George Will recommends a path toward a balanced budget amendment to the Constitution. Using Article 5, the states can make this happen even if the Congress refuses to act.

Congress, which relishes deficit spending, would not, unilaterally and unpressured, send this amendment to the states for ratification. Hence theGoldwater Institute’s recourse to Article V.

It provides, in the same sentence, two amendment procedures, one of which has never been used — the calling of a convention by two-thirds of the state legislatures. Many prudent people — remembering that the 1787 Constitutional Convention’s original purpose was merely to “remedy defects” of the Articles of Confederation — recoil from the possibility of a runaway convention and the certainty that James Madison would not be there to make it turn out well. The compact, however, would closely confine a convention: State legislatures can form a compact — a cooperative agreement — to call a convention for the codified, one-item agenda of ratifying the balanced-budget amendment precisely stipulated in advance.

SecDef Gates: “I should not have allowed it.”

Near the end of his book Duty, the former Secretary of Defense Robert M. Gates offers a strong criticism of the personnel system. Even many authorities who work on personnel issues may not be aware of his opinions on this topic, oversahdowed by other, flashier observations about the presidents he served, the wars he helped fight, and the culture of Washington. But this is the most interesting stuff he has to say, in my opinion:

Over the ten years of the Iraq and Afghan wars, too many officers were assigned to command positions because the stateside personnel system identified them as “next in line” rather than because they were selected as best qualified for the combat mission.  And too many talented officers who achieved real battlefield success were rotated out of command in Iraq and Afghanistan too soon simply to keep the personnel system running smoothly.  When we are in a fight, field commanders and the combatant commanders should be given the authority to relieve underperformers or keep good officers in command.

There’s more, but let’s stop and analyze how radical a proposal is being made here.  The key fact is that, as a general rule, military commanders do not have authority to hire, retain, or dismiss their own people. That is something men and women in uniform take as natural, but it is astounding to civilians. To outsiders, the dysfunction this invites is obvious, and not just for current military operations. Think for a second about the culture clash when troops leave the service and seek employment in the real world. They are totally unprepared. I can vouch for this among my friends of high rank and extraordinary accomplishment in uniform: the civilian job market is like the vast territory that is blank on their maps.  Is it any wonder the unemployment rate is high for veterans? Consider this from GEN James Jones (USMC ret) and Dan Goldenberg:

Nine percent of Gulf War-era II veterans remain unemployed, according to statistics released March 20 by the Bureau of Labor Statistics (BLS). … The unemployment rate for veterans remains higher than for America’s non-veteran population, and 21.4 percent of the youngest Gulf War II veterans (ages 18-24) remain unemployed. And much of the problem lies in a failure to connect veterans to the right employment services in the right place at the right time.

Everyone know this is a scandal, but Jones and Goldenberg are neglecting the fact that “employment services” cannot remedy a paternalistic employment culture after the fact. Until command authority for managing talent is restored in the military, troops will continue to pay the price later in life, no matter how superb the out-briefing.

Now back to Bob Gates:

In wartime, I believe the routine peacetime officer-assignment process should be set aside and senior field commanders should be empowered to choose their subordinate commanders. The failure to do this was, in my view, consistent with the peacetime mentality that pervaded the entire Defense Department, business-as-usual the order of the day among senior civilians and even among most generals and admirals, even as the troops were fighting and dying. I should not have allowed it.

I really admire Gates for writing these words. I think he can be forgiven for focusing on war strategy and not personnel structures, but I dearly hope policymakers listen and act on this call. The only question that remains is why we should limit this proposed management authority to wartime?  Why limit it to senior commanders? Why exclude the centrally planned markets for enlistees and non-command officers?  The same dysfunctional principles haunt the whole gamut of people in a profession that has the pretense of saying that it puts people first.

Many, many, many uniformed officers know this. They want to fix it. The final irony is that the rapid rotation culture edges senior officers out of power just as they figure out how the system isn’t working.

Supreme Court Restores Free Speech, in Pieces

Today the Supreme Court ruled to overturn a bit more of the labyrinthine regulations on Americans’ right to free speech. This subject is often accompanied by loud gnashing of teeth, but today’s ruling (McCuthcheon v FEC) is actually a tiny step. In fact, the 5-4 decision pulled its punch, meaning that fully free speech is still illegal in the United States, and what a shame that is.  Let’s remember that it was once the ACLU that was defending the freedom of a small group of Americans who ran a newspaper advertisement against Richard’s Nixon’s bombing of Cambodia. The ACLU (back when it care about free speech) said that so-called campaign finance “reforms” were a euphemism for speech control.

Let’s dispense with the usual misleading claims:

1. Campaign Finance rulings give a partisan advantage. Protesters think this a Republican versus Democrat issue.  It’s not.  The campaign finance laws are fundamentally about politics works mechanically, and both parties get equal treatment regardless of the Supreme Court decision. What’ in tension is whether the two major political parties have monopolistic control over campaign dollars. They both prefer such control, but this comes at the expense of outside voices (Tea Party as well as Green) and at the expense of entrepreneurial candidates. Today’s ruling is a small victory against the big parties.

2. Money is not speech. Okay then, the control money crowd says that they reject the very idea of money as speech. They say money is de facto corrupting.  This latter point is what gets them into constitutional hot water because it is baseless, presuming guilt before innocence. The “appearance of corruption” standard is no better than incriminating a young girl for prostitution because of the clothing she wears. Do we put people in jail for the “appearance of prostitution” or the “appearance of manslaughter?” To say this is a superficial standard is so accurate that it insults common sense. And as you might expect, the net result after decades of superficial control of politics is our modern, very superficial politics.

To continue the illogic of the critics, let’s think about the speech standard as applied to the New York Times.  The campaign finance dinosaurs hold that 100 pages of a newspaper cannot be regulated because that is free speech, but a 1/16th page advertisement in that same paper is subject to superficial standards, intrusive regulation, and outright banishment. So if a rich Saudi wants to publish and distribute a newspaper in the U.S. calling for jihad, he is free to say what he wants, but if an American wants to pay for a small “Vote for Kane” ad in the Washington Post, that is a thought crime! This is madness.

3. The open door will become a floodgate.  The bogeyman of money buying politics has been a staple of media reports about U.S. politics forever. Even now, Senator Harry Reid is using the Senate to attack individual Americans by name who dare to give money to his opponents. Yet the supposed “flood” of corporate money after the 2010 Citizens United case failed to, you know, flood. Where’s the story about Exxon or KFC dollars gushing into candidate or PAC accounts?  It never happened.  Instead, the angst is all about the Koch brothers or George Soros. Individuals. Not corporations. The reality is the individual right has never been subject to control by the FEC, and so there’s nothing new with Koch or Soros giving.

Why don’t for-profit corporations flood in?  Because it never really made business sense for public corporations to buy politicians, and so it, contrary to the hopes and dreams of professional angry anti-speech activists, just didn’t happen even after Citizens United allowed it.  Look up the 2012 donation records: no flood.  Non-profit giving is a different story, but that wasn’t torrential and besides, it’s hard to demonize.

Of course, that doesn’t stop the myth of the corporate flood from being repeated. Consider this line, common everywhere, but frustrating to see on the ultra-mainstream CNN today, in this lead story “SKY’S THE LIMIT” :

The Citizens United ruling helped open the floodgates to massive corporate spending in the 2012 elections.

Ultimately, McCutcheon is not nearly as important as Citizens United was, nor does it resolve the biggest restriction on political freedom, which is the freedom of individual candidates to raise unlimited sums from individual donors.  That restriciton, known as “base limits”, continues to hamstring political entrepreneurs.  Mr. McCutcheon, for example, has a base limit of $2600 maximum that can be given to an individual candidate, as well as an aggregate limit of $123,200 per cycle.

To be sure, incumbents can raise unlimited money because they are expert at direct mailing tens of millions of small donors, working back-scratching PAC networks, and milking their big party patrons. An entrepreneur has limited resources, but may have the backing of a visionary investor. But one or two high-net-worth donors cannot, still, give a big check to candidate X. Why? Hamstringing the entrepreneur remains.

At first, I thought SCOTUS had split the baby by just removing the aggregate limit but leaving the base limit in place. To my relief, Justice Roberts explained in his opinion that

This case does not involve any challenge to the base limits, which we have previously upheld as serving the permissible objective of combatting corruption.

That base limit case will come, but it cannot come soon enough.

Overtime, rooted in the LOL fallacy

If you can stomach a brazenly left-biased economics news article from the Washington Post, check out this coverage of the overtime trial balloon that the White House is floating:

White House officials declined to describe the proposal in detail, suggesting only that they were contemplating a change in the salary threshold that determines whether an employee receives overtime pay for working more than 40 hours a week.

These authors tend to describe liberal points as things “economists” say, but that counter arguments are things “critics” say.  Nice skew!  Examples: “[E]conomists say federal rules … have failed to keep pace with the growing cost of goods and services” and “Economists argue that the declining value of the minimum wage has also contributed to lagging wages.” Um, no they don’t.  Liberal economists might make those arguments, but the majority don’t say such things.

Fact is that this overtime effort is deeply flawed according to mainstream economics. It is based in a theory of human labor as a muscle commodity, which was relevant in, economists say, 1861.  This notion that raising the overtime threshold will create jobs is so wrong that it has a nickname among economists.  It’s called the “Lump of Labor Fallacy” and even has a Wikipedia entry. Look it up! and for that matter, LOL also has a 2003 essay in the New York Times dedicated to trashing partisans who advocated restricting work hours as a policy to boost employment:

Economists call it the ”lump of labor fallacy.” It’s the idea that there is a fixed amount of work to be done in the world, so any increase in the amount each worker can produce reduces the number of available jobs. (A famous example: those dire warnings in the 1950′s that automation would lead to mass unemployment.) As the derisive name suggests, it’s an idea economists view with contempt, yet the fallacy makes a comeback whenever the economy is sluggish.

Say who?  Yeah, um, that was Paul Krugman.



Politics Trumps Policy: Ezekiel Emanuel

This  essay by Ezekiel Emanuel Obama, an administration health insider who helped craft the ACA, explains how corrupting politics can be:

Economists—liberal and conservative alike—overwhelmingly denounce the tax exclusion. It drives costs higher while keeping wages down, it is regressive, and it is a major drag on the federal budget—lowering revenue by a whopping $250 billion a year.

During the 2008 presidential campaign, Senator John McCain proposed eliminating the exclusion and replacing it with a $5,000 tax credit to help families buy health insurance. The Obama campaign ran more than $100 million worth of ads pounding McCain, accusing the GOP nominee of “taxing health benefits for the first time ever.”

Once Obama was in office, his advisers split on the issue. The economists wanted to limit the exclusion, but the political team didn’t want to touch it. David Axelrod, the president’s political guru, even showed us a montage of Obama’s campaign commercials to remind the economic team of his stated position.

Emanuel (yes, Rahm’s brother) says that Obama ultimately did the right thing by adding a tax on Cadillac plans that will begin, wait for it, in 2018. Not only is the timing of the reform questionable, but it is delusional to think of this as real reform.

The reality is that Obama was devastating against John McCain using a very insincere, populist attack when it was McCain who was offering up a good policy proposal, a proposal that Emanuel himself calls a good, consensus, bipartisan idea. Politics won. The nation lost. End of story.

UPDATE: I spelled Emanuel’s name incorrectly in the original title. Now corrected.  Thanks to a reader for pointing this out.

Monopoly on the Left

Glenn and I argue in our book that the political system has become a monopolistic competition. A good book on the subject is this one from the Hoover Press by James Miller. It’s nice to see that idea confirmed by self-critical thinkers, and here is a very thoughtful essay out just today on race in SLATE by Tanner Colby:

The left has been ceded a monopoly on caring about black people, and monopolies are dangerous. They create ossified institutions, paralyzed by groupthink and incapable of self-reflection. To the extent that liberals are willing to be self-critical, it’s generally to flagellate themselves for not being liberal enough, for failing to stand fast with the old, accepted orthodoxies. Monopolies also lead to arrogance and entitlement, and the left is nothing if not arrogant when it comes to constantly and loudly asserting its place as the One True Friend of Black America. And yet, as good as liberal policies on race sound in speeches, many of them don’t hold up in the real world.

The good news is that this initial essay, excellent throughout, is the first in a series.

Freedom of Choice versus the Gender Pay Gap Theory

Thanks to Christina Hoff Sommers, I finally understand the often-repeated gender pay gap issue (see Sommers’ Daily Best essay here).  Actually, one of my econ grad school  professors (a female) discussed this, but it faded from my memory until President Obama made a big claim about it during his State of the Union Speech:

President Obama repeated the spurious gender wage gap statistic in his State of the Union address. “Today,” he said, “women make up about half our workforce. But they still make 77 cents for every dollar a man earns. That is wrong, and in 2014, it’s an embarrassment.”

What is wrong and embarrassing is the President of the United States reciting a massively discredited factoid. The 23-cent gender pay gap is simply the difference between the average earnings of all men and women working full-time. It does not account for differences in occupations, positions, education, job tenure, or hours worked per week. When all these relevant factors are taken into consideration, the wage gap narrows to about five cents.

All evidence suggests that though young women have the talent for engineering and computer science, their interest tends to lie elsewhere. To say that these women remain helplessly in thrall to sexist stereotypes, and manipulated into life choices by forces beyond their control, is divorced from reality—and demeaning to boot.  If a woman wants to be a teacher rather than a miner, or a veterinarian rather than a petroleum engineer, more power to her.

The White House should stop using women’s choices to construct a false claim about social inequality that is poisoning our gender debates. And if the President is truly persuaded that statistical pay disparities indicate invidious discrimination, then he should address the wage gap in his own backyard. Female staff at the White House earn 88 cents on the dollar compared to men. Is there a White House war on women?