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MMT On Inflation

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Posts in this series
The Deficit Myth By Stephanie Kelton: Introduction And Index
Debunking The Deficit Myth

The second chapter of Stephanie Kelton’s The Deficit Myth deals with inflation. In Chapter 1, Kelton explains that the deficit is not a constraint on government spending. Instead, inflation is the important constraint. A deficit does not prove that the federal government is overspending. Only an increase in inflation proves Congress is overspending. Kelton says Congress shouldn’t tax and spend so as to deliver a balanced budget. Congress should spend and tax so as to deliver a balanced economy, one that serves all of us. She says that historically we have not done this, that we have chosen to focus of deficits and in so doing our economy has not served us well.

Definition and Description of Inflation

Inflation means a continuous rise in the price level. A bit of inflation is considered harmless and even something economists like to see in a healthy, growing economy. But if prices start rising faster than most people’s incomes, it means a widespread loss of purchasing power. Left unchecked, this would mean a decline in society’s real standard of living. In extreme cases, prices can even spiral out of control, gripping a country in hyperinflation. P. 44.

The danger of eroding incomes explains why everybody worries about inflation, and explains why politicians can use the threat of inflation to terrorize voters. It works, even though the problem for more than a decade hasn’t been too much inflation, it’s been too little. Ever since the Great Crash inflation has been less than 2% annually despite efforts of the Fed.

Kelton says that economists think of inflation as either cost-push or demand-pull. Demand-pull inflation occurs when consumer spending rises faster than the economy can produce goods and services. That hasn’t been a problem for a long time. Cost-push inflation can arise from disasters, which reduce the supply of something; from pricing power, as in the case of Big Pharma with its patents and trade secrets; or from workers gaining market power and demanding higher wages which businesses pass on to consumers. That last one is the only fear mainstream economists suffer, as far as I can tell.

The dominant theory of inflation stems from Milton Friedman’s monetarism:

According to Friedman, “inflation is always and everywhere a monetary phenomenon.” What he meant was that too much money is the culprit in any inflationary episode. If prices weren’t stable, it was because the central bank was trying to force the economy to create too many jobs by allowing the money supply to increase too rapidly.

The early neoliberal Friedman insisted that the Fed must never interfere with the workings of the market. Specifically, the Fed should not try to reduce unemployment below a certain level, which came to be called NAIRU, the non-accelerating inflationary rate of unemployment. Friedman thought there had to be some minimum level of unemployment in the economy. [1] The Fed bought into this view, as did politicians of all stripes. They all agreed that to keep prices stable, the US has to accept a certain level of unwanted unemployment. And to be on the safe side, maybe a bit higher level of unemployment. In practice, Congress dumped the problems of inflation and unemployment on the Fed.

But problems arose. The NAIRU isn’t visible or measurable. It can only be seen in retrospect. And now we are pretty sure there isn’t a clear relationship between inflation and unemployment, as the Fed assumed. [2] The Fed Chair, Jerome Powell, freely admitted to Rep. Alexandria Ocasio-Cortez that the Fed has been wrong about NAIRU, but defended its use on the grounds that “We need to have some sense of whether unemployment is high, low or just right.” P. 53.

2. The Problem of Unemployment

It turns out that the Fed used the purported correlation between inflation and unemployment as its primary tool for controlling inflation, ignoring all other causes of inflation. When the economy heated up and unemployment dropped, workers gained market power, and their share of national income increased. That led the Fed to raise interest rates leading to a tightening of the economy and usually a recession, as the following chart shows.

Gray bars indicate recessions.


Kelton calls this a “human sacrifice”, forcing some people out of the workforce when they want to work and can be productive. She thinks we are asking too much of the Fed. It can’t spend money into the system; only Congress can do that. All the Fed can do is change the cost of borrowing. If unemployment is too high, the Fed can make borrowing cheaper, but it can’t force anyone to borrow. Usually when unemployment is high, no one wants to borrow. I note that this was what happened after the Great Crash. The Fed cut interest rates to zero and lowered bank reserve requirements, hoping to increase money going into the economy. It didn’t work.

3. The Job Guarantee

Kelton argues that a better way to deal with unemployment is a job guarantee. Every person who wants to work should be able to get a decent job with decent pay and decent benefits. If the private sector won’t provide those jobs, the government should. [3] Kelton discusses this idea and its foundations.

It would probably be impossible for Congress to monitor the economy closely enough to manage full employment by tweaking taxes and spending. A job guarantee would act as a safety-valve and an automatic stabilizer for the economy and help solve this problem, leaving the Fed free to focus on inflation. If the private sector needs all the workers it can find them. If not, the government hires people to do jobs that need doing. There is plenty of work that needs doing, and, as Kelton pointed out elsewhere, we can always use more flowers in our parks and boulevards.

4. Preventing Inflation

So how should Congress budget knowing that the only effective constraint on spending is inflation? What would change? The way Congress currently works is that every bill that calls for expenditures gets a score from the Congressional Budget Office that assesses the impact of the expenditure on the deficit over a ten-year period. If inflation were the constraint, then the CBO would offer a score based on the probable impact of the expenditure on inflation. If the economy is, as now, operating well below its capacity for producing goods and services, the possibility of inflation would be low.

If the economy is close to capacity, either as a whole or in part related to the area of expenditures, then Congress has to make hard calls. How important is the expenditure? Can we create “fiscal space” for the expenditure with taxes? For example, in the case of the entire economy humming along, a general income tax hike would take money out of most people’s hands so they would not be buying as much, leaving room for the government to buy more. If there is a bottleneck, a more focused tax or some other step might be necessary.

Conclusion

MMT recognizes that inflation is a crucial problem. It shows how it arises and how we should protect ourselves from it.

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[Graphic via Grand Rapids Community Media Center under Creative Commons license-Attribution, No Derivatives]

[1] Marx said that the reserve army of labour is a necessary part of capitalism. Hmmm.

[2] This relationship is embodied in the Philips Curve. I discuss it here.

[3] Other economists favor a universal basic income. Both have the added benefit of freeing workers from abusive or irritating employers. Your family won’t starve if you walk out on a bad situation.

Given Call for War, Pakistan’s Parliament Chose Peace. Will US Congress Ignore Call for Peace, Choose War?

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As Congress here in the US creeps ever closer to amassing a veto-proof margin for war with Iran by keeping sanctions in place even after a final P5+1 agreement would end them, it comes as especially refreshing that Pakistan’s Parliament has expressed clear sentiment against committing troops to a foreign exercise in folly. Especially remarkable is that this blunt refusal in the face of the Saudi request for Pakistani troops in Yemen comes only 13 months after the Saudis were found to have been the source of a critical $1.5 billion infusion of support when Pakistan’s economy was teetering.

Tim Craig gives us the essentials of Parliament’s move:

Pakistan’s parliament voted unanimously Friday to remain neutral in the conflict in Yemen, a major blow to Saudi Arabia as it seeks to build support for its offensive against the surging Houthi rebels there.

The parliament’s decision came after five days of debate in which lawmakers expressed major concern that Pakistan’s 550,000-man army could become entangled in an unwinnable conflict.

On Monday, Pakistan’s defense minister, Khawaja Muhammad Asif, said Saudi Arabia had requested that Pakistan send troops, warships and fighter jets to help it battle the Iranian-backed rebels in Yemen. But several Pakistani political leaders were strongly opposed to the request, saying the crisis in Yemen didn’t pose an immediate threat to Saudi Arabia.

The next paragraphs provide sharp contrast between the US Congress and Pakistan’s Parliament:

Instead, the resolution approved by Pakistan’s parliament warned that the Yemen crisis “could plunge the region into turmoil” if a negotiated peace and settlement was not reached soon.

“This bombing needs to be stopped because, as long as this is happening, the peace process can’t be launched,” Mohsin Khan Leghari, a Pakistani senator, said on the floor of parliament Friday.

A unanimous resolution against involvement in a foreign conflict that points out that Pakistan’s involvement “could plunge the region into turmoil”. Just wow. The US has sown turmoil on so many fronts throughout the Muslim world recently and yet Congress not only doesn’t see their own role in that turmoil but instead are doing their best to overcome the one opportunity we have there of establishing a peace process. I can’t think of a more damning indictment of Congress now than to put this move by Pakistan’s Parliament alongside Congress’ attempt to derail the Iran nuclear agreement. Given a call for war, Pakistan’s Parliament chose peace. Given a call for peace, the US Congress may still choose war.

For more details on the various forces at play in Yemen, this piece by Sophia Dingli at Juan Cole’s blog lays things out clearly.

The full text of the resolution can be found here.

On Day Senate Approved $500 Million for War in Syria, UN Announced $352 Million Funding Shortfall for Feeding Syrian Refugees

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A recent theme of mine has been that most of the time, the only response the US can come up with for a crisis anywhere in the world is to ask “Which group should we arm?” Despite ample evidence that this inane desire to train and equip various groups around the world always comes back to bite us in the ass, the US is intent, once again, on training and arming “moderate” rebels in Syria. Never mind that it has been shown, repeatedly, that the so-called “moderates” in Syria are anything but, as they have demonstrated by eating an opponent’s heart and carrying out multiple beheadings.

The one time the US avoided this approach and instead relied on diplomacy was a huge success. Syria’s declared chemical weapons have been removed from the country and destroyed despite the difficulty of this process taking place while the civil war raged. Choosing to ignore that clear success, the US is determined to make the situation in Syria infinitely worse by pouring this renewed effort into training and arming rebels. It is very easy to predict that this effort will result in radicalizing a whole new generation of fighters determined to attack the US precisely because of how it is getting involved in the Syrian civil war.

The flip side to the question of “Which group should we arm?” should be “What can we do to make the lives of the citizens of this region better?” In Syria and the surrounding countries affected by the masses of citizens who have fled the war, that answer is very clear. These refugees need food. They need shelter. They need basic medical care. Their students need schools, as estimates now say close to three million Syrian children are not in school.

Sadly, last Thursday, on the very day that the US Senate went along with the vote the previous day in the House to make $500 million available for this doomed effort to train and arm rebels, the United Nations’ World Food Programme announced that due to funding shortfalls, food allocations for Syrian refugees will be cut drastically in October and November and may not be available at all in December:

“We have reached a critical point in our humanitarian response in Syria and in neighbouring countries and unless we manage to secure significant funding in the next few days, I am afraid we will have no choice but to scale back our operation,” said Muhannad Hadi, WFP’s Regional Emergency Coordinator for the Syrian crisis.

/snip/

In Syria from October, WFP will continue to provide food to more than 4 million people, but the food parcel will be smaller, providing less than 60 percent of the nutritional value recommended in emergencies in October and cutting even more in November. For December, WFP has no funding available for programmes in Syria.

The group faces similarly catastrophic shortfalls in the countries surrounding Syria where citizens have fled the violence.

The total funding shortfall is staggering:

WFP requires US$352 million for its operations as a whole until the end of the year, including US$95 million for its work inside Syria and US$257 million to support refugees in neighbouring countries.

So the US is throwing away more money than is needed to feed Syrian refugees through the end of the year on a plan that will increase violence and likely lead to the deaths of many of these same refugees from starvation, exposure to harsh winter conditions and “collateral damage” from poorly targeted missiles.

Consider the current plight of Syrian families. Their country is ripped apart by fighting that has raged for years. The bulk of the citizens have merely tried to avoid the violence, but it has rained down on them from all sides of a war that has countless groups taking part. Now, on the very day that the largest relief agency in the world announces that it will have to cut back on its already inadequate assistance, the US moves forward with a plan to waste more money than the World Food Programme needs in a way that will make their lives measurably worse.

The question is not whether starving Syrian refugees will be radicalized when poorly targeted US missiles kill innocent family members, as that is guaranteed. The only question is just how many of these newly radicalized enemies this latest clusterfuck of a plan will generate.

The Day of Sentencing Judgment for Scott Bloch

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When we last left Scott Bloch, the former Bush attorney who was the appointed head of the Office of Special counsel (OSC), it was the original date for his sentencing. The court delayed entry of sentence to further investigate the full extent of his criminal conduct. It appeared that, after strong letters like from this blog and attorney Debra Katz, who represents several former OSC employees and good government groups, the court had real concerns about the entirety of Bloch’s vast criminal conduct compared to the sweetheart whitewashing collusive plea the DOJ was giving him.

Today, the court showed it really was not nearly as concerned as had been hoped. Scott Bloch has just been sentenced to one day in jail and two years probation. The single measly day in jail was stated by the court to be due to the “seriousness” of the offense. What a joke. I guess we should just be thrilled that, unlike James Clapper, Bloch was prosecuted at all. Still, it is a grossly soft sentence considering the entirety of Bloch’s admitted criminal conduct.

Just so the record is complete after all these years, here are the significant documents documents lodged with the court between the first sentencing date and today:

1) Bloch’s supplemental sentencing memorandum

2) DOJ’s supplemental sentencing memorandum

3) Bundle of additional sentencing letters from Bloch supporters

4) Supplemental sentencing letter from this blog

One last thing should be noted, and that is the sheer and craven hutzpah of the Department of Justice in whitewashing this matter. I refer to their supplemental memorandum (item 2 above), but specifically to footnote 1 therein that baldly claims other members of the public and victims aggrieved by Bloch just don’t have all the secret facts that the government was able to collect. It was truly an amazing thing to see the government saying they had the hidden facts mitigating Bloch’s conduct. Simply astounding and, as stated in the responsive letter to the court (item 4 above), it was unconscionable:

The bald faced hubris of the DOJ in footnote 1 of their “Supplemental Memorandum In Aid Of Sentencing” lodged in docket Number 21 to claim, and rely on, uncharged and unstated evidence and facts to mitigate the sentence of the defendant is far the other side of unconscionable and shocking. Hidden considerations cited by the government, in the face of the shocking record of conduct by defendant Bloch, are an insult to the court, and the citizens and rule of law it is designed to protect. In fact, the recitations of fact by the government itself demonstrates how absurd their protestations for mitigation, much those of Bloch himself in his supplemental sentencing memorandum (Docket Number 22), really are.

The perfidy, and obstruction to the American form of government, by Executive Branch officials upon the function of the Congress is a scourge that cannot be tolerated by the American people or the courts of the United States. After the questions germinated by ODNI Clapper’s testimony, there has been a sudden and welcome bi-partisan return of healthy concern over the conduct of Executive Branch officials in front of Congress.

This court stands at the crossroads on a seminal issue to the Constitutional health of these United States and the health of the separation of powers in our form of government. The problem of disdain for, and duplicity in front of, Congress must be addressed and a precedent set for the future. Mr. Bloch violated the trust and damaged the people and their lawfully elected representatives. Frankly the plea in this case is outrageous and should never be accepted, it is not in the interest of justice. But, if it is to be followed, and sentenced thereon, a precedent should be set and an appropriate sentence handed down for the egregious conduct of Scott Bloch.

If not in the instant case, then where? If not now, then when?

The answer is Article II Executive Branch officials and attorneys simply cannot, and will not, be prosecuted for perjury and obstruction of Congress, and neither the Article I Congress, nor the Article III Courts, seems to particularly care that such violation of constitutionally protected powers and prerogative is occurring habitually. It is a sad comment.

Scott Bloch Sentencing Blocked By The Court

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I have been a bit busy lately, so this is a tad late; but I should probably give the update on the Scott Bloch criminal sentencing that was scheduled for 9:30 am Monday morning May 13 in DC District Court in front of Judge Robert L. Wilkins. As you will recall, this blog has covered the Bloch case closely over the years due to its symbolism for government accountability and/or lack thereof.

The most recent coverage was immediately prior to the sentencing, and was in the form of a comprehensive post entitled “Former Bush Special Counsel Scott Bloch Bullies Journalists and Threatens 1st Amend Speech Before Criminal Sentencing”. As promised, a copy of said post was mailed to the court and it was entered on the docket. Several others sent letters as well, such as here for example.

The upshot is that Judge Robert L. Wilkins heard the voices. In what I can only describe as truly commendable, yet still refreshingly surprising, this is what happened at sentencing as described by Ann Marimow of the Washington Post:

The legal odyssey of Scott J. Bloch, the former head of the federal agency that protects government whistleblowers, continued Monday when a federal judge balked at proceeding with sentencing because of what he called an “improperly sanitized version of events.”
….
But U.S. District Judge Robert L. Wilkins chastised attorneys on both sides for presenting a narrow account of Bloch’s actions that the judge said doesn’t fully describe the conduct at issue. Wilkins said he was uncomfortable issuing a sentence until a fuller description of Bloch’s actions was in the record.

Sentencing documents, Wilkins noted, make little mention of Bloch’s previous deal with the U.S. Attorney’s Office in which he pleaded guilty to a misdemeanor charge of contempt of Congress.
….
In the current case, federal guidelines call for a sentence from zero to six months in prison. But prosecutors have agreed not to oppose a period of probation and want Bloch to pay a $5,000 fine and complete 200 hours of community service.

Wilkins suggested Monday, however, that he intends to consider Bloch’s conduct related to the previous case, which could expose him to jail time. The judge pointed specifically to Bloch’s position as a presidential appointee, a “position of public trust, operating with little oversight.”

Bloch’s sentencing hearing has been rescheduled for June 24.

We will try to do another update on status again before the next sentencing date on June 24. But, for now, hat’s off to Judge Robert L. Wilkins for hearing the voices of the public who object to the whitewash that was being applied to the misconduct in high office by Scott Bloch. Maybe there is hope for this Rule of Law thing after all.

Former Bush Special Counsel Scott Bloch Bullies Journalists and Threatens 1st Amend Speech Before Criminal Sentencing

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CryingJusticeWhen this blog last substantively left the continuing saga of Bush/Cheney Special Counsel Scott Bloch, it was with these words:

So, between August 2, 2011 and December 21, 2012, a period of nearly a year and a half’s time, the DOJ has done nothing whatsoever in furtherance of prosecuting Scott Bloch. Until today. And the vaunted Department of Justice has, on the Friday before the Christmas holiday…..filed a Motion to Dismiss. However, that is not the end of the story, as clause 5 of the Motion to Dismiss contains this language:

Concurrent with this Motion to Dismiss, the government is filing a new information.

Well, not quite concurrent, as the Motion to Dismiss was filed mid to late morning, and the new information was just now made public. The new charge, a misdemeanor, is pursuant to 18 USC 1361 Depredation of Government Property or Contracts. The factual basis is made out from the “seven level wiping” Bloch caused to be done. Here is the new information just filed.

Yes, that is the “Reader’s Digest” version of how Scott Bloch came to be where he is now….awaiting sentencing in the United States District Court for the District of Columbia. For a crime that barely even references, much less is indicative of, the actual acts he committed against the United States Government, and the citizens it represents.

But, Bloch is indeed now facing sentencing on the latest cushy plea he has been afforded by the Department of Justice; sentencing scheduled for Monday May 13, 2013, less than one week from today. Here is Defendant Bloch’s sentencing memorandum, and here is the curiously collusive memorandum from the DOJ, who simply cannot stand for any Article II Executive Branch attorney being sent to jail/prison for lying to Congress because, seriously, many more might be in jeopardy if that was the case and precedent.

So, what is Mr. Scott Bloch doing? Taking his medicine quietly for having been given the gift plea by the DOJ to a misdemeanor after he actually committed such acts that appear by all legal rights to warrant felony allegations? Allegations as were described the last time Bloch was tried to be handed such a gift horse plea by the DOJ as:

…felony crimes Bloch could have been, and should have been, charged with are staggering; including obstruction of justice, false statements, perjury, willful destruction of government property and Federal Records Act violations. But Defendant Bloch made a deal to plead to one little misdemeanor with the guarantee he would be considered under the most favorable sentencing guideline conditions imaginable.

Nothing has changed; not a single underlying fact has changed in the least, and Bloch still stands Read more →

The SCOTUS Healthcare Decision Cometh

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[UPDATE:Okay, from the SCOTUSBlog “The entire ACA is upheld, with exception that federal government’s power to terminate states’ Medicaid funds is narrowly read.” Key language from the decision on the mandate:

The money quote from the section on the mandate: Our precedent demonstrates that Congress had the power to impose the exaction in Section 5000A under the taxing power, and that Section 5000A need not be read to do more than impose a tax. This is sufficient to sustain it.

And, boy howdy, was I wrong. I steadfastly maintained that CJ Roberts would never be the swing vote on a 5-4 majority, but would only join a liberal majority on the heels of Tony Kennedy. WRONG! The mandate survives solely as a result of Roberts and without Kennedy. Wow.

Final update thought. While I think the mandate should have been constructed as a tax, it clearly was not in the bill passed. You want to talk about “legislating from the bench”? Well hard to see how this is not a remarkable example of just that. I am sure all the plebes will hypocritically cheer that, and fail to note what is going on. Also, if the thing is a “tax” how is it not precluded as unripe under the AIJA? don’t have a fine enough reading of the opinion – read no reading yet – to discern that apparent inconsistency.

As to the Medicaid portion, here is the key opinion language on that:

Nothing in our opinion precludes Congress from offering funds under the ACA to expand the availability of health care, and requiring that states accepting such funds comply with the conditions on their use. What Congress is not free to do is to penalize States that choose not to participate in that new program by taking away their existing Medicaid funding.

Oh well, people on the left have been crying for this crappy law, now you got it. Enjoy. I will link the actual opinion as soon as it is available.

And here is THE FULL OPINION]

Well, the long awaited moment is here: Decision Day On The ACA. If you want to follow the live roll out of the Supreme Courts decisions, here is a link to the incredibly good SCOTUSBlog live coverage. Coverage starts at 9 am EST and the actual Court proceedings starting at 10 am EST.

This post will serve two functions. The first is to lay just a very brief marker, for better or worse (undoubtedly the latter I am afraid), going into decision day, hour and moment, and a ready location to post the decision of the court and link the actual opinions. The minute they are known and links available, they will be put here in an update at the top of the post. That way you can start the discussion ahead of the decisions, lay a record of your predictions ahead of time AND have a place to immediately discuss the rulings as they come in and immediately afterward.

Many friends and other pundits involved in the healthcare SCOTUS discussion have been working for weeks on alternative drafts of posts and articles to cover every contingency so they can immediately hit the net with their takes. That is great, and some of them will be a service. But I have just been too busy lately to expend that kind of energy on something so canned. Sorry about that. So my actual analysis and thoughts will mostly have to come later, but they will be on the merits, such as they may be, when the actual decisions are in. Also, I will be in comments and on Twitter (under “bmaz” of course).

Okay, with the logistics out of the way, I have just a few comments to lodge on the front end of this gig. First off, the ACA/PPA started off as truly about health insurance, not about health care from the start, and that is, still, never more true than today. Marcy laid out why this is, and why a LOT of people may get, or be forced into, purchasing health insurance, but there is a real question as to whether they will be able to afford to actually use what they will be commanded to buy. See here, here and here as a primer. Those points are pretty much as valid today as they were back when she wrote them.

Secondly, I have no real actual idea how the ruling will come down as to the merits. But, just for sport and grins, I guess I should take a stab at what I think after all the briefing and oral arguments, so here goes. The Anti-Injunction Act argument that the issue is a tax matter and therefore cannot be ripe for consideration until implemented and applied, will be rejected. The individual mandate is struck by a very narrow majority in a very carefully worded opinion written by John Roberts. The remainder of the ACA is deemed severable and is left to stand, and the Medicaid provisions are left intact, again by a narrow majority. Here is the thing, I would not bet one red cent of my own money on the foregoing; but if I could play with your money, I guess that is how I would roll. Maybe. Note that, before oral argument, my prediction was that the mandate would be upheld; I may regret not sticking with that call.

The real $64,000 question is the mandate, and that could just as easily be upheld, in which case it will likely be by a 6-3 margin (I still think Roberts writes the opinion, and if that is to uphold that means it will be 6-3). Here is what I will unequivocally say: however this goes down as to the mandate, it is a very legitimate issue; the arguments by the challengers, led by Randy Barnett, are now, and always were, far more cognizant than most everyone on the left believed or let on. I said that before oral argument, I said that after oral arguments and I say that now. Irrespective of what the actual decision turns out to be. Oh, and I always thought the hook liberals desperately cling to, Wickard v. Filburn, was a lousy decision to start with.

I have been literally stunned by the ridiculous hyperbole that has been blithely bandied about on the left on the ACA cases and potential striking of the mandate. Kevin Drum says it would be “ridiculous”, James Fallows says it would be a “coup!”, Liz Wydra says the entire legitimacy of SCOTUS is at issue, So do the Jonathans, Chait and Cohn. A normally very sane and brilliant guy, Professor David Dow, went off the deep end and says the justices should be impeached if they invalidate the mandate. The Huffington Post, and their supposed healthcare expert, Jeffrey Young, ran this insanely idiotic and insulting graphic. It is all some of the most stupefyingly hyperbolic and apoplectic rubbish I have ever seen in my life.

Curiously, the ones who are screaming about, and decrying,”politicization of the Court”, my colleagues on the left, are the ones who are actually doing it with these antics. Just stop. Please. The mandate, and really much of the ACA was ill conceived and crafted from the get go. Even if the mandate is struck, the rest of the law can live on quite nicely. Whatever the decision of the court, it will be a legitimate decision on an extremely important and very novel extension of Commerce Clause power that had never been encountered before.

One last prediction: Irrespective of the outcome today, the hyperbole will continue. So, there is the warm up. Let’s Get Ready To Rumble!

The Un-Patriot Acts of Harry Reid

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As you undoubtedly know by now, the furious rush to extend the Patriot Act is once again in full swing. The Patriot Act is an odious piece of legislation that was birthed by fearmongering and the imposition of artificial drop dead, if we don’t pass this today the terrortists are gonna OWN us, artificial time emergencies. Then it was extended the same way. That is not a bug, it is indeed a feature.

When the government, through its executive and compliant Congress, wants to cut surveillance and privacy corners out of laziness and control greed, and otherwise crush the soul of the Constitution and the 4th Amendment, demagoguery and fake exigencies are the order of the day. And so they are again. Oh, and of course they want to get out of town on their vacation. And that is what has happened today.

Senators Wyden and Mark Udall had a superb amendment proposed to narrow the Patriots core provisions ever so slightly so as to maintain some Constitutional integrity. Marcy explained the details here. But, because that would engender real and meaningful debate on the efficacy of Patriot, it had to be quashed, and that is exactly what has occurred. Harry Reid and Diane Feinstein gave a couple of hollow and meaningless “promises”, of unknown content, to Wyden and Udall and strongarmed them into withdrawing their amendment. The citizens are simply not entitled to meaningful debate on their Constitution.

Spencer Ackerman, over at Wired’s Danger Room, shredded Reid for his unPatriotic act. Gloriously:

Remember back when a Republican was in the White House and demanded broad surveillance authority? Here’s Reid back then. ”Whether out of convenience, incompetence, or outright disdain for the rule of law, the administration chose to ignore Congress and ignore the Constitution,” Reid said about Bush’s warrantless surveillance program. When Bush insisted Congress entrench that surveillance with legislation in 2008, Reid turned around and demanded Bush “stop fear-mongering and start being honest with the American people about national security.” Any claim about the detrimental impact about a lapse in widespread surveillance were “scare tactics” to Reid that ”irresponsibly distort reality.” (Then Reid rolled over for Bush.)

That’s nowhere near the end of Reid’s hypocrisy here. When the Senate debated renewing the Patriot Act in 2006, Reid, a supporter of the bill’s surveillance procedures, himself slowed up the bill’s passage to allow amendments to it — the better to allow “sensible checks on the arbitrary exercise of executive power.” Sounding a whole lot like Rand Paul, the 2006-vintage Reid registered his “objection to the procedural maneuver under which Senators have been blocked from offering any amendments to this bill” and reminded his colleagues, ”the hallmark of the Senate is free speech and open debate.”

Reid could hardly be more of an opportunist here. He favors broad surveillance authorities — just as long as those scary Republicans stop being mean to liberals. When Attorney General John Ashcroft warned civil libertarians that their “phantoms of lost liberty… only aid terrorists,” Reid told CNN on December 8, 2001 that “people should just cool their jets” — but not that Ashcroft was actually, you know, wrong. By contrast, the ultra-conservative pundit Bob Novak said Ashcroft made “one of the most disreputable statements I have heard from an attorney general.”

Exactly right. But it gets worse. Rand Paul also had an amendment, but he, unlike our fine Democratic Senators, was not willing to quietly go off into the night. Paul stood his ground and now Reid has agreed to let Paul’s amendment to exempt gun purchases from Patriot’s scope have a vote:

Senate Democratic leadership seems poised to acquiesce to Sen. Rand Paul’s (R-Ky.) demand that the chamber vote on an amendment that would restrict national security officials from examining gun dealer records in their efforts to track potential terrorists.

The Kentucky Republican had been insisting that such language at least receive a vote as an addition to the extension of the USA Patriot Act.

So, that is where the Democratic party, Democratic Senate Leadership and the Obama Administration are on protecting the Constitution and its 4th Amendment. Sane and intelligent amendments to narrow focus and appropriately protect American’s privacy are squashed like small irritating bugs under a hail of fearmongering and demagoguery – from Democratic Leadership – and terrorists’ rights to buy guns with impunity and privacy are protected because just one GOP senator has the balls to actually stand up and insist on it.

Hanoi Harry Reid is on point and leading this clown car of civil liberties insanity, and so deserves a healthy chunk of the blame, but he is certainly not alone. For all the noise they made, why cannot Ron Wyden and Mark Udall stand up in a similar fashion? Where are the other Democrats who used to have such alarm when it was the Bush/Cheney Administration doing these things? Where is Russ Feingold, I miss him so, but I am sure that Obama and Reid are glad he is gone on days like today. Exactly why Feingold was, and is, so important.

UPDATE: There is late word Reid may have talked Mitch McConnell and GOP Senate leadership into putting a clamp on Rand Paul and holding up his amendment debate demand. We shall see.

Scott Bloch Headed To Prison

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[UPDATE: Bloch was sentenced to one month prison, one year probation and 200 hours of community service. His attorney indicated they will appeal, which could be interesting since the plea appears to, on its face, disallow appeal. And the saga of Scott the Blochhead rambles on…..]

Since mid-February an important, but little noticed, criminal case has been playing out in DC District court in which former Bush/Cheney administration Special Counsel Scott Bloch is charged with criminal contempt of Congress pursuant to 2 USC 192. As I summarized in an earlier post:

As you will recall, former former Bush/Cheney Administration Special Counsel Scott Bloch destroyed evidence by wiping government computers clean, lied to Congress about it and conspired with the DOJ to minimize the conduct and slough it off with a sweetheart plea deal. Then, outrageously, when the court indicated it was inclined to impose the mandatory minimum month in jail, which was mandated by the statute Bloch pled guilty to, Bloch and the DOJ conspired to get the plea, which had already been accepted and entered by the court, withdrawn.

When Bloch and DOJ both worked together to get the plea withdrawn, and frustrate justice, the egregious nature of the attempt was documented here in a fully argued and supported post published on Tuesday March 1, 2011. Subsequent to that post, the court also found questions with the attempt to withdraw the plea and ordered Bloch to file a reply supporting the attempt.

At the previous date set for sentencing, on March 14, the court gave Bloch one last shot to brief his way out of the hole he dug for himself and ordered a tight briefing schedule therefore. Bloch filed his Motion for Reconsideration on March 14, The government filed their response, again colluding with Bloch, on March 17, and Bloch filed his reply on March 23.

Late yesterday afternoon, Judge Deborah Robinson ruled on Bloch’s latest attempt to get out of the mandatory incarceration sentence he pled guilty to, and entered her order denying his motion. The court fairly well blasted Bloch’s whining attempt to withdraw and, by extension, the continued Read more →

Court Denies Scott Bloch & DOJ Collusive Attempt To Withdraw Plea

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As you will recall, former former Bush/Cheney Administration Special Counsel Scott Bloch destroyed evidence by wiping government computers clean, lied to Congress about it and conspired with the DOJ to minimize the conduct and slough it off with a sweetheart plea deal. Then, outrageously, when the court indicated it was inclined to impose the mandatory minimum month in jail, which was mandated by the statute Bloch pled guilty to, Bloch and the DOJ conspired to get the plea, which had already been accepted and entered by the court, withdrawn.

When Bloch and DOJ both worked together to get the plea withdrawn, and frustrate justice, the egregious nature of the attempt was documented here in a fully argued and supported post published on Tuesday March 1, 2011. Subsequent to that post, the court also found questions with the attempt to withdraw the plea and ordered Bloch to file a reply supporting the attempt.

Seeing the specious nature of Bloch’s reply filed on March 3, 2011, the Emptywheel blog got involved and initiated a formal filing with the court. We combined much of the material from the previous blog post on March 1 with new argument directly responsive to Bloch’s Reply, and additional general argument, into a formal sentencing recommendation and filed it with the court. The document was lodged on March 4.

Late last night, after consideration of the various pleadings related to the attempt to withdraw Bloch’s plea, the court filed its decision on PACER. Scott Bloch’s motion to withdraw from his plea, despite the collusive help from the DOJ, is DENIED!

For all of the foregoing reasons, the court finds that Defendant, at the time he pled guilty to a violation of 2 U.S.C. § 192, was well aware that he could have been sentenced to a period of incarceration of up to one year. His assertion, through his affidavit, that he would not have pled guilty had he “been informed” that he would not receive probation is, simply put, not entitled to credence. This court–like the Circuit, when confronted with a comparable contradiction between the defendant’s answers under oath during the Rule 11 colloquy and the affidavit in support of his motion – finds that “[Defendant’s] argument – if not his affidavit – amounts to a claim that the defect in the taking of the plea consisted of his committing perjury, when, under oath, he acknowledged the truth of the factual recitals in the plea agreement and in the government’s proffer. Lying to a court is not a ‘fair and just reason,’ Fed.R.Crim.P. 11(d)(2)(B), for allowing a plea to be withdrawn.” (emphasis added)

The entire ruling by the court is 20 pages long and takes apart every argument Bloch makes limb by limb. As it should have been. Perhaps the best line of Judge Robinson’s decision, and a point we argued strongly, is:

Confidence in the fair and orderly administration of justice is undermined by the suggestion that the court should participate in a process by which a sentence is first determined by Defendant and the government, and then an offense expected to guarantee such sentence is alleged.

Boy, the court sure got that right. Not to mention that confidence in fair and honest government is undermined when the DOJ is willing to not prosecute and/or minimize clear crimes committed by other Executive Branch officers. They tried to soft walk Scott Bloch out of this, and it is still awfully small punishment considering Bloch’s crimes, but at least they did not get away with further obfuscation and frustration of justice. Now let’s get the Obama DOJ to get some more prosecutions for all the other egregious Executive Branch crimes of the previous administration going. It is about time.

Bloch’s sentencing is set for this afternoon at 2:30 pm at the E. Barrett Prettyman Federal Courthouse.