Sunday, February 3, 2013

Rogue government

There's actually an article on the NYT's Economy page admitting that austerity is bad for the economy, and that government spending is needed to pull it back up. Amazing. I liked this bit:
"Our economy is facing a major headwind, and that's Republicans in Congress," said the White House spokesman Jay Carney.

Republicans said the White House was not advancing concrete plans for creating new jobs and stimulating the economy.

"The bad GDP news makes it even more unbelievable that Obama has been ignoring job growth in his 2nd term agenda," Reince Priebus, chairman of the Republican National Committee, posted on Twitter.

Meanwhile, some astonishing news at The Washington Post, "Senators question U.S. penalties against Wall Street banks as too lenient: A bipartisan pair of lawmakers on Tuesday questioned the Justice Department's prosecution of large financial institutions, raising concerns that recent settlements have fallen short of holding Wall Street accountable for wrongdoing. Sens. Sherrod Brown (D-Ohio) and Charles E. Grassley (R-Iowa) sent a letter to Attorney General Eric H. Holder Jr. asking for a detailed explanation of the department's procedures for going after financial crime. Penalties in settlements have been disproportionately low relative to company profits and the costs imposed on consumers, investors and the market, they said."

This should be interesting: "Antigua Gets OK to Become Copyright Haven: The islands of Antigua and Barbuda are threatening to strip intellectual property protections from American goods as part of a long-running trade dispute over the U.S. embargo on the tiny Caribbean nation's online gambling industry. U.S. officials say the proposed copyright haven - whose broad outlines were approved Monday at the World Trade Organization in Geneva - amounts to "government-authorized piracy." But Antiguans, who've won a series of legal victories against the U.S. at the international trade body, reject any suggestion that they're pirates."

Marcy Wheeler: "The International Manhunt for WikiLeaks: One of the things DOJ is protecting from FOIA in Electronic Privacy Information Center's suit is information other governments have shared with the US on the investigation."

Glenn Greenwald @ggreenwald
The way containment - the staple of US foreign policy for 45 years - is treated like some radical doctrine is amazing [Link]

Here's a legal problem you might want to read up on: Wickard v. Filburn: "Wickard v. Filburn, 317 U.S. 111 (1942), was a United States Supreme Court decision that recognized the power of the federal government to regulate economic activity. A farmer, Roscoe Filburn, was growing wheat for on-farm consumption. The U.S. government had established limits on wheat production based on acreage owned by a farmer, in order to drive up wheat prices during the Great Depression, and Filburn was growing more than the limits permitted. Filburn was ordered to destroy his crops and pay a fine, even though he was producing the excess wheat for his own use and had no intention of selling it. The Supreme Court interpreted the United States Constitution's Commerce Clause under Article 1 Section 8, which permits the United States Congress "To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes". The Court decided that Filburn's wheat growing activities reduced the amount of wheat he would buy for chicken feed on the open market, and because wheat was traded nationally, Filburn's production of more wheat than he was allotted was affecting interstate commerce. Thus, Filburn's production could be regulated by the federal government." Now read on for how this applies to marijuana.

Matt Taibbi: "It's certainly strange that White has to qualify the idea that bringing cases is a positive thing in a government official - that bringing cases is a 'positive thing . . . to a point.' Can anyone imagine the future head of the DEA saying something like, 'For a prosecutor, bringing drug cases is a positive, to a point?'" (via)

This story is headlined in such a way that I think you're not supposed to notice that the nasty partisan fighting is threatening to force Republicans to do the right thing just to get back at Obama-supporting companies.

More media-myth-busting from Dean Baker: "Fiscal Cliff Concerns Did Not Restrain Hiring. The NYT is still pushing the line that, 'uncertainty over fiscal policy and the fragility of the economy still seem to be holding back employers.' There is no evidence in this or prior job reports to support this contention. If employers are seeing a level of demand that would otherwise justify hiring, but are reluctant to do so because of uncertainty, they would look to fill this demand through alternative channels. The two obvious alternatives are increasing the length of the average workweek and hiring temporary employees. The average workweek has been stable or even gotten slightly shorter in recent months. Temp hiring has been extremely weak. These facts suggest that the reason for lack of hiring is simply that employers are not seeing adequate demand, not uncertainty."

Bill Black has a good take-down of Matt Yglesias trying to feed us roofies so the Elites can rape us some more.

"US military struggling to stop suicide epidemic among war veterans: Last year, more active-duty soldiers killed themselves than died in combat. And after a decade of deployments to war zones, the Pentagon is bracing for things to get much worse."

Bruce Schneier on Power and the Internet: "The standard story is that it empowers the powerless, but that's only half the story. The Internet empowers everyone. Powerful institutions might be slow to make use of that new power, but since they are powerful, they can use it more effectively. Governments and corporations have woken up to the fact that not only can they use the Internet, they can control it for their interests. Unless we start deliberately debating the future we want to live in, and information technology in enabling that world, we will end up with an Internet that benefits existing power structures and not society in general. [...] Either we fight for a seat at the table, or the future of the Internet becomes something that is done to us." PNH: "This is the thing. Even in 2013, too many of us still believe, down deep, when we're not forcing ourselves to think clearly, that there's something magic about the internet that always works to the benefit of underdogs. That the fact that we now all carry more computing power in our pocket than was used in the spaceship that landed on the Moon means that somehow all these 'disruptions' will amount to a net increase in the autonomy and power of individuals. To a significant extent these delusions reflect the tremendous success of the narratives promulgated by modern libertarianism, the just-so stories of 'free markets' and the 'wisdom of crowds.' Even non-libertarians have spent a generation eating that stuff up. Faith in those ideas has led many of us into quietism and apathy. But in fact, in the words of the Kevin Maroney remark quoted on the colophon of Making Light, 'a better future isn't going to happen by itself.' While we dream our dreams of the wisdom of crowds, power works in silence." I never bought the story that the internet was some sort of magic that could bypass all censorship; I knew that censorship does not simply shut down ideas, but shuts down the actors who promulgate and act on the ideas, and no medium can bypass that process.
Also at Making Light, Avram on Mayor Koch.

I was really hoping that Tom Harkin would never retire.

Online Ads Are More Dangerous Than Porn, Cisco Says

Photos: Battle scenes from Damascus

Google failed to celebrate Langston Hughes' birthday, but Michael Moore tweeted a link to his poem, "Democracy", and to his 1926 essay for The Nation, "The Negro Artist and the Racial Mountain" (which features a smashing photo of Zora Neale Hurston), in its honor.


  1. Wickard v. Filburn is the sort of twisted legal reasoning that gives me headaches. No way in hell did the framers intend for the commerce clause to be interpreted in such a broad fashion. The interpretation used by the court in this case is so broad as to grant the federal government essentially unlimited power to regulate anything and everything in our homes and on our property, and one thing that the framers were absolutely clear on is that the Constitution was a grant of limited powers to the government. Unlimited power isn't limited power. The justices reached the decision they wanted to reach by turning reason on its head.

    Put it this way...

    Based on the "reasoning" in Wickard v. Filburn, a person who wants to sew their own clothes from cloth they made from fibers they grew in their garden is subject to regulation under the commerce clause even if they never wear those clothes outside their home (or for that matter wear them at all) or offer them for sale or give them away...because the mere fact that they sewed their own clothes (or grew their own fiber or made their own cloth) can be construed to affect other commerce.

    Go further...

    Your home vegetable garden? The goats you raise for milk? The chickens you raise for eggs? The basket you weave? The candle you make? All of that could be construed to effect interstate commerce under Wickard v. Filburn.

    The broad reading of the commerce clause is often considered a good thing by Dems. Well, as a dyed in the wool liberal, I'm all for a liberal reading of the Constitution...but this is a reading of things that just aren't there and were never meant to be. And we see the effects in things like the drug war. Maybe it's time to revisit?

    1. There's nothing much in the way of entertainment to be found in the Ken Burns' film "The Dust Bowl" which premiered last November on PBS. However, the awful story it tells is quite informative. One of the questions raised back in the 1930s was whether the federal government should assume an active role in mitigating an ongoing catastrophe which was affecting millions of people or whether the United States was all about relying on some combination of individual freedom, unregulated markets, and state and local governments to resolve any economic and ecological issues that might arise from time to time.

      According to History dot com:

      [Indent]>>>Ranchers and farmers in the nineteenth and early twentieth centuries, driven by the American agricultural ethos of expansion and a sense of autonomy from nature, aggressively exploited the land and set up the region for ecological disaster. Most early settlers used the land for livestock grazing until agricultural mechanization combined with high grain prices during World War I enticed farmers to plow up millions of acres of natural grass cover to plant wheat....<<<[End indent]

      Based on the size of his holdings, Roscoe Filburn was permitted to grow 223.1 bushels of wheat for sale in the 1941 price supported national wheat market and, presumably, he sold that amount. According to the Court, "In the absence of regulation, the price of wheat in the United States would be much affected by world conditions. During 1941, producers who cooperated with the Agricultural Adjustment program received an average price on the farm of about $1.16 a bushel, as compared with the world market price of 40 cents a bushel."

      But Filburn grew wheat on more than twice the acreage he was allowed to raise that crop on and he ended up with more than twice the bushel totals the Agricultural Adjustment Act of 1938 allowed him to produce, arguing that the excess production was for consumption on his own farm. I don't see it stated explicitly but I assume Filburn generated income from the livestock he was feeding with his excess wheat production so he was maximally benefiting from the artificial wheat market price while avoiding any costs to himself from that same wheat market when conducting that part of his farming business which generated income from the livestock he raised and maintained.

      I suppose there's an argument to be made that, although we have a living Constitution, something as radical as the Agricultural Adjustment Act of 1938 should have been preceded by an enabling Constitutional Amendment. Personally, I don't think that's entirely realistic. That there have been unintended consequences arising from the ruling and its reasoning in Wickard, well that's a risk that accompanies any expansion of federal government power. The nation-state and a powerful federal government, you can't live with it but you better not try living without it in a modern industrial economy.

    2. Maybe it's time to revisit?

      Yes, a reversal of Wickard would markedly improve the landscape, because the meliorist approach is best and we shouldn't ever rock the jurisprudential boat too severely because those people who are disserved right now are irrelevant because they lack a fancy education or a blog where they pretend they are wonks at the nation's most prestigious think tank.

      Almost as naive as thinking a reversal or vacation of Citizens United would be momentous, or something.

    3. That's less than 7 tonnes of wheat. which by the best production standards of the time could be produced from about 3 hectares of land.

      This guy sounds like a tiny farmer, and the case still goes to the Supreme Court.

      Thing is, I don't know how wheat production was allocated under that 1938 Act. You can probably double the farm size to support horses, because I cannot really see how cropping on that scale would pay for a tractor. It's still tiny. Other crops? Just how many livestock was he feeding? And you need some grain to maintain working horses.

      "More than twice" suggests to my cynical mind that he grew somewhere between 450 and 500 bushels. That's a big percentage increase, but it make sense to me that a farmer would be growing more grain than he was allowed to sell (the horses, remember), and if weather and weeds and plant disease were kind, yields could be higher than expected. It's only post-WW2 that year-on-year variations started to fall, as herbicides and fungicides came into use. When was the crop harvested? Almost certainly the previous year, and possibly 1939, and was it a good year for wheat yields?

      It sounds as if there was some serious ignorance of farming in that court, on all sides. And I can see how that sort of action rather poisons the idea of the New Deal in the affected part of the country.

      Similar knowledge of how braindead politicians are about farming colours my current opinions of the breed. If David Cameron were a bull he'd have ended up a bullock by now.

    4. Thanks for your comment Zhochaka. Certainly I'll cop to being ignorant of the basics of farming.

      However, I am confident several members of the Court had lots of knowledge about farming and all of them were up on the metrics involved as were a large number of the members of Congress back then. The jurists and legislators were all men who had grown up in a different America from the one we're living in today.

      I should have gone back and reread the decision of the Court before commenting. Here is the opinion of the Court. [LINK] For starters, I take it I was wrong to assume that Filburn had sold the crop he planted in 1940 at the artificial price that prevailed in 1941.

      [Indent]>>>He sowed, however, 23 acres, and harvested from his 11.9 acres of excess acreage 239 bushels, which under the terms of the Act as amended on May 26, 1941, constituted farm marketing excess, subject to a penalty of 49 cents a bushel, or $117.11 in all. The appellee has not paid the penalty and he has not postponed or avoided it by storing the excess under regulations of the Secretary of Agriculture, or by delivering it up to the Secretary.

      The Committee, therefore, refused him a marketing card, which was, under the terms of Regulations promulgated by the Secretary, necessary to protect a buyer from liability to the penalty and upon its protecting lien.<<<[End Indent]

      But now onto how the Court spoke to the issues you raise:


    5. [Indent]>>>The appellee for many years past has owned and operated a small farm in Montgomery County, Ohio, maintaining a herd of dairy cattle, selling milk, raising poultry, and selling poultry and eggs. It has been his practice to raise a small acreage of winter wheat, sown in the Fall and harvested in the following July; to sell a portion of the crop; to feed part to poultry and livestock on the farm, some of which is sold; to use some in making flour for home consumption; and to keep the rest for the following seeding. The intended disposition of the crop here involved has not been expressly stated....

      The Act includes a definition of 'market' and its derivatives so that as related to wheat in addition to its conventional meaning it also means to dispose of 'by feeding to poultry or livestock which, or the products of which, are sold, bartered, or exchanged, or to be so disposed of.' Hence, marketing quotas not only embrace all that may be sold without penalty but also what may be consumed on the premises.

      Wheat produced on excess acreage is designated as 'available for marketing' as so defined and the penalty is imposed thereon. Penalties do not depend upon whether any part of the wheat either within or without the quota is sold or intended to be sold. The sum of this is that the Federal Government fixes a quota including all that the farmer may harvest for sale or for his own farm needs, and declares that wheat produced on excess acreage may neither be disposed of nor used except upon payment of the penalty or except it is stored as required by the Act or delivered to the Secretary of Agriculture....

      The wheat industry has been a problem industry for some years. Largely as a result of increased foreign production and import restrictions, annual exports of wheat and flour from the United States during the ten-year period ending in 1940 averaged less than 10 per cent of total production, while during the 1920's they averaged more than 25 per cent. The decline in the export trade has left a large surplus in production which in connection with an abnormally large supply of wheat and other grains in recent years caused congestion in a number of markets; tied up railroad cars; and caused elevators in some instances to turn away grains, and railroads to institute embargoes to prevent further congestion....<<<


    6. [my emphasis at the conclusion]

      [Indent]>>>In its effort to control total supply, the Government gave the farmer a choice which was, of course, designed to encourage cooperation and discourage non-cooperation. The farmer who planted within his allotment was in effect guaranteed a minimum return much above what his wheat would have brought if sold on a world market basis. Exemption from the applicability of quotas was made in favor of small producers.

      The farmer who produced in excess of his quota might escape penalty by delivering his wheat to the Secretary or by storing it with the privilege of sale without penalty in a later year to fill out his quota, or irrespective of quotas if they are no longer in effect, and he could obtain a loan of 60 per cent of the rate for cooperators, or about 59 cents a bushel, on so much of his wheat as would be subject to penalty if marketed....

      Marketing of wheat was defined as including disposition 'by feeding (in any form) to poultry or livestock which, or the products of which, are sold, bartered, or exchanged, ....' The amendment of May 26, 1941, made before the appellee had harvested the growing crop, changed the quota and penalty provisions. The quota for each farm became the actual production of acreage planted to wheat less the normal or the actual production, whichever was smaller, of any excess acreage.

      Wheat in excess of this quota, known as the 'farm-marketing excess' and declared by the amendment to be 'regarded as available for marketing' was subjected to a penalty fixed at 50 per cent of the basic loan rate for cooperators,36 or 49 cents, instead of the penalty of 15 cents which obtained at the time of planting. At the same time there was authorized an increase in the amount of the loan which might be made to non-cooperators such as the appellee upon wheat which 'would be subject to penalty if marketed' from about 34 cents per bushel to about 59 cents. The entire crop was subjected by the amendment to a lien for the payment of the penalty.

      The penalty provided by the amendment can be postponed or avoided only by storing the farm marketing excess according to regulations promulgated by the Secretary or by delivering it to him without compensation; and the penalty is incurred and becomes due on threshing.

      Thus the penalty was contingent upon an act which appellee committed not before but after the enactment of the statute, and had he chosen to cut his excess and cure it or feed it as hay, or to reap and feed it with the head and straw together, no penalty would have been demanded. Such manner of consumption is not uncommon. Only when he threshed and thereby made it a part of the bulk of wheat overhanging the market did he become subject to penalty.<<<[End Indent]

    7. Thanks for all this CMike. Zhochaka said This guy sounds like a tiny farmer, and the case still goes to the Supreme Court. The farm may have been tiny but the issue - the power of the government to regulate economic activity for the common good - is a big one. When a ruling is misused, in this case to regulate home-grown marijuana, it undermines the concept.

    8. Unthreshed wheat used to be stored for a few months in that state, until somebody got around to setting up a threshing machine, and I can see the point of threshing being the trigger point under the Act. But wheat straw is not much use as animal feed, and feeding whole-crop wheat to avoid triggering penalties under the Act is a rather fanciful strategy,

      Wheat in the 1940s had much longer straw than today, and so whole-crop wheat would be a bulky, low-nutrition, feed.

      That's the sort of detail that makes me wonder about the agricultural competence of the Court. Maybe they did all own farms. It doesn't mean they did any of the work or significant decision making.

    9. ksix exactly right, the magnificent thing about appellate law is that it takes up cases that involve private citizens, not just Monsanto and Archer Daniels Midland.

      Agree with the ruling or not, the crux of this case is the Supreme Court recognizing an expanded right of the United States Congress to regulate:

      [my emphasis]

      [Indent]>>> ...Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress may properly have considered that wheat consumed on the farm where grown if wholly outside the scheme of regulation would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.

      It is said, however, that this Act, forcing some farmers into the market to buy what they could provide for themselves, is an unfair promotion of the markets and prices of specializing wheat growers. It is of the essence of regulation that it lays a restraining hand on the selfinterest of the regulated and that advantages from the regulation commonly fall to others. The conflicts of economic interest between the regulated and those who advantage by it are wisely left under our system to resolution by the Congress under its more flexible and responsible legislative process. Such conflicts rarely lend themselves to judicial determination. And with the wisdom, workability, or fairness, of the plan of regulation we have nothing to do....
      <<<[End indent]

  2. This is a perspective on how federal intervention is one of the few powers that can help protect the commons:

    "The other villagers, faced with this situation, have a choice of their own to make. (We’ll assume, again, that they don’t have the option of forcing the villager with the new cows to get rid of them and return the total herd on the pasture to a level it can support indefinitely.) They can do nothing, in which case they bear the costs of the degradation of the pasture but gain nothing in return, or they can buy more cows of their own, in which case they also get more milk, but the pasture degrades even faster. According to most of today’s economic theories, the latter choice is the right one, since it allows them to maximize their own economic interest in exactly the same way as the first villager. The result of the process, though, is that a pasture that would have kept a certain number of cattle fed indefinitely is turned into a barren area of compacted subsoil that won’t support any cattle at all. The rational pursuit of individual advantage thus results in permanent impoverishment for everybody."

  3. The last time my AV software warning me about potential malware, I was downloading a software update from Adobe.

  4. I hesitate to link to this because it's so distressing but people should know who our dear friends and collaborators in the fight against evildoers are.

  5. Off topic but for any social scientists out there, the first comment in the thread for this Brad DeLong "same dog bites man yet again" post links to a site that features an interesting interactive series of charts. For anyone who thinks Social Security has problems down the road... wowsa.

    Paul Krugman has plotted an interesting graph of his own related to this last matter. [NY Times LINK]

  6. If you're comfortable with Obama's use of drones, then you're probably a Bush Democrat.