Liberal Supreme Court Justices Vote in Lockstep, Not the Conservative Justices…………………….Trump Deserves a National Security Adviser Who Agrees with Him and Can Translate His ‘America First’ Vision into Concrete Action……………………………………… Inside America’s Worst Financial Crisis: Gold, the Real Bills Doctrine, and the Fed………………. How to “Salvage Community” after Military Base Closure……………………

Liberal Supreme Court Justices Vote in Lockstep, Not the Conservative Justices

This article appears on USA Today on September 10, 2019.

Ever since Justice Anthony Kennedy announced his retirement last year, commentators have prophesied that President Donald Trump’s replacement of that moderate jurist would lead to a conservative majority running roughshod over core liberal concerns. That’s why opposition to the milquetoast establishmentarian Brett Kavanaugh was so fierce, even before the 11th-hour sexual-assault allegations

Justice Kavanaugh was supposed to have single-handedly overturned Roe v. Wade, but a funny thing happened on the road to apocalypse. Particularly in petition rejections and other procedural votes, Kavanaugh has demonstrated a pragmatic approach. And a term with few big controversies showed the liberals voting together much more than the conservatives.

Liberal justices vote together at high rates

There were 67 decisions after argument in the term that ended in June. In those cases, the four justices appointed by Democratic presidents voted the same way 51 times, while the five Republican appointees held tight 37 times. And of the 20 cases where the court split 5-4, only seven had the “expected” ideological divide of conservatives over liberals. By the end of the term, each conservative justice had joined the liberals as the deciding vote at least once.

That dynamic isn’t something that sprang up in the Trump era or with the court’s newest personnel. In the 2014-15 term, with Kennedy at the height of his “swing vote” power — the last full term before Justice Antonin Scalia’s death and resulting year-long vacancy — the four liberals stuck together in 55 of 66 cases, while the four conservatives (not counting Kennedy) voted as a unit in 39.

Even in 2013-14, when liberals and conservatives voted with their respective coalitions equally (54 times in 67 cases), 42 of those decisions were unanimous and there were only ten 5-4 rulings. In other words, when conservative justices vote together at the same rate as their liberal counterparts, it’s because the entire court is united.

Speaking of politically fraught cases that end up 5-4, it’s notable that there’s never a question of how the liberal justices will vote. Speculation runs rampant over whether one of the conservatives will go wobbly — whether out of unpredictable moderation, minimalistic pragmatismor idiosyncratic theory — but the liberals are guaranteed to please their constituency.

Conservatives side with liberal justices

Most famously, of course, in 2012’s National Federation of Independent Businessv. Sebelius, Chief Justice John Roberts transmogrified the individual mandate into a tax to save Obamacare. Roberts did a similar thing twice this past term, in cases regarding the census citizenship question (Department of Commerce v. New York) and judicial deference to administrative-agency reinterpretations of their own regulations (Kisor v. Wilkie).

Such intramural fractures often reveal lively intellectual debates that one rarely sees on the left. For example, Justice Neil Gorsuch has joined the liberals five times in 5-4 decisions, four of them this past term alone — with Gorsuch typically writing for the majority or concurring separately without adopting the liberal reasoning. These have mainly been criminal law cases, where Gorsuch’s originalism shines through to the benefit of criminal defendants in the same way Scalia’s often did — to the surprise of those who weren’t paying attention.

Indeed, Gorsuch is rapidly becoming a libertarian darling even as Kavanaugh steers down the middle of the road. Kavanaugh actually aligned himself as much with Justices Stephen Breyer and Elena Kagan as with Gorsuch. The Trump appointees voted the same less often in their first term together than any other two justices appointed by the same president, going back at least to President John F. Kennedy. Meanwhile, Obama appointees Kagan and Sonia Sotomay or were together in all the 5-4 cases this term.

The Ginsburg Four

In sum, if lockstep voting and a results-driven court concern us, it isn’t the conservatives we should be worried about. While senators, journalists and academics love decrying the Roberts Five, it’s the (Ruth Bader) Ginsburg Four that represent a bloc geared toward progressive policy outcomes. To be sure, a reinvigorated conservative grouping may yet come to dominate the court — especially if Trump fills another seat — but it hasn’t happened yet.

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ILYA SHAPIRO

Ilya Shapiro is director of the Robert A. Levy Center for Constitutional Studies at the Cato Institute.

Trump Deserves a National Security Adviser Who Agrees with Him and Can Translate His ‘America First’ Vision into Concrete Action

This article appeared on New York Daily News on September 11, 2019.

For those who argued that Donald Trump’s foreign policy views were dramatically different from those of his predecessors, the skeptics always had a ready answer: John Bolton. Now that Trump has unceremoniously dismissed his hawkish national security adviser, that could pave the way for the change that Trump had promised and that the public anxiously wants.

Over the course of his presidential campaign, Trump was rewarded for his willingness to challenge the policy elite. He even railed against the Iraq War, initiated by a Republican president, in a Republican debate in South Carolina — and won the primary there. Unlike nearly all of his rivals, Trump correctly sensed that Americans were disinclined to spend vast sums, and risk the lives of American troops, on regime-change wars and costly, open-ended nation-building projects abroad.

In a major foreign policy speech delivered as he was closing in on the GOP nomination, Trump explained that “foolishness and arrogance [had] led to one foreign-policy disaster after another.” And he pledged “to shake the rust off America’s foreign policy” and “invite new voices and new visions into the fold.”

But, once elected, he did nothing of the sort. Instead, he populated his administration with people committed to maintaining the status quo, including H.R. McMaster as national security adviser, Jim Mattis as secretary of defense, and John Kelly as secretary of homeland security, later White House chief of staff.

To be sure, these establishment figures occasionally steered Trump away from bad — and perhaps even disastrous — decisions. McMaster, Mattis and Kelly, along with Secretary of State Rex Tillerson, delayed, but ultimately couldn’t derail, Trump’s single-minded desire to leave the Iran nuclear deal. Bolton’s most enduring achievement, albeit a dubious one, may be in working with Tillerson’s replacement, Mike Pompeo, to set the United States on a possibly irrevocable path to war with Iran.

The next national security adviser will be judged by his or her ability to translate Trump’s “America First” vision into concrete action. That will involve countless decisions, starting with the appointment of like-minded personnel to staff up the National Security Council, and the removal of Bolton acolytes.

But the immediate policy priority should be extricating the United States from the 18-years-long war in Afghanistan. When Trump set about to fulfill his campaign promise to quit the conflict, he encountered near unanimous opposition from senior national security officials. When he increased the number of U.S. troops on the ground there, he pinned the blame on his advisers.

“We’re there,” he told the Washington Post, “because virtually every expert that I have and speak to [says] if we don’t go there, they’re going to be fighting over here.” Although nearly two thirds (64%) of Iraq and Afghanistan war veterans have decided that the wars were not worth fighting, Trump’s brain trust concluded, erroneously, that there was no alternative.

Bolton, like his predecessor McMaster, appeared to agree with this sentiment. He even tried to thwart Trump’s bid to get out of America’s longest war by undermining peace talks with the Taliban. He had similarly thrown cold water on the Trump administration’s North Korea negotiations. The president deserves a national security adviser willing and able to execute his top policy priorities.

More broadly, however, the next national security adviser can perform an invaluable service by bending U.S. foreign policy to conform with modern realities — including the wishes of the American people. America’s ability to police the world, while others watch from the sidelines, was waning long before Donald Trump took up residence at 1600 Pennsylvania Ave. Indeed, we should welcome the fact that the world is now populated by many like-minded actors who are able to defend themselves from harm. The United States should be working diligently to reduce its permanent overseas military presence, stop intervening in the affairs of sovereign states, and shed some of the burdens of being the world’s sole superpower, so that it can attend to more urgent problems here at home.

September 10, 2019 11:19AM

Inside America’s Worst Financial Crisis: Gold, the Real Bills Doctrine, and the Fed

The Cato Institute’s newest book, Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder, 1922–1938 is out now — and it’s already getting rave reviews for challenging conventional wisdom on the Great Depression.

InGold, the Real Bills Doctrine, and the Fed,preeminent monetary historians Thomas M. Humphrey and Richard H. Timberlake deliver a compelling critique of the U.S. central bank’s once-central theory on monetary policy: the Real Bills Doctrine. Theirs is the first full-length treatise on the doctrine and its formative role in the Great Depression and other monetary disorders of the early 20thcentury.

Even today, the gold standard remains one of the most popular scapegoats for “the Great Contraction” — the unprecedented collapse of the U.S. money supply, which began after the 1929 stock market crash and led to the Great Depression. Skeptical of this hypothesis,Gold, the Real Bills Doctrine, and the Fedtraces the Contraction and the Depression — along with similar monetary crises like the German hyperinflation — to their true source: the Real Bills Doctrine. By drawing a false dichotomy between “productive activity” and “speculative activity,” Humphrey and Timberlake argue, the Doctrine wrongfully impugned speculation as the source of asset price bubbles and financial panic. Such flawed premises made the Fed unduly reluctant to make full use of the United States’ ample gold reserves.

Gold, the Real Bills Doctrine, and the Fedrefutes these erroneous beliefs and vindicates the true gold standard. It also provides a stirring defense for what was once the United States’ decentralized network of competing monetary regimes.

Among the book’s many compelling contributions are:

  • Its thesis that a centrally-managed “gold standard” is a contradiction in terms: a true gold standard requires no discretionary management whatsoever.
  • Its discussion of the difference between a money stock based on real production — which can be price-stabilizing — and a money stock based only on the nominal dollar value of real production, which can never stabilize prices. Humphrey and Timberlake illustrate this distinction by comparing the New York Federal Reserve Bank’s monetary regime, which stabilized prices by adhering to the “quantity theory” of money, with the dysfunctional Real Bills-driven monetary regime that the Washington Fed Board imposed, and struggled under, at the same time.
  • The authors’ revolutionary new economic model,which presents the Real Bills Doctrine as a “metastatic equilibrium concept”: one whose ability to support a stable economy is exogenous to the Doctrine itself. On its own, the authors’ formal model shows, the Real Bills Doctrine can neither stabilize nor destabilize the economy. It can only reflect the preexisting level of political or economic stability within the price level and money supply.
  • A chapter on the history of the quantity theory of money, explaining its relative success compared to the Real Bills Doctrine.
  • The authors’ full-fledged refutation of the Real Bills Doctrine’s erroneous beliefs about production and speculation: Humphrey and Timberlake show that all productive activity is driven by expectations of future outcomes, and is therefore partly speculative. Likewise, all speculative activity is capable of producing real value, and can therefore be productive.

Former president and CEO of the Federal Reserve Bank of Richmond Jeffrey Lacker writes that the book “persuasively document[s] the baneful effects of a well-intentioned but hopelessly flawed economic idea — the Real Bills Doctrine.” And long before the book’s publication, 1976 Nobel Prize recipient Milton Friedman praised Humphrey and Timberlake’s scholarship on the Real Bills Doctrine, writing:

It certainly was not adherence to any kind of gold standard that caused the [Great Depression]. If anything, it was the lack of adherence that did. Had either we or France adhered to the gold standard, the money supply in the United States, France, and other countries on the gold standard would have increased substantially… . [Tom Humphrey and Dick Timberlake’s] emphasis of the Real Bills Doctrine complements in an important way Anna [Schwartz] and my analysis of why Fed policy was so “inept.” We stressed and discussed at great length the shift of power in the System. We did not emphasize, as in hindsight … we should have, the widespread belief in the Real Bills Doctrine on the part of those to whom the power shifted.”

Finally, Phil Gramm, economist and former chairman of the Senate Banking Committee, calls this

the most important book written on the Great Depression since Friedman and Schwartz published theirMonetary History of the United States. In originality and significance, I know of no other book that comes close in … explaining why U.S. monetary policy during the Depression allowed a financial panic, not significantly different from the Panic of 1907, to cripple the banking system, destroy a third of the money supply, and cause the most traumatic economic downturn in our history. . . .I strongly recommend this book to anyone who seeks to understand the economic history of America.

Gold, the Real Bills Doctrine, and the Fed is the only book in the economic literature devoted to the Real Bills Doctrine, its logic, history, strengths, weaknesses, and role in policy debates. It is also the first and only book to suggest that the Real Bills Doctrine was a key causal factor of the Great Depression and other monetary disorders of the 20thcentury. Anyone interested in understanding the causes of Great Depression, the role that prevailing economic theories played in it, and its implications for monetary policy and alternative currencies today, should regard Gold, the Real Bills Doctrine, and the Fed: Sources of Monetary Disorder, 1922­–1938 as an absolutely essential work. You can order it here today!

[Cross-posted from Alt-M.org]

https://www.cato.org

September 5, 2019 12:05PM

How to “Salvage Community” after Military Base Closure

It has been nearly 14 years since the Pentagon trimmed its excess base capacity through a Base Realignment and Closure (BRAC) round. Despite repeated requests by various Secretaries of Defense, Congress has blocked the military services from reallocating resources away from unnecessary overhead and toward more urgent priorities.

Much of Congress’s reluctance comes from the perception that base closures are devastating for nearby town and municipalities. In the immediate term, job losses follow whenever a base closes, and the cost of transferring and redeveloping property can be daunting. In most instances, however, elected officials, civic leaders, and interested businesses and non-profits join forces to convert former defense facilities into something else. The best cases deliver benefits throughout the community, including renters and homeowners, students, recreational users — and, of course, businesses and their employees.

A just-published book, Salvaging Community: How American Cities Rebuild Closed Military Bases (Cornell University Press, 2019), explores why some communities have been more successful than others. We hosted one of the authors, Michael Touchton, for a discussion here at Cato last week. Touchton, Assistant Professor of Political Science at the University of Miami, along with his co-author, Boise State University’s Amanda J. Ashley, explore a range of different measures of a given community’s financial health, before, during and after a nearby base closes, and assess the factors that contribute to either expeditious conversion — or frustrating and costly delays. Several organizations, including the Association of Defense Communities and DoD’s Office of Economic Adjustment, exist to help with such transitions. Nevertheless, communities are often unprepared. Touchton and Ashley’s work could bridge that gap.

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It begins with a unique and proprietary data set with information on 122 bases closed under BRAC. That alone was a signature achievement, requiring the authors to draw information from a wide range of sources including “public records from the DoD, the Census Bureau, other federal agencies, community redevelopment master plans, publicly available documentation of redevelopment outcomes on city, state, and local government website, and extensive e-mail and phone inquiries to supplement public records.” The metrics compiled include observed outcomes (dependent variables) such as job creation, revenue generation, municipal bond rating, and “equitable conversion benefits” – an indexed assessment of the various uses of former military land. Factors deemed relevant to success or failure include the diversity of funding sources, the number of public, private, and nonprofit partners, surrounding economic conditions at the time of closure, and the costs of environmental remediation.

But, Touchton and Ashley explain, “the quantitative data reveal only general relationships surrounding redevelopment rather than the causal mechanisms driving redevelopment performance.” Accordingly, Salvaging Community also includes an in-depth review of three California cases — the Naval Training Center in San Diego, now Liberty Station; the former Fort Ord in Monterey County; and Naval Air Station Alameda, a short distance across the bay from San Francisco’s financial district. I have visited all three of these sites, and previously written about San Diego, here at the Cato blog, and Fort Ord at this year’s International Studies Association meeting (PDF), but I learned additional details in this fine book.

Touchton and Ashley identify effective governance as a major factor in successful redevelopment. The different entities that take ownership of the land must be incorporated within a decision-making structure that mitigates jurisdictional infighting. Local non-profits and private businesses should also be involved in both the planning and execution of base conversion. Taking the process step by step, and ensuring maximum buy-in among all stakeholders, can ensure a steady stream of revenue to fund environmental remediation, removal of structures unsuitable for preservation and reuse, and construction of new infrastructure.

Base closures are never going to be easy or without consequence. Communities near shuttered bases do experience job losses, and a decline in tax revenue, but, on the whole, a typical community will see a return to pre-closure employment and revenue levels within 5-10 years. And the resulting redevelopment nearly always benefits many within the community — not merely those working for or with the U.S. military and the federal government.

Explains the Heritage Foundation’s Frederico Bartels, “A new round of BRAC would allow the [defense] department to free time, money, and manpower in installations for other uses.” But that is unlikely so long as fear of the short-term economic repercussions of these closures, and an inability to see the opportunities when former military bases are opened up to new civilian uses, persists. Those looking for new information that might break the political log-jam in Congress should definitely check out Touchton and Ashley’s Salvaging Community.

Thanks to research associate James Knupp for help organizing the event and with this blog post.

https://www.cato.org

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