Showing posts with label Congress. Show all posts
Showing posts with label Congress. Show all posts

Friday, December 19, 2008

The Auto Bailout Is Here and on Shaky Legal Grounds

So details are yet to come out, but the Treasury announced this morning that GM and Crysler will get a $17.4 billion loan through at least March 31st to be taken out of the TARP program (the $700 billion bank bailout). This is likely only the first installment.

But you've got to love this administration. The bailout failed to get Congressional approval, so they just go around it and do it themselves with the proverbial FU. Where the Treasury gets the legal authoirty to do this when the bill passed uses language that clearly states it is to be used for financial institutions only, is a mystery to me. The bill defines "Financial Institution" as:
FINANCIAL INSTITUTION- The term ‘financial institution’ means any institution, including, but not limited to, any bank, savings association, credit union, security broker or dealer, or insurance company, established and regulated under the laws of the United States or any State, territory, or possession of the United States, the District of Columbia, Commonwealth of Puerto Rico, Commonwealth of Northern Mariana Islands, Guam, American Samoa, or the United States Virgin Islands, and having significant operations in the United States, but excluding any central bank of, or institution owned by, a foreign government.

But then again since when does this administration or the Federal government in general care about following the law? I will be interested in seeing if and how many Democrat Congressmen come out against this action, considering it is violating the bill but at the same time the end result is something they want and tried to get through Congress. We will have an oportunity to see if the years of complaints by Democrats about the Bush administartion breaking laws was true outrage in principal or whether it was just political opportunism. In this case they are fine with breaking laws as well as long as its for their purposes. I'll be watching.

UPDATE: Obama's reaction:
Today's actions are a necessary step to help avoid a collapse in our auto industry that would have devastating consequences for our economy and our workers. With the short-term assistance provided by this package, the auto companies must bring all their stakeholders together — including labor, dealers, creditors and suppliers — to make the hard choices necessary to achieve long-term viability.

Maybe he would have preffered it go through Congress, but it looks like he's ok with the executive branch stretching and bending both the spirit and letter of the law as well. So much for "change." It will just be a different set of issues in his Presidency in which the end justifies the means.


-EJB

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Sorry for my absence lately, everyone. EJB has done well to hold down the fort while I finish up my finals. It's all over now so, let's get right back into it.

I'm pretty sure that absolutely nobody is shocked by this move. The Bush Administration has done nothing if not circumvent federal law every step of the way. Let's talk about the language of the TARP that EJB highlights.

Clearly, the plain meaning of those words leads to the conclusion that an auto company is NOT a financial institution. I fully expect a lawsuit to climb the court-ladder and be available for certiorari soon (though, the tricky aspect will be who has standing to actually bring the suit). But the Bush Administration has a plan - of this we can be certain. They would not have pushed forward with this move if their legal counsel hadn't advised them of a litigation strategy, should their move be challenged.

One clause, in particular, worries me. That a "financial institution" can be labeled as a "security broker or dealer" or an "insurance company" might be the text that the Bush administration relies on. Do the automakers insure their sales? Do they buy and trade in other company's securities? If so, it is entirely possible that a court could label them a "financial institution." EBAY was so labeled in a case under Delaware Corporate law - despite the obvious fact that EBAY is not a financial institution. But because EBAY dealt in corporate securities - and lots of them - the court found it fit to consider them a securities dealer. This, I think, would have to be Bush's defense plan, should his illegal move be challenged.

And can I just mention one more time, what the hell is going on with this Republican administration!? Congress, despite being strongly Democrat, shoots down a bill that would help auto companies (traditionally a strong Dem interest) and then a Republican president circumvents Congress and exerts fictional Article II powers to redistribute capital!? WHAT!? What country are we in? What year is it? This whole thing blows my mind.

~JSK

Friday, October 17, 2008

"The Change That We Can Believe"... Is Coming

With all of the attention directed towards the Presidential race, we often miss the other story and that's the Congressional races. In what looks like will be another tidal wave year for Democrats in Congress, it is becoming increasingly likely that in addition to a President Obama, the Democrats will come very close to if not reaching the 60 seat threshold required to gain a filibuster proof majority. The last two times this occurred with a Democrat president was in 1933 in the New Deal era and in 1965 in the Great Society era.Both times saw unprecedented increases in the role and power of the welfare state. And this was when the parties were not as ideologically pure and there were still numerous Southern Conservative Democrats. I hope America realizes that out of its disgust for recent Republican governance, that it is about to hand a super majority to the left that has not been seen in a generation. This Congress will be an even greater rubber stamp for Obama then it was for Bush.

Considering that ideological shifts have not occurred nearly to the extent of party affiliation, voters might be in for a surprise in upcoming years. A recent WSJ/NBC poll showed that voters self identify themselves as:

43% Democrat
36% GOP
20% Independent/Other

While at that same time:

23% liberal
37% conservative
36% moderate

(sorry, I'm looking at the hard copy and can’t find the online page to link)

Today's Wall Street Journal has an overview of various bills that have either passed in the House recently but have been blocked in the Senate, or ideas that are being proposed by the majority that will likely get passed in a 60 Democrat majority. Though the article writes about these in a largely negative light, it still is a good summary. Some of the examples include:

Medicare For All- although Obama is not actually advocating a complete state-run medical system, his plan is a big step in that direction, "Mr. Obama wants to build a public insurance program, modeled after Medicare and open to everyone of any income. According to the Lewin Group, the gold standard of health policy analysis, the Obama plan would shift between 32 million and 52 million from private coverage to the huge new entitlement." The public program will be designed to displace privately insured individuals until the bulk of the populous is comfortable with state run health insurance. It is then only a matter of time before rationing and heavy taxation become a necessity as is the case in nations with national systems.

Union "Card Check" - In a blatant attempt to bolster a Democrat special interest, the right to a secret ballot for union organization will be removed so that union bosses can go back to the day of being able to intimidate workers into joining a union. This is such a blatant attempt to reward a special interest group that even stalwart of the left George McGovern has strongly come out against this.

Taxes Will Have to Rise Drastically - If the Democrats are going to deliver on all the new spending programs they are promising, unless they are going to greatly increase the deficit, taxes are going to have to be raised to a level much higher then what Obama is proposing.

Free Speech - The so called "fairness doctrine" could be returned, allowing the FCC to regulate political speech on television and radio.

Huge Intervention in Business - Everything from price controls on pharmaceuticals, increased government stakes in financial insitutions to arbitrary oil "windfall" profits taxes are likely. Free markets will soon take a serious blow.

Higher Energy Costs and Carbon Taxes - Whether or not carbon emissions are something we should worried about does not change the fact that by design, any cap-and-trade system or carbon tax will make energy and therefore everything else we consume more expensive. In addition there will be a huge new bureaucracy to manage this, which will be a lobbyists wet dream as every special interest will have a reason why they need "adjustment credits."

We are still paying heavily for the first two giant leaps in the welfare state, as Social Security and Medicare/Medicaid are both going insolvent. I hope we can afford the likely third wave that is about to come upon us.

-EJB


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Hmm, EJB...I don't think your post is nearly clear enough on how you feel about a possible Democrat super majority.

Anyway, let's get back to reality. I'm not going to sit here and try to argue that a liberal super majority would be an out and out good thing. No sane person would argue that ANY super majority is a good thing, because we all recognize the importance of internal checks and balances. But I do have a few things to add:

1) The WSJ argument is flawed in a few ways. First, it is a simple appeal to fear - something we see entirely too much in the news media these days. In fact the entire tone of the article is akin to "the sky is falling!" and almost seems to encourage voters to vote GOP simply to avoid a parade of horribles. This is not a good reason to cast a vote. If the Dems reach a super majority it will be because our republican system functioned properly - it will be the choice of the people, and likely, a consequence and direct reaction to the failed policy of the last regime. Second, the ONLY gauge the article uses to predict the impending future welfare state is that, when Dems had Congress and the Presidency, the power of the State increased. First, causation is NOT established by this reference to two time periods. The correlation is strong, to be sure...but many other factors played a role in the then Congress' decisions to back certain plans (the Great Depression, FDR's unique personality, WWII and Korea, for instance). Let's also not forget that both parties are very different from what they used to be, even from the 60's.

2) It isn't anywhere near clear that this liberal super majority is even feasible. Estimates from different sites and polls are all over the place in terms of just how many seats the Dems will pick up.

3) The Democratic Party is NOT monolithic. Let's give some credit to the different factions and philosophies that are amalgamated into what we call the Democrats. I fully expect the Blue Dog's to strengthen their voice in a super majority because we they would understand the downsides of absolute, unchecked power. In fact, many of the new Dem Congressmen would likely be of the same type as Heath Shuler, not Ted Kennedy. Also, "Democrats" like my own Senator Lieberman or Bernie Sanders have shown no problem with taking sides against the party line.

4) There would be some positive benefits to a Democrat super majority. The education system would be drastically improved as we could finally get rid of the failure that was "No Child Left Behind." Obama's plan to improve and repair the national infrastructure would bring a much needed technological upgrade to our nation's highways, railroads and airports (much like FDR's infrastructure plan did - sans the airports). Anyone driving up 95 from NYC to Boston could tell you that they wouldn't mind paying a little more in taxes if it meant a safer and wider highway. Bridges and overpasses are literally crumbling all across the country. I also must disagree that the implementation of a State-run Health Care system would be a negative consequence of this supposed super majority. The quality of life for many of our poorer citizens would improve with Democratic policies. I'm not going to go into a full list of every possible beneficial policy that could get enacted.

Nobody should be arguing that a Dem super majority (or any super majority) is the best possible scenario for our country. But come on, EJB (and NTC), have some faith in our electorate. You guys are libertarians, you're supposed to believe in the power of people to choose the path that is most right for them. Thus a super majority would be right simply because it was so elected. And if they really do screw things up like you say they will, it'll only last two years because the people will shuffle them right out. The sky is not falling...we are not heading for a totalitarian welfare-state...let's get real.

~JSK


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Few things. First, I definitely acknowledge the tone of this article upfront saying, "Though the article writes about these in a largely negative light, it still is a good summary."

Second, you set up a straw man when you say, "
Second, the ONLY gauge the article uses to predict the impending future welfare state is that, when Dems had Congress and the Presidency, the power of the State increased. First, causation is NOT established by this reference to two time periods." The major premise of this article is that the bulk of the things listed are bills that have already been passed in the Dem controlled House in the past two years, but were blocked in the Senate. Or, they are things that Obama supports and the House would likely pass. This is not mere correlation, it is based on very recent history. The correlation only compares past historical precedent.

Third, though yes the Dem party is not monolithic, it is far more uniform then it had been in the past two time periods shown. There are the Blue Dogs, but they are far from the old southern democrats which in the Senate, we probably saw the last real one retire in Zel Miller. The legacy of the Southern Democrats is largely now in the Republican Party (for instance Sen. Shelby from AL was initially elected as a Democrat). The only current Dem Senator currently which I would argue could be called a conservative democrat is Ben Nelson from Nebraska. If he wins, Musgrove from Mississippi might be considered one too, maybe. I don't see many Democrats, particularly in the Senate, blocking anything the leadership puts through with the exception of some decisive social issues. As far as spending and social programs, they will pass just as they did with all the Blue Dogs currently in the house.

Fourth, I'm not saying a super majority is definitely going to happen. But its quite feasible. I even use language as "increasingly likely that they will come close if not reach" and place a "?" on my chart. I am only discussing a possibility that is quite feasible but not guaranteed.

Neither am I arguing that a Dem majority necessarily brings all bad things, but it brings the list that I discussed (though I would argue that No Child Left Behind needs to be totally scrapped).

Fifth, you seem to not get what "libertarian" means when you say, "
But come on, EJB (and NTC), have some faith in our electorate. You guys are libertarians, you're supposed to believe in the power of people to choose the path that is most right for them. Thus a super majority would be right simply because it was so elected." I do believe in the ability for the individual to chose the path for themselves. I don't believe in the ability of the individual to dictate that an authoritative power decide whats right for another individual.

Lastly, I am not making the argument that we are going to become the Soviet Union or an "authoritative welfare state." What I am arguing is that assuming that the Democrats get 60 seats, we are very likely to see the next major leap towards the expansion of the welfare state, just as the the last two
occurrences did, and what has been passed in the House already is a very good indicator of what will happen if the Senate and President are on the same page. We will further move more in the direction of a European Social Democracy and away from a Liberal Republic.

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EJB

Wednesday, October 15, 2008

Congress Gets One Right, Restores Posse Comitatus

We here at The Thinking Heads have been awfully hard on our leaders thus far. We've attacked politicians for their lack of economic knowledge, their willingness to abandon principle for popularity and their propensity for deviousness. But I bring to you, our loyal reader(s?) what might be the first Thinking Heads post to celebrate a political action. And I'm willing to bet that it's one you didn't even know occurred.

This year, Congress passed HR 4986: National Defense Authorization Act for Fiscal Year 2008. A small but extremely important part of this bill repealed certain amendments to the Insurrection Act that were a part of the Defense Authorization Act of 2007. This is fantastic news and here's why.

The Insurrection Act (1807) is a set of laws that governs the President's power to institute martial law - that is, to deploy American troops (Army, Navy, Air Force, Marines - but not the Coast Guard) to put down insurrections and rebellion. The Insurrection Act is highly deferential to State and local governments and strictly limits the plenary power of the President. This Act, in tandem with Posse Comitatus Act, provides a barrier against domestic military policing.

However, last year, in section 1076 of the Defense Authorization Act, Congress amended the Insurrection Act. In response to the "growing threat of terrorist acts committed within the United States," Congress grossly expanded Executive power in dealing with "national emergencies." The Amendment reads in relevant part:

(1) The President may employ the armed forces, including the National Guard in Federal service, to--
(A) restore public order and enforce the laws of the United States when, as a result of a natural disaster, epidemic, or other serious public health emergency, terrorist attack or incident, or other condition in any State or possession of the United States, the President determines that--
(i) domestic violence has occurred to such an extent that the constituted authorities of the State or possession are incapable of maintaining public order
Whoa, hold on a second. Did you see what happened there? Here's a hint, read the text I've conveniently marked in red. Instead of allowing martial law only to quell rebellion or insurrection, Congress granted the President power to impose domestic military policing whenever there's a "serious public health emergency" or "other condition." Other condition! One cannot help but marvel at the astonishing ambiguity of the text. There are absolutely no clarifications as to what type of "other conditions" satisfy the "other condition" standard. Terrorist attack? Send in the Army. Communist uprising? Call in the Marines. Martians attack? Deploy the Air Force! NYC riots after Jets win the Superbowl? Anchors away, Navy!

The sad fact is, this alteration - which created the potential for persistent and severe Constitutional violations and deprivations of liberty, was barely noticed. And for you WWII history buffs, another sad fact is the frightening resemblance between this Act and the Reichstag Fire Decree. Not so much in text, but in spirit.

Thankfully, Congress woke up. Section 1068 of the Defense Authorization Act of 2008 completely repeals Section 1076 of last year's Defense Authorization Act. Thus, the original terms of the Insurrection Act have been restored and we can, once again, sleep comfortably in the knowledge that (for now) our President cannot impose military rule upon us. Thank you, Congress, for actually helping to restore our Constitutional freedoms and maintain a healthy balance of governmental power.

~JSK