Free Markets, Free People

Monthly Archives: January 2012

Economic Statistics for 10 Jan 11

Today’s economic statistical releases:

The NFIB Small Business Optimism Index  rose for a 4th straight month by 1.8 points to 93.8.

Inventory build corrected sharply in November wholesale trade, increasing only 0.1% as businesses kept their inventories in check.

In weekly retail sales: ICSC-Goldman Store Sales plunged -5.4% in the Jan 7 week, with Year on year sales growth only 2.8%. Redbook also reports a strong sales decline, with the year-on-year rate falling from 4.9% to 3.3% last week.

Dale Franks
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It’s rare that I agree with Fidel Castro …

That got your attention didn’t it?  But it is true.  Castro, remarking on the American political scene, the President and those running for the office, said:

"Is it not obvious that the worst of all is the absence in the White House of a robot capable of governing the United States and preventing a war that would end the life of our species?" Castro, 85, wrote in one of the "reflections" he often publishes in Cuba’s state-controlled media.

Under the title "The Best President for the United States," Cuba’s ex-president said that if faced with a choice between Obama, a Republican rival or a robot, "90 percent of voting Americans, especially Hispanics, blacks and the growing number of the impoverished middle class, would vote for the robot."

Obama, Castro said, is "hopelessly immersed in seeking re-election," and "the dreams of (civil rights icon) Martin Luther King are thousands of light years further away than the nearest inhabitable planet."

Even a stopped clock is right twice a day. 


Twitter: @McQandO

“Conservatives” attacking capitalism [update]

Whether you like Mitt Romney or not, Jay Nordlinger at NRO is right about one thing that has disturbed me: we’ve been treated to a spectacle, through these often destructive debates, of so-called “conservatives” attacking capitalism in an effort to gain votes.  And yes, I meant to put the word in scare quotes because such attacks, by supposedly real conservatives (just ask them, each will tell you he’s the only “real” conservative in the race), should be unthinkable.

Nordlinger offers a litany of examples from two elections cycles, starting with:

Last time around, Mike Huckabee said Romney “looks like the guy who laid you off.”Conservatives reacted like this was the greatest mot since Voltaire or something. To me, Romney looked like someone who could create a business and hire the sadly unentrepreneurial like me.

Others said, “He looks like a car salesman,” or, worse, “a used-car salesman.” Ho ho ho! Commerce, gross, icky, yuck. Better Romney looked like an anthropology professor.

Or a law professor and community organizer, which is what we got.  Frankly, I’ll take a used car salesman any day over what we have now.

But Nordlinger’s point is true.  In their quest to tear down the bona fides of the candidate most threatening to their run for the roses, “conservatives” have been reduced to taking pot shots at capitalism even while they claim to be its champion.

Over and over, Romney defends and explains capitalism. And he’s supposed to be the RINO and squish in the race? That’s what I read in the conservative blogosphere, every day. What do you have to do to be a “real conservative”? Speak bad English and belch?

In the Saturday debate, Santorum knocked Romney for being just a “manager,” just a “CEO,” not fit to be president and commander-in-chief. This was odd for a couple of reasons: First, Romney did have a term as governor of Massachusetts (meaning he has executive political experience, unlike Santorum). And second: Since when do conservative Republicans denigrate private-sector experience?

Indeed, the Santorum remark hit me as the remark of someone who has no idea what a “manager” or “CEO” does.  But as Nordlinger points out,  Romney’s also been an executive position, something Santorum hasn’t. Naturally he left that out.

The disturbing aspect of the Santorum remark is the apparent poor regard in which he holds business managers and CEOs in a capitalist system and believes you should too.  This is just the “conservative” version of the Democrats class warfare shtick.

More Nordlinger:

Now Romney has said, “I like being able to fire people who provide services to me. You know, if someone doesn’t give me the good service I need, I want to say, ‘You know, I’m going to get someone else to provide that service to me.’” Simple, elementary competition. Capitalism 101. And conservatives go, “Eek, a mouse!”

I could go on: the $10,000 bet, the pink slips, conservatives wetting their pants, over and over. They have no appetite to defend capitalism, to persuade people, to encourage them not to fall for the old socialist and populist crap. I fled the Democratic party many years ago. And one of the reasons was, I couldn’t stand the class resentment, the envy, the hostility to wealth, the cries of “Richie Rich!” And I hear them from conservatives, at least when Romney is running.

So again, whether or not you’re a Romney fan (and I’m not), Nordlinger’s point is well taken.  The problem for politicians is it is hard to explain the benefits of capitalism.  But it is even harder to refrain from making assaults on another candidate when you think such an assault might be popular and gain votes.  After all, the capital of elections is votes.   In effect,  however, these “conservatives” unknowingly (or uncaringly) back the class warfare message of the left and the OWS crowd.  They are engaged in attacking and denigrating the very system they supposedly fervently support and see as the way out of the morass we find ourselves in.

And of course, at some point, depending on how this all turns out during the primary run, one of these “conservatives” may prevail and want to wrap himself in the mantle of “champion of capitalism” to solidify his base.  I have to wonder about his reaction when his intemperate words of today are turned on him by his opponent in the race.

UPDATE: Speaking of full on attacks by “conservatives” on Romney, based in twisting his past into an anti-capitalist assault, Newt Gingrich has committed to just that.  Even the left, in the person of Jonathan Chait, seems to understand that’s what is happening.  As Chait says, the attacks by Gingrich are not substantially different than those from

The political effect of these ads is to turn Romney’s chief selling point into a liability – his private-sector experience becomes an indicator not that he will fix the economy but that he will help the already-rich. It’s a smash-you-over-the-head blunt message, with ominous music and storybook dialogue. At one point, the narrator says of  Bain’s executives, “their greed was only matched by their willingness to do anything to make millions in profits.” (Aren’t “greed” and “willingness to do anything to make millions in profits” synonymous terms? Isn’t this like saying “his height was matched only by like lack of shortness”?)

The substantive merits of the attack are, obviously, a lot murkier. Romney’s job at Bain was a classic piece of creative destruction. The proper working of a free market system relies on ruthlessly identifying and closing down non-competitive business concerns. Gingrich’s assault relies on drawing a distinction between real capitalism and the “looting” undertaken by Bain Capital. “If somebody comes in takes all the money out of your company, and then leaves you bankrupt while they go off with millions,” he argues, “that’s not traditional capitalism.” The distinction is utterly ephemeral. It’s a way of saying you’d like all the nice aspects of capitalism without the nasty ones – creating new firms and products without liquidating old ones. For once I agree with inequality-denier and supply-side maven James Pethokoukis, who praises Romney’s work at Bain.

Trust me, when Chait agrees with James Pethokoukis, the reason for such agreement must pretty obvious – the attacks are a load of nonsense that even a leftist like Chait can’t ethically bring himself to accept.   Instead, Chait is reduced to emotionalism to at least find a way to take a shot at Romney’s record.

But the point is you have “conservatives” leading the charge and doing the opposition research and framing the attack on one of their own.  As an aside, I’ve been telling Newt fans that they’ll eventually see “bad Newt” show up, especially when he starts losing.  Well, here he is, in full and living color.


Twitter: @McQandO

Krugman: Redefining “Equal Opportunity”

For the left, Paul Krugman has become a reliable flack, constantly pushing ideological themes with a veneer of “critical thinking” that simply crumbles upon examination.

His latest bit of nonsense, and I’m really at a loss at what else to call it, is his riff about “equal opportunity” and how disadvantaged Americans are in that regard.  In fact, per Krugman, we’re a much more economically stratified and “class-bound” society  than Europe and Canada:

And if you ask why America is more class-bound in practice than the rest of the Western world, a large part of the reason is that our government falls down on the job of creating equal opportunity.

The failure starts early: in America, the holes in the social safety net mean that both low-income mothers and their children are all too likely to suffer from poor nutrition and receive inadequate health care. It continues once children reach school age, where they encounter a system in which the affluent send their kids to good, well-financed public schools or, if they choose, to private schools, while less-advantaged children get a far worse education.

Once they reach college age, those who come from disadvantaged backgrounds are far less likely to go to college — and vastly less likely to go to a top-tier school — than those luckier in their parentage. At the most selective, “Tier 1” schools, 74 percent of the entering class comes from the quarter of households that have the highest “socioeconomic status”; only 3 percent comes from the bottom quarter.

And if children from our society’s lower rungs do manage to make it into a good college, the lack of financial support makes them far more likely to drop out than the children of the affluent, even if they have as much or more native ability. One long-term study by the Department of Education found that students with high test scores but low-income parents were less likely to complete college than students with low scores but affluent parents — loosely speaking, that smart poor kids are less likely than dumb rich kids to get a degree.

Let’s start with his premise.  HIs premise is it is the job of government to pick up those who’ve made bad choices, in the name of “equal opportunity”, and do what is necessary to “level the playing field”.  As you might imagine, government is Krugman’s answer for all perceived wrongs.

Unlike the real world, in Krugman’s world there apparently should be no consequences for bad choices.  There should, however, be consequences for good choices – those who have done what is necessary to have advantages in life should see their priorities for their money shifted, by government, to digging those who’ve made poor choices out of the holes they’ve put themselves in.  Make no mistake about it – anything government does it has to do with money it takes from someone.  Obviously we’re not talking about those who are the subject of Krugman’s lament – the “poor”.  They shall receive.

You see, in the universe from which Paul Krugman comes, “equal opportunity” has to do with outcome.  It is a total redefinition of the word “opportunity”, something for which the left is famous.  Take a common term and redefine it by turning it on its head.  Who isn’t for equal opportunity or fairness?  But the left never means those terms as commonly accepted.  In almost every case, it means government intrusion and penalizing those who are successful in the name of their redefined word or phrase.

In my world, government’s role in providing equal opportunity means that everyone is equal under the law, treated that way and thus has the same chance as any other person to get ahead through their own effort.  While Krugman attempts to sell his ideas as “equal opportunity” ideas, they’re simply the usual leftist whine about unfairness and an appeal to have government do something about it at the expense of others.  For Krugman it is unfair that those who make poor choices have to live with the consequences of those choices while those who make good choices, work hard and attempt to provide the best for the families they form should have an advantage.  And he’s equally upset with businesses that cater too them, such as “Tier 1 schools”.

Never mentioned is the fact that the schools they are fleeing are public schools where, if anywhere, Krugman should be focusing his “equal opportunity” whine.  It is there his underclass are poorly served by the very institution he claims can change their condition if only we’d take more from the advantaged.


Krugman attempts to sell the idea of permanent underclass in this country, but in reality income mobility remains high [pdf]:

• There is considerable income mobility of individuals in the U.S. economy over the 1996 through 2005 period. More than half of taxpayers (56 percent by one measure and 55 percent by another measure) moved to a different income quintile between 1996 and 2005. About half (58 percent by one measure and 45 percent by another measure) of those in the bottom income quintile in 1996 moved to a higher income group by 2005.

•      Median incomes of taxpayers in the sample increased by 24 percent after adjusting for inflation.  The real incomes of two-thirds of all taxpayers increased over this period. Further, the median incomes of those initially in the lowest income groups increased more in percentage terms than the median incomes of those in the higher income groups.  The median inflation-adjusted incomes of the taxpayers who were in the very highest income groups in 1996 declined by 2005.

•      The composition of the very top income groups changes dramatically over time.  Less than half (40 percent or 43 percent depending on the measure) of those in the top 1 percent in 1996 were still in the top 1 percent in 2005.  Only about 25 percent of the individuals in the top 1/100th percent in 1996 remained in the top 1/100 th  percent in 2005.

•      The degree of relative income mobility among income groups over the 1996 to 2005 period is very similar to that over the prior decade (1987 to 1996).  To the extent that increasing income inequality widened income gaps, this was offset by increased absolute income mobility so that relative income mobility has neither increased nor decreased over the past 20 years.

Or, in other words, we’re doing fine.  Equal opportunity exists and those who make good choices seem to be taking advantage of it.

The fact that there is income mobility in all quintiles seems to speak of opportunities for all, and it is certainly evident that those in the bottom quintile have indeed had the opportunity to move up and have done so.  And note the third bullet – even the top income groups show that sort of change.

There’s plenty of opportunity in this country – just listen to recent immigrants (legal ones) who make this country their home and are amazed by the opportunities they’ve been able to take advantage of to better their lives.  

The entire Krugman piece, of course, is aimed at Mitt Romney specifically and the GOP in general.  It all works toward this basic claim:

Think about it: someone who really wanted equal opportunity would be very concerned about the inequality of our current system. He would support more nutritional aid for low-income mothers-to-be and young children. He would try to improve the quality of public schools. He would support aid to low-income college students. And he would support what every other advanced country has, a universal health care system, so that nobody need worry about untreated illness or crushing medical bills.

Obviously you have to buy into his false premise to then buy into this litany of nonsense.  What Krugman doesn’t realize is much of what he laments are problems caused by government or government intrusion as well as pure old falsehoods.

What would you rather have, Tier 1 schools for everyone, or the status quo in which government runs the majority of the schools and the results continue to get worse?  Krugman’s answer: take more money from the advantaged and spend  it trying to fix something we’ve been spending more money trying to fix for decades.  Perhaps, instead of more government, equal opportunity requires less government and more private sector?

Not in Krugman’s world.

In that world government is always the answer, the disadvantaged are always disadvantaged because of those richer than them and equal opportunity simply means a different government run scheme for income redistribution.

Yeah, that’s worked out incredibly well to this point, hasn’t it Mr. Krugman?


Twitter: @McQandO

Polling independents

One of the things I do quite often is throw poll numbers up here.   But they’re usually numbers from selected polls.  You’re unlikely to see me put up numbers about what percentage of likely voters some candidate holds in an election, especially a year out.   They’re essentially worthless. 

But three I do find interesting and telling are polls that measure the satisfaction of voters, like the “direction of the country” polls, polls that look at voter enthusiasm for each side and finally, polls that attempt to determine the size of the independent vote pool.

Those three types of polls are usually trending polls, i.e. they measure these things at regular intervals.  It is those trends that I find valuable and make it easier for me, personally, to get a handle on the mood of the voting public.

For instance, in the 2010 midterms we saw a decided shift of independents from the Democratic side to the Republican side as well as much more enthusiasm on the right than the left in those elections.  The result was a resounding Republican win with them picking up around 60 seats in the House.

Today we have one of those polls from Gallup.  It measures where independent voters are trending.  So let’s take a look.

The first thing that strikes you is the fact that the pool of independent voters has increased:

The percentage of Americans identifying as political independents increased in 2011, as is common in a non-election year, although the 40% who did so is the highest Gallup has measured, by one percentage point. More Americans continue to identify as Democrats than as Republicans, 31% to 27%.

Did you catch that last sentence?  There is a 4% difference in favor of Democrats with party identification.  That’s actually an decrease for the GOP as we’ll see later on.  Look at this chart from Gallup:



The key year is 2010.  Note that Republicans, as mentioned did very well that year in the mid-terms but still trailed Democrats in percentage of party identification.   Also note that increased identification as an independent began almost immediately after 2008, when Democrats controlled both the legislative and executive branches.

But since 2010 Democrat identification has flattened out.  In fact, if you look back toward 1988 the current percentage of identification with Democrats is at what one could consider a low.  But the same can be said for Republicans.

So what do the trends tell us?  Well, to me they indicate a very deep dissatisfaction with both parties.  And, in fact, in terms of self-identification, each party is “bottomed out” with those identifying with them being what one would consider their hard-core base.  For whatever reason they unswervingly identify with one of the two parties and, if I had to guess, go to the polls and pretty much vote a straight ticket.

Looking at the numbers, however, you realize that they’re obviously not enough, within these bases, for either party to win an election.  Democrats have a 4% lead in what they have to make up, but that’s not necessarily as much of an advantage as it might seem.  Because it all depends on how many independents they have leaning their way as to whether they can get the required majority of voters.

How dissatisfied is the voting public with the two parties?  Well, this little tidbit should give you an idea:

Gallup records from 1951-1988 — based on face-to-face interviewing — indicate that the percentage of independents was generally in the low 30% range during those years, suggesting that the proportion of independents in 2011 was the largest in at least 60 years.

So now the question is, even with that level of dissatisfaction, assuming no third party run, who do (or will) independents side with?  First keep in mind that while Democrats enjoy a 4 point lead in party identification, that’s down from the  7 point lead they enjoyed in 2008.

Secondly, in 2008, Democrats enjoyed a 12 point advantage among independents, with 52% leaning Democratic compared to 40% leaning Republican.  Now?




Now a virtual tie.  The huge advantage that Democrats enjoyed in the last presidential race among independents has dissipated. 

Of course everyone knows, or at least those who follow politics know, that the fight for the presidency will be determined by the “big middle” – those who identify as independents.

Given this chart, and despite the fact that their party identification has dropped a couple of points, it would appear that the GOP has made huge gains among independents.  This is a trend I’ve been remarking on for quite some time.  The 12% advantage is gone.

So now, what if anything does this tell us?

Well, it tells us that the presidential election isn’t a slam dunk on either side, but neither, at least at this point in time, is it a run-away for either side.  It will be exceedingly close, no matter who ends up as the nominee for the GOP. 

But I’d also say this – so far most of the blood-letting, politically speaking, has been on the Republican side with these interminable debates going on.  The numbers you see above reflect one party with its nominee already decided and the other still in the midst of deciding.

So given that point, I’d have to say that being tied among independents at this point is not particularly good news for the incumbent party.  Independent voters have trended away from Democrats and, for the most part, stayed away.   What one has to wonder is if the tie will be broken when the GOP finally settles on a nominee and which way it will go.  If I had to guess, once that is done, we’ll see another fairly significant change in “leaning” independents for one side or the other as they decide whether or not they can indeed support the nominee the GOP has named.

And that’s what is going to be interesting.  Instead of talking about who can beat Obama, the GOP needs to be concerned with who can and will attract independent voters.

That will not appeal to the staunch conservatives, especially the social conservatives, because, those independents still to be influenced most likely are moderate or, as some activists like to characterize them, from the “mushy middle”.  They are that 10% that don’t show up in the 45-45 tie.  They are the prize.

Unfortunately, that means appealing to a group that may be just as likely to vote Democratic as Republican and less likely to be attracted to either side pushing what they consider extremist ideas.

Just a point to consider.

Meanwhile, on the right, another choice is going to have to be made.  They are going to have to decide if they’re going to hold out for the perfect candidate or do what is necessary to get Barack Obama out of office.   And that means some probable nose-holding and lever pulling (that’s where the enthusiasm gap comes in).

Yes, friends, 2012 promises to be a political junkie’s dream in terms of watching the politics of the day develop.  Unfortunately, it promises the same sort of election we’ve had for decades – making another choice among a field of poor choices and then somehow expecting that poor (but best relatively speaking) choice to work miracles.

What was Einstein’s definition of insanity?


Twitter: @McQandO

Observations: The QandO Podcast for 08 Jan 12

This week, Bruce, Michael, and Dale talk about the president’s recess appointments and the new US military strategy.

The direct link to the podcast can be found here.


As a reminder, if you are an iTunes user, don’t forget to subscribe to the QandO podcast, Observations, through iTunes. For those of you who don’t have iTunes, you can subscribe at Podcast Alley. And, of course, for you newsreader subscriber types, our podcast RSS Feed is here. For podcasts from 2005 to 2010, they can be accessed through the RSS Archive Feed.

Economic Statistics for 6 Jan 12

Today’s economic statistical releases:

The Monster employment index fell 7 points in December to 140, as global economic uncertainty keeps hiring plans cautious.

But you don’t care about that. You care about the December Employment Situation. The BLS reports that 200,000 net new jobs were created last month, with the unemployment rate falling to 8.5%. Average hourly earnings increased by 0.2% while the average workweek rose 0.1 hours to 34.4 hours. The labor force shrunk by 50,000 but household employment rose 176,000 and the number of unemployed declined 226,000, according to the household survey. The labor force participation rate held steady at 64.0%. The U-6 unemployment rate, the broadest measure of unemployment, fell from 15.6% to 15.2%. Every indication is of a slowly and mildly improving labor market in December.

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Obama’s new defense strategy: Prescient or problematic?

Over the years I have seen more “new” defense strategies than one can shake a stick at.  And I’ve noticed one thing about all of them: for the most part they’ve been uniformly wrong.  We have mostly had an abysmal record in divining what sort of a military we need in the future, and I doubt this particular version will be any better.  Here’s POLITOCO’s Morning Defenses’ summary:

THERE WERE NO BIG SURPRISES IN THURSDAY’S ANNOUNCEMENT, mainly because the most important real-world effects of the new strategy won’t be known until the president’s budget proposal is released. Reaction was mainly predictable as well – Republicans were concerned about weakening U.S. power in a dangerous world, progressives blasted it as too timid and a lost opportunity for Pentagon reform, and veterans groups are concerned about future benefit cuts.

THE REAL TEST WILL BE whether the strategy will result in a military force capable of handling the unintended consequences of world events. The president is sitting comfortably right now – he’s ended U.S. involvement in Iraq, set a path for withdrawal in Afghanistan and seriously weakened Al Qaeda. Libya looks like a success story for the multilateral cooperation the strategy emphasizes for the future, and there are signs the sanctions on Iran are starting to bite. But any or all of these situations could turn for the worse in a heartbeat, and wake up U.S. voters who right now aren’t really paying attention. Nothing is settled.

IT’S ALL ABOUT RISK - Military leaders acknowledge and accept that the new strategy brings new risks, which they consider acceptable in the current environment. The United States can get away with a smaller army because its leaders don’t expect to be fighting any large ground wars in the future …

I’d actually argue that some of the assessments made in the middle paragraph are debatable.  Libya, for instance, seems anything but a success with Islamist militias poised to take over.  It certainly may be seen as a “military” success, but military success should tied to a strategy of overall success, not just whether it was able to defeat a rag-tag enemy.  After all the the military is but the blunt force of foreign policy, used when all less violent means have been exhausted.  There should be an acceptable outcome tied to its use.  Libya’s descent into Islamic extremism seems to argue against “success” on the whole.  Couple that with the fact that al Qaeda has set up shop there, and you could argue that even if al Qaeda has been “seriously weakened”, it has just been given a new lease on life in Libya.

That said, let’s talk about the defense cuts.  The last paragraph is obviously the key to the strategy.  It is about assessing risk and accepting that risk based on that assessment.  The problem is the phrase “acceptable in the current environment”.  The obvious point is that what is “acceptable in the current environment” may be problematic in any future environment.  

So what is happening here is a political position/decision is being dressed up as a military assessment in order to justify the political position.  We’ll cut land forces and concentrate on air and sea forces.

But where are we fighting right now?  Certainly not in the air or at sea.

The Army is already is slated to drop to a force of 520,000 from 570,000, but Mr. Panetta views even that reduction as too expensive and unnecessary and has endorsed an Army of 490,000 troops as sufficient, officials said.

The defense secretary has made clear that the reduction should be carried out carefully, and over several years, so that combat veterans are not flooding into a tough employment market and military families do not feel that the government is breaking trust after a decade of sacrifice, officials said.

A smaller Army would be a clear sign that the Pentagon does not anticipate conducting another expensive, troop-intensive counterinsurgency campaign, like those waged in Afghanistan and Iraq. Nor would the military be able to carry out two sustained ground wars at one time, as was required under past national military strategies.

The last sentence is pure bull squat.  National strategy goes by the boards when national necessity demands we fight “two sustained ground wars at one time” whether we like it or not.  The strategy would simply mean we’d end up fighting those two ground wars with a less capable force than we have now.  The other unsaid thing here is if you think we used the heck out of the Army National Guard in the last decade, just watch if something unforeseen happens after these cuts are made.

Also wrapped up in this new “national strategy” is some naive nonsense:

"As Libya showed, you don’t necessarily have to have boots on the ground all the time," an official said, explaining the White House view.

"We are refining our strategy to something that is more realistic," the official added.

Sorry to break it to the White House, but that’s not a “realistic strategy”.  It’s a wish.  I can’t tell you how many times, since the advent of the airplane in combat, I’ve heard it said that the necessity of maintaining ground troops is coming to an end.

Yet here we are, with troops in Afghanistan and 10 years of troops in Iraq.  Libya was a one-of that still hasn’t come to a conclusion and as I note above, what we’re seeing now doesn’t appear to improve the situation for the US – and that should be the goal of any sort of intervention.   I certainly appreciate the desire not to nation build, but that doesn’t necessarily mean you need less ground troops available in a very dangerous and volatile world.  Air and sea are combat multipliers, but as always, the only sort of units that can take and hold ground are ground combat units.  That hasn’t changed in a thousand years.  If you want to talk about contingencies, there are more of them that require those sorts of forces than don’t.

Finally, with all that said, what about the pivot toward China as our new, what’s the term, ah, “adversary”?   Is there some clever guy who has managed to come up with a strategy that will require no ground troops in any sort of a confrontational scenario with our new “adversary”?

Of course not.  Korean peninsula?  Taiwan?  Here we pivot toward what could be a massive threat which itself has a huge land army and we do what?  Cut ours.  Because we “think” that it won’t be necessary to have such a capability should our “adversary” become our “enemy”?  

I’m not saying they will, I’m just pointing out that the strategy – cut Army and Marines and pivot toward China which has one of the largest land armies in the world – doesn’t seem particularly well thought out.  But I’m not surprised by that.  Again, when you tailor a strategy to support a political position/decision, such “strategies” rarely are.

Oh, and don’t forget:

The military could be forced to cut another $600 billion in defense spending over 10 years unless Congress takes action to stop a second round of cuts mandated in the August accord.



Twitter: @McQandO

Proposed Constitutional Amendment

I think the president’s recess appointment power should be revised, as indeed the entire process of nomination and confirmation to appointed posts. The recess appointment power is really a holdover of the days when Congress was absent from Washington DC for 6 to 9 months of the year. At the same time, I don’t think the Framers intended for Congress to defeat appointments via filibuster, either. A president deserves an up-or-down vote on his nominees. So I would propose an amendment that does the following things:

1. Repeal the power of the president to make recess appointments.

2. The Senate must return a confirmation vote on all presidential appointees within 60 working days.

3. If no vote has been held within 45 working days, cloture on the debate will be automatically imposed, and all other Senate business must cease until a confirmation vote is held.

4. If a confirmation vote is not held within 60 working days, the nomination is automatically confirmed, and the Senate majority and minority leaders will be expelled from the Senate, and barred from reelection or reappointment to the Senate during the current term.

This would eliminate the president’s ability to sneak in an unconfirmable nominee during a recess, and would force him to be more selective about his nominees, and would force the Senate to explicitly confirm or reject every nominee, or wave bye-bye to the Senate leadership.

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Obama’s recess appointments II (Updated)

President Theodore Roosevelt made more than 160 recess appointments during a Senate break of less than a day in 1903. According to the Congressional Research Service (PDF):

[T]he President made recess appointments during a transition between sessions of less than a day in length, where no concurrent resolution regarding the transition between sessions had been adopted. In fact, it appears that little time elapsed between the sessions on this occasion. When the first session of the 58th Congress ended, at noon on December 7, 1903, and the second session began soon thereafter, President Theodore Roosevelt made over 160 recess appointments—mostly of military officers. President Roosevelt treated the period between these sessions as a “constructive recess.”

This particular case, the "recess" was literally seconds long. The Senate was not pleased, and 14 months later issued a report that condemned the President’s actions in that particular case; however (PDF):

The 1905 Senate Judiciary Committee Report was issued fourteen months after this action and, as is indicated by the quotation included above, emphatically rejected Roosevelt’s action. It is important to note, however, that the Report, while expressing disapprobation of the President’s exercise of the recess appointment power in such a manner, could be interpreted as validating the execution of intrasession recess appointments generally. Furthermore, Roosevelt’s actions could be viewed as a practical manifestation of the potential infirmities of the Knox interpretation: that is to say, if a formalistic interpretation of the Clause rests upon a concern that allowing intrasession appointments will foster systematic avoidance of the Senate’s advice and consent function, the fact that a President is able to make such appointments during an instantaneous “constructive recess” of the Senate would appear to belie such a distinction.

Indeed, part of the relevant language of that report states:

It was evidently intended by the framers of the Constitution that [“recess”] should mean something real, not something imaginary; something actual, not something fictitious. They used the word as the mass of mankind then understood it and now understand it. It means, in our judgment, . . . the period of time when the Senate is not sitting in regular or extraordinary session as a branch of Congress, or in extraordinary session for the discharge of executive functions; when its members owe no duty of attendance; when its Chamber is empty; when, because of its absence, it cannot receive communications from the President or participate as a body in making appointments. – Senate Report No. 58–4389, at 2 (1905).

At the very least, a colorable argument can be made that the mere existence of pro-forma sessions held for the specific purpose of disallowing recess appointments, during a time when the Senate is unable to meet to discharge its advice and consent functions, is itself an unconstitutional usurpation of the president’s Constitutional powers. There is nothing in the Constitution to indicate the president’s recess appointment power is any less important than the Senate’s advice and consent power.

President Roosevelt’s “constructive recess”, which took place between 12:00pm and 12:01pm on 7 December, 1903 surely seems a stretch of the idea of what a recess is. But, in the proximate case of President Obama it just as surely a stretch to argue that the Senate was "in session" while it was unable to meet to conduct any business.  Indeed, the specific adjournments about which we are concerned here explicitly stated that no business would be conducted.

Madam President, I ask unanimous consent that when the Senate completes its business today, it adjourn and convene for pro forma sessions only, with no business conducted on the following dates and times, and that following each pro forma session the Senate adjourn until the following pro forma session: Tuesday, December 20, at 11 a.m.; Friday, December 23, at 9:30 a.m.; Tuesday, December 27, at 12 p.m.; Friday, December 30, at 11 a.m.; and that the second session of the 112th Congress convene on Tuesday, January 3, at 12 p.m. for a pro forma session only, with no business conducted, and that following the pro forma session the Senate adjourn and convene for pro forma sessions only, with no business conducted on the following dates and times, and that following each pro forma session the Senate adjourn until the following pro forma session: Friday, January 6, at 11 a.m.; Tuesday, January 10, at 11 a.m.; Friday, January 13, at 12 p.m.; Tuesday, January 17, at 10:15 a.m.; Friday, January 20, at 2 p.m.; and that the Senate adjourn on Friday, January 20, until 2 p.m. on Monday, January 23; that following the prayer and pledge, the Journal of proceedings be approved to date, the morning hour be deemed expired, and the time for the two leaders be reserved for their use later in the day; further, that following any leader remarks the Senate be in a period of morning business until 4 p.m., with Senators permitted to speak therein for up to 10 minutes each, and that following morning business, the Senate proceed to executive session under the previous order.

As John Elwood puts it at the libertarian/conservative legal blog "The Volokh Conspiracy":

Concluding that such pro forma sessions (which by design are not for conducting business) interrupt the recess of the Senate and thus prevent recess appointments would present a risk to separation of powers because it would allow the Senate unilaterally to frustrate the President’s exercise of a power granted him by the Constitution, which the Framers considered to be important to keep the government functioning by filling offices.  Cf. McAlpin v. Dana, No. 82–582, slip op. at 14 (D.D.C. Oct. 5, 1982) (“[T]here is no reason to believe that the President’s recess appointment power is less important than the Senate’s power to subject nominees to the confirmation process.”).

So, it is far from clear that it was the President, rather than the Senate, who was acting in a manner that violated the Constitutional separation of powers.

Alas, the case of the Cordray nomination still has an unfortunate wrinkle for the president. The specific statutory language of Section 1066 of Dodd-Frank states that the functions of the CFPB cannot be turned over from the Secretary of the Treasury “until the Director of the Bureau is confirmed by the Senate in accordance with Section 1011.” Section 1011, in turn, states: “The Director shall be appointed by the President, by and with the advice and consent of the Senate.”

So, while the president arguably has the power to make recess appointments during pro-forma sessions of the Senate, the statutory language of the law provides that the CPFB cannot be created as an independent agency until after its first Director is confirmed by the Senate. In effect, this means that, while the president may make a recess appointment to the CPFB post, the Bureau that post oversees cannot actually be created until the Director is confirmed by the Senate. So, according to the statute, Mr. Cordray is the bureau chief of a non-existent bureau, until he can be confirmed. So, I hope they can find a nice office for him somewhere, with a comfortable napping couch.

This, in turn, brings up the question of whether sections 1066 and 1011 of Dodd-Frank consist of an unconstitutional violation of the separation of powers by impeding the president’s power to make recess appointments.

But, I’m pretty sure I don’t want to get into that issue at this point.

What should be clear, though, is that President Obama’s recess appointments are, in fact, arguably legal and constitutional, while the practice of pro forma sessions designed to prevent recess appointments are arguably illegal and unconstitutional.

Moreover, the Congress has a number of options for overturning the appointment of Mr. Cordray. They can refuse to fund the CFPB until he is confirmed. They can impeach him. As a recess appointee, they can reduce his pay to nothing.

The bottom line is that there are substantial tensions to recess appointments, and a historical lack of clarity as to what the scope and limits of recess appointments are. When both houses agree to adjourn and hold themselves in recess, the president’s power to make such appointments is unquestioned. But it is certainly unclear that it is constitutional for the Senate to adjourn sine die for weeks at a time, except for pro forma sessions at which no business is conducted and no quorum is present, in order to specifically impede the president’s recess appointment powers.

Whatever the actual practice has been in terms of when presidents made recess appointments, or whether presidents in the past have accepted the practice of pro forma sessions, or even whether someone argued a different view about such appointments in the past, is entirely irrelevant.  It might be instructive to know these things in order to make personal judgments about the character of the respective parties, but it has nothing whatsoever to do with the constitutional issues at hand.

The only relevant questions are, is the Senate in session or is it not?  Is the Senate in session when no quorum is present, the members are not available to meet, and no business is conducted for weeks? Is the Senate in session when it is incapable of providing the advice and consent function for weeks? If the answer to those questions is "no", then the Senate is in recess as a practical matter and pro forma "sessions" are nothing more than a sham with but one design: to subvert the Constitution. That is true whether the president is George W. Bush or Barack H. Obama.

Update: Commenter Pogue Mahone notes another Congressional Research Service opinion (PDF) that specifically states the initial appointment of the CFPB director can, in fact, be made via recess appointment:

Footnote 3:
"P.L. 111-203 § 1011. Although the CFP Act requires the CFPB Director to be confirmed by the Senate, the President could appoint a Director temporarily without Senate confirmation through his constitutionally provided power to make recess appointments. See U.S. Const., art. II, § 2, cl. 3 (“The President shall have Power to fill up all Vacancies that may happen during the Recess of the Senate, by granting Commissions which shall expire at the End of their next Session.”). A recess-appointed Director likely would be considered to have all of the authorities that would be held by a Senate-confirmed Director.

I have, however, seen other legal analyses that say otherwise. Note the word "likely" in the last sentence, above.

Again, my argument is not that the president can’t appoint the director via recess appointment, but that it can be argued the agency’s powers can’t be transferred to the CFPB until the statutory requirement is satisfied. He can be appointed the director of all he surveys, and still have no legal power, no salary, and no agency until the letter of Dodd-Frank is satisfied. The treasury Department could whip him up some spiffy business card, though. Unless congress defunds that, too. That’s a possibility some legal scholars are arguing, anyway.

I think, however,  CRS opinion is correct. The "advice and consent" phrase is pretty pro forma, and reflects the usual nomination/confirmation process, rather than setting up a specific ban on the recess appointment. Certainly, I’d presume the Constitutional recess appointment power would trump the statutory language. It’s amusing to ponder, but it seems pretty clear that a recess appointment to a non-existent position is effectively no appointment at all. Not that there wouldn’t be plenty of lawyers happy to argue otherwise.

Dale Franks
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