Brent Nyitray
Fairlington Blade
Let the mutherfuker burn!
jnc4p
Kevin S. Willis
Michigoose
lmsinca
markinaustin
Arcanaut
novahockey
quarterback
ScottC
yellojktVital Statistics:
| Last | Change | Percent | |
| S&P Futures | 1583.0 | 0.3 | 0.02% |
| Eurostoxx Index | 2664.1 | 2.5 | 0.09% |
| Oil (WTI) | 94.28 | -0.4 | -0.38% |
| LIBOR | 0.277 | 0.000 | 0.00% |
| US Dollar Index (DXY) | 82.15 | -0.387 | -0.47% |
| 10 Year Govt Bond Yield | 1.79% | -0.02% | |
| Current Coupon Ginnie Mae TBA | 105.4 | 0.0 | |
| Current Coupon Fannie Mae TBA | 103.7 | 0.2 | |
| RPX Composite Real Estate Index | 190.8 | 0.5 | |
| BankRate 30 Year Fixed Rate Mortgage | 3.56 |
Markets are flattish this morning after initial jobless claims came in lower than expected at 346k. They dropped 42k from last week, which spiked due to a seasonal adjustment related to the Easter holiday. Import prices fell half a percent on lower energy costs.Bonds and MBS are up.
Ever since the Bank of Japan announced its quantitative easing program, the market has been speculating that Japanese investors would enter the US market en masse and purchase Treasuries. There has been plenty of anecdotal evidence, but no real numbers to work with. Yesterday’s 10 year auction didn’t provide any either – the bid to cover ratio was 1.8 which was a little light.
FHA might need a little more money from the government. They have $30 billion of cash on hand and insure $1.1 trillion in loans. The Administration is projecting they might need another billion. It looks like it was the reverse-mortgage business that hammered them.
One of the interesting things about the latest FOMC minutes is that the dispersion of opinion regarding the future of QE appears to be widening. Some wanted to end QE now, while others not only want to continue it, they want to increase it. Nonvoting hawk Charles Plosser said the Fed would be wise to begin unwinding its balance sheet now.
SIFMA lays into Obama’s proposed 2014 budget. It sounds like ETF investors could be in for a nasty surprise. They support the Administration’s proposal to create bonds for financing infrastructure spending, but pretty much pan everything else. The proposal is loaded with new taxes on capital Suffice it to say, if you are an investor, the administration is gunning for you.
Filed under: Morning Report |
All Things in Moderation 
Wow, this is really complicated……………….I had no idea. This piece on how legislation, such as Dodd-Frank and PPACA, gets implemented and who writes and influences the actual rules is fascinating. It’s a wonder anything gets done.
Every stage in the rule-making process is guided by the APA. It begins the moment a law is passed and shunted off to the regulatory agency that will oversee its implementation. Once it’s in the agency, the APA governs the activities of a team of rule makers—researchers, analysts, economists, and lawyers—who do a bunch of fact gathering, perform studies, and hold a ton of informational meetings in an attempt to get a handle on how best to abide by the intention of the law and how to apply that intention to real life. Since big laws like Obamacare and Dodd-Frank deal with complex issues, Congress often makes the statutes deliberately vague, deferring to rule makers’ technical expertise and policy decisions, and giving them a significant amount of authority on how to interpret a law. All of that interpretation generally happens in the very beginning of the rule-making process, which is called the Notice of Proposed Rulemaking, or, in the acronymic parlance of the federal bureaucracy, NPRM.
snip
independent agencies like the Securities and Exchange Commission (SEC) and the CFTC, a bipartisan panel of commissioners publicly debates and votes on the rule—a process that often results in further revisions and compromises.
snip
Or that’s how it’s supposed to work. But like many things in Washington, that’s just half the story. The rule-making process is actually a much messier, much more cacophonous affair, dictated to a large degree by lawmakers who voted against the law to begin with, and by industry groups who would often prefer that no rules be implemented at all. In the last decade, conservative members of Congress have built ever-higher hurdles that agencies must clear, and done so while cutting their staff and budgets.
Meanwhile, since the passage of Dodd-Frank, financial industry groups have also sabotaged parts of the APA’s carefully plodding process, overwhelming rule makers with biased information and fear tactics and threatening to sue the agencies over every perceived infraction. That’s a big reason why agencies have missed so many of their deadlines for implementing Dodd-Frank—a subtlety reporters frequently miss.
http://www.washingtonmonthly.com/magazine/march_april_2013/features/he_who_makes_the_rules043315.php?page=all#
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Since big laws like Obamacare and Dodd-Frank deal with complex issues, Congress often makes the statutes deliberately vague, deferring to rule makers’ technical expertise and policy decisions, and giving them a significant amount of authority on how to interpret a law.
Quality legislating, that, making laws that are deliberately vague and leaving it up to unelected bureaucrats to make it up as they go.
I still don’t understand how regulatory agencies can be sensibly construed to be constitutional. We have unelected people, appointed by the executive, making laws instead of the legislature.
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I still don’t understand how regulatory agencies can be sensibly construed to be constitutional.
In German legal theory, what is not permitted is prohibited. A park sign would have to say “You may walk on the grass.” In Anglo legal theory, what is not prohibited is permitted. A park sign would have to say “Keep off the grass.”
Thus it is natural to have a constitutional law theory that says what the legislature and executive are not prohibited from doing they may do. Further, the Cabinet, as an extension of the Executive, must be delegated the power to implement legislation quite directly, as the Congress itself has no power to implement and enforce its laws.
Nevertheless, agency rulemaking is a difficult passage to navigate and we rely on the NoVas of the world to do it. I have, in my career, been hired to analyze and criticize a proposed federal regulation, and local attorneys may do that work for random clients around the country, but it takes trade association power to really affect anything of significance, in my experience.
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Mark:
Thus it is natural to have a constitutional law theory that says what the legislature and executive are not prohibited from doing they may do.
Only if one ignores the very purpose of the constitution along with the clear intention of the 10th amendment.
Further, the Cabinet, as an extension of the Executive, must be delegated the power to implement legislation quite directly, as the Congress itself has no power to implement and enforce its laws.
I have no problem with federal agencies implementing legislation. I have a problem with agencies making law, which is what they now do, and what deliberately vague legislation is designed to have them do. In my mind they are clearly operating outside constitutional mandates given to the federal government. The legislature, not unelected bureaucrats appointed by and working for the executive, is supposed to make law.
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Nobody in the financial industry was even contacted until DF was law… That is why it has been such a disaster.
DF was drafted in a perfect lily-white pure environment, at least from a regulatory capture standpoint. Liberals should have adored the process – there was no input from the private sector to despoil their perfect intention. They had their way with it 100%. That is why it has been chock full of unintended consequences and why Washington is scratching its head years after the fact, as to why credit is still so hard to come by. Even smart liberal regulators like Arthur Levitt understand that DF was written more out of emotion than logic and think DF went too far.
I love how the author automatically dismisses any forecasts of the effects of the law out of the private sector as “biased information and fear tactics.” As if the private sector couldn’t possibly disagree with the oh-so-smart and pure regulators for any other reason than greed or pique.
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I suspect some senators prefer bills that spell out everything in detail so that they can grandstand at a microphone about the number of pages in the bill and how nobody read it.
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Regulators hate giving the private sector bright lines. They prefer them to be as blurry as possible in the hope that they don’t even get approached, let alone crossed.
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Brent:
Regulators hate giving the private sector bright lines. They prefer them to be as blurry as possible in the hope that they don’t even get approached, let alone crossed.
It also gives regulators a lot more personal power and significance. Instead of “You can’t do X” it becomes “You can’t do X unless I decide you can.”
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Legislating, due to the horrific size of the government, has run into the knowledge problem.
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I’m wondering if you guys read the entire piece or just my selection. It’s really long and has something for everybody. It’s not just a slam against the financial industry.
This piece was linked in a Charles Pierce piece, who I’m sure most of you don’t care for but I thought it was interesting how strong the forces are to maintain the status quo, to the extent that they’re not only writing the legislation but setting the rules as well. Makes our paltry votes and discussions, even who is President, a rather moot point.
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I’m wondering if you guys read the entire piece
I will! I will!
But I do understand how this system works and how complex it is. LMS, this is also true at the State level, especially in big states.
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lms:
Makes…even who is President, a rather moot point.
If only it were so.
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This paragraph cracked me up.
It is in some ways a Sisyphean task. Here you have a group of rule makers—lawyers, economists, analysts, and specialists—sitting around a table. On one side, they’ve got the language of Dodd-Frank, which requires them, by congressional mandate, to effectively regulate new, never-before-regulated products in never-before-regulated markets that change by the month. On the other side, they’ve got a pile of reports, nine out of ten of which were provided by the same industry they’re trying to rein in. Meanwhile, industry lobbyists and lawyers are crowding into their conference rooms on a nearly daily basis, flooding their in-boxes with comment letters, and telling them that if they do something wrong, they’ll be personally responsible for squelching financial innovation and destroying the economy. “They’re scared to death,” said Naylor of Public Citizen, who compares the effect the financial industry has on rule makers to Stockholm syndrome. “No one wants to be the one who writes the rule that screws up the entire financial system.”
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Part of that is the regulator’s own doing. They refuse to recruit people from outside academia or the civil service. As a result, they tend to be clueless about how the financial industry actually works.
The financial industry is smart enough to recruit ex-regulators so that they can deal with Washington. Washington refuses to do the same thing…
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I understand how complex it is Mark, at least I do now. Until now I didn’t realize how easy it would be to capture the process. Regarding Dodd-Frank, we already know both Dodd and Frank were not the best people to either regulate or write legislation, and when you add the complexity of the financial services they were trying to regulate and the lobbying against effective legislation and rules, I guess it’s no wonder we have a big mess of legislation on our hands that either doesn’t accomplish it’s purported goals, has lots of unintended consequences, and is taking effect much slower than intended.
I guess I’m continuing my cynic phase.
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lms:
Until now I didn’t realize how easy it would be to capture the process.
The consequences of it not being captured would be far worse. You’d have uninformed civil servants making laws about things about which they know absolutely nothing whatsoever.
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“Regarding Dodd-Frank, we already know both Dodd and Frank were not the best people to either regulate or write legislation”
At least they know some people in the financial industry and have a rudimentary understanding of the industry. Someone like Elizabeth Warren would have been a complete and utter disaster.
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“difficult passage to navigate and we rely on the NoVas of the world to do it. ”
Frankly, I don’t see how you can do it without a specialist. I just spent 2 days tracking down the right cube in Baltimore to get a question answered. if you don’t know how to work that system, it would be impossible. I can’t imagine actually running a business and doing it.
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Are there any deserted islands left I could afford to buy and move to?
The disconnect between literally everything is overwhelming me lately……….hahaha
It’s really tempting to just ignore it all and be an ignorant American whose world revolves around her own little piece of the pie and forget the rest. That would be good for you guys……………there’d be one less progressive to worry about, heh.
I do have one question Google hasn’t been able to answer for me. When Dodd Frank was being written wasn’t it actually written by staff members who do have financial industry knowledge? Isn’t that the point of legislative staff? I mean the gal (forgot her name) from United Health basically crafted ACA right? And then if it’s up to others to write the actual rules, according to law I guess, maybe that’s what needs to change. The people actually writing the legislation need to be different.
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One very small example of the type of idiotic things we are having to deal with in regards to D/F.
D/F mandates that all swaps between registered “Swap Dealers” must be cleared through a clearing house on the same day that the trade is transacted. The way a trade gets cleared is through a confirmation system called Markitwire. Every time a trade is transacted electronically, a Marktiwire confirmation with all of the trade details is sent to the two transacting parties. As soon as both counterparties affirm the Markitwire, LCH is notified and the trade is cleared. So we end up with the following (not at all hypothetical) scenario:
A Swap Dealer headquartered in London but trading out of an office in Tokyo has a position he wishes to close at a certain level if the market gets there. So before going home for the evening in Tokyo, he leaves an order with a broker to execute the trade at his level during either London or NY hours. During morning time in New York, the market moves in his favor, and the broker who was given the order (and passed it to his own NY office) executes the trade with another Swap Dealer headquartered and trading out of New York. The Markitwire confirmations are generated and….the guy in Tokyo is not in his office to confirm the trade. He won’t click the button on the Markitwire until Tokyo morning, after NY closes for the day. Which means the trade will not clear until tomorrow. Which means it is in violation of D/F. Or is it?
D/F says that the trade must clear within the calendar day on which it is executed, and the calendar day is defined as ending at 4pm. But 4pm New York time or Tokyo time? D/F says that “day of execution” means the day of the party which ends the latest. So since the deal was transacted after 4pm Tokyo time, that makes the execution date tomorrow for the Tokyo side, which is later than today in New York, so it would seem that the trade does not have to clear until tomorrow, and therefore it will not be in violation of D/F.
But wait! D/F refers to the “day” as it pertains to “the party to the swap”. And the “party to the swap” is in fact a London-based entity, even though it was traded out of their Tokyo office. And the trade was executed prior to 4pm London time, which makes the execution day today, not tomorrow, which means it will indeed be in violation of D/F if it is not cleared until tomorrow. But how can that make any sense? Why should one trader residing in Tokyo have more time than another trader residing in Tokyo to clear the exact same swap with the exact same New York counterparty just because he works for, say, Bank of Tokyo Mitsubishi instead of Royal Bank of Scotland? And why should the New York counterparty have more time to clear a trade done with the Tokyo branch of BoTM than with the Tokyo branch of RBS?
So we end up doing a trade on the basis that it will be cleared, hedging it with other instruments, then arguing internally for 45 minutes about whether it has to clear today or not when we find out the trader on the other side is in Tokyo and won’t be able to click on a button until after 4pm New York time, and whether or not we will be in violation of D/F and have to worry about auditors and regulators finding a reason to give us a hard time. And, ultimately, conservatism prevails, it is decided not to take a chance on the common sense of the regulators, and we have to DK* the trade and leave ourselves open on the hedges that we did because the market for those hedges has, in the interim, closed and we cannot get a price to undo them.
This is the kind of shit that D/F is producing, and the type of concerns that we now have to waste our time worrying and arguing about. And over which we end up having to take risk, both regulatory and market.
*DK = Don’t Know, or in other words cancel the trade as if it never existed
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lms:
I’ve been tempted, too, to just forget it all and be an ignorant American whose world revolves around sucking on the government teat and forget about the rights and freedoms of other people. That would be good for you….one less conservative/libertarian to worry about.
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Scott –
1] I do not understand your Tenth Amendment objection. If any of the regs appropriate a “right” heretofore existing in a state then there is a Tenth Amendment objection.
As SDO’C explained, the feds cannot compel a state to directly enforce federal regulations. It can encourage a state, of course, through the spending and commerce powers.
But those limits apply whether on Congress, or the Executive, or the bureaucracy. That is why some EPA stuff gets limited by the Circuit Courts, pretty regularly down here in the 5th C., anyway.
2] If Congress has the power to make a law, and the Executive has the power to enforce it, then the rulemaking authority follows. However, the rules and regulations cannot materially change the statute. Congress sets a Tax Code, but how it is collected involves reading the Treasury Regs. Tax lawyers often look for overreaches in the Regs where one would not think the statute authorized Any Such Thing.
3] I completely agree with Scott that the publishing of proposed rules in the Federal Register so that our trained representatives, our own lobbyists, trade goups, and lawyers, can comment and represent us, is absolutely necessary for the funcitoning of this nation. The idea that the regs would be dreamed up and finalized by even the best intended and trained clerks is quite British. We really must have the public input, which comes through NoVA and his cohorts.
LMS, I agree with NoVA that there is no way an individual can stay abreast and most of the PL commentary is just toilet flush woosh! Brent is right when he says the lack of expertise often screws the pooch from the gitgo. State law is worse.
If we actually wanted to revise the Tax Code in a meaningful way, but not from scratch, it would do to have a gang of tax CPAs, Tax Lawyers, Public Finance Economists, and journalists, sort it out, section by section, rewrite it in plain English, and have an annotated commentary as to who pushed that section into law and why. Then it would be possible to talk about what we wanted to change in granular detail. That is not as hard as it sounds because the book publishers CCH and BNA and PH all do that for lawyers and CPAs now. They could be contracted to do it for the gummint and while we were arguing how to change it we would actually all know what it says. The Regs would be better for that effort, too. Trust me, the IRS does not always understand the import of the Code, which is quite detailed, itself.
For most of us we can only talk about starting from scratch. The way this tax system now works, JNC’s flat tax is much more progressive! Really.
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Mark:
I do not understand your Tenth Amendment objection. If any of the regs appropriate a “right” heretofore existing in a state then there is a Tenth Amendment objection.
The point of the 10th amendment was to make clear that all power rests with states or individuals except those that are specifically given to the fed by the constitution. In other words, the fed can only do what it is explicitly allowed to do by the constitution. This is the exact opposite of your notion that the fed can do whatever it wants unless explicitly prevented by the constitution.
However, the rules and regulations cannot materially change the statute.
More fundamentally, the rules and regulations cannot be used to define the statue. But when a statute is deliberately made vague in order to allow regulatory agencies the leeway to do as it will, that is precisely what is happening.
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Scott, we agree, word for word, but you think the tautology of the Tenth implies more in a specific sense than I do. Clearly, if Congress and the Executive do not have the power, they don’t get it by creating an agency. But you think it has a greater purport – that the power to tax, the commerce clause, the spending power, etc. leave more on the table for the states than I think they do.
And I agree that purposefully vague statutes are bad news, for the reasons you suggest and for other reasons, as well. Courts are given little guidance on the application of vague statutes. If there are penalties involved, vague statutes are interpreted to not apply – there are construction rules that say we cannot penalize someone when the action could not be palinly read to be prohibited in the law. But for other purposes, vague just means scratch your head, and be seen as making law from the bench, by one side or the other, no matter what you do.
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Mark:
Clearly, if Congress and the Executive do not have the power, they don’t get it by creating an agency.
With regard to agencies, I think that Congress does not have the constitutional authority to give law-making authority to the executive, which is what it has effectively done by allowing agencies to make “rules” and “regulations” which ostensibly implement legislation, but which in fact define legislation.
On the more general issue, I am not sure we do agree, because I think that the following two statements:
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
…and…
what the legislature and executive are not prohibited from doing they may do.
…are diametrically opposed. A constitutional theory which holds the latter to be true must reject the former, and vice versa.
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The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.
…and…
what the legislature and executive are not prohibited from doing they may do.
…are diametrically opposed. A constitutional theory which holds the latter to be true must reject the former, and vice versa.
Read what you wrote very carefully and tell me that it makes sense to you. Then, if it does still make sense to you, tell me how
1] “delegated powers” + 2] powers not “prohibited by it to the States” means anything other than 3] “what the legislature and the executive are not prohibited from doing”.
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Mark:
First, your 2] has no relevance to what the federal government can do or cannot do. It relates only to powers that state governments do not have, namely anything that the constitution (“it”) specifically prohibits them from doing.
But more importantly, consider two statements:
The government is only authorized to do X, Y, and Z.
The government is only prohibited from doing A, B, and C.
I think these two statements say vastly different things. Both statements prohibit the government from doing A, B, and C, and both statements allow the government to do X, Y, and Z. But the former prohibits it from doing anything from D thru W as well, while the latter authorizes it to do anything from D thru W. The two statements are mutually exclusive.
I think the 10th amendment is essentially saying the former, namely that a closed set of certain, explicitly specified powers are delegated to the federal government, while an open set of all other unspecified powers are prohibited to it. And I think that your statement is essentially saying the latter, namely that a closed set of explicitly specified powers are prohibited to the federal government, while the open set of all other unspecified powers is delegated to it.
I will grant you that your statement can be interpreted in a different way, but then it becomes nothing but a tautology empty of any meaningful or edifying content. I assumed you did not intend it that way. Please correct me if I am wrong.
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Scott, this comes down to naming powers, first, and then determining how broad they are, second.
Your examples are not worthless but they are not instructive, either.
The enumerated powers are big and the powers that are prohibited to the states are big.
I think you know the enumerated powers. Have you considered the powers prohibited to the states?
As a practical matter, the combination not only leaves enormous power in the federal government, but leaves minimal power in the states. That was the purpose of the Constitution, as opposed to the Articles of Confederation. Beyond the original document and the BoR, the post Civil War Amendments further strengthened the federal position.
Look, I know you think the states are sort of sovereign, even though they are prohibited from printing money, or having any form of gummint that is not republican, or having a military, or treating their citizens as not having the privileges and immunities of American citizens, or restricting trade with other states, or conducting foreign policy, or having control of their navigable waterways.
I think the powers remaining to the states are a veritable anthill. I am pretty sure I am right. Marital rights? Local public health and public safety? Sure.
Meanwhile, I think the EXPRESS federal powers to raise arms, to go to war, to tax, to spend, to regulate commerce including the navigable waters, to conduct foreign policy, to define citizenship and suffrage, to print money that must be the money used by all the states, to borrow money, to issue patents, copyrights, and trademarks, to keep any states from joining each other, to make any law necessary and proper to exercise these powers and to have any federal law that is not unconstitutional be considered supreme over any conflicting state constitution or state law, pretty much cover the waterfront.
The tenth amendment doesn’t provide much of anything except where the feds overreach by ordering a state to perform a federal function.
I don’t know why you have so much difficulty with this, Scott.
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Mark:
Look, I know you think the states are sort of sovereign…
It’s not just me. As I have pointed out to you before, the Supreme Court routinely refers to the sovereignty of the states. And of course there is Federalist 32:
An entire consolidation of the States into one complete national sovereignty would imply an entire subordination of the parts; and whatever powers might remain in them, would be altogether dependent on the general will. But as the plan of the convention aims only at a partial union or consolidation, the State governments would clearly retain all the rights of sovereignty which they before had, and which were not, by that act, exclusively delegated to the United States.
I think the EXPRESS federal powers…pretty much cover the waterfront.
If that were true, then it seems odd that the undeniable growth in federal power over the years has come, slowly and haltingly, as the result of oftentimes split and controversial Supreme Court rulings. Why, for example, did the Supreme Court so often rule against FDR’s early attempts to exercise power, to the point that he threatened to pack the court, if the powers he was attempting exercise were so obviously and EXPRESSLY given to him by the constitution?
But really our disagreement is not so much over what the constitution says as it is over how to approach constitutional questions of federal power. The constitutional theory that you advanced suggests that one should assume an exercise of power is authorized unless one can find somewhere in the constitution a reason to think it isn’t. I think that is exactly the opposite of the correct approach. I think one should assume that a given exercise of power is not authorized, unless one can find somewhere in the constitution a reason to think it is. My approach assumes that the 10th amendment exists for a reason and has meaning. Your approach dismisses the 10th amendment as a meaningless redundancy.
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MarK;
From Federalist 45:
The powers delegated by the proposed Constitution to the federal government, are few and defined. Those which are to remain in the State governments are numerous and indefinite. The former will be exercised principally on external objects, as war, peace, negotiation, and foreign commerce; with which last the power of taxation will, for the most part, be connected. The powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.
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Certainly, Madison in 45 and Hamilton in 84, I think, argued that Article I Sections 8 and 9 did not substantially alter the Articles of Confederation, I think in order to quell the fear of the Jeffersonians. Maybe they believed what they wrote, but if you read those enumerated powers and then the limitations imposed, I think they must have known better. Having given Congress the power to tax and spend and to control commerce both outside and inside the nation they had to have been at least a bit anxious that eventually Congress would indeed tax and spend a lot and control commerce, a lot.
What they thought was that we would vote them out if they taxed and spent too much, or stupidly, or controlled commerce too much, or stupidly. Thus those rights were retained by the people, or before direct election, by the states, in that singular way in a republican form of government.
Again, in case you missed it, I agreed that purposely vague laws are bad laws for many reasons, including the vesting of too much power in an unelected bureaucracy. I think you argued that the vesting of power to effectively write law is, or should be, unconstitutional. That is food for thought, I agree. I think that was my first reaction to the Base Closing Commission, but that was “saved” by the provision that Congress could overrule their recommendations.
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Mark:
Maybe they believed what they wrote, but if you read those enumerated powers and then the limitations imposed, I think they must have known better.
I have to admit that I’m having a hard time accepting that the Federalist Papers were just one big marketing fraud deliberately designed to sell voters on a false view of the Constitution.
Having given Congress the power to tax and spend and to control commerce both outside and inside the nation they had to have been at least a bit anxious that eventually Congress would indeed tax and spend a lot and control commerce, a lot.
Given that it took a civil war, several constitutional amendments, and the invention of a new constitutional philosophy to bring it about, I don’t think any of the founders could possibly have envisioned anything close to the current degree of federal control over the daily lives of citizens.
I think you argued that the vesting of power to effectively write law is, or should be, unconstitutional. That is food for thought, I agree.
I’m glad.
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Scott, I want to reply to your understanding of the history of federalism.
I don’t have time for more than this. The big development, the one that led to all the others, incrementally but I think inexorably, dates to 1791. It was the establishment of the First US Bank.
There is no mention of a “bank” in the express powers. Jefferson [and his ally, Randolph] argued against it. Hamilton’s defense of the bank won the day: he said it was necessary and proper to an express power.
In his argument, Hamilton said that necessary was not limited in its meaning to laws indispensable to an express power but included laws conducive to an express power.
This restrictive interpretation of the word necessary is also contrary to this sound maxim of construction; namely, that the powers contained in a constitution of government, especially those which concern the general administration of the affairs of a country , its finances, trade, defense &c., ought to be construed liberally in advancement of the public good… The means by which national exigencies are to be provided for, national inconveniences obviated, national prosperity promoted, are of such infinite variety, extent, and complexity, that there must of necessity be great latitude of discretion in the selection and application of those means. . . .
It leaves, therefore, a criterion of what is constitutional, and of what is not so. This criterion of what is constitutional, and of what is not so. This criterion is the end, to which the measure relates as a means. If the end be clearly comprehended within any of the specified powers, and if the measure have an obvious relation to that end, and is not forbidden by any particular provision of the Constitution, it may safely be deemed to come within the compass of the national authority. . . .
The successful defense by Hamilton of the First Bank, and the presumed legality of the First Bank, was cited in Marshall’s later opinion in McCulloch. Madison broke with Hamilton on this issue and argued in Congress that the new Tenth Amendment was a prohibition to a central bank. So you are in good company on what the Tenth means, but so am I.
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Mark:
I want to reply to your understanding of the history of federalism.
I understand the importance of the First US Bank as a precedent regarding federal power. But I still do not think where we find ourselves now flows inexorably and inevitably from that precedent. Many intervening steps had to been taken, any one of which could have been reasonably avoided. It would be the ultimate slippery slope argument to say that to allow the US government to charter a bank is to allow the US government to force citizens to purchase a privately provided product as a result of being born. I don’t think even Hamilton, who had perhaps the most expansive view of federal powers of all the founders, would have either envisioned or countenanced, say, Wickard to take just one outrageous example. I could be wrong, of course.
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say, Wickard to take just one outrageous example. I could be wrong, of course.
And we can conclude there. I agree that Wickard is a step too far. The outer boundary of the commerce clause set one click into the ozone.
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Here you go LMS. This is today. Can you get to LAX by 4:30?
Air Tahiti Nui – Flight 7 8h 30m
Take-off Thu 4:30p LAX Los Angeles, CA
Landing Thu 10:00p PPT Papeete, French Polynesia
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I thought one of the advantages of Obamacare was that it would cover you with a pre-existing condition. If so, then why are we taxing those poor souls with a preexisting condition? Shouldn’t they be getting their nicotine needs taken care of by Obamacare? If not, why not?
http://www.thedailybeast.com/articles/2013/04/11/why-is-obama-taxing-a-pre-existing-condition.html
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speaking of cigarettes — DC city council considers ban on indoor use of e-cigarettes.
http://www.washingtonpost.com/local/dc-politics/should-e-cigs-be-banned-indoors-in-dc/2013/04/09/19ae0a2e-a14d-11e2-82bc-511538ae90a4_story.html
why? there’s no second hand smoke.
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Must not be enough opportunity for graft. Is there taxes on E-Cigs?
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Thanks nova………………you didn’t have to buy me a ticket like that……………. 😉
Even medicare supplemental plans have different rates based on smoking and age, nothing new there.
What are E-cigs, is that something like 3D printing?
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http://en.wikipedia.org/wiki/Electronic_cigarette
it’s a nicotine delivery device without the second hand smoke problem.
I think it’s simply a smoking is bad and we’ll save you from yourself.
Re: Medigap … this is from the POTUS FY 2014 budget proposal:
Medicare requires cost-sharing for various services, but Medigap policies
sold by private insurance companies provide beneficiaries with additional
coverage for these out-of-pocket expenses. ome Medigap plans cover all or almost all
copayments, including even modest copayments for routine care that most
beneficiaries can afford. This practice gives beneficiaries less incentive to consider the cost of services, leading to higher Medicare costs and Part B premiums. This proposal would introduce a Part B premium surcharge for new beneficiaries who
purchase Medigap policies with particularly low cost-sharing requirements, effective in
2017. Other Medigap plans that meet minimum cost- sharing requirements would
be exempt from the surcharge. The surcharge would be equivalent to approximately 15 percent of the average Medigap premium (or about 30 percent of the Part B premium). [$2.9 billion in savings over 10 years]
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You go first Scott……………..But why would your world revolve around government largesse, mine wouldn’t? I said I wanted to buy an island. It’s funny, we have a compound here already and it’s paid for, and with the pool it almost is an island. All I’d have to do is turn my brain off or shut down the internet so I don’t get drawn into “issues”………………hahaha
Thanks NoVA. I don’t see anything wrong with more cost sharing in medigap, especially on the routine end. People who can’t afford medicap plus the copays are presumably getting medicaid. I was surprised how cheap medigap insurance was.
So these cigarettes deliver nicotine but no smoke? Are they supposed to be healthier for the smoker or the bystander I wonder? And why not just take a nicotine pill instead? I never understood the attraction obviously. I do like the new smoke free zones though, I have to admit.
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FWIW, there’s an arms race in town to land the top tax staffers from Senate Finance and House Ways and Means. tax reform is the next big thing and everyone is fighting over a handful of aides.
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Mark, how did we get on taxes? I’m not saying we don’t need experts to write legislation, I’m saying I thought that was what staff members were supposed to be. And I think there’s a difference between expertise and capture, don’t you? When I think of the money involved in lobbying compared to the lack of money involved in protecting consumers and average Americans I’m pretty sure who will eventually win. And I even understand the need for lobbying so I’m not actually opposed to it wholeheartedly like others.
I don’t think there’s anything progressive or even liberal about any of the bills congress has passed since Obama became President. I think the most we can say is the LGBT community has fared pretty well. For the rest, I believe we have a dysfunctional Legislative body and a weak president. He seems like a nice guy to me but it seems to me the powers moving against him are actually winning. I think it’s kind of silly to pretend that the upper echelon of income earners and mega corporations, even banks, aren’t doing fine. The middle class……………….meh
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Just got on taxes for two reasons: it is the next big fight and it is the obvious place where we see “capture” on a sustained basis.
Didn’t mean to change the subject.
The issue is, I suppose, how do we get representation in the process if we are merely the third party victims of it and not the direct beneficiaries or obligors?
I suppose we could have a well staffed Public Citizen Lobby Firm, supported by voluntary donations. Would we trust it?
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lms:
But why would your world revolve around government largesse, mine wouldn’t?
I think you missed my point.
When I think of the money involved in lobbying compared to the lack of money involved in protecting consumers and average Americans I’m pretty sure who will eventually win.
The two are not necessarily in a competition. Often times they are on the same side.
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No worries changing the subject, I just thought I missed something. I didn’t know taxes were going to be the next big thing. I do agree that jnc’s plan would probably be more progressive than what we have now though. I would welcome tax reform but only if they mean it and the first thing that happens immediately after isn’t legislation for carve outs.
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showdown at gucci gulch is a great read a behind the scene look at the ’86 tax reform.
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Mark
most of the PL commentary is just toilet flush woosh
Ha, not only that but about half the time that’s all they talk about now………..who’s flushing whom. I tried going back but it was no good. I pretty much do the same thing there that I do here now, just drop in the occasional link and see what happens. More partisan ones over there though……:)
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I think you missed my point.
Or I’m just pretending to.
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lms:
Or I’m just pretending to.
I guess that is a possibility too.
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“most of the PL commentary is just toilet flush woosh”
Cao pretty much has a conniption any time someone responds to something I post.
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Good piece on Calpers.
http://www.city-journal.org/2013/23_1_calpers.html
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From J’s Calpers link:
“Right now, the pension bill that Californians owe because of CalPERS is enormous. In a December 2011 study, former Democratic assemblyman Joe Nation, a public finance expert at Stanford University, estimated that CalPERS’s long-term pension debt is a sizable $170 billion if CalPERS achieves an average annual investment return of 6.2 percent in years to come. If the return is just 4.5 percent annually—a rate close to what more conservative private pensions often shoot for—the fund’s long-term liability rises to a forbidding $290 billion. By contrast, CalPERS itself estimated its long-term unfunded liability at merely $80 billion, using a lofty projected annual investment return of 7.75 percent. (The fund has recently cut that estimate to 7.5 percent.)”
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@lmsinca: “So these cigarettes deliver nicotine but no smoke? Are they supposed to be healthier for the smoker or the bystander I wonder?”
Yes, although the bystander doesn’t have much to worry about with 2nd hand smoke from actual cigarettes: about 90% of the bad stuff stays in the lungs, and you’ll inhale less than 10% of that unless they are exhaling directly into your mouth. So the smoker has a much more present worry. Also, nicotine settles out of the air almost immediately, so you won’t be exposed to the only real poison in e-cigarettes: nicotine.
They are also probably healthier for the smoker, although the effect of the constant inhalation of hot propylene glycol vapor is not yet known, as we haven’t have 30 years data on people smoking e-cigarettes yet. Compared to the hundreds of poisons in cigarette smoke (known) there is only one in an e-cigarette with nicotine, and that’s nicotine. The smoker can ingest as much or more nicotine with e-cigarettes, and nicotine is a vasoconstrictor that can worsen circulation, and in some cases trigger a relatively rare condition that results in such poor circulation you’ll end up getting all your limbs amputated, if you don’t stop ingesting nicotine. And, it is an addictive poison, so there’s that.
@novahockey: “why? there’s no second hand smoke.”
Because it delivers nicotine, and a big part of smoking bans is to making smoking socially unacceptable, as the real health concerns of 2nd hand smoke are minor (although displeasure of noxious odors is not). E-cigarettes are on their way in certain circles to making smoking cool again, if more complicated, and it doesn’t help that sometimes cartridges malfunction, nicotine is a poison, and people can suddenly ingest two or three packs worth of nicotine, and will get ill.
The folks engineering the bans don’t want people to smoke or do anything that looks like smoking, period, for reasons of public health. Given that smoking kills 50% of the people who do it and don’t quit (and a fair percentage of the people who do it and manage to quit), and causes lifelong disabilities in many of those who end up dying of something else . . . one understands why some folks just want to keep people from smoking anything, period.
Also, there’s the confusion issue: lots of e-cigarette smokers have been told to stop smoking, even though they technically aren’t smoking, and have complained about the confusion of people forcing them to stop smoking. Which is all silly, give you could palm an e-cigarette and inhale it and put it back in your pocket without a single person around you really knowing what you were doing.
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Kevin:
Given that smoking kills 50% of the people who do it and don’t quit (and a fair percentage of the people who do it and manage to quit), and causes lifelong disabilities in many of those who end up dying of something else. . . one understands why some folks just want to keep people from smoking anything, period.
I don’t understand it except as part of a more general, elitist desire to impose one’s own values and concerns on others.
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Kev, while nicotine is a great insecticide and in large doses a deadly poison, it is not a carcinogen. Nicotine deaths just incur funeral expenses for the family, not health care costs.
The e-cigarette serves the same purpose as the nicotine patch, of course.
Plus it satisfies people who want to suck on something.
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Well, those sound like a pretty good idea to me. As long as people aren’t blowing smoke in my face, or my daughter’s, I don’t really care whether they smoke or inhale straight nicotine or not.
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“he folks engineering the bans don’t want people to smoke or do anything that looks like smoking, period, for reasons of public health.”
“Of all tyrannies, a tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.”
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