The Supreme Court’s role in economic policy, explained

“in the American system, essentially every law and regulatory undertaking is subject to litigation and second-guessing by the courts. That means Supreme Court appointments have vast and wide-ranging authority over economic issues — authority that is often ignored by politicians and the media, but not by people with money at stake.

The US Chamber of Commerce, for example, did not enthusiastically back Brett Kavanaugh’s nomination because they liked his thinking on abortion, but because they like his hostility toward regulatory agencies. And while progressives often appreciated that Kavanaugh’s predecessor Anthony Kennedy sided with liberals like Ruth Bader Ginsburg on some abortion and LGBTQ rights cases, it’s telling that Kennedy himself — like Sandra Day O’Connor before him — strategically timed his retirement to be replaced by a Republican president and a GOP Senate.”

“though the bulk of the law was spared by John Robert’s judiciousness, he did cost millions of people health insurance by inventing a new doctrine (that Congress could not threaten to take away previously provided matching funds to create an incentive for states to accept new matching funds) to block aspects of Medicaid expansion.

What makes Ginsburg’s departure from the bench alarming in this regard is that post-Lopez, essentially all new progressive legislation has been a crapshoot. There’s inevitably a lawsuit to strike down anything, but on any given issue, a Roberts or (more rarely) Gorsuch or Kavanaugh might defect. With a sixth conservative justice, it would be that much easier to stop any new law that you like, since you only need to get five of them. There are many conservative legal theorists — including Thomas on the bench and Georgetown professor Randy Barnett in the scholarly world — who believe that essentially all modern economic regulation is unconstitutional. There are plenty of smart conservative lawyers to write up a brief arguing that any new law should be struck down. As for using old laws to address new problems, well, there’s a fix for that, too.”

“Conservative jurists, in other words, are preparing to sharply limit regulators’ ability to promulgate new rules, arguing that each new change in policy should be achieved through the passage of a new law.

That sounds nice, but it’s completely out of touch with how the American political system actually functions.”

“the business community and the Supreme Court bar and the conservative legal movement are all well aware that there is a huge economic and regulatory element. Their strategy is to put in place a judicial roadblock to democratic governance of the economy.”

How to fix Lebanon’s political crisis

“Lebanon’s political system is the product of a decades-old power-sharing arrangement among leaders of Lebanon’s 18 religious sects, the most important being the Sunni and Shia Muslims and Maronite Christians.”

“It has helped mediate sectarian conflict, forced leaders to build consent among their constituencies, and prevented the heavy centralization of power that plunged much of the Arab world into dictatorship.
But this particular medicine has side effects. Political elites have used their positions to bleed the economy dry and monopolize control over public institutions. Parliament and many cabinets have been filled with some of the same faces for decades. The speaker of Parliament, Nabih Berri, has occupied the post since 1992. As members of the traditional ruling class age or die out, their sons often replace them, meaning politics has become a family business for the Gemayels, Hariris, Aouns, and Jumblatts, to name a few.

Many politicians have amassed great wealth by taking cuts of public contracts, facilitating bureaucratic processes, or directly siphoning public funds. Public servants are appointed by sect rather than on merit, and national loyalty competes with and often loses out to sectarian loyalty.

This has undermined civic life and turned politics into a zero-sum sectarian competition rather than a policy debate. Questions as mundane as where to build a waste incinerator or how to reform public utilities, for example, take on sectarian dimensions over who gets what.

Why, then, do people not simply vote this rotten elite out?

For one, they have played on sectarian insecurities to perpetuate distrust among the population, casting themselves as saviors of their community. Attempts to unseat a particular leader are quickly seen as attacks on the sect itself, leading to a rallying effect around said leader regardless of their performance.”

“The political class has also skillfully used the state to provide constituents with jobs, financial support, and other privileges. And, of course, where persuasion fails there is always coercion. Parties routinely harass and intimidate those who seek reform or even dare to criticize their leaders.
All factions are complicit to some degree, but one in particular presents an altogether more difficult problem: Hezbollah.”

“Hezbollah maintains a formidable militia with direct support from Iran. It has turned Lebanon and its Shia community into the base of its “resistance” project of open-ended conflict with Israel and the West.
Hezbollah runs a state-within-a-state, complete with a military, security forces, and infrastructure; at the same time, it has penetrated Lebanon’s institutions through politics or by cultivating powerful allies. The Lebanese military lacks the will and ability to disarm Hezbollah. Those who present a serious challenge to its armed status are intimidated or killed.”

“Attempts to constrain its military arm are violently repressed. In May 2008, for example, a cabinet decision to dismantle the militia’s independent telecommunications infrastructure was met with a military takeover of much of Beirut. Hezbollah has also been implicated in a string of assassinations of political rivals, most recently through a United Nations tribunal that convicted Salim Ayyash of complicity in the murder of former Prime Minister Rafik Hariri.”

We can end America’s unemployment nightmare

“Erin Suggs applied for unemployment in March as soon as the California salon she works at shut down. She figured her case would be pretty straightforward — she works on commission, meaning she’s counted as a regular employee, not self-employed.

But it took the 50-year-old mother of two more than two months to get her benefits, during which time she estimates she and her husband called California’s Employment Development Department, which administers the state’s unemployment system, upward of 3,000 times. It turned out that in filling out the forms, she checked one box wrong. “It just put me in pending hell for 10 weeks,” she says. “There was no way of fixing it.”

Her experience is hardly unique. In California alone, more than 6 million people, or one-third of the state’s workers, have filed for unemployment benefits, and hundreds of thousands of them have been stuck in a weeks- or even months-long backlog. Meanwhile, nearly 1 million people across the United States continue to file new unemployment claims each week, and some 29 million people are receiving some sort of unemployment assistance. And for many of them, navigating the system has been a nightmare.

The coronavirus has brought home the many shortcomings of the American unemployment insurance system and revealed it to be fundamentally — and often intentionally — broken, chipped away over time to ensure that the jobless don’t use it too much, lest anyone get used to it. Unemployment insurance operates under a hybrid state-federal setup that has resulted in an awkward push-and-pull between the federal government, state governments, and employers. No one quite wants to take full responsibility of it, but everyone wants a say.”

” A reimagined unemployment system would treat the jobless like customers, not criminals, while helping them stay afloat as they find their next gig. It would be easier to navigate, pay people more consistently, regardless of where they live, and take into account the wage stagnation of decades past. It would be easier to ramp up in times of crisis and better serve the modern workforce — groups such as gig workers, short-term employees, and people looking for jobs.”

“unemployment insurance has never worked super smoothly in the US. The first state in the country to put an unemployment insurance program in place was Wisconsin in 1932, and the federal program became law under the Social Security Act of 1935. It was set up as a mixed federal-state endeavor for reasons that wouldn’t surprise the average political observer today: There was disagreement over what level of government should be in charge of running the program, and proponents of unemployment insurance were nervous it might be undone by the Supreme Court, which had struck down multiple pieces of legislation. The hope was that this model would give it a better chance with the court, and even if the federal component were struck down, the state components could live on.

“It was designed to have this very broken and fractured structure,” Konczal said.”

” In the US, unemployment insurance is meant to work by replacing about half of a worker’s wages (up to a certain cap) for about 26 weeks. It is intended for those who involuntarily lost their jobs, meaning they were laid off or fired, and not people who quit. Those who quit their jobs can wind up collecting benefits, namely if they can explain that they did so for good cause, such as experiencing sexual harassment, but it often winds up being a battle adjudicated by the state.

The program is financed through state and federal payroll taxes that are supposed to fund administrative systems and the benefits themselves.

Many states have kept those taxes pretty low, resulting in a system that is chronically underfunded. And during periods of stress, the impact of that underfunding really shows.”

“Years of disinvestment in technology and administration led to problems like those now affecting Suggs and millions of unemployed workers across the country. You make one mistake, or your case has one little quirk, and you’re sucked into a bureaucratic black box disaster with no clear end in sight. And then, once the economy gets better, everyone moves on and forgets, and the political impetus to fix these problems fades.”

Trump Says He Downplayed the Coronavirus Threat To Avoid ‘Panic.’ That Helps Explain His Policy Failures.

“President Donald Trump has admitted in a series of interviews with veteran journalist Bob Woodward that he downplayed the threat of COVID-19 despite knowing that it would cause considerable harm.

On February 7, Trump emphasized that the novel coronavirus was “deadly stuff.”

“You just breathe the air and that’s how it’s passed,” Trump said on a taped call with Woodward. “And so that’s a very tricky one. That’s a very delicate one. It’s also more deadly than even your strenuous flu.”

Contrast that with Trump’s remarks later that month: “The flu, in our country, kills from 25,000 people to 69,000 people a year,” he said at a briefing on February 26. “That was shocking to me. And so far if you look at what we have with the 15 people, and they are recovering.””

“According to Trump, the move was strategic. “I wanted to always play it down,” Trump told Woodward mid-March. “I still like playing it down, because I don’t want to create a panic.””

“it remains unclear how lying to the American public and deliberately propagating wrong information, even if it cultivates some false sense of security, is a winning strategy. Just last month, the president said that just 9,000 people had died from COVID-19.

The short-sightedness of such an approach is reflected not only in Trump’s public statements but also in how he approached the virus from a policy perspective in its nascent stages.

Consider Trump’s March 13 announcement that he would pave the way for a public-private partnership to create a robust testing program, as private labs were having difficulty navigating burdensome Food and Drug Administration (FDA) regulations. The decision was a good one but could have been made earlier had Trump chosen to be frank with the American people.”

“Also in February, Trump privately admitted to Woodward that the virus would pose a menacing threat. But the president did not shepherd the Roche test, which is particularly efficient at screening for the virus, through FDA approval until that March 13 press conference, hamstringing the country’s ability to get ahead of the problem.”

Airlines Are Asking for a Second Bailout. Congress Should Say No.

“Let’s remind everyone why we shouldn’t bail out airlines. Yes, the coronavirus crisis is both a public health and an economic tragedy. But this doesn’t justify the government granting special privileges to private firms, at least not without those firms first taking other available steps to potentially avoid the need for a bailout.

There are other options they could pursue.

First, the airlines still have plenty of access to private capital markets. They own significant amounts of durable assets that they can sell or use as collateral to get additional financing. Indeed, they’ve been able to secure substantial private capital since the beginning of the pandemic.

Second, if private financing fails, some airlines can and should do what they’ve done in the past when in such a predicament: declare bankruptcy. Past bankruptcies tell us that airlines can continue flying safely even during a bankruptcy, so there’s no systemic risk posed to the economy at large.

To be sure, bankruptcy would mean that, for the time being, airlines may fly on more limited routes. But that shouldn’t be a problem in light of a collapse in demand, which won’t be resolved as long as Americans remain wary of flying.

There’s no easy solution during this pandemic. Many people and businesses have no options at all. But an airline bailout would bring about more negative consequences. The first is that it’s a huge expense for taxpayers to shoulder with no promise for a solid return. We’ve already bailed out the airlines, and all this past coddling has done is to postpone the inevitable layoffs of its excess employees.

Analysts don’t think air travel will return to prepandemic levels for several years—some say up to seven. Let’s assume that it takes five years for air travel to return to its previous level. That would require taxpayers to extend up to $320 billion in bailout funds to the airlines.”

The legal theories of Amy Coney Barrett, explained

“We know she identifies as an originalist who believes that the original public meaning of the Constitution is binding law. But we also know that she is skeptical of the radical libertarian originalist idea that economic regulation is presumptively unconstitutional, and that she believes some Supreme Court decisions that originalists may conclude are incorrectly decided nonetheless stand as “superprecedents” that the Court can abide by.

Her legal writing has also prompted heated reactions from detractors. One piece (with fellow law professor John Garvey) on when Catholic judges might be obligated to recuse themselves from death penalty cases, prompted criticism from Senate Democrats during her appeals court confirmation hearings, who suggested Barrett was unable to separate her faith from her jurisprudence (a charge she strongly rejected).

Another piece (with late Notre Dame colleague John Copeland Nagle) on how members of Congress should incorporate the original meaning of the Constitution into their votes has raised the eyebrows of some commentators, because it begins by noting that there are originalist arguments (which the paper itself does not accept, except for the sake of argument) to think that West Virginia was invalidly admitted as a state; that the 14th Amendment wasn’t properly ratified; and that paper money is unconstitutional, among other surprising conclusions.”

“She’s been pretty vocally committed to originalism as really being the guiding light, more so than some others. She is more explicitly committed to the notion that one ought to be an originalist, and that it is the primary principle for judges, than Roberts is, or than Kavanaugh historically was. In that sense, she’s a little more like Thomas and Gorsuch. She has a clear judicial philosophy, and originalism is at its core.”

“she has also suggested that judges ought to care more about stare decisis [the doctrine that courts should generally abide by their previous rulings] than Thomas tends to. I think she’s a more moderate figure in that regard than Thomas. She would be trying to navigate precedents that are in conflict or in tension with original meaning, rather than just thinking they ought to be tossed overboard.”

“I’m glad you brought up stare decisis. A paper she wrote with her colleague John Copeland Nagle, “Congressional Originalism,” has caused a bit of concern among critics, in part because she leads with a list of precedents that arguably conflict with the original meaning of the Constitution.

Brown v. Board of Education is the most incendiary one, but she mentions arguments that West Virginia was invalidly admitted, that the 14th Amendment wasn’t properly ratified, that paper money is unconstitutional, and so forth. She doesn’t say she thinks they ought to be overruled — and indeed suggests that the point is moot in most cases as these issues would never come before the Court — but I think even putting up the examples has raised hackles.

How should people weighing her nomination think about that paper?”

“I tend not to think it’s terribly significant. To some degree, it is an academic enterprise of trying to think about, “What are the tensions here? What are the implications of adopting a certain theoretical perspective? What are the implications if you think there are tensions between the theory and some of these foundational constitutional decisions that have been made over time, whether they are things like creating the state of West Virginia or things like Brown v. Board?” For her, that’s just a starting point for then trying to think about how to deal with the fact that there are going to be these tensions.

Importantly, her view was not, “you’ve got to go overturn all these decisions,””

” A lot of people have run with the notion that she’s emphasizing the significance of her religious belief and, likewise, the religious beliefs of other judges and justices. But I think it’s one of these cases where that’s the starting point for her, saying, “It is true that judges have religious beliefs. And those religious beliefs sometimes have implications for the kind of issues that come before the court.” And then the question is how judges ought to deal with that. Certainly her conclusion is not simply that judges ought to therefore impose their religious beliefs.”

Who is Amy Coney Barrett, Trump’s nominee to the Supreme Court?

“Barrett is a staunch Catholic, a favorite of the religious right, and a former law clerk to conservative Justice Antonin Scalia. Her judicial record is fairly thin, owing to the fact that she’s only been a judge for about three years, but that short record suggests she’ll be a reliable conservative if confirmed to the Supreme Court.

In one of her most revealing opinions, Barrett took an expansive view of the Second Amendment — dissenting to the right of two colleagues who were appointed by President Ronald Reagan.

Before joining the federal bench, Barrett was a law professor at the University of Notre Dame, and she frequently weighed in on many of the cultural fights that animate religious conservatism.

In a 2013 speech on Roe v. Wade, Barrett reportedly stated that life begins at conception — a common view among abortion opponents. She signed a 2012 statement claiming that an Obama administration policy requiring employee health plans to cover contraception was “a grave violation of religious freedom and cannot stand.” She also signed a 2015 statement to Catholic bishops endorsing the church’s conservative views on abortion, sexuality, and marriage.

And in a 2017 book review, Barrett seemed to criticize two Supreme Court decisions that largely upheld Obamacare against partisan attacks — suggesting that she is likely to vote to undercut the Affordable Care Act and potentially strip health care from millions of Americans in the process.

Barrett’s views are hardly atypical of a Trump appointee to the federal bench. And her professional credentials, while impressive, are shared by many other sitting judges. It’s likely that she rose to the top of Trump’s Supreme Court shortlist not because her record sets her apart from a dozen or more staunch conservatives on the federal bench, but because of an effort by Democrats to impugn Barrett’s fitness for the bench when she was originally nominated to the Seventh Circuit.

That botched effort allowed religious conservatives to paint Barrett as a persecuted martyr, and means that Trump’s choice of Barrett could double as an attempt to stoke resentment among Christian conservative voters shortly before the election.”

We now know what Trump was trying to hide by holding back his tax returns

“The Times story makes clear the supposedly wealthy president often paid no income taxes while his businesses regularly lost vast sums of money, and he himself was on the hook for increasing sums in loans. All of that is politically damaging enough to Trump’s image, and likely a sufficient reason to work hard to keep the tax returns secret.

But there’s likely another reason behind Trump’s reticence — because reporters would scour his returns for legally dubious claims, and put the pieces together to how he was trying to snooker the IRS.

That’s just what ended up happening here. For example, Buettner, Craig, and McIntire sussed out that mysterious write-offs for consulting fees on certain Trump projects matched the amounts of payments to Trump’s daughter Ivanka. And there’s far more in the Times’s excellent piece.

One major theme of the Times piece is that the IRS audit of Trump is extremely serious, and that he could end up owing the US government more than $100 million. So reporters’ scrutiny of his tax returns might not just be politically problematic for Trump — they could also be financially and legally problematic.”

“Trump did indeed pay zero in income taxes from 2011 to 2014, and a paltry $750 in 2016 and 2017. He pulled this off by claiming that his businesses lost massive amounts of money. He has $421 million in debt due in the next few years, and he could owe $100 million more to the US government if he loses his audit battle with the IRS.”

“the specific reason Trump paid no taxes is embarrassing — because his businesses lost tons of money. (At least, that’s what he claims; keep in mind that the tax return information is his representation of his businesses to the IRS.)

To be clear, some parts of Trump’s business really do make money — for instance, The Apprentice sent cash pouring in, and Trump Tower is profitable. But Trump avoids paying taxes on these profits because he’s claimed such massive losses from other parts of his business empire.”

“there’s clearly some legally questionable stuff in there.

For instance, the records obtained by Buettner, Craig, and McIntire show that Trump wrote off $26 million in supposed consulting fees as a business expense between 2011 and 2018. But the reporters took the added step of uncovering where some of that money was going — and they figured out that some of those write-offs matched payments to Trump’s daughter Ivanka, as revealed on her own financial disclosure forms.

Ivanka was an executive vice president of the Trump Organization, not some outside consultant. And sources told the Times that there were no outside consultants involved in certain projects for which Trump’s businesses wrote off consulting fees.

The Times story also mentions other questionable practices — Trump dubbed a Westchester, New York, mansion an “investment property” so he could write off property taxes on it, but his son Eric Trump called it “our compound.” The Trump Organization also wrote off Donald Trump Jr.’s legal fees for the lawyer who represented him in the Russia investigation.”