Monthly Archives: June 2014

Is Hyper Partisanship Unconstitutional?

flags04Partisanship, especially the hyper variety, which has resulted in severe gridlock in Washington D.C., goes hand in hand with the accretion of Presidential power. One feeds the other. Hyper partisan gridlock has moved the President to take actions he believes are beneficial for the nation as a whole.  When Congress, as a strategy in a grand power struggle,  refuses to act,  even on measures that are bi-partisan in origin and have widespread public support, any President will push the envelope to get around it. Critics on the right, of course, as well as some (presumably) non partisan constitutional lawyers (like Jonathan Turley of Georgetown University) have argued the President’s solo actions are unconstitutional.

While Obama’s defenders often say hyper-partisanship in D.C. is the reason the President acts unilaterally, their legal justifications have rested on traditional constitutional arguments around executive powers; and precedents going back to the beginnings of the “imperial presidency,” often traced to FDR.  (Clear signs of it were apparent in the presidencies of the first Roosevelt and Woodrow Wilson).

Supporters of the President have used hyper partisanship as a political defense, but not as a legal justification for unilateral action.  Recess appointments by the President, “creative” enforcement of immigration law, and executive orders, such as raising the minimum wage for workers under federal contracts, are examples of going solo when hyper partisan gridlock precludes actions that arguably benefit the nation as a whole; and which the polls say have very strong public support.  The recess appointment issue has already been heard by the U.S. Supreme Court, and a decision is due shortly.

Is there any basis for lawyers and jurists to consider hyper partisanship, not just as a political argument, but as a legal one, when they defend the continuance of the “imperial presidency?”  (I say “continuance” here, because even Turley, a strong critic of Obama, points to a series of presidencies, especially Bush II,  which, in his view, have mangled the constitution).

Put another way, is there a basis for saying Hyper Partisanship is Unconsitutional?  That question isn’t quite as facetious as it sounds.

James Madison, among other founders of the Republic and framers of the Constitution, not only omitted any reference to political parties in the original document and bill of rights,
but notably warned about factionalism and the dangers of partisanship. Madison’s most famous essay about this was in Federalist Papers #10.  This is a must read, even if you already perused or heard about it in Government 101.

The Federalist Papers are a bible for jurists who look to the framers’ beliefs and intent as the basis for interpreting the Constitution today. At least four of the sitting Justices on the current Supreme Court can be fairly described as “Originalists.”  They try to channel the framers when faced with difficult issues.  “What would you have to say about police drones with cameras peering into windows, Mr. Madison?”  These sacred ceremonies are not conducted in candlelight by justices in a haunted house in Georgetown; and they surely wouldn’t be caught holding hands.  But they do consult in some manner with the framers and founders.

Madison argues in Federalist #10, that majority parties, and partisans generally, are prone to run roughshod over minorities, taking actions which are contrary to the rights and interests of the community as a whole.  Acting in the “best interests of the people, or the nation as a whole,” are elusive concepts, but philosophers of democratic and representative government, from John Locke and John Stuart Mill to James Madison, advanced them passionately.

Madison’s philosophy resulted in the many checks, balances, and complex governmental structures that make it generally hard for the federal government to act. But I doubt even Madison would have been pleased with today’s hyper- partisan gridlock.

The main danger of majority hyper partisans today is not their proclivity to run roughshod over helpless minorities through selfish actions; but rather in preventing government from taking actions that oppose the interests of the whole community.  (Why would they do this? Again, its a strategy with a view toward re-gaining power in the future,). Examples include failure to promote clean energy, stem the bleeding of middle class jobs, or support infrastructure, road, and transit spending that benefits commercial activity. (See, for example, the stunning refusal of House Republicans to replenish the Highway Trust fund).  Gridlock on the roads, mirrors gridlock in Congress.

Hyper partisanship has prevented federal agencies (created by Congress) from operating because every nominee to head them is rejected. It has prevented courts from functioning because judges can’t be appointed. It has stopped regulatory agencies (also creatures of Congress) from settling disputes because board member nominations can’t be approved for the required quorum.

Is all that merely the Congress exercising its joint role in executive appointments?  Or is it the political tactics of a hyper partisan majority (in the House),  the kind the framers feared would run roughshod over minorities or the “public good?”

What would James Madison say about that?  And will the four ardent Originalists on the High Court ask the question?  (Playing on the words of legendary Mariner baseball announcer, Dave Niehaus, “Get out the incense and the rye bread, grandma, its grand salami time”).

Would channeling Madison influence opinions about “recess appointments?”  Might law suits in the lower courts, arguing that partisan gerrymandering  (drawing state legislative and congressional district lines to deliberately empower one political party and weaken others) is unconstitutional,  be affected by reading what the framers said about hyper partisanship?

I am realistic enough to know the current Court probably won’t go there.  They can be Originalists,  Literalists, or believers in a Living Constitution, whichever one is needed to reach a desired outcome.   But it wouldn’t hurt if lawyers reminded the four Originalists that recent examples of the “imperial presidency” have their roots in hyper-partisanship, and that the founders are now saying “I told you so.”

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Police Check Points: An Emotional Argument Against

car_train05I live in Escondido, California, near San Diego. Both Escondido and San Diego use police “check points” on a regular basis. A heavily trafficked place is chosen by police, barriers are erected, and cars are stopped (presumably at random), to check drivers licenses. Drivers are also asked if they have been drinking. In the course of the stop, an officer may pick up the scent of alcohol or see empty beer cans on the back seat. That may lead to a DUI. Lack of a license may lead to deportation, if the driver doesn’t produce a valid license or another cause is identified for further detention.

The policy justification for check points is, of course, that they reduce the incidence of DUIs (and accidents), and lead to the capture of criminals and undocumented residents.
There are differences about how effectively check points accomplish all of these goals; or if they are sufficiently effective to outweigh civil liberty and privacy concerns.

Because they don’t require police to stipulate a “probable cause” for a stop, you might think check points are prohibited by the 4th Amendment to the U.S. Constitution (regarding illegal searches and seizures). But federal courts have upheld the practice, as long as certain procedures are followed. I don’t think legal story is entirely over.

Even though I have a valid drivers license, am not a criminal, don’t drive under the influence, and am not undocumented, I have a viscerally negative reaction to the check points. Analytically, my views about check points are well represented by a recent blog article  written by Pat Mues, who blogs regularly (and brilliantly) on Escondido politics and society. So, I won’t use this space to make the analytic argument against the practice; read Ms. Mues’ article.  Perhaps (I hope) uncharacteristically (for this blog), I will make the purely emotional case against it.

Supporters of check points argue that average, middle class, law abiding citizens, are (somehow) reassured by check points. They don’t find them especially invasive or intimidating, it is proposed, because “we” as “good people,” have nothing to fear when encountering a barricade, flashing lights, and an inquiring officer, with more lights. The check points are also supposed to be re-assuring to businesses, which naturally want their city to have the reputation of being safe and habitable. Check points are believed by some to improve the reputation and business climate of a city.

As one of the demographically identified folks who are supposed to be re-assured by the check points, I challenge these notions, admittedly and without apology, on emotional grounds. I was raised in a Jewish household in New York City, where my grandmother and her senior friends often told stories (with tears) about once living in places in Europe where police could knock forcefully on doors, come into your house, stop you on streets, without reason, cause or warrants. They talked about the sheer terror of living that way.

San Diego, thank goodness, is of course nothing like my grandmother’s home land (in decades past).  And check points are not the same as the terror my ancestors experienced, Nonetheless, I can recall my heart racing and anger rising, the first time I encountered a check point in Escondido. That was a visceral response. I reacted that way, even though, realistically, I had nothing to fear or hide; and had (still have) the utmost trust and admiration for Escondido officers. But it’s not enough to tell me I need to take a pill and lie down.

Many supporters of practices like check points and stop and frisk laws in America don’t comprehend how repugnant they are to so many (of us) “average” people, who are not criminals, regularly inebriated,  or “here illegally.”  So, when I first visited San Diego before re-locating here, and encountered a check point, do you think I called back home to tell my family and business friends to rush down and buy real estate or open a business?  My late wife Cheryl and I moved here because of weather and proximity to family, not because we felt re-assured about living in a city with check points.

Research on the efficacy of check points is not conclusive. (I will get push back on that). But even if it was, research alone can’t be used to justify the practice. We can make a city 100% safe if we just wired every inch of it for sound and video and tapped every phone call.

“Prevailing Wage” Policies – Don’t Throw Out the Baby With the Bath Water

Wonder if they paid prevailing wage for this?

Wonder if they paid prevailing wage for this?

“Prevailing wage” policies (in essence) require government construction contractors to pay wages closer to what union shops pay, which is of course generally higher than pay at non union companies, sometimes much higher. Along with the minimum wage, prevailing wage policy is one of the few remaining tools government can still (realistically) use to prevent the further erosion of worker wages.

“Prevailing wage” is under attack ideologically by politicians opposed to wage regulations of any kind, even where the government is contracting for the labor.  Opponents also say that paying “prevailing wages”  inflates government capital budgets, either limiting how many schools, bridges, roads and other projects can be built, or making taxpayers pay “more than necessary” for capital projects.

In most of the battles around the country over prevailing wage policies, there are only two choices – retain it or scrap it.  Policy-making in general today is binary. But, prevailing wage requirements are eminently scalable. Without implacable ideologies, and where compromise is still possible, adjustments can be made so that capital budgets are not being busted, while skilled construction labor can still receive a “living wage,” materially above minimum.

Something like that appears to have happened recently in Delaware. The Delaware story wasn’t buried in Delaware, but it was in the rest of the country. You can read about it here. In contrast with battles in places, where prevailing wage rules have been repealed, the Republican controlled legislature in Delaware passed a law which affects the way prevailing wage is determined, but the core policy appears to remain intact.

The public is a lot more aware of minimum wage, but the higher wages paid to government contracted construction workers under prevailing wage rules, can have much greater impact on local economies. Yes, the impacts can be negative or positive, but I argue that, just like the minimum wage, when the upward adjustments are reasonable,  paying the higher prevailing wage is beneficial to the overall economy of a region. More about that later.

The change adopted in Delaware is not easy for headline writers. It involves which data are used to determine the prevailing wage in a community. That may elicit a yawn, unless you’re a numbers junkie…..or really care enough about workers wages to venture into the weeds a bit.

The bill passed in Delaware says data provided by the federal Bureau of Labor Statistics (BLS) shall be used in administering the State’s prevailing wage law, rather than data from other sources. State Labor and Industry agencies across the nation often provide the information used for prevailing wage determinations.

Without maligning data from all Labor and Industry agencies, or that used from other sources, it is true that sloppy or politically compromised wage surveys, from time to time, result in outrageously skewed wage data (usually in the high direction). That of course affects the prevailing wage mandated by governments, and has contributed to opposition. However, ideologues, who don’t want any government involvement in wage setting, would oppose prevailing wage even if the data were not sometimes skewed.

In my own experience, managing a large state research shop which provided labor market data, the BLS data were generally the most trusted.  Under contract with BLS, we obtained the data through large scale, professionally conducted surveys. Our surveyors worked hard to construct representative samples (neither under or over sampling union shops) and to encourage accurate responses from both union and non union employers. The survey process was insulated from politics.

I am discouraged by arguments against prevailing wage which cite examples of outrageously high wages mandated by some governments for certain projects. These problems are solvable. I am especially skeptical and discouraged by arguments, appealing to taxpayers, that prevailing wage requirements bust capital budgets, limit the number of projects that can be accomplished, and cause higher taxes.

When politicians say their government can save, say, $20 million on their $100 million capital budget, it doesn’t mean the jurisdiction’s annual budget is reduced by $20 million, or that citizens will see that reduction in tax bills, or that another $20 million in additional projects can be funded, if only prevailing wage would get out of the way. On the latter point, it could mean some projects don’t get done as quickly, but not that they fall off the radar screen altogether.

Governments typically issue 20 to 30 year bonds to fund capital projects. On a current account basis, the government is paying debt obligations annually on those bonds, not $100 million at once. For a hypothetical $100 million capital outlay supported by 20 to 30 year bonds, the government is probably spending anywhere from $5 million to $10 million in annual debt payments. So, even if eliminating prevailing wage reduced the cost of capital projects by 20 percent — which is a high estimate in most cases – a local government is saving perhaps $1 to $2 million in their operating budget.

That is nothing to sneeze at, but is it too high a price to pay for retaining one of the last policy instruments available (in practical terms) to address income gap and inequality issues?  Moreover, my back of the envelope estimate of budget/tax burden – the $1 to $2 million figure — is on the high side, because it doesn’t include tax collections from increased spending in the community by higher paid workers.

Yes, the owners of construction companies may have to absorb some of the costs of paying a higher wage (though they are likely passing it along to the customer – in this case the government, where it’s further passed on in tiny amounts to numerous tax payers).  But, even if the owners are making less profit, evidence is strong that lower income people, like a typical worker, spend any extra income more quickly, and more of it in their own communities, than higher income folks.

Of course all bets are off if a minimum or prevailing wage intervention by government is large and precipitous. Yes, you can sink an economy if wage policies are extreme.  But, ideologues don’t seem to care if the re-distribution is small or large; they are against it anyway. And those same folks invoke slippery slopes and tipping points. I understand and respect that; but it’s a matter of when your risk aversion comes into play. It’s a simple truth, that conservatives and liberals are risk aversive about different things, around who’s ox is at risk of being gored.

Are the LA Clippers Worth $2 Billion? – What A Silly Question!

Basketball Gold

Photo By Norm Olson, copyright 2013

Everyone by now knows that Steve Ballmer, the 34th wealthiest person in the world,
according to Forbes, and former Microsoft CEO, has offered to buy the NBA Los Angeles Clippers basketball franchise for $2 billion. At this writing, it’s not a done deal. But since the price demolishes all records for sports franchise sales, I will be very surprised if the deal doesn’t close. The price has triggered a lot of questions. The most common: “Are the Clippers really worth $2 billion?” This is a teachable moment.

A preliminary answer is: “The Clippers are worth whatever a buyer is willing to pay.” Period. That’s not entirely satisfying. But it is instructive. People don’t always buy things because they believe it will make (more) money for them. If you’ve ever collected coins, art, or baseball cards, you know that you “overpaid” at one time or another just for the joy of owning that Bob Uecker Topps card you were searching for on ebay for several years, or the Ken Griffey Jr. Upper Deck refractor.

Ballmer, who is said to be worth $20 billion, merely places a lot of value on owning a professional sports franchise, like his former Microsoft associate, Paul Allen (who owns the Trailblazers and Seahawks), and other high tech giants who now own professional sports teams.

Ballmer is brilliant and charismatic, but he just got pushed out of his Microsoft CEO job; he’s 58 years old, probably wants to have some fun the rest of his life, remain relevant somehow, and stay in the lime light. That’s worth $2 billion to him. Want to fight about that with Mr. Ballmer?

The main reason we ask if the Clippers are worth $2 billion is that we’ve all learned
from Econ 101 (and by osmosis), that economic behavior is always “rational” in some sense; that economic actors only buy or invest when “it pencils out,” meaning that the buyer will get a positive monetary return on the investment. Yet, even within the classic economics framework, if you think about it for a moment, Ballmer’s purchase may very well “pencil out.”

From Father Sarducci’s, five minute economics PhD, with 2.5 minutes devoted each to “supply” and “demand,” it’s obvious the supply of major league sports franchises is small and artificially constrained; while, the demand for them is going through the roof. Guess what happens to price.

Check out the number of newly minted billionaires in America and the world who are looking for new things to do with their billions; and compare that with the number of major league sports franchises on the market. And then look at the trends. If you believe Thomas Piketty, the number of multi billionaires is going to get much larger in the next few decades. The quantity of major league sports franchises won’t grow nearly as fast. That’s true, almost by definition. If every mid size city in America gets a major league franchise, its no longer “major league.”

But, the NBA will grow internationally. Ballmer is a forward thinker; and can play chess on a very high level. Don’t you think it crossed his mind that in 20 years, the NBA will have franchises in China, Brazil, and Germany? How much do you suppose those markets will generate in cable revenues and gear sales for every NBA owner?

Congrats, Mr. Ballmer and have fun with your new toy. Condolences to Seattleites who’s last best hope for bringing NBA basketball to that town, Mr. Ballmer, is now committed to a franchise in LA.