Judicial Theory, Judicial Practice

I have been reading about the recent Supreme Court decision, McDonald vs. City of Chicago, striking down Chicago’s ban on the private possession of handguns. What interests me about this decision is not so much the subject itself as the way it illuminates the lack of a consistent judicial theory among the court majority.

Theoretically, this is a state's rights court. The majority claim to want the minimum of federal interference in the rights of states to chart their own legislative and judicial courses. Agree with it or disagree with it, McDonald is yet another extension of federal jurisdiction. Of course, the court pitched out states rights in favor of political interest with the Bush vs. Gore decision, but this is not an aberration – it’s a trend.

There is another odd contradiction here. The majority opinion in this supposed state’s rights court discussed with approval the so-called “privileges or immunities” clause of the 14^th Amendment.  That clause reads, “No state shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States;” The clause was written specifically to protect newly freed slaves from racist laws in southern states. Back in 1873 the Supreme Court invalidated this clause in what are known as the Slaughter-House cases, and did so on a strong state’s rights basis. While the present court didn’t actually overturn the 1873 decision, it showed a decided interest in the revival of the privileges or immunities clause.

David Gans, in an article on the Scotusblog, notes that Justice Alito promotes a “robust” interpretation of the due process clause of the 14^th Amendment as an alternative to a revival of the privileges or immunities clause. (“;nor shall any State deprive any person of life, liberty, or property without due process of law;”) Wait a sec. The use of the due process clause has caused much clamor in conservative circles, as progressive judges have used it as just such an end run around Slaughter-House to advance civil liberties cases. Conservatives tend to view this practice as legal gymnastics in the service of judicial activism. Apparently it isn’t judicial activism if the NRA approves of it.

Also, theoretically, this is an originalist court. They claim to be, as Chief Justice Roberts expressed it, umpires calling balls and strikes, looking back to the original intent of the framers of the constitution. Originalists try to decipher the meaning of words to the framers in their time and attempt to determine the mindset of those men at that time. I (and many constitutional scholars) think this position is a crock for a variety of reasons, but it is the majority opinion in this court.

Even so, they are inserting an imaginary "A musket over the fireplace being necessary for farmhouse defense" clause in place of the actual "A well regulated militia being necessary for the security of a free state" clause. The majority opinion in McDonald, as in the Heller decision overturning Washington D.C.’s handgun ban, also cited the popularity of handguns as the self defense weapon of choice for modern Americans. With the handgun popularity issue, these so-called originalists are arguing from a position of modern day utility.

An originalist would recognize the militia clause as explaining the framers' intent. The framers of the constitution still held the romantic notion that yeoman farmers were capable of picking up muskets and defeating a professional army. George Washington knew better and relied on the Continental line troops, but the Jeffersonians had a utopian agrarian vision. (Which cost them the burning of D.C. in the War of 1812) The framers offered citizens a collective right to "bear arms" (a military term at that time) in order to defend the state, not themselves. We do, in fact have a well regulated militia, the National Guard, but this pseudo-originalist court wouldn't recognize that. Contrast this with many state constitutions (such as ours in Vermont) that actually specify personal self defense (Article 16) as a reason for possessing arms.

Whether you agree with the decision or not, it presents a court majority that has functional, though unacknowledged, political theories, but only pays lip service to a consistent judicial theory. It touts states rights when that suits its purposes, and resorts to federal authority when that suits. Originalism works for them when striking down progressive legislation, but takes a back seat when modern conservative opinion disagrees. 

Wait Just a Goddamned Minute

I have two issues under that heading, one big and national, one small and local.

First, the national issue, under the sub-heading of “Confirming your distrust of BP,” or perhaps, “Start trembling with rage.” It involved the statements of Kindra Arnesen, the wife of a Louisiana shrimp fisherman. For some unknown reason, probably a misguided attempt at PR, BP gave Ms. Arnesen complete access to their cleanup operations, including staff meetings. She was, as she says in this video “a fly on the wall.” What she heard and saw confirms our worst suspicions about the unstated attitude of BP towards the disaster. This includes BP officials emphasizing cost cutting, before the spill is even under control. It includes the practice of Potemkin cleanup, using a phrase that I hope will become a national watchword: “Ponies and balloons.” What it means is that whenever a government official is about to show up, BP deploys all the cleanup resources available. When the official leaves, 75% of the equipment and personnel leave as well. Arnesen also mentions BP restricting the use of respirators among its cleanup workers, despite widespread evidence of illness among people working on and downwind of the spill. She also addresses new illnesses among the residents of coastal Louisiana, including her own children. She paints a picture of a corporation that doesn’t give a damn about anything but its own bottom line and state and federal government officials willing to be bullied and fooled. If you had any doubt that major corporations run the show, cease doubting. And start working for campaign finance reform.

The second issue came to me courtesy of the flyer for the Vermont Mozart Festival. The Vermont Legislature, in its desperate search for revenue, passed a bill that includes a 6% sales tax on tickets to musical events put on by non-profits such as the VMF. I know we have a deficit, but wait just a goddamned minute. They aren’t making any money. Tickets only account for 40% of their revenue, the rest being sponsorships and donations. The last thing organizations like VMF need is in times like these is downward pressure on their ticket prices. Next time you talk to your favorite Vermont legislator, you might mention this in passing.

Economic Mysteries

Ὁ βίος βραχὺς,

ἡ δὲ τέχνη μακρὴ,

ὁ δὲ καιρὸς ὀξὺς,

ἡ δὲ πεῖρα σφαλερὴ,

ἡ δὲ κρίσις χαλεπή.

Life is short,

the scope of our art is large,

opportunity fleeting,

experiment fallible,

judgment difficult.

 Hippocrates, Aphorisms, Sect. 1, No 1

A while back I had the audacity to write a piece about our debt to the Chinese central bank. It was called “Mutually Assured Economic Destruction,” and it was wrong. Not completely wrong, but significantly. In it, I compared the U.S. international debt situation to a bunch of guys in a closet, each with a grenade strapped to his chest, each with a finger hooked in the pin of the next guy’s grenade. Everybody wants out, but nobody makes a move for fear of a) not getting out in time, and b) getting his own pin pulled. The grenade, in this labored analogy, stands for the instant devaluation of the dollar if anybody stops buying our debt, and the resulting financial chaos. Nobody likes holding a shaky currency, but nobody wants to end up underneath the stampede away from it, either.

There are a few problems with this story. One is that China has its currency, the renminbi, pegged against the dollar. That means that a dollar is always worth a certain number of renminbi, that number being 6.8 for the past few years. Everyone outside China considers the renminbi undervalued because the exchange rate effectively discounts Chinese exports. The conflict with my previous thesis is the reality that China can’t stop buying U.S. debt unless it is willing to see the renminbi rise. The only way China can maintain the exchange rate is to offer to buy U.S. Treasury bonds, as many as are left on the market, at 6.8 renminbi to the dollar. If the renminbi rises, Chinese exports fall, and Chinese unemployment rises, along with social/political unrest. Catch-22 for Hu Jintao. The Chinese government, in response to widespread criticism, has made a vague statement about letting the renminbi float higher against the dollar. A number of observers have pointed out that they have promised exactly nothing, and that the renminbi has stayed within its previous trading band.

Another problem with the story is that now, in 2010, even the dollar is looking good compared to the Euro, compared to stocks, compared to commercial bonds, compared to just about anything. The interest rate on U.S. 10-year Treasury bonds is around 3.5%, which given long-term inflation is essentially bupkis. That means that people and institutions are willing to buy relative safety in an ugly financial world by sacrificing return.

The Euro is in trouble because of the old problem of responsibility without authority. Back when the Euro was introduced, the European Central Bank had all the Euro Zone countries cross their hearts and promise to keep their debt levels low and their finances transparent. Of course, these were a bunch of sovereign nations with varying degrees of prosperity and starkly different sets of internal political pressures. The ECB had no authority to proactively reach into any nation’s internal affairs and stop them from borrowing. Countries, both geographically and economically speaking, on the borders of Europe acted under the assumption that Dad would bail them out if they got in trouble. The PIIGS, (Portugal, Italy, Ireland, Greece, and Spain) are all deep in debt, with no apparent magic streams of income showing up to get them out. The usual options for countries in this predicament are 1) give the finger to your creditors and declare a sovereign bankruptcy, or 2) crank up the printing press and create enough paper money so that inflation makes your nominal debt smaller in real terms. Euro nations are denied both of these options. The whole wheezing, clanking, shuddering Euro mechanism perseveres or collapses together.

About 20 years ago my then-girlfriend and I saved up a few thousand dollars each and decided to blow it on a trans-European ramble. We hit the UK, France, Italy, Austria, and both West and East Berlin, changing currency all the while. I remember being in Berlin, contemplating some minor purchase, and racking my brain back through half a dozen exchange rates trying to figure out what the damn price was in dollars. The value of money suddenly seemed so airy and arbitrary. I do remember that the Italian lira was pathetic, at about 1500 to the dollar, compared to a handful for francs, marks, and schillings. All these values shifted against each other on a daily basis, according to the whims of…what?

After reading the contrary opinions of dozens of economists, one could be forgiven for believing in capricious and vengeful Money Gods. I mean gods in the old Greek style; proud, devious, horny, sentimental, and cruel. I can imagine ones that would dick with us just to while away eternity. Think of anthropomorphic figures in gold armor or robes, armed with an abacus or a ballpoint tipped spear, endlessly setting us up. Hubris, nemesis, hubris, nemesis – till in our madness humans come up with the mythology of free markets and trickle down economics, churning our portfolios according to the superstitions of priests in pinstripes.

Swinging with the Hellenic mythology for a moment, I just imagined Tony Hayward (CEO of BP) and Lloyd Blankfein (CEO of Goldman Sachs) chained side by side to a rock, like twins of Prometheus. An eagle comes every day to feast on their livers, which grow back every night, ready for the next morning’s payback brunch, forever. Hey, at least Prometheus brought us fire.

Economics a complex subject and half of it is mythology. It also suffers from the problem of too many hands on the steering wheel, all pulling in different directions at different times for different reasons. Our economy is one of hundreds of interlocking economies, markets, and sub-markets, with millions of participants, all with different sets of ideas and information. It adds up to alternating periods of weaving, stasis, and apparently decisive moves. Someone trying to call the next direction needs to integrate rational, semi-rational, and irrational actors, plus other rational, semi-rational, and irrational actors trying to predict the actions of the first set, and each other. Players who realize that most people are operating primarily from the lowest, reptilian third of the brain have a slight advantage.

The only relief from this hash of conflicts is to contemplate physical reality in the long term. The virtual world of electronic financial transactions rests on the foundation of a very real, hard world of physics, geology, and biology. This world resists manipulation and imposes its own thoughtless will in the end.

Making a living in the real world is difficult. People and businesses are limited by resources and physics. It takes effort to move things around and transform them. When the financial firms realized that they could make money, not by investing in real world processes, but by making bets on the real world, or bets on bets on the real world, they created a virtual gold mine. They could disconnect themselves from physics and make money in a world restricted only by regulations. Which, of course, they mostly dismantled. The amount of money flowing through these virtual channels still far exceeds the amount of money connected with real world activities. What killed the bubble was the physical world.

Our economy, as I noted above, is still founded on manipulating real world objects. Virtual money and software can’t feed us, clothe us, or shelter us. The real estate market collapsed when the speculative price of houses exceeded the real world ability of people to pay. Real estate was only the most recent physical asset to be used as a nominal poker chip by speculators. Remember tech companies? Telecom infrastructure? In the 1920s it was the entire stock market, in the 19^th century it was railroads and canals, and in the Netherlands a few centuries ago it was tulip bulbs. All the bubbles eventually returned to the practical value of the commodity.

As will this one. Expect real estate prices to return to their inflation adjusted levels of 1997, just before the bounce. Expect the Euro Zone economies to return to their pre-Euro levels of prosperity. Expect our long-term level of prosperity to be governed by the net amount of useful resources we can sustainably extract from the planet.

“But make no mistake: the weeds will win; nature bats last.” Robert M. Pyle

The Crushing Handshake

I just read a piece in the Rutland Herald about Joe Trippi coming to work for Doug Racine in his gubernatorial bid. Trippi gained fame as the new media genius behind Howard Dean’s insurgent run for the Democratic presidential nomination. Dean did better than expected, raising a lot of money outside the normal DNC channels.

Some have noted that Racine has a nice guy image and might lack the teeth for hardball campaigning. This has been a failing of most recent Democratic contenders for the Vermont governor’s office. In contrast, Peter Clavelle, former mayor of Burlington, came across as combative and sour. I watched Clavelle in a debate against Jim Douglas at the Renewable Energy Vermont conference. Clavelle scored all the points on a factual basis, but Douglas had on his usual Teflon suit and engaged in genially vague deflection. Talking with a few other renewable energy professionals afterward, we agreed that Clavelle would get our votes, but that the public in general would be turned off by him. Apparently they were.

The secret of success in Vermont politics is the crushing handshake. Metaphorically speaking, the two (or more) contenders walk up to each other, smile broadly, and shake hands. They hold the pose for the cameras. In reality, each is squeezing as hard as possible, attempting to reduce the other’s metacarpals to chalk dust. Neither is allowed to show the least hint of anger or pain. They just smile, a sheen of sweat on their brows, perhaps a bit of moisture in their eyes, squeezing with all their respective strength.

In practice, this means saying that your opponent is a lying ignoramus, and supports policies destined to bankrupt the state or reduce us to slavery, without seeming to be angry, accusatory, or unpleasant. Jim Douglas’ success can be attributed to just this skill. What I hear people say about him is that in person “..he’s a really nice guy!” No doubt.  His public persona is bland to the point of unflavored oatmeal, a kind of Rorschach blot in gray. I’ve never heard the man raise his voice. And yet, with this low-affect voice he has criticized his political opponents to great effect. I should say, because of this low-affect voice – it’s his secret weapon.

Which brings me back again to Trippi and Racine. As noted, Doug Racine already has a nice guy image. He needs to use it like a spiked club. An odd simile, but that’s Vermont politics. Trippi and Amy Schollenberger (Racine’s campaign manager) need to manage the content and imaging of Racine’s statements to bust Brian Dubie’s chops – in an easygoing manner. Douglas has managed to make right wing myth and the usual hortatory blather sound like common sense. Dubie will try to follow his lead. Racine should be able to start with rational policy and make it appealing. It’s all in the presentation.

It may all be useless at this point. I recently spoke with a Vermont Democratic Party insider who had serious doubts about the ability of any of the Democratic candidates to beat Dubie. In his opinion, any one of them could have beaten Dubie if there hadn’t been a primary. With a primary, however, all five have been busy jockeying with each other instead of focusing on the general election. The real money is tied up until after the primary, and meanwhile Dubie is organizing. Another factor he mentioned was that more and more people are voting early (if not often). Almost a quarter of voters are voting with absentee ballots, which can be sent in the day after the Democratic primary. A double digit percentage of the votes could be cast before the Democratic candidate could even put out a press release.

As far as the Minor Heretic is concerned, any of the five Democratic candidates would be far superior to Brian Dubie. Doug Racine, Deb Markowitz, Matt Dunne, or Peter Shumlin would be perfectly satisfactory. Susan Bartlett less so, but I wouldn’t whine. The question for me is which one has the greatest political grip strength. Who among them can latch on to Brian Dubie and make him lose his cool? The race is his to lose at this point, and we need a forced error.



Proper Prior Planning

…Prevents Poor Performance, as the hokey saying goes. I read and heard recently about BP’s latest failure to stop the oil gushing out of their offshore well. Their next attempt will be to cut off the bent pipe with robots and place a new valve on top. Apparently the preparation for this will take four days. This raises a question: If the top kill procedure that just failed was such a chancy maneuver, why didn’t BP have the next option already in place?

I was discussing this with an engineer friend the other night, and he asked why they hadn’t pursued six different possibilities, both long and short term, all at once. Perhaps the third option would have worked and the fourth through sixth would have been wasted money, but so what? Spending money on contingencies is the price of safety.

This raises the further question of what they had, or didn’t have in place when the well blew. As I mentioned in a previous essay, BP could have spent what now looks like chump change on an auxiliary, remotely operated emergency valve on the sea floor.

That containment dome that they hurriedly fabricated – why wasn’t it already made and waiting on a barge? My engineer friend proposed the plausible idea of a set of hydraulic rollers that could crush the leaking pipe and roll a section of it flat. Why not have something like that ready to go, plus half a dozen other devices for various situations?

The answer, as always, is that insurance costs money and requires a long term view. BP, like the rest of its corporate cohort, has an eye on the next quarter’s earnings report.

But wait, there’s more. According to an article in the Alaska Dispatch (hat tip to HuffPo), BP and other oil companies have known for years that their blowout preventers only work about half the time. The last ditch device on the blowout preventer is called a shear ram. It is a combination of a sliding door and a knife, powered by a large hydraulic ram, that can cut off the pipe and seal the top of the well. As far back as 2002, oil companies were reporting that existing designs of shear rams couldn’t cut the pipe in all situations. An independent study in 2004 confirmed this. If there was a drill down the pipe, or if a weld was in the way, the shear ram failed. The existing designs had trouble with stronger modern pipes as well. Chevron has a stronger shear ram under development, but the industry has been operating with a demonstrably defective technology for the past eight years.

The investigative journalist Greg Palast has written about the response, or non-response, to the 1989 Exxon Valdez oil spill. The government required BP to have oil spill response equipment and crews stationed around Prince William Sound. (What? BP, not Exxon? Yes, BP was in charge of spill response in the Sound.) At the beginning the company did just this. They trained local Inuit people to handle spills, stationed skimmer barges around the Sound, and hired teams to be on call like firemen. Then they abandoned it all. The response teams were laid off and the equipment left on shore. When the Exxon Valdez ran aground there was nothing in place to deal with the disaster. But BP’s and Exxon’s quarterlies looked just that little bit better. Exxon blamed their captain, who wasn’t at the wheel, instead of the broken and never fixed radar. Twenty years later there is still a layer of oil three inches under the beaches. Prince William Sound is dead. The surviving natives got paid off at ten cents on the dollar.

BP is heading down exactly the same path today, trying to save money while the oil kills the Gulf of Mexico. I’ll bet the rent that BP will try to place the blame on operator error rather than ongoing safety violations and cost cutting. Likewise, it will be cheaper for BP to pay lawyers to obfuscate and delay than to pay the price of cleanup. And you can be sure that a full PR blitz will ensue, with high profile, yet inexpensive acts of kindness towards the residents of the Gulf Coast.

As long as I am channeling Greg Palast, I should note his recent report that another BP facility, the Alaskan oil pipeline, leaked 100,000 gallons onto the tundra last week. BP explained that “procedures weren’t properly implemented.”

Can we still pursue offshore drilling? Perhaps. There would have to be backup valves on top of backup valves, with skimmers and domes, booms and crews standing by. There would have to be constant inspections and perp walks for violations. With flow rates from existing wells disappointing their owners, the cost of safe operation might not appeal to the major oil companies. It might just be that offshore drilling in the Gulf of Mexico is technically feasible but not ethically feasible. Of course, ethics gets in the back seat when America wants to hop in its 5,000 pound SUV and go get a bag of chips. We’re all guilty, to some extent.

There’s the hard part – it’s about lifestyle change. Not new car models, not biofuels, not windmills and solar panels, although these things are part of a long term solution. We could ban offshore drilling, and we should at least scale it back, slow it down, and tighten it up, but what follows that decision?

What follows is the necessity of preparing for expensive oil. It will take fifteen years to work through our present stock of cars, and a similar time scale to make a dent in our fossil fuel use through efficiency upgrades and renewable energy installation. In the meantime it’s a question of how we behave. Forty years ago we drove half as many miles per person annually. Extrapolate that to today and it would eliminate 10% of the world’s oil demand, about 8.5 million barrels a day. Right now, offshore oil platforms in the Gulf of Mexico produce about 1.5 million barrels per day. A nine or ten percent reduction in our annual mileage would offset that. We’re going to have to reduce our driving by that much at some point, and then more. Why not now, before the next blowout?