"In short, it is the perfect political explanation, however little economic sense it makes."Sounds like an idea with wide application.
Thomas Sowell, The Economics and Politics of Race
"Let's start with first principles. It seems clear to me that a judge may consider moral norms in making judicial decisions. As I explained in my article Social Propositions and Common Law Adjudication, however, judges may not look to their own moral values:Any complex society needs an institution before which claims based on existing societal standards can be heard. In our society, that institution is the courts.20 “If the courts resolved disputes by reasoning from those moral norms and policies they think best, there would be no institution to which a member of the society could go to vindicate a claim of right based on existing standards.” Second, since the judicial system is a peculiarly undemocratic institution, the legitimacy of the adjudicative process requires courts to look to “existing legal and social standards rather than those standards the court thinks best.” Finally, prohibiting the courts from employing their personal standards makes legal reasoning fairer and more easily replicable by the profession. (Page 6)
Instead, judges may consider only those moral norms having substantial support in the relevant community. (See pages 7-10 of my article.) Although my article focused on common law adjudication, I believe the same holds true with respect to constitutional and statutory interpretation. Of course, some would argue that a judge should be an originalist and a strict constructionist with respect to the latter forms of adjudication, which would obviate the relevance of personal or social moral norms. As Justice Scalia one put it:Before proceeding to discuss the morality of capital punishment, I want to make clear that my views on the subject have nothing to do with how I vote in capital cases that come before the Supreme Court. That statement would not be true if I subscribed to the conventional fallacy that the Constitution is a “living document”—that is, a text that means from age to age whatever the society (or perhaps the Court) thinks it ought to mean.
I've got substantial sympathy for that point of view, of course, but I'm assuming herein that evaluation of moral norms is relevant to at least some aspects of what a Supreme Court justice does."
"Senator Harry Reid of Nevada, the Democratic leader, characterized Mr. Bush's move as 'the latest abuse of power by the Bush White House,' while another Democrat, Senator Frank R. Lautenberg of New Jersey, said in a statement that 'even while the president preaches democracy around the world, he bends the rules and circumvents the will of Congress' at home."
"The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session." (Article 2, Section 2)
Medical metaphors are often used to describe an economy. We commonly hear reports of "healthy" and "strong" economies, or "sickly" and "weak" ones. In the case of Europe, with its multi-symptomatic condition, we even hear of a particular economic illness -- the European Disease. This disease is marked by high tax rates, inflexible labor markets, over-regulation and resurgent protectionism, among other maladies. Prognosis? Not so good, we are told.WOW. Well said. This one paragraph summarizes some of the most significant wisdom found through the study of economics. "You make it (economic policy) for people." "People respond to incentives."
However, I am optimistic about Europe. Why? To paraphrase Herbert Stein's famous maxim: The current situation is unsustainable, and what is unsustainable must end. But what, exactly, is unsustainable, and why am I optimistic that Europe's current problems will give way to a new era of growth?
[ . . . ]
Spain offers a good case for European optimism. Like many of its continental neighbors, Spain was afflicted with declining labor force participation through the mid-1990s. Let's pause here to look at some facts. From 1993-96, the average hours worked (per working age person, per week) in Spain was 16.5. This compares with 17.5 hours in France and 19.3 in Germany. Clearly, Spain wasn't working.
Then, in 1998, Spain flattened its tax rate in a manner similar to the U.S. tax reforms of 1986. Coupled with labor market reforms of the previous year, Spain's labor force participation increased about 21% in the period 2000-2003, to 20 hours per week, exceeding that of Germany (18.3) and France (17.8). Correspondingly, this increase in labor participation led to increased tax revenues. (Incidentally, Spain, France and Germany all had slightly higher labor force participation rates than the U.S. in the early 1970s, when European tax rates were more in line with those in the U.S.)
I've made this point about tax rates before on these pages but it bears repeating because it reflects a fundamental economic insight that gets to the heart of policy making: People respond to incentives. You don't make economic policy for nations, you make it for people. And it's the responses of those people, when aggregated, that give us those data that we all love to analyze.
So, why did the European labor supply decrease by a third from the early 1970s to the mid-1990s? Because the marginal effective tax rate was increased to 60% from 40%. People chose to work less than before. Consequently, tax revenues fell. You can't raise revenues by taxing people beyond their willingness to pay. And you can't expect an economy to grow when people don't have the incentive to work, or when entrepreneurs lack the incentive to take a chance.
European countries, in other words, were approaching a point of unsustainability. Spain had reached such a point, and even though there is still progress to be made, its subsequent policy correction has worked wonders. Of course, Spain is not alone in its transformation: Britain paved the way with its earlier reforms and has since reaped the rewards from gains in labor supply, the Netherlands has also instituted important labor market reforms that have paid dividends, and some Eastern European countries are benefiting from tax reforms. It's time that the rest of Europe pay close attention to the examples of their perimeter neighbors.
[ . . . ]
"Democrat Jim Clyburn retained another $25 million for his famous 'Bridge to Nowhere,' a project in rural South Carolina that has already sucked up $34 million in federal funds. The California delegation secured $1.4 billion for more than 479 projects, including $2.5 million for freeway landscaping. And ranking Transportation Committee Democrat James Oberstar snatched more than $14 million for Duluth, Minnesota, including $3.2 million for an extension of the longest paved recreational path in the nation.
Next to this highway extravagance, the energy bill seems almost a bargain at an estimated $66 billion or so. Minor highlights here include the repeal of a Depression-era law (Puhca) that will open up electricity sector investment; new reliability standards for the national power grid; more federal authority to settle siting disputes over much-needed natural gas terminals; and an inventory of offshore oil and gas resources that may someday encourage more exploration.
We can also say this for the bill: It doesn't pick energy winners or losers. Everyone who produces so much as a kilowatt hour is a winner in this subsidy-fest of tax credits and new federal mandates. There's $550 million for forest biomass, $100 million for hydroelectric production, and $1.8 billion for 'clean coal.' There are subsidies for wind, solar, nuclear and (despite $60 oil) even for oil and gas.
Most egregious is the gigantic transfer of wealth from car drivers to Midwest corn farmers (and Archer-Daniels-Midland) via a new 7.5-billion-gallon-a-year ethanol mandate, which will raise gas prices by as much as a dime a gallon on the East and West coasts. Oh, and don't forget the $15 billion (a 155% increase) in federal home heating subsidies, $100 million for 'fuel cell' school buses, and $6 million for a government program to encourage people to ride their bikes--presumably along Mr. Oberstar's newly paved trail."
I want to see if I have the facts straight with respect to the situation described in the news story. First, as an aside, I want to overlook the reference to party politics, but it makes me wonder what parts of the story I can take at face value.
Setting that aside, this is what I think is going on. Government owns some land. As the owner of the property right to this land, government can choose to do what it wants with it, as long as (just like with you and I as property owners) it does not harm the person or property of others. So, government decides to lease the land it owns to Mr. Grazer, of course with agreed upon terms which no doubt includes rules about the number of animals etc. Then Mr. Grazer meets Mr. Enviro who offers to buy the lease from Mr. Grazer. A deal is struck between these two, money changes hands and Mr Grazer takes his animals elsewhere. Does that sound about right?
If it does, the it looks alot like the idea of a sub-lease to me. If so, does it make sense that the original property owner can take back its land?
I have an example that might be on point here. Years ago my father owned about a section of land that was fairly well forested. At some point he was approached and asked if he would lease the land to a timber company to cut down trees. He agreed because of 2 things: (1) there was money, and (2) he wanted his trees "thinned" as he called it. Now suppose Mr. Timber had taken that lease and then made a deal with Mr. Hugger who did not cut down any trees. My Dad would have had money, but he would still have had more trees than he wanted. It seems to me that Mr. Timber failed to uphold the lease contract he agreed to, and my father should then have an opportunity to have the tree removal aspects of his contract enforced.
Perhaps the news article isn't describing a situation that is fairly characterized as use of the market. Perhaps so. Now, I'm not sure if I think a bureaucrat should decide the "chiefly valuable use" of BLM land. On the other hand, the government is the property owner, just as my father was the property owner, and I don't think any one (or at least very many of us) are going to say my father can't decide what is the "chiefly valuable use" of his land.
As a citizen, and in a way a shareholder in government's ownership of this parcel of land, I would encourage government to lease this parcel to be used by the highest bidder. I think that perhaps the best use of the market with this set of circumstances would be to have the BLM auction the leases to the highest bidder.
". . . the Bankruptcy power in Article I, sec. 8 of the Constitution was not actually put into the Constitution to help debtors. This is usually quite surprising to most people. It was actually put there in large part to help creditors--like the Contracts clause, Fair Faith and Credit, and prohibition on state issuance of paper money, Congress's power to 'enact uniform laws on the subject of bankruptcies' was designed to enable creditors to collect interstate debts more easily and to eliminate the power of state legislatures to try to discharge the debts of their residents (as often was the case during the Articles of Confederation era). In particular, states used their laws to pass pro-farmer laws that interfered with the ability of banks to collect on farm loans and vesting the Bankruptcy power in the federal government was an effort to restrict the excesses of state legislatures under the Articles."
"We the people therefore ask that the Constitution of the United States be amended to include the following language:
The right to ownership of property being the cornerstone of liberty, no government, or agency thereof, within these United States shall have the authority to take property from any person, corporation, or organization through exercise of eminent domain for other than a public use without just compensation.
Public use shall be understood to be property the government owns or retains the paramount interest in, and the public has a legal right to use. Public use shall be understood to include property the government owns and maintains as a secure facility. Public use shall not be construed to include economic development or increased tax revenue. Public use of such property shall be maintained for a period of not less than 25 years.
Just compensation shall be the higher of twice the average of the price paid for similar property in the preceding six months, or twice the average of the previous 10 recorded similar property transactions. Compensation paid shall be exempt from taxation in any form by any government within these United States."
"With the new year under way, there was little time for brooding, seldom time enough for anything. A steel strike loomed, threatening the whole economy. Hurried meetings were held. Official cars came and went in the White House drive. '1946 is our year of decision,' [President] Truman had told the country in a radio broadcast. 'This year we lay the foundation for our economic structure which will have to serve for generations.'Interesting, eh? Both sides have too much power. What is interesting to me is that the President is involved in labor negotiations between two entities that seem to me to have considerable monopoly power. The President is negotiating what seems to me to amount to the way the extra profits of monopoly power will be distributed between a producer monopoly and a union or labor monopoly. Further, the losers in this dispute will really not be either big labor or big steel, but rather "we the consumers." If the government is going to be involved in such a situation, shouldn't its policy be to work to end the monopoly profits, and not to determine the distribution of monopoly profits?
The steel workers' union, headed by Phil Murray, called for a wage increase of 19 1/2 cents an hour. The steel companies, represented by Benjamin Fairless of U.S. Steel, offered 15 cents. At the conclusion of a long, arduous session at the White House on January 12, Truman was able to announce that Murray had agreed to postpone the strike for one week. After another session on the 17th, and still no agreement, Truman proposed that the steel companies grant an increase of 18 1/2 cents. Both sides wanted time to consider and were told that they had until noon the following day.
Murray accepted the President's proposal, but Fairless refused. On January 19, 1946, at more than 1,000 mills across the country, 800,000 steel workers walked off the job in the biggest strike in history.
[ . . . ]
Pressed for a statement about the steel strike at his next press conference, Truman replied, 'I personally think there is too much power on each side, and I think it is necessary that the government assert the fact that it is the power of the people.'"
David McCullough, Truman, p. 480-481
The framers of our Constitution gave us the Fifth Amendment in order to protect us from government property confiscation. The Amendment reads in part: '[N]or shall private property be taken for public use, without just compensation.' Which one of those 12 words is difficult to understand? The framers recognized there might be a need for government to acquire private property to build a road, bridge, dam or fort. That is a clear public use that requires just compensation, but is taking one person's private property to make it available for another's private use a public purpose? Justice John Paul Stevens says yes, arguing, 'Promoting economic development is a traditional and long-accepted function of government.'
[ . . . ]
The Court's decision helps explain the vicious attacks on any judicial nominees who might use framer-intent to interpret the U.S. Constitution. America's socialists want more control over our lives, property and our pocketbooks. They cannot always get their way in the legislature, and the courts represent their only chance. There is nothing complex about those 12 words the framers wrote to protect us from governmental property confiscation. You need a magician to reach the conclusion reached by the Court's majority. I think the socialist attack on judicial nominees who'd use framer-intent in their interpretation of the Constitution might also explain their attack on our Second Amendment "right of the people to keep and bear Arms." Why? Because when they come to take our property, they don't want to risk buckshot in their butts.
Mutt and Jeff Ride Again: The Case of Malice and Envy.Surely malice and envy are attitudes to consider and be concerned about when we run up against them in our relationships with others, and certainly malice and envy of others is something I hope we would consider character flaws in ourselves and others. But, we do not have questions here that are matters of an economically efficient allocation of resources.
Those who want to see judges who will apply the law instead of imposing their own policies face not only political obstruction to the appointment of such judges but also calculated confusion about the very words used in discussing what is at issue.I agree with Sowell. And, I think the debate around "judicial activism" has greater import than discussion of "legislating from the bench" suggests. I think the term "judicial activism" certainly includes "legislating from the bench," but the term covers more. When the Supreme Court allows government to "bulldoze people's homes to turn the land over to a private developer" it has done more than "legislate from the bench." The Court has amended the words of the Constitution from "for public use" to "for public purpose." The Legislature cannot, on its own, amend the Constitution. So, sometimes the term "activist judges" describes more than legislating from the bench. Perhaps we should say in such cases that "activist judges" are "amending from the bench" or even "ratifying from the bench."
Judges who impose their own preferences, instead of following the law as it is written, have long been known as "judicial activists" while those who carry out the law, instead of rewriting it to suit themselves, have been said to be following the "original intent" of the law.
But now a massive effort to muddy the waters has been launched by those who want judges who will continue to impose the liberal agenda from the bench. Words like "activists" and "intent" are being twisted beyond recognition.
. . . . . . . .
One of the major functions of the Supreme Court for more than two centuries has been to strike down acts of Congress, the President, or the lower courts when any of these exceed the authority granted to them by the Constitution. Calling this "judicial activism" is playing games with words and befogging the real issues.
. . . . . . . .
It is one thing to allow the government to take land needed to build a military base or a dam and something very different to allow the government to bulldoze people's homes to turn the land over to a private developer to build casinos or shopping malls.
"Many of us would welcome the chance to have Scalia as a professor. But outside the ranks of the right wing, few Americans want their country defined consistently by Scalia's choices. In shifting the balance on the court, Roberts could give Scalia the power to impose his worldview."
But, by decreasing the number of people wanting gas and improving fuel efficiency, we decrease the demand for gas and LOWER THE PRICE. Lower prices create a disincentive for innovation and lengthens the time to conversion to alternative energies.
"I believe the president should focus on putting Social Security on a sound footing. The best way to do that is to adjust benefits by increasing the retirement age, cutting back payments further for those who choose to retire early and indexing the growth in benefits to the consumer price index (that is, inflation) rather than to wages. Raising payroll taxes -- or increasing the ceiling below which those taxes are collected -- should be off the table. Such a hike would have a disastrous effect on the economy.Seems worth a look.
Should we give up on personal accounts?
Not at all. Those accounts will grow organically as Social Security withers.
The inevitable result of benefit adjustments will be to reduce, slowly over time, the importance of Social Security in the overall retirement scheme. The system would become more of a safety net. Retirees would, very naturally, fill in the gap by saving more.
The vehicle for those savings would be personal stock and bond accounts -- which already exist!
There are 401(k) plans, IRAs, Roth IRAs, Keoghs, 403(b) plans and other tax-advantaged accounts. These should be consolidated under simplified rules. My preference is a universal, unlimited IRA -- income that you put into savings is not taxed at all. When you withdraw the money, at, say, age 60 or later, then you pay capital-gains taxes on it."
"Also implicit in the I.Q. controversy is the notion that mental tests are not only intellectually invalid, but morally 'unfair' if they do not measure 'real' or innate ability. But there is no more individual merit in having received a windfall gain in the form of brain cells rather than in the form of encyclopedias or private schooling. Each individual is born into a world he never made, with a brain he never made. His moral claims are no greater or less, whether heredity or other circumstances beyond his control gave him his advantages or disadvantages. Similarly, his value to society is the same, whether that value originated inside his head, or inside his home or school, or among his companions."I'm curious about the meaning of "his value to society." My curiousity is not specifically with respect to Sowell's point in this paragraph. I think this phrase has a more general use than just in the discussion of I.Q. What do you think this phrase means?
-- Thomas Sowell, The Economics and Politics of Race, p. 145
"The question is not about the 'right' or 'best' definition of the word 'racism.' Words are servants, not masters. The real problem is to avoid shifting definitions that play havoc with reasoning."
-- Thomas Sowell, The Economics and Politics of Race, p. 144
I believe there are many examples of shifting definitions over time in public policy discussions that play havoc with reasoning. One might be what happens with the idea of a negative externality. This concept has been precisely defined to be a source of market failure. After some time it seems that using this concept in discussions of public policy choices has led to definitions of negative externality that plays havoc with reasoning. Reasoning has been so distorted or misguided in some cases that negative externality has been used by some to characterize government failure rather than market failure.
". . . Cost-benefit analysis differs, however, from other analytical approaches in the following respect: it demands that the advantages and disadvantages of a regulatory policy be reduced, as far as possible, to numbers, and then further reduced to dollars and cents. In this feature of cost-benefit analysis lies its doom. Indeed, looking closely at the products of this pricing scheme makes it seem not only a little cold, but a little crazy as well.
Consider the following examples, which we are not making up. They are not the work of a lunatic fringe, but, on the contrary, they reflect the work products of some of the most influential and reputable of today's cost-benefit practitioners. We are not sure whether to laugh or cry; we find it impossible to treat these studies as serious contributions to a rational discussion."
