If the President really wants to tax Buffett, and if Buffett really thinks he's undertaxed, there's a much better way to go. Mr. Buffett claims roughly $40 million in income. He has a net worth of roughly $50 billion. That means his return on investment is less than 1%, for officially purposes at least. Why so low? Buffett pays no dividend in his holding company, and does not take the kind of salary that most people who run large companies take.
If we really want to raise taxes on Mr. Buffett, we should pay attention to the reason why his income is so low. Mr. Buffett's refusal to pay a dividend deprives we the people of a greater share of his true income. And if the failure to buy an item can be taxable--the argument that he supporters of Obamacare make--surely it is also reasonable to force Buffett to pay an "idle capital" penalty. So long as he conspires against the people, and deprives us of tax revenue, by refusing to pay a dividend, he should pay a penalty.
]]>]]>Whenever I suggest in these essays, for want of space or of humility, that one or another decision seems to me "plainly right" or "plainly wrong," or that some proposal or position is "clearly" consistent (or inconsistent) with the constitution, I hope my words will be understood as shorthand not for a conclusion I offer as indisputably "correct" but solely for a conviction I put forward as powerfully held.
Epstein points to Charles Fried as a case in point. (Fried may have served in the Reagan administration, but, as Epstein notes, he has bought the Progressive re-writing of the constitution. Fried also supported Obama for President.) Fried insists that there is no practical limit to the federal government's power under the commerce clause. As Epstein points out, Fried claims "that the scope of the commerce power was settled as early as 1824 in Gibbons v. Ogden, which he does not refer to by name. Of Gibbons, Fried explains, "If something is within the power of Congress, Congress may exercise that power to its fullest extent."
On the contrary, Epstein notes, notes that Progressives like to cite Chief Marshall's opinion in Gibbons v. Ogden to justify a very expansive reading of the commerce clause, "in Gibbons, Chief Justice Marshall wrote without embarrassment that "the completely interior traffic of a State" was beyond the power of commerce to regulate. A fortiori, the regulation of manufacture, agriculture, mining, or health care was far outside the scope of Congressional regulation."
Epstein goes on to note that Chief Justice Marshall very clearly indicated that the federal government has no authority, at least under the commerce clause, to regulate intra-state commerce--of which there was a good deal: "in Gibbons, Chief Justice Marshall wrote without embarrassment that "the completely interior traffic of a State" was beyond the power of commerce to regulate. A fortiori, the regulation of manufacture, agriculture, mining, or health care was far outside the scope of Congressional regulation."
In the founding era, the argument was between loose construction (which the Federalist Party supported) and strict construction (which the Republican Party supported). Both sides agreed that there were real limits to the federal government's power. They disagreed about whether there were implied powers at all. Nowadays, the argument not about whether there are implied powers, but, rather, about whether there is anything that cannot be turned into an implied power. If one may discover some implied powers, may one be justified in discovering any conceivable implied power? Progressives seem to think that the answer is yes--so long as History or Progress demands it.
In other words, the argument today is between loose construction and deconstruction, not between strict and loose construction of the Constitution.
]]>Since Progressives have long praised the Court for taking away from the people the right to make law on may subjects, the comment might seem striking. But I actually think it is entirely consistent with the Progressive understanding of the "living constitution." Whatever furthers the Progressive agenda is good, and whatever blocks it is bad. Living is only supposed to be in the direction of "progress." If the Court strikes down laws Progressives like, they will decide that judicial review is passe.
But what if the country is divided about what is "forward" in history? And what if some (many, I suspect) Americans are not living in an Hegelian world in which History has direction?
More evidence that a living constitution is impossible absent a consensus about what's next.
P.S. Obama's criticism of Paul Ryan for "thinly veiled Social Darwinism" draws out a related point. Uncle Barry's moral ideas are from fifty years ago. His Progressivism is trapped in the past. His living constitution is the prisoner of 20th century Progressivism.
]]>[Soliciter Genera] Verrilli's error was substantive: He failed squarely to answer Roberts and Kennedy's repeated questions about what limits he envisioned to Congress's power to regulate interstate commerce. Verrilli's evasions weren't only unhelpful--they were also unnecessary.
Rosen suggests that there is an obvious limiting principle, one that can be discovered in the founding. "In previous cases denying Congress the power to regulate local activities such as guns in schools or violence against women," he notes, "the Court has drawn a distinction between activity that is truly local and activity that is truly national."
More generally, he quotes a new book by Neil S. Siegel suggesting that the federal government was designed to address any problem that was not local in nature:
"The Commerce Clause is best understood in light of the collective action problems that the nation faced under the Articles of Confederation, when Congress lacked the power to regulate interstate commerce." Siegel argues that "to over-come failures to participate in collective action whose effects spill across state borders, the clauses of Article I, Section 8 authorize Congress to require various kinds of private action."
Balderdash! If that was the meaning of the commerce clause, it would not say: "The Congress shall have Power . . . To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."
Rosen's argumen views the Constitution from 30,000 feet. Its particular details fade into nothingness and it becomes a plenary grant to address any issue that Rosen thinks is a national one.
Consider some constitutional arguments of the founding era. In that era, we should note, it was an open question whether the federal government had the authority to build roads, canals, and other such projects. President Madison thought it might be, but in the end, he decided that such projects required an amendment, which he supported. Whigs disagreed with that. But if internal improvements were constitutionally controversial, it is hard to claim that there would have been any discussion of whether the federal goverment may regulate my visit to my doctor.
In his Opinion on the Constitutionality of the Bank, Hamilton said that Congress may create a corporation to fulfil the powers listed in Article 1, section 8. Among those he listed was the commerce clause. After all, creating and managing a national circulating medium is a national act, by definition. The key question between Hamilton and Jefferson turned on whether Hamilton was correct to infer a power to create a corporation in the service of the enumerated powers. It was self-evident that the object was national in scope.
But Hamilton noted that there were very real limits:
The only question must be in this, as in every other case, whether the mean to be employed or in this instance, the corporation to be erected, has a natural relation to any of the acknowledged objects or lawful ends of the government. Thus a corporation may not be erected by Congress for superintending the police of the city of Philadelphia, because they are not authorized to regulate the police of that city
The federal government, even Hamilton, the man with the most expansive understanding of federal power at the time, argued, did not have a general police power. And what is the police power, classically speaking, the power to regulate health, safety, and morals and other such things. But Rosen wants to say that, under modern conditions, my visit to my doctor is a national concern. Ha! To be sure, my doctor may buy products that are shipped interstate. And if the federal government allowed it, it might be possible to buy heath insurance across state lines (that would be nice). In those cases there would be interstate commerce. By my visit to my doctor is hardly interstate commerce--unless we allow, as Rosen implies, that there is no such thing as intra-state commerce.
And that brings us to another celebrated case--Gibbons v. Ogden. That case involved the grant, by the State of New York, of a monopoly of shipping on the Hudson river. The Court ruled, not unreasonably, that the Hudson is not an intra-state waterway. ItJus has borders on New York and New Jersey, and it ends at the Atlantic Ocean. Hence such a monopoly grant was illegal.
This case matters because people on the Left often cite Justice Marshall's opinion to justfy an expansive reading of federal power. Justice Sotomayor quoted it from the bench this week. But we need to keep in mind that the case involved shipping on a waterway that borders on more than one state, and that ends at the ocean. We should also read more closely what Marshall actually said:
Comprehensive as the word "among" is, it may very properly be restricted to that commerce which concerns more States than one. The phrase is not one which would probably have been selected to indicate the completely interior traffic of a State, because it is not an apt phrase for that purpose, and the enumeration of the particular classes of commerce to which the power was to be extended would not have been made had the intention been to extend the power to every description.
A clause that grants the federal government power regarding commerce among the states necessarily implies that there is such a thing as commerce that is local--the very thing that Rosen says does not exist. To be sure, he points to "previous cases denying Congress the power to regulate local activities such as guns in schools or violence against women." But close observers will note that those are not commercial activities at all. If my visit to my doctor is interstate commerce, then there is no commerce that is not interstate.
If that is what the people want, there is a simple remedy, one consistent with the constitution. Amendment. But somehow the amendment clause falls by the wayside in pursuit of the public good.
Rosen's argument is that under current circumstances the health care market is national. H quotes a Representative from Massachusetts:
A national mandate would free Massachusettes[sic] from being "forced to subsidize through higher premiums and higher Medicare and Medicaid costs the uncompensated care of people in other states who do not have health insurance."
But others might reply that Rosen is attacking the notion that the states in our federal system are laboratories of democracy. They will have diverse laws, and many different approaches to health care policy. He suggests that a state that passes a policy may not suffer from competition with other states. In other words, he presumes what he is concluding--that health care is naturally a national market.
And that brings us to a point that Walter Russell Mead makes eloquently. America's health care system is simply too large and complex to be regulated by a bureaucracy in Washington that creates a uniform set of rules for a country as large and diverse as the United States. Even by his own living constitution model, therefore, Rosen's argument fails.
]]>The Seals: How Obama Learned to Use His Secret Weapon.
Shouldn't that be "America's Secret Weapon"?
]]>Indeed I tremble for my country when I reflect that God is just: that his justice cannot sleep for ever: that considering numbers, nature and natural means only, a revolution of the wheel of fortune, an exchange of situation, is among possible events: that it may become probable by supernatural interference! The Almighty has no attribute which can take side with us in such a contest
And John Winthrop:
]]>There is now set before us life and good, death and evil, in that we are commanded this day to love the Lord our God, and to love one another, to walk in his ways and to keep his commandments and his ordinance and his laws, and the articles of our covenant with him, that we may live and be multiplied, and that the Lord our God may bless us in the land whither we go to possess it. But if our hearts shall turn away, so that we will not obey, but shall be seduced, and worship other God-our pleasures and profits-and serve them , it is propounded unto us this day, we shall surely perish out of the good land whither we pass over this vast sea to possess it: Therefore let us choose life, that we and our seed may live by obeying His voice and cleaving to Him, for He is our life, and our prosperity.
But is holding a passport a "privilege" or a "right"? Interestingly the dissenters in U.S. v. Wong Kim Ark (Fuller, joined by Harlan) noted that "birthright" or the notion that soil determines citizenship, was associated with subjecthood--under common law, anyone born on soil belonging to the king could only leave the country with his explicit consent. That's why that argued that in 1776 the U.S. broke from not just allegiance to the crown, but also from the idea of birthright. They argued that American citizenship was based upon the principles of 1776--mutual consent between current citizens and any new would-be citizen. It seems some of our bureaucrats are following the logic of "birthright citizenship" all too well.
]]>"Egypt's crisis was the easiest market call since Moses warned Pharaoh about the frogs."
]]>]]>The Republicans should start right now -- pitching their campaign against "the do-nothing Democratic Senate." If they do so -- in, say, cheap radio advertisements all over the country -- it will throw a very large monkey wrench into the Democratic plan, and it will lay the foundation for their taking a large number of seats in the Senate.
]]>As I think I've said before, I used to cover financial crises (from America) and wonder why governments didn't do things that seemed so obvious. The answer, I now realize, is that politicians can't just do the "obvious best" thing. There is no such thing as a perfect rational maximizer in policymaking.
Politicians are always limited by what their voters think is fair. The voters may be right, they may be wrong, but in the end (hopefully), they're still the boss.
The largest civil rights group in America, the National Association for the Advancement of Colored People (NAACP), is petitioning the UN over what it sees as a concerted efforted to disenfranchise black and Latino voters ahead of next year's presidential election. . . .
According to The Guardian, the group complains that "34 states have introduced a requirement that voters carry photo ID cards on the day of the election itself." Voter ID and other laws, such as laws that strip felons of the vote, at least for a time, are an affront to democracy, according to the NAACP:
Benjamin Jealous, the NAACP's president, said the moves amounted to "a massive attempt at state-sponsored voter suppression." He added that the association will be urging the UN "to look at what is a co-ordinated campaign to disenfranchise persons of colour."
So the NAACP is appealing to a non-democratic institution, and is attacking the American legal system, and American sovereignty, in the name of democracy? How democratic do they think the world would be if the UN ran it?
]]>In this debt-ceiling fight, I'm having horrible flashbacks to the Republican debacle over health care.
Then as now, what could have been a negotiated deal turned into all-out political war.
Then as now, Republicans rejected all concessions by the president as pathetically inadequate.
Then as now, Republicans refused any concessions of their own, instead demanding that the president yield totally to their way of thinking.
Then as now, Republicans convinced themselves that they had the clout to force the president to yield.
With health care, Republicans calculated spectacularly wrong.
Peggy Noonan last weekend:
]]>Once again the president thought he was playing a shrewd game: The collapse of the super committee would serve his political purposes. Once again he misjudged.
What has occurred is an exact repeat of the summer's debt ceiling fiasco. Then the president summoned a crisis, thinking people would blame it on the Republicans. Instead they blamed Washington, which is to say him, because he owns Washington. Immediately his numbers fell. As they did again this week.