Friday, February 27, 2009

Well that worked ... I guess

Bloggers on the left are upset that I used a running joke with a friend to poke fun at the President while making a serious point. While I said I do not believe that Barak Obama is a "freakin' moron," I am concerned that his economic policy is incoherent.

He is at once engaging in an incredibly ill considered orgy of spending while promising to cut the deficit. He is blaming the economic meltdown on too much debt while heading straight to the Chinese for a gigantic advance. He wants to jump start the economy but his stimulus package is oddly backloaded and much given over to long deferred pet projects that seem neither temporary or targeted. He wants people to spend while raising the prospect of significant tax increases. (There is, no way to get where he wants to go by taxing only the rich and, like it or not, taxing the rich is tomorrow is unlikely to prompt them to invest today.) He wants people to feel confident about the future but, until his speech earlier this week, ran around the country predicting doom unless Congress immediately pass a bill that it had not read or deliberated.

At the same time that he wants to raise the deficit and cut the deficit (an unreconstructed Keynesian might believe in that), he has, as Charles Krauthammer points out, promised a fundamental change in the nature of the US economy, seeking to substantially shift resources from the public to the private sector.

Of course, he's not a freakin' moron. I know what it takes to make the Harvard Law Review. I don't even claim that he is acting like one. But the markets are unimpressed and its hard to see why they should be.

It's easy, of course, to blame Bush and his supposedly "conservative economic policies." But I am still waiting for a convincing statement of that case.

One can accuse Bush of fiscal irresponsibility (conservatives were doing that all along), but the Democrats have decided to see him on the spending front and go all in.

One can imagine regulations that might have prevented some of the stupidity in the housing market but those regulations would most definitely not been supported by the Democrats who, in fact, opposed belated Republican efforts to rein in Fannie and Freddie. Would Democrats have supported federally mandated tightening of lending standards?

Was the problem tax cuts for the rich? Why?

It does seem that Greenspan mismanaged monetary policy by overreacting to the bust of the Clinton era tech bubble and 9-11 and then overcorrecting too quickly. But overreaction seems to be the order of the day.

I, and others, have been accused of cheering the market declines. Hardly. I'm going to need that money some day.

At least I should be in the running for Jerk of the Week.

Wednesday, February 25, 2009

Barack Obama: Savior or freakin' moron?

Blogging has been slow and may continue to be as law review submission season begins. But if I can't be prolific, maybe I can be provocative.

I have a friend who has a tendency to refer to some of those with whom he disagrees as "freakin' morons." Although he is one of the very smartest people I know, I think he uses the term too often and tell him that God must have loved freakin' morons because, in his view, She made so many of them.

This guy has one of the world's great man crushes on Obama so let me be heretical.

Barack Obama just may be a freakin' moron.

Of course, I don't really think that, but his economic performance so far does not quite make it to dull average.

Let's put aside for a moment the debate over whether the past few months have revived Keynesian economics. What does classical Keynesianism tell us about debt financed responses to a recession which was brought on by, at least in the administration's view, too much borrowing? Really, who knows? Does it make sense to say, if people have borrowed too much and are now hunkered down, that the answer is to let the government borrow for them? If that idea is problematic, isn't it rendered more problematic by the coming entitlement crisis? What about the fact that, unlike times past, we are borrowing overseas and thus become dependent on foreigners willingness to continue? To quote the Boss, do we have debts no honest man can pay?

If that's so, one option is to inflate them away and John Cochrane has argued that, for stimulus to work, people must believe that is what will happen. They must believe that government does not intend to raise taxes to pay the debt back. Otherwise, they will save the injected funds in anticipation of the coming taxes and economic slowdown.

But Obama has announced that he is going do precisely that. Having blown the deficit through the roof, he now wants to talk about fiscal responsibility. Well, at least he's given himself a big target.

One way out of that trap is to use the stimulus money to create value, i.e., to make the economy more productive or to direct resources from less to more productive uses. But Obama outsourced the package to people like Nancy Pelosi, Henry Waxman and Dave Obey and got a grab bag of Democrats' pet projects tailored to total the $800 billion he wanted.

A certain type of unreconstructed Keynesianism says that this does not matter. We could, as Lord Keynes himself said, pay people to fill up bottles with old currency or as Larry Summers says, pay them to dig and then fill ditches. The idea is to get money in hands that will spend it. Now.

But that didn't happen either. Much of the package is backloaded. A moratorium on the payroll tax - giving moderate and low income earners a 7.5& raise after taxes - would have done that more effectively. But that was the GOP's proposal.

Off the stimulus package, there is no plan to address the underlying credit problem other than suggestions to nationalize banks. The proposal to spend huge amounts (more than the announced amount) to rescue improvident borrowers has been met with much deserved derision.

And, although finally got religion last night, the President has talked the economy down. Perhaps he is speaking words that are hard but true. Or maybe he is trying to play down expectations for political purposes. In any event, economics is, to a large degree, applied psychology and when the President tells us that catastrophe is imminent, folks do not feel good about spending and investing.

Back to that theme of fiscal responsibility. How do you reconcile it with last night's ambitious talk about what government can do you for just about anybody.

The result: The markets do believe that Obama is a freakin' moron. They were roiled. But since it became clear that he would win, they have tanked.

Thursday, February 19, 2009

OK, Judge, you hit your number or die in this room*

Much of the attention following yesterday's decision in Siefert v. Alexander focuses upon the invalidation of prohibitions against judges or judicial candidates belonging to political parties and endorsing partisan candidates for office. That part of Judge Crabb's decision seems to me, given the balance struck between regulatory interests and the protection of speech struck by the United States Supreme Court in Republican Party v. White, to be clearly correct.

And not, in my view, very momentous. Many judges have pre-judicial partisan affiliations and, in highly salient elections, it is not hard for the public to discern whether a candidate is a Republican or Democrat. In fact, one could argue that allowing candidates to claim partisan affiliation is a relatively efficient way to provide pertinent information to voters in campaigns where discussion of the issues is difficult and often cramped by legal and customary restrictions. It's not that we expect judges to rule in whatever way their party wants (although, as Judge Crabb points out, the prior partisan affiliation of federal judges is strongly correlated with voting patterns), but that partisan affiliation may tell us something (admittedly broad and general) about a candidate's judicial philosophy.

More significant, it seems to me, is that part of the decision striking down the Code of Judicial Conduct's prohibition against the personal solicitation of funds by judges and judicial candidates. This represents a sea change in the nature of judicial campaigns and may further dissuade lawyers from running for judge. Judge Crabb at least implicity recognized that - observing that the restriction may have had the "quaint" intent of protecting judges from the indignity of dialing for dollars - but found this insufficient to justify the restriction. (Caution: following the link will take you to some rather raw language.)

But posited state interests in preventing actual or apparent corruption have been far more likely to justify restrictions on campaign conduct and restrictions on contributions have been far more likely to be sustained. It is not clear to me that prohibiting personal solicitation represents the same type of restriction on communication as a prohibition on identifying one's partisan affiliation (or, as in White, one's position on certain issues of public interest). Nor am I sure that it is unreasonable for a state to conclude that personal solicitation of funds by a judge or judicial officer represents a substantial risk of actual or apparent corruption that is not presented by solicitation through a judicial committee.

* An homage to one of the greatest television series of all time.

Cross posted at Shark and Shepherd

Wednesday, February 18, 2009

Scott Walker - not so dumb

One of my pet peeves is the tendency of folks in the blogosphere and public discourse generally to contort themselves in order to suggest that their political opponents are not only wrong, but stupid. Such has been the case this week in a number of responses to Scott Walker's proposal to use federal stimulus money to suspend the state sales tax.

I am not endorsing the idea and it's not going to happen, but it is hardly the knee slapper that some are claiming it to be.

Ken Mobile says that Walker has demonstrated his economic incompetency. The blogger known as the Recess Supervisor says he is an "greasy haired," a "whorish, no nothing," and possessed of "idiocy." State Democratic Party chair Joe Winecke says the proposal is "ridiculous," "pathetic" and consists of "fuzzy math."

Why is Scott Walker so clueless? It boils down to this:

1 Suspending the sales tax would require a change in the law. Well, yes. It is a policy proposal and these things often require changes in the law. Indeed, Walker called upon the Governor and legislature to enact his proposal into law. It may be that a change in federal law would be required (that would depend on the wording of the federal stimulus bill) but that hardly means that Walker ought not to propose what he thinks is a better idea.

2. He's using fuzzy math. Winecke, echoed by Mobile, jumps on Walker's claim that the sales tax costs the average household almost $3000. Ho, ho, they say, this cannot be. Does the average household spend $60,000 on taxable goods?

Except that it's apparently true. Walker is using a mean as opposed to a median or mode. In addition, sales taxes are imposed on all sorts of transactions that get built into the price of what you buy. According to the Tax Foundation, Wisconsin's collections of general sales and gross receipts tax in 2006 was ... $2834.00 - the overwhelming majority of which (apparently $1102 per capita out of $1131 per capita in sales and gross receipts taxes)most of which is the general sales tax.

3. The tax holiday would benefit flatlanders. Everyone from Illinois would come up here and buy stuff tax free, paying use tax back home. First, I suspect that few people would actually pay the use tax. Second, such an impact would presumably have a stimulative effect. Wisconsin businesses would sell that much more. It would be, in other words, a good thing and not a bad thing, even if it did result in some increase in Illinois use tax collections.

Third, it is not clear that this has to be true. The holiday could be limited to Wisconsin residents - enforced by displaying a driver's license or other proof of residency and, perhaps, a tax identification number in business transactions. There would be some administrative cost in doing this and some one may try to argue that it constitutes an infringement on the right to travel,a denial of equal protection or privileges and immunities, but the justification would be that this is a rebate of other taxes paid by residents, i.e., the state is forgoing this revenue and the need - if there is one - to replace it would fall on its residents. I'd want to look at this more carefully before reaching a conclusion but, as I said, it is not clear to me why such a limitation would even be desirable.

4. The feds are already picking up the sales tax on new vehicles. Says the Recess Supervisor, "Wisconsin would collect no tax, Illinois or Minnesota would, and the consumer would have their state sales tax refunded to them by the federal government. Illinois and Minnesota win! Wisconsin loses! Yay stimulus!"

Not quite. They are proposing to make the sales tax deductible. That's a huge difference. But once again, don't we benefit more from flatlanders coming north to buy $40,000 cars than by - for those who itemize - losing a tax deduction on sales tax that was not paid?

Sunday, February 15, 2009

Sunday's Hymn for Her

This week one of the greatest rock bands ever is playing at the Potawatomi Casino, so this Sunday it's all Pretenders.

The early Pretenders had a mocking punk sound. This is "Tatooed Love Boys."

This song was popular when my son was born. I'm not the cat I used to be either.

The band has a new album. This is "Boots of Chinese Plastic."

But this is one of the sweetest songs you'll ever hear. Forgive the existential French introduction and artsy shimmering camera. It doesn't last long.

The title of the post is, of course, a reference to another Pretenders song.

Saturday, February 14, 2009

Refuse to recuse

The Associated Press has raised the issue of contributions by Cannon & Dunphy to Chief Justice Abrahamson. I think its a nonissue.

Lawyers are going to contribute to judicial campaigns. They ought to. They presumably are specially interested in the administration of justice and in a strong position to evaluate the candidates.

The state supreme court is a collegial law developing court. The justices should be reluctant to recuse themselves because to do so will deprive the voters of the state of one of the people elected to resolve our state's most important legal disputes.

It does not surprise me that lawyers at Cannon & Dunphy would contribute to the Chief Justice. It is not, however, that they hope to influence her to vote in a way that she otherwise would not. It's far more likely that they find her judicial philosophy - which is more favorable to plaintiffs in tort cases - preferable to those of others, including, perhaps, Judge Koschnick.

Part of this is that it serves the firm's economic interest (although I suspect tht these lawyers also believe that such a philosophy reflects a better reading of the law and good policy), to be sure, but that is their motivation and not the Chief Justice's. She is more inclined to interpret the law in a way that shifts losses to parties that she believes are better able to bear them and tends to be more concerned with the adequacy of compensation than its costs.

Of course this doesn't mean that she is going to find for the plaintiff in every case or that those who take a different view are always going to find for the defendant. It just means that there are differences of opinion on these matters and that persons interested in judicial races are smart enough to figure those out and act accordingly.

Should she disclose the contributions? I suppose, although they are matters of public record and, if she did disclose them, she (and every other justice) ought to be very careful about recusal. If she truly believes that she can approach the case impartially (and she does), then she ought to hear it.

Friday, February 13, 2009

Hope and flailing

Sage advice on the stimulus from the always intriguing Jim Manzi. In a related post, he makes the obvious point that there is no appealing to authority on this matter. We've got Nobel laureates who support and Nobel laureates who oppose the stimulus package.

Under these circumstances, the manner in which President Obama has handled this is highly questionable. Outsourcing the content of the bill to people like Nancy Pelosi and Dave Obey while rushing it through without much in the way of disclosure - let alone debate - and virtually nothing in the way of concessions to a party that, notwithstanding its current nadir, has won most of the elections around here for the past 15 years, almost guarantees embarassing post passage disclosure of items that few knew about or wanted, waste, fraud for which he must take all the blame.

Some have speculated that Obama is either very committed to 1930s style Keynesianism or things that the economy is going to approve anyway (perhaps in response to monetary policies now in place). That's the thing about government policy and the economy. It's hard to know what difference it has made. Did the New Deal improve or deepen the Great Depression. Seventy years later, we still argue about it.

MPS: Beyond a bailout

The Wisconsin Taxpayers Alliance report on MPS is, beyond your political persuasion, disturbing. It is quite apparent (and my daughter-in-law and son and sister are beneficiaries) that its current labor contract and compensation policies are unsustainable. Educating inner city children is a challenge but MPS is quite clearly doing less with more and the reason is unaffordable benefits packages. No one who pays competitive wages (and MPS does) can survive with a burden rate of almost 60%. The district's 2.4 billion dollar unfunded liability to retirees is going to bankrupt it. There isn't the tax capacity in the city to fund that without turning it into Detroit and the state isn't going to come to the rescue. For conservatives or liberals, the process will not be pretty.

Thursday, February 12, 2009

Barney Frank's bad question

My earliest recollection of Barney Frank is circa 1979. He was, I think, a Massachusetts state legislator at the time and had a cameo role in the Harvard Law School student musical which, as I recall, was entitled "Supraman." I can't recall the context but his one line was something like "don't be talking down to the working man." (The other thing I recall from the show was my Property professor saving Supraman from kryptonite because nothing had penetrated him for 30 years.)

Barney has, however, been talking down to people for 30 years. One of his more ridiculous moments came this week in the bankers' Walk of Shame being conducted in Congress.

"What would you do differently if you didn't get a bonus?"

The rationale behind the question is apparently Frank's belief that "[t]his notion that you need some special incentive to do the right thing troubles me."

I have some problems with the bonus structure in the financial industry. In the company that I came from, bonuses were structured in a way that the company had to do well for the bonus to be paid and it made little sense to game one year because that would increase the bonus target for the next year. At the same time, senior managers were given a deferred compensation plan that was tied to the company's long term success.

But Frank's inability to understand incentives is startling. Management of a complicated enterprise is extraordinarily difficult and not simply a function of doing some well defined "right thing." Businesses understand that giving people a stake in the enterprise's outcome motivates them to reach beyond merely doing the "right thing" and to find ways to do accomplish things that, at first look, seem unlikely.

Of course, it doesn't always work and there is a well known problem of "short termism" (my colleague Nadelle Grossman has some emerging work on this). Wall Street bonuses seem to have been poorly structured to avoid the later problem. But Frank's question, championed by TPM and local blogger Keith Schmitz, reflects ignorance and not insight.

Supraman would have been disappointed.

Graduation in churches?

When I was in first grade, there was a Lutheran church next to the Catholic school we attended. The nuns told us that it was the devil's workshop. I still remember standing across the street and trying to look inside. What was Satan up to in there?

Americans United has objected to the practice of several Wisconsin school districts to hold graduation at a local church. I have three reactions.

The first is that the fact that AU expends resources on an issue like this should reassure us that theocracy is a long way off.

Second, under existing law, AU may well be right. The Supreme Court has held that a bland nondenominational prayer at graduation violates the rights of those who do not wish to hear it. To listen to a state sponsored prayer as a condition of attending graduation constitutes, at least in the view of Justice Kennedy and four other justices in Lee v. Weisman , may be seen by a reasonable dissenter as participation in a religious exercise. It is certainly not inconceivable that entering a church could be seen as some sort of affirmation of its beliefs or, as Justice O'Connor would have put it, a dissenter might see the choice of Elmbrook Church as an endorsement of religion that makes here feel like a disfavored member of the political community. While I believe that Lee was wrongly decided, I think that there are still five votes for it on the Court and, of course, even justices who would not have joined Lee might be reluctant to overturn it.

On the other hand, perhaps Justice Kennedy would see this case differently. Perhaps entry into a church with religious symbols on display is not the same as standing or remaining silent during a prayer that is part of the graduation ceremony itself. That doesn't strike me as a particularly persuasive distinction but then I wasn't persuaded by Justice Kennedy's opinion in Lee so I may not be in the best position to plumb his thinking on the matter.

There is, incidentally, Wisconsin precedent on the matter. In State ex rel. Conway v. Joint School Board No. 6, a 1916 decision, the Wisconsin Supreme Court held that holding graduation ceremonies in a church does not violate Wisconsin's version of the religion clauses, Art. I, sec. 18 (which is worded differently than the federal provisions). Should this issue go to court, the United States Supreme Court's interpretation of the United States Constitution will take precedence.

Third, I think Conway is nevertheless instructive. As I have argued here, the (understandable) desire to protect dissenters from discomfort cannot be implemented neutrally. The Conway court seemed to recognize this when it said that "[t]he fact that certain persons desire to attend graduation exercises with their children, and that they say that being compelled to enter a church of a different denomination from that to which they belong is violative of their assured rights of conscience, does not make it so" - at least not in a way that the law must recognize. In attempting to do so, our current Establishment Clause jurisprudence is overly ambitious. As I argue in a forthcoming paper, because it is overly ambitious, it has become asymmetrical, i.e., it fails to protect religious dissenters from the comparable harm that arises from certain forms of secular speech and this infringes upon religious liberty in ways that ought to concern us. My solution is to both expand and contract the idea of nonestablishment. If the state must be sensitive to the claims of religious dissenters who believe they are coerced or made to feel disfavored by the state's secular messages, we cannot provide the type of exacting protection called for by Justice Kennedy's opinion in Lee.

Cross posted at Marquette University Law School Faculty Blog

Wednesday, February 11, 2009

To disagree is not to misunderstand

I suspect that most of the controversies that arose during last year's Supreme Court election will arise again, even as the campaign itself draws less attention. Challenger Randy Koschnick wants to talk about State v. Knapp, a case in which the court held that a sweatshirt worn by the defendant and stained with the victim's blood should not have been admitted into evidence because it was the "physical fruit" of an intentional failure to provide the warnings required by the United States Supreme Court's Miranda decision.

It's natural that Judge Koschnick would emphasize the case because it is one that has been emphasized by critics of what seemed to be emerging trends on the court prior to last year's election and because he was the trial judge in the case.

Tom Foley, the blogger known as Illusory Tenant, has tried to argue that the criticism of Knapp is inaccurate. Last spring he attacked my former student and RA Daniel Suhr for making the same criticism and now he suggests that Judge Koschnick himself does not "understand" the law.

Putting aside whether Judge Koschnick formulated the problem correctly in the Wisconsin Lawyer interview that Tom cites, Knapp does raise legitimate questions. As I explained in greater detail here, there are two Knapp decisions. In Knapp I, the Wisconsin Supreme Court relied on the US Constitution in throwing out the sweatshirt. Because it had relied on federal grounds, the state was able to ask the US Supreme Court to review the case. That Court remanded the case with instructions to the state supreme court to reconsider in light of a recent Supreme Court decision that had held that the physical fruits of a Miranda violation need not be excluded.

In that case, Patane, five of the nine justices agreed that the physical evidence need not be excluded but they didn't agree on why.

Three of the five said it was unnecessary to exclude such evidence even if it was obtained as a result of a Miranda violation and two other justices (Kennedy and O'Connor)thought it unnecessary to determine whether Patane's rights were violated or whether there is "'anything to deter' [by excluding the evidence] so long as the unwarned statements are not later introduced at trial." They said that "[a]dmission of nontestimonial physical fruits . . . does not run the risk of admitting into trial an accused's coerced incriminating statements against himself" and expressed doubt that the exclusion of reliable physical evidence could be justified by the need to deter violations of a defendant's self incrimination rights.

Now, it is possible that the Justices Kennedy and O'Connor might have ruled differently had the Miranda violation been intentional, but it seems doubtful. The Siebert case - that Tom regards as important - dealt with admitting the unwarned statement itself.

Still, that's not what made Knapp interesting. On remand, the state supreme court, which had initially based its decision to exclude on federal grounds, switched to state grounds and by doing that insulated its decision from further review in the Supreme Court.

Now, the state supreme court has every right to do that although it usually doesn't. The point is whether it ought to do it and, even if it should, when they should. In this case, the switch to state grounds seems to have been motivated by a desire to avoid what seemed to be the likely application of Patane to allow the evidence. There are rather powerful arguments that state courts ought not to do this, i.e., that they should depart from federal interpretation of cognate provisions only when there is some reason other than disagreement with the court. Others have a different view.

Now, in public debate, all of this is necessarily simplified (i.e., Judge Koschnick's statement that the court "made up" the law)and with simplification, it is always the case that some pertinent fact will be left out.

But that doesn't mean that the criticism of Knapp - or even the way that criticism is discussed in general discourse - reflects some form of ineptitude or misunderstanding.

Monday, February 09, 2009

Not so stimulating

The stimulus plan will pass with minimal GOP support and that's as it should be. The plan presents a radical departure from what the Republican Party is supposed to stand for and the best it can do now is to provide principled opposition or, as the President of Unity calls it, "distractions and politics as usual."

There is a sense, however, in which the plan is neither fish nor fowl. It is certainly not animated by supply side principles but neither does it seem to be a coherent effort to make the type of social investments that the left believes will lead to economic growth. There is, to be sure, a little bit for everybody but that's the problem. The Dems are managing to blow through a trillion dollars without coming close to solving any of the supposed "crises" that have come from years of GOP neglect.

We are left then with a sort of unadulerated retro classic Keynesian priming of the pump. Spend money. Spend it on anything. All will be well.

There are two problems. The first is that a stimulus justification would require that the spending be temporary. I suspect that the welfare spending in the bill will not be - at least not without substantial GOP gains in 2010.

The second is that this type of pump priming doesn't work. It didn't end the Great Depression. It didn't work during the post war period. It didn't work for Japan in the 90s.

A friend recently suggested that, well, the problem with the New Deal is that it was too small but WWII, when we really kicked out the jams, shows the power of deficit spending. That, he says, finally ended the Great Depression.

Maybe. But if we wanted to make this like WWII, we'd have to not only engage in massive deficit spending (more than what this package calls for) but we would have to prevent people from spending the money for four years so there would be substantial deleveraging and pent up demand and we'd have to blow up a good chunk of the EU. There would be no transfer payments and no spending on social programs.

When pressed to make a case for the plan, Obama invokes panic (we'll have a "catastrophe) and says "I won." But, as Rich Lowry says, "[i]f he had pledged in October to double federal domestic discretionary spending in a matter of weeks—including increasing the budget of the National Endowment for the Arts by a third, spending hundreds of millions more on federal buildings and throwing tens of billions on every traditional liberal priority from job training to Pell Grants—he’d have been hard-pressed to win at all."

The current economic downturn is serious but it is not - at least not yet - the worst since the Great Depression. The notion that because we have to do something we should do anything is where disasters begin.

As for transfer payments, if you believe in the liquidity trap, then transfer payments are the last thing you want because people won't spend the money. You have to spend it for them.

I'd be shocked if there isn't some improvement in the short run, but it's the longer run that concerns me.

Sunday, February 08, 2009

Songs for Valentine's week

A number of years I asked my son where the happy songs went. He didn't know or, at the time, much care. I could have asked where the love songs went. Like this:

But sometimes love was spurned.

Or couldn't be resisted.


And won.

Saturday, February 07, 2009

Give me more convenient trash pickup or give me death

After we moved from Hawley Road, I grew up in Greenfield. It appears that not much has changed.

Friday, February 06, 2009

"Since the service isn't available, you have to step up,"

So says David Walsh, chairman of the Board of Regents and member of the UW Hospital Foundation Board, about the decision to offer second trimester abortions at a clinic owned, in part, by UW Hospital and Clinics and the UW Medical Foundation. The Supreme Court has created an unfettered right to second trimester abortions so this UW affiliated entity has to provide them.

No, it doesn't.

That you have a constitutional right to something does not mean that I have to provide it. Although presumably private insurers or patients will pay for the abortions and the doctors who perform them are on the state payroll, their compensation for doing so will come from a private source. But, of course, there is more to it than that. These doctors will be using what is, at least in part, state funded infrastructure and support staff.

The proposal may violate the law. Pursuant to WIS. STAT. § 20.927, no funds of the state or of any state agency may be paid to either an physician, surgeon, hospital, clinic or other medical facility for the performance of an abortion. Under WIS. STAT. § 20.9275, no state or federal funds from various sources may be used for a program that either provides, encourages, or refers for abortions.

The UW claims that state funds won't "directly" subsidize abortions but the statutory language is rather broad and its not clear that the provision of abortions that do not fall within certain statutory exceptions in a clinic that operates, at least in part, with state funds won't run afoul of the statute.

Beyond that, it seems to me that the same moral misgivings that make it almost impossible to find a doctor that will do these suggest that the state ought not to undertake them in our name.

Thursday, February 05, 2009

Misinformation comes in all forums

I am close to being a first amendment absolutist. While some of the stuff that we see in the course of judicial elections tries my commitment, I am opposed to almost all regulation of campaign speech. As we face another Supreme Court election in Wisconsin, I fear my commitment may be tried again (although it is, at this point, unclear whether there will be much of a race).

I a judicial election agnostic. I have often said that campaign speech in judicial election will often make me, as someone who studies and loves the law, cringe. But just when I am ready to dismiss the idea of elected judges, I think of the last confirmation battle over a Supreme Court or controversial lower court nominee and I am back on the fence.

Last night, while preparing my award winning chili, I read a review by Andrew McCarthy of Robert's Bork latest book in The New Criterion. McCarthy recalls Senator Kennedy's invocation of "Robert Bork's America" as one in which "women would be forced into back-alley abortions, blacks would sit at segregated lunch counters, rogue police could break down citizens' doors in midnight raids, schoolchildren could not be taught about evolution, writers and artists could be censored at the whim of the government."

This was, of course, every bit as nonsensical as the ads with dead bodies, empty swings and slamming jail doors. Not only did it stretch Bork's jurisprudence into something that he himself would not recognize, it suggests that, if a desired policy is not imposed by the judiciary, it will not be adopted at all. Bork does not believe in a constitutional right to abortion, but neither does he believe in a constitutionally mandated prohibition of abortion. One can certainly disagree with Bork's judicial philosophy, but wasn't Kennedy's attack just as misleading as the suggestion that a judicial candidate delights in the release of criminals?

Cross posted at Marquette University Law School Faculty Blog

Wednesday, February 04, 2009

Obama, Barber of York

There's an interesting article on the stimulus package in the Weekly Standard arguing that the current package manages - all at once - to be too small, too late and misdirected.

The public response to the package suggests that the change voters sought is not as deep as the House Democrats thought it was. As has become quite clear, the package is a grab bag of full of whatever was on the House Democrats' Christmas lists and there is really no coherent theory behind it except a rather simple-minded and somewhat outdated Keynesian assertion. As a friend e-mailed last night "[f]rankly it doesn't much matter what government spends it on ...." This is supposedly so because there is a liquidity trap in which people just don't want to borrow and spend so the government has to do it for them.

Another friend responded by e-mailing this paper by John Cochrane at the University of Chicago. He points out, contra Paul Krugman, that Keynesian fiscal stimulus has been largely discredited.

This is not fancy economics. Most of my arguments come from simply asking where the money is going to come from, simple arithmetic. Why are so many economists said to support fiscal stimulus? Am I some sort of radical? No, in fact economics, as written in professional journals, taught to graduate students and summarized in their textbooks, abandoned fiscal stimulus long ago.

Keynesians gave up by the 1970s. They saw that fiscal programs took too long to implement. They especially disparaged temporary measures, which would not stimulate the consumption that classic Keynesians thought was important to stimulus. Every undergraduate text has repeated these conclusions for at least 40 years. I learned this view from Dornbusch and Fisher’s undergraduate text, taught by Bob Solow, in the 1970s. Even the optimistic projections by the Obama economic team say that fiscal stimulus will not really kick in for two years, validating the durability of this view.


In textbooks and graduate curriculums across the country, stimulus is presented at best as quaint “history of thought” with no coherent defense that one should believe it in the context of modern economics. (For example, David Romer’s classic graduate text Advanced Macroeconomics) At worst, it is presented as a classic fallacy. (My view of the treatment in Tom Sargent’s,Dynamic Macroeconomic Theory and Sargent and Ljungqvist’s Recursive Macroeconomic Theory).


These ideas changed because Keynesian economics was a failure in practice, and not just in theory. Keynes left Britain 30 years of miserable growth. Richard Nixon said “we’re all Keynesians now” just as Keynesian policy led to the inflation and economic dislocation of the 1970s, unexpected by Keynesians but dramatically foretold by Milton Friedman’s 1968 AEA address. Keynes disdained investment, where we now all realize that saving and investment are vital to long run growth. Keynes did not think at all about the incentives effects of taxes. He favored planning, and wrote before Hayek reminded us how modern economies cannot function without price signals. Fiscal stimulus advocates are hanging on to a last little timber from a sunken boat of ideas, ideas that everyone including they abandoned, and from hard experience. If we forget all that, we could repeat the economics of postwar Britain, of spend-and-inflate Latin America, and of bureaucratic planned India.

Part of the problem, according to Cochrane, is that people will spend the money that the government borrows and places in their pocket only if they believe that the ensuing public debt will not be repaid, i.e., will be inflated away. Otherwise it still makes sense to hang on to the money in anticipation of coming tax increases or spending reductions. But that has its own difficulties:

In sum, the US needs to keep its fiscal powder dry. The Government’s borrowing and taxing ability is limited. When the crisis fades, we will need fiscal resources to unwind a massive increase in government debt. If the debt corresponds to good quality assets, that’s easy. If the debt corresponds to government investments yielding a stream of tax revenue, that’s ok. If the new debt was spent or given away, we’re in more trouble. If the debt will be paid off by higher future tax rates, the economy can be set up for a decade or more of high-tax and low-growth stagnation. If the Fed’s kitty and the Treasury’s taxing power or spending-reduction ability are gone, then we are set up for inflation; essentially a default on the debt. Needless to say, no amount of monetary or interest rate policy – fooling with the split of government debt between money and treasury bills – would stop that inflation. Trading money for debt will do no good when people want to dump both equally.

Cochrane believes that tax rate cuts can help but only (and here's the part Bush missed) if you deal with the structural deficit. Otherwise, they are seen as temporary.

This doesn't mean, in his view, that government can do nothing. Given the demand for treasuries, government can borrow to meet it but only if, in doing so, it acquires valuable assets or creates assets that lead to economic growth. That's what's missing from the Obama/Pelosi package.

Sunday, February 01, 2009

Music for Super Bowl Sunday

It's Super Bowl Sunday - XLIII. I remember I, except it was not I and it was not the Super Bowl (although people had started to call it that), it was the NFL-AFL World Championship Game. We all know what happened.

The Packers did not do as well this year, but the Vikings still suck.

As a boy, I loved NFL Films and John Facenda reciting the week's highlights as if he were calling play by play for the landing at Normandy. The music was brilliant. No John Facenda here, but some of the music including "The Classic Battle" and "Raiders." Great scenes from the Ice Bowl begin around 2:30. This is for the Reddess:

But how about some great Super Bowl musical moments? (Sorry, no costume malfunctions.) Whitney Houston during the first Gulf War.

And U2 after 9-11.