesters angry and tempts them to respond in kind, which hardly ever turns out well. You can’t win physically against the police, and unless it is clear that the violence comes entirely from their side, you won’t win in the media either. “They started it” wasn’t a convincing argument when you were ten, and it still isn’t.

Second, watching your nonviolent allies lose the battle — as they always do when the police are determined and ruthless enough — is discouraging. You might wonder: How can we ever win when they can be violent and we can’t?

And yet, nonviolent movements do cause major change (the Civil Rights movement), have defeated empires (the British in India), and can even overthrow dictators willing to torture and kill (most recently in the Arab Spring). How does that work?

In stages:

  1. Bring a problem to public attention and make its victims visible.
  2. Demonstrate the injustice of the system’s response.
  3. Make explicit the implicit violence that maintains the unjust system.
  4. Turn the servants of the unjust system, including (eventually) the police.

If you make it to stage 4, where the police simply refuse to follow orders, the government either gives in or falls. Governments know this, which is why they frequently give in sooner.

Now let’s go through the stages more slowly.

The Occupy Wall Street movement has already succeeded at Stage 1. FDL finds the value of the protest in

its shoving the Overton Window away from the far right end of the spectrum, far enough away to make talk of meaningful solutions possible, which is the first step towards making them politically viable. Putting a surtax on the rich and/or letting the Bush tax cuts finally expire was considered politically verboten as recently as a month ago. Then Occupy Wall Street got started, and suddenly surtaxes on millionaires start becoming very much discussed indeed.

Also, people are finally starting to pay attention to the fact that many of the financial manipulations leading up to the crash were illegal, and that the bankers/criminals are either getting away with it or paying wrist-slap fines far smaller than their ill-gotten gains.

Sometimes stage 1 is all that’s necessary to create change, but usually you need to keep going.

It’s working on stage 2, occasionally popping up to 3. The main response the authorities are making to the protests is to identify broken regulations — there’s no camping in this park — and then say “We can’t tolerate breaking the law.”

The movement hasn’t succeeded yet in making the public see the hypocrisy in this. What the system actually can’t tolerate are little people breaking little laws. When Goldman Sachs commits fraud, or Bank of America illegally repossesses people’s homes, no one is arrested and no heads get broken. But put up a tent someplace you shouldn’t and all hell breaks loose.

The next job is to get people all over America asking, “What’s up with that?”

Here’s the comparable phase in the Civil Rights movement: when ordinary white people started seeing the Whites Only signs differently. At some point, they realized that there were no separate-but-equal facilities for blacks, and that blacks’ absence did not mean that they were happier with their own kind. Instead, whites began to see Whites Only not as an organizing label (like Men and Women signs on restrooms), but as a threat to have blacks carted away by force. Ordinary white people began to see the violence implicit in their apparently peaceful segregated lunch counters.

In order to win this phase, OWS has to stay as peaceful and orderly as possible, while continuing to keep up the pressure. The disproportion between their civil disobedience and the response it draws — and the contrast with the easy law-breaking of the financial elite — is what makes the case.

One NYC protestor had it exactly right (at the 5:30 mark)

Each new depiction of the abuses of the police on the First Amendment, the more people will show up here in New York City, and the more waves of occupation will spread across this country. And you should be proud of that, police, because you are participating in our media publicity campaign. Thank you for attending.

The challenge will be to keep Wall Street in the picture, and not let the financiers disappear behind the police.

Stage 4. Sometimes you establish the injustice of the system and the violence that maintains it, and it’s still not enough. The moral pretentions of the powerful have been exposed, but they’re basically saying, “Yeah, we’re bad guys. So what? We’re still bigger than you.”

That’s when an invisible moral force begins to work in your favor. You see, most people don’t grow up wanting to be evil. Maybe a few become bankers so that they can foreclose on widows and orphans, Snidely Whiplash style, but probably not many. Maybe a few become police so that they can get away with pepper-spraying defenseless young women in the face, but probably not many.

A lot of police joined the force because they wanted to be good guys, not bad guys. Many of them still want to be good guys. That’s why they can be turned.

Turning the police takes incredible courage and persistence on the part of the protesters. Basically, you have to let them beat you up until they can’t make themselves do it any more. One event that spins out of control is usually not enough. Police have to go to bed knowing that tomorrow they will get up and beat innocent people, like they did today.

At some point they’ll just stop. The order will come down and they’ll say no. It sounds incredible, but it happens.

Usually it doesn’t come to that, because the authorities will do anything to avoid it. (In Cairo, the army forced Mubarak to resign rather than see their ranks dissolve. At Tiananmen Square, the government brought in troops from the provinces, because they were afraid local soldiers wouldn’t obey.) But whether things actually go that far or not, the ultimate threat of a nonviolent movement is to turn the police. No government can survive that.

Protesters need to understand this threat from the beginning, and treat the police accordingly: Shame them but don’t insult them, and above all don’t threaten them. They are your ultimate weapon.

This video from Occupy Boston, of protesters chanting “Who do you protect? Who do you serve?” is exactly right. Those are the questions we want cops asking each other in the privacy of their squad cars, and asking themselves late at night when they can’t sleep. We want them discussing that topic in their union meetings, and mulling it over when the 1%’s refusal to pay taxes leads to layoffs of good cops.

Who are the 99%, officer? You are. So what are you doing on that side of the barricade?

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Eliminate the Work Penalty

October 24, 2011 – 12:43 pm

Like clockwork every four years, Republican presidential candidates propose to “simplify” the income tax by replacing it with a “flat” tax — an income tax where all income is taxed at the same rate.

As I’ll explain below, a flat tax doesn’t simplify anything, but progressives could respond with a proposal that would: Eliminate the work penalty. Don’t tax dividends and capital gains separately from wages or at a lower maximum rate. Treat all income the same.

Fake simplification. Here’s what’s wrong with the idea that a flat tax is simple. An income tax has two parts:

  1. defining what income is
  2. saying how much tax a person at each income level pays.

If you’ve ever filled out your own tax return, you know that the complicated part is (1). Once you know your taxable income, you just look up your tax on a table.

But a flat tax only changes (2), so it doesn’t make your life simpler at all, and it doesn’t shrink the “three million words of the current tax code” that Rick Perry rails about. It slightly simplifies the formula the IRS uses to compute the tax tables, but that’s about it.

The only purpose a flat tax serves is to cut taxes for rich people and raise them for everyone else. “Simplification” is a just ruse to sell the change to people who aren’t rich.

Deductions. Now, sometimes a flat-tax proposal is coupled with eliminating a bunch of deductions. Depending on how it’s implemented, that could simplify both your tax return and the tax code. And it might or might not be a good idea, depending on which deductions get eliminated and whether or not the corresponding tax expenditures are replaced with subsidies.

But that part has nothing to do with flattening the tax. If getting rid of a bunch of deductions is a good idea, we could do that while continuing to tax the rich at a higher rate than the poor or the middle class. The two ideas are unrelated.

The Work Penalty. However, there is a way progressives can steal the tax-simplification issue, and simultaneously put the plutocrats on defense: We could propose eliminating what Andrew Tobias has aptly called “the work penalty”.

Currently, if your money makes any sizable amount of money for you through dividends and capital gains, you fill out a way-too-complicated worksheet in the instructions for Schedule D. (Check out page D-10.) That’s because we don’t really have one income tax system, we have two: One for people who make money by working, and a different one for people who make money by having money.

Guess which system has the lower rates?

For the last several years, tax rates on wages have started at 10%, jumped to 15% when a single wage-earner’s taxable income got over $8,500, gone up to 25% at $34,500, and kept rising from there to max out at 35%.

Meanwhile, the tax rate on qualifying dividends and capital gains is capped at 15%. So (because of how tax-brackets work) a wage-earner whose taxable income tops $38,750 ends up paying a higher tax rate than an idle billionaire whose income is all dividends and capital gains.

That’s a work penalty. If you work, you pay more than if you had acquired the same amount of money by being idly rich.

Herman Cain’s 9-9-9 plan would make the work penalty bigger by not taxing capital gains at all. Cain would tax dividends at the same rate as wages, but this is mostly a ruse, because corporations would stop paying dividends. Instead, they’d use their excess cash to buy back stock, which raises their stock price and so converts taxable dividends into tax-free capital gains.

Making tax simplification a liberal issue. The work penalty is the reason that Warren Buffett pays a lower tax rate than his secretary. President Obama has proposed to fix this by adding a new Buffett Rule to the tax code: a higher minimum tax rate for people whose income is higher than $1 million a year, however they acquire it.

But rather than tack on an extra rule, why not go for the heart of the beast? Eliminate the work penalty. Treat all income the same.

If we made this proposal revenue neutral, tax rates on wages could go down. (Whether we need more revenue in general should be debated separately.) The tax booklet would get slimmer. The income tax would get conceptually simpler, and the Schedule D worksheet would go away. Plus, it would eliminate all the games that make astronomical CEO and hedge-fund manager wages look like capital gains. It’s a win all around, unless you make a lot of money off your money and pay somebody else to do your taxes.

And the framing is tremendous. The work penalty captures the part of the Occupy Wall Street message that most resonates with the general public: the feeling that the rich have special privileges. (Robert Reich’s tax proposals address the work penalty, but he buries it at the end of his article, not realizing the power of the idea.)

It also follows the pattern of the marriage penalty, a concept the Right has put a lot of effort into publicizing. (Marriage and work are both traditional American values that don’t deserve to be treated badly by the tax code.) It associates liberals with working people and conservatives with the idle rich. It steals the tax simplification and tax reform memes from conservatives.

And finally, it’s just the right thing to do. Income is income. There’s no moral justification for favoring the idle rich over people with jobs.

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Koch-Funded Study: “Global Warming Is Real”

October 24, 2011 – 12:17 pm

A new study begun by skeptics from outside the climate-science community, funded in part by the climate-change-denying Koch Foundation, has published four papers supporting one of the key global-warming hypotheses.

To put this in context, there are three distinct ways to deny that we should take action on global warming.

  1. Claim the planet is not getting warmer. Rick Perry has taken this approach, claiming that there is in fact a “cooling trend” that scientists have “manipulated data” to cover up.
  2. Claim that the warming trend is a natural fluctuation unrelated to greenhouse gases or fossil fuels. Debunked here.
  3. Claim that possible actions are too expensive. This is the hardest point to resolve, because it depends not just on climate science, but on economic projections, speculation about future technologies, and your tolerance for catastrophic risk. See the discussion here.

Shifting from one form of denial to another (depending on how much the audience knows) is a sure sign of a charlatan. Such speakers will grant that the planet is warming in one discussion, then talk about a cooling trend in the next.

The new research is a devastating blow to type-1 denial. The work was done by the Berkeley Earth Science Temperature Study (BEST), prominent scientists from outside the usual climate-science research circles (the Economist article on this mentions and physicist and an astro-physicist, including a Nobel Prize winner), who were open to the idea that climate scientists were either misguided or dishonest. So they came up with an independent way to process raw temperature readings going back 200 years. Their conclusions matched the orthodox climate-science results (warming one Centigrade degree since the 1950s) within 2%.

As BEST scientist Richard Muller wrote in Friday’s Wall Street Journal:

Global warming is real. Perhaps our results will help cool this portion of the climate debate.

I think Muller is too optimistic, as shown by the comments WSJ’s climate-denier readership appended to his article. In a rational truth-centered world, we would stop hearing type-1 denial. But in our world type-1 denial will continue, because the new study does not change the relationship between global-warming denial and fossil-fuel-company profits (diagrammed here).

ThinkProgress’ Joe Romm examines the particular case of type-1 denier Anthony Watts. Watts was supportive of the BEST study before he knew what it would say, calling their technique “a better method” and “a novel approach that handles many of the issues that have been raised”. In March Watts pledged: “I’m prepared to accept whatever result they produce, even if it proves my premise wrong.”

But now that he’s seen the result, he’s not budging. Right now he’s saying: wait for peer review. In a few months peer review will be in, and I predict he’ll come up with another excuse.

If the public debate does eventually progress to type-2 denial, here’s a handy fact to keep in mind: The hypothesis that greenhouse gases make a planet hotter isn’t some ad hoc thing left-wingers came up with to justify a government takeover of the economy. Originally, it was developed to explain a completely non-political mystery: why Venus is so hot. (I mean: why the planet Venus has a surface temperature over 800 degrees, not why the Roman love goddess is so attractive, which should be obvious. Sorry for the ambiguity.) Only later did people begin to wonder how the same phenomena played out on Earth.

Among astrophysicists, the greenhouse-gas explanation of Venus’ climate is not at all controversial (probably because no corporation owns Venusian oil rights). Given the example of the Earth’s closest cousin in the solar system, type-2 deniers need a stronger argument than mere skepticism. They need to explain why the same processes that make Venus a furnace don’t work here on Earth.

I like the way a commenter on TPM responded to type-2 denier:

Sooooo . . . help me out here. Which part is it that you doubt, the “theory” that CO2 is transparent to visible light but opaque to infrared, the “theory” that the Earth absorbs visible light and reradiates it in the infrared spectrum, or the “theory” that burning fossil carbon emits CO2?

The complete humans-cause-global-warming hypothesis may be hard to test in one experiment, but the pieces of it are simple and well-established.

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Shoot-out at the MSNBC Corral

October 24, 2011 – 12:10 pm

This Rachel Maddow segment is a classic let’s-take-this-outside challenge to the billionaire Koch brothers.

Some background: First the Maddow show used the Koch brothers as an example of a failure of trickle-down the-rich-are-job-creators economic theory. The Kochs get richer and richer while destroying jobs, as shown here:

Then the show made fun of Koch Industries for touting its 1,240 job openings as if it demonstrated that a government jobs program is unnecessary. (And how many current employees will those 1,240 replace? Less than 1,240 or more?)

Then Koch Industries shot back — not at Rachel directly, but at the staff person who wrote the blog post.

And that brings us to Friday’s segment, in which Rachel refuses to refer to the Kochs as “industrialists” or “businessmen” or any of the other respectful titles they are usually given. Instead, she talks about “Daddy’s company” and “their enormous inherited fortune” before closing with this:

Charles Koch, David Koch, you are trying to intimidate the wrong people. This kind of thing is as pitiful from billionaires as it is from anyone. So I reiterate my many earlier invitations to you: Come sit for an interview. I would love to have you. Come sit for an interview and let’s talk this out. Rather than have Daddy’s company attack my producers one-by-one by name, feel free to man up any time.

Your beef is with me.

This is the point in the Westerns where the bartender ducks behind the bar and the poker players dive under their table. But I bet the Kochs wimp out and the on-air showdown never happens.

Still, when a skinny little female looks you in the eye and tells you to “man up”, that’s gotta hurt. Charles, David — they’ll never admit it to your face, but the fewer-and-fewer people you employ are passing Rachel’s link around and laughing at you.

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Suck It Up: Using Our Pride Against Us

October 17, 2011 – 1:03 pm

Last week I talked about the role of shame in maintaining an unjust system: A lot of people are losers in such a system, but who wants to identify with losers? The closer you are to the abyss, the stronger the temptation to deny that you bear any resemblance to the people who have already fallen in.

This week we got to see the slip side of the same phenomenon: how the rich and powerful take advantage of the legitimate pride many struggling people feel in the virtues that keep them afloat.

It started a week ago Wednesday with a cruel joke: Erick Erickson, founder of the right-wing blog Red State and recently a CNN commentator, started the We Are the 53% web site to parody the emotionally powerful We Are the 99% site I linked to last week. He posted a photo of himself disguised in a working-class t-shirt and holding up his story:

I work 3 jobs. I have a house I can’t sell. My family insurance costs are outrageous. But I don’t blame Wall Street. Suck it up, you whiners. I am the 53% subsidizing you so you can hang out on Wall Street and complain.

The “53%” are from a right-wing talking point that is debunked here and in more detail here: 47% of American households pay no net income tax, mostly because they don’t make enough money to qualify. (They pay plenty of other taxes, however, some at a higher percentage of their income than many rich people.) The point of “the 53%” is to evoke an image of a hard-working majority that pulls the weight of everyone else. It is part of the right-wing argument that minimum-wage-earners (and not the rich) should be paying more taxes.

And in Erickson’s case, it is ridiculous. His “jobs” consist of doing what he enjoys, and he could stop any time he wants. The only things he “sucks up” are money and fame, not abuse or anxiety. But one of the talents that puts Erickson firmly in the 1% is his understanding of working-class resentment and how to turn it against the weak rather than the powerful. So people with legitimate stories to tell have followed his example and posted to his site. Like this guy:


I am a former Marine. I work two jobs. I don’t have health insurance.

I worked 60-70 hours a week for 8 years to pay my way through college. I haven’t had 4 consecutive days off in over 4 years.

But I don’t blame Wall Street. Suck it up you whiners. I am the 53%. God bless the USA!

Minus the suck-it-up closing, this could be a 99% posting. This guy is a victim of the economy, but he doesn’t like being a victim, so he identifies with the lords rather than the serfs. Damn those whining serfs, for claiming to be like him.

A similar (if less in-your-face) story has been forwarded all over Facebook:

Like the ex-Marine, this woman (the fingers and handwriting look female to me) has virtues worth taking pride in: She’s talented enough to get a scholarship, hard-working, and with enough self-control to spend less than she makes. Her version of “Suck it up, you whiners” is less insulting, but just as distancing: “I am NOT the 99%, and whether or not you are is YOUR decision.”

Really? I don’t think so. We can all decide not to identify with the people who work more and more for less and less, but we can’t decide not to resemble them.

I picture this student sitting in her cheap apartment, maybe watching somebody’s cast-off picture-tube TV rather than going to the movies with her friends, eating something sensible that she cooked herself, planning to get back to her homework in another few minutes — and identifying with the 1%.

“That’s how it’s supposed to work,” she writes. She’s supposed to “work my @$$ off” for whatever she gets, and hope that she doesn’t get sick, and hope that when she picked her major she didn’t guess wrong about where the jobs would be. Meanwhile, the ever-increasing bounty of this rich planet goes to other people — many of whom aren’t as talented, didn’t scrimp and save, and don’t work their asses off.

That’s how it’s supposed to work?

It’s tempting to pour scorn on these two, but that’s just falling into Erickson’s divide-and-conquer trap. The 99% are supposed to fight each other. The field slaves are supposed to resent the house slaves, and vice versa.

So what is the right response? Max Udargo nailed it in Open Letter to that 53% Guy. It’s absolutely worth reading in its entirety (it has become the most shared post in the history of Daily Kos), but this is the key point:

I understand your pride in what you’ve accomplished, but I want to ask you something.

Do you really want the bar set this high? Do you really want to live in a society where just getting by requires a person to hold down two jobs and work 60 to 70 hours a week? Is that your idea of the American Dream?

… And, believe it or not, there are people out there even tougher than you. Why don’t we let them set the bar, instead of you? Are you ready to work 80 hours a week? 100 hours? Can you hold down four jobs? … And is this really your idea of what life should be like in the greatest country on Earth?

It would be one thing if life was just that hard, if producing enough for everybody to get by required everybody to work 70 hours a week and never make a wrong move. But that’s not true. We know it’s not, because things used to be different. Americans used to have secure 40-hour-a-week jobs that paid well enough to raise a family on one income. Per capita GDP has gone up considerably since then, but the surplus has all accumulated at the top.

That’s not natural; it didn’t happen to nearly the same extent in other countries. It happened here because the very wealthy got control of our political system and ran it for their own benefit. It happened because we changed the rules to reward financial sleight-of-hand over making things and serving people. It happened because we devalued the public sector — the schools, the roads, the parks, the safety net — and let our whole society get split into First Class and Coach.

Fixing that is what the 99% movement is about. It’s not about making talent and hard work and wise choices irrelevant. But how talented, how hard-working, how wise — and how lucky, never forget the role of luck in your success — should a person need to be to have a decent life? How unforgiving do we want to make our society?

If the 99% win and the system changes, the economic race will continue and some people will still outrun the others. Nobody grudges them that. But we don’t have to live in a society where the Devil takes the hindmost. And we can still have empathy for the people we pass. That’s a virtue too.

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A View from Dewey Square

October 17, 2011 – 12:48 pm

I doubt the world needs another occupation-protest eye-witness blog post. People much better known than me have already been there: Michael Moore, Chris Hedges, Rick Perlstein, and Jeffrey Sachs, just to name a few. And Pistols At Dawn already did the ordinary-person-checks-out-the-hype thing pretty well.

Still, when I heard there was an Occupy Boston protest at Dewey Square (at the South Station T stop across from the Federal Reserve), I couldn’t resist taking a look. And having been there, I now can’t resist writing about it. But I’ll try to restrain myself from repeating what’s already been said hundreds of times.

Two things struck me about Occupy Boston. First, Dewey Square is tiny. I didn’t do a count, but Salon’s description of a “field … filled with hundreds of tents and tarps” is a vast exaggeration. We’re talking at most a few dozen small tents, and they totally fill the available space but for a walkway. Mayor Menino’s warning “you can’t tie up a city” is similarly absurd. Any occupation confined to Dewey Square isn’t even a mosquito bite on a city the size of Boston.

Second, the way conservatives try to make the Occupation movement sound scary is ludicrous. Eric Cantor’s talk about “mobs” and Glenn Beck’s warning that “They will come for you and drag you into the streets and kill you” — we’re in Fantasyland here. People who say things like this are just hoping you don’t bother to get any genuine information.

I was at Occupy Boston on Tuesday (the same day as The New Yorker; their photo shows about a third of the encampment). Monday the camp had tried to expand to the next park down the Greenway (for obvious reasons; they’re out of space), and police violently ejected them at 1:30 in the morning. The video got national attention, and not in a way that made the police look good. Veterans For Peace positioned itself between the police and the protesters, and the police manhandled them.

So if ever the Occupiers were going to be surly and vengeful, it would have been Tuesday.

But I didn’t run into anybody surly and vengeful. Annoyed, maybe.  Some of them were amazed (in that way educated white people get) to realize that police don’t necessarily act reasonably or even obey the law. But everyone seemed to understand that the Occupation is nonviolent by definition. If they get provoked to violence, they’ve lost the argument.

Two of the people I talked to were white-haired folks who reminisced about the Vietnam War protests of their youth. One had a Santa-Claus beard and was selling anarchist pamphlets, probably for less than it cost him to photo-copy them. (I bought one for 50 cents.) The other was a woman who was trying to figure out how to start an occupation in Cambridge.

A young man wearing a pink wig was holding a sign about police abuse, so I asked him about the previous night’s confrontation. He told the same basic story I eventually heard from just about everyone (each in their own words rather than rehearsed or programmed): The police were violent and the demonstrators peaceful.

The clean-cut 20-something geeks in the media tent told me the most outrageous Monday-night story: Someone had rented a hotel room overlooking the square and were broadcasing a live feed of the police raid, until the police came up and stopped them — on no particular grounds anybody could imagine.

But as in the famous John Gilmore quote, “The Net interprets censorship as damage and routes around it.” The geeks were excitedly processing all the Monday-night video they could get their hands on and posting it to the Web. That seemed to be all the revenge they needed.

The guy at the information table was collecting bail money. At the logistics tent they were hoping for donations of tents to replace the ones the police had thrown in a garbage truck Monday night.

Everybody was careful not to speak for the group. Future strategy was going to be a topic of that evening’s General Assembly, and nobody wanted to prejudge the outcome. (The Occupiers were proud of their democratic process, though they all admitted it was tedious.)

Anger? Not so much. There was stuff to do. Venting or riling each other up wasn’t going to get it done. No one seemed hurried or panicked, but many seemed focused.

Like so many middle-aged people who see an Occupation protest, I can’t resist making a sweeping generalization: I don’t think people my age appreciate the effect a lifetime of computer games has had on the rising generation. They are both more strategic and more relentless than we expect them to be.

So they did not experience Monday’s police raid as some primitive horror; it was just the new challenge that marked the Occupation’s progress to Level 2. It’s something else to overcome, like bad weather. So the Occupiers bail people out, get more tents, and keep going until they can find the door to Level 3.

[I haven’t been to Occupy Wall Street, but the way they met the weekend’s park-cleaning challenge sounded similar. This level has a new obstacle; how do we marshal our resources to overcome it?]

If the authorities think they’re going to get rid of these protests through slow escalation, they’d better think again. They’ll just be training the protesters to reach ever-higher levels of proficiency.

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