Krugman Messes with Texas Again: State Spending and Education Outcomes

Absent a Republican president, Paul Krugman's favorite target for disdain is the Texas statehouse.  Professor Krugman's column today equates the likely reductions in spending on education and health care in Texas (and elsewhere) with an attack on children. 

While low spending may sound good in the abstract, what it amounts to in practice is low spending on children, who account directly or indirectly for a large part of government outlays at the state and local level.

 And in low-tax, low-spending Texas, the kids are not all right. The high school graduation rate, at just 61.3 percent, puts Texas 43rd out of 50 in state rankings. Nationally, the state ranks fifth in child poverty; it leads in the percentage of children without health insurance. And only 78 percent of Texas children are in excellent or very good health, significantly below the national average.

Krugman's claim is pretty straightforward: Texas is bad for kids because of the state's low-spending policy choices.  Just one problem, though, at least in terms of public education, Texas is not exactly miserly.

Based on data  from the National Information Center for Higher Education Policymaking and Analysis, Texas had a high school graduation rate of 65.29% in 2008 (the most recent year for which data are reported).  That ranked Texas 43rd in high school graduation.  However, Texas ranked 26th in the country in terms of per capita spending on education ($293) and 15th in state and local education spending per pupil ($7,934).  Despite being at or better than the median in terms of spending on education among states, Texas has one of the worst high school graduation rates.  As incongruent as this may seem at first, Texas's situation is indicative of a larger trend.  Education spending at the state level is not strongly related to state-level educational outcomes.

The (limited) correspondence between spending and outcomes is evident in the following scatterplots.  (Data are from 2008 reported by National Information Center for Higher Education Policymaking and Analysis).  The first plots state education spending per capita against graduation rates.  The second plots the average combined state and local expenditures per pupil (adjusted for cost of living and state enrollment mix) against graduation rates. 

Both scatterplots tell the same story: money alone does not determine educational outcomes.  In fact, both figures show a negative relationship between educational expenditures and educational outcomes.  The correlation between state per capita spending and graduation rates is -0.25 (p=0.08).  The correlation between state and local spending per pupil and graduation rates is -0.40 (p<0.01). 

Obviously, spending does not cause poor educational outcomes at the state level.  In fact, my hunch would be that poor educational outcomes attract remedial spending.  In any event, looking over the list of high performing states, the secrets of their success are pretty evident.  These are the 17 states with the highest graduation rates in 2008---roughly the top third of all states.

Vermont	86.63
Wisconsin	85.57
Minnesota	85.38
New Jersey	85.21
Iowa	83.92
South Dakota	82.70
North Dakota	81.89
New Hampshire	80.62
Pennsylvania	79.52
Nebraska	79.46
Montana	78.76
Maine	78.67
Missouri	78.37
Kansas	78.23
Connecticut	78.12
Idaho	77.62

Basically, the highest performing states in terms of high school graduation are the upper Midwest and New England plus New Jersey (25th in per pupil expenditures) and Pennsylvania (41st in per pupil expenditures).  As a group, these first two sets of states states are richer, more racially and ethnically homogeneous, more sparely populated, less urban, and (not trivially) colder than the rest of the country.  As a descriptive datapoint, Vermont has the highest graduation rate in the country and the lowest adjusted per pupil education expenditures ($2,383---about 30% of per pupil spending in Texas).  Students in these states are (probably) much more likely to come from families with multigenerational histories of relatively high educational attainment and to develop personal expectations of scholastic achievement.

Now, look at the bottom 17 states in terms of high school graduation.

Washington	68.62
Hawaii	68.43
California	68.17
New York	67.13
Arizona	67.13
North Carolina	65.90
Alaska	65.82
Delaware	65.68
Texas	65.29
Alabama	64.03
Mississippi	61.69
New Mexico	60.61
Florida	59.56
Georgia	58.77
Louisiana	58.13
South Carolina	53.85
Nevada	47.56

There are dastardly  red states (Texas, Alabama, Mississippi) and sainted blue states (Hawaii, California, New York), eastern states (North Carolina and Florida) and western states (New Mexico and Nevada), northern states (Delaware) and southern states (Georgia and Louisiana).  In fact, the only link that spring to mind among the states are high levels of racial and ethnic diversity.

If I had to guess, high school graduation rates among middle class and wealthy white students are comparable in these states and in the Yankee states and frozen tundra states in the high achieving cohort.  The aggregate difference between states is due to the difficulty in delivering educational services to students in vulnerable and disadvantaged populations---namely the poor black, Latino, and indigenous populations that are scattered in high-density pockets throughout the country---regardless of how much money is spent on average per pupil or per person in the state.

I know much less about health outcomes the education outcomes---and don't have any data handy to support this intuition---but, I'd bet dollars to doughnuts that health outcomes among young people map pretty closely onto educational outcomes.  States with lots of vulnerable and disadvantaged young people probably have relatively poor aggregate health statistics for young populations regardless of the resources that are available for public health.  Aggregate health and educational outcomes at the state level are probably much more a product of economic and demographic characteristics than public policy choices.

All of which is to say that the state policy (i.e. spending) choices don't *cause* educational and health outcomes as Professor Krugman intimates.  All of which *is not to say* that Texas (or other states) should be as eager to cut spending on education and health care as it (which is to say, its elected officials) appear to be.  I would prefer a mix of tax increases (and spending from the rainy day fund) and spending cuts to either the current cut only proposals in the Texas legislature or the (I presume) tax only (or maybe tax and borrow) ideas percolating in Professor Krugman's mind.  Though, I think the preponderance of the state's fiscal imbalance should be remedied by reduced outlays.

Regardless of personal policy preferences, a newspaper editorial (or blog post) need not be a completely thorough analysis of any given policy problem.  However, Professor Krugman's column today seems to cherry picks data to make Texas look bad and ignores a variety of important factors aside from spending that bear on states' educational and health outcomes.  At a minimum, the implicit empirical claims in today's column are sloppy and unworthy of either Professor Krugman or The New York Times.  At worst, they willfully disingenuous.  Either is a shame.  Professor Krugman's academic position and Nobel Prize give his popular writing a veneer of dispassionate scholarship.  They deserve greater care.

More on Unions and State Budgets

Yesterday, I commented on John Sides's discussion of the link (or lack thereof) between unionization and state deficits.  My complaint was that John's analysis missed the point a bit.  The claim of union opponents is not that unionization per se increases deficits, but that public sector unionization increases spending which can exacerbate debts when revenue collections fall because of tax cuts or economic contraction.

When public sector unions participate in the political process, candidates who are supported by unions can become officeholders charged with negotiating collective agreements for public sector unions.  The unions, then, have agents on both sides of the bargaining table when their salaries and benefits are negotiated.  This obviously creates a situation in which any given bargaining session may yield compensation for union members that is greater than that which would have been negotiated under adversarial circumstances.  Terry Moe makes the point more thoroughly here.

Stephen Bainbridge has an extensive post on the subject, also making reference to Moe's argument, among others. 

The logic of anti-union arguments is pretty clear, in any event.  Either public employee unions extract greater wages and benefits for their members than they would have otherwise received (increasing spending) or they do not (no spending effects).  In the first case, union busting may decrease public spending.  In the second, union busting doesn't hurt anything because the unions aren't winning any rewards for their members.

Yet, John's original analysis suggests there is little link between state spending an unionization.  John has since updated his analysis on the basis of readers' comments.  John's updates deal with the distinction between public sector unions and unionization overall, deficits and spending, and deficits and debt (relative to the size of state economies).  The updates show that the link between deficits and public sector unionization is stronger than the link between deficits and unionization in general, and also that there are signifcant associations between public unionization and spending and between public unionization and state debt.

Having had a chance to update my own data from yesterday  (including filling some missing observations) using the sites John links to--- http://www.unionstats.com/ and http://usgovernmentspending.com/---I have a couple further notes.  First, I think the association between public sector unionization and spending is a bit strong than John makes out.  John plots the percent of public sector employees in unions against state spending per capita to judge the relationship between unionization and spending.  I think the issue comes into a bit sharper focus by considering the proportion of all workers in a state covered by a public sector union collective bargaining agreement against spending per member of the workforce.  The results, illustrated below, are pretty similar to Johns.  I think you get more leverage, though, because this unionization measure takes into account the size of the unionized public workforce relative to the size of the state's entire working population (and not just its public sector).  Spending per worker rather than per capita probably makes even less difference than the first, it seems to me to match up with the political claims that tax payers are supporting overly generous compensation packages for public sector employees a bit better than a per capita figure.

Again, I find much the same thing as John, but the relationship is a bit stronger overall.  Using data from all 50 states and DC, spending and public unionization correlate at 0.52 (p<0.01).  Removing the same outliers as John (AK, DC, and WY), the correlation strengthens modestly to 0.55 (p<0.01), though the slope of the bivariate regression lines slips from 1.32 to 0.78.  Using the all states estimate, an increase of 10 percentage points in the share of a state's entire workforce represented a public sector union collective bargaining agreement predicts an increase of about $13 thousand in state and local spending per worker.  Using the no outliers estimate, that increase in unionization predicts an increase in state and local spending of nearly $8 thousand per worker.

What about deficits, though?

To start to get a handle on deficits, I look at state revenues per worker and public unionization (using the same measure as above).  The top figure is based on all 50 states plus DC; the bottom figure excludes AK, DC, and WY.

In both cases, we see a positive association between unionization and revenues collected.  In the all states case, the correlation between public sector unionization and revenues per worker is 0.40 (p<0.01).  Removing the outliers, the correlation is 0.54 (p<0.01).  As we might expect, higher public unionization is associated with higher revenues (taxes and fees) as well as higher spending.

However, the association between public unionization and spending is "steeper" than the association between public unionization and revenues.  An increase of 10 percentage in public unionization (all cases) predicts $13 in addition spending per worker, but only $8.6 thousand in additional revenues.

How might we account for this disparity?

An obvious answer is that public sector unions exert asymmetrical political pressure on a states; fiscal decisionmaking.  They place demands for higher spending, but they do not make similar demands for revenue collections.  The second should be implicit in the first, but in practice, revenue policies are (sadly) made independently of spending policies.  Irresponsible or inattentive officeholders might easily submit to unions' political demands for higher compensation (spending) and other constituents' demands for stable or lower taxes and fees (revenues), winning accolades form both in the short-run while burying their states in fiscal disasters in the long-run. 

My take away, public sector unionization is probably related to higher spending and higher revenue collections.  It is probably also related to higher deficits, but only because of other structural features of the political process related to the elector incentives of legislators and the severability of spending and revenue questions.  Union busting may reduce government spending, but that's only half the problem.  Figuring out a way to induce actual fiscal responsibility in state governments---in the sense of creating adequate, sustainable, and fair revenue streams that support a given basket of spending policies---is the harder part.

Public Sector Unions and State Budgets

At The Monkey Cage, John Sides blogs about the relationship between unionization and state budgets deficits.  He notes that there is little systematic relationship between the level of public sector unionization and current budget deficits among the states.  Plotting current state shortfalls as a percent over levels of public unionization shows that:

There is not much of a systematic relationship. The fit line bumps and wiggles but is essentially flat. The bivariate correlation is 0.19, with a p-value of 0.21. Based on these measures, states with larger unionized workforces do not have larger budget deficits.

The data are quite clear, but I think they are nonetheless a bit misleading.  I don't think the claim of Gov. Walker in Wisconsin and other opponents of public sector unionization is that unions create deficits directly.  Instead, I think, the claim is that the political influence of public sector unions combined with the collective bargaining process increase spending (which increases deficits when revenue collections fall due to reductions in tax rates or a shrinking economy).  When public sector unions participate in the political process, candidates who are supported by unions can become officeholders charged with negotiating collective agreements for public sector unions.  The unions, then, have agents on both sides of the bargaining table when their salaries and benefits are negotiated.  This obviously creates a situation in which any given bargaining session may yield compensation for union members that is greater than that which would have been negotiated under adversarial circumstances.  Terry Moe makes the point more thoroughly here.

So, the correlation we would expect is between public sector union membership (particularly membership subject to collective bargaining agreements) and public expenditures.  And, in fact, that is what we may observe.  Using data on public sector unionization for 2010 from unionstats.com and state spending for 2011 from the CBPP, I constructed the following scatterplot:

This shows a much stronger positive relationship between public sector unionization and state budget's than Sides's deficit data would suggest.  Here, the bivariate correlation is about 0.6, meaning that public sector unionization can account for about 35% of the variance in spending per member of each state's workforce.  Along the bivariate regression line, each additional percent of a state's workforce in a public sector union covered by a collective bargaining agreement predicts additional expenditures of about $400 per worker in the state.  (Wisconsin, by the way, is smack on the regression line.)

Let me note a couple things that are problematic about my analysis.

First, I am missing budget data from eights states: WY, TN, ND, NH, DE, AR, AK, and AL.  (I computed total state spending for 2011 from Table 1 on the indicated CBPP webpage, so I had to live with their missing data.  I couldn't find an alternative source within my self-imposed blogging time limit.)  With the exception of AK, which has high unionization, most of these states are probably in the low spending low unionization quadrant, so I wouldn't expect the correlation or fit line to change much, but it could.

Second, budgeting is a complex political process with very strong autoregressive (perhaps even integrated) components.  So, budgets in any given year reflect many prior years of budget decision-making.  Unionization rates in one year tell us only a very small part of the story about the formulation of a budget in that year.  So, it would be very easy to over-read the figure I've produced or put too much stock in the slope of that regression line.

Having said all that, I think the Walker-Moe point of view has more merit than most of its opponents suggest.  Public sector unionization may very well create political dynamics that push public expenditures above levels they would have reached otherwise.  Limiting the scope of public sector unions' collective bargaining rights may be a useful structural reform for limiting the growth of government spending over time.

Are the Rich Better Represented?

Blogging at Mother Jones, Kevin Drum recalls research by Larry Bartels and Martin Gilens pointing out that the preferences of wealthier citizens more strongly predict congressional voting and legislative outcomes than the preferences of poorer citizens.  I have done and continue to do some work on this subject (here and here), and, frankly, I think Bartels and Gilens, and by extension Drum, are incorrect. 

The upshot of my work (and a similar study by Stuart Soroka and Chris Wlezien) is that the majority of wealthier Americans usually want the same thing out of government as the majority of poorer Americans.  So, it is usually impossible to represent the rich without representing the poor.  Bartels's pithy "Homer Gets a Tax Cut" actually offers some explanations for why this may be the case by examining the case of support for President Bush's 2001 tax cut proposal across income groups---including among the poor who did not stand to gain much directly from the proposal.  Whatever the cause, though, representational bias can only emerge if majorities of rich people and poor people are on different sides of the issue, which is rarely the case.  Income is just not the pivotal social cleavage in American politics often enough for this systematic bias to emerge.

This leaves a puzzle.  How do we account for the evidence presented by Bartels and Gilens.  Jim Stimson suggests an answer: measurement error.  Since income is positively associated with political sophistication, wealthier Americans are more apt to understand politics in the terms used by pollsters and other political elites and to express their ideological orientations and attitudes more precisely in survey responses than poorer Americans.  This creates an unfair horse race between the aggregated preferences of wealthier and poorer citizens in models of legislative voting and policy outcomes.  These models include two indicators of the same thing: public opinion.  One of those indicators has much more measurement error than the other.  As a result:

[T]o the degree that upper-income constituents are also better educated, more involved, and so forth, we would expect their views to be the most precise, with those of the middle less so, and those of the lower-income constituents least. This would produce the reported finding, even in the absence of any discriminatory behavior on the part of senators.

I am sympathetic to the idea that public policy can influence the distribution of income, but I don't think the growth of income inequality follows from a bias in the system of representation.  To the extent that that growing skewness in income is the result of political choices rather than structural changes in the economy (e.g. globalization putting downward pressure on manufacturing wages and upward pressure on "superstar" wages in finance) it has emerged, in part, because lower income Americans have joined with higher income Americans in their opposition to high taxation wealthy Americans.  Understanding how poor, working class, and middle class Americans link (or do not link) their economic self-interest with their political preferences and behaviors is a more promising path for sorting out the inequality problem than simply blaming a selectively unresponsive government.

Mr. Micawber, Mr. Buchanan, and the Deficit

Thinking about today's budget news, I am reminded of Mr. Micawber's immortal advice to David Copperfield:

Annual income twenty pounds, annual expenditure nineteen six, result happiness. Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

I am also reminded of President James Buchanan, of whom the Wikipedia notes:

By the time he left office, popular opinion had turned against him, and the Democratic Party had split in two. Buchanan had once aspired to a presidency that would rank in history with that of George Washington. However, his inability to impose peace on sharply divided partisans on the brink of the Civil War has led to his consistent ranking by historians as one of the worst Presidents. Buchanan biographer Philip Klein puts these rankings into context: "Buchanan assumed leadership [...] when an unprecedented wave of angry passion was sweeping over the nation. That he held the hostile sections in check during these revolutionary times was in itself a remarkable achievement. His weaknesses in the stormy years of his presidency were magnified by enraged partisans of the North and South. His many talents, which in a quieter era might have gained for him a place among the great presidents, were quickly overshadowed by the cataclysmic events of civil war and by the towering Abraham Lincoln. [References omitted.]

The federal budget cannot be balanced, let alone the national debt repaid, except by means that will shock the ordinary Americans who have been quietly going about the business of their lives while political leaders of both major parties have led us inexorably edge of ruin. The health care town halls and tea parties of the last two years are mere tremors compared to the size and scope of conflict that will emerge when real austerity is ultimately forced on us by a real fiscal crisis. 

Is there absolutely no one in any position of responsibility anywhere in the national government with the guts to actually deal with this problem? 

Do the Packers Prove That Socialism Works?

Miguel Centellas, a political scientist at the University of Mississippi, has first dibs on the next big metaphor for the political left: the Green Bay Packers. 

He writes:

The Green Bay Packers are publicly owned by the City of Green Bay.  Thus, in contravention to the currently dominant ideology that the private sector can always do things better than the public sector, the Packer's victory in the Super Bowl yesterday was in part a victory of public officials outperforming their private competitors.

It's a clever and well made point.  But, it is wrong in at least two ways.

1. The Green Bay Packers are not owned by the City of Green Bay nor are they operated by "public officials."  The Green Bay Packers are owned by a corporation, albeit a nonprofit corporation.  According to the Wikipedia, roughly 112,000 stockholders own about 4.75 million shares in the Green Bay Football Corporation.  It is run by a board of directors that elects corporate officers who represent the team's collective owners to the League, etc.  I am certainly no corporate law expert, but I presume that officers of a nonprofit corporation have pretty similar fiduciary duties to their shareholders as those of a for-profit corporations.

All of this is to say that the City of Green Bay does not own the team.  The mayor of Green Bay is not ex officio its president, general manager, or head coach.  There are no "public officials" in the equation to outperform their "private counterparts."

I am open to claims that nonprofit management of a unique public resource or accommodation may be superior to for-profit management of the same resource or accommodation, but that is much different than saying that public management is superior to private management.

2. Even if the Packers were directly owned by the City of Green Bay, it would be very difficult to read the performance of the Packers as evidence of the raw power of public management.  The NFL is not a free market.  A socialist franchise would benefit from all of the collusive structures embedded in the NFL that promote parity among the teams in order to maximize the shared monopoly rents that the owners as a group can squeeze out of the public.  Tiny Green Bay, smaller than Bryan-College Station, gets the same cut of television revenue and pays players the same capped submarket wages as every other team in the League.  Essentially, the League subsidizes football in some places (Green Bay) at the expense of others (Chicago) because it maximizes the shared profits of the owners.  Absent this monopolistic behavior on the part of the League, football in Green Bay, publicly or privately held, would have withered a long time ago.  This may help the League as a whole put on a better show, but it's no free market.

Thanks to Kim Yi Dionne for pointing this one out.

Professor Tribe Thinks People Like Me Misunderstand the Supreme Court

Harvard Law Professor Laurence Tribe reads the Supreme Court's tea leaves as pointing strongly toward affirming the constitutionality of the Patient Protection and Affordable Care Act.  In fact, he thinks people like me are very much off base.

But the predictions of a partisan 5-4 split rest on a misunderstanding of the court and the Constitution. The constitutionality of the health care law is not one of those novel, one-off issues, like the outcome of the 2000 presidential election, that have at times created the impression of Supreme Court justices as political actors rather than legal analysts.

Since the New Deal, the court has consistently held that Congress has broad constitutional power to regulate interstate commerce. This includes authority over not just goods moving across state lines, but also the economic choices of individuals within states that have significant effects on interstate markets. By that standard, this law’s constitutionality is open and shut. Does anyone doubt that the multitrillion-dollar health insurance industry is an interstate market that Congress has the power to regulate? 

Professor Tribe is quite correct about the Court's string of New Deal compromise Commerce Clause cases.  PPACA falls is a straight line with those cases, but I think he underestimates the extent to which the mandate to purchase health insurance may be distinguishable from other regulated economic activity.   Regulating what kinds of products may be sold, by whom, to whom, and at which prices in an interstate marketplace are within the scope of the Commerce Clause.  Requiring someone to participate in a marketplace in the first place is different.  It is the difference between regulating commerce and regulating everything. 

If Congress may compel a person to purchase health insurance to expand the risk pool, may it also require him to purchase life insurance?  Surely, people without life insurance sometimes burden the public with their burial expenses and the costs of caring for dependents for whom no arrangements have been made.  In what way would a life insurance mandate be different from the health insurance mandate?

If Congress may penalize people who fail to buy insurance, may it also penalize people for being overweight?  Surely, people who are overweight, on average, burden the public by consuming disproportionate shares of health care resources.  In what way would a mandate against obesity be different from the health insurance mandate?

Just because the Commerce Clause permits Thing 1 and Thing 2 does not mean that it must also permit Thing 3 as long as it falls on the same line as 1 and 2.  Requiring people to spend their money on a private good sold only by a relatively small number of government approved and regulated firms is different than taxing workers to provide a public benefit or social service.  It may only be different as a matter of degree and not of type, but it is a consequential degree that yields a more legitimate argument against PPACA than Professor Tribe suggests.

That legitimacy is critical, as I explained yesterday, because it creates the space necessary for the justices' political predispositions to play a larger role in the outcome of the case than if it were as open-and-shut as Professor Tribe suggests.

If I were to read political motives into Professor Tribe's editorial, I would, in fact, presume that he fully understands this and is working to delegitimize legal arguments against PPACA to leverage political dynamics on the Court to his advantage.  More precisely, he presents PPACA as a mortal lock for a favorable judgment because only the perception that the alternative outcome is wholly without legal merit can salvage the law. 

Indeed, Professor Tribe has some track record of this kind of strategic public relations campaigning.  In 1989, also in the editorial pages of The New York Times, Professor Tribe argued that the Flag Protection Act, which made it a federal crime to burn an American flag, was constitutionally permissible despite the Supreme Court's recent ruling in Texas v. Johnson that state laws banning flag burning violated the First Amendment.  Held up against Professor Tribe's extensive public record, his opinion about the flag burning ban is anomalous.  It may be that he sincerely believed Congress could criminalize flag burning.  Or, it may be that he made this opinion public in order to forestall efforts to amend the Constitution to explicitly permit Congress to ban flag burning in favor of a statutory remedy that would not survive judicial scrutiny.  In doing so, Tribe provided cover for those who privately opposed banning flag burning while posturing by passing an ordinary statute against it.  By the time the Supreme Court got around to striking down the new federal law in 1990, tempers had cooled sufficiently to allow the constitutional ban to be (politically) safely slain.

I oppose banning flag burning, and I can appreciate the intellectual sacrifice that, I believe, Professor Tribe made by strategically misrepresenting his views to advance a political-constitutional cause he supported.  My point in bringing this up now is merely to suggest that law professors can be just as much attitudinalists as judges and justices and that public representations of personal views may be influenced by strategic considerations.  Given the political imperative of undermining the credibility of constitutional arguments against PPACA, I think it is worth taking claims about the legal standing of PPACA from its political supporters with a grain of salt.

Books for College Students

A "talented and ambitious" colleague and friend mentioned that she is reading one the four books I like to recommend for students entering college on her blog. 

I'll try to get around to a longer post on each, but here are the four.

1. A Tree Grows in Brooklyn
2. Siddhartha
3. Letters to a Young Poet
4. I Am Charlotte Simmons 

Prediction: SCOTUS 5-4 Striking PPACA (Obama's Health Care Reform)

My talk at the University of Texas Law School on the political construction of judicial independence was snowed out yesterday.  My coauthor and I had already made our way to Austin on Thursday, though, and had a chance to have dinner with a handful of the law school faculty.  Everyone was incredibly gracious and interesting, and I am bummed to have missed out on the chance to present our paper.

During dinner, talk turned to the recent federal court decisions variously upholding and striking down the Patient Protection and Affordable Care Act (a.k.a. the health care reform law or ObamaCare) and speculation about whether and how the Supreme Court would eventually decide the case.  Given the preponderance of lawyers around the table, the conversation focused on prior Commerce Clause cases as they relate to the individual mandate to purchase health insurance under PPACA.

Not being a lawyer, though, I approach the problem of the Supreme Court's likely disposition of the case somewhat differently.  For me, the issue isn't simply identifying the outcome most strongly consistent with prior cases.  There is ample reason to believe that a variety of extralegal factors bear on Supreme Court decision-making in general and are likely to influence a ruling on PPACA in particular.  Looking at the Court from a political perspective, leads me to think that a 5-4 decision against health care reform is coming. 

Here are my considerations in making that prediction.

1. The availability of plausible legal arguments on both sides of the issue.  Supporters and opponents of PPACA have both advanced reasonable claims about the constitutionality of the individual mandate to purchase health insurance under the Commerce Clause.  Supports claim that PPACA's mandate provisions are protected by well-established case law finding that Congress has broad authority under the Commerce Clause to regulate individual noncommercial behavior that, in the aggregate, may influence interstate commerce.  Opponents (generally) concede the reading of prior cases, but argue that PPACA's mandate provisions are somewhat more expansive regulations of individual (non)behavior than those upheld in prior cases and that this marginal increase in intrusiveness crosses, even just barely, a critical line demarcating the boundary between the power to regulate interstate commerce and the power to regulate anything. 

Better legal minds than my own can, will, and do disagree about which of these two claims is superior.  The relative merits of each, though, are less important to my analysis than the simple fact that both have merit in the first place.  The law constrains the Supreme Court only to the extent that the canon of legal doctrine and legal reasoning rule out (more or less) completely ridiculous claims.  When the justices face multiple plausible outcomes, that constraint dissolves and the justices are relatively free to choose among the available outcomes on the basis of other criteria.

2. The justices' attitudes.  Given multiple, plausible resolutions to a particular case, there is substantial evidence that justices are apt to choose the alternative most consistent with their personal political preferences.  I do not know, but I suspect that five justices (Alito, Kennedy, Roberts, Scalia, Thomas) would prefer---as a matter of personal political preferences---that PPACA not be in effect.  Faced with the availability of reasonable legal claims that support striking down the law, theses justices' predisposition will be do to so.

3. The separation of powers.  The results from the last election make it highly unlikely that a decision vetoing PPACA would be attacked through the elected branches of government by either reenacting similar legislation or undertaking serious court curbing activity.  Republican control of the House of Representatives and the relevant filibuster pivot in the Senate mean that the Court is protected for the foreseeable future from serious efforts to undermine the Court's decision or the Court itself.  The Supreme Court could strike down PPACA without risking a damaging backlash.

4. Public opinion.  The public remains divided over PPACA.  For anyone offended by a decision overturning the law, the Court may count on at least one person heartened by the same decision.  There is no net loss of short-run political support by making the decision.  Moreover, the best evidence available suggests that taking on a high profile decision like this one may ultimately yield a long-run increase in public support for the Court as news of the decision acts as a giant civics lesson for the country, exposing ordinary people to the powerful legitimizing symbols that surround the Court.

5. Anthony Kennedy.  This is a bit of Kremlinology, but...  We are all motivated by our self-concepts: the pictures of ourselves we carry around in our heads.  In general, we want to act like the people we think we are, and, maybe even more importantly, we want to act so that other people sees us like we think we should be seen. 

Above and beyond Anthony Kennedy's reasonably mainstream Republican politics, I think his self-concept is nicely summed up by the title of one scholarly analysis of him and his judicial philosophy: The Tie Goes to Freedom.  Justice Kennedy sees himself as one of the great defenders of personal freedom in the history of the Supreme Court.  So, he has become one of the great defenders of personal freedom in the history of the Supreme Court. 

Joining a majority that confirms yet another incremental extension of New Dealism by upholding PPACA is strongly inconsistent with that vision of Justice Kennedy.  Leading a majority that draws a line in the sand protecting personal freedom and reviving the idea of judicially enforceable limits on Congress's Commerce Clause powers is precisely consistent with that vision of Justice Kennedy.  Being the fifth vote to strike down PPACA, especially if he is also the fifth vote to strike down state prohibitions against same-sex marriages, makes Justice Kennedy the most important and interesting member of the Supreme Court at least since Earl Warren.  Combined with (I presume) a preference to let the politics of health care reform in Congress unfold with a stronger Republican voice in the process, Justice Kennedy's pivotal voice seems likely to emerge among the opponents of PPACA

6. Marbles.  This Supreme Court has 'em.  Contested presidential election?  We can handle that.  Want to ban corporate money in elections?  We don't.  How about handguns?  Nope.  These guys have no compunction about telling the rest of us what the Constitution does and does not allow.

As Chief Justice Rehnquist wrote in U.S. v. Morrison:

No doubt the political branches have a role in interpreting and applying the Constitution, but ever since Marbury this Court has remained the ultimate expositor of the constitutional text. As we emphasized in United States v. Nixon (1974), “[I]n the performance of assigned constitutional duties each branch of the Government must initially interpret the Constitution, and the interpretation of its powers by any branch is due great respect from the others… . Many decisions of this Court, however, have unequivocally reaffirmed the holding of Marbury … that ‘[i]t is emphatically the province and duty of the judicial department to say what the law is.’ ” Contrary to Justice Souter’s suggestion... [the commerce power is] not exempt... from this cardinal rule of constitutional law. His assertion that... public opinion has been the only restraint on the congressional exercise of the commerce power is true only insofar as it contends that political accountability is and has been the only limit on Congress’ exercise of the commerce power within that power’s outer bounds.

If a majority of the justices on the Supreme Court are inclined to strike down PPACA, they will strike down PPACA and let us sort out the rest.

Bill Maher's Stoopidly Apt NFL Tirade

Last week, Bill Maher went off on a rant comparing the National Football League and Major League Baseball as a metaphor for Democratic and Republican governing philosophies.  In a nutshell, the NFL is good because its "socialist"---the teams share revenues and players work under a salary cap---and MLB is bad because its capitalist---teams share less revenues and there is no salary cap.  This make the NFL more competitive and interesting, and MLB "incredibly boring."  


So, Maher's metaphor for Democratic Party governance is a secretive network of billionaires who collude with one another and the league (government) to set wages of their  largely black and working-class (background-wise, anyway) employees below their market rates (the salary cap), providing nominally extensive health care that does little to actually enhance health (concussions), while providing an over-priced product to the public, stifling competition, and maximizing their collective profits all the while distracting everyone with plenty of bread and circuses.

Sounds about right, actually.

Egypt and Social Choice

Events in Egypt are an important reminder that social choices---even social choice over constitutions and governing arrangements---are rarely in equilibrium.  Constitutional choices may be "sticky" and they can be reinforced by external actions, such as threats of violence, but the forces that give rise to any given regime can also support efforts "to alter or to abolish it, and to institute new Government."  When it become evident that a given constitutional order does not produce outcomes consistent with the needs or preferences of some critical mass of citizens, alternative regimes will be offered and, sooner or later, the status quo will be replaced.   As Riker wrote in 1980:

In the end, therefore, institutions are no more than rules and rules are themselves the product of social decisions. Consequently, the rules are also not in equilibrium. One can expect that losers on a series of decisions under a particular set of rules will attempt (often successfully) to change institutions and hence the kind of decisions produced under them. In that sense rules or institutions are just more alternatives in the policy space and the status quo of one set of rules can be supplanted with another set of rules. Thus the only difference between values and institutions is that the revelation of institutional disequilibria is probably a longer process than the revelation of disequilibria of taste.