Government by Executive Decree

According to press reports, by Executive Order President Trump is preparing to suspend the payroll tax through the end of the year retroactive to July 1. He also intends to extend supplemental jobless benefits, although at what level and for how long remains unclear. Add to that his intent to impose a partial moratorium on evictions and assistance with student loans and you have a perfectly tuned re-election program aimed squarely at the economic illiteracy pandemic now afflicting the voting public. 

The program would be a blatant violation of the U.S. Constitution, both in its particulars (Article 1, Section 8, clause 1) and in its violation of the separation of powers.  The precedent for this Constitutional vandalism was firmly established by former President (and University of Chicago Constitutional law lecturer) Barack Obama. Notwithstanding the fact that the U.S. Constitution locates the taxing power in the Congress, President Obama ordered the IRS not to enforce the penalty for non-compliance with the coverage mandate required by the Affordable Care Act, otherwise known as Obamacare.  

While on the hustings, the Obama Administration argued that the mandate did not constitute a tax. However, in front of the Supreme Court the Administration argued that the mandate was in fact a tax. The Supreme Court agreed with them and declared the mandate to be a tax. It was a tax that the Administration pointedly refused to enforce. 

It is worth noting that the mandate was a necessary element of the bill for two reasons. First, the CBO used the mandate to overestimate how many young people would comply with the bill, thus reducing the cost estimate.  Second, the CBO cost estimate served to bolster the Obama Administration’s risible claim that the bill would reduce unit costs and therefore consumer insurance rates. 

In the event, Republicans asked a prescient question: What would happen if a Republican President announced he would not enforce a different section of the tax code, for instance the capital gains tax? Progressives gave their stock answer: “That will never happen”, they said.  That by the way is answer they usually give when pressed about the potential consequences of promoting lawless activity. 

Well, here we are. The president, a Republican, has said that unless certain conditions are met, he will indeed refuse to enforce the tax code in a way that is liable to help him electorally.  And let’s not kid ourselves. This type of lawless governmental behavior has become the rule, not the exception. 

Governors, for instance, often rely on declaring tax holidays, sometimes targeted to dates, sometimes targeted toward geographies. Except that generally sales taxes are not transaction taxes—they are use taxes, and so cannot be legally declared exempt for certain situations within the meaning of the law. And not to put too fine a point on it, there has not exactly been a rush to enforce laws protecting people and property from rioters in large American cities. Nor has much mention been made of the obvious fact that the rioters are on the whole, whiter than the police departments they are accusing of systemic racism. 

 So here we have a situation where a Republican president is threatening to refuse to enforce the law because he expects it to redound to his electoral benefit. It is a stunt that progressive politicians have been pulling for years (See DACA). The depth of the cynicism is notable though. Since there is no “pay for” mechanism and since it extends through election day, it is aimed at a short term goal, namely Trump’s re-election campaign. 

It also creates creates several other political advantages for Trump and the Republicans. He will have the space to claim that he unilaterally delivered on several Democratic-populist goals, namely student loan assistance, and an eviction moratorium. But it does something else that could prove excruciatingly painful for progressives. By suspending payroll tax collections, it would bring the day of insolvency for Social Security that much closer. 

The Social security system is already being battered by the economic downturn with its mass unemployment. A six-month month suspension of payroll tax receipts would constitute a direct and massive hit at the solvency of what we laughingly call the Social Security Trust Fund, thus bringing the day of reckoning closer. 

It should also be noted that something like 75% of taxpayers fork over more in payroll taxes than they do in income taxes. Progressive hysteria aside, the income tax system falls overwhelmingly on people in the upper brackets.  A suspension of the payroll tax would therefore have two important impacts, one direct, the other indirect. On the political side, if the Democrats were to resist, they would effectively be denying a substantial tax cut for a huge proportion of the voting population, particularly the blue collar workers they are trying to win back for the 2020 Presidential contest. 

There is an important indirect consideration as well. A suspension of the payroll tax, and even more so with somewhat reduced supplemental unemployment insurance, changes the back-to-work calculation. It would raise net after-tax compensation for workers who go back on the job, thereby increasing the incentive to work and reducing the incentive to stay home. That would likely increase the pace of economic recovery. 

But there is no such thing as a free lunch. The price to be paid for all this is in the disaster known as public finance. Federal, state and local governments are piling up horrendous deficits and off balance sheet obligations at an unsustainable pace. The time to address those obligations could be, and probably is, just around the corner. The problem is that a pervasive free-lunch mentality has contributed to the creation of a dependent and subservient portion of the population. 

The other price we pay is continued lawlessness by government. By continuing to operate by decree justified by bumper sticker sloganeering, government becomes progressively more authoritarian. It fails to perform its primary function of securing natural rights and protecting ordered liberty. The evidence of failure is all around us, whether it is the near universal failure of urban public schools, public distrust of basic institutions, or the collapse of traditional institutions like the family, spurred on by public policies designed for centralized command-and-control of citizens’ everyday lives. 

JFB

The Week Trump Lost the Election

When the history books of the 2020 election are written they will most likely say that this was the week that Donald J Trump lost his bid for re-election. Not because of the economy; not because of the killing of George Floyd by Minneapolis police; not because of mass protests and later rioting. 

Donald Trump lost because his deceitful and cowardly nature was laid bare for all to see including those who would prefer not to see. It was laid bare when he was whisked to a bunker in the White House when the crowds outside got unruly. It was there and then that his phony macho rhetoric crashed into the reality of his cowardice. 

Had he been a real leader he would have gone outside to address the crowd, while showing some humility and decency.  But that is not part of his make-up. Instead he ran and hid in his bunker displaying his true nature—that of a coward and a weakling. 

The American people can tolerate a lot in a President. Over the years there have been plenty of opportunities to forgive and forget. But the American public has little tolerance for an amoral sniveling coward in the White House; a narcissist whose primary concern is his own well being rather than that of the nation. Which is why even Mr. Trump’s backers are starting to waiver. Come November, the American public will likely show Mr. Trump the door. 

JFB 

The Narrative

One of the more disheartening developments in what we laughingly call public debate has been the extraordinary emphasis placed on “the narrative”. The whole point of “the narrative” is issue framing. Instead of facts like who, what, where, why and when, the narrative seeks to define the contours of a story, and therefore the way the story is understood. In this manner, a story becomes part of a larger picture, woven into a tapestry of stories, pointing in the same direction, supposedly revealing a larger truth. 

But there is a problem with this. It is reasonably easy for unscrupulous players to get away with deliberately mischaracterizing issues by slippery uses of language and symbols, especially when they are not called out by the press. To be clear, it is not just deliberate mischaracterization that is a problem; it is also results from intellectual laziness and sloppy thinking that comfortably fits into the accepted “narrative”. 

Consider recent developments. The Corona virus is now charting a devastating path across the globe. With few exceptions, Taiwan being one, governments have been caught flat-footed. In part this is due to the dishonestly of the Chinese government which tried to cover up the outbreak at its epicenter in the Wuhan province. But other governments and international agencies like the World Health Organization (WHO) chose to believe them or pretend to believe them, giving the virus time to metastasize around the globe before effective containment efforts could begin. 

Let’s acknowledge that there are reasonable people (most politicians excluded) on all sides of the discussion considering the likely path and severity of the virus. In part this is due to a lack of data. As the Wall Street Journal reports, CDC officials botched the initial development of a test kit; resisted calls from state officials and medical providers to broaden testing, and health officials failed to coordinate with outside companies to ensure needed test-kit supplies. As a result, largely due to lack of information, U.S. efforts to contain the virus were hamstrung from the very beginning. 

Add to that the magical thinking of President Donald J Trump. The irony is that Trump, a germaphobe, apparently decided that the whole exercise was nothing more than a publicity problem. And so he embarked on a regimen of happy talk in the hope that it would all go away, thus displaying for the umpteenth time how utterly unsuited he is for the office he holds. 

Which gets us back to the narrative. 

There is little question that Trump put on a breathtaking display of incompetence in his initial response to the threat posed by the virus. That said, it is also the case that we have a systemic failure on our hands. The failure has been years in the making. It is the result of bureaucratic ineptitude and policies adopted across many levels of government over a long period of time. It is not the singular fault of Trump as the developing narrative has it. Nor is the solution to simply hand out buckets full of cash, which is the usual progressive solution to just about everything. 

Consider, for example, the latest policy initiative which is to “flatten the curve”. When epidemiologists talk about flattening the curve, they mean to spread out over time, rather than reduce, the incidence of contagion. The rationale for this is to avoid a concentrated case load that would overcome the treatment capacity of the health care system. Note that this approach, designed to save the system rather than individual patients, may very well result in more rather than fewer people becoming infected. On the other hand, if the system did become overwhelmed, it is quite possible, if not probable, that more people would die. 

Why Are We in This Mess?

At this stage of the game it is worth asking why the wealthiest, most powerful nation on earth finds itself with a potential shortage of hospital beds, other relevant medical equipment, doctors, nurses and other health care professionals. One important reason, although not the only one, is the collection of perverse incentives embedded in the health care system. 

Consider the question of hospital bed capacity. The limited number of available hospital beds is not an accident; it is there by design. Hospitals are subject to state as well as federal regulations.  Among those are requirements for hospitals to acquire a “certificate of need” or CON from state regulatory authorities before adding hospital beds and some other types of equipment, e.g.,— MRI machines. Partially as a result, the U.S. has only 2.8 beds per 1,000 people—less than the 3.2 beds Italy has. By way of contrast, South Korea heads the list with 12.3 beds per 1,000 people. (For an in depth discussion, please see this article in Reason Magazine.)

Anti-competitive restrictions on hospital beds and other capital equipment are not the only problem. The system is driven by price controls that discourage innovation. The biggest spender for health care is the federal government, which decrees what it will pay for certain services through Medicare and Medicaid. In turn, these pricing policies affect what insurance companies will pay providers. Which in turn affects premiums that customers pay. Which, of course, our modern central planners want to eliminate by making private insurance illegal, thus locking in all the market distortions the current system has embedded in it. A single payer system would rely on mandates and allow no competition, and would guaranty that supply and demand would remain out of alignment. 

But rational discussion of supply, demand and market pricing is to be avoided at all costs. The all important and phony narrative must be maintained. The problem is really the result of waste, fraud, abuse and corporate greed. Couple that with the fact that Donald Trump is president. Add the fantasy that he is illegitimate because Vladimir Putin put him there, and all the ingredients are there to believe anything. Anything but the truth of the matter, which is that a combination of incompetent leadership and the command and control system put in place over the years failed us. As usual.

Not surprisingly, because it fits the narrative, the solution being crafted in Washington is to throw money at favored constituencies, which may or may not have anything to do with the virus. Consider the argument for sending out checks to citizens in order to stimulate the economy. Does anybody seriously believe that sending citizens checks and then telling them to stay home is even remotely stimulative?

It is certainly the case that many citizens will experience significant hardship over the months ahead as the unemployment rate rapidly heads north. In this emergency situation it is proper for the government to act as a backstop, especially since it is a response to a situation utterly beyond the control of the citizenry. But it is important to note that the rescue is not free; the bill will have to be paid later. In addition, it should serve as a wake up call for reform that moves in the opposite direction we have been headed. The health care system should move toward decentralization, market pricing and local decision making rather than more centralization, price controls, and top down bureaucracy.  

But I’m not holding my breath. 

JFB

Now What?

Campaign Finance

Recent events have proved to be clarifying if unedifying. Michael Bloomberg did us the enormous favor of spending over $500 million in an effort to win the Democratic Presidential nomination. For his efforts he won a total of 13 delegates; 4 in American Samoa plus another 9 scattered around the country. That’s about $38 million per delegate. Two days later former Mayor Bloomberg dropped out of the race and pledged to work for the election of Joe Biden. 

Bloomberg Drops Out

All of this would seem to provide rather conclusive evidence discrediting the idea that money is determinative in elections. Despite the evidence though, we can expect Progressives to continue their attempt eviscerate First Amendment speech rights under the guise of campaign finance reform and fighting “hate speech” because the goal is control, not clean elections or civility. 

And, by the way, if the best Michael Bloomberg could do was grab 13 delegates with $500 million, why would anybody continue to believe that Russian propaganda on Facebook was sufficient to tip the 2016 Presidential election to Donald Trump. 

About Those Norms

The Trump Administration—actually POTUS himself—has been criticized, frequently and correctly, for violating long held political norms. Trump, for example, launched a typically idiotic Tweet calling for Justices Sotomeyer and Ginsburg to recuse themselves from cases involving him and his administration.  And candidate Trump famously attacked a federal judge complaining that the judge, who was born in Indiana, was Mexican and therefore could not be counted on to give Trump a fair hearing. 

Well, Chuck Schumer has done Trump one better. On March 4, speaking at a demonstration at the Supreme Court, Schumer said the following referring to an abortion case before the Court.

“I want to tell you, Gorsuch. I want to tell you, Kavanaugh. You have released the whirlwind and you will pay the price…You won’t know what hit you if you go forward with these awful decisions.”

Abortion Rights Protest at the Supreme Court

Which is to say that Chuck Schumer (Harvard Law, 1974) issued a direct threat by name to sitting justices on the Court, contingent on their votes. Surprisingly enough, Schumer’s fellow progressives who were once so concerned about democratic norms, have fallen strangely silent. 

Feel the Phony Bern

Bernie Sanders (I. Rolling Stone) has spent the better part of the last 40 years or so attacking “the establishment” and singing the praises of folks like Fidel Castro. In 2012 he threatened to “primary” (now a verb) then President Obama who wasn’t quite left wing enough for comrade Sanders taste. But on Super Tuesday he got trounced by former Vice President Biden, who among other things grabbed a commanding share of the African American vote. 

And all of a sudden Bernie-the-Authentic has decided that he has been a fan of Obama after all. So his campaign has released an ad showing what pals he and Obama were and are. Needless to say, former Obama officials have denounced the ad as deceptive, misleading etc etc. Which, of course, it is. Just like the rest of his campaign. 

The ad is below. Have a look and think about what it says about the raw political ambition of the selfless Socialist from Vermont. 

New Sanders Ad

JFB

Stopping Bernie

After Mike Bloomberg imploded onstage pretty much throughout the entirety of Wednesday night’s Democratic primary debate in Nevada, panic set in among the Party establishment. Keep in mind that Bloomberg was the perfect candidate for the pooh-bahs that run the Party machinery. (More on that later). On paper, Bloomberg checked all the right boxes. He is a climate fanatic, an abortion rights fanatic, an experienced executive in both the private and public sectors, and he is a technocrat with a record of competence. Plus he has a lot of money that he can spend on a campaign. A real lot. 

Bloomberg was supposed to be the Party savior who would rescue it from the clutches of Bernie Sanders, the likely nominee. And Sanders isn’t even a Democrat. But he effectively owns something like 25% to 30% of the Democratic’s primary electorate and he is almost certain to waltz into the Milwaukee convention with a plurality, and maybe a large plurality of the delegates. The game plan was (and is) for Bloomberg to consolidate the “moderate lane” behind his candidacy  and snatch the nomination away from comrade Sanders, whom the party is convinced is going to lead to a McGovern like debacle once November rolls around. 

There are a couple of problems with the plan. In fact there are lots of problems with the plan. To begin with, Sanders is rapidly moving the Party very far to the left. In the latest Washington Post-ABC News poll, 62% of Democratic-leaning adults said Sanders is “about right” ideologically. That result is not statistically distinguishable from the support given to Biden, Warren or Buttigieg. In addition, 72% of Democratic leaning voters say they believe Sanders would beat Trump. Nothing wins like winning. 

Polls in February are kind of fluid. It’s pretty hard to imagine that when the voting public actually begins to focus on the election that they will be quite so friendly to a socialist. Despite all the whining from the Sanders campaign, he has gotten relatively friendly treatment from the press. After all, he says he is a socialist, but his friends among the punditocracy take the edge off by insisting that he really isn’t a “real” socialist. 

Paul Krugman for instance says that Sanders socialism is just branding, the evidence being that Sanders hasn’t yet called for government to own all the means of production. I wonder if Krugman would characterize a candidate who carried around a dog eared copy of Mein Kampf as just working on his branding strategy. Somehow that’s pretty hard to imagine. We are not talking about dog whistles here. People who march around with swastikas do so for a reason. They are Nazi sympathizers or possibly outright Nazis. 

Let’s face it. Bernie Sanders is a socialist. At every opportunity he says he is a socialist. He advocates policies that only a socialist would advocate. Putting the qualifier “democratic” in front of the word socialist is a meaningless exercise. Communist dictatorships were always called “People’s Republics of…”. The end game is always the same. Occasionally people turn the boat around before it’s too late, as in the Nordic countries. (Memo to Bernie: they are arguably more capitalist than the U.S.)  Mostly however, the body count piles up before the citizens have a chance to recapture their freedom. That would be in places where Bernie has a lot of trouble criticizing the regime. Places like, Cuba, Nicaragua and Venezuela not to mention the former Soviet Union where he spent his honeymoon and then waxed effusive about the subway system. 

So the question is this: Is there any realistic hope that the Democratic Party establishment can stop comrade Sanders from capturing the Democratic Party nomination? 

The answer is: No. 

There are two reasons why the Democratic Party establishment can’t stop Bernie. First the party establishment no longer exists as an important force. The same is true of the Republicans. The party establishment imploded when it faced Donald Trump during the 2016 primary season and the party has been thoroughly Trumpified since then. Sanders is doing to the Democratic Party pretty much what Trump did to the Republicans. 

A second reason why the party establishment is incapable of stopping Sanders is that the party is ideologically incapable of countering Sanders socialism. Four years ago Convention Chair Debbie Wasserman Schultz tripped all over herself trying to explain the difference between socialism and progressivism. She couldn’t explain the difference because there isn’t any. Face it: there is no progressive limiting principle other than “trust us”. It is all government all the time.

American progressives have been attacking foundational American values for at least half  a century, and arguably longer, beginning with Teddy Roosevelt and Woodrow Wilson. Those are the foundations upon which the basic institutions of civil society depend. They have been so weakened that it is going to take a long time to rebuild them.  If ever. It is not merely a question is who is elected to what post. What is needed is structural reform, a change in the culture and the rebuilding of fundamental institutions. Progressives are the ones who led “the long march through the institutions” that resulted in today’s dismayingly relativistic culture and its dysfunctional politics. They are hardly the ones to rebuild civil society.  

It is certainly possible that Sanders may be denied the Democratic Party’s presidential nomination. That said, it is hard to see how the Party’s nearly powerless establishment would go about it. Any steps they take to block Sanders will certainly embitter Sanders partisans, whom the Party desperately needs for the general election in November. On the other hand, the nomination of Sanders would very likely lead to the re-election of Donald Trump. 

As awful as another 4 years of tweeting idiocy would be, the key question in politics remains: “Compared to what?”. A crushing defeat of socialism at the ballot box would be something to celebrate. It might also prompt the Democratic Party to seriously re-evaluate itself so it could spend its energies thinking seriously about public policy instead of having tantrums  about intersectionality. 

There is the small, but truly awful possibility that Bernie Sanders could actually win and bring in a big progressive wave along with him. Then New Zealand would be a pretty good place to move to for a couple of years. 

JFB

Comrade Sanders Surges in Poll

The latest CNN poll, released today, has Joe Biden and Bernie Sanders statistically tied in the race for the Democratic nomination. (The CNN story is at this link). While not all that surprising, it seems to reflect the alienation of large swaths of the public from mainstream society—or what we used to think of as mainstream society. The leftward lurch of the Democratic Party is a reflection of this.

The growing enthusiasm for Senator Sanders is similar to the groundswell that catapulted Donald Trump into the White House. In each case the respective party establishments were appalled at how the candidate attacked elites and their policy prescriptions. Nevertheless in each case disaffected voters flocked to the outsider candidate, largely because of a sense of aggrieved populism. In each case those disaffected voters found a candidate who would speak to those grievances, real and imagined. 

Senator Bernie Sanders

There is, however, an important difference between Donald Trump and Bernie Sanders. Donald Trump’s campaign and Presidency is one that thrives on symbolic politics. It checks the cultural boxes of Trump supporters (e.g., build the wall) but, with the exception of trade, most of the policy is standard Republican fare seasoned by Trump’s personal boorishness. Which is to say that the key to understanding the Trump White House is to separate policy and personality. Not an easy thing to do. 

But Bernie Sanders is different. He is a man with a weltanschauung. And he gives every indication that he actually believes the preposterous things he says, which are an integral part of that world view. The problem is that a large swath, and perhaps a majority of Democratic primary voters, does not understand what it is that Bernie Sanders is trying to sell. That is because he occasionally–actually more than occasionally– obfuscates. Whether Sanders muddies up the waters because of ignorance or just plain tactics remains to be seen. For instance, he can pretend all he wants that his policy preferences are similar to the ones adopted by the Nordic countries, but they are not. While Bernie Sanders remains a committed socialist, the Nordic countries are among the most capitalist, market-centered ones on earth. Arguably more so than the United States in many respects, especially with respect to public finance. 

Bernie Sanders is a hard line socialist who wishes to remake society just like every other socialist.  And he has been singing the same tune (with occasional politically convenient adjustments) for at least 40 years. The problem is that a lot of people, and perhaps a plurality, have no idea how catastrophic the result would be if Sanders and his left wing allies (like the Squad) were able to seize the levers of power.  

So think of the 15 minute video below, put together by Reason magazine, as a public service message. It summarizes Sanders’ policy and political activities since the 1980s. That’s pretty much all you need to see. Anyone who would even consider voting for Sanders ought to watch this film. If, after watching this, anyone still insists on voting for Sanders, that person will have succeeded in achieving the improbable goal of making Trump supporters look like comparative geniuses. 

JFB