The Attitudinal Model and Laurence Tribe's Crystal Ball

In February, I wrote about Harvard Law School Professor Laurence Tribe's essay claiming that people who predict a closely divided vote along partisan or ideological lines in a Supreme Court decision about the constitutionality of the Patient Protection and Affordable Care Act (Health Care Reform or Obamacare, if you prefer) misunderstand the Supreme Court and constitutional law. Professor Tribe wrote, in part:

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. 

Professor Tribe's complete confidence in the constitutionality of the PPACA should provide little comfort for supporters of the law. Digging around in Lexis-Nexis for some lecture material, I ran across Professor Tribe's evaluation of the prospects for the success of then-Governor George W. Bush's federal claims against the effort to complete a partial recount of votes in Florida in 2000:

Laurence H. Tribe, a constitutional scholar at Harvard University who is leading Mr. Gore's legal team in the federal courts, said that he had expected the Bush appeal to the Supreme Court but that it would fail.

"This appeal will not be hard in the least to defend, because the federal questions are frivolous," Mr. Tribe said. "There is no plausible basis for arguing that there is a federal constitutional flaw in the carefully reasoned way in which the Florida court deliberated."

That's from The New York Times, p. A1, November 23, 2000, "Bush Takes Appeal to the U.S. Supreme Court" by Adam Purdum. 


In contrast, in their 1993 book on the attitudinal model, political scientists Jeffrey Segal and Harold Spaeth predicted:

if a case on the outcome of a presidential election should ever reach the Supreme Court...the Court's decision might well turn on the personal preferences of the justices.

Claims that justices act, in part, on the basis of their political predispositions in general or that they will do so in a case considering the PPACA are neither "distressing" nor "crude," as Professor Tribe writes. Rather, they follow naturally from decades of political science research on the extralegal influence on the behavior of Supreme Court justices. Those interested in predicting and, later, understanding the results of PPACA litigation before the Supreme Court should avoid Professor Tribe's casual dismissal of "politics" as an influence on the business of the Court.

Elizabeth Warren and the Road

Elizabeth Warren is a serious scholar of bankruptcy at Harvard, but, off-campus, she has become a partisan hack and a candidate for the U.S. Senate in Massachusetts. Her preferred metaphor for her political style is "throwing rocks" at Republicans. It is possible, I suppose, that Warren has not thought about or does not understand her own trope. A thrown rock, though, is actually dangerous. People get hurt and killed by them all over the world. Picking that as the preferred description of your mantle is at least tasteless and petty.

Watching video of Elizabeth Warren rail against entrepreneurs, though, makes me think her rock throwing self-image is surprisingly apt. Warren argues that the state's role in coordinating the provision and maintenance of public goods entitles the community to take whatever it wants from those who benefit from using them:

There is nobody in this country who got rich on his own — nobody.

You built a factory out there? Good for you. But I want to be clear. You moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police-forces and fire-forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory — and hire someone to protect against this — because of the work the rest of us did.

Now look, you built a factory and it turned into something terrific, or a great idea. God bless — keep a big hunk of it. But part of the underlying social contract is, you take a hunk of that and pay forward for the next kid who comes along.

Warren's allegory of the road shows her deep misunderstanding of the relationship between the individual and the state and offer a window into a political philosophy which requires individuals to justify keeping their earnings and property rather than requiring the state to justify taking from the individual for some legitimate public purpose.

First of all, the gal who built the factory also probably helped pay to build that road she uses to pay to bring her goods to market. And, since she is rich, she probably paid a lot more toward its construction than the rest of us poor schlumps. Also, her use of the road for commercial purposes doesn't stop the rest of us from using and benefiting from the road we all paid for. Anyone gets to use the road, subject to limitations like speed limits and weight restrictions that keep it safe to use and in good order, for whatever purpose she wants. In fact, we all got together (figuratively) and agreed to build the road in the first place because we would all be better off by building it. The community is entitled to collect a tax to create and preserve the road, but fact that someone uses the road doesn't entitle the community to tax them.

Warren wants the prior provision of the public good by the state to justify the prospsective taxation of those who benefit from it. That formulation of the case of the road is exactly backwards.The right way to look at it is that prior tax collections were used to provide a public good from which we may all enjoy benefits. The community has a right to make a social choice to tax individuals to enure the maintenance of the road, but it does not have a general claim to a "hunk" of the benefits obtained by using the road. That may seem like a subtle distinction, but Warren's version of things implies that the state has a claim on my property restricted only by its perception of the size of the "hunk" I am allowed to keep for myself. The alternative grants the state a limited and discrete claim on my property.

Mike Munger makes the same point much more colorfully:

If I need security, I get a dog. If a group of us need security, we might sign a contract and get a really big, strong dog. Let's call it...I don't know... GOVERNMENT. It's big, stupid, poops in places it shouldn't and wastes a lot of time sleeping and licking its "Representative Wiener", because it can.

But, suppose that big smelly dog also does a reasonably good job protecting my house, and yours. We build factories, we create wealth, we do a lot of useful things.

And it's true that we needed the dog, for security, so we could concentrate on things that idiotic, lazy dogs can't do.

For some reason, Elizabeth Warren concludes from all this that our dog...OWNS OUR HOUSE! That is just a non sequitur. It's a DOG. But here is what she says.

Warren's allegory of the road also leave out the extent to which the rest of us have gained by building road that lets the factory owner move her wares to market. Sure, the factory owner makes a profit selling her sprockets and cogs, but we are all better off because there are sprockets and cogs to buy and jobs to be had in the factory as well as opportunities to sell parts and materials to the factory (using the road to take things to the factory), to build and sell homes to all those factory workers (who will use the road to get to and from work), and on and on and on.Warren tells us that the factory owner would be worse off without the rest of us. Fine. But, we would all be worse off, too, without the factory owner.

Warren's limited view and misunderstanding of the relationships among the state, individuals, and public goods would be harmless enough tucked away in her next law review article, but she wants to be a rock throwing United States Senator. As I wrote earlier,

Elizabeth Warren is many wonderful things, but she is also exactly the sort of partisan busybody who likes to think she knows how to make better choices for other people than they do and is eerily comfortable using the coercive power of government to push the rest of us into making the kinds of choices she likes and punish those who disagree with her.

Frankly, the combination of her statist urges and her inclination toward describing herself as a destructive or violent partisan (depending on if she is throwing her rocks at things or people) gives me the heebie-jeebies.

Given the huge Democratic advantages in Massachusetts, it is sadly likely that Warren will end up in the Senate. Scott Brown remains personally popular in the state, though, and barring a major economic turnaround, there is some chance that the anti-Democratic tide that started in 2010 may come in high enough in 2012 to deliver her safely back to Harvard Yard. Early polls are pointing to a tight race. So, there is some hope, I suppose.

United Kingdom, Great Britain, England...

This great video, which I discovered via John Transue, explains the complex geography and political associations of the nations and territories of the former British Empire.

Perry, Ponzi Schemes, and Social Security

Rick Perry's comments labeling Social Security a Ponzi scheme have generated a lot of unflattering attention from many liberals (not surprising) and from other Republicans (a little surprising). In particular, Governor Perry's principal rival for the Republican presidential nomination, former Massachusetts Governor Mitt Romney, has argued that a political attack on Social Security would be a major electoral liability for the GOP in next year's elections. In an interview with Sean Hannity, Romney said:

If we nominate someone who the Democrats can correctly characterize as being opposed to Social Security, we will be obliterated as a party.

As someone who is on record defending the Ponzi scheme label for Social Security, it is probably not surprising that I come down on Governor Perry's side of this spat:

Social Security works by paying cash benefits to retirees and the disabled from taxes contributed by those currently working who are, int turn, promised benefits when they retire or should they become disabled. Neither a Ponzi scheme nor Social Security use contributions from "existing investors" to purchase assets that might provide returns to those investors. Instead, both a Ponzi scheme and Social Security depend on the contributions of new "investors" to redeem promises made to "existing investors." As a result, both a Ponzi scheme and Social Security will continue to make good on promises to "existing investors" so long as a sufficient stream of "new investors" are brought into its system. However, both a Ponzi scheme and Social Security will ultimately fail to pay promised returns if inputs from "new investors" are insufficient to cover the payments due "existing investors."

Social Security is especially egregious in its self-representation as some sort of investment plan. It even sends out annual statements of "contributions" that  Americans have made into the Social Security system and the "credits" that workers have earned. Of course, unlike an actual investment, Americans have no proprietary claim to Social Security benefits and the government has no contractual obligation to pay benefits that anyone has "earned."

Whether "Ponzi scheme" is a fair description of Social Security is one thing, but whether it is good politics for a presidential candidate, like Governor Perry, to employ it is another question. The conventional wisdom, of course, is that this is a bad idea. Americans, as a group, like Social Security, and older people, who are especially likely to vote, are apt to punish politicians who are perceived as a threat to Social Security. So, the thinking goes, denigrating the program, especially in a way that suggests an openness to reductions in benefits in the foreseeable future, is politically dangerous.

I will freely admit that there are risks to an aggressive stance on Social Security, but there are some big potential rewards, too. Social Security *is* in trouble, and every payroll tax holiday just makes that trouble just a little bit bigger. Sooner or later, the Social Security status quo has to be changed: benefits will have to be cut or means-tested, eligibility ages will have to go up, payroll taxes will have to be raised, or some combination of these things. Pointing out that Social Security is not an earned asset, but a program of taxing and spending that is not actuarially sound, is both true and a potentially a good political posture.

*If* voters see that Social Security is in trouble, then the politician who pulled the fire alarm can get some traction. Politicians who defend the status quo can be painted as the threat to Social Security. Those who are aggressive about criticizing the status quo and proposing reforms can make reasonable claims to be the program's savior.

Getting voters to buy the notion that Social Security is in trouble shouldn't be that hard. It is, and the recent deficit debates should help emphasize the general theme of Washington's irresponsibility and the unsustainablility of our fiscal policies. Moreover, the president and his record of deficit, debt, stimulus, bailouts, and paying for policies on layaway is, in some ways, the personification of Social Security's problems. President Obama did not create the seriously underfunded federal entitlements, but he has been utterly unwilling to deal with them.

The more difficult part is putting together a reform plan that cannot plausibly be portrayed as an effort to undermine the progam. Some combination of means-testing benefits, slowly raising retirement ages, and further incentivizing private retirement savings, so fewer people will draw out of the (means tested)  system later, wouldn't fundamentally change the nature of the Social Security system, but it would make it more sustainable and help more people become independent of the federal government during their retirement in the future.

So long as Governor Perry's tough talk on Social Security is a prelude to offering a plan for seriously reforming it (and hopefully, other federal entitlements), he call call it whatever he wants and leave those telling him to play it safe safely behind, too.

ATR, Supermajorities, and Balanced Budgets

Americans for Tax Reform is an utterly misnamed organization at this point since its political efforts are now entirely aimed at preserving the utterly dysfunctional status quo of our public revenue system. Lobbying hard against removing ridiculous tax subsidies for ethanol was a low point. It's position on a supermajority requirement for raising taxes in a Balanced Budget Amendment is even lower.

This is how ATR explains things:

Washington has an overspending problem, not an under-taxing problem. Historically, outlays have averaged about 21 percent of Gross Domestic Product (GDP) while revenues have amounted to about 18 percent of GDP. Due to the Obama Administration and Congressional Democrats’ spending binge, outlays now average almost 25 percent of GDP, and are projected to stay around 23 percent in perpetuity.

Unless tax hikes are taken off the table, reckless lawmakers will increase taxes to pay for these new bloated spending levels, rather than bring spending in line with revenues. Any lawmaker serious about restoring American solvency cannot seriously vote for a BBA that does not include a super-majority requirement for tax increases. To pass a BBA that allows a tax hike by simple majority is to distract from the real problem of government spending, and leave taxpayers to bear the burden of foolhardy federal budgeting.

First of all, Washington does have an under taxing problem right now. Revenues are about 14% of GDP, well below the 18% historical average. Raising revenues back to 18% would cut the deficit in half. But, I digress.

A rule to require a supermajority vote in order to "raise taxes" means that a host of sensible, valuable, pro-growth, conservative ideas for, you know, tax reform effectively get taken off the table. Removing deductions, credits, and exemptions for special interests? Getting rid of the awful carried interest loophole for equity fund managers' pay? Generally moving to a flatter, fairer, simpler, more transparent tax system? Under any of these arrangements, someone's taxes will increase even if many people's tax liabilities go down. If we apply the ATR's interpretation of its so-called "Taxpayer Protection Pledge" to a constitutional provision requiring a supermajority vote to raise taxes, then the prospects of actually, you know, reforming the tax system in a meaningful way goes down the toilet.

Moreover, the temptation in Congress is not going to be to raise taxes in general but to raise taxes selectively to cover spending. So, the right approach is to include a provision that sets a maximum ratio of the highest marginal tax rates to the lowest marginal tax rate above a defined income threshold. For example:

In no case shall the highest total marginal rate of taxes on annual individual incomes imposed by the government of the United States be no greater than three times the lowest total marginal rate of taxes on annual individual income above $35,000 or its equivalent adjusted for inflation.

So, if the lowest total marginal income tax rate (the rate produced by combining collections from income taxes, Social Security taxes, Medicare taxes, etc.) [say on income between $35k and $50k] were 15%, the highest combined marginal tax rate could be no higher than 45%. And, if Congress wanted to raise the total marginal rate at the high end, they would have to raise the rate at the low end, too.

This rule would ensure that the costs of government are borne broadly by the American people so that efforts to increase the size and scope of government activities necessarily imply imposing real costs on electoral majorities. By extension, any "reckless" legislators who tried to support spending on less useful programs and services by passing the buck to taxpayers would quickly find himself out of a job. 

In contrast, an arbitrary supermajority threshold for tax increases doesn't really protect taxpayers. It just institutionalizes a mechanism that will build up unsatisfied demand for government services and programs that will, eventually, manifest itself as the unthinkable supermajority that imposes skewed tax increases along with its bursts of new government programming. Indeed, the supermajority rule for tax increases strikes me a sure-fire recipe for exacerbating the pathologies of the current fiscal mess in which the country finds itself.

The other provision utterly lacking in drafts of Balanced Budget Amendment proposals I have seen is a rule for spending in the absence of a new budget. Congress is legally obligated to pass a budget each year, and we see how well that works. Unless a BBA is judicially enforceable, i.e. courts can order new taxes or spending (which we really don't want to do) there is no mechanism to ensure that budgets actually balance and no accounting for spending that's not part of an official budget, like this year's government by continuing resolution.

For any fiscal year or part of a fiscal year for which Congress has not adopted a budget in accordance with the provisions of this Article,  nominal budget authorizations and actual rates of taxation for the last year in which a budget was adopted shall prevail.

This would establishes a constitutionally mandated "continuing resolution" provision that would hold spending at the previous year's level until a new budget is enacted.