The Volokh Conspiracy

University of Tennessee lawprof Glenn Reynolds (AkA “Instapundit”) has an interesting short paper on the dangers of prosecutorial discretion in a world where the scope of criminal law has gotten so vast that almost anyone can be convicted of a crime if the prosecutor goes after them aggressively enough:

Attorney General (and later Supreme Court Justice) Robert Jackson once commented: “If the prosecutor is obliged to choose his cases, it follows he can choose his defendants.....“ Prosecutors could easily fall prey to the temptation of “picking the man and then searching the law books.... to pin some offense on him.” In short, prosecutors’ discretion to charge – or not to charge – individuals with crimes is a tremendous power, amplified by the huge number of laws on the books....

As Tim Wu recounted in 2007, a popular game in the U.S. Attorney’s office in the Southern District of New York was
to name a famous person – Mother Teresa, or John Lennon -­ and decide how they could be prosecuted....:

The trick and the skill lay in finding the more obscure offenses that fit the character of the celebrity and carried the toughest sentences. The, result, however, was inevitable: “prison time....”

The result of overcriminalization is that prosecutors no longer need to wait for obvious signs of a crime. Instead of finding Professor Plum dead in the conservatory and launching an investigation, authorities can instead start an investigation of Colonel Mustard as soon as someone has suggested he is a shady character. And since, as Wu’s game illustrates, everyone is a criminal if prosecutors look hard enough, they’re guaranteed to find something eventually.

Glenn goes on to note that, once prosecutors do go after a defendant, they can often force him to plead guilty even if he is innocent of any real wrongdoing simply by “overcharging” him with dozens of different offenses. The strong likelihood that at least one will stick in a jury trial is a powerful incentive to cop a plea.

As Glenn recognizes, most of us are still “safe” from abusive prosecutions because prosecutors simply don’t have the time or the resources to go after everybody. But the combination of overcriminalization and prosecutorial discretion can be a nightmare for people who are unpopular, unsympathetic, or simply run afoul of influential officials.

Various scholars and jurists I have focused on this problem before. I myself blogged about it in this 2009 post, where I referenced earlier commentary by Judge Alex Kozinski and Misha Tseytlin, and Radley Balko. Harvey Silverglate has published an important book on the subject.

But Glenn’s essay is a particularly helpful and concise summary of the problem. He also proposes some potential reforms, including penalizing prosecutors for overcharging and strengthening the role of grand juries as possibly safeguards against abusive prosecutions. This recent Boston Globe article by Leon Neyfakh describes a variety of reforms proposed by Glenn and other scholars, most of them focusing on strengthening the role of juries.

I think some of the reforms discussed in the Neyfakh article have merit, and all at least deserve serious consideration. Increasing the role of juries might help alleviate the problem. But in some cases, it might make things even worse, especially if the defendant is unpopular or otherwise unsympathetic.

Ultimately, the best solution for overcriminalization is to reduce the number of crimes on the books. If we really want to move away from a world where we are all at the mercy of prosecutors, we should move away from a world where we are all criminals. As I discuss here and here, there are numerous places where federal criminal law can be pared back, especially when it comes to the massive War on Drugs. The same is true in many states. Silverglate’s book includes more proposals along these lines, as does this interesting 2004 book edited by Gene Healy. Silverglate summarized some of his ideas in this series of guest-blogging posts right here at the VC.

I also have a modest proposal for attracting public attention to the problem. While the idea is something of a joke, I really do think that it would increase public awareness if the president actually did it:

The last three presidents of the United States are all federal criminals under the drug laws, as are probably the majority of people who went to college in the last 40 years. Kozinski and Tseytlin cite statistics suggesting that nearly half of Americans have taken banned drugs at some point in their lives. The next presidential state of the union address should perhaps begin with “My fellow federal criminals,” instead of the traditional “My fellow Americans.” It would be a great teaching moment!

Ernst Freund was one of the Founding Fathers of progressive constitutionalism. His 1904 book The Police Power: Public Policy and Constitutional Rights argued for a vastly expanded understanding of the police power. (The police power, broadly defined, is a government’s power to regulate health, safety, welfare and morals. It is distinct from other government powers, such as the tax power, or the military power. In the U.S. system, the federal government does not have a police power, except as to federal territories, but the States do have a police power.)

Freund’s expansive view of the police power aimed to overthrow the then-prevailing (at least in theory) view, articulated by Christopher Tiedeman in his 1886  A Treatise on the Limitations of the Police Power in the United States, that the police power could only be used to prevent people from harming others or violating their rights. In the long run, Freund’s view became the mainstream.

So what would Freund, that great advocate for loosening the restraints on big government, have to say about laws which prohibit the medical use of marijuana? Here’s what he wrote about liquor prohibition:

All prohibitory laws make an exception in favor of sales for medical purposes. This is not a legislative indulgence but a constitutional necessity, since the state could not validly prohibit the use of valuable curative agencies on account of remote possibility of abuse. “[T]he power of the legislature to prohibit the prescription and sale of liquor to be used as medicine does not exist, and its exercise would be as purely arbitrary as the prohibition of its sale for religious purposes....” The right to an adequate supply of medicines cannot be cut off by the legislature, and when legal provisions would have such effect they must that extent be inoperative.

Freund, at 210-11, quoting Sarrls v. Commonwealth, 83 Ky. 327, 332-33 (1885) (interpreting physician exception in statutory ban on liquor transfers).

In The Evolving Police Power: Some Observations for a New Century (27 Hastings Const’l L.Q. 511 (Spring 2000)), Glenn Reynolds and examined the trend in some courts towards judicial recognition of an issue on which Freund and Tiedman agreed: however one defines the boundaries of the police power, it is not infinite, and there are some personal zones into which it cannot reach.

Commentators such as liberal E.J. Dionne and even libertarian David Harsanyi are claiming that the election results prove that Obama won a great referendum on the role of government in American society, achieving a mandate for expanded government intervention.

The CNN exit polls tell a very different story. 51 percent of voters said that government is doing “too much” that should be left to businesses and individuals, compared to 43% who believe that government should do “more” to solve problems. By far the biggest and most controversial new government program of the last four years was the Obama health care plan. The CNN poll shows that 49% would like to see it repealed in whole or in part, while 44% want to keep it as is or expand it. The latter number is particularly interesting in light of the fact that we just went through an election where the GOP nominee could not attack the individual health insurance mandate – the single most unpopular part of the law – because he enacted an individual mandate himself back when he was governor of Massachusetts.

Somewhat inconsistently, there is a 63-33 majority against the idea that taxes should be raised to help cut the deficit, but a 60-35 majority in favor of raising taxes on people earning over $250,000 per year. Either there is a huge number of people who want to raise taxes but not spend any of the money on paying down the deficit, or (more likely) the wording of the two questions has different framing effects.

I don’t fool myself into believing that the majority of the public are as libertarian as I am. Not even close. The vast bulk of the 51% who believe government is doing too much and and the 49% who would like to repeal all or part of Obamacare still favor a much bigger government than I do. But they don’t seem to endorse the liberal view of government’s role either.

It’s too early to say whether a more libertarian position is the best political strategy for the GOP (or any party) going forward. I certainly hope it’s true. The above survey data combined with the continuing popularity of property rights, and the growing social liberalism evident in increased support for drug legalization and gay marriage is some evidence for the theory. On the other hand, the fastest-growing ethnic segment of the electorate is Hispanics, and they tend to be economically statist. Whether the GOP can persuade more Hispanics to support free markets if they reach out to the group by changing the party’s position on immigration is difficult to say. Also, it’s very hard to persuade a majority of the public to support deep cuts in entitlement spending – the single largest component of the federal budget, in part because of widespread ignorance about how enormous that spending actually is. At this point, therefore, it is hard to say whether a much more libertarian stance than that which the GOP took in 2012 will yield political dividends. It’s always tempting to conclude that whatever you support is also good political strategy. But the temptation should be resisted unless and until you have some strong evidence to prove it.

What we can say, however, is that the available evidence does not show that the election was a clear mandate for bigger and more interventionist government. The majority of the public remains suspicious of government and more people want it to leave more issues to the private sector than want it to do more.

UPDATE: It’s worth noting that the 49-44 breakdown on Obamacare is consistent with other recent surveys on the law, which show an average of 47 percent opposing it, and 39% in favor. A smaller sample of polls aggregated by RCP shows an average of 50-44 in favor of repealing the law. That reduces the likelihood that the CNN result was a function of flaws in the wording of their question (such as ambiguity over what it means to repeal “part” of the law, or “expand” it). This not a high enough level of opposition to force the Democrats to actually repeal it. But that’s not my point. I merely suggest that there is no majority consensus in favor of it.

That was the provocative title of a seminar earlier this month organized by the Istituto Bruno Leoni, Italy’s free market think tank. The event was the IBL’s 9th annual Mises Seminar. As is common at multinational seminars in Europe, the event and the papers were in English, which is today’s lingua franca among well-educated Europeans.

My favorite paper was presented by Kaetana Leontjeva, who is a Senior Policy Analyst at the Lithuanian Free Market Institute. Her paper, Old-age state social insurance: may its failure be averted?, examines the history of old-age pension systems throughout Europe, with a special focus on the USSR, Lithuania and Georgia. She shows how these programs, initially of modest size, grew to an unustainable  level that is financed by borrowing. She argues that there are only two realistic alternatives:

1. Continuing the present systems, with only “technical” reforms. This will eventually lead to complete failure of the old-age pension system, as occurred in the USSR. “ This would lead to a sudden and dramatic change in conditions of the elderly, bringing about poverty and chronic insecurity.” OR

2. “managed failure.” This means starting to shrinking the existing pension systems, by requiring that they operate on a balanced budget. Young people should not be told to depend on the current system, but should be encouraged to start making plans for their own retirement, by setting aside some of their current income to provide for their retirement. “For the ‘managed failure’ approach to work, one generation has to concede and make a sacrifice by paying for the pensions of the current retirees and for their own. In the absence of such a consent and solidarity, the generation to make the sacrifice would emerge spontaneously, and the process of an unexpected old-age social insurance failure would be much more painful.”

Another interesting paper came from Peter J. Boettke (Mercatus Center, George Mason University) and Daniel J. Smith (Manual H. Johnson Center for Political Economy, Troy University). “Monetary Policy and the Quest for Robust Political Economy” examines the failures of economists in thinking about the Federal Reserve. It is possible to imagine a Federal Reserve which conducts its affairs in an economically sound and apolitical fashion. But in practice, the Fed has often been a pump-priming engine of inflation, for political reasons. In other words, “Technical optima are nonoperational in a contemporary democratic setting.” In the wake of the Great Recession, the economics profession has been busy dissecting recent technical mistakes by Fed. Boettke and Smith argue that economists instead ought to be analyzing the only solutions which can put an end to a century of Federal Reserve failures: the adoption of a monetary policy (e.g., based on an external standard, such as a commodities bundle) which removes Fed discretion to promote inflation. While such a policy might not be politically feasible in the short run, it is the only constructive alternative, and would become more politically feasible if economists did not self-censor their recommendations based on short-term political viability.

In “Bankruptcy: Why are Banks Treated Differently Anyway?,” Mathieu Bédard (Ph.D. candidate in economics, Aix-Marseille Université, and a Fellow at the Institute for Humane Studies) classifies and analyzes the 29 different forms of government intervention into bank failures. He argues that ordinary bankruptcy is often superior to liquidations managed by the Federal Deposit Insurance Corporation.

Even if you don’t agree with the policy recommendations in these papers, they are worth reading for their thoughtful analysis.

The Prologue to my book No More Wacos: What’s Wrong with Federal Law Enforcement and How to Fix it, includes a section on the Ruby Ridge case. Much more on Waco and Ruby Ridge is available on the Waco page on my website.

In this interesting recent op ed in Canada’s National Post , my George Mason colleague Frank Buckley argues that parliamentary systems of government are less likely to become dysfunctional than separation of powers systems such as that of the United States:

Before Standard and Poor’s downgraded U.S. public debt, Barack Obama mused that the American system of separation of powers might not be all that it is cracked up to be. It results in gridlock, and had raised the specter that Congress would fail to raise the debt ceiling. “We did not have a AAA political system to match our AAA credit rating,” Obama noted....

By contrast, the Canadian system of government has never seemed more attractive, if one judges these things by their results. Notwithstanding its generous social-welfare safety net, Canada is ranked as economically more free than the United States by the conservatives at the Heritage Foundation in Washington, which puts Canada in sixth, and the U.S. in 10th place, in the group’s most recent international survey. On per capita government spending, the two countries are tied, and on corporate taxes Canada is way ahead. On public debt levels, it’s no contest....

Getting legislation passed or repealed in America is like waiting for three cherries to line up in a Las Vegas slot machine. Absent a supermajority in Congress to override a presidential veto, one needs the simultaneous concurrence of the president, Senate and House.

In a parliamentary system, however, one needs only one cherry. In Canada, neither the governor-general nor the senate has a veto power. All that matters is the House of Commons, dominated by the prime minister’s party.

An American separation of powers might nevertheless be thought better able to screen off bad laws, which might more easily be enacted in a parliamentary regime. The flip side is that bad laws, once enacted, can more easily be reversed when a government doesn’t face the gridlock of the separation of powers.

So which is more valuable: Pre-enactment screening or ex post reversibility? I’d suggest the latter, for one important kind of legislation: “Experience laws,” whose effects cannot be judged without the benefit of hindsight. Then, reversibility trumps ex ante screening — not that there’s much of the latter in Washington. And when you get down to it, just about all laws are experience laws.

Frank makes a good case. But I remain unpersuaded. It is indeed true that Canada’s government has performed better than the United States over the last decade, which has enabled Canada to (slightly) surpass the US on the Heritage Foundation’s measure of economic freedom in recent years, and to establish a much better fiscal position. On the other hand, that same Heritage rating had the US ahead of Canada for many years before the late 2000s (as was also true in the rival Cato/Fraser Institute index). During much of that period, Canada also had much worse fiscal problems, higher taxes, and higher per capita government spending than the United States. And obviously the US had a separation of powers system and Canada a parliamentary system in those days too.

The recent reversal is a result of Canada’s impressive economic reforms since 1996 and the massive growth of American government under George W. Bush and Barack Obama. That growth did not occur because of “gridlock,” but because Congress and the president successfully enacted major new laws greatly increasing spending and regulation. It would be dangerous to generalize from this relatively brief period, or even from the US and Canadian experience as a whole. Studies that compare the records of many countries, such as Persson and Tabellini’s Economic Effects of Constitutions show that, controlling for other variables, presidential separation of powers systems have smaller public sectors than parliamentary systems.

Frank’s argument that post-enactment reversal is more valuable than preenactment screening in preventing bad laws overlooks the problem of institutionalization. Once a bad law is enacted, interest group pressures and inertia often make it difficult to repeal – even in a parliamentary system. Moreover, widespread political ignorance ensures that voters often don’t even realize that a law is having bad effects or even that it exists at all. That is one of the reasons why so many European governments are experiencing severe fiscal crises caused by overspending – despite the fact that nearly all of them have parliamentary governments. Even if most “bad” laws are “experience laws,” it is also true that many such laws have been tried elsewhere previously. Opponents can rely on that experience without having to first try out the bad law themselves.

Frank also contends that parliamentary systems will distribute government spending more equitably than separation of powers systems:

A party leader who seeks support across the country must have the interest of the country as a whole in mind. If he concentrates government spending in one region only, he will lose support in other regions. That’s why strong a prime minister and a Parliament of nobodies better serves the country than the separation of powers and earmark-seeking Congressmen, like the late John Murtha of Pennsylvania (of the John Murtha Airport, John Murtha Center, etc.).

Porkbarrel spending for local projects is a genuine problem in the US. But the same is true in many parliamentary systems. In the latter, parties often include narrow interest groups who get compensated for their support with government spending grants. It’s far from clear that the problem of fiscal favoritism for narrow interest groups or particular regions is less severe under a parliamentary system than in the US. Western Canadians have long complained about the concentration of federal grants in Quebec and the Atlantic provinces.

This is not to suggest that the US system is ideal or that all other nations should copy it. There are a variety of reasons why a nation might prefer a parliamentary system to presidentialism. For example, a powerful presidency that concentrates executive authority in one person’s hands might be a bad idea for a nation with deep ethnic divisions or one with a long tradition of authoritarianism. Obviously, people who want high levels of government spending and regulation also have good reason to prefer parliamentary systems – a point made by many American liberals going back to Woodrow Wilson in the late 19th century. However, the available evidence suggests that separation of powers is an important constraint on the growth of government and that parliamentary systems are not, on average, better at preventing fiscal crises.

President Obama today fired his opening salvo in an unprecedented attack on the Constitution of the United States. Regarding the impending Supreme Court ruling on the health control law, the President said, “Ultimately, I’m confident that the Supreme Court will not take what would be an unprecedented, extraordinary step of overturning a law that was passed by a strong majority of a democratically elected Congress.”

His factual claims are false. His principle is a direct assault on the Constitution’s creation of an independent judicial branch as a check on constitutional violations by the other two branches.

It is certainly not “unprecedented” for the Court to overturn a law passed by “a democratically elected Congress.” The Court has done so 165 times, as of 2010. (See p. 201 of this Congressional Research Service report.)

President Obama can call legislation enacted by a vote of 219 to 212 a “strong” majority if he wishes. But there is nothing in the Constitution suggesting that a bill which garners the votes of 50.3% of the House of Representatives has such a “strong” majority that it therefore becomes exempt from judicial review. To the contrary, almost all of the 165 federal statutes which the Court has ruled unconstitutional had much larger majorities, most of them attracted votes from both Democrats and Republicans, and some of them were enacted nearly unanimously.

That the Supreme Court would declare as unconstitutional congressional “laws” which illegally violated the Constitution was one of the benefits of the Constitution, which the Constitution’s advocates used to help convince the People to ratify the Constitution. In Federalist 78, Alexander Hamilton explained why unconstitutional actions of Congress are not real laws, and why the judiciary has a duty to say so:

There is no position which depends on clearer principles, than that every act of a delegated authority, contrary to the tenor of the commission under which it is exercised, is void. No legislative act, therefore, contrary to the Constitution, can be valid. To deny this, would be to affirm, that the deputy is greater than his principal; that the servant is above his master; that the representatives of the people are superior to the people themselves; that men acting by virtue of powers, may do not only what their powers do not authorize, but what they forbid. . . .

Nor does this conclusion by any means suppose a superiority of the judicial to the legislative power. It only supposes that the power of the people is superior to both; and that where the will of the legislature, declared in its statutes, stands in opposition to that of the people, declared in the Constitution, the judges ought to be governed by the latter rather than the former. They ought to regulate their decisions by the fundamental laws, rather than by those which are not fundamental.

Because Hamilton was the foremost “big government” advocate of his time, it is especially notable that he was a leading advocate for judicial review of whether any part of the federal government had exceeded its delegated powers.

Well before Marbury v. Madison, the Supreme Court recognized that the People had given the Court the inescapable duty of reviewing the constitutionality of statutes which came before the Court. The Court fulfilled this duty in cases such as Hylton v. U.S. (1796) (Is congressional tax on carriages a direct tax, and therefore illegal because it is not apportioned according to state population?); and Calder v. Bull (1798) (Is Connecticut change in inheritance laws an ex post facto law?). The Court found that the particular statutes in question did not violate the Constitution. (The ex post facto clause applies only to criminal laws; the carriage tax was an indirect tax, not a direct tax.) However, the Court’s authority to judge the statutes’ constitutionality was not disputed.

It would not be unfair to charge President Obama with hypocrisy given his strong complaints when the Court did not strike down the federal ban on partial birth abortions, and given his approval of the Supreme Court decision (Boumediene v. Bush) striking down a congressional statute restricting habeas corpus rights of Guantanamo detainees. (For the record, I think that the federal abortion ban should have been declared void as because it was not within Congress’s interstate commerce power, and that Boumediene was probably decided correctly, although I have not studied the issue sufficiently to have a solid opinion.) The federal ban on abortion, and the federal restriction on habeas corpus were each passed with more than a “strong” 50.3% majority of a democratically elected Congress.

As a politician complaining that a Supreme Court which should strike down laws he doesn’t like, while simultaneously asserting that a judicial decision against a law he does like is improperly “activist,” President Obama is no more hypocritical than many other Presidents. But in asserting that the actions of a “strong” majority of Congress are unreviewable, President Obama’s word are truly unprecedented. Certainly no President in the last 150 years has claimed asserted that a “strong” majority of Congress can exempt a statute from judicial review. President Lincoln’s First Inaugural criticized the Dred Scott majority for using a case between two private litigants for its over-reaching into a major national question, but Lincoln affirmed that the Court can, and should, provide a binding resolution to disputes between the parties before the Court. And in 2012, the government of the United States is one of the parties before the Court. (And the government is before the Court in part because the government filed a petition for a writ of certiorari to ask the Court to use its discretion to decide the case.)

Alone among the Presidents, Thomas Jefferson appears as a strong opponent of judicial review per se. Notably, he did not propose that Congress be the final judge of its own powers, especially when Congress intruded on matters which the Constitution had reserved to the States. Rather, Jefferson argued that in such a dispute the matter should be resolved by a Convention of the States, and the States would be make the final decision. Given that 28 States have already appeared as parties in court arguing that the individual mandate is unconstitutional, we can make a good guess about what a Convention would decide about the constitutionality of the health control law.

President Obama, however, wants Obamacare to be reviewable by no-one: not by the Supreme Court, not by the States.  You can find professors and partisans who have argued for such lawlessness, but for a President to do so is unprecedented.

The People gave Congress the enumerated power “To regulate Commerce . . . among the several States.” According to the Obama administration, this delegation of power also includes the power to compel commerce. Opponents contend that the power to regulate commerce does not include the far greater power to compel commerce, and that the individual mandate is therefore an ultra vires act by a deputy (Congress) in violation of the grant of power from the principal (the People). Seventy-two percent of the public, including a majority of Democrats, agrees that the mandate is unconstitutional. Few acts of Congress have ever had such sustained opposition of a supermajority of the American public.

President Obama today has considerably raised the stakes in Sebelius v. Florida. At issue now is not just the issue of whether Congress can commandeer the People and compel them to purchase the products of a particular oligopoly. At issue is whether the Court will bow to a President who denies they very legitimacy of judicial review of congressional statutes–or at least those that statutes which garnered the “strong” majority of 219 out of 435 Representatives.

With the Supreme Court probably voting on the constitutionality of Obamacare (a term the President proudly embraces) on Friday, the health control law’s academic friends are diligently attempting to do what the entire United States Department of Justice could not do after two years of litigation: articulate plausible limiting principles for the individual mandate. Over at Balkinization, Neil Siegel offers Five Limiting Principles. They are:

1. The Necessary and Proper Clause. “Unlike other purchase mandates, including every hypothetical at oral argument on Tuesday, the minimum coverage provision prevents the unraveling of a market that Congress has clear authority to regulate.” This is no limitation at all. Under modern doctrine, Congress has the authority to regulate almost every market. If Congress enacts regulations that are extremely harmful to that market, such as imposing price controls (a/k/a “community rating”) or requiring sellers to sell products at far below cost to some customers (e.g., “guaranteed issue”) then the market will probably “unravel” (that is, the companies will lose so much money that they go out of business). So to prevent the companies from being destroyed, Congress forces other consumers to buy products from those companies at vastly excessive prices (e.g., $5,000 for an individual policy for a health 35-year-old whose actuarial expenditures for health care of all sorts during a year is $845).

So Siegel’s argument is really an anti-limiting principle: if Congress imposes ruinous price controls on  a market, to help favored consumers, then Congress can try to save the market’s producers by mandating that disfavored consumers buy overpriced products from those producers.

2. The Commerce Clause. “The minimum coverage provision addresses economic problems, not merely social problems that do not involve markets.” This is true, and is, as Siegel points out, a distinction from Lopez (carrying guns) and Morrison (gender-related violence). However, it’s pretty clear under long-established doctrine that the Commerce power can be used to address “social problems that do not involve markets.” E.g., Caminetti v. United States, 242 U.S. 470 (1917) (Congress can use the interstate commerce power to criminalize interstate travel by people intending to engage in non-commercial extra-marital sex); Champion v. Ames, 188 U.S. 321 (1903) (“What clause can be cited which, in any degree, countenances the suggestion that one may, of right, carry or cause to be carried from one state to another that which will harm the public morals?”). Personally, I thought that Chief Justice Fuller’s dissent in Champion had the better argument, but Champion and its progeny are well-established precedents, so proposed limiting principle number two does not work, unless we overrule a century of precedent.

Besides that, #2 does not work for the same reason that #1 does not work. If Congress forced food producers to sell products to some consumers at far below cost, then Congress could (for economic, not social/moral motives) force other consumers to buy overpriced food, so that the producers do not go bankrupt. Imagine that instead of the Food Stamp program (general tax revenue given to 1/6 of the U.S. population to help them buy food), Congress forced grocery stores to sell food to poor people at far below cost. And instead of raising taxes in order to give money to the grocery stores to make up for their losses on the coerced sales, Congress instead forced other consumers to spend thousands of dollars on food from those same stores, which would be sold to those consumers at far above its free market price.

If there’s a limiting principle, the only one seems to be that in order to mandate the purchase of a product, Congress must also inflict some other harm on the producers of the product, which the coerced purchases will ameliorate.

3. “Collective action failures and interstate externalities impede the ability of the states to guarantee access to health insurance, prevent adverse selection, and prevent cost shifting by acting on their own. Insurers operate in multiple states and have fled from states that guarantee access to states that do not.” This is really a policy argument for Obamacare. Hypothesizing that it’s a good policy argument, it’s not a limiting principle. That the advocates of Obamacare think that the policy arguments for their mandate is better than the policy arguments for other mandates does not provide courts with a limiting principle of law.

Moreover, the policy argument is wrong. It’s true that some insurance companies stop operating in states where the law forces them to sell insurance to legislatively-favored purchasers at far below the actuarial cost of the insurance, with the  legislature failing to compensate the companies for the enormous resulting losses. If you make it difficult for companies to operate profitably in your state, then they will eventually stop operating in your state. It’s not a collective action problem; it’s just a problem of several states enacting laws that prevent companies from covering their costs. Any state with guaranteed issue and other price controls can solve the problem immediately by simply using tax revenues pay compensation for the subsidy which the state law forces the insurance companies to provide to certain consumers.

Obamacare is a particularly weak case in which to argue that the federal government is riding the rescue of the states to solve a collective action problem. For the first time in American history, a majority of the States are suing to ask that a federal law be declared unconstitutional. These states are taking collective action to stop the federal government from imposing a problem on them.

4. The Tax Power. “[T]he minimum coverage provision respects the limits on the tax power. The difference between a tax and a penalty is the difference between the minimum coverage provision and a required payment of say, $10,000 that has a scienter requirement and increases with each month that an individual remains uninsured. Unlike the minimum coverage provision, such an exaction would be so coercive that it would raise little or no revenue. It would thus be beyond the scope of the tax power.”

Let’s put aside the fact that, however ingenious the progressive professoriate’s  tax arguments have been, the chances that the individual mandate is going to be upheld under the tax power appear to be at most 1% greater than the chance the Buddy Roemer will be the next President of the United States.

Presuming that Siegel’s tax justification for the individual mandate is valid, it is an anti-limiting principle. Congress can indeed mandate eating hamburgers, smoking, not smoking, not eating hamburgers, or anything else Congress wants to mandate, as long as Congress sets the “tax” at level that will raise a moderate amount of revenue, does not include a scienter requirement, and does not make the “tax” increase each month that the individual refuses to do what Congress mandates.

5. Liberty. “The minimum coverage provision does not violate any individual rights, including bodily integrity and substantive due process more generally. These rights would be violated by a mandate to eat broccoli or exercise a certain amount.” Pointing to the existence of the Bill of Rights is not an example of a limiting principle for an enumerated federal power. The Constitution does not say that Congress may do whatever it wishes as long as the Bill of Rights protections of Liberty are not violated. Ordering New York State to take title to low-level radioactive waste generated within the state (New York v. United States) did not violate any person’s substantive due process rights, but the order was nonetheless unconstitutional because it exceeded Congress’s powers. The federal Gun-Free School Zones Act did not, as applied, violate the Second Amendment rights of Alfonso Lopez, who was carrying the gun to deliver it to a criminal gang. Yet the Act still exceeded Congress’s commerce power. A limiting principle must limit the exercise of the power itself, not merely point out that the Bill of Rights protects some islands of Liberty which the infinitely vast sea of federal power might not cover.

Finally, I certainly agree with Professor Siegel that the Fifth Amendment’s liberty guarantee (and its 14th Amendment analogue for the states) should be interpreted to say that no American government can order people to consume a certain amount of healthy food, or to exercise. But there is no major case that is on point for this. The argument for a new unenumerated right “not to eat the minimum quantity of nutritious food which government scientists have  determined is essential for good health” is something that would have to be built almost entirely by extrapolation from cases that have nothing to do with food. I hope that courts would accept the argument; but if the political culture ever moved far enough so that a nutrition mandate could pass a legislature, I’m not as certain as Prof. Siegel that courts would overturn the mandate. The odds of winning a case against a nutrition mandate will be better if the judges who decide that case have not grown up in a nation where a federal health control mandate is the law of the land.

The debt deal passed today does not go as far in cutting spending as I would like. But it does nonetheless enact substantial cuts without any tax increases, with a significant likelihood of more cuts in the future. If the bipartisan commission created by the new legislation fails to come up with a spending cut plan or Congress fails to enact the plan, there will be additional automatic cuts in both civilian and military spending.

If nothing else, the deal provides additional evidence in support of the proposition that divided government reduces the growth of the state, and makes deregulation and spending cuts more likely. Certainly, it is inconceivable that any such deal would have been made had the Democrats retained control of Congress in 2010. One can argue that the Republicans would have enacted bigger cuts had they controlled the Senate and the White House as well as the House of Representatives. But it should not be forgotten that the GOP presided over massive increases in spending and regulation when they controlled all three under George W. Bush. The government-restraining effects of divided government are demonstrated not only by the last decade, but by previous historical experience.

The evidence on the effects of divided government undercuts Democrats’ claims that they can be trusted to get spending under control on their own. But it should also give pause to conservatives who believe that our fiscal problems will be solved if only the GOP can make a clean sweep in 2012.

Although federal spending was a major political issue in the 2010 campaign and for many months before it, this recently released CBS poll [HT: Dan Mitchell] reveals widespread public ignorance about the distribution of spending between various programs. The detailed data reveal that only 23% know that Medicare and Medicaid take up between 20 and 30% of federal spending, and only 15% realize that Social Security takes up between 20 and 30%. Some 48% underestimate the extent of Social Security spending, with a much smaller percentage overstating it. Similarly, only 23% recognize that defense spending takes up between 20% and 30% of the budget. In this case, the most common error is to overestimate the extent of spending (a mistake made by 42%). Defense, Social Security, and Medicare/Medicaid, are by far the three largest items in the federal budget. And the vast majority of Americans don’t know how much of the federal budget is spent on them. Even if we count as “correct” answers that are close to the truth (on the grounds that all three programs are right around 20%, so both 10 to 20% and 20 to 30% might potentially be correct), the large majority still doesn’t know the answer in all three cases.

The majority overestimates the percentage of federal spending that goes to foreign aid, welfare, and earmarks. For example, only 9% realize that foreign aid is less than 5% of the federal budget, while 67% believe that it is higher than that, including 48% who believe that the true figure is a whopping 10% or more.

Knowing approximately how much federal spending goes to which program is not enough to have a reasonably informed discussion on spending policy. But it’s probably a necessary prerequisite to doing so. Therefore, it’s noteworthy that the majority of the public is ignorant on these points, despite the extensive public debate over the issue over the last two years.

This result is, of course, in line with previous data showing widespread public ignorance on a wide range of issues. As I have argued elsewhere, it is in fact rational for most voters to make little or no effort to acquire political information, because the chance of influencing electoral outcomes is so low. Few people find the details of federal spending policy interesting, and there is little incentive to learn about them just to be a better voter. Political ignorance is individually rational behavior that leads to bad collective outcomes. Voters may have a duty to become informed, but if so few take that obligation seriously.

It is tempting instead to blame politicians and the media for the extent of public ignorance on these issues. Certainly, politicians often talk about spending in very vague terms, and pretend that we can cut the deficit without touching entitlement programs or defense. No doubt, the media is also often uninformative. However, it is still easy for people to get accurate data on federal spending if they were so inclined. A quick google search turns up several easy to use sites such as this one and this one. It’s also not hard to find think tank studies, newspaper and magazine articles, and other information sources that discuss the budget in an accessible way.

Moreover, to the extent that politicians and the media don’t provide more information on spending, it is largely because they are responding to voter and consumer demand. If TV news viewers wanted more programs discussing the details of the federal budget, TV and radio news stations would be happy to provide it. It would be cheaper to produce than much of their current programming. Similarly, if voters punished at the polls politicians who fail to discuss budget specifics, more candidates would do so. In reality, of course, politicians are more likely to be rewarded at the polls for avoiding discussion of specific budget cuts than for embracing it. Doing the latter will earn them the ire of organized interest groups, while getting little reward from the general public. And TV news executives know that most viewers prefer entertainment to stories on the budget. In sum, politicians and the media are primarily responding to and exploiting public ignorance, rather than creating it. They may exacerbate the problem, but they didn’t cause it.

UPDATE: To my mind, the good news in the CBS poll is that it partly refutes the conventional wisdom that the public wants to cut spending in general, but opposes cuts in specific programs. Substantial majorities say they are willing to cut Social Security benefits for “retirees with higher incomes,” farm subsidies, defense spending, and money for “projects in your community.” There is a statistical dead heat (45% in favor, 48% against) on eliminating the mortgage interest deduction. The public isn’t nearly as willing to cut spending as I would prefer. But it is not correct to say that they oppose cuts in all important programs.

Of course the fact that a majority is willing to support cuts in these areas does not necessarily mean that any will actually be enacted. Social Security, farm subsidies, defense spending, and porkbarrel grants all have strong interest group constituencies behind them, which may be able to prevail against poorly organized majority public opinion.

In a recent post on Illinois’ plan to nearly double its state income tax, Megan McArdle writes:

The state of Illinois is allegedly close to a deal to nearly double its income tax, from 3% to 5.25%.....

The income tax increases.... are both workable and necessary. Conservatives will holler, but Illinois is not going to eliminate its entire deficit by cutting spending; the cuts needed too deep, the citizenry dependent on the services. Whether or not you think these programs should exist, they do now, and you can’t simply throw people off who planned their lives around them.

Economist David Henderson responds:

It’s not just conservatives who would holler: libertarians would probably holler even louder. But think about her reasoning. McArdle is saying, in effect, that if a government program has been in force for many years–people “planned their lives around them”–it should be kept.....

I saw her on John Stossel’s show the other night making a cogent case for making most drugs legal. She’s probably aware that one of the most effective lobbies for the drug war in California is the prison guard’s union. Although it stayed out of the Proposition 19 battle, it was instrumental in defeating an initiative in 2008 to lighten prison sentences for drugs. Certainly many prison guards, as well as “drug court professionals,” as the article linked to above puts it, have “planned their lives” around this program. Yet that didn’t stop McArdle from advocating a end to the drug war. As well it shouldn’t have.

The bigger issue is that with McArdle’s decision rule–keep even bad government programs in place if enough people have depended on them long enough–promotes the government ratchet that Robert Higgs talks about. The net effect is a bigger and bigger government.

This issue is a common challenge facing libertarians or indeed anyone who wants abolish a longstanding government program: what do about the interests of people who depend on that program, sometimes to the point of “planning their lives around it.”

My own view is somewhere in between McArdle’s and Henderson’s, but closer to the latter. It is indeed true that there are people who depend on government programs that should be abolished, and in some cases it would be unjust to simply cut them off immediately. But that doesn’t mean we should simply leave the programs in place forever. There is a wide range of options in between going cold turkey and feeding the addiction indefinitely. For example, we could lower program benefits without eliminating them completely. We can also continue paying current beneficiaries, but gradually eliminate the program for future ones (who generally rely on the program less). Another option might be to give some or all of the beneficiaries a lump sum “severance payment” to cushion them through the transition they face.

There are also some relevant moral distinctions to be made between different classes of program beneficiaries. There is a difference between an ordinary citizen who relies on a program he or she had no hand in creating and a politically sophisticated, powerful interest group that aggressively lobbied for its establishment and perpetuation. That’s the distinction between, say, a low-income old lady who lives off a Social Security check and big agribusiness interests that lobby for massive farm subsidies and then whine about having become dependent on them.

It’s also worth noting that people who rely on government programs, even those who are not politically sophisticated, are aware that such programs are subject to change by future legislation, and that they accept the risk of such change when they decide to participate in the program. That doesn’t mean they have no legitimate reliance interests. But it does diminish the extent to which the rest of us are morally bound to fully compensate them for their losses if the program is cut or abolished.

Finally, reliance interests cut both ways. If some people have “planned their lives” around existing government programs, others have planned their lives around existing tax rates. Doubling state income tax rates imposes considerable harm on the latter. That doesn’t mean that Illinois is morally required to never raise them. But it does mean that any reliance interest rationale for increasing taxes in order to pay for programs must take account of reliance interests on the other side.

Obviously, the above analysis is only relevant in the case of programs that we should eliminate in the absence of reliance interests. If the program is justified on other grounds, then the reliance rationale for it becomes superfluous. But the presence of reliance interests shouldn’t stop us from abolishing or at least cutting back, government programs that should never have been created in the first place.

Economist Bryan Caplan has an interesting post outlining six types of libertarian arguments against government action – “six stages of libertarian denial,” as he calls it:

Libertarians set themselves apart from other political thinkers by habitually denying that government should do things. Denial is therefore at the heart of libertarian thought. Thanks to pop psychology, unfortunately, “denial” has come to mean “refusing to admit the truth” rather than “refusing to admit what others claim.” But denial is still a concept worth holding onto.....

Playing off of pop psychology, I find it most useful to think about six stages of libertarian denial.

Stage 1: Deny the problem exists. Ex: When someone complains about Chinese imports, the libertarian says, “What’s the problem? They’re selling us cheap stuff.”

Stage 2: Blame the problem on the government. Ex: “Sure, Third World poverty is terrible. But without their governments’ statist economic policies – and our immigration restrictions – they’d already be rich.”

Stage 3: Admit that the government didn’t cause the problem, but insist that government action would only make the problem worse. Ex: Opposing price controls for grain after a severe drought. “The market is making the best out of a terrible situation. You’re going to destroy the incentives that will get us out of this disaster.”

Stage 4: Concede that government action wouldn’t make the problem worse, but say that the cure is so expensive that we’re better off just living with the problem. Ex: Opposing handicap accessibility regulations. “It’s going to cost 1% of GDP. For that price, we could give every handicapped person three full-time helpers.”

Stage 5: Admit that government action could solve a problem at a low cost, but claim that the libertarian principle is more important.” Ex: “Freedom means tolerating the very views that you find most abhorrent – even Satanism.”

Stage 6: Yield on libertarian principle, but try to minimize the deviation. Ex: “Yes, government has to supply some roads. But we can still fund them with user fees, not taxes.”

I suspect that what sets me apart from the typical libertarian is that I lean especially heavily on Stage 1....

Bryan’s classification scheme strikes me as a good one. He doesn’t explicitly include slippery slope arguments (“Government Action A isn’t terrible in itself, but it will lead to B, C, and D, which are much worse”). But they arguably come under Bryan’s Category 4; the cost of a government policy includes not only its immediate impact but that of future policies that it renders inevitable or significantly more likely.

Note that Category 2 arguments (“government caused the problem”) don’t by themselves prove that government action is undesirable. The fact that the government caused Problem X does not prove that it shouldn’t try to solve the problem it created. In some cases, one could even claim that the fact that government caused the problem strengthens the case for a government solution (e.g. – “government played a big role in causing the problem of black poverty by promoting slavery and segregation. Therefore, it’s only fair that government enact affirmative action programs to compensate blacks for the wrongs it inflicted on them.”). Thus, Category 2 arguments need to be paired with subsidiary points showing either 1) removing the government policy that caused the problem will solve it, or 2) any politically feasible government effort to solve it will cause more harm than good.

Most of my own libertarian-related work comes under Bryan’s Categories 2, 3, and 4. However, I think he is right to emphasize the importance of Category 1. Some of the most harmful government policies are enacted in response to non-problems. One important category of such are economic regulations enacted to inhibit market competition that lowers prices, improves quality, or make goods and services available to more people. Bryan’s example of protectionism is one of the better-known cases in point, but there are many other examples, such as anti-usury laws (which make it difficult to extend credit to the poor and small businesses).

An even more harmful set of Category 1 policies is that of various nationalist policies based on the mistaken notion that the economy is a zero-sum game in which one nation or ethnic group can only gain at the expense of others. This idea was at the heart of Nazi economic and foreign policy. But less extreme versions of it often crop up on both the left and the right.

University of Florida lawprof D. Daniel Sokol has published a very good (and extremely favorable) review of co-conspirator Todd Zywicki’s important recent book Public Choice Concepts and Applications in Law (coauthored with Maxwell Stearns), in the Michigan Law Review.

Danny writes that the book is “likely to be recognized as the leading work on the subject for some time.” Having read it myself, I tend to agree. It’s a great introduction to and analysis of the literature on public choice and its implications for law. The book drives home the implications of the simple but important public choice insights that government actions can be understood using the same tools of economic analysis that economists have long applied to the private sector, and that political behavior is often just as self-interested as market behavior. I would also note that the book has an interesting political balance, since Stearns is generally liberal and certainly well to the left of Todd.

Danny’s review essay also considers some possible additional applications of public choice to legal issues that were not covered by Stearns and Zywicki, especially in the field of international law. As he points out, scholars in the international law field have made very little use of public choice analysis, even though international legal institutions have serious public choice problems that may be even worse than those of domestic political processes in Western democracies. John McGinnis and I have sought to help close this gap in the literature in our work on international human rights law and domestic incorporation of international law.

I have often criticized government subsidization of sports stadium construction, including the biggest such boondoggle: the record expenditure of over a billion dollars in government money on the new Yankee Stadium (see here for my most recent post on the subject and links to earlier ones). As I pointed out in my very first post on this issue, such subsidies almost always fail to produce economic benefits that justify their exorbitant costs.

New York, however, is not the only city that has indulged in this particularly egregious form of corporate welfare. Washington, DC spent a great deal of public money to build a stadium for the Nationals. Now, however, the city is extending the life of a tax originally intended to pay for the stadium so that they can divert the funds to other projects [HT: Taxprof Blog]:

A citywide business tax the D.C. Council passed to help to help pay for the $611 million Washington Nationals ballpark has become such a cash cow that the city is now using it to help close its nine-figure budget gap.

D.C. passed a tax on businesses’ gross receipts to help finance the construction of the stadium. From fiscal 2005 until the end of this fiscal year, more than $129 million will have been collected, finance office records show. Overall, the city will have netted more than $135 million in all taxes and rent above what the city is paying back in bond payments from fiscal 2005 to 2010.

But instead of using the surplus funds to pay the stadium off, Mayor Adrian Fenty and the city council are using the money to plug monstrous holes in the District’s budget.

“They took all the money,” Councilman Jack Evans, D-Ward 2, said of his colleagues. “They’re spending every dime.”

Many business leaders are crying foul.

“The deal that we had ... was that any excess monies would be used to pay down the bond,” said D.C. Chamber of Commerce Chief Executive Barbara Lang. “We would like to see those bonds paid off earlier to relieve us of that tax. I’m very concerned that it will become part of the city’s operating budget.”

Evans, who helped engineer the ballpark deal, said the tax “was the biggest mistake that this government has made.”

Imagine that! A “temporary” government program intended to serve a narrow purpose has become permanent because it has turned into a cash cow for politicians. Everyone knows that when government power expands during a crisis, that expansion is always limited to measures strictly necessary to address the problem at hand and is terminated as soon as the crisis is over! Unfortunately, past and present experience shows that that is very far from being the case.

The DC businesspeople who apparently expected the city government to stick to the “deal” they had worked out should not have been so naive. No city government is going to give up a massive revenue source merely because the initial justification for creating it is no longer valid. To borrow a line from Instapundit, this may be a case of “rubes self-identifying.”

The passage of the health care demonstrates the ways in which economic crises create opportunities to expand the power of government, often in ways that have little connection to any effort to alleviate the crisis itself. Back in the fall of 2008, I expressed my fear that the combination of an economic crisis, political ignorance by voters, and unified Democratic control of the federal government would lead to a vast expansion of government if Obama were elected. White House Chief of Staff Rahm Emanuel famously said that the Democrats shouldn’t let “a serious crisis go to waste” because a crisis represents “an opportunity to do things you could not do before.”

I. Once Again, a Crisis Facilitates the Growth of Government.

Obama and the Democrats began to realize my expectations by passing a gargantuan “stimulus” bill and pushing a massive expansion of government control over health care, as well as promoting other major increases in the size and scope of government. But recent Republican political victories, especially Scott Brown’s win in Massachusetts, led many people to think that the health care bill would fail and the expansion of government might come to a halt. I had to admit that I had underestimated the political constraints inhibiting the administration. But I still thought that Democrats might be able to pass the bill by getting the House to adopt the proposal previously passed by the Senate – which has indeed happened.

The health care bill will now take its place with numerous Depression and wartime policies that expanded government in ways that would never have been possible absent the crisis, but which had no real connection to alleviating it. Absent the economic crisis, the Democrats would not have won such a sweeping victory in 2008, nor would Obama have had such an enormous reservoir of initial popularity to invest in pushing the health care bill through. As it turned out, the Democrats will have needed almost every bit of their huge crisis-created congressional majority in order to make up for defections in their own ranks.

II. Crisis-Enabled Measures that Make the Crisis Worse.

Whatever its other merits, the heath care bill does little if anything to alleviate the economic crisis that made its passage possible. Indeed, it may well end up exacerbating the crisis because it includes an employer mandate requiring any employers with more than 50 employees to either provide health insurance that meets various federal requirements or pay a $2000 fee per employee, if any of their employees receive federal health care subsidies. You don’t have to be a labor economist to predict that this increases the costs of hiring workers, and therefore is likely to increase unemployment or at least inhibit its reduction, as may already have happened under Massachusetts’ similar plan.

This too is not a new pattern. Many government-expanding policies enacted during the Depression and other past crises also exacerbated their effects. For example, the National Recovery Act – the centerpiece of the initial New Deal – significantly increased unemployment and raised prices for consumers. Later New Deal policies exacerbated unemployment in similar ways. The Agricultural Adjustment Act, famously upheld by the Supreme Court in Wickard v. Filburn, was a scheme intended to raise food prices at a time when many poor families were already having trouble making ends meet or suffering from malnutrition.

In most of these cases, political ignorance likely contributed to the passage of massive expansions of government that could actually make the crisis worse. Voters have incentives to be rationally ignorant about policy issues, and often don’t realize that proposals advanced in a time of crisis may actually exacerbate it or benefit narrow interest groups at the expense of the general public. Unlike much of the New Deal legislation, the health care bill has become quite unpopular. But public opposition would likely have been much stronger if more people realized that it was likely to increase unemployment, at least in the short run.

III. Will the Health Care Bill Become Permanently Entrenched?

The health care bill is also similar to previous historical examples of crisis-enabled legislation in so far as it will be extremely difficult to reverse. Sixty-five years after the Great Depression, we still have the kinds of perverse agricultural cartels created by the AAA, as well as numerous other dysfunctional policies first sold to the public as efforts to alleviate the Depression.

By creating a wide range of new entitlements and interest group payoffs, the health care bill is also likely to become entrenched over time, and even increase in scope. For example, the mandate requiring individuals to purchase insurance will create a ratchet for further expansions of government, as various interest groups lobby to increase the range of conditions against which people are required to buy insurance. Even if the Republicans retake control of Congress in the fall, they are unlikely to be able to repeal the bill in the face of Democratic opposition and a veto by President Obama. By the time a Republican president might be elected in 2012 or 2016, the new entitlements created by the bill will be sufficiently entrenched that they will be even more difficult to repeal or even limit – just as it has become extraordinarily difficult to constrain Medicare and Social Security.

Ultimately, the political lesson of the health care bill is that the combination of crisis and single-party control of the White House and Congress leads to massive government growth even in a situation where the proposal in question faces public skepticism and unified opposition by the minority party. I don’t claim that this by itself proves that the bill is a bad policy. But it does teach an important lesson about the dynamics of government in times of crisis.

UPDATE: The original version of this post went up just a few minutes before the bill passed. I have changed the language to reflect the fact that the House has now actually voted for the Senate bill.