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If you think that government experts should be free from political influence, then think again.
Twice this June the Supreme Court ruled that the president could exert more control over regulatory agencies, the government institutions that are as important as they sound boring.
While Congress may write laws, agencies are needed to interpret them, apply them, and fill in their gaps. Take the government’s efforts to address lead poisoning. Congress passed a statute in 1971, and since then, a suite of agencies has issued regulations that keep up with the latest science on the problem. Such updating is especially needed in an era of political gridlock. Most climate policy, for example, builds on a 1963 statute that hasn’t been amended in nearly 30 years.
Congress initially designed many of these agencies—including the two at issue this term—to stand above the whims of politics. But the court may be on the verge of undoing almost a century’s worth of precedent and legal understandings protecting that independence.
More Presidential Control Over Hiring
In one case, the court ruled that administrative judges hired to hear challenges to existing patents were too independent and had to be supervised by a presidential appointee with the power to overturn their decisions.
The judges sit on the Patent Trial and Appeal Board at the United States Patent and Trademark Office–known as the “death squad” because it frequently invalidates patents. Smaller businesses say giants like Apple and Google use the board to squash legitimate competition, while larger companies argue these so-called competitors are infringing on existing patents, and the board is needed to root them out. Often, millions, if not billions, of dollars are at stake.
So, in 2015, when the board’s administrative judges declared that the medical device company Arthrex held an invalid patent, Arthrex took aim at not just the board’s decision but the board itself.
The company argued that the patent judges held too much power and were too insulated from the president’s political influence. This arrangement, the company said, ran afoul of the power the Constitution grants to the president. Either the president should appoint the judges himself or a presidential appointee should supervise them more directly.
The high court agreed. In an opinion by Chief Justice John Roberts, the court ruled that the president did need more control of the judges. That, the court held, would ensure a direct chain of political accountability between the president and the administrative officials beneath him.
But the court didn’t give Arthrex everything the company had asked for. Arthrex hoped the court would see a constitutional defect with the patent judges and scrap the whole patent board as a result. Instead, the court preserved the board but reined in the patent judges’ independence, granting the presidential appointee who directs the patent office the power to reverse their decisions.
Most administrative judges are already heavily supervised by political appointees, so June’s decision may just bring the patent office in line with the status quo. Still, the justices have injected politics into an agency Congress wanted to be nonpartisan. What’s more, they have tightened the reins on Congress, limiting its ability to create independent agencies in the future.
More Presidential Control Over Firing
In a second case, the justices again ruled that the president should hold more sway, this time over firing.
In the aftermath of the 2008 financial crisis, Congress set up a new agency to oversee Fannie Mae and Freddie Mac, the quasi-public companies meant to stabilize the mortgage market. Fannie’s and Freddie’s shareholders alleged that the agency, in its attempts to recoup bail-out money, illegally appropriated billions of dollars from the companies. All this was illegal, they said, because the agency was overly protected from presidential control.
Specifically, the agency had only a single director—as opposed to a committee of directors—and the single director had a term longer than the president’s. What’s more, the president could only remove the director for cause—meaning corruption, malfeasance, or neglect of duty. But, the shareholders claimed, the president should be able to fire the director for any reason, without cause.
Like Arthrex, the shareholders said this problem infected the agency’s decisions—particularly its decision to recoup billions in government money given to Fannie and Freddie to prevent a complete meltdown in the mortgage market during the financial crisis and thereafter.
The justices again agreed only in part. With an opinion by Justice Samuel Alito, a fractured court held the president should be able to remove the director without cause. But the court declined to set aside the director’s decisions because he had been appointed constitutionally, namely by the president and confirmed by the Senate.
An Attack on Agencies
The same day the court said the president could fire the agency’s director, President Biden did exactly that. And three weeks later, Biden axed the head of the Social Security Administration, also headed by a single director whom President Trump had appointed.
More lawsuits and more firings may lie ahead at other agencies run by a single director, like the Government Accountability Office.
Even more prominent agencies may also be at risk, among them the Securities and Exchange Commission, the Federal Reserve Board, and the Federal Communications Commission. Though these agencies are led by multi-member commissions, not single directors, those commissions have a single chairman who is difficult to replace. Now those chairmen may be in the crosshairs.
June’s decision is the latest attack on a New Deal era precedent that protects agency independence. In 1935, a unanimous court held that President Franklin Roosevelt had acted unconstitutionally when he fired William Humphrey, a Federal Trade Commissioner, for political reasons. Humphrey was a conservative holdover from the prior administration who disagreed with Roosevelt’s progressive policies. And the court said that under the statute that created the FTC, he could only be fired for cause, meaning misconduct.
The current court has narrowed the scope of this 86-year-old precedent. On top of that, Justices Neil Gorsuch and Clarence Thomas have called for overturning the 1935 decision altogether, and Justice Brett Kavanaugh criticized the decision while a judge on the D.C. Circuit Court of Appeals.
A Scalpel or a Sledgehammer?
Both of June’s decisions also raised a question that reaches beyond regulatory agencies. When one provision of a law is unconstitutional, can the court remove the issue with a scalpel and then patch up the problem? Or does the court need to strike down whole portions of the law with a sledgehammer and then undo the government’s decisions?
Arthrex corporation, for example, argued that because of a problem with how patent judges are appointed, the court should not just reverse their ruling against Arthrex, but also eliminate the whole board of patent judges. And Fannie’s and Freddie’s shareholders wanted the court to unwind billions of dollars’ worth of agency decisions for want of a single removal provision.
But the court for nearly a century has used a more surgical approach. The justices have presumed that unconstitutionality in one provision does not infect the rest of the law or an agency’s decisions. In these two cases, a majority of the court reaffirmed that presumption.
In both cases Justice Neil Gorsuch bucked the trend. He would have reversed the decisions of the patent judges and undone $124 billion worth of bailout decisions aimed at stemming the financial crisis. In other recent cases, Justices Clarence Thomas and Samuel Alito have signed on to Gorsuch’s idea. When the court this term upheld the Affordable Care Act, Justice Alito dissented, calling for the court to strike down the law’s key provisions because of a problem with just one of them. These three justices may fall short of a majority, but they have planted the seeds for future cases.
Politics: The Minders and Mandarins of Capitalism – The Wall Street Journal
James R. Otteson’s “Seven Deadly Economic Sins” (Cambridge, 305 pages, $27.95) is a fine effort to introduce readers to the basic principles of market economics. The hamartiological framing—the “sins” are bad assumptions about how markets work—is part of the author’s effort to make the subject more engaging than a typical treatise on economics. It works. Mr. Otteson, a professor of business ethics at Notre Dame, writes with an apt combination of casual wit and rigorous logic.
I only regret that the book had to be written at all. There was a time in this country’s history—if the reader will allow a bit of declinist gloom—when America’s political class understood by instinct that wealth in a market economy comes about by voluntary exchanges in which all parties benefit. We do not live in such a time. About half of this country’s high-level elected officials appear to believe that some Americans have money because they took it from other Americans (the rich got rich “on the backs of workers” is a common trope). And so it is left to scholars such as Mr. Otteson to spell out the difference between zero-sum and positive-sum economic relationships.
A transaction based on extraction or theft is zero-sum (1 – 1 = 0). A transaction based on a mutual exchange is positive-sum (1 + 1 = 2). Wealth in most societies before about 1800, he reminds us, was based on the former model; wealth in market economies is based on the latter. What we need is someone able to explain to our well-intentioned politicos that the wealth they want to reallocate came about from mutually beneficial positive-sum transactions and not from zero-sum extraction. The way to diminish poverty and aid the disadvantaged is therefore not to punish positive-sum exchanges by taxation, but to allow more of them.
Other chapters in the book treat the “Good Is Good Enough Fallacy,” or the idea that every beneficial end is worth pursuing by all available means; the “Progress Is Inevitable Fallacy,” or the idea that a certain level of prosperity is guaranteed no matter what we do; and the “Great Mind Fallacy,” or the idea “that there is some person or group that possesses the relevant knowledge to know how others should allocate their scarce time or treasure.”
This latter point isn’t new—you can read the gist of it in Friedrich Hayek’s essay “The Use of Knowledge in Society” (1945) or Thomas Sowell’s book “Knowledge and Decisions” (1980)—but Mr. Otteson helpfully elucidates it in terms of individual experience. The experts may know that high-sugar carbonated drinks are on balance bad for your health, but they cannot know if you, in your circumstances, should or shouldn’t have a Coke. Most people would agree with that observation, but it is remarkable how many government policies are premised on its antithesis. City bans on unhealthy habits, state subsidies for favored industries, tax breaks meant to encourage virtuous behavior—these and a thousand other state-backed strategems assume the authorities and their experts understand immeasurably complex circumstances that they can’t possibly understand. But the alternative—allowing the people who do understand them to make their own decisions, even if they’re wrong—isn’t so satisfying to our governmental minders.
“The Power of Creative Destruction” (Belknap/Harvard, 389 pages, $35), translated by Jodie Cohen-Tanugi, is a full expression of the Great Mind outlook. Not that the authors—Philippe Aghion, Céline Antonin and Simon Bunel, all associated with the Collège de France—are socialists or militant redistributionists. They are mandarins. They recognize that you can’t pay for the modern welfare state or enjoy high levels of prosperity without robust economic growth. But capitalism, in their view, is constantly menacing itself and requires the aid of sage policy makers to prevent its collapse.
The authors are heavily influenced by the Austrian economist Joseph Schumpeter. In “Capitalism, Socialism and Democracy” (1942), Schumpeter contended that capitalism was doomed by its own logic. The capitalist system depends on a constant succession of entrepreneurs dislodging established firms—a process he called “creative destruction.” But eventually, he saw, yesterday’s innovators become today’s monopolists and learn to use the levers of power to prevent further innovation. Growth diminishes; a dissatisfied public demands welfare-state protections and restrictions on entrepreneurial activity; and capitalism, deprived of growth, slowly transmutes into socialism.
Clearly some parts of that analysis are valid, although Schumpeter was mistaken, in my view, to think of capitalism as a “structure” that can’t adapt to the demands placed on it by an intermittently irrational public. Mr. Aghion, Ms. Antonin and Mr. Bunel share Schumpeter’s overdefined understanding of capitalism. “Capitalism must reward innovation,” they write, “but it must be regulated to prevent innovation rents”—rents meaning profits accruing to incumbent firms—“from stifling competition and thus jeopardizing future innovation.”
And what sort of regulations do they think will encourage innovation, foster competition and save capitalism from itself? You may have guessed already. Industrial policy: tariffs and other protections, subsidies to viable industries and firms, “investments” in R&D and higher education, and so on. What capitalism needs, if I may put their argument in my own words, is more public officials ready to heed the advice of centrist academic economists.
The book is rife with charts and graphs, and the authors cite a bewildering array of highly specialized studies. Much of this technical argumentation strikes me as overdone. I appreciate, for instance, the conclusion that lobbying and barriers to entry are likelier than innovation and competition to aggravate inequality. But people who think markets worsen inequality are committed to an unfalsifiable ideology and won’t be moved by any combination of graph-packed quantitative studies.
Love and death in a utopian community, the remorseless business of slavery, a passion for peacocks, updating Sir Gawain and more.
“The Power of Creative Destruction” is an impressive book in its way, but the authors don’t acknowledge the—to me—obvious objection. Once you afford governmental bodies the power to manage the economy, you also give established firms the tools with which to insulate themselves from competition. Wouldn’t it be easier and more effective to deprive incumbent firms of any special privileges and let them figure out how to survive? Then again, if we did that, we wouldn’t need so many mandarins.
Book review: Border politics serve up racism, human exploitation – Vancouver Sun
Border & Rule: Global Migration, Capitalism, and the Rise of Racist Nationalism
Harsha Walia | Fernwood Publishing (Halifax and Winnipeg, 2021)
$27 | 320pp
Borders are far more than lines on paper.
As local organizer, activist and scholar, Harsh Walia demonstrates in her passionately felt, deeply researched and closely reasoned new book, Border and Rule, that borders can serve as lethally intricate mechanisms of imperialism, colonialism, racism, sexism and class exploitation.
They work to divide workers and undermine international solidarity, while inscribing cartographies of privilege and oppression on the long-suffering face of the Earth.
And yet in mainstream discussions, borders are only questioned when heart-rending images of migrant children huddling miserably in U.S. border holding pens or drowned on the shores of the Mediterranean inspire brief and self-congratulatory spasms of outrage and pity among comfortable observers on the “right” side of the borders.
Walia, who has spent much of her adult life doing the hard work of organizing solidarity activity and saving lives of those threatened with deportation back to the dangers they are fleeing, is understandably dismissive of such liberal responses. She points out that centuries of imperial conquest, colonial occupation and gendered, racist segmentation of the workforce have set the stage for the current global crisis, which saw over 80 millions of our sisters and brothers driven forcibly from their homes last year, according to the United Nations, while hundreds of millions more have been forced to migrate by climate disasters, poverty and famine. Such disasters are, Walia persuasively argues, not so much “natural” as created by economic and social relations (aka predatory and racialized capitalism and a world order designed to serve the needs of the rich over the needs of the rest of us).
Walia’s analysis is dense and complex, and her language occasionally overburdened with abstraction. But even where her thought is difficult, it is always worth the time it takes to grasp.
This is a remarkable book that reflects a lifetime of activism and reflection on the author’s part — Walia has been in the news lately, resigning as executive director of the B.C. Civil Liberties Association after a controversial social media post on arson committed at several Catholic churches. Still, this book is rich with learnings for us all.
Her core argument, that “a political and economic system that treats land as a commodity, Indigenous people as overburden, race as a principle of social organization, women’s caretaking as worthless, workers as exploitable, climate refugees as expendable and the entire planet as a sacrifice zone must be dismantled,” will challenge and inspire readers.
Tom Sandborn crossed a border to live in Vancouver in 1967. He welcomes your feedback and story tips at email@example.com
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Jason Kenney's longing for Alberta's pre-COVID politics – iPolitics.ca
Pandemic? What pandemic?
In Premier Jason Kenney’s Alberta, the pandemic isn’t just retreating, it has been defeated.
“Such a joy to connect with Albertans during Canada’s first major event after the pandemic,” said a jubilant social media post last week from Kenney after he visited the Calgary Stampede.
Saying “after the pandemic” was no slip of the keyboard. Kenney chose his words carefully, including being sure to point out the Stampede was the “Canada’s first major event.”
Alberta was the first province to lift virtually all pandemic restrictions on July 1; the first to get more than 70 percent of eligible citizens vaccinated with one dose; and, now, the first province to declare we’re in a post-pandemic world.
This is Alberta exceptionalism, Kenney style.
And, boy, does Kenney need to be seen as exceptional these days. His popularity plummeted during the pandemic – from a high of about 60 per cent in support in 2019 to around 30 per cent now, according to the most recent polls.
The pandemic, of course, is not over – as health experts are quick to point out.
The number of cases and hospitalizations have fallen dramatically in Alberta (and other jurisdictions) thanks to vaccinations, but the pandemic is still with us, even if it is a shadow of its former self.
At the same time, countries including France are re-imposing restrictions as the number of Delta-variant cases surge and experts talk ominously of a fourth wave among the unvaccinated.
Ironically, Kenney’s optimistically misleading view of Alberta being in an “after the pandemic state” might actually put the province at risk of enduring more variant cases. The province’s vaccine rollout, doing so well just weeks ago, has stalled. After hitting 70 per cent of Albertans with their first dose a month ago, the rate has increased by a trickle to just under 75 per cent despite the government announcing a vaccine lottery with cash prizes and exotic vacations.
There are a multitude of reasons for the slower uptake including lack of access to clinics in rural areas and suspicion of the vaccines — but you have to think that Kenney talking about the pandemic in the past tense has some people wondering why they’d bother to get a shot now.
Therein lies a Catch-22 for Kenney among his Conservative supporters who have rankled at pandemic restrictions from the beginning.
Tell them the pandemic is over and they’ll see no reason to get vaccinated. Tell them the pandemic is not over and he’d have to maintain pandemic restrictions, further aggravating his conservative base.
For the base, the big issue is politics, not pandemics.
Right-wing voters are disappointed in Kenney, not just because he imposed what they considered draconian COVID-19 measures, but because he backed off on his war with the federal Liberal government during the pandemic.
Well, that war is back on.
Kenney is holding a referendum vote this October, in conjunction with Alberta’s municipal elections, asking Albertans if they want the federal equalization program scrapped. Never mind that it’s a federal program paid for by federal tax dollars, Kenney is arguing that equalization is unfair to Alberta (even though Kenney himself was part of the Harper federal cabinet that amended the equalization formula a decade ago).
Kenney has dusted off the anti-Trudeau rhetoric, once again accusing the prime minister of “openly campaigning against Alberta” in the last federal election, even though the federal government bought the Trans Mountain pipeline and has committed to twinning the pipe so Alberta can get more energy products to the West Coast for shipment internationally.
But Kenney is loath to give his political nemesis any pats on the back. This reluctance reached petty heights, or lows, on July 7 when the prime minister held a news conference in Calgary with Mayor Naheed Nenshi to formally announce the city’s $5.5-billion Green Line LRT project. Neither Kenney nor anybody from the Alberta government attended the news conference even though the province is kicking in $1.5 billion.
Kenney’s office said the announcement was just a rehash of previous announcements. That’s true – but when has a politician ever shied away from re-announcing projects when there are headlines to grab?
Kenney apparently didn’t want to be seen helping boost Trudeau’s profile on the eve of a possible federal election.
On a more practical front, Kenney’s anti-Trudeau feelings could prove costly to Alberta’s parents, particularly those in the large urban centres, who are keen on the federal government’s $30-billion plan for a $10-a-day daycare system.
Both British Columbia and Nova Scotia have signed on to plans tailored to their provinces and Alberta insists it is in negotiations, but Kenney’s initial response in April was to dismiss the federal plan as a “nine-to-five, government-run, union-operated, largely-urban-care” system. Predictably, the Alberta government is also upset with the federal government’s plan announced this week to begin consultations on a “Just Transition” plan to help Canadian workers energy workers get ready for a future less dependent on fossil fuels.
“The federal government’s intention to hastily phase out Canada’s world-class oil and gas industry is extremely harmful to the hundreds of thousands who directly and indirectly work in the sector, and will be detrimental to Canada’s economic recovery,” said Alberta Energy Minister Sonya Savage Tuesday in a deliberate misreading of Ottawa’s intent.
But that’s the tone of the Alberta government in 2021 when it comes to dealing with the federal Liberals: partisan, pugilistic and plain ornery.
It’s a throwback to 2019 before the pandemic hit.
In that respect, Kenney is right. Politically speaking, Alberta is indeed in a post-pandemic world.
The views, opinions and positions expressed by all iPolitics columnists and contributors are the author’s alone. They do not inherently or expressly reflect the views, opinions and/or positions of iPolitics.
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