Tuesday, March 3, 2009

Commerce, Competition, and the Court: An Agenda for a Constitutional Revival

Commerce, Competition, and the Court: An Agenda for a Constitutional Revival. By Michael S. Greve
Bradley Lecture
AEI, Feb 03, 2009

In this Bradley Lecture, Michael S. Greve urges a return to constitutional structure as the Supreme Court's principal focus and responsibility. "Return," because the Supreme Court of the late nineteenth century--the purest "structure court" in American history--aggressively deployed constitutional doctrines designed to protect a competitive political process and economy. The malignant features of today's legal landscape, from "hellhole" jurisdictions to state protectionism to government by (attorney general) indictment, all result from the Court's abandonment of its structural constitutional role in the wake of the New Deal. A recommitment to that role would compel a fundamental rethinking on all sides of the legal debate, including conservative originalists.

Part I

Courts are empowered to interpret constitutions for two basic purposes. One, they coordinate relations among government institutions--the legislature and the executive, states and the national government, and so forth. Let's call this a "structure" function. Two, courts protect individual rights against majoritarian politics. Let's call courts committed to that business "rights courts."

Our Supreme Court is a rights court. It has lots of company: around the globe, courts enforce an ever-expanding panoply of rights, most having to do with sex or with welfare. Rights proliferation and the accompanying empowerment of courts and legal elites--"juristocracy," as political scientists now say--have been among the most conspicuous features of the "Third Wave" of democratization over the past decades.

Note the oddity: by all accounts, courts are the least democratic institution of liberal regimes. Only in the United States, however, has juristocracy's anti-democratic thrust met with resistance--conservative resistance. Of course, libertarians complain about the Court failure to enforce "economic" rights. But the anti-rights-proliferation, pro-democracy voices clearly dominate among conservatives. I have been part of that chorus, and I am not going to defect to the boisterous rights mob tonight. I believe, however, that the conservative choir needs a second, new but also very old tune. The Court and its law should not simply be against more rights but also for more structure.

Behind that proposition lurk an obvious question, and a controversial contention. The question: why do we need a second tune? Don't we conservatives have our originalist, anti-rights-proliferation, pro-democracy, anti-activist ducks all in a row? My answer: I pity the ducks. The unvarnished pro-democracy position was put before the American public in 1987, in Robert Bork's nomination. It lost decisively, and it has failed to recover since. I do not mean to excuse the despicable tactics deployed in the campaign against Judge Bork. Nor do I deny that sustained conservative opposition to promiscuous rights proliferation may have helped to prevent the Supreme Court from expelling Right-to-Life constituencies from respectable political discourse. But we always had a broader contention: we ought to govern ourselves, and the Supreme Court's endeavor to articulate a collective moral conscience is inherently problematic, regardless of its appalling content. That broader argument has plainly failed.

Why has it failed? Juristocracy's worldwide ascent suggests a deeper cause than the ebb and flow of American politics. Martin Shapiro, from whom I have borrowed the distinction between structure courts and rights courts, has linked the rise of rights courts to mass democracy. Competitive politics is plausible if it is a reasonably fair repeat game. That confidence in democracy is hard to sustain in deeply divided societies, where a loss in one round may mean death. Nor is it plausible even in the societies of Western Europe or Canada, where every citizen's welfare, from cradle to grave, hangs on political allocations. One way of hedging against the risk of ruin is to let rights proliferate and to entrust their protection to an independent body--the judiciary.

Conservative resistance to the Supreme Court's reign rests on the contention that we Americans are better than that. Are we? My colleague Karlyn Bowman has collected data on public confidence in our institutions. That confidence collapsed in the late 1960s, just when the country was supposedly becoming vastly more democratic. In the long run, the only institutions to emerge unscathed, and in fact with heightened degrees of public trust, were the least democratic: the armed forces, and the Supreme Court. Quite naturally, people measure "democracy" by the democratic institutions they know and see. And they neither like nor trust what they see.

Hence, my proposition: a jurisprudence that sets is face against juristocracy and rights proliferation solely on the grounds of democracy, without more, is doomed. Moreover, it deserves its fate. "Democracy" (full stop, period) is just a slogan. If it means an unstructured, undisciplined, exploitative interest group free-for-all--our politics, that is to say--it is an unpalatable alternative to juristocracy. On the other hand, if democracy means a structured, institutionally cabined and constitutionally disciplined form of government--a republican form of government, as we used to say--it is emphatically worth having. By constitutional design, though, that form of government assigns a prominent role to the Supreme Court. It collapsed because the Court abandoned that role, and it cannot and will not restore itself. Thus, the appeal to democracy has to be coupled with a credible judicial re-commitment to the Court's constitutionally envisioned role of protecting a transparent, responsible politics.

A rights court--our Court--cannot and will not do that. Even an anti-rights court cannot and will not do it. I will provide examples of the contemporary Court's dereliction at the structure front. But the full extent of that abdication appears in sharpest relief against the purest structure court in American history: the Court of the Gilded Age. Let me introduce you to that Court. What did it do, and why did it do it?

Part II

The late nineteenth-century Court under Chief Justices Waite and Fuller is bracketed by two seminal rights cases. At the front end, the Slaughterhouse Cases in 1873 held that Privileges and Immunities Clause of the newly enacted Fourteenth Amendment covered only the rights of national citizenship and, in so doing, took a potentially enormous number of rights claims off the table. The tail end is the notorious Lochner case in 1905, which covered a portion of the ground abandoned in the Slaughterhouse Cases with a doctrine that eventually came to be called "substantive due process." Between those bookends, the Court had virtually nothing to say about rights.

The justices, though, did not sit idle. Year-in, year-out, they decided more than twice as many cases as the modern Supreme Court (without law clerks, mind you). What were those cases about? Overwhelmingly, they had to do with constitutional structure--in particular, the structure that governs the commerce of the United States. And overwhelmingly, they arose in diversity jurisdiction--that is, the Court's constitutional authority to decide cases between a state and a citizen of another state, or between citizens of different states. Two sets of doctrines and cases loomed particularly large: federal general common law, and the dormant Commerce Clause.

"Federal general common law," very roughly, says this: in diversity cases that are not governed by a federal or state statute, the federal courts will decide cases under a federal common law (of contract, or of negotiable instruments), as opposed to following state courts' pronouncements. In substance, the doctrine protected contracts in interstate commerce. Railroad bond cases illustrate the point.

At the time, local governments (primarily in the Midwest) often sought to attract railroad investment with offers of aid, typically financed by floating local bond issues. State constitutions often barred local governments from issuing such bonds or limited their terms. Equally often, those restrictions were ignored, with a willful intent to dishonor the bonds once they had been sold or re-sold to Wall Street or foreign investors. State courts routinely sanctioned those maneuvers. The question was, and is, whether the protection of bond investments and contracts is any of the Supreme Court's business. On one view, local autonomy should trump. In theory, the risk that local governments might do very bad things could be priced into the bonds. In practice, however, nobody knew how to price the risk of random exploitation on the frontier with any kind of accuracy. The liquidity and marketability of commercial paper in secondary markets depended on ensuring the integrity of the underlying transactions. And only the Supreme Court could provide that protection.

The force of these considerations appears in Gelpcke v. Dubuque, an early and notorious bond case decided in 1864. The Iowa legislature had authorized localities to float railroad bonds, and the Iowa Supreme Court had repeatedly declared those authorizations constitutional--until the schemes went belly-up and the Iowa Court determined that the authorization violated the State Constitution after all. With that ruling, the bondholders were out of luck. The Supreme Court reversed on principles of general law. The justices were scandalized by the political shenanigans that had prompted the Iowa Court's about-face. "We shall never immolate truth, justice, and the law," the Court intoned, "because a state tribunal has erected the altar and decreed the sacrifice."[1] Only Justice Miller (who hailed from the Iowa town of Keokuk) dissented, as he would in many municipal bond cases.

Over time, municipal bond defaults reached some $100-$150 million--real money in those days. The settlement was a protracted tug of war between the states and the Supreme Court. States barred railroads and other companies from doing business in the state unless they surrendered their right to invoke the federal courts' diversity jurisdiction. Counties re-organized themselves to escape payment. State judges consistently sided with the debtors. With equal consistency and determination, the Supreme Court enforced the contractual rules and insisted on its jurisdiction.
The general common law, then, protected already-made investments in interstate commerce. What, though, of cases where states seek to block those investments? The Constitution affirmatively empowers Congress to regulate "commerce among the several states." Throughout most of our history, that language has been taken to prohibit--of its own force, and without any federal legislation--certain state regulations of interstate commerce. At the time, this so-called "dormant" Commerce Clause prohibited two types of state laws. First, states were prohibited from taxing or regulating the in-state leg of interstate commerce on a discriminatory basis. Second, states were prohibited from taxing or regulating interstate commerce on an "extraterritorial" basis. Interstate commerce as such was exclusively for Congress to regulate.

That two-pronged doctrine did not protect all interstate commerce as well as one might wish. For example, insurance was not deemed to constitute interstate commerce at all. Hence, states discriminated and excluded to their hearts' content, as they do to this day. Similarly, the last mile of a railroad connection was undoubtedly in-state. States taxed that last mile and its proceeds to the hilt, with the result that nobody made any money running a railroad in those days. But for the great majority of industries, the dormant Commerce Clause solved a central problem--the problem of vertical firm integration.

Consider a humble, once-standard household item--the sewing machine. Around 1860, I.M. Singer had found that existing local wholesalers were incapable of supplying consumer credit or demonstration and repair services. Over the next two decades, therefore, Singer created its own distribution network, consisting of over 500 stores that also served as a base for a large force of door-to-door salesmen. States did not like it one bit. They stepped up enforcement of licensing laws against peddlers, and they imposed taxes that effectively put the sellers of out-of-state products out of business.

Singer had both the incentives and the muscle to break those barriers. It urged its local agents to ignore state laws so as to invite prosecution and conviction and then hired high-powered law firms to contest the state laws. In 1875, the strategy bore fruit: in Welton v. Missouri, the Supreme Court invalidated a Missouri law that required peddlers--defined as persons selling commodities "not the growth, produce, or manufacture of the State"--to pay a license fee for the privilege of doing local business. The prohibitory force of the Commerce Clause, the Court held, "continues until the commodity has ceased to be the subject of discriminating legislation by reason of its foreign character"--that is to say, up to and including final retail sales.[2]

Precariously perched on this doctrinal beachhead, Singer was still exposed to a barrage of hostile fire. Virginia, in one variation on a common theme, enacted a license fee that effectively forced I.M. Singer and similar companies to disband their state sales force. The Supreme Court invalidated that scheme, too, along with several others.

A similar pattern unfolded in the meat industry. The invention of the refrigerated railroad car sharply reduced transportation costs, relative to on-the-hoof transport. The "Big Four" Chicago meatpackers, led by the Swift Company, soon proved able to ship dressed beef over long distances. But Swift did not become dominant because of the refrigerated railroad car. Rather, it was the first to appreciate the need for a vertically integrated distribution network to produce, store, and deliver meat all the way to retailers. Local wholesalers, organized in 1886 as the National Butchers' Protective Association (BPA), organized boycotts and mobilized local opposition--a losing cause, in light of the national firms' low prices and the superior quality of their products.

The local monopolists' best bet was "federalism"--specifically, the states' right to ensure their citizens' health and safety. That claim was more than colorable. There was a real risk of sales of spoiled goods to consumers who cannot readily ascertain the quality of the product, and modern solutions (such as branding by producers or supermarkets) were decades away. Even so, when states mandated inspections of out-of-state beef, the Chicago producers prevailed. Health and safety concerns, the Court insisted, would have to be met by measures less fraught with protectionist risks.[3] Evasive state maneuvers enacted at the BPA's behest (such as discriminatory inspection fees) were likewise struck down by the Court.

Part III

Three decades after Gelpcke, the justices had decided some 300 railroad bond cases. Commerce Clause cases also numbered in the hundreds. And those sets of cases were part of a much larger universe of interrelated doctrines on federal removal jurisdiction, unconstitutional conditions, and the law of foreign corporations. All those doctrines show the same pattern: states displayed boundless creativity in expropriating interstate commerce. The Supreme Court displayed equal creativity and determination in adjusting constitutional doctrines to forestall that result. Though highly technical, those doctrines were anything but lawyerly abstractions. They were a central means--make that, the central means--of the nation's economic and political integration. Deliberately and self-consciously, the Court strove to reconcile democracy and corporate capitalism on a constitutional basis. The doctrines I have sketched--the federal common law, and the dormant Commerce Clause--left states and the Congress ample room to regulate commerce. But they had to do so within constitutional metes and bounds; and in the shadow of a commerce-protective structure, not on an open field.

From our modern vantage, the Court's enterprise looks suspect. Grant the benefits of vertical integration and large-scale industrial organization, and the pernicious effects of state protectionism: isn't it for Congress to decide those questions? Maybe. But Congress had neither the means nor the motives to decide them. Either the Court would establish and protect a viable structure, or no one would.

The point is susceptible to something closely approximating proof. As I mentioned, insurers were not covered by the Court's doctrines. Starting in the 1870s, they begged and lobbied Congress to provide a remedy by providing them with an optional federal charter. My colleague Peter Wallison knows that policy proposal well--not because he is an expert on nineteenth-century law, but because the campaign for a federal insurance charter continues to this day, with no happy end in sight. Or consider the rare case where the Gilded Age Congress actually did intervene--the Sherman Act: as laymen are startled to hear but antitrust lawyers know all too well, that statute prohibits, by its terms, any kind of contract. Congress left to the Supreme Court the task of figuring out rules of reason to make sense of a statute that lacked both.

Behind those illustrations lurk the deep sectional divisions of the age. While the America of the Gilded Age was divided in many ways, a true chasm ran between the industrial core (the Northeast and Great Lakes states) and the agricultural periphery. At stake in the cases over railroad bonds, peddler taxes, and meat inspection was whether the surplus of those activities would accrue to capital and labor in the producer states or else, be expropriated by "consumer" states, mostly the South. The Supreme Court's doctrines did two things. First, by opening the Southern markets, the Court created for American corporations economies of scale that were unavailable anywhere else on the globe. Second, by insisting that the profits find their way home to the producers, it cemented an alliance between labor and capital that spared America the class warfare that accompanied industrialization everywhere else.

Could that regime have been replicated in Congress? No way. Meat inspection? Every state except Illinois would have insisted on protectionist rules. Sewing machines? There would have been a Machine Sellers Protection Act before you can say "Singer." (We did in fact get an economy-wide statute of that sort in 1936--the egregious Robinson-Patman Act.) The Supreme Court's relative insulation from sectional and interest group interests, and the need to formulate general rules that cut across industries, prevented an otherwise certain outcome--the dissipation of economic gains in Congress, and institutionalized class warfare over the scraps.

Do not take this lightly. Many countries--Germany, Britain, France--underwent a transition to large-scale capitalism around the same time. As the renowned Harvard sociologist Barrington Moore observed, no democracy seems to have undergone it willingly. Capitalism's destructive side appears to leave only two options--endless side payments to the losers, which wipe out the gains; or else, class warfare and, as in Germany, authoritarian politics. America alone escaped the horns of that dilemma. As Cornell's Richard Bensel, one of the keenest experts on the period, has shown, a principal reason for that good fortune was the Supreme Court's signal contribution to "The Political Economy of American Industrialization."[4]

The Court's resolve to play that structural role, I submit, was not judicial "activism." It was firmly rooted in a fundamental constitutional precept and intuition. Alexander Hamilton argued that political integration can be achieved in only one of two ways--by force of arms, or by law (the "mild influence of the magistracy," as Hamilton put it). A century later, that alternative was still very real. The justices of the Gilded Age were well aware of it, and they acted accordingly.

Part IV

Fast-forward a century: the Supreme Court has ceased to play a structural role--not by desuetude, but by deliberate decision. Diversity jurisdiction, the primary structure venue, has been driven out by federal question jurisdiction, which is principally a rights venue. (Think "Bong Hits for Jesus": that is a federal question.) One of the Gilded Age doctrines I described is dead: a century's worth of federal general common law was buried--as unconstitutional, no less--in the famous Erie Railroad case (1938). My second example, the dormant Commerce Clause, has been stripped of its extraterritoriality prong: California or Kansas may regulate the Internet, barring only an overt preference for local residents. And even that anti-discrimination remnant is now widely viewed as illegitimate. In a recent decision (United Haulers v. Oneida-Herkimer Solid Waste Management Authority), the Supreme Court ominously compared the dormant Commerce Clause to Lochner.[5]

In the Supreme Court's own telling, this abandonment embodies a shift from federal judicial imperialism to judicial neutrality: less judicial control over the structure of the political process ipso facto means more democracy--and let free citizens make of it what they will. But that posture is at best a conceit. The decision against structural checks is a decision for political pathologies and exploitation.

Should you have the misfortune of wandering into a small town in Jackson County, Mississippi or Morris County, Texas, you will find the social structure virtually unchanged from Melvin Fuller's days. Everyone in town owes his livelihood to a single individual. That local lord resides in a big, imposing mansion--the only one around, separated from the shacks. He has prospered by expropriating rents from interstate commerce. He is a "philanthropist," meaning that he shares a few table scraps with the school band and the fire brigade. But the local lord is not a plantation owner; he is a trial lawyer. He has made the cotton fields into a private airstrip. And the former sharecroppers have found new employment as--the jury pool.

What does this have to do with the judiciary's structural surrender? Everything. Under the old constitutional structure, local lords and monopolists operated under severe constitutional constraints just as soon as they entered into the interstate commerce they sought to exploit. Correspondingly, parties in interstate commerce enjoyed robust protections against local exploitation. Those constraints and protections have waned or been eliminated outright. In fact, the now-operative rules systematically steer business the local monopolist's way.

Back then, diversity cases were routinely decided under general common law. Now, the ironclad rule of Erie Railroad is that they must be decided under state law--in federal court, assuming a defendant can even get to that forum, under the state law in which the federal court sits. Since diversity cases by definition implicate more than one state's law, the question then arises whether a state court is obligated to respect the law that obtains in the defendant's state. The Constitution speaks directly to that question: it says that each state shall give "full faith and credit" not only to sister-states' "judicial proceedings," but also to their "public Acts." The Supreme Court, too, has spoken directly: it has said, in its most recent pronouncement, that, in the context of public acts, full faith and credit is satisfied by no faith and credit. The petitioner in that case was not some opportunistic corporation but the State of California, whose tax officials had been dragged into a Nevada court. Under California law, the officials enjoyed immunity; in Nevada, under Nevada law, they were stripped of it. Responding to California's argument that the constitutional language must mean something, the justices had this to say: "We decline to embark on the constitutional course."[6] The case is Franchise Tax Board v. Hyatt (2003), and the decision and opinion were unanimous.

Under those rules, what prevents plaintiffs from suing in jurisdictions that will reliably home-cook out-of-state defendants? Answer, "nothing." The strategic choice of law and "forum-shopping among states," the Supreme Court has said, is "reserved for plaintiffs."[7] (That, too, is a direct quotation.) You wonder why there are judicial hellholes? The mystery has been solved. They are the inevitable result of a Court that abjures a coordinating role.

Part V

The doctrines I just sketched share two characteristics. First, they have no constitutional basis. Second, all of the decisions, from the Lochner comparison to the "we decline" morsel to the pro-plaintiff choice-of-law pronouncement, were written and joined by conservative justices. Justice Alito alone is wholly innocent and, to his great credit, has firmly defended the dormant Commerce Clause.

Why would conservative justices read the Constitution as a trial lawyers' Bill of Rights? The answer takes us back to the connection between rights and structure. If rights proliferation is bad because it is anti-democratic, then the implicit prescription--less judicial intervention, more democracy--must also apply to structure. "Democracy" is whatever an unconstrained political process throws up. If the people do not like the results, let them elect someone else. So goes the train of thought. But its destination is a very grim place. And the conductors presuppose a coordinating capacity that our political institutions no longer possess--if, indeed, they ever did.

The nineteenth century trajectory of the dormant Commerce Clause and federal common law, I said earlier, proves that Congress was simply incapable of supplying the structural function of those doctrines. In recent times, the proofs have continued to accumulate. In 1959, the Supreme Court effectively repealed dormant Commerce Clause restrictions against the extraterritorial state taxation of business income.[8] The Court acknowledged that the field needed coordination, and begged Congress to provide it. A half-century later, we are still waiting. In 1964, in a famous essay, Judge Henry Friendly endorsed the demise of a judicially enforced Full Faith and Credit Clause, already in progress at the time--but earnestly urged Congress to legislate a desperately needed statute to coordinate jurisdiction and choice of law.[9] If the saintly Judge Friendly is looking down on us now, he will see that no such statute exists; and, seeing all of history in the blink of an eye, he will tell us that it never will exist. Mind you: Judge Friendly recognized the need for legal structure in this field before the advent of modern class actions, the emergence of an organized litigation industry, and migrating asbestos mass torts. To no one's surprise, the Court's repeated, desperate calls for Congress to clean up that "elephantine mess" have likewise gone unheeded.

I seriously doubt that any Congress, ever, had the ability to play the coordinating role that the modern Court's doctrines presuppose. I doubt, even more seriously, that the Founders expected Congress to be capable of playing that role. Be that as it may, though, the modern Congress most certainly lacks the judicially wished-for coordinating capacity. Congress is now a "universalist" institution, which is the political scientist way of saying: "I scratch your back, you scratch mine." Except under rare conditions, laws get enacted either near-unanimously (because everyone has been paid off) or else, not at all. Even the recent stimulus bill was passed only because it stimulated every Democratic interest, plus three Republicans.

A closely related phenomenon is the explosive growth and increased power of semi-autonomous governmental or quasi-governmental agencies. Products and profits disappear in hellhole jurisdictions; no one checks their exploitative tendencies. Entire industries are reorganized in multistate settlements under the auspices of the National Association of Attorneys General. Any AG in the country can unleash these proceedings; no one controls or coordinates them. No one really governs the agencies of the City of New York; most operate under open-ended judicial consent decrees. Despite much agitation, we do not have a reliable, knowable accounting regime for public corporations. Technically, those rules are the business of the Public Corporation Accountability Oversight Board, affectionately know as "Pekaboo," a wholly independent and nominally private body that combines rulemaking, prosecutorial, and for good measure taxing powers. But Pekaboo insists that it is only an "inferior" bit player and doing what it is being told. Told by whom? By the SEC, another independent body. By congressional subcommittees. Or maybe by Arthur Levitt.

Is any of this going to change? Why, yes: it will go from bad to much worse. James Madison proffered a sophisticated theory why Congress would be capable of enacting public-regarding laws, as opposed to factional dross. The central premise, though, was what Madison called "distance" between the electorate and the legislators. We now call that "agency slack," and the fact is that there isn't any. Every Congressman and Senator is perfectly monitored by his or her constituent interests. Coordination cannot happen because it requires mutual concessions, which no legislator can make. Similarly, the proliferation of functionally differentiated, semi-autonomous government organizations is an irreversible by-product of economic modernization and political democratization. "Democracy"--in the anarchic sense of interest group politics and institutional fragmentation--isn't the answer to our problems. It is their cause. A responsible constitutional jurisprudence would reflect that fact. It would re-commit the Court to its principal constitutional task: supply structure.

Part VI

In urging that re-commitment, I do not suggest that federal judges act as a National Review in robes--standing athwart history, and yelling "stop." The point of institutional design, constitutional norms, and grants of judicial power is not to arrest or reverse the course of history. The point is to bound the equilibrium outcomes and to intervene when we can be confident that intervention translates into improvement, on a constitutional margin. Think of antitrust law as an analogy: No one believes that the courts are the first line of defense against anti-competitive conduct. No one believes that they should superintend private arrangements on an on-going basis. But we do not on that account discard judicially enforced rules against naked cartels. Nor do we simply say, "Let Congress provide." The Supreme Court has been quite willing to cultivate and coordinate this field on its own.

If I were inclined to sarcasm and point-scoring, I would note that antitrust law supplies a coordinating function because it is a pristine form of federal common law--the very thing that Erie Railroad supposedly prohibits. Since I am so inclined, I do so note. But the analogy carries further. In antitrust law, courts generally trust economic competition but intervene when conspiracies are clearly afoot. We should adopt the same approach with respect to constitutional law and political markets.

Competition as a constitutional principle separates political pathologies that, so to speak, come with the democratic territory (like congressional universalism) from those that are constitutionally suspect, or even prohibited outright. By way of example: one pro-competitive coordination rule of thumb is a baseline of exclusivity. If the FDA has been entrusted with regulating drug approval or the FTC, tobacco advertising, only the strongest evidence to the contrary should overcome the presumption that the authority is exclusive. In a characteristically brilliant essay, Richard Epstein and I have developed a workable doctrine along these lines under a catchy moniker: one problem, one sovereign.[10]

A close corollary is that joint exercises of public authority are inherently suspect. As it happens, an application of that principle is right there in the Constitution. Article I §10 categorically forbids states from making treaties with one another, or with foreign nations. And it forbids them from making any other "compact or agreement" without the consent of the Congress. Predictably, though, the Supreme Court has done with that "Compact Clause" what it has done with all other inconvenient structural provisions: it has read it out of the Constitution. In a 1978 case, the Court held that the states may do jointly whatever they may do individually, without congressional consent.[11] In other words, the Compact Clause forbids nothing that is not already illegal. On that supposed authority, the states in 1998 banded together with one another and with the major tobacco producers to commit what my friend Jonathan Rauch has called "the constitutional crime of the century"--the imposition of a $250 billion tobacco excise tax that no legislator, state or federal, ever voted for. On that same authority, states have signed greenhouse gas compacts with each other, and with foreign nations, without congressional consent. In my estimation, federal courts should enjoin those arrangements. In so doing, they would re-impose on our faction-ridden politics structural constraints that are both badly needed and directly required by the Constitution.

So there is my program. I fear that it will leave many of you disappointed. I have no "Dirty Dozen" mega-precedents to overrule; no grand "presumption of liberty" that will bring the Constitution back from exile; no fifth justice on Injured Reserve whose activation will bring victory at last. A re-commitment to structure would mean cases without sex appeal, and mostly without sex. It would mean doctrines that only lawyers can comprehend and decisions that proceed in an incremental, common-law-like fashion, not by bold declarations. Structure courts aren't given to dramatic gestures, because gestures don't structure anything. In my estimation, that dial-down is actually a virtue: structural cases compel judges on all sides to argue like lawyers, as opposed to oracles or culture warriors. I do concede that my program lacks the inspiring, constituency-building appeal of an originalist "no more rights" program, or for that matter a libertarian "more of our rights" program. Those programs, however, would leave the pathologies of our politics unchecked. A structure court would attend to them.

The hard question is how far it could get. That is primarily a question not of legal doctrine, but of politics. Seemingly arcane structural doctrines can be and have been every bit as controversial and ideological as, say, abortion. The Fuller Court's diversity jurisprudence and general common law were targets of relentless attacks and agitation long before Lochner, and they remained its targets long afterward. Whose attacks? Politically, state governments and their protectionist hangers-on, such as the Butchers Protective Association. An assortment of what we now call "public interest groups," such as prohibitionists. And, of course, trial lawyers. Intellectually, the law faculties at Harvard, Yale, and Columbia. The Court's course, they all chirped, thwarted democracy and democratic aspirations.

What protected the Court and its jurisdiction against that assault? Answer, business, and the Republican Party. Back then, the GOP had the good sense of not having a legislative program at all, knowing full well that any program would fragment its electoral base. Instead, the GOP defended the Supreme Court's diversity jurisdiction against constant attack in Congress; appointed and confirmed justices who would exercise it; and dissipated the proceeds of the tariff to its friends. The permanent Republican majority of those decades rested on a simple formula: judicial ordering; tariffs; earmarks all the way.

That political context illustrates my final brief points. One, constitutional understanding is not simply a matter of having the "right" fifth justice. A structure court presumes, or will have to create, a politics that creates room for that role. Two, a judicial re-commitment to structure and coordination would be an intensely ideological affair. A judicial supply of structure translates into a competitive, disciplined politics. Judicial abdication at that front translates into a "democracy" where any faction enjoys the "active liberty" of occupying some institutional bastion any day of the week, and where the only secure expectation is permanent instability. That was the choice before the Fuller Court. It is our choice today. Whose side are you on?

Our current constitutional debate evades that question. The contestants fight about rights--that is to say, external barriers to a politics that all presume to be an unstructured mess, a factional grabfest, beyond judicial purview. That is not my answer. My answer is James Madison's. He had a word for an unconstrained politics: he called it anarchy, "as in a state of nature."[12] We have a constitutional structure calculated to forestall that result. If the Court will not enforce that structure, I'll join the juristocracy chorus after all: Give me my rights.

Michael S. Greve is the John G. Searle Scholar at AEI.


Yemen Parliamentary Elections Postponement

Yemen Parliamentary Elections Postponement, by Gordon Duguid, Acting Deputy Department Spokesman, Office of the Spokesman, US State Dept, Bureau of Public Affairs
Washington, DC, March 3, 2009

The United States views with deep concern and disappointment the decision by Yemen’s ruling and opposition parties to postpone the April 2009 Parliamentary elections for two years. It is difficult to see how a delay of this duration serves the interests of the Yemeni people or the cause of Yemeni democracy. We sincerely hope that the political leadership of Yemen uses this period to cooperate in earnest to reach a consensus on the procedures for the elections that are consistent with the recommendations made by international elections observers in 2006. All parties share the responsibility to ensure that the people of Yemen have the opportunity to choose their representatives in a timely and transparent manner. The United States stands ready to assist in this process.

PRN: 184

Brookings: The Economic Crisis and the Fiscal Crisis: 2009 and Beyond

The Economic Crisis and the Fiscal Crisis: 2009 and Beyond. By William G. Gale & Alan J. Auerbach
Brookings Institution, Mar 3, 2009

This paper discusses the impact of recent tumultuous economic events and policy interventions on the Federal fiscal picture for the immediate future and for the longer run.

In 2009, the federal deficit will be larger as a share of the economy than at any time since World War II. The current deficit is due in part to economic weakness and the stimulus, and in part to policy choices made in the past. What is more troubling is that, under what we view as optimistic assumptions, the deficit is projected to average at least $1 trillion per year for the 10 years after 2009, even if the economy returns to full employment and the stimulus package is allowed to expire in two years.

The longer-run picture is even bleaker. We estimate a fiscal gap – the immediate and permanent increase in taxes or reduction in spending that would keep the long-term debt/GDP ratio at its current level –about 7-9 percent of GDP, or between $1 trillion and $1.3 trillion per year in current dollars.

Recent trends in credit default swap markets show a clearly discernable uptick in the perceived likelihood of default on 5-year U.S. senior Treasury debt, a notion that was virtually unthinkable in the past. While it is difficult to know exactly how to interpret these results, it is clear that – although fiscal policy problems are usually described as medium- and long-term issues – the future may be upon us much sooner than previously expected.

Read the full paper » (pdf)

White House: Cyber review underway

Cyber review underway
White House press office
Monday, March 2nd, 2009 at 11:14 am

John Brennan, Assistant to the President for Homeland Security and Counterterrorism, passed along this update about the ongoing review of our nation's communications and information infrastructure.

In response to President Obama’s direction, the National Security Council and Homeland Security Council are presently conducting a 60-day review of the plans, programs, and activities underway throughout the government that address our communications and information infrastructure (i.e., cyberspace). The purpose of the review is to develop a strategic framework to ensure that our initiatives in this area are appropriately integrated, resourced and coordinated both within the Executive Branch and with Congress and the private sector.

Our nation’s security and economic prosperity depend on the security, stability, and integrity of communications and information infrastructure that are largely privately-owned and globally-operated. Safeguarding these important interests will require balanced decision making that integrates and harmonizes our national and economic security objectives with enduring respect for the rule of law. Guided by this principle, the review will build upon existing policies and structures to formulate a new vision for a national public-private partnership and an action plan to: enhance economic prosperity and facilitate market leadership for the U.S. information and communications industry; deter, prevent, detect, defend against, respond to, and remediate disruptions and damage to U.S. communications and information infrastructure; ensure U.S. capabilities to operate in cyberspace in support of national goals; and safeguard the privacy rights and civil liberties of our citizens.

The review will be completed by the end of April 2009. At that time, the review team will present its recommendations to the President regarding an optimal White House organizational construct to address issues related to U.S. and global information and communications infrastructure and capabilities. The recommendations also will include an action plan on identifying and prioritizing further work in this area.

Learn more about the administration's Homeland Security priorities.

Obama administration's defense budget

Indefensible. By Thomas Donnelly
AEI, Monday, March 2, 2009

The Obama administration's defense budget figures are not what they seem. While the baseline defense budget appears to have grown, the increase is very likely the result of funds migrated from the wartime supplemental spending package, which itself has shrunk markedly, and is projected to decrease precipitously after next year. If these numbers remain steady for the foreseeable future, as the Obama administration has indicated they will, the United States will be hard-pressed to maintain its defense commitments abroad.

The era of big government is back. But conservatives ought not simply to worry about the size of government or the federal deficit--although a $1.7 trillion deficit is an eye-popper. They should worry, too, about the shape of American government. Barack Obama may be running up World War II levels of debt, but he'll be running down the U.S. military.

Of course, that's not what the headlines on administration press releases or in the actual newspapers say. Even the leading defense industry paper, Defense News, trumpeted "Obama Budget to Boost Spending" for 2010. But a closer reading of even the sketchy budget charts provided by the administration this week paints a very different picture.

Take first the question of the current budget, the fiscal year 2010 spending that Congress will approve this year. As during the Bush years, there are two critical accounts to track: the normal or "baseline" defense budget and the "emergency supplemental" appropriations to cover wartime costs. In order to understand what's really happening, it's crucial to try to keep these distinctions clear. To make an everyday analogy, it's the difference between the sticker price of your car--what it costs to bring it home from the dealer--and the expenses of filling it with gasoline and keeping it running.

In 2009, the Bush administration's baseline budget was $513 billion, and the plan was to spend $523 billion in 2010. The Obama administration announced this week that it would "boost" the 2010 figure to $533 billion. So the Obama budget is bigger than the Bush budget, right?

The reality, though, is something quite different. Here's where the question of wartime supplementals comes into the picture. The Bush administration's last supplemental requests were for $188 billion in 2008--at the height of the Iraq surge--and a $65 billion installment on the war costs of 2009. The Obama budget adds another $75 billion in war costs for 2009, for a yearly total of about $140 billion. What accounts for the whopping difference between the 2008 spending of $188 billion and the $140 billion to be spent in 2009? It's not, unfortunately, that the success of the Iraq surge or the drawdown now beginning in Iraq are saving much money. Indeed the immediate costs of a safe withdrawal are no different from those of staying on. And, with a second surge--really, a long-term ramping up--of forces in Afghanistan about to begin, the supplemental cost of those operations is going way up.

What's happening is probably that what previously has been counted as "war costs" is migrating from the supplemental appropriations to the baseline budget. This is what reformers, good-government types, and the folks in the Obama Pentagon mean when they talk about "honest budgeting."

Particularly in the 2007 and 2008 supplementals, tens of billions of dollars were spent to "reset" the Army, which has seen its equipment stocks decimated by the efforts in Iraq and Afghanistan, and to buy needed gear like the heavy Mine Resistant Ambush Protected vehicle--the Big Wheel-like carrier that is being used in convoys and for patrols instead of the thin-skinned Humvees. The Washington Post reported, too, that the costs of countering improvised explosive devices, the increasingly sophisticated "IEDs" that account for a disproportionate share of American casualties, are now to be paid for out of the baseline budget. The bottom line is this: The Obama defense budget isn't "boosting" anything. As should become apparent over the next two months as the administration prepares detailed defense budget proposals, this actually is the beginning of significant cuts in defense programs. What the president really means when he talks about "hard choices" is a less capable U.S. military.

The Obama budget is an especially stark and in-your-face announcement of a new direction for the country. Indeed, budgets are the most concrete expression of a government's prejudices and ambitions.

Consider how, per the budget, Obama imagines the America of 2016. The economy has recovered in fine style. The stimulus produced a spurt of growth and the economy is expanding permanently at about 2.5 percent per year. Inflation remains low, about 2 percent, the annual federal deficit is "only" $500 billion, and total GDP is a touch more than $20 trillion. These are the assumptions enshrined in the Obama budget.

But the government itself looks more like the government of France than what American governments have looked like in the past. We'll be spending $4.5 trillion on social entitlements--Social Security, Medicare, and Medicaid--debt servicing, and other mandatory programs. That's about 22 percent of GDP. Discretionary domestic programs--the prime source of congressional pork--have grown to nearly $700 billion, another 3.5 percent of GDP. Defense spending will be smaller. The baseline defense budget will be $594 billion, less than 3 percent of GDP. That's half the 50-year Cold War average.

The United States cannot remain the sole superpower, the guarantor of the international system, if it chooses to spend just 3 cents of every dollar on defense. The Obama administration loves to talk about "soft power" and "smart power," but the fact is that "hard power" is still real power. The Obama budget is a plan for steady American decline.

It also plans on a rapid retreat from current commitments. Announcing his Iraq withdrawal plan in a speech at the Marine base at Camp Lejeune, N.C., on Friday, Obama said--"as plainly as I can"--that U.S. combat forces would be out of Iraq by August 31, 2010, and that the "residual" force of advisers and trainers would be gone by the end of 2011. The budget codifies this timetable in dollars: The projected wartime supplemental for 2010 drops to $130 billion. The largest slice of that pie will pay for the withdrawal of 12 combat brigades from Iraq, while it's likely that the costs of fighting in Afghanistan--where commanders see 2009 as a holding of the line in preparation for more effective operations in 2010--will begin to equal Iraq costs. But the big drop is planned for 2011, the year that the Iraq status-of-forces agreement takes full effect. In that year, the Obama budget has a "placeholder" for wartime costs of just $50 billion. Based on the numbers, by 2011 Obama plans to be fighting the "Long War" at less than one-third the cost of the effort of 2008. He's fulfilling his end-the-war campaign pledges, but almost certainly at the sacrifice of any lasting victory.

An American retreat that leads to a longer-term American decline will make for a very different world. Obama's budget is a signal to friend and foe alike that the United States is turning inward, will be a less certain ally and a less powerful adversary. It's there in the numbers. Indeed, these numbers almost perfectly reprise the Clinton "peace dividend" of the 1990s--minus the peace. How the world will respond to the combination of a deep and long-lasting economic contraction and a shrinking of American power is difficult to say. The historical precedents are not encouraging: These are the conditions that preceded World War II.

There is nothing inevitable in any of this. President Obama is presenting one path forward. Other political leaders--especially those who understand America's role in the world--can present an alternative way forward.

Thomas Donnelly is a resident fellow at AEI.

Conservative view: "Global Warming: Using the Polar Bear to Impose Costly Measures"

Global Warming: Using the Polar Bear to Impose Costly Measures. By Ben Lieberman
Heritage, March 2, 2009
WebMemo #2319

Full text w/references here.

In 2008, the Bush Administration, responding to litigation from an environmental group, listed the polar bear under the Endangered Species Act (ESA). Bush Secretary of the Interior Dirk Kempthorne also made some changes to the implementation of the ESA in order to limit the adverse consequences. But now, the omnibus appropriations bill, first passed by the House and now being debated in the Senate, seeks to reverse these common sense limitations.

If successful, this revised polar bear policy would greatly threaten economic growth and serve as a powerful anti-stimulus measure, not just in the polar bears' Alaskan habitat but throughout the United States. These rule changes are a costly and unnecessary form of backdoor global warming policy and have no business in a massive spending bill that is headed for quick passage with limited debate. With such drastic implications for the nation, the Senate should, at a minimum, fully debate the pros and cons of such a policy.

History of the ESA: More Economic Harm Than Environmental Good

Enacted in 1973, the ESA authorizes the Department of the Interior (DOI) to create a list of species considered endangered or threatened. Once a new species is listed, the statute requires DOI, working with other federal agencies, to formulate a recovery plan that includes any and all actions deemed necessary to protect the species and its habitat. Broad citizen suit provisions allow environmental activist groups to force DOI to enjoin any activity alleged to be in violation of the provisions of the ESA, to list additional species, or to expand provisions for already-listed species.

Notwithstanding its laudable goal of protecting species, the ESA has proven to be a flawed approach that has only gotten worse after three decades of judicial interpretation. Some 1,300 species are listed, but very few have actually recovered to the point of being de-listed, and only 5 percent are more than 50 percent recovered.[1]

While doing little to protect species, the ESA's provisions have been highly successful in curtailing economic activity in the vicinity of the designated habitat for the 1,300 species.

The ESA, Global Warming, and Polar Bears

Such ulterior motives are clearly a part of the push to list the polar bear. Its global numbers have actually doubled, from an estimated 8,000–10,000 in 1965–1970 to 20,000–25,000 today.[2] Unfortunately, the requirements for listing have never been rigorous. In the case of polar bears, listing was based on speculation that, according to computer models, continued global warming will reduce the future amount of Arctic summer ice upon which the bears rely.[3] In this way, the ESA is being used to implement global warming policy.

Among its many requirements, the ESA states that "each federal agency shall, in consultation with and with the assistance of the Secretary, insure that any action authorized, funded, or carried out by such agency is not likely to jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of habitat."[4] These so-called Section 7 consultations routinely add delays to economic activities near endangered species and sometimes block them entirely.

Most directly, the polar bear listing could curtail energy production in Alaska. This would be unfortunate, as Alaskan oil and natural gas potential is tremendous. A 2008 U.S. Geological Survey study estimated there are 40 billion barrels of undiscovered oil above the Arctic circle—which would nearly double America's proven reserves—as well as tremendous volumes of natural gas.[5]

The impacts of the polar bear listing stretch well beyond Alaska, though locking up Alaskan energy would be bad enough. Carbon dioxide, the ubiquitous byproduct of fossil fuel combustion, is the agent DOI blames for the warming that supposedly shrinks the ice and thus harms the bears. Consequently, any activity producing or using energy—building a new bridge in Alabama, opening a factory or power plant in Arizona, expanding a dairy operation in New York, constructing a school in Idaho—could invoke the Section 7 consultation process. Bottom line: Environmental activists could use the ESA to hold up any of thousands of projects across the U.S. This would include many if not all of the "shovel ready" projects that are funded in the stimulus package.

Anticipating these adverse economic impacts, Secretary Kempthorne took several steps to address them. This included a rule to limit the Section 7 consultations to those where the cause and effect between the activity in question and the harm to species is not tenuous (thus excluding carbon dioxide and other greenhouse gas emissions from any individual source) and a rule specifically exempting new global warming considerations with regard to the polar bear listing.

Congressional Attempts to Undo These Regulations

Now, Section 429 of the House-passed Omnibus Appropriations Act would allow DOI to reverse these rules for the polar bear listing and, worse, to do so without the customary notice and comment rulemaking. In other words, the provisions here would allow DOI to make the change and do so with even less transparency and accountability than usual.

If this is done, then every activity that involves energy—from expanding a power plant to starting a farm—could get caught up in ESA red tape. The long-term economic impacts would be severe, and ironically the shorter-term effects would undercut the thrust of the stimulus package to spur an economic recovery.

Consider all new construction projects as well as efforts to create or expand all but the very smallest of businesses—the very kinds of things that are both a part of the stimulus package and that in any event are necessary for economic growth. Assuming the proposed changes are enacted, then all of the federal agencies involved in one way or another in such projects—for example, the Environmental Protection Agency for the many things that require EPA permits—will have to engage in Section 7 consultations with the Department of the Interior over the global warming implications. At the very least, such projects will be held up by bureaucratic delays, thereby creating opportunities for environmental groups and others to initiate litigation against them. Aside from delays, which could stretch into years in some cases, some projects could end up being scaled back in an effort to mitigate the supposed adverse impact, and others could be stopped entirely.

Beyond being bad policy in itself, the very fact that this complicated and far-reaching change is being done in an omnibus bill with precious little opportunity for debate strongly urges that these provisions should not be rushed into law.

Backdoor Extremism

The American people do not need a costly backdoor global warming policy implemented through the misuse of preexisting ESA authority never intended for that purpose. But at no time is such a policy more harmful than in the midst of a severe recession. The adverse economic impacts of ill-advised global warming measures are clear and are a big part of the reason why Congress has yet to directly enact any such measures. Doing it indirectly via the ESA and quietly tucking it into the massive omnibus appropriations bill now moving through the Senate would be just as damaging. The Senate should allow and encourage a full debate on this pernicious policy rather than cramming this legislation through with little to no discussion of the economic perils it would bring to the nation's future.

Ben Lieberman is Senior Policy Analyst in Energy and the Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

CSIS: NATO and France

NATO and France, by Manuel Lafont Rapnouil and Julianne Smith
CSIS, Mar 02, 2009

Q1: Why did France leave NATO’s integrated military structures in the first place and why has France decided to reintegrate into NATO this year?

A1: At General Charles de Gaulle’s urging, France left NATO’s integrated military structure in 1966 to maintain its own independent defense policy. Since then, however, France has continued to participate in NATO’s political structures and make sizeable and important contributions to NATO’s ongoing missions, particularly in Kosovo and Afghanistan. France has also committed itself to alliance transformation efforts such as the NATO Response Force (NRF).

In 1995, at the beginning of Jacques Chirac’s presidency, France contemplated reintegration into NATO’s military structures. But after two years of difficult negotiations over changes to NATO command structures and the arrival of Lionel Jospin as prime minister, the idea was taken off the table. Nevertheless, the French government had already started resuming its full presence in the NATO Military Committee.

Over the last two decades, NATO has changed significantly. Its membership and missions have expanded, and with it, so too have French contributions. Given France’s active role in NATO, President Nicolas Sarkozy’s administration may decide to match France’s formal status in the alliance with its actual contributions. Many of the original obstacles both inside France and among NATO members have been removed in recent years. Questions over NATO commands are far less contentious than in years past and concerns over France’s independence can be easily addressed. For example, no French troops will be under permanent allied command in peacetime. If desired, France could also remain outside of the Nuclear Planning Group, preserving the independence of its deterrent force.

Q2: What will this change mean for the United States and transatlantic relations?

A2: Some analysts in Washington predict that France’s full reintegration into NATO will translate into an alignment of U.S. and French policies. This will not necessarily be the case. Instead, Washington should expect that, on issues such as disarmament or enlargement, France will maintain its distinct positions, which are sometimes in direct contradiction with U.S. views. Paris may also try to maximize its influence within the alliance and seek to design a more deliberative decisionmaking process.

In Europe, some analysts there fear that Paris will soften its ambitions for—and dedicate fewer resources to—a stronger European Security and Defense Policy (ESDP) inside the European Union. On the contrary, Sarkozy’s team hopes that this move will ease suspicions about ESDP inside NATO and among NATO member states such as the United States and the United Kingdom. This new climate could lead to enhanced EU-NATO ties and enhance transatlantic relations more broadly.

Q3: What will NATO have to offer in exchange? Will this alter France’s influence in NATO?

A3: It is important to remember that France will make this decision on its own. The alliance is not trying to persuade the French to reintegrate. Therefore, NATO has not been asked to present a package of concessions in exchange for this French decision. However, France’s reintegration would certainly trigger discussions about high-level posts in NATO’s integrated command structures, which would be settled in the weeks and months ahead.

Ultimately, France’s influence inside NATO will be driven by its continuing contributions to NATO missions, its vision for NATO’s future role in global security, its input into the next Strategic Concept, and its contributions to ongoing NATO reform efforts.

Manuel Lafont Rapnouil is a French career diplomat and a visiting fellow with the Europe Program, and Julianne Smith is director of the Europe Program at the Center for Strategic and International Studies in Washington, D.C.

Obama Makes Overtures to Russia on Missile Defense

Obama Makes Overtures to Russia on Missile Defense. By Michael A. Fletcher
The Washington Post, Tuesday, March 3, 2009; A02

President Obama has sent a letter to his Russian counterpart that raises the prospect of the United States halting development of its missile defense program in Eastern Europe if Russia helps resolve the threat posed by Iran's nuclear program, senior administration officials said last night.

Obama's letter, delivered to Russian President Dmitry Medvedev in mid-February, "covered a number of topics" of mutual interest to the two countries, "including the issue of missile defense and how it relates to the Iranian threat," a senior administration official said. The official spoke on the condition of anonymity because of the delicacy of the matter.

This official and others said the letter repeated an assertion Obama administration officials have voiced in recent weeks: The missile defense system would not be necessary if the threat posed by Iran's long-range missiles and its nuclear program was eliminated.

Russia has cooperated with Tehran on a range of issues and has often resisted Washington's tough stance toward Iran, which insists that its nuclear program is aimed at developing only cheap energy, not weapons.

Meanwhile, Russian leaders have been infuriated by U.S. plans for a missile base in Poland and radar deployment in the Czech Republic, saying that U.S.-run weapons installations so close to its border represent a threat to its national security. The Bush administration, which initiated the plans, had waved off the Russian displeasure, saying the system would protect Russia as well as NATO allies from the threat posed by Iranian missiles.

The Obama administration, however, sent signals that it intends to smooth relations with Russia. Speaking at a defense conference in Munich last month, Vice President Biden said the administration wants to "press the reset button" with Russia.

During a visit to Russia two weeks later, Undersecretary of State William J. Burns suggested that Moscow's cooperation in eliminating the threat posed by Iran's nuclear program could result in the idea of missile defense being shelved.

"If, through strong diplomacy with Russia and our other partners, we can reduce or eliminate that threat, it obviously shapes the way at which we look at missile defense. We are also open to the possibility of cooperation with Russia and with our NATO partners on new missile defense configurations which can take advantage of assets which each of us have," Burns said in an interview with the Russian news agency Interfax.

And Defense Secretary Robert M. Gates said last month in Krakow, Poland, "I told the Russians a year ago that if there were no Iranian missile program, there would be no need for the missile sites."

Administration officials said Russia has not responded to the letter on missile defense, details of which were first reported yesterday by the Russian newspaper Kommersant. But Obama is scheduled to meet with Medvedev early next month in London, on the sidelines of a summit of the Group of 20 industrialized and developing nations.

Russian Foreign Minister Sergei Lavrov is scheduled to meet Saturday with Secretary of State Hillary Rodham Clinton in Geneva.

Assistant Secretary of State Daniel Fried noted last week that, in advance of the meeting, "There have been letters between the leaders, between the foreign ministers, outlining a way forward and a positive agenda, and it is on that that we want to build."

The U.S. overtures seem to be well received by Medvedev, who told Spanish reporters on Sunday that he expected the new administration to approach the issue of missile defense "in a more inventive and partnership-like" manner.

"We have already received such messages from our American colleagues," Medvedev was quoted as saying. "I expect those messages to take the form of specific proposals. I hope that during my first meeting with Mr. Obama, President of the United States, we shall be able to discuss" the issue.

Obama and Medvedev have exchanged several letters and phone calls over the past month. Kommersant reported that the letter that outlined possible cooperation on missile defense also raised other opportunities for cooperation, including on the Middle East, Afghanistan and arms control.

Correspondent Philip P. Pan in Moscow contributed to this report.

Europe: The street may replace the voting booth as the way to force change

Another Spectre Is Haunting Europe, by Andrew Stuttaford
The street may replace the voting booth as the way to force change. The Weekly Standard, Mar 02, 2009, Volume 014, Issue 23

As the worldwide slump deepens so must worries that the economic crisis will spill out onto the streets. In December, France's president Nicolas Sarkozy warned that les évènements of May 1968 could repeat themselves, and not only in the land of the torched auto. That same month IMF chief Dominique Strauss-Kahn used the possibility of social unrest--in rich countries as well as poor--to drum up support for aggressive fiscal expansion. Now it's reported that the leaders of the EU's member states will spend part of their March summit discussing signs of growing disorder across their increasingly embattled union. After weeks in which Greece came close to anarchy, and riots broke out in Bulgaria, Hungary, Latvia, and Lithuania (and, just outside the EU, in newly destitute Iceland), they are right to be concerned.

After roughly three decades of growth, European living standards are imploding, and once-rising expectations are dropping down with them. It's the sense of something lost that hurts the most. People can deal with living without that which they never had (which is why so many dirt poor countries languish without any meaningful regime change), but when prosperity vanishes, rage will go hand-in-hand with disappointment, frustration, and despair. Extra-legal protest, whether it's antiglobalization riots, spasms of racial or ethnic violence, or the repeated recourse to highway blockade, is already a part of the European political landscape, east and west. Under the circumstances it's hard to see how an economic slowdown on the current scale can continue without expanding this miserable tradition. The only question is where. Riga today. London tomorrow? Hamburg? Lille? Madrid? Dublin? A glance at the business pages suggests there are plenty of places to choose from.

It's a sad commentary on the situation Europe's leaders are now contemplating that some of the best clues as to what might happen there can be found in China and Russia. This reflects how the increasing reach of the EU within its member states has left the individual nations less free to respond to the demands of their peoples at a time of distress and imposed upon them a soft authoritarianism that increases the chance of disorder.

Start with China where, despite the extraordinary economic expansion of recent years, the promise of prosperity has spread far further than its achievement. According to some reports, there were nearly 80,000 "major" incidents of unrest in 2007, an inevitable response to the dislocations of helter-skelter growth in a People's Republic where hundreds of millions of the People have been left behind, deprived of what scant security they once enjoyed, and given no legal way of making themselves heard. And that was in the good times.

Since 2007, growth has slowed dramatically to an annualized rate of perhaps 6-7 percent. That's some way below the near double-digit pace usually thought necessary to sustain China's vast army of migrant workers (some 20 million of whom are said to have lost their jobs in the downturn). More ominous still are the large numbers of new university graduates: articulate, ambitious, and now unemployed. There is a good reason that the Chinese regime has put in place a $600 billion stimulus package. It's the same as the one that has led some of the country's elite to worry openly about the prospects for social peace.

There are at least some (faint and fiercely disputed) signs that all those billions might be having an effect, but no such comfort is available in Russia. The ruble is sharply down, and the economic growth that legitimized Putin's rule has dwindled to nothing. This winter has seen protests in Moscow, Vladivostok, and other cities, events largely unthinkable a year ago. Like the Chinese, the Russians are throwing money at the problem. And, like the Chinese, they are tightening up internal security. The rigidities of authoritarian rule may ultimately provoke a violent reaction, but so long as these regimes retain a monopoly of force and a willingness to use it, disorder can generally be stamped out: until, of course, the revolutionary moment. But that moment still seems far away.

In a broad collection of countries to Russia's west, the situation looks more immediately dangerous. These states are all nominally democratic, but the extent to which democracy, and the shared trust that must go with it, have really taken root is not only unclear, but also about to be put to a brutal test. Emerging from beneath the rubble of the Soviet imperium has been a long and wearying process, marked by setbacks and punctuated by crises, but somehow nearly always sustained by the dream of better times to come and, more practically, massive transfusions of Western money, both public and private. That was then. GDPs across the region are in free fall (if you prefer another cliché, the governor of Latvia's central bank has offered up "clinically dead" as a description of his country's economy), a situation that may finally sink the hulks of the Western European banks already perilously exposed to this part of the world and not, therefore, in a position to come up with any fresh cash.

Economic collapse and fragile democracies are a fissile combination, and that's before considering the opportunity they present for geopolitical mischief-making. The Ukrainian state is politically weak, ethnically divided, facing tricky elections, and, many analysts reckon, on the edge of insolvency. Under these promising circumstances Moscow would be most unlikely to object to a destabilizing riot or two in a neighbor whose independence it still resents. And the same holds true for the Baltics. After all, the Kremlin was widely thought to be behind disturbances (unrelated to the economy) in the Estonian capital, Tallinn, in 2007.

But while Kiev, Riga, and Sofia may seem reassuringly remote, believing that the more established democracies in the western half of the continent will necessarily escape disorder is, as Sarkozy, Strauss-Kahn, and those fretting European premiers undoubtedly understand, to ignore the lessons of the past. Optimists like to see Iceland as a special case, and, yes, Greece too. They might also argue that the January protests in France were nothing more than business as usual. But all these supposedly discrete disturbances were beginning to look like a pattern even before a wave of wildcat strikes in the U.K. (protesting the importation of cheap foreign workers from other EU countries). Expectations are being dashed in the west of Europe just as much as they are in the east, and there will be consequences. To be sure, the nations of the EU's heartland are far better off (and, critically, have more generous social security nets) than those that so recently escaped Soviet rule, but a dashed expectation is a dashed expectation wherever it falls to earth.

In some ways the darkening of a once bright future may be more difficult to deal with for populations like those living in Western Europe where truly hard times (and the psychological mechanisms to cope with them) are scarcely more than a folk memory. Making matters worse, social cohesiveness within these countries has been badly battered, most notably by mass immigration and, more happily, the greater opportunities for individual autonomy that affluence has hitherto brought in its wake. The idea that, at some level, "we're all in this together"--a vital safety valve for a society under stress--may no longer be available for use.

Adding further poison to the mix is the catastrophic effect of EU membership on the relationship between Europeans and their political class. The idea that the governing should listen to the governed underpins any successful democracy. It does not underpin the EU--as those naughty no-voting Irish are just the latest to discover. National politicians, neutered by a confederation where most important decisions are taken within an opaque and remote political structure that is subject to but the barest pretense of democratic control, now function as little more than messenger boys or enforcers for the real bosses in Brussels.

This raises rather awkward questions as to what Europe's ballot boxes are actually for, questions that may turn very ugly indeed when the bread has gone stale, the circuses have shut down, and recovery remains elusive. Fortified perhaps both by images of disturbances elsewhere and the knowledge of the spinelessness that is a not-so-guilty not-so-secret of so many European governments, the peoples of the EU might well conclude that the street is a better way to force through change than the voting booth. Throw in the organizing capabilities of the Internet, relatively high levels of unemployment amongst the articulate and well-educated, and the rallying impact of a populist cause, and it's easy to see what will come if the slump lingers on.

No clear thread yet runs through the discontent now rippling across the EU, which remains mostly of the throw-the-bums-out variety. Yet in the midst of a debacle typically blamed (we could debate how fairly) on capitalist excess, a Trotskyite postman is the second most popular political figure in France and a party with its roots in the Communist dictatorship is polling at around 15 percent in Germany. If economies continue to spiral down, anxiety, uncertainty, and anger are bound to assume more concrete ideological forms, forms that are unlikely to be pretty.

Sometimes history repeats itself as tragedy, not farce.

Andrew Stuttaford, who writes frequently about cultural and political issues, works in the international financial markets.

Conservative comments on BHO's higher education plans

A Ph.D. in Every Pot. By Andrew Ferguson
Obama's diploma mill.
The Weekly Standard, Mar 09, 2009, Volume 014, Issue 24

In the long, long list of presidential directives that President Obama handed down to his countrymen in his televised Day of Reckoning speech last week, one was more far-reaching than it appeared at first glance. "Tonight," he said, "I ask every American to commit to at least one year or more of higher education or career training." He said he didn't much care what kind of higher education it was: "community college or a four-year school; vocational training or an apprenticeship." The ultimate goal is that by 2020 "America will once again have the highest proportion of college graduates in the world." Then we'll be able to compete in that globalized economy we keep hearing about, "where the most valuable skill you can sell is your knowledge."

The goal, though comfortably far off, is impressive enough, but the point was driven home with unusual force. First, the president insisted that "dropping out of high school is no longer an option." Anyone who doesn't finish high school, he said, is "quitting on your country." (This attack on the patriotism of high-school dropouts drew whoops of approval from his audience on Capitol Hill.) So everyone has to finish high school, and everyone who finishes high school has to go on to higher education. And if they go on to higher education but don't go on to get a degree, America won't regain its world title in college graduates. They'll be letting down the team.

To prevent such an outcome, the president will provide a variety of inducements, from the tiniest Pell Grants for a two-year associate's degree to full rides at the fanciest four-year colleges. And as you might expect, the people who stand to receive the most money under the president's proposal are adamant in their belief that the country probably will not survive unless it is enacted at once. The president of the American Council on Education could barely contain herself.

"The education components of the new economic stimulus package prove that President Obama will back his words with resources and action," said Molly Corbett Broad. This is lobbyist talk for ka-ching! "If America is to compete economically," she went on, "we must have a competitive work force and a new generation of innovators and entrepreneurs."

The assumption here is that the way to make somebody a competitive worker is to send him to college, an idea that will astonish anyone who's ever been served in a restaurant by a waiter with a master's in art history. This is just the first of the confusions that dog the president's proposal, which for the moment exists only in hypothetical form. Another confusion comes from his hazy definition of what the problem is.

The 2020 goal relies on a gloomy factoid that has become a favorite of hand wringers and heavy breathers in the education-obsessed community. According to data compiled by the Organization for Economic Cooperation and Development, the United States ranks tenth among the 30 developed nations in the higher-ed "participation rate"--the number of people between the ages of 25 and 34 with postsecondary degrees.

But the poor ranking isn't nearly as portentous as it seems, as several educational researchers have pointed out, to little effect. Clifford Adelman of the Institute for Higher Education Policy noted recently in (the indispensable) Inside Higher Ed that the OECD rankings take no account of the country's vast demographic and ethnic stew, and ignores a 45 percent increase in foreign-born immigrants over the last 15 years that tilts toward the young and unschooled. If a country's population is growing at the younger and older ends, then its higher-ed participation rate in the middle will appear artificially low. Most of the United States's OECD competitors have flat or declining population numbers, along with greater social conformity.

When you expand the cohort to those between the ages of 25 and 65, the U.S. participation rate jumps and the United States ranks fifth among the 30 OECD countries. It turns out that lots of Americans earn their degrees after they've passed college age and even the middle years. "Lifelong learning," and the federal government's insistence on "fostering" and "nurturing" a "culture" thereof, has been a fetish and cliché of our politicians for 20 years. Weirdly enough, it seems to have worked. Lifelong learning makes more sense than cramming all your schooling through the window of the late teens and early twenties. As a vocational matter, late learners are more likely to concentrate attention on abilities that the current marketplace needs, unlike kids who have to predict what jobs this finicky global economy of ours will be rewarding 10 years from now. And the learning is more likely to stick. Adults are smarter than teenagers. In general.

Thus the OECD rankings are less gloomy than the president thinks. If there is a problem with a shortage of workers with associate's degrees or B.A. degrees, it is more concentrated than he lets on. The Gates Foundation announced last November that it's spending close to $100 million to encourage young people to get a higher-ed degree. Unlike the president, however, the foundation will spend money where the difficulty lies. While more than 60 percent of high schoolers go on to post-secondary school, the number for poor black and Hispanic high schoolers is roughly half that. These are the students that the Gates program will encourage and subsidize. More important, it will bring them into community colleges and vocational schools exclusively. At the least they will get an associate's degree and a marketable skill. Then, if they're inclined, they can go on to a four-year school.

The president's view is more romantic. With certain exceptions, he'll have taxpayers pay for anyone to go anywhere--wherever higher-ed is sold, whether it's to learn hospitality management at DeVry University or to study neocolonialism at Oberlin. Many taxpayers will find this approach indiscriminate, even incoherent. For behind the president's proposal is a contradiction set deep in the American understanding of things--deep in American democracy itself.

On one hand, the president takes the purely utilitarian view of what higher education is for: You get a degree so you can get a good job, and, as you work, you make the country more prosperous. On the other hand, by including traditional four-year liberal arts colleges and universities in his plan, he implicitly endorses the opposite view: Higher education is for spiritual advancement, the development of character, and the refinement of the mind, and it must be, moreover, accessible to everyone. It is the collision of American practicality and American romanticism. The second view considers the first crudely materialistic, the reduction of education to mere training; the first sees the second as . . . well, nice, I suppose, but pretty much beside the point. Haven't you heard about that global economy?

The idea that the two views can be reconciled is why the restaurants of our great country are overrun by art history majors spilling osso bucco on disgruntled customers; these delicate souls have been trained for everything but work. It's also why more than half of students who enroll in traditional four-year schools never finish; they didn't want be trained for everything but work. They wanted to be trained for work. It has also inspired a multi-billion dollar industry designed to help teenagers get into a four-year college whether or not they really want to go.

When he included four-year schools in his list of higher-ed options, the president was being very generous. (Why wouldn't he be? It's not his money.) But the traditional college was only one of four options. In practice the three others--postsecondary education understood as job training--will be where the action is and, if we're lucky, where the students are.

The democratic ideal of outfitting everyone with a liberal arts degree has always been vaguely unrealistic, and now the lack of realism is becoming unavoidable. Whether intentionally or not, the effect of pursuing the president's goal will be to reconfirm the utilitarian view and slowly -render the traditional view irrelevant--an overpriced indulgence that the country can no longer afford. For traditional colleges, this is a Day of Reckoning the president didn't mention.

Andrew Ferguson is a senior editor at The Weekly Standard.

Conservatives describe Barack Obama's America with Tocqueville's words

Barack Obama's America - A timeless critique from Tocqueville.
The Weekly Standard, Mar 09, 2009, Volume 014, Issue 24

It seems that if despotism came to be established in the democratic nations of our day, it would have other characteristics: it would be more extensive and milder, and it would degrade men without tormenting them. . . .

When I think of the small passions of men of our day, the softness of their mores, the extent of their enlightenment, the purity of their religion, the mildness of their morality, their laborious and steady habits, the restraint that almost all preserve in vice as in virtue, I do not fear that in their chiefs they will find tyrants, but rather schoolmasters. . . .

I want to imagine with what new features despotism could be produced in the world: I see an innumerable crowd of like and equal men who revolve on themselves without repose, procuring the small and vulgar pleasures with which they fill their souls. . . .

Above these an immense tutelary power is elevated, which alone takes charge of assuring their enjoyments and watching over their fate. It is absolute, detailed, regular, far-seeing, and mild. It would resemble paternal power if, like that, it had for its object to prepare men for manhood; but on the contrary, it seeks only to keep them fixed irrevocably in childhood; it likes citizens to enjoy themselves provided that they think only of enjoying themselves. It willingly works for their happiness; but it wants to be the unique agent and sole arbiter of that; it provides for their security, foresees and secures their needs, facilitates their pleasures, conducts their principal affairs, directs their industry, regulates their estates, divides their inheritances; can it not take away from them entirely the trouble of thinking and the pain of living?

So it is that every day it renders the employment of free will less useful and more rare; it confines the action of the will in a smaller space and little by little steals the very use of it from each citizen. . . .

Thus, after taking each individual by turns in its powerful hands and kneading him as it likes, the sovereign extends its arms over society as a whole; it covers its surface with a network of small, complicated, painstaking, uniform rules through which the most original minds and the most vigorous souls cannot clear a way to surpass the crowd; it does not break wills but it softens them, bends them, and directs them; it rarely forces one to act, but it constantly opposes itself to one's acting; it does not destroy, it prevents things from being born; it does not tyrannize, it hinders, compromises, enervates, extinguishes, dazes, and finally reduces each nation to being nothing more than a herd of timid and industrious animals of which government is the shepherd. . . .

I have always believed that this sort of regulated, mild, and peaceful servitude, whose picture I have just painted, could be combined better than one imagines with some of the external forms of freedom, and that it would not be impossible for it to be established in the very shadow of the sovereignty of the people.

--Alexis de Tocqueville

From Democracy in America, volume two, part four, chapter six: "What Kind of Despotism Democratic Nations Have to Fear" (translated by Harvey C. Mansfield and Delba Winthrop)

Eugene Robinson on BHO: Bending the Trajectory Left

Bending the Trajectory Left. By Eugene Robinson
WaPo, Tuesday, March 3, 2009; A13

Sometimes, it turns out, politicians can be taken at their word. More than a year ago, while campaigning for the Democratic presidential nomination, Barack Obama told the Reno Gazette-Journal that "Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not, and in a way that Bill Clinton did not." Reagan, he said, "put us on a fundamentally different path because the country was ready for it." The implication was that Obama, if elected, would be no less ambitious.

But well before then, and without reference to the Gipper, Obama was aiming higher than most of us could have imagined. In an interview two years ago, I remember being struck by his certainty that this was a moment that required audacity -- one of his favorite words -- and that he, uniquely, could supply it. Obama is determined to shift our whole political spectrum to the left, redraw the boundaries of our politics and expand the realm of the possible. He senses that the nation is already moving in his direction, well ahead of its political leadership.

So far, Republicans seem oblivious to what's happening. After Obama gave his prime-time speech to Congress last week, Louisiana Gov. Bobby Jindal began his response with a patronizing, cringe-worthy riff in which he congratulated the president on being the first African American to hold the office -- as if we hadn't noticed. Jindal went on to lay out a program that would have sounded innovative if the year were 1978: lower taxes, smaller government, wave the flag, etc. Two days later, former presidential candidate Mike Huckabee told the annual Conservative Political Action Conference, "I'm still convinced America wants to like us" -- as if he were having a private Sally Field moment.

Obama's speech to Congress was merely to set the stage. The week's main event -- and the most important act thus far of his already eventful presidency -- was the $3.6 trillion budget he proposed Thursday. The sums of money involved are so huge that commentators used up a year's worth of adjectives: unprecedented, staggering, breathtaking. Ultimately, though, the numbers will mean less to history than the way Obama's budget reorders the nation's priorities and changes the relationship between Americans and their government.

In halting some of the largess that the Reagan, Bush and Bush administrations gave to the wealthiest Americans, Obama reintroduces the principle of progressive taxation -- the idea that the rich, who can afford it, should pay a greater percentage of their income in taxes so that the government can do more to improve the lives of those who are not rich. This is what John McCain was warning against, I think, when he attacked Obama during the campaign as a "redistributionist." It is also why the Rush Limbaugh wing of the Republican Party immediately began sputtering about rampant socialism.

Does anyone else recall that one early supporter of this radical redistributionist idea was Teddy Roosevelt, McCain's supposed hero? I wonder whether the Rough Rider's assessment of today's Republicans -- staunch defenders of those who make more than $250,000 a year and who tell everyone else to buzz off -- would be printable in a family newspaper.

Obama proposes the kind of budgetary support that Kathleen Sebelius, nominated yesterday as health and human services secretary, must surely love: a $634 billion "down payment" over the next 10 years on health-care reform, with the aim of moving toward universal coverage. The important thing here isn't the big number but the fact that he is expanding the government's responsibility for citizens' health beyond the old, the young and the poor. Conservative commentators, of course, are outraged that Obama would go so far as to offer a government-supported plan that Americans are likely to prefer to the hodgepodge of private insurance coverage they now have to navigate. Has the president no shame?

By including education among his top three priorities, Obama expands on a commitment to make improving the schools a federal matter, not just a local issue. This bit of intrusive social engineering was actually initiated by George W. Bush, of all people. On energy policy, by contrast, Obama reverses Bush administration policy, which was all about oil. But the bigger headline on the energy front is his acceptance of our nation's responsibility to play its part in slowing or reversing global climate change.

There's a reason Obama's approval ratings remain so high. He senses that Americans yearn for greater fairness and accountability, especially after the excesses that threaten to wreck our economy and destroy so many dreams. He knows that American individualism is tempered by the need to feel community in the nation and the world.

He also knows that windows of opportunity for fundamental change remain open just briefly before slamming shut. His declaration Saturday that "I didn't come here to do the same thing we've been doing or to take small steps forward" may be the understatement of the year.

Libertarian on Caroline Smith DeWaal for FDA's Food Safety and Inspection Service

Will the “food police” be nationalized?, by Fran Smith
Open Market/CEI, March 02, 2009 @ 5:25 pm

In this bizarre Washington world, it can’t possibly be true, but it is: a top staffer at the lobbying organization often pejoratively referred to as the “Food Police” is one of two candidates in line to be the nation’s top food safety guru.

According to news reports, Caroline Smith DeWaal, a top food alarmist at the Center for Science in the Public Interest (CSPI), may be named head of the FDA’s Food Safety and Inspection Service (FSIS).

CSPI is the group that railed against food irradiation even when just about every major international and domestic food group and public health official extolled its virtues in helping to prevent food-borne disease outbreaks. This is the group that campaigns against fat yet waged a scientifically inaccurate campaign against the fat substitute Olestra. This is also the group that opposes carnivore eating habits, yet hyperventilated about Quorn, a meat substitute. Again, CSPI is the group that tried to terrify people about acrylamide — a naturally occurring substance formed in starches cooked at high temperatures.

Their lack of scientific evidence for much of their fear-mongering, however, doesn’t stop them from attacking sugar, caffeine, saccharin alcohol, whole milk – and any other substance that doesn’t suit their lifestyle choices.

Next to CSPI’s founder, Michael Jacobson, Smith DeWaal is the leading food alarmist at the group, and, according to the Washington Times, has lobbied–
. . . the White House, Congress, the USDA, the Food and Drug Administration, the Environmental Protection Agency, and the departments of Interior, Treasury, Health and Human Services, and Justice on matters concerning food safety.

The center spent $610,000 in the past two years, according to Senate records, to lobby the House and Senate.

Smith DeWaal previously worked for Public Voice for Food and Health Policy and a subgroup of the Ralph Nader-founded group, Public Citizen.

Check out what Reason columnist Jacob Sullum has written about CSPI. Also check out this and the many articles critiquing the group by the American Council on Science and Health.