Thursday, June 10, 2010

Federalist 16-20: Alexander Hamilton's hopey-changey thing

Here we are, once again: The shadow of the Civil War -- about 70 years in the future -- keeps popping up as we make our way through the Federalist Papers. Why? Because Alexander Hamilton, John Jay and James Madison keep making the case that the United States under the Articles of Confederation is prone to such a war.

Hamilton revisits this theme in Federalist 16, suggesting that the states under the Articles have so much latitude to act on their own -- instead of falling in line under a central government -- that conflict is more likely to arise between the states. "The first war of this kind," he warns, "would probably terminate in a dissolution of the Union."

There's another possibility, though, as Hamilton admits: If one state went its own way in defiance of the national government, the other states would probably do likewise -- rather than make a big deal and incite war. "And the guilt of all," Hamilton writes, " would become the security of all."

And I admit: I'm having a hard time finding a major flaw in that arrangement. It appears there are two possible ways of insuring against a civil war: building a central government with the power to keep the states in line, or giving the states the freedom to act on their own and not impose laws and rules on each other.

Indeed, the antifederalists argue that building and empowering a centralized government will make a civil war more likely -- and more devastating when it occurs. "A Farmer" is one of those who made the argument.

Whether national government will be productive of internal peace, is too uncertain to admit of decided opinion. I only hazard a conjecture when I say, that our state disputes, in a confederacy, would be disputes of levity and passion, which would subside before injury. The people being free, government having no right to them, but they to government, they would separate and divide as interest or inclination prompted-as they do at this day, and always have done, in Switzerland. In a national government, unless cautiously and fortunately administered, the disputes will be the deep-rooted differences of interest, where part of the empire must be injured by the operation of general law; and then should the sword of government be once drawn (which Heaven avert) I fear it will not be sheathed, until we have waded through that series of desolation, which France, Spain, and the other great kingdoms of the world have suffered, in order to bring so many separate States into uniformity, of government and law; in which event the legislative power can only be entrusted to one man (as it is with them) who can have no local attachments, partial interests, or private views to gratify.

That kind of sounds like what happened, doesn't it? But Hamilton argues for big gubmint. Get this:

The government of the Union, like that of each State, must be able to address itself immediately to the hopes and fears of individuals; and to attract to its support those passions which have the strongest influence upon the human heart. It must, in short, possess all the means, and have aright to resort to all the methods, of executing the powers with which it is intrusted, that are possessed and exercised by the government of the particular States.

There's a lot of talk here about pretty mushy concepts like "hopes" and fears" and "the human heart." It sounds, in fact, almost Obama-like. Hamilton isn't really talking about limited government staying out of the way of citizens, who are then free to make their own way by dint of their rugged individualism. He's talking about using the power of the state in the service of citizen self-actualization. When Democrats talk like this these days, my conservative friends react with horror and contempt. Am I missing something?

Don't worry, Hamilton says in Federalist 15. The federal government under the U.S. Constitution will be too limited to really infringe on the people, or even to displace state governments. And it's here that I confess: My conservative friends are probably right when they say Hamilton et al could never have imagined the huge federal government we have today. Here's Hamilton talking about those limitations:

I confess I am at a loss to discover what temptation the persons intrusted with the administration of the general government could ever feel to divest the States of the authorities of that description. The regulation of the mere domestic police of a State appears to me to hold out slender allurements to ambition. Commerce, finance, negotiation, and war seem to comprehend all the objects which have charms for minds governed by that passion; and all the powers necessary to those objects ought, in the first instance, to be lodged in the national depository. The administration of private justice between the citizens of the same State, the supervision of agriculture and of other concerns of a similar nature, all those things, in short, which are proper to be provided for by local legislation, can never be desirable cares of a general jurisdiction.

Mr. Hamilton: I give you the Department of Agriculture -- which has done more to affect why, how and what we grow and eat than any other institution in human history, perhaps. So there's that.
He keeps going.

There is one transcendant advantage belonging to the province of the State governments, which alone suffices to place the matter in a clear and satisfactory light, -- I mean the ordinary administration of criminal and civil justice. ... This great cement of society, which will diffuse itself almost wholly through the channels of the particular governments, independent of all other causes of influence, would insure them so decided an empire over their respective citizens as to render them at all times a complete counterpoise, and, not unfrequently, dangerous rivals to the power of the Union.

Mr. Hamilton, I give you the FBI. Bank robberies, no matter how third-rate and niggling, aren't really a local matter anymore -- they're prosecuted in federal courts. Just last month, the Supreme Court ruled that federal officials could civilly commit sex offenders who've served out their criminal prison sentences -- a role that used to be exclusively reserved to the states. And that ruling came from a conservative Supreme Court -- based on the so-called "necessary and proper clause" of the Constitution that gives Congress the power to make any law it needs to carry out its duties.

And hoo boy: The Antifederalists saw that one coming. Here's "Brutus," writing in Antifederalist 17.

The legislature of the United States are vested with the great and uncontrollable powers of laying and collecting taxes, duties, imposts, and excises; of regulating trade, raising and supporting armies, organizing, arming, and disciplining the militia, instituting courts, and other general powers; and are by this clause invested with the power of making all laws, proper and necessary, for carrying all these into execution; and they may so exercise this power as entirely to annihilate all the State governments, and reduce this country to one single government. And if they may do it, it is pretty certain they will; for it will be found that the power retained by individual States, small as it is, will be a clog upon the wheels of the government of the United States; the latter, therefore, will be naturally inclined to remove it out of the way.

Now it's not true that state governments have been "annihilated." But it is true that the trend has been that federal power has increased and state power has contracted. Which brings us to Hamilton's most flatly untrue statement -- though, perhaps, he couldn't have known it at the time.

It will always be far more easy for the State governments to encroach upon the national authorities than for the national government to encroach upon the State authorities.

It didn't really work out that way, did it?

Now, I don't think that's entirely bad. But if I'm honest here, I've got to say, the Antifederalists were generally right and the Federalists were generally wrong: The government being built under the new Constitution did morph into something big and powerful and giant, reaching into many areas of the lives of its citizens. Maybe that growth is a distortion of the Founder's vision -- probably, to some extent, it is -- but Hamilton's pretty blase about the possibilities. "It can't happen here," is what he seems to be saying. But it did.

Federalists 18, 19 and 20 also concern themselves, ostensibly, with the insufficiency of the Articles of Confederation -- but rely mostly on a verrrry dry reading of history from throughout the ancient world. I'm not familiar enough with Greek or German or Dutch history to judge the interpretations offered by Hamilton and Madison here, so I won't try.

But now I'm faced with a question: Will reading the Federalist and Antifederalist papers turn me into a libertarian weirdo? It's a possibility!

Tuesday, June 8, 2010

You know what? I hope that Sarah Palin runs for president. And loses. Badly.

I'm so tired of Sarah Palin's sense of grievance. But I know it's not going to go away -- it defines her. It is the reason, at this point, for her political existence. Don't believe me? Here's a Palin post offering President Obama advice on how to handle the BP oil spill.
My experience (though, granted, I got the message loud and clear during the campaign that my executive experience managing the fastest growing community in the state, and then running the largest state in the union, was nothing compared to the experiences of a community organizer) showed me how government officials and oil execs could scratch each others’ backs to the detriment of the public, and it made me ill.
You'd think Barack Obama had never, ever been a senator -- one elected to federal office two years before Sarah Palin became a governor. But you know what? I'm not going to replay the resume pissing match that indeed was resolved by voters two years ago.*

*OK, one item: A big chunk of Sarah Palin's gubernatorial experience with oil companies was using their money to send checks to Alaskans instead of taxing them. That looks nothing at all like the world non-Alaskans  live in.

But, lordy, a little class wouldn't hurt the woman would it? Showing respect for the president's actual accomplishments would be a good place to start -- unless Palin wants us to refer to her primarily as a onetime local sports anchor as the prime way we refer to her pre-2008 experience. It's true, of course, but it's not accurate. And showing a little respect for the voters -- instead of sneering at their judgment as she does here -- wouldn't be a bad second step.

The Flyers and feminism

You don't have to be a Flyers fan or a feminist to think this Chicago Tribune "pullout poster" is simply stupid:


Get it? HE'S A GIRL! Hahahahahahaha!

Jeebus. Flyers play the Blackhawks tonight. Now I doubly hope the Flyers win.

Friday, June 4, 2010

Federalist 15: Do today's Tea Partiers know about this?

I had thought I'd be taking these Federalist chapters in big chunks, rather than one-by-one, but it turns out there's a lot to think about in all of these. So we're going to have to go slowly.

You might remember that I said -- somewhat near the outset of this project -- that I expected some of the context of the Federalist would reveal itself as we proceeded through the papers. I wasn't entirely wrong, because we're now at Federalist 15, and Publius is ready to start telling us why the Articles of Confederation stink.

Not, of course, that he needs to make the case. From what I can tell skimming through the Antifederalist Papers, there's no great love for the Articles among any huge segment of the nascent American society. And Publius -- Alexander Hamilton in this particular chapter -- acknowledges as much.
The point next in order to be examined is the "insufficiency of the present Confederation to the preservation of the Union." It may perhaps be asked what need there is of reasoning or proof to illustrate a position which is not either controverted or doubted, to which the understandings and feelings of all classes of men assent, and which in substance is admitted by the opponents as well as the friends of the new Constitution.
So what's the problem here, exactly?

Well, as Hamilton puts it, the antifederalists know the Confederation doesn't work -- but they're unwilling to countenance a government strong enough to overcome the Confederation's problems.
While they admit that the government of the United States is destitute of energy, they contend against conferring upon it those powers which are requisite to supply that energy. They seem still to aim at things repugnant and irreconcilable; at an augmentation of federal authority, without a diminution of State authority; at sovereignty in the Union, and complete independence in the members.
Hmmm. Let me say right here I'm not trying to score any political points. But I've increasingly suspected -- reading the Federalist Papers and skimming over the Antifederalist Papers -- that today's Tea Party/GOP/conservative crowd might be heir more to the antifederalist tradition rather than the federalists. I'm not ready to mount a definitive case here -- I've not done enough reading, and in any case I've already suggested that Alexander Hamilton may not be the most reliable narrator -- but this passage here adds to my sense of things. Because it sure sounds like Hamilton is describing the kind of schizophrenia that characterizes a movement that roots on a president who breaks wiretapping and torture laws while decrying slightly higher marginal tax rates as "tyranny."

But I might be overreading things. I'm not ready to make the case. So let's move on.

Because of the antifederalist bipolar approach, Hamilton says, he's going to have to show how the Confederation really doesn't work. And he starts off with the biggest problem: The national government has too little power, while the states have too much. That means the states can -- and do -- ignore the laws made by the national government. It's an untenable situation.
The United States has an indefinite discretion to make requisitions for men and money; but they have no authority to raise either, by regulation extending to the individual citizens of America. The consequence of this is, that though in theory their resolutions concerning those objects are laws, constitutionally binding on the members fo the Union, yet in practice they are mere recommendations which the States observe or disregard at their option.
Up till now, Publius has talked long and hard about the need for the United States to remain, well, united. Now he takes a different tack: It would be better for the states to exist as separate nations -- though allied, like the NATO alliance -- rather than allow the national government to continue in such an emasculated state. Otherwise, Hamilton writes, it's time to give a national government the power to enforce the laws it makes -- even over the objections of the states.
Government implies the power of making laws. It is essential to the idea of a law that it be attended with a sanction; or, in other words, a penalty or punishment for disobedience. If there be no penalty annexed to disobedience, the resolutions or commands which pretend to be laws will, in fact, amount to nothing more than advice or recommendation.
He continues:
There was a time when we were told that breaches, by the States, of the regulations of the federal authority were not to be expected; that a sense of common interest would perside over the conduct of the respective members, and would beget a full compliance with all the constitutional requisitions of the Union. ... In our case, the concurrence of thirteen distinct sovereign wills is requisite, under the Confederation, to the complete execution of every important measure that proceeds from the Union. It has happened as was to have been forseen. The measures of the Union have not been executed; the delinquencies of the states have, step by step, matured themselves to an extreme, which has, at length, arrested all the wheels of the national government, and brought them to an awful stand.
And here again, I'm thinking of today's Tea Party/conservative/GOP folks who regularly assert the rights of states to nullify federal laws. (Take a look at the states attorneys general bringing legal challenges to the Affordable Care Act.) They claim to be acting in the traditions of the Founders; yet the Founders really did act to centralize power -- take it away from the states -- instead of distributing power to the states.

I have no doubt I'll come up against a flaw in this theory -- or that somebody will point it out to me -- as I continue reading. But so far, I'm finding it harder to avoid this idea: Today's Tea Partiers might actually be heirs to folks who wanted nothing to do with the Constitution. There's nothing inherently wrong with that, assuming I'm right. But it might cast a very different flavor to our modern debates.

Thursday, June 3, 2010

Does your Miranda "right to remain silent" still exist?

That's the question for this week's Scripps Howard debate between Ben Boychuk and me, asked in the wake of the Supreme Court ruling this week that criminal suspects must speak up to claim their Fifth Amendment right against self-incrimination. My take:

The Supreme Court's ruling boils down to this: Police get to assume you don't want your Constitutional rights. The Miranda warning -- the one you've heard cops say on TV a million times -- is now essentially meaningless.
"Today's decision turns Miranda upside down," Justice Sotomayor wrote in her dissent. "Suspects will be legally presumed to have waived their rights even if they have given no clear expression of their intent to do so."
Imagine if the government treated our other Constitutional protections this way. Federal agents would be free to shut down church services unless prayer was preceded by a pastor's public statement that churchgoers were exercising their First Amendment rights. Newspapers and bloggers would have to print the First Amendment on their front page to stave off a crackdown against criticizing the president. Gun owners would have to sign documents affirming their Second Amendment rights, or the government would be free to seize their firearms.
Sounds ridiculous, even un-American, right? So why should the Fifth Amendment right against self-incrimination be treated differently? Why should the government get to assume that you don't want your rights? Yes, there is a public interest in investigating and prosecuting crimes. But the Founders knew that interest could be abused, which is why they limited the government's police powers in the Constitution. Police don't like that, of course, but they're not supposed to. They're supposed to obey the rules anyway.
Constitutional rights are something that all American citizens are supposed to have. We're not supposed to have to jump through hoops in order to keep them; the government is supposed to jump through hoops in order to take them away. The Supreme Court, ironically led by "small government" conservatives, has now ruled otherwise. The Tea Partiers who routinely decry government tyranny might want to take notice.

Michael Smerconish's crazy, unfactual sympathy for BP and the oil spill

Michael Smerconish isn't joining a boycott of BP -- because if the boycott succeeds, maybe BP will go out of business. And if they go out of business, who will provide the money and expertise to fix the oil spill in the Gulf of Mexico?
I intend to drive out of my way to fill up at a BP pump.

Why? Because it's imperative that the company doesn't tap out before plugging the leak and cleaning up the tens of millions of gallons of crude oil marring the Gulf of Mexico.

If BP goes under before either of those tasks is complete - or if the company can't afford to complete them itself - the federal government will be sucked into picking up the tab. Or worse, actually taking the lead in trying to stop the flow of oil into the Gulf and mop up the mess.
Here's the thing: the mess is proving very costly to BP -- both in terms of its stock market value and in terms of how much it's spending. And yet those enormous costs pale in comparison to how much money BP still has left over. Tuesday's New York Times:
One analyst calculated that in a worst-case scenario, BP’s cleanup liability would be around $14 billion, which would account for the entire loss of all fishing and tourism revenues for coastal states closest to the spill, said Kevin Book, a managing director at ClearView Energy Partners. Even then, Mr. Book said, the market overreacted, and BP can easily handle the cleanup bill.

BP remains a formidable corporation, with the ability to withstand penalties that would easily bankrupt most companies. On April 26, a few days after the Deepwater Horizon rig that it had rented from Transocean sank, BP reported first-quarter profits of $6.2 billion. Because of its considerable profits and size, it does not buy outside insurance for such disasters.

The market drop means that while BP is not at risk of bankruptcy, the crisis could potentially turn it into a takeover target if the slide continues.
So the worst that can happen to BP right now -- aside from the unlikely scenario of the federal government deciding to take it over -- is that some other capitalist will take the company over, not that the company will go under. And honestly: Why should I care if some other Richie Rich is making profits and assuming liability for the oil spill? It's too bad Michael Smerconish didn't decide to use some actual facts in his column, instead of indulging in baseless speculation.

Tuesday, June 1, 2010

Bag O' Books: "The Big Short" by Michael Lewis

Michael Lewis' great talent is to take abstractly nerdy topics and turn them into bestsellers by grafting a compelling human narrative on them. "Moneyball" took baseball stats revolution and made Billy Beane into a hero; "The Blind Side" took a look at football's left tackle position -- a position that even most die-hard fans don't watch that closely, except in slow-mo instant replays -- and turned it into an Oscar for Sandra Bullock. So it's difficult to read "The Big Short" -- a chronicle of the subprime housing market collapse, and how it nearly took the entire financial system down with it -- ­and not  think of the movie possibilities.

Certainly there's characters aplenty, each with wacky distinctiveness but who share a common bond: They were the few people who saw the collapse coming -- despite the "nobody could've known" rationalizations afterward -- and who got rich because of it. There's Michael Burry, a one-eyed former doctor with Asperger's syndrome whose condition gave him advantage: he was one of the few financial analysts obsessed enough to sift through subprime bond documents to discover how tenuous the market was. There's Steve Eisman, whose great talent in life was to be an asshole contrarian. There's Eisman's sidekick, Queens-bred Vinny Daniels, who entered the financial industry not from an Ivy League school but from SUNY-Binghamton. And there's Charlie Ledley, a "diletantte" who made his fortune with shrewd guesses about which companies would rebound from disaster better than others.

Cross the cast from "The Dream Team," maybe and stick them in "Wall Street," and "The Big Short" is what you get. (And it's probably no accident that two movies from the 1980s fit perfectly here: As Lewis makes clear, the subprime collapse marked the end of the exuberant "financial 1980s" some 20 years late.)

Only Lewis' cast of characters is real. And they got rich predicting the collapse of the subprime market because they did what very few individuals -- and even fewer big banking institutions -- did: They tried to make the subprime market explain itself. Why are subprime bonds given such good ratings? Why isn't there better information about the quality of loans that are bundled into the bonds? Why is the process so opaque? The answers they got didn't make sense, but nobody else was asking the questions because everybody was making too much money. Until they weren't. (The similarity to "Moneyball" is astounding, actually, except that the fate of capitalism itself rests in the balance.)

In the end, the success (until it failed) of the subprime bond market depended on a bit of weirdness: Housing prices had gone up, up, up for 60 years, and nobody thought they would ever go down. Combine that faulty assumption -- computer models used by big banks wouldn't even let you input a decline in home prices to see what would happen to the value of the subprime bonds -- with the collapse of lending standards, and, well, what happened was always going to happen. Lewis describes an immigrant strawberry picker who got a loan to buy a $700,000 house ... on an income of $14,000 a year. How did that happen?

One thing the book drives home -- something that we want to forget -- is how close the entire financial world came to collapsing in 2008. One of Charlie Ledley's partners calculates that the city of Chicago has eight days of chlorine available to treat the city's water supply -- a calculation he makes because he thinks it might be relevant. Other characters come to question the viability of democratic capitalism -- even as they're making a killing -- because the heart of Wall Street's (and thus America's) economic engine was dependent on opacity, near fraud and Ponzi-like scheming for success.

We're still fighting about how to regulate the financial markets, but Lewis doesn't offer much in the way of solutions -- only anger about the messed-up nature of the system. That's ok: movies don't need to offer solutions. And Matt Damon would be great as Michael Burry.

Stubborn desperation

Oh man, this describes my post-2008 journalism career: If I have stubbornly proceeded in the face of discouragement, that is not from confid...