Saturday, July 4, 2015

A Post on the Same Sex Marriage Decision Before Reading It

Unlike the decision on Obamacare, the Supreme Court's decision on same sex marriage (I refuse to use the term "marriage equality") is long and complex and no doubt involved high constitutional principles.  I haven't read it yet.  I suppose I really ought to read it and give an opinion on it after the crisis in modern Greece quiets down but before returning to Classical Greece.  But in the meantime, I can say a few things on same sex marriage in general.

First, I have no quarrel with same sex marriage and am mildly in favor of it.  But I just don't think it is the most important issue of our day.

Second, that being said, I do not think any such right can by any stretch of the imagination be read into the US Constitution.  There are legitimate constitutional grounds to address whether one state must recognize such a marriage if made in another state.  But if you want same sex marriage, get it enacted by the usual democratic practice of legislation or initiative.  It is slow, but doable.

Finally, when I read the anti's (which I do a lot at Rod Dreher) my sympathies are entirely with the pro's.  When I read the pro's (my Facebook feed, for instance) I get a lot of sympathy with the anti's.

To the anti's:  I am perfectly prepared to concede that your opposition to same sex marriage is not motivated by any hatred toward gays.  Nonetheless, when you give the whole "The sky is falling" talk, when you warn that allowing gay marriage will mean the end of all ontological and moral distinctions, the final collapse of all values, and the end of Western Civilization, can you understand how some people might take that as hostility?  Try looking at that from the perspective of two members of the same sex who want to get married and are told that allowing them to do so will destroy the entire moral foundation of our society.  It isn't hatred, exactly, but it sounds very much like extreme, irrational fear.  And exaggerated, irrational fear can be even worse than hate because it makes people think like cornered animals.

To the pro's:  By all means celebrate this victory.  But your degree of obsession with the subject is really disturbing.  Too often, you treat support for same sex marriage as the be-all and end-all of whether someone is a good person.  There are a lot of other issues out there.  The Supreme Court took on a case that could have stripped 7 million people of their health insurance.  The Republicans are still formally dedicated to taking it away from some 20 million.  They also want to start a war somewhere.  In fact, we are already fighting drone wars and proxy wars in may parts of the world.  Greece may be on the verge of total economic collapse.  Global warming may take away all our futures.  And all that matters to you is whether gay couples can get married?  Do not turn away valuable allies on other subjects just because they disagree with you on this one.  Give some thought of the extent to which you are violating millennia of tradition and have some sympathy with people who just can't make that leap instead of dismissing them as bigots.  Some people have sincerely religious objections to participating in same sex weddings.  As someone else put it, give them the same respect you give to people who have religious objections to eating pork or drinking alcohol or working on the Sabbath.

And, having won this case and looking for some glorious new cause to champion, any chance you could find something a little more mainstream than guaranteeing the 0.2% of the population that is transsexual the right to be called by their pronoun of choice and use their bathroom of choice. Anyone who makes that their primary issue is running a boutique party and deserve to lose.  (Not that Republicans deserve to win).

A Single Post on King v. Burwell

I posted on my Facebook a picture that says, "My Facebook feed looks like a battle broke out between the confederates and a Skittles factory."  Actually, it's not true.  I don't have any Confederate flag fans on my Facebook, but the point is well taken, because my Facebook feed really does look as though someone bombed a Skittles factory and sent the bright-colored pieces flying everywhere.

I mean, come on folks!  It really does disturb me that a Supreme Court decision not to strip millions of their health insurance barely makes a ripple (before or after the fact) while a decision in favor of same sex marriage leads to such an uncontained outburst.  Granted, the decision for Obamacare is the disaster that didn't happen while the decision for SSM changed something.  But I didn't even get much anxiety ahead of time.

That being said, after actually reading the decision in King v. Burwell, I can see why it is so hard to get excited about.  Let's just say it isn't exactly beach reading.

It isn't all that long an opinion.  Nor is it a highly fragmented opinion, as decisions on controversial issues so often are.  There is one majority opinion, written by Justice Roberts and joined by five others, and a dissent written by Scalia and joined by two others.  Scalia concludes with about the opposite of Lincoln's famous words at Gettysburg, "The world will little note nor long remember what we say here, but it can never forget what they did here."  Wrong and wrong!  So, too, Scalia:
Perhaps the Patient Protection and Affordable Care Act will attain the enduring status of the Social Security Act or the Taft-Hartley Act; perhaps not. But this Court's two decisions on the Act will surely be remembered through the years. The somersaults of statutory interpretation they have performed ("penalty" means tax, "further [Medicaid] payments to the State" means only incremental Medicaid payments to the State, "established by the State" means not established by the State) will be cited by litigants endlessly, to the confusion of honest jurisprudence. And the cases will publish forever the discouraging truth that the Supreme Court of the United States favors some laws over others, and is prepared to do whatever it takes to uphold and assist its favorites.
I dissent. 
Well, I suppose he is right to the extent that this case will probably be cited as precedent in other cases on statutory construction.  But it is unlikely to be a case that lives in infamy along with, say Dred Scott or Plessy v. Ferguson, or even Roe v. Wade.  In fact, it has been largely forgotten already!

Those were cases that contained famous quotes and enunciated broad principles.   King, by contrast, is mostly a dry-as-toast parsing of specific obscure statutory clauses to determine what they mean in the context of other statutory clauses.  Bo-ring!

The problem, of course is that the ACA made subsidies available on an "exchange established by the state" and neglected to offer them on exchanges established by the federal government.  Roberts points out that other parts of the Act clearly treat exchanges created by the states and exchanges created by the federal government as equivalent.  More importantly, he emphasizes the overall purpose of the statute.  Guaranteed issue (requiring insurance companies to cover everyone regardless of pre-existing condition), community rating (requiring insurance companies to give comparable rates to all members of a community regardless of their health), individual mandate (requiring everyone to have health insurance) and subsidies all go together.  Without the subsidies, the system would break down.  It would not just make coverage unaffordable in states that did not establish exchanges, by applying the same regulations in all cases, it would wreck their individual coverage markets altogether.  (By requiring companies to cover the sick as well as the well at the same rates, they would discourage the well from buying insurance until they were sick.  This would mean companies would cover a disproportionate number of sick people, forcing them to raise rates and drive more healthy people from the markets.  The dreaded death spiral).

Roberts concludes with the words, "Congress passed the Affordable Care Act to improve health insurance markets, not to destroy them. If at all possible, we must interpret the Act in a way that is consistent with the former, and avoids the latter."  Translation:  All you Obamacare opponents out there, do not try to wreck the law with another of your lawsuits.  We will not cooperate.

Scalia dissents with foaming-at-the-mouth outrage.  Thomas and Alito presumably chose him to write the dissent because no Supreme Court Justice does foaming-at-the-mouth outrage as well as Scalia.

His argument is basically that "established by the state" means established by the state.  The Supreme Court must interpret the statute by its exact words and ignore any disagreeable real-world consequences  like setting off a death spiral in 34 states.  Besides, by preferring to have states establish exchanges, maybe Congress was signaling that it preferred to involve the states, and considered this a more important goal than making health insurance more widely available.  (Actually the evidence against this is pretty powerful, but never mind).  

Probably more significant is his outraged tone throughout.  (No Supreme Court Justice does outrage as well as Scalia).
Understatement, thy name is an opinion on the Affordable Care Act!
Impossibility, thy name is an opinion on the Affordable Care Act!
Contrivance, thy name is an opinion on the Affordable Care Act!
We should start calling this law SCOTUS [Supreme Court of the U.S.] Care
Finally, most dissents say, "I respectfully dissent."  Scalia pointedly leaves out the word "respectfully," which seems accurate enough.

No constitutional issues were raised here, which is perhaps a shame.  At oral argument, Justice Kennedy was concerned about the argument that Congress deliberately made subsidies available only on state exchanges in order to pressure states into creating them.  He considered the threat to send the individual policies market into a death spiral to be an unconstitutional coercion of the states, and many expected him to rule in favor of the subsidies on those grounds.  It is, in fact, a well-established rule with the Supreme Court that Congress may use an offer of money to entice states, but not to coerce them.  (That opponents of Obamacare were prepared to send state insurance into death spirals just to make Obama look bad tells us something about just how irrational they have gotten).

It is also a longstanding rule of the Supreme Court that if a statute can be interpreted in either a constitutional or an unconstitutional way, it should be interpreted as constitutional.  Thus the potential argument was that the threat to send state health insurance into a death spiral is a unconstitutional act of coercion, so we should avoid that result by interpreting "exchange established by the state" to include federal exchanges.  Of course, if the majority had said that, Scalia would have agreed on the unconstitutional coercion, and offered it as another golden opportunity to strike the whole measure down.

Scalia is enraged that the Supreme Court has now twice interpreted this statute in order to protect it. But if the precedent here is that the Supreme Court should normally interpret legislation so as to preserve rather than undermine it, that is a longstanding rule of interpretation and a generally sound one.  I think it is probably reasonably to infer an element of projection here.  He was really, really looking forward to overturning or at least gutting this statute and is angry (really angry) at his colleagues for passing up the opportunity not once but twice.

Friday, July 3, 2015

The Confederate Flag: Heritage (of Slavery and Segregation) Not Hate

So, with Greece settled into watchful waiting, I can now post on other topic.  The question is, how much can fit in before the referendum.

I will start with the easiest -- the Confederate flag. Maybe I am the wrong person to be posting on the subject because I am not a Southerner and have no real exposure to the South, so I have no idea what the Confederate flag means to a lot of Southerners.  But I can at least say what it means to this Yankee.

This Yankee, growing up in the 1970's, never once saw a Confederate flag outside of a history book.  I learned that the Civil War was about slavery.
Abe Lincoln was tall and he was long
His heart was high and his faith was strong
But he hated oppression and he hated wrong
So he went down to his grave
To free the slave.
So we sang when celebrating the bicentennial when I was in sixth grade.  About that age I was starting to learn that things were not quite that simple.  Lincoln did not run on a promise to end slavery but only to restrict it from growing.  The Civil War started, not with an attempt to end slavery, but with secession.  Lincoln maintained that his purpose was not to end slavery but to preserve the union.  ("If I could preserve the Union without freeing a single slave I would do it.  If I could preserve the Union by freeing all slaves I would do it.  If I could preserve the Union by freeing some slaves and letting others alone, I would do it.")  The Emancipation Proclamation ended slavery only in the states in rebellion, not in the ones that stayed in the union, and was undertaken in large part to keep Britain and France from intervening because they were unwilling to go to war for slavery.

But these were mere caveats, mere nuances.  Never once was it questioned that slavery was the underlying cause of the war, even if the immediate causes were more complex.  And to me the Confederate flag stood for slavery, plain, pure and simple.

I took for granted that Southerners saw things in the same light.  When we read To Kill a Mockingbird, one character was named Braxton Bragg Underwood, but called himself B.B. Underwood.  Scout's father said that naming one's sons after Confederate generals made for slow and steady drinkers.  I assumed that B.B. Underwood concealed his true name and drank out of shame at being named after a man who fought for slavery.*  And when we saw films about the Civil Rights movement that showed white Southerners who opposed the movement waving the Confederate flag, I was shocked to my core.  They were waving the flag of slavery, which to me could only mean a desire to restore it.

This is not to say that all my classmates were so naive.  It is to say that if my experience is typical, by the 1970's outside of the South, if children were learning romanticism about the Confederacy, they weren't learning it at school.  Most likely, it was coming from various sources in popular culture.  My parents somewhat sheltered me from popular culture.  They strictly limited our TV viewing  and didn't go to all that many movies.

Probably my first exposure to Confederate romanticism came somewhat later (don't remember exact age) when we were wrote some sort of short story in school and read each other's.  The one I read involved a Southern belle during the Civil War who heard that the Yankees were at the plantation house and considered going in to offer what protection she could, but then self-preservation took over and she ran, tearing her skirt off to go faster.  When her brother caught up with her, he was shocked at her immodest state and seemed more concerned about it than the danger.  Going to the house, they discovered that the other family members and their faithful house servant had been killed defending the family silver.  Our heroine said what fools they were, but her brother said they were defending the family honor.  After some other exchanges, it becomes clear that she is prepared to adjust to changing times but he is not, and she can only shake her head over his rigidity.

My next exposure was in seeing Gone with the Wind, which was quite an eye-opener.  Nonetheless, it never disputed that the war was about slavery; it simply romanticized slavery.  And the car in Dukes of Hazard had the Confederate flag on it.  And I got a glimpse of the Southern perspective reading something about the infamous Birth of a Nation.

But it was not until college that I learned something of the Southern perspective on the war.  I was talking to a friend who was not a Southerner herself, but has spent a lot of time in the South and knew their outlook.  And I asked if there were still hard feeling over the war.  She said yes, and romantic views about the Confederacy.  I said something to the effect of romantic yearnings for the Confederacy not being exactly a desire to revive slavery and she said, "The Civil War had nothing to do with slavery."  This absurd statement so shocked me that I had no words to answer.

Since then I have learned some things about the Confederacy and its flag.  One is that a lot of Southerners probably share that viewpoint.  Another is that the Confederate flag did not really become a symbol of the South until the 1950's and the Civil Rights movement.  Maybe that should not be so surprising.  It does not get emphasized much in Gone with the Wind, which was made in the 1930's.  Nor do you hear much about it in To Kill a Mockingbird, written in 1960, but based on the author's memories of her childhood in the 1930's.

So the Confederate flag was the flag of an army fighting a war over slavery, even if to your average foot soldier it was no doubt mostly a war in defense of their own.  And it became popular a symbol of the South specifically in the context of fighting for segregation, though no doubt many saw it as a symbol of resistance to an overweening federal government.  And Southerners say it means "heritage not hate."  I don't doubt that this is true.  I certainly don't think that slave holders hated their slaves, or that segregationists hated black people, so long as they knew "their place."  But the "heritage" that flag refers to is a heritage of slavery and racism, as proved by the fact that the flag was first flown on the pro-slavery side of a war over slavery, and became a symbol of the South only in the struggle over segregation.

Is there a less offensive symbol of Southern "heritage"?  In all honesty, I don't know and I don't care. Other parts of the country manage to get by without so flagrant a symbol of "heritage."

What is interesting, though, is how sudden the reaction has been since Dylan Roof did his shooting. Presumably, as is often the case, the elements were all there primed to go anyhow.  But somehow this incident seems to have driven home for the first time to a lot of people that for some people the Confederate flag really is a symbol of hate.

*Today I cannot say I understand why Underwood hid his true name and drank.

Greece: Yes is Ahead by an Eyelash

Alas, I couldn't find my favorite cartoon depiction of the upcoming referendum which shows Greece as a diner at a restaurant given a choice between two menu items -- yes and a noose, or no and a pistol.  The image was apt -- yes for slow strangulation, no for a sudden, severe, self-inflicted and possibly fatal wound. Not much of a choice!  But the cartoon on the left conveys the message pretty well.

In the latest update from Greece two opinion polls are quoted.  One poll, conducted June 30-July 1 has the "yes" vote at 41.5%, no at 40.2% and undecided at 10.9%.  A small number intend to abstain or leave their ballots blank.  Another poll conducted July 1-3 has "yes" at 41.7%, "no" at 41.1%, and undecided at 10.7%  Margin for error is 3.1%.  So far Nate Silver's statistical blog 538 has not found enough meat here to aggregate polls.  So a very slight preference for the noose over the gun, but basically too close to call.

At least my first question has been resolved.  The pressure will not be strong enough to force the Grexit ahead of the referendum.  But another question remains.  Given how close the sides appear to be, it may very well take several days to determine who won.  Will events force the Grexit in that time?  And what if the vote is yes?  The current government will fall.  This article points out that it may take several  days (at least) to form a new one.  And the deal being approved is (theoretically at least) no longer on the table, so even a yes vote may lead to new negotiations and more time for the pressure to build.  And (possibly worst of all), the creditors are now divided, with the IMF calling for debt relief and the others refusing, so a deal may not be possible.  So events may end up forcing Greece to leave the euro even if the vote is yes.

Like most people, I take for granted that a no vote will mean default and devaluation.  The only question is how long it will take.

I also attach the cartoon below.  It appears to derive from a 1930's cartoon by David Lowe, which showed the various countries in stormy seas in one boat, with the debtors frantically bailing and the creditors complacently saying, "Good thing it's not in our end of the boat."  It has seemed most appropriate in Europe in the current crisis.  This is a variant on it.

Wednesday, July 1, 2015

The Appeal of the Euro

Despite the disasters the euro has wrought for Southern Europe in general and Greece in particular, there are still plenty of countries, from Eastern Europe to Iceland, that want to join.  I am very grateful to this article for making me understand why.  While belonging to the euro causes one set of problems, having a fluctuating currency causes others.  The grass is always greener on the other side of the fence.  People get frustrated with the problems they have and don't recognize the problems they are avoiding.

To a large country like the US, where most debts are internal, a fluctuating currency just means fluctuating import prices.  And we are large enough that imports don't make up all that much of our consumption, so currency fluctuations are at worst mildly inconvenient for most Americans.  In a country where a very large amount of what is consumed is imported, changes in import prices are more painful.  And to a country where many individuals and small businesses have foreign debt, a currency drop can mean a sudden, devastating surge in debt service costs for large segments of the population.  The article explains that this lead to political pressure in these countries to peg their currencies to the one most debt are in, with all the related dangers of an overvalued currency.

In Iceland, what was at work was apparently that even a highly successful adjustment to the worst financial crisis of all time is still necessarily painful.  A country as tiny as Iceland imports almost everything it uses.  As its currency plunged, prices of everything skyrocketed.  And foreign debts surged.

As for why they haven't learned anything from the experience of Southern Europe, well, they blame those lazy, profligate Southern Europeans and are confident they could never make the same mistakes.  I have seen quite a few articles (too lazy to look for them) commenting that Greece is not getting much sympathy from Eastern Europe, strapped though many countries there are.  In fact, it is a point of pride to many former Communist countries that they are not the center of the crisis and take it as evidence of their superior virtue.  More likely, being out of the euro and therefore able to devalue has been more at work, and if East European countries ever do get into the euro, they are most likely to learn that the hard way.

As for Iceland -- well, if Iceland had been in the euro, the EC would never have allowed it to stiff its foreign creditors, and it would be sentenced to be drained dry in perpetuity to repay them.

Perpetual Depression for the Sake of Growth

OK, I lied.  Again.  I know there isn't too much to do on the subject of Greece between now and Sunday other than watch and wait.  But there are so many related subject crying out for discussion that I sort of can't resist.  This time the subject of "structural reforms."

When you talk about the health and growth of a general economy, there are two sides of the equation, the demand side and the supply side.  Roughly speaking, the demand side is about how close to capacity an economy is operating.  Supply side is how fast that capacity can grow.  Traditional macroeconomics has been about the demand side.  How do we keep an economy from falling below its capacity.  I am not familiar with the "real business cycle theory" which attempts to explain business cycles from the supply side, but in general "structural reforms" are on the supply side, i.e., how things are produced and therefore how fast economic capacity can grow.  Traditionally, at least, they are considered part of micro.

"Structural reforms" also have a serious problem.  In almost all cases structural reforms mean ending job security, which tend to lead to layoffs and increase unemployment; reform means shutting down inefficient sections of the economy, which tends to increase unemployment; reform means getting rid of a lot of surplus work force, which tends to increase unemployment.  It also tends to mean cutting pensions (why pay people not to work?), weakening the safety net, and generally increasing the penalty for being unemployed at exactly the same time you are taking actions that will increase unemployment.  The goal here is that newer, more efficient, more competitive industries will rise to take the place of the old ones so the overall economy will grow.  (Greater "efficiency" tends to mean employing fewer people, and "more competitive" tends to mean paying less, but we can ignore that for now).

There is an obvious problem with these calls for supply side reforms.  All those people who have been laid off or had their pensions cut or made to feel the squeeze from being unemployed will respond by spending less.  This, in turn, will mean less business for remaining industry, unbought inventory, which will lead to fewer orders, less stuff being manufactured, and in turn, more layoffs and industries closing.  In other words, supply side reforms to improve the economy's capacity for growth can lead to reduced domestic consumption and thus a demand-side recession (or depression). The people calling for structural reforms tend not to see this as a serious problem.  More industry shutting down and more people being laid off just shows more aggressive structural reforms underway and are taken as proof of virtue.  If a country fails to rebound, it obviously just shows they didn't implement enough "structural reforms."  Nothing a few more shutdowns, layoffs, and spending cuts won't cure.  This is a lot of what is happening in Greece today.  It happened to Argentina at the turn of the millennium.  And to Europe in the 1930's.  And to Latin America in the 1980's.  And to Eastern Europe after the fall of Communism.  And to Asia in the 1990's.  And to peripheral Europe today.  But no one ever seems to learn from it.

Besides, the structural reform crowd usually disapproves of producing for domestic consumption anyhow.  Countries should produce for export.  (They tend also to disapprove of importing even as they encourage exports).

That opens at least one possibility as to how a country can get through supply-side domestic reforms without causing a demand-side depression.  It can allow its currency to fall and make up for the decline in domestic consumption by exporting more.  A falling currency will also give domestic industry a boost by making prices more competitive with imports.  This is not to say that a falling currency is painless.  It raises the prices of imports and inflates the value of foreign debts.  That latter is not a serious problem in a country like the US where most borrowing is domestic anyhow, but in a smaller country with a lot of cross-border borrowing, it can be ruinous.  These are unpleasant tradeoffs, but in general the best a country can do is either not peg its currency, or abandon the peg before it undertakes structural reforms.  The longer it delays a devaluation, the bigger the currency tumble will be when it occurs and the more traumatic the aftermath.  That, too, is what happened to Argentina, which had pegged its currency to the dollar and was unable to compensate by devaluation until the pressure became truly unbearable and the collapse catastrophic.  The recovery was rapid, but it would have been much better to have devalued in the first place and avoided the crisis.

That is precisely what Greece is now incapable of doing because it has not merely pegged its currency but given it up and therefore cannot devalue.

Another alternative if the country undergoing "structural reforms" is a debtor country (as it usually is) is to relax demands for austerity and allow the debtor country (Greece in this case, Argentina in another, also Latin America 1980's, Asia 1990's, southern Europe in general today, etc) to spend more of its income on domestic consumption and less on foreign debt service.  But there are obstacles there too.  First of all, creditors never seem to agree.  Second of all, keeping the squeeze on a debtor's economy is a great way of maintaining control.  Control to do what?  Why to force structural reforms, of course.  And what if those structural reforms continue to depress domestic demand and interfere with recovery?  So much the better.  It give greater leverage to demand more structural reforms.

At this point it become fair to ask what the purpose of all those structural reforms is supposed to be. It can't be entirely to get one's debts repaid, since the debtor country will never be able to repay its debts so long as its economy remains depressed.  So what is the purpose?  The usual answer is to improve economic health and allow for faster growth.  This is insane!  Keeping an economy perpetually depressed and crushed with debt in order to encourage faster growth makes about as much sense as invading another country to impose democracy at gunpoint.  (Another reason for my war analogy). 

The usual objection is that you have to keep the pressure on to make structural reforms because if countries are instead allowed to experience a devaluation-fueled boom, they will neglect to make such reforms and their economies will end up in trouble anyway, as is happening to Argentina now. 

And in the end, the answer has to be so what?  If a country is more interested in bringing its economy back to capacity right now than undertaking reforms that will allow its capacity to grow over the long run, but which also tend to shrink it farther and farther below capacity right now, is that such an unreasonable decision?  If a country breaks out of its immediate depression now, only to grow more slowly in the future, really who does it hurt but itself, and whose business is it but its own?

The analogy I often see given by austerity critics is that if a sedentary, morbidly obese patient has a heart attack, no one doubts that he should go on a diet and adopt an exercise program.  But an immediate starvation diet before he has had time to recover from the heart attack is a poor decision. And too strenuous exercise too soon can be fatal.  But really, a better analogy here might be a doctor deliberately keeping a patient sick so he will be more submissive to medical advice.  Advice about how to get well.  Think about it.

Tuesday, June 30, 2015

So Much to Do . . .

And now I will be keeping an eye on Greece and posting if something new comes up.  But if it turns out to be just a matter of holding our breaths until Sunday, I really need to say something about the Confederate flag, and Supreme Court decisions on Obamacare and same sex marriage.